World Development Report 1984

Part I Recovery or Relapse in the World Economy?
2 Recession in retrospect
The world has now had two major recessions in also more severely affected. Their GDP grew by
the past ten years. The recession of 1974-75 was only 2.5 percent in 1980, 2.4 percent in 1981, 1.9
sharp but short in industrial countries, where GDP percent in 1982, and an estimated 1 percent in 1983
rose by 6.1 percent in 1973, then by only 0.8 per- (see Table 2.1 and Figure 2.1). They had fared betcent
in 1974, before falling by 0.4 percent in 1975. ter in the first recession not only because it was
In 1976, however, GDP growth in industrial coun- shorter but also because, for a time, their heavy
tries was back up to 4.7 percent. Developing coun- borrowing allowed them to grow. In the second
tries were less badly affected. Their GDP growth recession, however, the availability of foreign capiwas
7.4 percent in 1973 and 5.9 percent in 1974; it tal declined abruptly after 1981. This change
fell only modestly to 4 percent in 1975 before rising imposed substantial pressure on those countries
to 6.3 percent in 1976. which had come to rely on foreign loans as a prin-
The recent recession of 1980-83 was not so sharp cipal way of escaping recession.
but it lasted longer. In the industrial countries GDP The recent recession had two proximate causes:
grew by 3.3 percent in 1979, then 1.3 percent in the rise in oil prices in 1979, stemming from supply
1980, and 1.3 percent in 1981. It fell by 0.5 percent disruptions in Iran, and the disinflationary policies
in 1982 and is estimated to have risen to only about of governments in most major industrial countries
2.3 percent in 1983. The developing countries were after 1980. Both the need to reduce inflation and
TABLE 2.1
Population, GDP, and GDP per capita in 1980, and growth rates, 1960-83
9D 1980 GD8p GDP growth rates
(billions population per capita (average annual percentage change)
Countrygroup of dollars) (millions) (dollars) 1960-73 1973-79 1980 1981 1982 1983
Developing countriesb 2,118 3,280 650 6.3 5.2 2.5 2.4 1.9 1.0
Low-income 549 2,175 250 5.6 4.8 5.9 4.8 5.2 4.7
Asia 497 1,971 250 5.9 5.2 6.3 5.2 5.6 5.1
China 284 980 290 8.5 5.7 6.1 4.8 7.3 5.1
India 162 675 240 3.6 4.3 6.9 5.7 2.9 5.4
Africa 52 204 250 3.5 2.1 1.3 1.2 0.5 -0.1
Middle-income oil importers 915 611 1,500 6.3 5.6 4.3 0.9 0.7 0.3
East Asia and Pacific
Mliddle East and North
204 183 1,110 8.2 8.6 3.6 6.7 4.2 6.4
Africa 28 35 800 5.2 3.0 4.2 -2.4 5.5 2.0
Sub-Saharan Africac 37 60 610 5.6 3.7 5.5 3.9 1.1 0.3
Southern Europe 201 91 2,210 6.7 5.0 1.5 2.3 0.7 -0.9
Latin America and Caribbean 445 241 1,840 5.6 5.0 5.8 -2.3 -0.4 -2.2
Middle-income oil exporters 5
654 494 1,320 6.9 4.9 -2.4 2.4 0.9 - 1.7
High-income oil exporters 228 16 14,250 10.7 7.7 7.4 0.0 ..
Industrial market economies 7,463 715 10,440 4.9 2.8 1.3 1.3 -0.5 2.3
. . Not available.
a. Estimated.
b. Data for 1982 and 1983 are based on a sample of ninety developing countries.
c. Does not include South Africa.
d. The estimated 1983 data exclude Angola, the Islamic Republic of Iran, and Iraq.