G - H



GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT)
A trade agreement after the World War II among several countries, that sets out rules of conduct for international trade relations; provides a forum for multilateral negotiations to solve trade problems; and aims for the gradual elimination of TARIFFS and other barriers to trade. GATT undertakes negotiations among countries. Now on its eighth round of negotiations, the Uruguay Round, the coverage extends to trade-related aspects of intellectual property rights, trade-related investment measures and trade in services.
GROSS DOMESTIC PRODUCT (GDP)
The value of pro-duction taking place inside a country’s borders in a given year. GDP includes that part of output contributed by foreigners based in the country, but excludes the earnings of a country’s citizens working abroad. This should be contrasted with GNP, which includes what citizens earn abroad but excludes what foreigners earn.


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GDP > GNP IN SINGAPORE The GNP of Singapore has always been smaller than its GDP. This is because the earnings of multinationals and expatriates have always been greater than the incomes of its own citizens. Likewise, earnings sent home by Filipino overseas contract workers since the late 1980s have become so significant that Philippine GNP is now greater than GDP.
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GROSS INTERNATIONAL RESERVES (GIR)
“Hard” foreign currencies (also called reserve currencies) such as the U.S. dollar, yen, pound, deutschmark, etc. as well as gold, accumulated from the country’s foreign earnings and borrowings, which can be used by citizens to make foreign payments, e.g. for imports and debt service. They now also include SPECIAL DRAWING RIGHTS (SDRs) from the INTERNATIONAL MONETARY FUND, bonds, and other foreign financial assets like stocks and equities by a country’s central bank which can be easily converted into currency.


The authorities in most developing countries seek to maintain a minimum level of international reserves sufficient to cover three to four months’ imports. When international reserves drop below normal levels as a result of successive balance of payments deficits, a devaluation or depreciation typically follows.


The GIR may be likened to a country’s piggy bank of foreign currencies. When a country experiences payments deficit, it draws from its piggy bank, the GIR, to pay off the deficit. BOP, then, is “balanced”. A balance of payments surplus, on the other hand, represents increases in the country’s foreign reserves. GIR therefore rises.
GROSS NATIONAL PRODUCT (GNP)
The value of goods and services produced by citizens of a country over a given period. It likewise refers to the total income earned by citizens, whether at home or overseas. GNP is usually measured on an annual basis, but it can also be presented on a quarterly and semestral basis.


The 1990 GNP of Bangladesh is about one fifth of the global sales of General Mo-tors, a top multinational corporation Indonesia’s GNP approximates the gross sales of Ford Motors Corporation, the Philippines’ approximates that of Samsung.


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WHAT IT IS, WHAT IT’S NOT -- GNP is often used to measure a country’s degree of affluence, and, in the past, was used to measure ‘development”. But GNP measures mostly those things which can be bought and sold. The ecological benefits flowing from first-growth forests, for instance, do not get counted in GNP; but, logging over these same forests for commercial lumber will raise GNP.
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GROSS NATIONAL PRODUCT, NOMINAL
GNP valued at current prevailing prices. Even if the amount produced remained the same from one period to the next, nominal GNP would rise if prices simply increased, say because of inflation. Therefore, to gain a better idea of income real GNP is computed.
GROSS NATIONAL PRODUCT, REAL
Is a recomputation of GNP that removes the effects of price changes or inflation and retains only the changes in the output of goods and services in the economy. Real GNP is important, since it allows one to say whether there has been an actual increase or decrease in incomes from one period to the next.
GROSS NATIONAL PRODCUT PER CAPITA
Or GNP per head. This is GNP divided by a country’s total population in a given year. It shows how much income each citizen would hypothetically receive if the country's output were equally distributed. Justifiably or not, it is often used as a rough measure of the level of economic development. It may be used to measure how productive or how well-off a country is compared to other countries or in relation to another period.


HUMAN DEVELOPMENT
The United Nations Development Program defines human development as “a process of enlarging people’s choices to lead a longer, healthier life to acquire knowledge and to have access to resources needed for a decent standard of living?’
HUMAN DEVELOPMENT INDEX (HDI)
Using the concept human development as earlier defined, human development index is a number that rates a country according to its people’s life expectancy, literacy and per capita income. An index closer to 1.0 means a relatively good life for a country’s people. Closer to zero implies miserable life for the people.


COPYRIGHT: PCPS/DAGA 1994