Script for Economics Presentation This is what effect Im trying to go for http://www.youtube.com/watch?

v=bspq4LGP2Qs basically its showing random clips of the countries and talking about GDP and HDI. Then tossing in personal interviews with professors and actual citizens living in the country. 1. [Opening] 2. [Queue relaxing calm music (possibly some Borat music see link below for additional details) http://www.youtube.com/watch?v=JBGatwVOvWE) ] 3. Ripped video of camera overhead view going across a vast landscape of city (choice still pending) 4. [Enter with fade in] Title: HDI vs GDP/GNP Documentary (title still pending) [Exit with fade out] 5. [End music] 6. [Shows video of cities/economies/people this can be pretty random since we have not introduced the countries yet] Throughout history, economists have sought ways to quantify the development and expansion of our economy and nation. HDI, known as the human development index, attempts to measure human development. Opposed to this, there is GDP/GNP, the gross domestic product. This indicator enables us to measure the growth of an economy. Though each one measures a specific factor of growth, they possess their own strengths and weaknesses. 7. Rosenberg: Oh sorry [finally walks into frame]. Sorry , Im late everyone! [starts counting heads] Hi Im Dr Rosenberg, lead anchor for JBC news. Recently, I have been put on an assignment investigating the GDP, GNP and HDI for the country of Equatorial Guinea. This really served as an enriching performance, better than my last assignment where I looked at rocks all day. Anyhow, let me start off by explaining a few terms. To start off New Guinea is located off of the west coast of Africa. T was originally a Spanish colony and has became one of the greatest oil exporters. In 2004, it was said they had the greatest growing economy. The population as of 2009 was approximately 676,000. As with some of these African countries there was backhand corruption. In 2004, the President Obiang was accused of getting payments for oil.

Now I will start with some basic economic theories. National Income is a measure of economic welfare in a country. It is defined as the total market value of all final goods and services produced within a country and its income from other countries, in a given period of time. The calculation methods differ from country to country and institution to institution, but there are many general problems that exist when attempting to arrive at comprehensive and credible values. When is it the perfect time to calculate the national income? For advanced calculations, which are performed a month or two after the quarter ends, economists look at only a few firms, and the estimates, more often than not, do not correspond with the revised predictions. With so many different institutions using differing sources to gather information and differing methods to process it, oftentimes the values generated do not match. When this is the case, it is hard to determine which one is the most credible. Today we will be speaking with head economist of the Universidad Nacional de Guinea, Mr Roger Obilbang and Professor . They will give us a few indications of the state of the country today. We also have first hand accounts about living standards from different citizens of Equatorial Guinea. Well first of all gentlemen, the floor is yours. 8. Economist: Thanks, Paul. The human development index (HDI) is a composite statistic that serves as a gauge of human development in countries, categorizing them as developed, developing, or underdeveloped. It was first used by the United Nations Development Programme. The HDI is comprised of the life expectancy index, the education index, and the GDP index; the HDI is often considered by many economists to be superior to the GDP when measuring a countrys growth and development. The HDI recognizes that social development plays a large factor in living standards, and not simply just economic development. The HDI takes this into account with the education index, which is composed of an adult literacy index, and a gross enrolment index which looks at the combined primary, secondary and tertiary gross enrolment (an indication of the level of education from kindergarten to postgraduate education). 9. Professor: The HDI also recognizes that the development of a society can be seen in human terms rather than in products or consumables. What this is saying is that although the production of goods and services may be one aspect of living standards, other factors such as education, life expectancy, happiness, etc. which may be even more important, are not taken into account in GDP calculations. The HDI is superior in this aspect because it attempts to consider some of these factors, and that it recognizes that human well-being is valued as an end in itself.

10. [Show video of country with low GDP and high HDI] Economist: Furthermore, the HDI can address the question of the distribution of the benefits of growth. In GDP calculations, national income is one figure across the country it is basically taking an average, and applying that number to the whole population. That can be a problem because it does not answer the questions of equality and even wealth distribution. For example, a country like Equatorial Guinea may have a high GDP ($18.53 billion / 659197), but has a low HDI (0.719 compared to 0.879 of Hungary) because of issues with government corruption, unwise/inadequate government spending, leading to uneven wealth distribution. Just because a country is rich, doesnt mean that it is spending the money towards development and improving living standards. For example, a country could be spending its money on supporting a strong army, rather than putting money into funding an improvement in the education system. Equatorial Guinea may have many rich, developed cities, but is also inhabited by many different tribal groups. 11. Professor: The HDI is preferred over the GDP as a measure of the progress of a society because it can be constructed for various groups, not just entire countries. When using GDP figures, we cannot see each individual territory or group of people we can only see the big picture. But in reality, even in the wealthiest of countries, there are areas and groups of people who live in poverty. These groups are not reflected in GDP figures, but can be identified with the HDI. 12. Economist: Though the HDI may be in theory better than the GDP in measuring progress in a society, it is still far from perfect. The HDI is much harder to compute than the GDP, because on top of the GDP index, it must look at life expectancy and education. Just like the GDP, the data may be unreliable because it too looks at GDP. Moreover, although it is true that the HDI considers more aspects of human well-being than GDP, it still does not measure factors such as politics, gender equality, human freedom, or even the fundamental question of happiness- high levels of life expectancy, education, and GDP still do not necessarily add up to happiness. 13. Rosenberg: good point guys. Dont forget to mention that it is difficult to measure goods and services that are not reported (i.e. dont produce a receipt). This means that in formal calculations of national income, there is inadequate information to make the values credible. For example, it is extremely difficult to estimate the production of the service sector and leisure. How would one measure how much is produced from the output of a hospital? Another problem is the number of transactions that are either illegal or underground. For example, a piano teacher that receives payment but does not give an accurate report of their income would cause the estimated national income to deviate from the true value, as there are values that are not being accounted for. As

for illegal transactions, these transactions should be included in the national income, but is not because of the incredible endeavors to track and record all of the transactions. Furthermore, the national income account ignores the bads of an economy. This is saying that although the purchasing of more guns because of an imminent war will increase the national income, it is not necessarily an increase in economic welfare. 14. Professor: Also significant is the problem of double-counting. This concept can be illustrated with the following, simplified situation: Yu-gi-oh cards are produced from lumber from the lumber mill, which sells the lumber to a processing company, which sells the processed cardboard to a card-production company, which then sells the card to the store, which in turn sells the card to the final consumer. The monetary value of the product at each stage already takes into account all the factors used before it, and so it is redundant to include all of the intermediate stages. In order to prevent doublecounting, calculations of national income are based only on the final market price of goods and services, and ignoring all intermediate prices. 15. Economist: Dont forget that not all hidden transactions are illegal; all goods and services produced in the subsistence/non-monetised sectors are also not accounted for in estimates of the national income. Goods and services produced at home, for example, are not accounted for in the calculation. These goods, which may be bartered or selfconsumed, are also difficult to track and account for. For example, if a household grows their own vegetables and trades them to their neighbour for dog-walking services, then the transaction would not be accounted for in the calculation of national income. 16. Rosenberg: Lets now assume that the values are all accurate, that economists have total information to calculate the true national income of the country. But does that necessarily say that citizens have a better quality of living? An increase in work hours may lead to an increase in consumption and national income, but if it costs labourers their leisure time, are they actually better off? Could it be possible that a simple life is better than one that is more productive but also more stressful? This is a question that cannot be answered by the values of national income, one of the biggest flaws of the concept of national income. 17. Economist: Another problem with measuring the national income is that it only reflected the market price of the goods sold in the country. The value of items such as pencils and pens when measured with the national income are based on the values sold in the stores, however factor cost, the cost of the factors of production to produce the product is not considered. Because taxes and subsidies extend the price of the goods, it often alters the true price that the seller wished to put the product on the market for. Therefore, factor cost is more effective to use when calculating the national income. However, the problem is we are not certain of the taxes on every product sold as they often do differ within production.

18. Professor: When looking at imports and exports, these products are sold on the market. However, real market data often not take into account that is not really for the quarter. When the data is released by Statistics Canada, the data is inaccurate since it does not accurately provide in that time period what the actual change in exports and imports are. This would affect the GDP and GDP per capita, either estimating too high or too low. This leads to inaccuracy and inaccurate ideas whether a change in GDP per year is actually occurring. Also, even these numbers cannot be quantified fully. It is often an estimate as to how much has been exported and imported and therefore this measure is difficult to provide full evidence of the true GDP. 19. Rosenberg: Well thank you gentlemen. Now I will talk to two different Equatorial Guineans, Thusie and Byron about their current living conditions. So what do you think of the current quality of your lifestyles? 20. Thuise (Funny, we can make him pretend to talk in another language and get someone to dub over him as he talks or we can add subtitles even though he speaks perfect English yay) Along the lines of As a child my parents were not rich, my dad worked as a teacher. Despite this our community was strong and the gap between the rich and poor was not large. making up this as I go 21. Byron Yes my family is rich, we own a cotton plantation. But the pollution in the air causes many health problems for us. My grandma died recently at the age of 60 and my uncle at the age of 40. The doctors said it was related to lung cancer blab la. 22. Rosenberg: So are you trying to tell me that both of these methods are quite flawed? Which method is better then? Im still not sure I understand youre point you are trying to make here. 23. Rosenberg: So therefore, are we certain that the HDI is a good indicator of GDP or GNP? No we cant be certain at all. The problem relies on so many factors and so many problems in the way we collect and interpret things. In our current paradigm, we assume that by having high standards, high GDP/GNP will follow. However, as seen today, there are often many discrepancies on how things are counted and therefore skews our data. Therefore, we cannot be certain about anything. Still, I hope you thoroughly enjoyed this presentation.