Based on real life examples, discuss whether GDP is the best way to measure country’s

standards of living.
GDP is defined as the monetary measure of the market value of all the final goods and services
produced in a specific time period.

Despite 25 years of democracy, South Africa remains the most economically unequal
country in the world, the focused economic concept here is economic well-being, which is
defined as a multidimensional concept relating to the level of prosperity and quality of living
standards enjoyed by members of an economy.
GNP greater than GDP is best for a country because it means that the population of that
country will have a greater total income (i.e. total output) than if GDP was greater than GNP,
in South Africa the GNP is 742.6 billion PPP dollars which is greater than its GDP (349.4
billion USD).

GNI is better to measure the standard of living in a country, it measures the income of all
residents while GDP measures the value of goods produced in an economy
GDP per capita is a starting point for comparing standard of living in countries as higher
GDP/capita could result in more spending on health and education and it can reflect lower
level of unemployment and other uses for GDP.
GDP also does not take into consideration the do it yourself work like house work, it also
does not take into consideration the hidden economy which includes illegal work like black
markets.

GDP 349.4 billion USD

GDP per capita 6,160.73 USD
GNI 742.6 billion dollars
GNI per capita 2018 was $5,720, a 5.93% increase from
2017
GINI index South Africa's Gini coefficient ranges
from about 0.660 to 0.696

HDI Value South Africa's HDI value for 2018 is 0.705

— which put the country in the high human
development category—positioning it at 113
out of 189 countries and territories.
GNP 742.6 billion PPP dollars
Government spending 33% of the GDP is from government
spending
Government expenditure on education 19% of the government expenditure is
spent on education

In 2018, government expenditure in South Africa amounted to about 33.44 percent of the

country's gross domestic product.
GDP figures does not take into consideration negative consequences of production such as
air and noise pollution and traffic congestion. All these factors affected the standard of living
in a country, the two major types of pollution in South Africa are air and
marine pollution. ... More than 90% of South Africa's electricity is generated from the
combustion of coal that contains approximately 1.2% sulphur and up to 45% ash. Coal
combustion can lead to particulate matter in the air, as well as contribute to acid rain.
GDP also does not take into consideration the hidden economy which includes illegal work
like black markets, South Africa's level of the hidden economy is currently higher than the
global average, which is expected to come down from 22.5% of GDP

The gap between rich and poor is wider in South Africa than in any other country where
comparable data exist, the World Bank found.
South Africa's richest households are almost 10 times wealthier than poor households,
according to World Bank estimates.
South Africa's GDP growth slowed from 1.3 per cent in 2017 to an estimated 0.7 per cent
in 2018. Economic growth is expected to reach 1.5 per cent in 2019, rising to 2.1 per cent
by 2021.
South Africa has a high unemployment rate which is about 29.1% so people are resorting to
jobs like babysitting which is not included in the country’s GDP

The average babysitter rates for 2020 is R66.13 to R80.65 per hour
About 80 percent of Zambia's emerald production and half of Sierra Leone's diamond output
is illegally shipped out of these two countries.
About 55% of South Africans live in extreme poverty.
The small West African country is a major exporter of gold and diamonds, yet it does not
produce an ounce of the golden metal nor a carat of gleaming gems. The precious goods
are smuggled in from neighbouring Ghana and Burkina Faso by intrepid traders, who earn
European or U.S. currencies for their trouble
In Cameroon, for example, the government is loath to crack down on the smuggling that
brings up to $500 million worth of goods into the country each year

Since 1994 700 Billion South African rand had been lost due to corruption which is about
$46 bn.
A total of 2.01 million crimes were recorded in 2019 in South Africa, most from
Johannesburg where there have been cop scams where people pretended to be policemen
and scammed tourists for their money, while the rest of the crimes recorded were murder
and homicides.

In conclusion, GDP is not the best measure for an economy’s well-being as there are a lot
of factors that play a role in the economy’s well-being while not being included in the GDP,
being like the road crimes that often happen in South Africa and the unemployment rate that
is causing people to start black markets, smuggling, illegal jobs and DIY jobs like babysitting,
and South Africa requires higher and more inclusive growth to address unemployment and
poverty.

Video Links: https://www.youtube.com/watch?v=XTyXmtwXl_Q

https://www.youtube.com/watch?v=O14hwqjtruk