[abelardlindsay]

http://news.scotsman.com/latest.cfm?id=710502006

I was researching in the CIA world factbook and came across the ridiculous statistic of $50,000 gdp per capita in this small african nation. I thought the CIA must have made an error but oddly enough, more than 1 billion barrels of oil was found off the coast in 1995. I find it totally bizarre that I hadn't heard anything at all about this country. Economic growth has been 20+% a year for the last ten years. Truly staggering and weird...

[pea-jay]

From what I have heard, it is ruled by a corrupt despot, so most of the oil money probably flows directly into the strongman's hands. Simply dividing the national income by the national population will fail to give a good understanding of the inequities.

[lorenzo]

To use "per capita GDP" or PPP to estimate an economy's strength is one of the biggest mistakes to make.

You don't have to look at Equatorial Guinea (where one dictator owns a billion dollars, while the rest lives in sheer poverty).

Have a look at the difference between the UK and France, for example. Both economies have 60 million inhabitants, so then can be compared.

Per capita GDP:
France: $30,000 (2005 est.)
United Kingdom: $30,900 (2005 est.)

>From this you would think the UK's economy leads to more wealth for more people. In fact this is totally wrong.

1. First off, you have to correct British GDP for the oil and gas bonus; the UK exports billions worth of oil and gas each year, and has been doing so for decades; while France has had to import billions worth of it, for decades.
Factor this in, and British per capita GDP becomes $28,700.

2. Secondly, look at the factors that determine "standard of living":

Life expectancy (total population):
France: 79.73 years (2006 est.)
United Kingdom: 78.54 years (2006 est.)

>Difference of more than one year, which is very big.


Gini coefficient, measuring income inequality:
France: 32.7
United Kingdom: 36

>Difference of more than 3 points, which is quite big

Health status and health burden of population:

Infant mortality rate:
France: 3.1 promille
UK: 5.3 promille
>a considerable difference

Morbid obesity rate:
France: 9.4%
UK: 23%
>a huge difference (the OECD now takes obesity rates as one of its crucial factors in the health status analysis). High obesity rates correlate with high poverty rates.

OECD 2005 Health Status Table
http://dx.doi.org/10.1787/348874817562

Access to and quality of health care (world rank):
France: 1
UK: 18

French health care system ranks first in world, to see how this is calculated (many factors):
http://www.oecdobserver.org/news/fullstory.php/aid/356


Most importantly, and showing an incredible difference:

Poverty rate:
France: 6.5% (2000)
United Kingdom: 17% (2002 est.)



In short, if you analyse things correctly and carefully, you see that France's living standards are considerably higher than those of the UK.

If you were to stick to per capita GDP, you would never have found this out.