World Development Report 1984

effective exchange rate for foreign trade transac- tions, in particular for the oil-producing countries
tions in convertible currencies. during the period of sharp increases in oil prices. It
The World Bank, for its own operational pur- is used as an indicator of inflation because it is the
poses, attempts to estimate internationally compa- most broadly based deflator, showing annual price
rable and consistent GNP per capita figures. This movements for all goods and services produced in
task is made difficult, however, by conceptual and an economy.
coverage as well as quality differences in the basic Life expectancy at birth indicates the number of
data and by the fact that prevailing exchange rates years newborn children would live if subject to the
do not fully reflect the rate at which transactions mortality risks prevailing for the cross-section of
take place. Recognizing that these shortcomings population at the time of their birth. Data are from
affect the comparability of the GNP per capita esti- the UN Population Division, supplemented by
mates, the World Bank recently initiated a process World Bank estimates.
aimed at revision of the World Bank Atlas methodol- The table on this page shows basic indicators for
ogy described above. It is systematically evaluating 34 countries that have a population of less than a
the GNP estimates of its member countries, focus- million and are members of the United Nations,
ing on the coverage and concepts employed, and the World Bank, or both. For most of these counwhere
appropriate will make adjustments to tries, comprehensive data are not available.
increase comparability. This evaluation of national The averages in this table are weighted by popuaccounts
data will be based on documentation on lation.
the sources and methods underlying the compilations,
obtained either directly from national governments
or from other international agencies Tables 2 and 3. Growth and structure of
such as the UN Statistical Office, OECD, and the production
Statistical Office of the European Communities.
The World Bank is also undertaking a systematic Most of the definitions used are those of the UN
review to improve the conversion factors. For 1983 System of National Accounts.
on, GNP per capita for a specified year in US dol- Gross domestic product (GDP) measures the total
lars will be estimated by converting GNP in final output of goods and services produced by an
national currencies using a mean of the official economy-that is, by residents and nonresidents,
exchange rate for that year and the two preceding regardless of the allocation to domestic and foreign
years, adjusted for relative price changes between claims. It is calculated without making deductions
the economy in question and the United States. for depreciation. For many countries, GDP by
An alternative conversion factor will be used when industrial origin is measured at factor cost; for
the official exchange rate is judged to be egre- other countries without complete national
giously different from the rate effectively applied accounts series at factor cost, market price series
to foreign transactions. were used. GDP at factor cost is equal to GDP at
GNP per capita estimates calculated using the market prices, less indirect taxes net of subsidies.
new methodology will be published in the next The figures for GDP are dollar values converted
editions of the World Bank Atlas and the World from domestic currency by using the average
Development Indicators, together with detailed annual official exchange rate for the year in questechnical
notes. tion: that is, they were not calculated by using the
Given the data and conversion factor consider- World Bank Atlas method described in the note for
ations discussed above, this year's GNP per capita Table 1. Because of these differences in concept
figures must be interpreted with great caution. and in method of conversion, the figures in these
The average annual rate of inflation is the least- tables are not comparable with the GNP-based
squares growth rate of the implicit gross domestic numbers in Table 1.
product (GDP) deflator for each of the periods As in Table 1, data are shown only for East Euroshown.
The GDP deflator is first calculated by pean nonmarket economies that are members of
dividing, for each year of the period, the value of the World Bank.
GDP in current market prices by the value of GDP The agricultural sector comprises agriculture, forin
constant market prices, both in national cur- estry, hunting, and fishing. In developing counrency.
The least-squares method is then used to tries with high levels of subsistence farming, much
calculate the growth rate of the GDP deflator for of the agricultural production is either not
the period. This measure of inflation has limita- exchanged or not exchanged for money. Due to
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