World Development Report 1984
World Development Report 1984
World Development Report 1984
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An open trading system is also a way of capturing terms. Low-income Africa grows at 2.6 percent a<br />
the potential for increased integration between year, -0.7 in per capita terms. Even major exporters<br />
developed and developing countries. And, last but of manufactures manage GDP growth of only 4.4<br />
not least, it is a sine qua non of a resolution of the percent a year, while growth of GDP in the other<br />
debt problem. middle-income oil importers falls to 3.5 percent a<br />
For the more advanced developing economies, year.<br />
the next stage in their progress will carry them into Overall, developing-country exports grow by 4.0<br />
industries that have hitherto been the preserve of percent a year under Low I compared with 4.7 perthe<br />
industrial countries. Unless the industrial cent in the Low case; manufactures grow by 6.1<br />
countries keep their markets open, they will percent compared with 7.5 percent; and primary<br />
thwart the newcomers' progress. By seeking to commodities, 2.2 percent as in the Low case. As a<br />
retain a monopoly of such industries, the indus- result, the developing countries reduce the growth<br />
trial countries will also be holding back their own in their imports, from 5.1 percent a year in the Low<br />
economic growth. case to 4.3 percent in Low I. All regions are<br />
affected: exports by the major exporters of manu-<br />
The threat of increased protectionism factures grow at only 5.2 percent a year, by other<br />
middle-income countries at 2.3 percent a year, and<br />
Slow growth in the industrial countries is the most by low-income Africa at a disastrously low 2.1 perlikely<br />
trigger for a significant increase in protection cent a year (see Table 3.6).<br />
directed against developing countries. It is also in<br />
this context that the adverse effects on the devel- The benefits of improved policies in developing countries<br />
oping countries would be most serious, since a further<br />
decline in their exports would slow their over- just as industrial countries might make matters<br />
all growth even more. To illustrate these worse (even within the Low scenario) by resorting<br />
implications, the Low case contains a variant (Low to protection, so developing countries can partly<br />
I) which assumes that governments in industrial offset the effects of slow growth in the industrial<br />
countries step up protection against imports from world by improving their own policies. This is<br />
developing countries (see Table 3.5). In other illustrated in Low lI-a second variant of the Low<br />
respects, the industrial countries' policies and per- case which assumes slow growth in the industrial<br />
formance are assumed to be unchanged. Under world but an improved performance by the develthese<br />
circumstances, low-income Asian countries oping countries. They would achieve faster GDP<br />
grow at 4.2 percent a year, only 2.6 in per capita growth by raising savings and investment rates, by<br />
increasing and diversifying their exports, and by<br />
using imports more efficiently as well (see Box<br />
3.2).<br />
TABLE 3.5 As Table 3.5 shows, the improved policies of<br />
Growth of GDP in developing countries, Low Low II would allow GDP to grow in developing<br />
scenario and variants, 1985-95<br />
(average annual percentage rhange) countries at an average rate of 5.1 percent a year,<br />
recovering half of the difference between the Low<br />
Increased Improved and High cases. Low-income Asian countries<br />
industrial- developing- would grow at 4.9 percent a year as against 5.3<br />
Loa' country countryl<br />
Countnjgroup case protectionism policy percent under the High case, low-income Africa at<br />
3.0 percent as against 3.2 percent in the High case.<br />
Developing countries 4.7 4.3 5.1 Major exporters of manufactures would manage<br />
Lowincome 4.6 4.2 49 5.7 percent a year, and other middle-income oil<br />
Africa 2.8 2.6 3.0 importers 4 percent.<br />
Middle-income oil Developing-country exports of primary comimporters<br />
modities would grow at 2.4 percent a year, but<br />
Major exporters exports of manufactures would grow at 8.0 percent<br />
Other 3.8 3.5 4.0 a year (Table 3.6). That would give the developing<br />
Middle-income oil countries overall export growth of 5.1 percent a<br />
exporters 4.7 4.6 5.0 year compared with 6.4 percent in the High case,<br />
a. Low 1. but 4.7 percent in the Low case; adding inflation,<br />
b. Low II. export earnings would rise at more than 13.0 per-<br />
4-1