UN warns: GDP alone cannot tell whether people are better off
GREAT BAY--A new United Nations report is challenging one of the most common assumptions in public policy, that economic growth automatically means people are better off. For St. Maarten and the wider Caribbean, where tourism numbers, investment activity and GDP growth are often treated as shorthand for national progress, the report delivers a clear message: countries must begin measuring what people actually experience in their daily lives.
The report, titled “Counting What Counts: A Compass of Progress for People and Planet,” was prepared by the UN Secretary-General’s Independent High-Level Expert Group on Beyond GDP. It argues that Gross Domestic Product, while still useful as a measure of economic activity, was never designed to capture the full range of conditions that determine whether people are living better, safer, healthier and more secure lives.
For small island economies such as St. Maarten, that distinction matters. A country can record growth while households struggle with utility bills, food prices, rent, medical costs, traffic congestion, crime concerns, school needs, limited land space, vulnerable infrastructure and the anxiety that comes with living in a hurricane-prone economy. A cruise season can look strong, hotel occupancy can rise, and government revenue can improve, yet many residents may still feel that life is becoming harder.
That is the gap the report seeks to address.
The expert group states that for decades GDP and GDP growth have been treated as “the closest thing the world has to a measure of progress.” Yet the report notes that GDP growth has existed alongside persistent inequality, environmental degradation and declining trust in public institutions. The problem is not that GDP is useless. The problem is that governments, international institutions, markets and the public have expected GDP to answer questions it was never created to answer.
In practical terms, GDP can tell St. Maarten whether the economy is producing more goods and services. It cannot tell whether working families are keeping more disposable income after bills. It cannot show whether young people feel opportunity is within reach. It cannot explain whether the tourism economy is lifting all communities or only certain sectors. It cannot measure whether residents trust institutions, feel safe walking in their neighborhoods, have reliable access to health services, or believe their children will inherit a more resilient island.
The report does not call for abandoning GDP. Instead, it calls for a broader compass, one that places people and the planet at the center of how progress is measured. Its central principle is that progress should mean equitable, inclusive and sustainable well-being. That means looking not only at output, but at health, education, security, environmental quality, social cohesion, inequality, public services and the ability of a country to withstand future shocks.
For the Caribbean, the relevance is immediate. Many islands depend heavily on tourism, imports, fuel, external markets and fragile coastal infrastructure. This often creates a contradiction: GDP may rise when visitor arrivals, construction and spending increase, but the same growth can place pressure on housing, waste systems, roads, energy demand, public services and the environment. If the benefits are unevenly distributed, residents may see growth in national accounts without feeling improvement in their homes.
The report describes this as part of a global problem: GDP has become “the number by which the world judges itself,” even though it was originally designed to measure the changing scale of economic activity, not overall societal well-being. It notes that warnings against using GDP as a broad measure of progress have existed for decades, including from Nobel laureate Simon Kuznets, one of the architects of national income accounting.
The implications for St. Maarten are significant. National conversations often focus on economic recovery, budget strength, tourism performance, airlift, cruise arrivals, investment and revenue. These are important. However, the report suggests that they should not be treated as the whole story. A government can celebrate economic expansion while residents still ask more basic questions: Can I afford my bills? Is my job secure? Are schools improving? Is health care accessible? Are public services working? Is government responsive? Is the environment being protected? Are we prepared for the next disaster?
These are not side issues. According to the report, they are core indicators of whether a society is truly progressing.
To address this, the expert group proposes a dashboard of 31 indicators organized around four major components. The first is foundational principles: peace, human rights and respect for the planet. The second is current well-being, including material conditions and work, health, education, security, subjective well-being, social cohesion, quality of institutions and environmental quality. The third is equity and inclusion, including poverty, income inequality, wealth inequality, work inclusion, regional inequalities and overlapping deprivations. The fourth is sustainability and resilience, including produced, human, social, institutional and natural capital.
For St. Maarten, such a dashboard would mean looking beyond whether the economy is growing and asking where that growth is going. It would require policymakers to examine whether income gains are reaching workers, whether poverty is being reduced, whether young people are in school or work, whether public services are effective, whether residents feel safe, whether people are lonely or socially disconnected, whether women and men are benefiting equally, and whether natural resources are being protected.
The report’s current well-being indicators include household disposable income per capita, labor underutilization, unpaid domestic and care work, healthy life expectancy, educational achievement, ICT skills, intentional homicides, whether people feel safe walking alone after dark, life satisfaction, loneliness, satisfaction with public services, air quality and safely managed drinking water.
That kind of measurement would be especially useful in Caribbean societies where headline growth can mask stress inside households. An economy can expand while workers remain underemployed. Investment can increase while young people leave in search of opportunity. Government revenue can rise while public trust falls. Tourist arrivals can grow while residents feel excluded from the benefits. GDP alone cannot capture these realities.
The report also places strong emphasis on equity and inclusion. It recommends measuring wealth inequality, income inequality, poverty, women’s earnings compared to men, regional disparities and multidimensional poverty. For St. Maarten and the wider Caribbean, this is crucial because national averages can hide sharp differences between communities, income groups, age groups and households. A country may appear prosperous on paper while certain families remain trapped in unstable work, unaffordable housing, debt or limited access to services.
The Caribbean dimension is also reflected in the composition of the expert group. Damien King, Executive Director of the Caribbean Policy Research Institute, CAPRI, served as one of the members of the UN High-Level Expert Group. His inclusion places Caribbean policy experience inside a global discussion that is directly relevant to small island developing states.
The report’s treatment of sustainability and resilience is also important for St. Maarten. For a small island, progress cannot be measured only by what is built today. It must also be measured by what is protected for tomorrow. Roads, schools, utilities, health systems, human skills, trust in institutions, coastal ecosystems, water resources and disaster preparedness are all part of the real wealth of the country.
The report explains that sustainability should be understood through different forms of capital: produced, human, social, institutional and natural. This matters because a country can grow GDP while depleting the very assets that support future well-being. In the Caribbean, that could mean overburdened infrastructure, environmental degradation, weakened institutions or a workforce not adequately prepared for the future. GDP may record the activity, but it does not automatically deduct the damage.
The report also warns against what it calls a “sustainability mirage,” where economic gains or human capital improvements can hide ecological damage. For islands exposed to sea level rise, hurricanes, biodiversity loss, coastal pressure and waste challenges, this warning is not theoretical. It is central to long-term survival.
Another important part of the report is its attention to trust and institutions. GDP can rise even when people believe public institutions are not listening, services are not reliable, or decision-making is not fair. The report includes quality of institutions as a core part of current well-being, measuring people’s satisfaction with public services and confidence in civil services.
For St. Maarten, this offers a useful policy lesson. Public confidence is not a soft issue. It affects compliance, cooperation, social stability and the ability of government to implement difficult decisions. When citizens do not trust institutions, even necessary reforms can face resistance. When people feel excluded from progress, growth figures lose meaning.
The report also recognizes that measurement must be practical. It notes that close to half of the proposed indicators are drawn directly from the Sustainable Development Goals, meaning that many countries already have some of the data systems needed to begin. The group recommends that governments establish and regularly publish country-owned progress dashboards, grounded in the framework but adapted to national priorities. It also recommends embedding these dashboards in policy, planning, budgeting and accountability.
For St. Maarten, this could mean developing a national well-being dashboard alongside traditional economic reporting. Instead of reporting only GDP growth, inflation, tourism performance or government revenue, the country could also report on household disposable income, poverty, youth employment, public service satisfaction, safety, housing pressure, environmental quality, school outcomes, health access and disaster resilience.
Such a dashboard would not replace economic data. It would make economic data more useful. It would allow leaders, Parliament, civil society, businesses and residents to ask better questions: not only whether the economy is growing, but whether growth is improving lives, reducing vulnerability and preparing the country for the future.
The report also says the media, academia, civil society and the private sector have a role to play in shaping public debate and sustaining the Beyond GDP agenda. That is especially relevant in small communities, where public conversation often determines whether policy remains focused on lived reality or becomes trapped in technical language.
For the Caribbean, the broader lesson is clear. Tourism-dependent economies cannot measure success only by arrivals, occupancy, spending and construction. Those indicators matter, but they do not tell the whole story. A truly successful economy must also be judged by whether people can live with dignity, whether workers benefit from growth, whether young people see a future, whether public services are reliable, whether communities are safe, whether the environment is protected, and whether the country can withstand shocks.
The report’s closing message is simple but powerful: what societies measure shapes what they value. It does not ask the world to discard GDP. It asks governments to look at the full picture and act accordingly.
For St. Maarten and the Caribbean, that may be the most important takeaway. Growth is not the same as progress. A bigger economy does not automatically mean better lives. The real test is whether people are healthier, safer, more secure, more included, more hopeful and better prepared for the future.
By that standard, the question for policymakers is no longer only: How much did the economy grow?
The better question is: Did people’s lives improve?