Macroeconomic Stability is a result of having fiscal (tax),
monetary and exchange rate policies aimed at hitting key macroeconomic
targets such as economic growth, inflation, external debt and net
Microeconomics is the study of how particular industries,
businesses or households work.
Gross Domestic Product (GDP) is a measure of the total amount of
wealth created in a country over a given period of time ie the total value
of all the goods and services created and exchanged for money. If the
total for this year is 1% higher than for last year then the growth in GDP
is 1%. But the GDP is famous for ignoring a lot of valuable work that
could be included - for example running a household and family by cooking
and fetching fuel and water, and also people building their own houses
from local materials and growing food for their own use.
Gross National Product (GNP) is the same sort of thing as GDP
but includes imports and exports.
Real Growth: For both GDP and GNP, if the measured growth is 7%
per year but inflation has been 5% per year then the 'real growth' will
have been only 2% per year.
Inflation: a measure of how much prices rise between one year
and the next - often based on the idea of filling an average shopping
Social Capital is the 'glue' that holds families, groups and
society together. It refers to the shared beliefs, customs, and habits
that help people work together effectively in formal and informal groups.
It can apply at the village level but also at the regional, national and
Civil Society Organisations include formal organisations that
are registered by Government, and many kinds of informal organisations.
They include charity organisations, religious institutions, activist
groups, pressure groups, academia, and special interest groups such as
trade unions and student movements. Informal organisations include Upata
groups, mutual aid groups, ethnic-based welfare societies, football clubs
organised by young men and netball clubs organised by young women.
Pro-poor budgeting (and expenditure monitoring). Money is set
aside in the budget for programmes which are intended to benefit poor
people. But this money has first to pass through the Treasury, the
relevant Ministry, the Regional and Council authorities and the service
units (eg schools and hospitals) before the poor people will feel the
benefit. By monitoring the process carefully it should be possible to make
it more efficient.
Public Expenditure Review the PER team meets once every two
weeks to study the details of how the Government is collecting and
spending its budgeted money. The team, set up in 1997, includes the key
Government officials and representatives from the business community,
civil society organisations and foreign donor organisations.
Government Budgets: The government is like a household that has
to keep a balance between the money that comes in and the money that goes
out. When there is not a lot coming in the government has to decide what
to spend it on and what not to spend it on. The process of gathering this
information and making decisions is called Budgeting.
Sources of government income
Raising taxes is seldom popular and some kinds of tax are harder on
poor people than on rich people. Loans are useful for filling short term
gaps, and for getting new businesses started, but they have to be repaid.
Grants and Donations are very welcome but we cannot expect them to
Personal Emoluments (PE) and Other Charges (OC): a
Ministry will spend part of its budget on salaries (personal emoluments)
and part on doing the work for which it exists (other charges). As part of
the PRSP, the Government will increase the amount of the budget set aside
for 'other charges' - for example, between 1999/2000 and 2002/2003, from 2
to 3.8 per cent for basic education and from 2.1 to 3.8 per cent for