Guinea in Context

One of the most interesting things that a person can study is economic data. The statistics and figures produced by economists are sometimes simple, sometimes complex, and often overly so in both cases. For example GDP per capita, wherein you take the total output of a country expressed as gross domestic product and divide it by the population of a country, is often used to compare the relative productivity or economic performance of different countries. If GDP per capita increases, that indicates economic growth. This is an oversimplification, which ignores levels of unemployment levels, actual distribution of income, and the like. Now, it depends on which perspective you are coming from, and what you wish to accomplish with the concept of GDP per capita, of course. I am fond of the saying that “there are lies, damned lies, and statistics”, which was popularized by Mark Twain, though its true coiner remains a mystery.

I was examining data for Guinea recently. According to MIT’s Observatory of Economic Complexity (OEC), Guinea had a GDP per capita of $1,220 in 2014, which ranked 173rd out of 185 countries in the world. Compare this to a figure that an acquaintance who works for the Guinean government cited, which is that the average monthly income for Guinean households is around $50. This puts most households at around $600 a year. Now, we cannot look at those two figures alone and draw any conclusions about the relationship between them, which would be unsound logic, statistically speaking. It is necessary to examine further the context in Guinea. It has had a negative trade balance, despite being well endowed with natural resources, since 2007, the final year of Lasana Conte’s regime. The Ebola outbreak exacerbated the economic situation after a tentative rebound, such that GDP growth was almost 0% last year.

Guinea has an economic complexity score of -1.33 according to the OEC, meaning that its has minimal diversity in its output, its products are raw mineral and input resources and foodstuffs, and a very limited amount of added value production. Indeed when you look at the exports of Guinea in 2014, only about 1% of exports were machine-related, and much of those were salvaged parts. A full 85% of exports was minerals and precious metals. Over 21% of its imports were foodstuffs, and 24% were gas and oil. Guinea imports the vast majority of its refined petroleum from the Netherlands, and a large amount of rice from India. China supplies Guinea with much of its general consumer commodity imports. Guinea’s largest export destinations are South Korea, who imports a huge amount of crude oil along with India. India also imports gold. The United Arab Emirates import a substantial amount of gold, and interestingly enough, postage stamps as well. At 6.1% of its exports, postage stamps make up Guinea’s largest non-mineral commodity, generating $188 million in 2014, most from the UAE. Net exports for 2014 reached $3.07 billion, while imports were $3.88 billion.

Just as to show perspective between other countries’ data, China is the largest economy in the world, with exports worth $2.37 trillion; imports were $1.53 trillion in 2014. Its GDP per capita was only $13,200 however, and its economic complexity is 0.74, ranking 37th out of 185 countries. Japan has the most economically diverse economy in the world, scoring a 2.25 in complexity. Guinea’s neighbor Senegal scores an identical -0.33 in complexity, and only exports $2.91 billion with a GDP per capita of $2,330. It imports an astonishing $7.53 billion, and its top import partner is Mali, which scores a -0.77 in economic complexity and only exports $867 million. It imports $3.07 billion and has a GDP per capita of $1,600. Guinea has a population of around 12 million people, Senegal has around 14 million, and Mali has around 15 million people. It is interesting to note that these countries have relatively smaller economic output, and yet have higher average per capita GDP.

It is easy to get lost in economic data, delving into the intricacies of indicators, trade complexity, and integration of the global economy. And yet we have to remember that these countries are full of millions of people who are trying to live just as we Americans do. Business and economics, though theoretically they draw on general human psychology, tend to be too quantitatively driven, with little concern for humanity and qualitative impact. We see byproducts of human suffering on the news and in our travels, which stem from ever worsening financial inequalities and corrupt governments. We need every new, young entrepreneur and aspiring economist to have a care for the social aspects of their enterprise and work. In the global economy, one individual’s consumption expenditure is another’s wage: or, one person’s dollar is another person’s plate of rice. Change and social benefit can happen incrementally, and some small modicums of support can translate to a better life for someone. We should not get lost in the numbers surrounding “growth”, though neither should we dismiss them. If everyone aims to help others while they help themselves to succeed, then we will build a better world more efficiently for one and all.