Global Economic Prospects 2001

1
Global Economic Prospects and the Developing
Countries 2001
December 2000
2
Prospects for developing countries and world trade

• World trade remains on a high growth path
• Strong rebound in developing countries this year
  has created favorable short-term prospects in all
  regions
• With high growth, tensions and risks are
  building up
• Long-term prospects of developing countries are
  favorable, but risks remain

3
World trade versus GDP growth
Trade
GDP
Notes Trade is defined as the average of real
exports and imports of goods and non-factor
services. Source DECPG DAD database.
4
Developing regions real GDP growth, 1999-2002
Source DECPG staff estimates.
5
Divergent recovery of commodity prices
Oct-00
Crude Oil
Metals and Minerals
Agriculture
Source DECPG staff.
6
Spreads on high-yield asset class in 2000 (basis
points above benchmark)
Emerging markets
21-Nov
U.S. High-yield
Source Bloomberg and DECPG staff estimates.
7
GDP per capita growth, 1990-2010(percent change
per annum)
Source DECPG.
8
Trade policies in the 1990s and the poorest
countries

• Trade barriers reduced across developing world
• Output and export growth in poorest countries
  disappointing
• Exports constrained by weak domestic policies and
  external trade barriers

9
Average unweighted tariff rates by region
Sources WTO, IDB database and Trade Policy
Review Country Report, Various issues, 199098
UNCTAD, Handbook of Trade Control Measures of
Developing Countries Supplement, 1987 and
Directory of Import Regimes, 1994 World Bank,
Trade Policy Reform in Developing Countries since
1985, WB Discussion Paper 267, 1994, The Uruguay
Round Statistics on Tariffs Concessions Given
and Received, 1996 and World Development
Indicators, 1998 OECD, Indicators of Tariff and
Non-Tariff Trade Barriers, 1996 IDB, Statistics
and Quantitative Analysis data, 1998, Patalinga.
10
Merchandise export and GDP per capita growth in
poor developing countries in the 1990s
Source World Bank Data.
11
Real effective exchange rate volatility and
growth in the 1990s
Source World Bank Data International Financial
Statistics, IMF.
12
Share of developing countries in world trade
Source FAOSTAT, World Bank Data.
13
Standards, developing countries, and the global
trading system

• Product standards important, but can be used as
  trade barriers
• Core labor and environmental standards critical
  for sustainable development.
• However, trade sanctions ineffective in promoting
  good labor and environmental standards

14

• Product standards increase acceptance of
  international trading system
• Product standards may also be protectionist
• Developing countries disadvantaged in formulating
  and challenging standards

15

• Labor and environmental standards important for
  welfare
• However, trade sanctions to support labor and
  environmental standards ineffective and may be
  counterproductive

16
Electronic commerce and the developing countries

• E-commerce may improve productivity and enhance
  trade in developing countries
• But countries that cannot participate effectively
  could be marginalized
• Government role important in easing constraints
  on electronic commerce, particularly access to
  telecommunications

17
Estimates of electronic commerce in industrial
countries, 1999-2000
Notes B2Bbusiness to business B2Cbusiness to
consumer Teo MSDW Source
18
Regional internet access, 1990(percent of
population with access to Internet)
Source
19
Access to telecommunications(per 1000 persons)
Source World Bank 2000.