(INFO) Technical terms in Asia Pacific Human Development Report 2006

Technical terms  in  Asia Pacific  Human Development  Report 2006
Ad valorem duties (tariffs) Is calculated as a
percentage of the value of the dutiable items.
Contrasts with a specific tariff.
Anti-dumping duties May be imposed if
export dumping causes injury to producers of
competing goods in an importing country. The
duties should be equal to the difference between
the export price and the normal value of the
dumped goods.
Balance of trade Refers to the difference
between the value of exports and imports. It is
calculated as the value of exports of goods and
services minus the value of imports of goods
and services.
Balance of payments Records all flows of
money in and out of a given country. These
flows might result from the sale of exports (an
inflow or credit) or from the country's purchase
of imports from overseas (an outflow or debit).
They might also arise from other countries
investing in the country (inward investment – a
credit), or from country's companies investing
abroad (a debit). All flows of money are added
together and grouped according to their type.
The overall account is then called the balance
of payments – principally because the total of
outflows must be equivalent to the total of
inflows. The balance of payments therefore
Blue Box Comprises measures regarded as
exceptions to the general rule that all subsidies
linked to production must be reduced or kept
within defined minimal levels. Covers payments
directly linked to land size or livestock as long
as the activity being supported limits
Common external tariff Refers to a tariff rate
applied by a regional grouping of countries as a
Dumping Occurs when goods are exported at
a price less than their normal value, generally
meaning that they are exported for less than
they are sold in the domestic market or third-country
markets, or at less than cost of
Employment elasticity Is the percentage
change in employment resulting from a one per
cent change in economic growth.
EU Common Agricultural Policy Refers to the
system of European Union agricultural subsidies
that guarantees a minimum price to producers
and pays a subsidy for crops planted.
An export processing zone (EPZ) Eases tax
and labour restrictions. Its primary purpose is
to generate export revenues in poor developing
countries. It is largely identical to a free trade
Extreme poverty Is the most severe state of
poverty, where people have minimal or very
limited access to basic necessities, such as food,
clothing, shelter, education and health care. The
World Bank defines extreme poverty as living
on $1 or less per day, and estimates that 1.1
billion people currently live under these
conditions. Eradication of extreme poverty and
hunger by 2015 is a Millennium Development
Financial liberalization Refers to a series of
regulatory changes that allow foreign investors
to buy domestic assets and allows domestic
citizens to invest in foreign assets which make
the domestic securities market an integral part
of the world market. The process is mainly
defined as a series of regulatory changes that
open up the capital markets to foreign investors
with the introduction of depository receipts,
country funds or equity capital flows to the
emerging economy. 
GATS framework Is the General Agreement
of Trade in Services. It covers four 'modes of
supply" for the delivery of services in cross-border
• Mode 1, cross border trade – which is
defined as delivery of a service from the
territory of one country into the territory
of the other country;
• Mode 2, consumption abroad – which
covers supply of a service of one country to
the service consumer of any other country;
• Mode 3, commercial presence – which
covers services provided by a service
supplier of one country in the territory of
any other country; and
• Mode 4, presence of natural persons –
which covers services provided by a service
supplier of one country through the
presence of natural persons in the territory
of any other country.
A 'Natural Person' is a human being, as distinct
from a legal person such as a company or
organization. Countries can freely decide where
to liberalize on a sector-by-sector basis,
including which specific mode of supply they
want to cover for a given sector.
Gross Domestic Product (GDP) Is gross value
added, at purchasers' prices, by all resident
producers in the economy plus any taxes and
minus any subsidies not included in the value of
the products. It is calculated without deducting
for depreciation of fabricated assets or for
depletion or degradation of natural resources.
Value added is the net output of an industry
after adding up all outputs and subtracting
intermediate inputs.
Gender Is a social construct regarding culture-bound
conventions, roles and behaviours for, as
well as relationships between and among,
women and men and boys and girls.
Generalized System of Preferences (GSP) Aims
to encourage developing countries' exports by
allowing their products preferential access to
the markets of developed countries. Although
donor countries are under no obligation in inter-national
law to give preferences, almost all
developed countries operate GSP schemes; how-ever,
the schemes they offer vary significantly.
Green Box Contains income support and
subsidies that are expected to cause little or no
trade distortion. Subsidies have to be funded by
governments but must not involve price
support. Environmental protection subsidies are
included. No limits or reductions are required
for such income support or subsidies.
Gini coefficient (index) Measures the extent
to which the distribution of income (or
consumption) among individuals or households
within a country deviates from a perfectly equal
distribution. A value of 'zero' represents perfect
equality, while a value of 'one' represents
perfect inequality.
Globalization For the purposes of this report,
refers to the generalized expansion of
international economic activity, which includes
increased international trade, growth of
international investment (foreign investment)
and international migration, and increased
proliferation of technology among countries.
Globalization is thus the increasing worldwide
integration of markets for goods, services,
labour, and capital.
Headcount ratio Is also known as the poverty
incidence or headcount index. It measures the
share of the total population in a given area
whose consumption is below the poverty line.
In other words, it is the proportion of the
population who cannot afford to purchase the
basic basket of goods and services.
Infant mortality rate Is the probability of
dying between birth and exactly one year of
age, expressed in terms of per 1,000 live births.
Intellectual property rights Is a generic phrase
encompassing intangible property rights,
including, among others, patents, trade and
service marks, copyrights, industrial designs,
rights in semiconductor chip layout designs, and
rights in trade secrets.
Least Developed Countries (LDCs) Are
countries which, according to the United 
Nations, exhibit the lowest indicators of
socioeconomic development. A country is
classified as a Least Developed Country if it
meets three criteria based on:
• Low-income (GNI per capita of less than
• Human resource weakness (based on
indicators of nutrition, health, education
and adult literacy)
• Economic vulnerability (based on instability
of agricultural production, instability of
exports of goods and services, economic
importance of non-traditional activities,
merchandise export concentration, and
handicap of economic smallness, and the
percentage of population displaced by
natural disasters).
Life expectancy at birth Is the number of years
a newborn infant would live if prevailing
patterns of age-specific mortality rates at the
time of birth were to stay the same throughout
the child's life.
Low- and middle-income developing countries
Are defined on the basis of per capita gross
national income (GNI), based on the approach
used by the World Bank. Based on GNI per
capita for 2004, the groups are: low-income,
$825 or less; lower middle-income, $826–
$3,255; upper middle-income, $3,256–$10,065;
and high income, $10,066 or more.
Maternal mortality ratio Is the annual number
of deaths of women from pregnancy-related
causes per 100,000 live births.
Multifibre Arrangement (MFA) Also known
as Agreement on Textile and Clothing (ATC),
governed the world trade in textiles and
garments from 1974 through 2004, imposing
quotas on the amount developing countries
could export to developed countries. It expired
on 1 January 2005.
Most-favoured-nation (MFN) Is a commit-ment
that a country will extend to another
country the lowest tariff rates it applies to any
other country. All WTO contracting parties
undertake to apply such treatment to one
another under A`rticle I of the GATT. When a
country agrees to cut tariffs on a particular
product imported from one country, the tariff
reduction automatically applies to imports of
that product from any other country eligible for
most-favoured-nation treatment.
Newly industrializing economies (NIEs) A
term originated by the Organization for
Economic Cooperation and Development
(OECD), describes economies of the Third
World that have enjoyed rapid economic
growth and can be described as 'middle-income'
economies. The term was first applied to Hong
Kong (China), Singapore, the Republic of
Korea, and Taiwan (China), but it is often
extended to other economies.
Outsourcing of business processes Is the
leveraging of third party technology or specialist
process vendors to provide and manage an
organisation's enterprise processes and
applications. In these contracts the provider is
responsible for performing and managing the
outsourced function or process on behalf of the
customer. Business process outsourcing
contracts generally involve the provider taking
overall responsibility for the business process
and not just supplying IT applications or
services to facilitate the process. Through
business process outsourcing, vendors provide
and manage a company's critical and/or non-critical
enterprise applications. The most
common examples of such arrangements are
call-centres, human resources, accounting and
payroll outsourcing. Business process
outsourcing may involve the use of off-shore
Plant variety protection (PVP) Is a synonym
for plant breeders' rights (PBR). It is the legal
protection of a new plant variety granted to the
breeder or his successor in title. The effect of
PBR is that prior authorization is required
before the material can be used for commercial
Poverty gap Provides information on how far
the consumption of poor people is from the
poverty line – i.e. the depth of poverty. More
technically, the measure captures the average 
expenditure shortfall, or gap. It is obtained by
adding up all the shortfalls of the poor (ignoring
the non-poor) and dividing this total by the
number of poor. The poverty gap thus measures
the consumption deficit of the population, or
the resources that would be needed to lift all
the poor out of poverty through perfectly
targeted cash transfers.
Preferential treatment Refers to trade
preferences that have long been an instrument
of foreign and commercial policy, employed to
establish closer relations, both economic and
political, between the countries concerned.
Preferential treatment by developed countries
of imports from developing countries has, in
addition, become a firm element of
development-oriented policies. The various
existing regimes of trade preferences for
developing countries can be classified into three
major categories: (i) the Generalized System of
Preferences (GSP); (ii) special preferential
regimes for groups of developing countries; and
(iii) regional free-trade arrangements between
individual developed countries and given groups
of developing countries.
Regional integration Refers to the formation
of closer economic linkages among countries
that are geographically near each other, especi-ally
by forming preferential trade agreements.
Small-island developing states (SIDS) Include
low-lying coastal countries that share similar
sustainable-development challenges, including
small populations, lack of resources, remote-ness,
susceptibility to natural disasters, excessive
dependence on international trade and vulner-ability
to global developments. In addition, they
suffer from lack of economies of scale, high
transportation and communication costs, and
costly public administration and infrastructure.
Special and differential treatment Is the
principle in the WTO that developing countries
be accorded special privileges, either exempting
them from some WTO rules or granting them
preferential treatment in the application of
WTO rules.
Tax-to-GDP ratio Refers to taxes and social
security contributions as a percentage of GDP.
This indicator is widely used to measure the
overall tax burden.
Total factor productivity (TFP) Often referred
to as the 'Solow residual', addresses any effects
in total output not caused by inputs or
productivity. In terms of a standard Cobb-Douglas
production function –
Y = AK 〈 L 1 – 〈
where Y represents total output as a function of
total-factor productivity (A), capital input ( K),
labour input (L), and the two inputs' respective
shares of output. Technology growth and
efficiency are regarded as two of the biggest
factors affecting TFP, the former possessing
'special' inherent features such as positive
externalities and non-rivalness which enhance
its position as a driver of economic growth.
TFP is seen as the real driver of growth within
an economy, and studies reveal that whilst
labour and investment are important contri-butors,
TFP accounts for up to as much as 60
per cent of growth within economies.
Trade diversion Occurs when a trade reform
measure discriminates between different trading
partners and a less efficient (higher cost) source
displaces a more efficient (lower cost) one. Can
arise whenever some preferred suppliers are
freed from barriers but others are not.
Tradable goods Are goods that have export
or import potential. The possibility of their
being traded abroad sets up a continuous
comparison between their price and that of their
overseas competitors.
Trade liberalization Is the removal of barriers
to free trade, such as tariffs, quotas, nominal
and effective rates of protection and exchange
Trade Related Investment Measures (TRIMs)
Is one of Agreements covered under Annex IA
to the Marrakech Agreement, signed at the end
of the Uruguay Round negotiations. The
Agreement addresses investment measures that
are trade related and that also violate Article III 
(National treatment) or Article XI (general
elimination of quantitative restrictions) of the
General Agreement on Tariffs and Trade.
Trade-Related Aspects of Intellectual Property
Rights (TRIPS) Is an international treaty
under the World Trade Organization (WTO),
which sets down minimum standards of
intellectual property for all products and
services, covering copyrights, trademarks,
geographical indications, industrial designs,
integrated circuits, patents and trade secrets.
Trade-to-GDP ratio Is the sum of imports and
exports as a proportion of GDP.
Value added tax Is similar to a sales tax in
that it is levied at the time of the sale of goods
and services. In some countries, including
Australia, Canada, New Zealand, and
Singapore, this tax is known as 'goods and
services tax' or GST; and in Japan it is known
as 'consumption tax'. VAT is an indirect tax, in
that the tax is collected from someone other
than the person who actually bears the cost of
the tax (namely the seller rather than the
Venture Capital Fund Is a pooled investment
vehicle (often a partnership) that primarily
invests the financial capital of third-party
investors in enterprises that are too risky
for the standard capital markets or bank