A couple of days ago Johan sent me a link to the Sustainable Development Index, which shows Cuba on top of the world!
Incredible I thought when looking at Cuba’s GNI per capita. Are Cubans richer than people in Costa Rica or Panama, two of the wealthiest countries on the continent? Nobody that has been to the three countries would believe in that.
The SDI-figures became even more confusing when I sorted by income level: Could Cubans really have the same per capita income as Chileans, Latvians and Croats?
And was it even surprising that the Cuban figure was so exactly 21,000. However, the SDI methodology chapter gave a clue to the reason:
the SDI sets $20,000 as the sufficiency threshold on the income index scale, at a point above which additional income becomes unnecessary for achieving strong social outcomes.
So Cuba is perfect. Hardly a coincidence. I wrote the SDI and asked for the source of the data and got a quick reply:
The income data for Cuba is extrapolated from UNDP records. This is based on World Bank data.
We note, however, that the World Bank has recently revised Cuba’s income PPP data, reducing it by more than half. Apparently this has to do with confusion surrounding how to handle Cuba’s dual currency system in PPP calculations, about which there is not yet firm agreement.
The World Bank has thus more than halved Cuba’s economy between the data sets for 2014 and 2018. So I took the data on Cuba from the two links and made a graph.
Until 2014, the UN reported Cuba’s GNI per capita according to the red bars. Now according to the blue.
Unfortunately, Gapminder does not have GNI per capita for Cuba. On the other hand it has GDP per capita (PPP for 2011), and according to what I understand it should not be that different. However, Gapminder also reports that Cubans are significantly richer than what the World Bank now says they are.
Update:
Gapminder saw this post in december 2019 and decided to update its dataset on the Cuban economy. The documentation of the new Gapminder data can be found here.
The documentation of the Gapminder data can be found here. And their Cuba data is probably closer to reality now,
The fact that the UN system has so blindly reported the figures that the Cuban government has invented year after year should have far more consequences than Cuba collapsing on the Sustainable Development Index. When will the UN revise Cuba’s data for other indicators? If Cuba cannot be trusted when reporting economic indicators, why should we rely on their figures on infant mortality, literacy or anything else?
Interesting to see. When I first saw the SDI, what struck me is that it much like GDP probably isn’t measuring very interesting things. Some states, like Venezuela, Azerbaijan, Algeria, Iraq and partly Iran, as well as some relatively high-scoring states like Russia, have high SDIs not because of good policy but because of bad policy, they are under the curse of oil, they are failed petro-states, which if given half the chance, would have lived well beyond the means, like those of us in the red.
A certainly think it is useful to see ourselves in the mirror now and then, to see where we perform terribly, but the SDI does not seem like a valid contribution to a very important debate.
It looks like a good indicator, Cuba has enormous growth potential, as well as North-Korea.
For some bizarre reason not many Florida residents risk their own life to create makeshift boats to get to Cuba. Strange isn’t it?
I completely agree. Even if you delete Cuba from the list, the countries on top of the list are not interesting examples to follow.
Indeed. The Cuban government has so many admirers around the world, but none of them would move there.