World Development Report 1984

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