Planet Money, one of many podcasts I listen to in Beltway traffic, had a great episode recently attempting to explain why GDP is important. The reporter contrasts the resources for a school in Kingston, Jamaica with a socioeconomically similar school in Barbados. The difference in what a country can do with a per-capita GDP of approximately $15,000/year (Barbados) versus around $5600/year (Jamaica) turns out to be quite staggering. Hearing about teachers paying for school materials out of their own pockets sounded a lot like what I’ve heard and read in news stories and features about inner-city schools here in the U.S. One part of the piece that I believe has broader applications to how foreign direct investment (FDI) is used worldwide is when Jamaica’s minister of education (Andrew Holness) explained why the FDI Jamaica has received hasn’t resulted in the expected benefits to the country. It boiled down to not having enough sufficiently-educated people to staff the projects being built, whether it was bauxite plants or anything else.
A paper by Peter Blair Henry (a Jamaican-born economist) goes into more detail on the comparison between Barbados and Jamaica. There’s also a podcast of him from last year on the same subject. I can’t vouch for these latter two links (yet), but the Planet Money episode is worth a listen if you’re at all interested in economics.