Hungary Develops Harmonic Development Index To Measure Wellbeing Beyond GDP
By V. Sankara
KUALA LUMPUR, Jan 15 (Bernama) -- Hungary has developed the Harmonic Development Index (H2DI) as a new global framework to measure sustainable development and societal wellbeing beyond gross domestic product (GDP).
The Hungarian government’s commissioner for economic strategies and the “Teach for Hungary” programme, Dr László György, said the index was developed to provide a more comprehensive picture of national progress by incorporating six key pillars that go beyond economic output.
“GDP has its constraints. It is important, but it is not enough. Our societies have to develop in harmony. That is why we created the Harmonic Development Index to measure sustainable development and wellbeing,” he told Bernama in a special interview at a hotel here on Tuesday (Jan 13).
The former Hungarian state minister and chief economist, who is on a five-day official visit to Malaysia from Jan 11 to 15, said the H2DI is a Hungarian-developed framework being introduced to Malaysia for further study. However, he said both countries are examining their suitability for possible adoption and that it is not yet an official indicator in either country.
He highlighted that the H2DI balances economic performance with long-term financial sustainability, environmental protection, social cohesion, demographic viability, and work- and knowledge-based development.
“You cannot live a better life today at the expense of the next generations. Development must be financially and environmentally sustainable, meritocratic, socially cohesive, and demographically viable,” he added.
Dr György said he cooperated with Malaysian institutions, including the Malaysian Institute of Economic Research (MIER), the Asia-Europe Institute at the University of Malaya, and the Institute of Strategic and International Studies (ISIS) Malaysia, to explore how the index could be refined and adapted to the Malaysian context.
According to H2DI, Malaysia has performed well over the past 25 years in areas such as economic sophistication, environmental sustainability, human-capital intensity, and social cohesion. “We agreed that GDP alone cannot reflect how a society is really doing. We will engage in developing the Harmonic Development Index further and see what lessons from Hungary can be contextualised for Malaysia,” he said.
Dr György said the H2DI is closely linked to Hungary’s economic transformation following its transition from communism in the 1990s, during which the country lost nearly 30 per cent of its jobs before embarking on a programme since 2010 to rebuild its middle class through job creation, re-industrialisation, and skills development.
He shared that under Prime Minister Viktor Orbán, Hungary introduced a contribution-oriented social system, linking welfare, tax incentives, and family benefits to employment, training, and active participation in society.
“The most important change was not that people earned three or four times more than before. It was the human dignity they regained by contributing to society and being able to sustain themselves and their families,” said Dr György, the lead author of the peer-reviewed study Harmonic Development Index: A Novel Approach to Measure Environmental, Social, and Economic Development.
He said Hungary funded the system by taxing windfall profits and rent-seeking activities, particularly in sectors that benefited from external shocks such as the COVID-19 pandemic and the Russia-Ukraine war. “We tax those who gain extra profits from external shocks and use those resources to support working families, small businesses, and people who are willing to train and work,” he elaborated.
Dr György noted that Hungary and Malaysia share similarities, including a reliance on foreign direct investment, strong manufacturing bases, and key sectors such as automotive, agriculture, and food processing, making both countries natural partners in developing innovation-driven and inclusive growth models.
He also commented on the impact of artificial intelligence (AI) on labour markets, saying governments must respond with clear and timely policies to ensure technological progress supports human agency and social cohesion.
Dr György is also in Malaysia to promote his latest book, The Middle-Class Revolution: A Meritocratic Strategy for the 21st Century, published by World Scientific, which outlines Hungary’s contribution-based, middle-class-centred economic model and introduces the H2DI as a tool to assess the impact of policy interventions on wellbeing.
During his visit, Dr György took part in a series of high-level engagements organised by the Hungarian embassy in Kuala Lumpur, including meetings with economic think tanks, universities, and innovation agencies. These included discussions with the Asia-Europe Institute at Universiti Malaya, MIER, ISIS Malaysia, Cyberview, and the Malaysian Research Accelerator for Technology and Innovation (MRANTI), as well as a courtesy call on Melaka Governor Tun Dr Mohd Ali Mohd Rustam and a meeting with Deputy Minister of Finance Liew Chin Tong.
-- BERNAMA