GDP: Not the Same as Wealth

I remember having started a new job in Doha where my then-boss came out with a real gem. "This is", he said, "the richest country in the world", and then pointed to some recently published figures on GDP per capita. Of course, there are a number of well-documented criticisms of the reliability of Gross Domestic Product data and the ways in which it is collected. What this instance also highlights, however, is the common misconception of GDP as a measure of "wealth". It was not at all comfortable to have to explain that GDP was about measuring the amount of economic activity within a specific country at a given period of time. 

I was reminded of this--fairly common--misapprehension earlier today when I came across some more recent World Bank data on Twitter, which you can find here. According to the stats, Qatar ranks third worldwide for per capita GDP, after only Luxembourg and Norway. (Note the preponderance of countries with small populations and large reserves of natural resources at the top of this list.)

It's not difficult to see how this might have nothing at all with what we think of as "wealth": the aggregate of the purchasing activity within a given economy over a given period of time. Every time chocolate bar, car, haircut and meal you buy counts towards this. Obviously, in Qatar, the contributions to this economic activity will come in the form of mega-scale infrastructure projects. These don't only include the World Cup 2022, but also the upcoming rail network--Qatar Rail was the largest single client in the GCC during 2013--and road reconstruction, and the upcoming Doha zoo. In fact, the railway construction contracts alone are the equivalent of just about 4% of Qatar's Gross Domestic Product in 2013.  

Clearly, none of this is what people think of when they think of the phrase "richest country in the world": what they want to know is, usually, how many people in said country can drive fancy cars? An indication of this is given by the median income. 

Here, the data which I found were unfortunately dated by at least seven years, but somehow were published in 2013 (I know some more recent data exist, so please get in touch if you have them). Yet the figures provided in the Peninsula article here seem to be very inflated when you consider the armies of blue collar labourers who make this country possible; other data from the ILO point to a much lower average wage of US$ 1,700 or so per month for Qatar. While, again, a mean (average) and a median are not the same, they should tend to the same limit in a well-distributed Gaussian curve. A very indicative fact is that while the other two countries which help Qatar make up the top of the list for the biggest GDP per capita--Norway and Luxembourg--are at the top of ILO list for average monthly income, Qatar here ranks at number 29--right after Turkey.