Washington DC — A new World Bank report entitled "Global Economic Prospects and the Developing Countries 2001", published this week, says prospects for growth in the developing world are better than they have been for three decades and that, in some cases, growth rates will outstrip those in developed countries.
That won't be true, however, for the poorest countries, particularly in Africa, where rates of growth in per capita incomes are overall likely to be less than 1.5 per cent.
The report reviews the impact of the global economic environment on developing countries and assesses the impact of technological change and lowered trade barriers.
The Bank's chief economist, Nick Stern, told a press conference the report had three key messages:
- First, good prospects for growth were the result of improved economic policies, more responsible macro-economic policies, greater openness to trade and internal economic reform. Expanded education in some places was also playing a part. He said countries coping with inflation and protectionism over the years had learned these lessons themselves, but had also benefited from advice from the World Bank, the IMF and the wider international community.
- Secondly, poverty would decline over the coming decade but principally where growth rates were fastest, in countries such as India and China. In Africa, very low growth rates mean there will be very little impact on poverty. He said: "There is a major challenge for us all to try to accelerate (the) rate of growth and poverty reduction in Africa. It is looking better than the last decade. We're anticipating growth in per capita incomes in Africa of only around 1.3 per cent in the coming decade. It needs to be much faster than that if the problems of poverty are to be overcome in that continent," he added.
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- Thirdly, countries were using environmental and labor standards as a cloak under which to introduce protectionist measures; in particular he blamed rich countries for erecting trade barriers against poor countries' goods. He said: "the total cost to developing countries of protectionism in advanced countries is bigger, perhaps two times as big or more, than the overall annual flows of aid"
Stern said there was "a certain hypocrisy" about lectures from advanced countries to developing countries on the importance of liberalization while at the same time keeping out the kinds of goods which developing countries naturally wanted to trade.
Asked about the impact of AIDS, Stern said the greatest problem was in Africa, particularly southern Africa. Labor force growth might well fall 'one or two percentage points' simply because of AIDS.
"AIDS not only is a terrible human tragedy but tends to affect the people who are in the prime of their life, the breadwinners, the people who support children and older people. That could actually result in a decline in per capita income, depending on (the) severity of how the disease plays itself out in the next decades," he said.
Read the full report: Global Economic Prospects and the Developing Countries 2001
