4.5.2. GDP and economic well-being
Even though, GDP is an imperfect measure of economic
well-being. Among other factors affecting well being omitted by the real GDP
are the availability of leisure time, non-market services such as unpaid
homemaking and volunteer services, environmental quality and resource
conservation, and quality of life indicators such as low crime rate. The GDP
also does not reflect the degree of economic inequality in country; because
real GDP is not the same as economic well-being, therefore proposed policy
should not be evaluated strictly in terms of whether or not they increase the
GDP. But this gap may be fulfilled using SUT and IO-T.
Although the GDP is not the same as economic well-being, it is
positively associated with many things that people value: better homes , better
life, better health, higher life expectancy, higher rate of literacy. This
relationship between real GDP and economic well-being tend to evaluate economic
development of Rwanda and this relationship has led Rwanda to the improvement
of their way of producing, saving and consuming, health and education in search
of better life and has motivated policymakers in Rwanda to try to increase the
rate of economic growth oriented to economic development of Rwanda through out
many strategic policies such as EDPRS, RSSP.
Obviously, as the model of production and expenditure improve
and that the GDP increases, Rwandans are likely to possess more and better
goods and services. On average, like the GDP of Rwanda is increasing, Rwandans
tend to enjoy larger, better constructed, and more comfortable homes, higher
quality food and clothing, a greater variety of entertainment and cultural
opportunities, better access to transportation and travel, better
communications and sanitation, and other advantages.
Through 10 years ago, Rwandans have made tremendous sacrifices
and taken great risks to secure a high standard of living themselves and their
families. In fact this initiative may be better viewed in SUT structure year by
year and improvement of satellite accounts data which their improvement may
ameliorate Rwanda's economic development indicators such as HDI, Life
expectancy, people living in good hygienic conditions.
Beyond an abundance of consumer goods, the increase of GDP
brings other basic advantages. Those advantages include some important
indicators of well-being, including life expectancy, reduce in infant and child
mortality rates, number of doctors, measures of nutrition and education
opportunity, but all those factors may be captured in satellites accounts in
order to perform further analysis with STU and IO-T in SAM «education
account, Health account, Environmental account» and compiled with GDP from
SUT. One may conclude from the list of important factors omitted from the
official figures that GDP is useless as a measure of income welfare. But as
explained above GDP has a closer relationship with Socio-Economic Well-being of
Population.
Clearly, in evaluating the effects a proposed economic policy,
considering only the likely effects on GDP is not sufficient. Planer must also
ask whether the policy will affect aspect of economic well-being that is not
captured in GDP. Environmental regulations may reduce the production of some
products as wood, fish, and pottery for example, consequently decrease of GDP;
but that factor is not sufficient basis on which to decide whether such
regulations are good or bad. The right way to decide on that question is to
apply cost benefit principle. Therefore to promote Economic development, Rwanda
policymakers have to think about how to introduce SUT and IO frameworks in
order to complete necessary information rather than focusing only on the output
from Production and Expenditure Approaches due to its deficiency as a measure
of Economic Development.
| 
