Net National Product (NNP)

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NNP  Net National Product (NNP)  Net National Product (NNP) of an economy is the GNP after deducting the loss due to ‘depreciation’. The formula to derive it may be written like this: NNP = GNP – Depreciation or, NNP = GDP + Income from Abroad – Depreciation. The different uses of the concept of NNP are as given below: (i) This is the ‘National Income’ (NI) of an economy. Though, the GDP, NDP, and GNP, all are ‘national income’ they are not written with capitalized ‘N’ and ‘I’. (ii) This is the purest form of the income of a nation. (iii) When we divide NNP by the total population of a nation we get the ‘per capita income’ (PCI) of that nation, i.e., ‘income per head per year’. A very basic point should be noted here that this is the point where the rates of depreciation followed by different nations make a difference. Higher the rates of depreciation lower the PCI of the nation (whatever be the reason for it logical or artificial as in the case of depreciation being used as a...
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SANTIAGO CONSENSUS & SANTIAGO PRINCIPLES

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 SANTIAGO CONSENSUS


This is yet another alternative to the Washington Consensus. Put forward by the then World Bank group President James D. Wolfensohn (in Santiago) for the developing countries. Core idea of this model is inclusion which should not be only economic but social too. This way, this is a socio-economic development model and is bound to have its local characteristics. This way,it looks similar to the Beijing Consensus which also includes the social overtones.

In addition to financial resources the World Bank proposed to harness the incredible power of the information technologies and new spirit of openness and partnership (under the spell of rising globalisation) to make knowledge of global best-practice in development accessible to all. World Bank started building an internal architecture of a ‘knowledge bank’ for the purpose.

This proposal from the World Bank inspired the world governments to focus more on aspect of inclusive socio-economic growth. We see this happening in India also—with the Government launching the third generation of economic reforms in 2002 (which was aimed at making the fruits of reforms inclusive in nature).

The Santiago Principles drafted by the International Working Group of SWFs and welcomed by the IMF’s International Monetary Financial Committee in 2008,  the objectives of the Santiago Principles are:

* To help maintain a stable global financial system and free flow of capital and investment;

* To comply with all applicable regulatory and disclosure requirements in the countries in which SWFs invest;

* To ensure that SWFs invest on the basis of economic and financial risk and return-related considerations; and

* To ensure that SWFs have in place a transparent and sound governance structure that provides adequate operational controls, risk management, and accountability.


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