GDP Critical Analysis - Essay Example

As a case in point, one may refer to the fact that according to this statistical measure, Qatar, Kuwait, and the United Arab Emirates rank as the second, fourth and fifth most developed nations in the world, and Equatorial Guinea as the ninth (IMF, 2008). These countries are not democratic, do not uphold gender equality, and have been repeatedly cited by Amnesty International for human rights abuses (Amnesty International, 2006). In direct comparison, the United States, Great Britain, and France, to name but a handful, are all democratic nations that uphold gender equality. While they have been cited for human rights abuse, they have been at a significantly much lower rate than the previously mentioned nations (Amnesty International, 2006). Yet, following GDP per capita statistical measures, these countries rank as the seventh, the twenty-first, and the twenty-fifth on the global GDP scale (IMF, 2008). This is a clear indication of the extent to which GDP contributes to inaccurate readings of national development status and, indeed, fails to provide an accurate reading of the living standards and quality of life enjoyed, or suffered, by populations. As the weakness of GDP ultimately lies in that which it does not measure, it needs to be supplemented with poverty index, human development index, and gender development index measures.

GDP is a weak statistical indicator of national development because it fails to measure a wide array of critical development indicators. GDP measures the total market value of all goods and services which have been produced in a country within a specific time and, on the per capita level, divides the total value of the economy, or its size, by its population figures (Chant, 2008). As may be deduced from the foregoing, therefore, it does not discriminate between the rich and the poor, thereby indicating poverty levels and, does not calculate literacy and gender equality levels, to name but a few critical indicators. Added to that, and as Chant (2008) explains, in its calculation of the total amounts spent on healthcare in a given country within a specified time frame, it interprets higher expenditure levels as a positive indicator of well-being rather than as an indicator of possibly worsening health conditions. The implication here is, therefore, that not only does it exclude critical indicators from its measurement of national developmental and economic status but, that the GDP and the GDP per capita measures are inherently incapable of providing an accurate indicator of economic and developmental status because the measure is non-discriminatory and tends towards generalizations.