Look beyond GDP

New Internationalist, July, 2004 by Marek Rybar

I agree with you that in many (but certainly not all) countries in Eastern Europe, the standard of living has deteriorated ('The Facts', NI 366). Nevertheless, you often use Gross Domestic Product growth figures to back up this argument. GDP measurement ignores equality, which you rightly mentioned, but there is another issue, equally important, that you fail to take into account.

The communist regime was well known for its blatant disregard for the environment. To at least partially undo the damage--the legacy of four decades--countries in Central and Eastern Europe had to spend billions of dollars. Though spending related to restoration or protection of the environment ironically boosts GDP in the particular year, it is not 'productive' in the limited economic sense like, say, investing in fixed capital assets.

To give an example: in the Czech Republic in 1990, the percentage of population living in locations with the worst air quality was close to 30; by 2000 that figure was down to nearly zero. In many places one can see fish that were not there a few years ago. In contrast, by looking at a level of GDP alone, one could suggest that we are in effect not better off today than we were then--which is of course absurd.

Marek Rybar Prague, Czech Republic