Context 2: The Pursuits of National Policy

Extract A: The Growth Imperative and its Discontents

In recent decades, emerging economies such as India and Vietnam have experienced rapid economic growth, often exceeding 6% annually. This expansion has lifted millions out of extreme poverty, funded critical healthcare and education infrastructure, and attracted significant foreign direct investment (FDI). Proponents argue that a high and sustained rate of economic growth is the ultimate engine of social progress, providing governments with rising tax revenues to solve societal challenges without increasing tax rates.

Extract B: Rethinking the Goal of Economic Policy

In advanced economies, the debate has shifted from quantitative growth to the quality of life and sustainability. With secular stagnation, demographic ageing, and declining productivity growth across Europe, many argue that pursuing high GDP growth rates is both unrealistic and undesirable. Some policymakers advocate for a "Wellbeing Economy" framework—similar to initiatives in New Zealand and Scotland—which elevates indicators like mental health, environmental quality, and income equality alongside or above traditional GDP.

Others, however, maintain that without economic growth, managing public debt, funding public services, and financing the massive investments needed for the green transition will be impossible. They suggest that the focus should not be on "degrowth" but on "green growth"—decoupling GDP expansion from carbon emissions through technological innovation. From this perspective, economic growth remains a necessary condition for achieving other macroeconomic objectives, including full employment and fiscal sustainability.

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Extract A states: "Proponents argue that a high and sustained rate of economic growth is the ultimate engine of social progress, providing governments with rising tax revenues to solve societal challenges."