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GDP as a trick for masking neo-colonialism
GDP was adopted by the World Bank and the International Monetary Fund in 1990 replacing the index Gross National Product (GNP). The difference between the two indexes is important and explains the reason for the substitution: GDP measures the production within a territory and GNP considers the citizenship.When a privatization is carried out, the production is being performed on a country’s territory (and thus is being reported as GDP) but a great part of the profit from this production is being exported abroad thanks to the movement of the capital.
For example, if a foreign citizen buys the rights to exploitation of a mine, he will pay only a small fee to the state (in Bulgaria the Canadian company Dundee Precious Metals pays only 1% royalties), exporting abroad a big part of the profit. When the mine’s profits increase, the GDP is going to rise, while GNP will show a drop in the state’s income because the company is Canadian. The Bulgarian national product is decreasing while at the same time Canada’ GNP is increasing.
http://failedevolution.blogspot.gr/2016/04/gdp-as-trick-for-masking-neo-colonialism.html
