Magazine article The Futurist

World Economy in the 1990s

Magazine article The Futurist

World Economy in the 1990s

Article excerpt

Integration of the world economy is likely to continue through the 1990s, with good economic performance in high-income countries but mixed results in developing countries, predicts the World Bank. This disparity in results may exacerbate the already widening gap in income levels between the industrialized and the developing countries, the Bank warns in its report A Long-Term Outlook for the World Economy.

The outlook for economic growth in some developing countries is blurred by uncertainties about their domestic economic policies, the openness of industrialized countries' markets to developing countries' products, and the overall strength of world trade. Varied performace has marked the economic growth of many developing countries during the 1970s and 1980s; while some countries have become more closely integrated with the economies of the high-income countries, other countries' growth rates have not kept up.

The increasing interdependence among nations is reflected in several important trends, says the report. First, in almost every country, the percentage of exports and imports in relation to gross domestic product has steadily increased. Second, international financial markets and international currency trading are rapidly expanding and, by 1989, increased to six times their 1979 volume.

Third, with the effects of new technologies, raw materials are losing their importance in world production and consumption as the value added to products in the process of refinement has increased. Because developing countries still have a higher percentage of their exports in these raw materials, the countries that have not diversified their production base and shifted their exports toward manufacturing have tended to see a decline in their living standard. A final trend is the development of three major trading blocs: North America, the European Community, and eastern Asia. …

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