1. The Balance Between GDP and Life Expectancy in a third world country
The civil war that lasted for three decades in Ethiopia has finally come to a
conclusion when a new nation, Eritrea is established as a settlement of the civil war;
where the young nation has assumed complete independence from Ethiopia in 1993.
After its independence, there is no doubt that Eritrea has achieved a substantial
relative stable growth rate after its separation from Ethiopia. However, it is only a
flash in the pan as it has only lasted a short period since its independence. In reality,
the Eritrean economy is experiencing an imbalance growth in the last decades. One
unusual phenomenon regarding the imbalanced economy is that the living standard
has no correlations with life expectancy. In fact, the increase in life expectancy does
not necessarily indicate that living standard has increased. This article will explore
further on the contradiction of life expectancy and living standards based on the
following indicators: life expectancy at birth/mortality rate, the average growth rate in
GDP, Real GDP per capita and health expenditures.
Drawing references from the WorldBank, the life expectancy at birth in Eritrea
has risen roughly about 5 years of age from 56 to 61 when comparing the recent year
2010 and the base year 2000. In addition, the average mortality rate of both infants
and adults, has decreased at a substantial rate. Without a doubt, an increment in the
life expectancy and the decrement in mortality usually indicate that living conditions
must have improved. However, the increment in life span of Eritrean does not truly
reflect the living conditions of Eritrea. Ironically, the living condition in terms of the
whole economy is certainly worse off than it is ten years ago.
Figure 2. GDP growth (annual %)
By viewing the last decade of the economy of Eritrea, it can easily be determined
that the overall health of the economy for the last decade can be characterized as
erratic. In the year of 2000, the Eritrean economy has reached a point where it has
experienced a devastating negative growth rate. It has obtained as low as 13.1% as
demonstrated in Figure 1. However, after one year, the country has experienced a
major bounce back in the growth rate, as high as 9%. One particular reason that can
be explained about this sudden fluctuation is the postwar reconstruction. As shown in
figure 2, the country sometimes experiences fluctuating growth rate (negative growth
rate). Furthermore, the country has obtained roughly about 3% growth rate in 2010.
2. Perhaps, this may seemed like a good progress for the economy. However, this is a
false phenomenon. The increase in growth rate does not necessarily imply that the
living standard condition has improved. In fact, according to the WorldBank, the Real
GDP per capita, PPP in 2010 is $ 542. Compare to the rest of the world, such amount
of GDP per capita is categorized as extremely low. Therefore, this indication
identifies Eritrea as a low-income country. Not only that, one fact that should be
noticed is the decrease in real GDP per capita, PPP referencing to the base year, 2000.
As demonstrated, the GDP per capita has fallen about 4.74% [(569-542)/569] relative
to the base year,2000 where it has accounted for $569. This indication is significant
because it demonstrates that the current economy is actually doing worse off than it is
ten years ago during the war. The differences of $ 27 [$569-$542] may not seem like
a significant amount for large countries, but it is definitely an enormous amount for
such poor country. Also, as shown in figure 2, the economy at times experiences
many growth disasters due to agricultural termination. Since Eritrea agricultural
productions account for 75% of all jobs in the country; a change in the climate will
affect agricultural productions. For the last decade, the country has experienced many
natural disasters such as drought causing many people out of work. With the absence
of Gini coefficient measuring income inequality, indeed there is no way to show that
almost everyone in the country share roughly about the same income. However, by
just scrutinizing at the surface of the real GDP per capita, PPP alone is sufficient to
identify that average citizens are extremely poor. Here, it is evident that they are
earning less income compared to a decade ago; making their living conditions worse
off. Supposedly, when income is lowered, the living condition should be worse off.
Thus, leading to inadequate health, in which in turn decreases the life span. However,
Eritreans are actually experiences the opposite.
The last intriguing point that will be discussed in this paper is the health care system.
Statistically, it has been discovered that for the last decade; less resources are invested
into the health care system. In 2000, health care expenditure is accounted for 5% of
the GDP. However, it is only accounted for 2 % in 2010. It decreases every year.
Here, it is evident that citizens are getting less proper care from the health care
system. Generally, the life span on average should decrease along with the health care
system but that is not the case here. The case here is that less proper care results in an
increase in the average of life span. Therefore, in a sense, the health care system, does
not demonstrate any correlations with the life expectancy.
The only particular explanation that can be explained for these unusual
phenomenons is most likely with the help of national aids. In a sense, national aids
alone should not be sufficient to increase the life expectancy of Eritreans when living
standard has been relatively low. Still, there are many factors that are yet to be
discussed that may reject the statement. For now, focusing on the overall view of the
economy will indicate that it is an unnatural phenomenon; it should imply that the
economy is experiencing macroeconomic imbalances. Until these imbalances are
solved, the young nation will remain as one of the poorest, underdeveloped countries
in this modern era.
3. References
Afrol News. (2011). Economic crisis continues in Eritrea. Retrieved from
http://www.afrol.com/articles/15589
BBC News. (2011). Drought-hit Eritrea expels NGOs. Retrieved from
http://news.bbc.co.uk/2/hi/africa/4834936.stm
Central Intelligence Agency. (2011). The World Factbook: Eritrea. Retrieved from
https://www.cia.gov/library/publications/the-world-factbook/geos/er.html
Rena, Ravinder. 2006: War-Torn Eritrean Economy-Some Issues and Trends,
Eritrea Institute of Technology
The World Bank Group. (2011) Retrieved from http://data.worldbank.org/indicator
![Perhaps, this may seemed like a good progress for the economy. However, this is a
false phenomenon. The increase in growth rate does not necessarily imply that the
living standard condition has improved. In fact, according to the WorldBank, the Real
GDP per capita, PPP in 2010 is $ 542. Compare to the rest of the world, such amount
of GDP per capita is categorized as extremely low. Therefore, this indication
identifies Eritrea as a low-income country. Not only that, one fact that should be
noticed is the decrease in real GDP per capita, PPP referencing to the base year, 2000.
As demonstrated, the GDP per capita has fallen about 4.74% [(569-542)/569] relative
to the base year,2000 where it has accounted for $569. This indication is significant
because it demonstrates that the current economy is actually doing worse off than it is
ten years ago during the war. The differences of $ 27 [$569-$542] may not seem like
a significant amount for large countries, but it is definitely an enormous amount for
such poor country. Also, as shown in figure 2, the economy at times experiences
many growth disasters due to agricultural termination. Since Eritrea agricultural
productions account for 75% of all jobs in the country; a change in the climate will
affect agricultural productions. For the last decade, the country has experienced many
natural disasters such as drought causing many people out of work. With the absence
of Gini coefficient measuring income inequality, indeed there is no way to show that
almost everyone in the country share roughly about the same income. However, by
just scrutinizing at the surface of the real GDP per capita, PPP alone is sufficient to
identify that average citizens are extremely poor. Here, it is evident that they are
earning less income compared to a decade ago; making their living conditions worse
off. Supposedly, when income is lowered, the living condition should be worse off.
Thus, leading to inadequate health, in which in turn decreases the life span. However,
Eritreans are actually experiences the opposite.
The last intriguing point that will be discussed in this paper is the health care system.
Statistically, it has been discovered that for the last decade; less resources are invested
into the health care system. In 2000, health care expenditure is accounted for 5% of
the GDP. However, it is only accounted for 2 % in 2010. It decreases every year.
Here, it is evident that citizens are getting less proper care from the health care
system. Generally, the life span on average should decrease along with the health care
system but that is not the case here. The case here is that less proper care results in an
increase in the average of life span. Therefore, in a sense, the health care system, does
not demonstrate any correlations with the life expectancy.
The only particular explanation that can be explained for these unusual
phenomenons is most likely with the help of national aids. In a sense, national aids
alone should not be sufficient to increase the life expectancy of Eritreans when living
standard has been relatively low. Still, there are many factors that are yet to be
discussed that may reject the statement. For now, focusing on the overall view of the
economy will indicate that it is an unnatural phenomenon; it should imply that the
economy is experiencing macroeconomic imbalances. Until these imbalances are
solved, the young nation will remain as one of the poorest, underdeveloped countries
in this modern era.](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)