A brief glossary of some development terms|
Bilateral — Involving two nations or parties.
Debt Service — Payments on interest and principal.
External Debt — Debt owed outside the country from public and private sectors. Like GNP/GDP, the ratio between internal and external debt differs markedly between industrialised and developing nations.
External debt is divided into three categories:
Private — owed to private lending institutions, corporations and individuals
Bilateral — owed to other national governments
Multilateral — owed to multilateral financial institutions
GDP — Gross Domestic Product — the value of all goods and services produced within a country. Includes foreign owned domestic production.
GDP per capita — A country's total GDP divided by it's population, or the average domestic production for each citizen.
GNP — Gross National Product — the value of all goods and services produced by a country’s citizens within a country, or by foreign subsidiaries of TNC’s controlled from within the country. Does not include domestic production that is foreign controlled.
GNP and GDP are used as prime measurements of a nation's economic size and condition. Industrialised countries generally have higher GNP than GDP due to income from the foreign operations of large domestically based TNC’s. For developing nations, GDP is often higher than GNP because their economies often include a larger amount of foreign controlled production.
Multilateral — Involving more than two nations or parties. Commonly refers to treaties, trade agreements, or organisations, such as the World Bank (WB), International Monetary Fund (IMF) or World Trade Organisation (WTO). Multilateral financial institutions, (IMF, WB, development banks), are funded and controlled by the wealthier industrialised nations and give loans to developing countries for specific projects (hydroelectric dams, pipelines, industrial development, etc.). These loans are often granted with “conditionals,” such as restructuring, privatisation of public services or liberalisation of trade and investment controls.
Sovereign or National Debt — Debt of a country’s government.
There are primarily two methods by which sovereign debt accumulates: loans and sales of securities.
TNC — Trans-national Corporation — a corporation with operations in more than one country