In 2013, Italy, Spain and Britain had a sizable increase in their GDP calculations compared to previous years. Reports that came out this year showed Spain with a 2.5% raise, from €26.2 billion to €1.05 trillion. The United Kingdom’s GDP likewise had a boost of 0.9 percent from April to June 2014, quite a rapid rise, thanks to illegal drugs and prostitution. Not coincidentally, for the first time, these black market trades are being figured in officially in UK’s computation of its gross domestic product estimate. Italy is a latecomer, and will only start including illegal drug sales and prostitution in its GDP estimates in 2014. It is an ironic twist of fate that all three countries have a Catholic background, with Italy and Spain having a predominantly Roman Catholic population. England broke away from Rome and the Catholic Church in the 16th century but majority of its people still practice Christianity.
But before we put the blame on these countries, let’s take a look at the facts. Italy, Spain and Britain are members of the European Union, a group of 28 European states that have banded together for economic and political partnerships. In its 2010 European System of Accounts, it required all members of the EU to include all illegal actions in its GDP estimates. And that includes prostitution and illegal drug trade. Getting accurate figures for both industries is another matter altogether.
Most of Europe’s nations have some form of legalized prostitution and drug trade. It doesn’t really come as a surprise, considering that many European nations accept relatively permissive behavior compared to the Asian countries. If Japan, China and Korea had similar practices, maybe there wouldn’t have been Korean comfort women during World War2.
From an economic standpoint, the new EU regulation is a logical step to measuring and comparing EU states’ economies. For accurate comparisons, standards must be established, or so Economics professor at the University of Manchester in the UK Diane Coyle thinks. Another economics professor, Andrew Oswald of the University of Warwick, however says that the GDP is not relevant in today’s times, as far as Europe is concerned. Physically and materially, the people’s wants and needs have been met and developed countries should measure instead their people’s level of psychological well-being.
In the end, it’s a matter of maintaining personal principles in the face of government’s efforts to satisfy its inordinately huge desire to pump up its monetary figures.