Beware of GDP and GNI

I’d like to tell you about an article I read in El País this morning, about Luanda. I hadn’t really intended to read it – I mean, who cares about Luanda? But there was an intriguing dislocation in the heading that I could not resist: The most expensive city in the world is in an underdeveloped country. Now why would that be? I wondered, so I read on.

Yes, rich countries are the ones with expensive capitals, so how come Luanda has surpassed them all with regard not only to the price of water? In 2017, I read, the most expensive cities are, in descending order: Luanda, Hong Kong, Tokio, Zurich, Singapore, Seoul, Geneva, Shanghai, New York and Bern. Madrid follows way down the line as no. 111, and Barcelona is only no. 121. Now how about that!

Well you see, the article tells me, Angola is actually a super-rich country, for the rich that is, who enjoy its oil and diamonds. (Just think of it, diamonds!) The country is so rich that its government has been kind enough to pass a minimum salary law, giving employees the right to the equivalent of EUR 88/month (assuming the employment in question is declared, of course). This amount is just enough to pay for 30 litres of water, 10 kg of rice and 10 litres of milk. Now that might not sound all that bad to you, but try surviving on this amount of water, milk and rice for a whole month.

And what about this figure: about 50% of all families living in Luanda have no running water.

I leave El País and look up the CIA “World Factbook” – to make quite sure that I have not misunderstood Angola’s situation: No, Angola is not considered a communist state or even a dictatorship. In 2012, I read in the CIA World Factbook, “the UN assessed that conditions in Angola had been stable for several years and invoked a cessation of refugee status for Angolans.”

To conclude – and I am no longer leaning on either the CIA World Factbook or El País – I note that the famous GDP (whether nominal or forecasted (PPP)) (see Wikipedia as at 1/7/2017) tells us very little about whether or not a country stinks – excuse my French. Personally, I have learned today that Angola, for instance, is a particularly bad country to live in for almost everybody.

I would like to add on a more positive note, however, as there there are other ways of measuring countries. There is something called the HDI – Human Development Index, which is better able to describe a country than the GDP and GDI. You are of course welcome to disagree with me, but since I do not allow comments, I shall never know.

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