Many nations fail to join the global economy<\/p>\n
JAKARTA (JP): Key developing countries have led global
\neconomic integration over the past five years, but many other
\ndeveloping nations have failed to open up to the world economy,
\naccording to the latest issue of the World Bank's Global Economic
\nProspects and the Developing Countries 1996 report.<\/p>\n
The report, issued in Washington yesterday, notes that there
\nhave been severe disparities and the threat of a permanent gap
\nbetween fast and slow integrating economies.<\/p>\n
Though developing countries on the whole have kept pace with
\nthe world rate of trade integration, the ratio of trade to Gross
\nDomestic Product actually fell in some 44 out of 93 developing
\ncountries observed over the past 10 years, says the report, a
\ncopy of which was made available to The Jakarta Post yesterday.<\/p>\n
The World Bank observes that the distribution of foreign
\ndirect investment was also skewed as eight developing countries
\naccounted for two-thirds of capital inflow in 1990 to 1993 while
\nhalf of all developing countries received little or none at all.<\/p>\n
\"But globalization also demands more of governments,\" the
\nreport says, noting that as firms face more intense international
\ncompetition their need for clear rules, a stable environment,
\naccess to imports, efficient infrastructure and freedom from red
\ntape increases.<\/p>\n
Moreover, the report adds, greater reliance on private sources
\nof finance makes it essential to retain the confidence of
\ninternational capital markets.<\/p>\n
The World Bank says successful integration will depend on
\nfundamental economic reform, requiring difficult policy decisions
\nthat often lead to painful, yet manageable costs.<\/p>\n
\"Openness to external trade and investment is often the
\nnecessary first step to solid, sustainable economic development,\"
\nthe report notes.<\/p>\n
Charting out the prospects for the world economy, the report
\nobserves:<\/p>\n
The next 10 years will see an acceleration in the pace of
\ninternational integration. Real interest rates will be moderate
\nand growth of world trade is likely to exceed 6 percent a year in
\nvolume terms.<\/p>\n
The growth of developing countries is likely to accelerate.
\nStill, if current policies continue, large differences in
\nperformance in developing countries will persist. Countries with
\nbad policies will tend to lag in integration and are likely to
\nsee only a mild rise in per capita incomes. (vin)<\/p>",
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