ed worldwide in a given year.
GNP/GDP methodology: In the "Economy'' section, GNP/GDP dollar estimates for the
OECD countries, the former Soviet republics, and the East European countries are
derived from purchasing power parity (PPP) calculations rather than from
conversions at official currency exchange rates. The PPP method normally
involves the use of international dollar price weights, which are applied to the
quantities of goods and services produced in a given economy. In addition to the
lack of reliable data from the majority of countries, the statistician faces a
major difficulty in specifying, identifying, and allowing for the quality of
goods and services. The division of a PPP GNP/GDP estimate in dollars by the
corresponding estimate in the local currency gives the PPP conversion rate. One
thousand dollars will buy the same market basket of goods in the US as one
thousand dollars--converted to the local currency at the PPP conversion rate--
will buy in the other country. GNP/GDP estimates for the LDCs, on the other
hand, are based on the conversion of GNP/GDP estimates in local currencies to
dollars at the official currency exchange rates. Because currency exchange rates
depend on a variety of international and domestic financial forces that often
have little relation to domestic output, use of these rates is less satisfactory
for calculating GNP/GDP than the PPP method. Furthermore, exchange rates may
suddenly go up or down by 10% or more because of market forces or official fiat
whereas real output has remained unchanged. One additional caution: the
proportion of, say, defense expenditures as a percent of GNP/GDP in local
currency accounts may differ substantially from the proportion when GNP/GDP
accounts are expressed in PPP terms, as, for example, when an observer estimates
the dollar level of Russian or Japanese military expenditures; similar problems
exist when components are expressed in dollars under currency exchange rate
procedures. Finally, as academic research moves forward on the PPP method, we
hope to convert all GNP/GDP estimates to this method in future editions of The
World Factbook.
Growth rate (population): The annual percent change in the population, resulting
from a surplus (or deficit) of births over deaths and the balance of migrants
entering and leaving a country. The rate may be positive or negative.
Illicit drugs: There are five categories of illicit drugs--narcotics,
stimulants,
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