Global Economic Prospects and the Developing Countries 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, 1990–98; 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: B2B=business to business; B2C=business 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.