World Development Report, 1978 The World Bank, August 1978 World Development Report 1978 The World Bank Washington, D.C. August 1978 U Copyright © The International Bank for Reconstruction and Development / The World Bank All rights reserved. Manufactured in the United States of America. Library of Congress Catalog Number: 78-67086 Foreword The World Development Report, 1978, along patterns of trade to reflect shifts in comparative with its statistical annex, is the first of what we advantage. expect will be a series of annual reports provid- These adjustments will not be easy, but the ing a comprehensive assessment of the global alternative to a more rational economic frame- development issues. This first report deals with work can only mean, in the end, greater penal- a number of fundamental problems confronting ties for all. the developing countries, and explores their In the meantime, whatever the uncertainties relationship to the underlying trends in the in- of the future, governments have to act. They are ternational economy. Since it is not possible to faced with the necessity of daily decisions. And address every major question in this initial hence the quality of the information, and the volume, the analysis will be extended to other range of available choices on which those deci- aspects of development in subsequent years. sions will have to be made become critically The past quarter century has been a period of important. unprecedented change and progress in the de- That is why we have undertaken this anal- veloping world. And yet despite this impressive ysis. The World Bank, with its broad-based HI record, some 800 million individuals continue membership, its long experience, and its daily to be trapped in what I have termed absolute involvement with the development problems of poverty: a condition of life so characterized by its members is in a unique position to analyze malnutrition, illiteracy, disease, squalid sur- the interrelationships between the principal roundings, high infant mortality, and low life components of the development process. To the expectancy as to be beneath any reasonable extent that these are more clearly understood, definition of human decency. the institution itself, and all of its member gov- Absolute poverty on so massive a scale is al- ernments individually, will be able to cooper- ready a cruel anachronism. But unless economic ate more effectively in accelerating economic growth in the developing countries can be sub- growth, and reducing the intolerable depriva- stantially accelerated, the now inevitable in- tions of massive poverty. creases in population will mean that the numbers This initial volume represents the work of of the absolute poor will remain unacceptably many expert and dedicated colleagues of mine high even at the end of the century. in the Bank. The judgments expressed, of course, The twin objectives of development, then, are do not necessarily reflect the views of our Board to accelerate economic growth and to reduce of Directors or the governments they represent. poverty. The report has been produced under the direc- Greater progress toward these goals will re- tion of Ernest Stern; D. C. Rao was its principal quire an immense effort by the developing coun- author. To them and to all who have contributed tries; an effort that must be matched by a more to it, the institution is deeply indebted. realistic level of support from the industrialized nations. It is a fact that the international econ- omy is growing more interdependent. That evolution can and should benefit developing and developed countries alike, but if it is to do so there must be adjustments in the global Robert S. McNamara WORLD DEVELOPMENT REPORT, 1978 Contents Page 1. Introduction 1 The Development Experience, 1950-75 3 The Record of Developing Countries 3 The International Environment 8 Conclusions 11 International Policy Issues 13 The Growth of the Developed Economies 13 Protectionism in the Industrialized Countries 14 Trade in Primary Commodities Other than Fuel 19 The Energy Outlook 20 International Food Issues 22 The Supply of External Capital 23 Prospects for Growth and Alleviation of Poverty 26 Growth Projections for the Medium Term 26 The Impact on Poverty 33 Policies for Reducing Poverty 34 Monitoring Performance 36 Low Income Asia 38 Accelerating Growth 38 Small Farmer Productivity and Incomes 42 Employment 44 Demography 45 Sub-Saharan Africa 47 Development of Agriculture 48 Industrialization 49 Trade 50 Demography 51 Strategic Development Priorities 52 International Assistance 54 Development Priorities in the Middle Income Developing Countries 56 Industrial and Trade Policy 56 Agriculture 61 Distributing the Benefits of Growth 63 Conclusions 65 Annex: World Development Indicators 69 Text Tables Page Developing Countries: Growth of Gross National Product per Person, 1950-75 3 Developing Countries: Growth of Production, 1960-75 3 Developing Countries: Structure of Production, 1960 and 1975 4 Developing Countries: Growth of Education, 1960-75 4 Developing Countries: Birth and Death Rates, 1960 and 1975 5 Developing Countries: Population, 1950-2000 5 Developing Countries: Urban Population, 1960-75 6 Developing Countries: Investment and Savings Rates, 1960 and 1975 6 Developing Countries: Government Consumption Expenditure as a Percentage of Gross Domestic Product, 1960-75 7 Life Expectancy and ml ant Mortality, 1960 and 1975 7 Developing Countries: Relative Size, 1960 and 1975 8 Increase in Industrialized Countries' Trade in Manufactures, by Country Groups, 1960-75 9 Growth of Merchandise Exports, 1960-75 9 Developing Countries: Growth of Exports of Goods and Non-factor Services, 1960-75 10 Numbers of Developing Countries with Exports of Manufactures over VI Selected Values, 1965-75 10 Developing Countries: Changes in the Purchasing Power of Exports, 1960-75 10 Industrialized Countries: Growth of Gross Domestic Product, 1960-85 13 Primary Commodities Classified by Degree of Price Instability 20 Primary Energy Balances, 1965-85 20 Developing Countries: Balances in Major Staple Foods, 1975 and 1985 22 Medium- and Long-term Capital at Market Terms, 1970-85 23 Net Flows of Official Development Assistance from Donors, 1965-85 25 Growth of Gross Domestic Product, 1960-85 27 Developing Countries: Investment and Savings Rates, 1975 and 1985 27 Developing Countries: Growth of Merchandise Exports, 1960-85 28 Manufactured Exports of Developing Countries as a Share of Markets in Industrialized Countries, 1960-85 28 Developing Countries: Growth of Manufactured Exports, 1970-85 29 Developing Countries: External Financing Requirements, 1970-85 30 Net Disbursements of Medium- and Long-term Capital to Developing Countries, 1970-85 30 Net Disbursements of Medium- and Long-term Capital to Developing Countries, by Type of Capital and Country Income Group, 1970-85 31 Developing Countries: Debt Service Ratios, 1970-85 31 Alternative Assumptions on Average Annual Growth Rates, 1975-85 32 Implications of Alternative Global Assumptions for Developing Countries 32 Projected Decline in Absolute Poverty, 1975-2000 33 Dependence on Agriculture in Low Income Asian Countries 38 Marginal Farmers and Landless Households in Low Income Asian Countries 38 Page Growth in Low Income Asia, 1960-85 39 Demographic Indicators in Low Income Asian Countries 45 Sub-Saharan Africa: Selected Development Indicators 47 Developing Countries: Product Composition of Non-fuel Exports, 1975 50 Demographic Indicators in Selected Countries in Sub-Saharan Africa 51 Indexes of Food Production per Person, 1966-70 and 1971-76 52 Size of Industrial Markets and Import Ratios in Middle Income Countries, 1975 56 Industrialized Countries: Average Tariff Levels in Broad Classes of Products, including Raw Materials, 1973 58 Developing Countries: Product Composition of Merchandise Trade, 1975 59 Product Composition of Trade in Manufactured Goods among Developing Countries, 1975 60 Distribution of Holdings by Size and Area in Selected Middle Income Countries 63 Figure 1: Access to Safe Water and Sewerage: Developing Countries, 1975 8 VII Definitions Country Groups in this report are defined as The Development Assistance Committee follows. (DAC) of OECD comprises Australia, Austria, Belgium, Canada, Denmark, Finland, France, Developing Countries are divided, on the the Federal Republic of Germany, Italy, Japan, basis of 1976 Gross National Product (GNP) the Netherlands, New Zealand, Norway, Swe- per person, into: den, Switzerland, the United Kingdom, the Low Income Countrieswith income per United States, and the Commission of the person of US$250 and below. European Economic Community. Middle Income Countrieswith income per person above US$250. The Organization of Petroleum Exporting Capitol Surplus Oil Exporters: Kuwait, Libya, Countries (OPEC) comprises Algeria, Ecua- Oman, Qatar, Saudi Arabia, and United Arab dor, Gabon, Indonesia, Iran, Iraq, Kuwait, Ix Emirates are identified as a separate group. Libya, Nigeria, Qatar, Saudi Arabia, the Other major exporters of oil are, grouped United Arab Emirates, and Venezuela. among the developing countries. Manufactured goods refers to commodities in Industrialized Countries are the members of the Standard International Trade Classification the Organisation for Economic Co-operation (Revised) (SITC), Sections 5 through 9 minus and Development, apart from Greece, Portu- Division 68: chemicals and related products; gal, Spain, and Turkey, which are included iron and steel; manufactured articles, including among the Middle Income Developing Coun- textiles and products based on leather, rubber, tries. wood, metals, and minerals; machinery and transport equipment; building fixtures and fit- Centrally Planned Economies (CPEs) are Al- tings; furniture, clothing, footwear, professional bania, Bulgaria, the People's Republic of and scientific instruments, photographic and op- China, Cuba, Czechoslovakia, the German tical goods, watches and clocks, and miscel- Democratic Republic, Hungary, the Demo- laneous articles not classified elsewhere in the cratic Republic of Korea, Mongolia, Poland, SITC. Romania, and the USSR. Organisation for Economic Co-operation and Primary commodities comprise SITC Sections 0 Development (OECD) members are Australia, through 4: food and live animals; beverages and Austria, Belgium, Canada, Denmark, Finland, tobacco; inedible crude materials; fuels, includ- France, the Federal Republic of Germany, ing coal, petroleum and petroleum products, Greece, Iceland, Ireland, Italy, Japan, Luxem- natural and manufactured gas, and electric cur- bourg, the Netherlands, New Zealand, Nor- rent; animal and vegetable oils, fats, and waxes; way, Portugal, Spain, Sweden, Switzerland, and the non-ferrous metals of SITC Division 68. Turkey, the United Kingdom, and the United States. Billion is 1,000 million. Chapter 1: Introduction The past quarter century has seen great prog- they need to be accompanied by growth in pro- ress in developing countries. In virtually all of ductivity and incomes to expand the resources them, income has risen faster than population, available to raise living standards. with a consequent rise in income per person. The obstacles that the developing countries Economic growth has been accompanied by a face in accelerating progress are different in rapid expansion of education systems, growing degree and in kind, as are the tools at their literacy, improvements in nutrition and health command. The differences reflect the enor- conditions, increasing technological sophistica- mous diversity in their resource availabilities, tion, and structural changes, including a growing economic structure, social and political tradi- industrial base and greater urbanization. Prog- tions, and management skills, and in their rela- ress on such a wide front and the steadily grow- tionships to the international economy. ing capacity of developing countries to manage In the Low Income countriescountries with their economies effectively are impressive annual income per person up to US$250pov- achievements. erty alleviation depends overwhelmingly on But much remains to be accomplished. Most increasing agricultural productivity to raise the countries have not yet completed the transition purchasing power of the small and marginal to modern economies and societies, and their farmer and to create employment for the land- growth is hindered by a variety of domestic and less at higher wages. However, the Low Income international factors. Moreover, about 800 mil- countries in Asia and in Sub-Saharan Africa lion people still live in absolute poverty. These face very different problems in implementing are people living at the very margin of existence such a strategy, reflecting differences in the with inadequate food, shelter, education, and scarcity of land, the availability of locally usable health care. For many of them, there has been technology for achieving rapid increases in little improvement in the standard of living, and yields, the quality of economic infrastructure for some, there may have been a deterioration. such as transport and communications systems, Added to the sense of frustration at the size of water and electricity supply) and the numbers of the task ahead is an increasing awareness of how people with industrial and managerial skills. difficult it is to alter traditions and social rigid- The Middle Income developing countries are ities, which often impede efforts to accelerate a heterogeneous group in their economic struc- growth and to raise the living standards of the ture, development experience, and level of in- poor. come per person. In general, their economic Past experience has served to create a broad growth depends more closely than that of the consensus about the goals for the future. The Low Income countries on international trade and development effort should be directed toward capital markets. For them, the main strategic the twin objectives of rapid growth and of re- choices relate to how industrial and trade policy ducing the numbers of people living in absolute should respond to changes in the international poverty as rapidly as possible. Most developing environment. Progress in alleviating poverty in countries have moved, or are moving, toward these countries is less hampered by the shortage these objectives in designing their development of resources than in the Low Income countries, strategies, and industrialized countries increas- but nonetheless will require strenuous efforts. ingly see them as the basis for defining their Over the past twenty-five years, the interna- contribution. tional economy has been supportive of growth Rapid growth and alleviating poverty are in- in the developing economies in many respects. extricably linked. Most of the absolute poor live The rapid growth of the industrialized countries in the poor countries of Asia and Africa, where fostered a major expansion of international economies have grown relatively slowly. In trade. The growth of tourism and labor migra- some of the more rapidly growing economies, tion, the emergence of large-scale official capital the incomes of lower income groups have been transfers, and the more recent rebirth of the in- raised substantially. Special action programs to ternational capital markets also helped to sup- improve the quality of life of the poor should be plement domestic savings and provide foreign an integral part of a development strategy, but exchange for development programs. As their economies have grown the developing countries of the linkages between the international econ- have become a large market for the exports of omy and domestic strategies in the developing the industrialized countries, suppliers of a wide countries against the background of changing range of manufactured goods, and significant patterns of interdependence and increasing com- borrowers in international capital markets. plexity in the world economy. It assesses the There is now a close interdependence between prospects for progress in accelerating growth the economic policies and environment for and alleviating poverty, and identifies some of growth in industrialized countries and the pros- the major policy issues that will affect these pects of a large number of developing countries, prospects. It is hoped that the report will help affecting the development strategies which the to illuminate the role of both the industrialized latter can implement effectively. and the developing countries in dealing with This report is designed to help clarify some these policy issues. 2 Chapter 2: The Development Experience, 1950-75 The effort at systematic, accelerated develop- of their industrialization: income per person ment can be dated to the middle of this century grew by less than 2 percent a year in most of the for most developing countries. For processes of industrialized nations of the West over the 100 fundamental social change, twenty-five years is years of industrialization beginning in the mid- short; and for many countries, especially those nineteenth century. Even in Japan, which has in Africa that gained independence only in been one of the most rapidly growing of the the early 1960s, the relevant experience is even industrialized countries, the long-term rate of shorter. Nevertheless, it is useful to explore the growth in income per person is estimated at less problems of today in the light of the experience than 2.5 percent a year. of the past quarter century.' There have, of course, been marked differ- The record is both encouraging and sobering. ences in the performance of individual develop- Economic growth in the developing countries ing countries in this period. Growth rates have has exceeded original expectations, and their generally been lower in the Low Income coun- economic, managerial, and physical capacity for tries of Africa and Asia, where the majority of further development has been greatly strength- the world's poor live. In countries accounting ened. But, despite the successes, about 800 mil- for half the population of the developing world, lion people in the developing world still live in income per person has risen by less than 2 per- absolute poverty, with incomes too low to en- cent a year. sure adequate nutrition, and without access to essential public services. Many of these people 1. Developing Countries: Growth of Gross National Product per Person, 1950-75 have experienced no improvement in their living Average Annual Number of Percentage of standards; and in countries where economic Growth Rate (percent) Countries Populationa growth has been slow, the living standards of Less than 0 3 1 the poor may even have deteriorated. The num- 0-2 25 48 bers in poverty alone are a stark measure of 2-4 33 35 how much remains to be done. Above 4 11 15 aShare of the total population in the 72 developing countries The Record of Developing Countries covered. These 72 countries accounted for 88 percent of the Economic Growth and Structure total population of developing countries in 1976. The developing countries have grown impres- As output and income grow, there are gener- sively over the past twenty-five years: income ally substantial changes in economic structure, per person has increased by almost 3 percent a with industry increasing its share of total output year, with the annual growth rate accelerating at the expense of the agricultural sector, even if from about 2 percent in the 1950s to 3.4 percent the latter grows rapidly. Industry has been the in the 1960s. Contrasted with what little can be fastest growing sector in virtually all the devel- gleaned of the experience of these countries be- oping economies, although it grew at more than fore 1950, this is a substantial improvement over 10 percent a year only in a few of them. the historical record. Moreover, it compares ex- 2. Developing Countries: Growth of tremely favorably with the growth rates achieved Production, 1960-75 by the now developed countries over the period (Median values, at 1975 prices) Average Annual Growth Rates (percent) lOf special interest is the experience of a few countries whose development strategies have centered around strong Gross measures to improve the living standards of Low Income Domestic groups. Among these countries are the People's Republic of Product Agriculture Industry Services China and Cuba. Our direct knowledge of their experience is extremely limited, neither being members of the World Low Income Bank; data are scarce; and discussions in the literature are Countries 3.1 2.1 5.4 3.7 generally based on partial information. There are many Middle areas where the measures adopted by these countries are of immense interest, but there is still uncertainty about their Income applicability in social environments or political systems that Countries 6.0 3.5 7.9 6.7 have not been transformed as they have been in these coun- tries. They and other centrally planned economies are not In the poorer and slower growing countries, included in the references to developing countries in this report. the share of agriculture in total production has declined only slightly and is still large. The rapid 4. Developing Countries: Growth of growth of the services sector is ambiguous. In Education, 1960-75 (Median values) the industrialized countries, the share of the Percentage services sector in total output is high and rising, Percentage of Second- in response to changes in the pattern of demand. of Primary ary School While part of the growth of services in develop- School Age Age Percentage Children Children of Adults ing countries is in response to growth in demand, Attending Attending Who Are it also reflects the inability of the industrial sec- School School Literate tor to absorb fully the additions to the urban 1960 1975 1960 1975 1960 1974 labor force. People who do not find employment Low Income in organized industry may eke out a meager liv- Countries 30 52 2 8 10 23 ing in occupations with low productivity or find Middle employment in a burgeoning government sector. Income Countries 79 97 12 35 61 63 3. Developing Countries: Structure of Production, Source: World Development Indicators, Table 18. 1960 and 1975 (Median values, at current prices) The growing sophistication of developing Distribution of Gross Domestic Product (percent) economies is marked by large and modern in- Agriculture Industry Services stitutions of increasing complexity, ranging 1960 1975 1960 1975 1960 1975 from major industrial corporations to first-rate universities. Institutions, both public and pri- Low Income Countries 52 43 12 23 35 45 vate, whose main business is economic develop- Middle ment, have proliferated. They include industrial Income development banks, agricultural credit institu- Countries 26 15 23 38 46 47 tions, extension agencies, vocational training institutes, research centers, central banks, and Note Sectoral shares do not add to 100 percent because median values have been derived separately for each sector. economic planning agencies. Not all of these institutions function satisfactorily and serious These broad changes in the sectoral composi- gaps remain in the institutional development of tion of production do not convey the full char- many countries. One of the most important acter of changes in the economy. They do not, shortcomings is in agricultural research, spe- for instance, depict the large improvements in cifically in the common failure to build up the availability of transportation, communica- sufficient national capacity for the adaptive re- tions, and electric power, nor the great expansion search suited to local agroclimatic conditions in the capacity to borrow and adapt technology that is fundamental to achieving sustained gains that is vital to the expansion and diversification in agricultural productivity. of the economy's productive capacity. Nor do Developing countries demonstrated their pro- they suggest the gains in human skills, both of ficiency in economic management through their industrial labor and of management, that play a adjustment to a series of external shocks in crucial role in modern economic growth. Such recent years, including wide fluctuations developments are difficult to quantify and, in in international commodity prices, the sudden any event, data on social factors are scarce in increase in oil prices, the prolonged recession developing countries. Available indicators such in industrialized countries, and the unpredict- as literacy rates and school enrollment ratios, able gyrations of international exchange rates. shown in Table 4, reflect very imperfectly some Through measures affecting the structure of of the changes that have taken place. domestic production and prices, as well as The scope of the economic changes of the external trade and borrowing, they have been past twenty-five years is perhaps suggested bet- able to withstand these external shocks, main- ter by the fact that many developing countries tain their growth, and control inflation. Those have modernized their agriculture and sustained following export-oriented policies have gener- high rates of growth in agricultural production, ally fared better than others. while a number of them now manufacture tech- nologically sophisticated equipment (electric Population power generators, for example). Many have siz- The progress made by developing countries able capacities in engineering industries; and is the more impressive considering that their some now compete effectively for turnkey proj- populations have been growing at historically ects internationally. unprecedented rates. During 1950-75, their total population increased at 2.4 percent a year. This century. An estimate of their total population in is substantially faster than the population the year 2000 is shown in Table 6. growth ratestypically about 1 percent a year Eventually, the process of development is that the now developed countries had to likely to reduce fertility and slow down the pace contend with during the period of their indus- of population growth, working through such trialization. forces as the education and employment of women; the desire that children should be edu- Developing Countries: Birth and Death Rates, cated, and hence the wish to limit family size to 1960 and 1975 ensure better provision for each child; and the (Median values) perception that children have a better chance of Crude Birth Rate Crude Death Rate per Thousand per Thousand surviving, leading to a willingness to limit the Population Population number of births. But, particularly in the poorest 1960 1975 1960 1975 countries, these forces are insufficient. The pres- Low Income sure that rapid population growth exerts on Countries 48 47 26 20 resources, and the difficulties it imposes for Middle Income raising income and employment levels, make Countries 45 40 17 12 the spread of effective family planning programs Source: World Development Indicators, Table 15. an urgent matter. Even with effective programs to reduce popu- The growth of population in developing coun- lation growth rates, the dynamism of the present tries over the past twenty-five years illustrates demographic structure means that population how complex are the interactions among various will continue to increase for several decades. factors in development. The decline in mortality Many countries still have grossly inadequate that was a prime cause of the acceleration in programs and some, particularly in Africa, have population growth was the result of the earliest not yet taken account of the problems that the efforts at improving living standards, including present demographic situation implies for the the establishment of public health systems and future. Though the population in developing mass eradication campaigns against such major countries will continue to grow for decades diseases as malaria, smallpox, and cholera. But ahead, effective action now can shorten the time the increase in life expectancy was not accom- required to achieve a stationary population and panied by a decline in fertility, for a variety of reduce its ultimate size. reasons. Indeed, in some countries, the improve- ments in public health and nutrition led to an Urbanization increase in birth rates, since they reduced the Rapid urbanization has been one of the ma- infertility in women caused by ill-health. jor features of the past twenty-five years, as the Declines in fertility associated with economic difference in economic opportunities between development have been documented in develop- urban and rural areas has widened. Urban popu- ing countries, especially in East Asia and parts lations in most developing countries have ex- of South Asia. Nevertheless, total fertility rates2 panded far more rapidly than total population. are still over 6 in developing countries, com- This is only partly because of the increase in pared with about 2.3 in industrialized countries, industrial activity: many biases in policy have the latter being close to the levels associated created strong incentives to expand economic with a stationary population. Even on optimistic activity in urban rather than rural areas, and have assumptions about how fast fertility will decline thus encouraged people to move to urban areas in the developing countries, their population will in the expectation of higher paid jobs and better continue to expand well into the twenty-first access to services. Far more people have mi- grated to urban areas than could be absorbed, Developing Countries: Population, 1950-2000 and despite large investments in urban infra- (Billions) structure, the result has been a severe strain on 1950 1975 2000 urban services and labor markets. Low Income Countries 0.7 1.2 2.0 In most developing countries, this strain is re- Middle Income Countries 0.5 0.9 1.5 flected in highly dualistic urban systems, where islands of high income "modernity" coexist aThe assumptions on which these projections are based are with shanty towns and slums. The permanence described in the Notes to Table 16 in World Development Indicotors. of the new peripheral urban settlements has 2For a definition of this term, see the Notes to Table 15 in not been adequately recognized, and municipal World Development Indicators. financing and management have not received the attention they need. As a result, little has rates. In the Middle Income countries, inflows of been done either to deal with the appalling inad- external capital have increased as a percentage equacy of essential services, such as sanitation, of both gross domestic product and investment, in these settlements, or to assist the large part playing a major role in financing the increase of the urban economy that consists of small- in investment. The Low Income countries have scale and informal production activities, which been remarkably successful in raising their do- operate at low levels of productivity. mestic savings, although their investment rates 7. Developing Countries: Urban Population, 1960-75 in 1975 were only comparable to those achieved Percentage Average by the Middle Income countries fifteen years of Total Annual earlier. In part, this is because foreign resource Population Growth Rate inflows have supplied a decreasing share of in- 1960 1975 1960-75 vestment, reflecting the relatively slow growth Sub-Saharan Africa 14 19 5.0 of concessional capital and the limited access North Africa and of these countries to the rapidly expanding Middle East 32 44 5.0 sources of commercial capital. Their domestic Latin America 49 61 4.3 savings rates have also been lower than those Asia 17 22 4.0 of the Middle Income countries, because of their Southern Europe 40 51 3.2 lower income levels. The wide difference in Source: Selected World Demogrophic Indicators by Coun- investment rates, especially when allowance is tries, 1950-2000 (New York: United Nations, 1975) made for depreciation, has certainly been an While the problems are easily apparent, solu- important reason for differences in the growth tions are not. Urban growth requires large in- rates of the Low and Middle Income countries. vestments in infrastructure and these compete There have also been major policy differences with alternative uses of scarce investable among countries, affecting the efficiency of resources. investment. As a result, some countries with similar rates of investment have achieved very Investment and Savings different rates of growth of output. The development strategies of most countries The types of difficulties in raising investment have laid considerable stress on expanding in- levels differ among individual Low Income coun- vestment in order to accelerate economic tries, but they essentially reflect the shortage of growth. Efforts have been made to raise the entrepreneurial and managerial talent and the rates of gross domestic investment through pub- difficulties of increasing savings at low levels lic investment and through measures to encour- of income. In some countries which are still at age private investment, although the relative an early stage of development, especially those proportions of public and private investment in Sub-Saharan Africa, there have been serious have varied, reflecting different views on the difficulties in identifying profitable investment role of the public sector. opportunities. Efficient investment requires a 8. Developing Countries: Investment and dynamic entrepreneurial class and public insti- Savings Rates, 1960 and 1975 tutions sufficiently well manned and established (Percentages of gross domestic product, to identify and implement a broad range of pro- at current prices) ductive projects. Many countries are meeting Low Income Middle Income these conditions only gradually; indeed, the cre- Countries Countries ation of an entrepreneurial class and of appro- 1960 1975 1960 1975 priate public institutions was precisely their Gross Domestic first task of development. Investment 14.7 19.1 20.2 26.4 In many countries an important reason for the Financed by: difficulty in raising savings rates is a continued Gross Domestic Savings 11.6 15.6 17.8 22.1 reliance on commodity taxation, which makes Net Foreign the revenues generated less sensitive to in- Resource Inflows 3.1 3.5 2.4 4.3 creases in incomes than if progressive income Note: taxes and taxes on value added were used. In Net Foreign some countries, it was hoped that government Resource Inflows as a Percentage enterprises would generate surpluses for in- of Investment 21 18 12 16 vestment. This has often proved unrealistic, primarily because such enterprises have been Generally, the developing countries have been burdened with the task of meeting other social successful in raising investment and savings objectives, such as employment creation and maintaining low prices for key products, and 10. Life Expectancy and Inf ant Mortality, also because they lacked the management cad- 1960 and 1975 (Median values) res needed to run them efficiently. Moreover, governments have found it ex- Life Expectancy tremely hard to restrain the growth of their at Birth Infant Mortality (years) per Thousand consumption expenditure enough to bring about 1960 1975 1960 1975 the anticipated increase in public savings. The high level and rapid growth of government con- Low Income Countries 36 44 142 122 sumption in the poorest countries illustrates the dilemma they face in seeking to meet urgent Middle Income Countries 49 58 72 46 needs in the face of rising expectations, and simultaneously raising savings to finance Industrialized Countries 70 72 25 15 increases in production for the future. The changes in the ratios of current government Centrally Planned Economies 66 70 consumption to total output are shown below: Not available. 9. Developing Countries: Government Consumption Source: World Development Indicators, Table 17. Expenditure as a Percentage of Gross Domestic Product, 1960-75 Saharan Africa also has a high proportion of its (At current prices) population in absolute poverty, although the 1960 1970 1975 total number of poor people is much smaller, be- Low Income Countries 8.8 10.4 13.9 cause of Africa's much smaller population. In Middle Income Countries 11.0 12.2 13.1 addition to the absolute poor, many more people All Developing Countries 10.5 11.9 13.2 have inadequate access to essential public ser- vices, such as health care, safe drinking water, and sanitation. As Figure 1 shows, they include By 1975, the poorest countries assigned a substantial proportions of the population in the slightly higher share of gross domestic product Middle Income countries. to government consumption than the richer Historical experience suggests that the poorer countries, and certainly a much higher share members of the population are unlikely to share than the latter did at a comparable stage of de- equitably in economic growth, mainly because velopment. The share of government consump- they have less access to the productive assets tion expenditure in the Low Income countries needed to generate incomesland, credit, edu- rose by almost 58 percent between 1960 and cation, and jobs in the modern sector. In the 1975. The reasons for this growth are not hard poorest countries, with their slow average rate to find. The past twenty-five years have seen a of growth, the incomes and consumption levels tremendous expansion in the development role of the poorer half of the population have stag- of governments in developing countries, and a nated. Worse, in countries where agriculture great deal is expected from governments even has expanded more slowly than population in relatively poor countries. Fulfilling this role (parts of South Asia and Sub-Saharan Africa), by providing such services as health and educa- the incomes of some of the rural population tion, which are important for development and have probably declined. politically compelling, requires a substantial In some fast growing countries, notably the allocation of resources. Republic of China (Taiwan), the Republic of Korea, and Yugoslavia, the benefits of growth The Impact on Poverty appear to have been fairly equally distributed. Economic development has brought improve- This may be explained by an important charac- ments in the quality of life, but progress has teristic that these three countries have shared: been slow and uneven. Better nutrition and prior to their rapid growth, they had a wide dis- health have raised life expectancy, and infant persion of skills and an equitable distribution mortality has been brought down, though it is of assets, including land, as a result of the land still at alarmingly high levels (see Table 10). reforms in the Republic of Korea and the Repub- About 40 percent of the population of devel- lic of China, and the extensive reform of prop- oping countries, nearly 800 million people, are erty relations, involving social ownership and still living in absolute poverty. The majority of worker management, in Yugoslavia. These in- them are in rural areas, with the greatest con- itial conditions, however, are not characteristic centration in South Asia and Indonesia. Sub- of most developing countries. In general, experience suggests that the distri- The International Environment bution of income is likely to worsen in the The expansion in the international economy course of economic growth. However, even if over most of the 1950-75 period has contributed income disparities increase, the incomes of the to rapid economic growth in many developing poor can rise. Particularly where people are at countries, as trade has been liberalized and cap- Figure 1: Access to Safe Water and Sewerage: Developing Countries, 1975 Safe Water -70 Sewerage - 60 -50 C 0 (5 0 -40 0. 0 C) 0, (5 -30 C C) U C) a. - 20 -10 -0 Africa South Asia and Europe, Middle East Latin of Sahara Pacific and North Africa a America 9n this figure, "Europe" refers to Greece, Portugal, Spain, Turkey, and Yugoslavia. Source: World Health Statistics Report, Vol. 29, No. 10 (Geneva: World Health Organization, 1976). the margin of survival, it is their income levels, ital flows have expanded. Nonetheless, the rather than their relative position in the distribu- economies of the develppin countries are still tion of income, that require the mOst urgent small, relative to those of the industrialized attention. countries, despite the significant rise in their share of total GNP since 1960. 11. DeVeloping Countries: Relative Size, 1960 and 1975 Percentage Share Developing Industrialized of Developing Countries Countries Countries in (billions) (billions) Totala 1960 1975 1960 1975 1960 1975 Population 1.4 0.6. 70 75 GNPb 460 1,048 2,071 3,841 18 21 Value Added in Industryb 120 350 745 1,483 14 19 Share in the total of developing and industrialized countries. bThese data are in 1975 US dollars, using official exchange rates between nationa' currencies whiph may not properly reflect differences between countries in purchasing power. For a further discussion of this problem, see the Notes to rable I in World Development Indicators. - Growth of World Trade Growth and Diversification of Developing In the industrialized countries, the years of Countries' Exports reconstruction after World War II were fol- The developing countries' exports have in- lowed by a long period of rapid economic creased more slowly than those of the indus- growth, averaging 4 percent a year from 1950 to trialized countries oyer the last twenty-five 1975. The growth was particularly fast, averag- years, although there have been very important ing 5 percent a year, in the decade prior to the differences in growth rates among countries. increase in oil prices in 1973. 13. Growth of Merchandise Exports, 1960-75 With this rapid expansion of the OECD econ- (Average annual percentage growth rates, at 1975 prices) omies and sustained progress in the liberaliza- Indus- Develop- tion of international trade through successive Total trialized ing rounds of negotiations under the auspices of the World Coun- Coun- General Agreement on Tariffs and Trade, there Trade tries tries was a tremendous increase in world trade. This Food and Beverages 4.1 5.2 2.8 was led by trade among industrialized countries, Non-food Agricultural boosted by regional integration in Western Products 4.5 5.6 2.6 Europe. The volume of industrialized countries' Non-fuel Minerals exports increased by 7 percent a year in the and Metals 3.9 3.1 4.8 decade of the 1950s, and the increase acceler- Fuel and Energy 6.3 4.2 6.2 ated to 8.5 percent a year between 1960 and Manufactures 8.9 8.8 12.3 1975. The volume of their imports rose by 7.5 Total Merchandise 7.1 7.5 5.9 percent and 8.5 percent a year, respectively. Sources: World Bank; United Nations Yearbook of Interna- Over the past twenty-five years, developing tional Trade Statistics, 1960, 1976; and Handbook of Interna- tional Trade and Development Statistics, 1976 (op. cit.). countries have emerged as a major market for the manufactured exports of the industrialized One of the reasons why developing countries' countries. Apart from trade within Western exports have increased more slowly than those Europe, the growth of those exports has been of industrialized countries is their greater con- led by exports to developing countries. centration in primary commodities. During 1960- 75, developing countries' exports of manufac- tures, fuels, minerals, and metals rose faster 12. Increase in Industrialized Countries' Trade than those of industrialized countries. In the in Manufactures, by Country Groups, 1960-75 agricultural commodities, in which developing (At current prices) countries have a large share of world trade, their Share of Share of exports grew more slowly than those of the Increase in Increase in world as a whole. In part, this is because of the Industrialized Industrialized Countries' Countries' slow growth in world demand for tropical bev- Imports of Exports of erages and hard fibers, which are among the Manufactures Manufactures major exports of developing countries. But in- (percent) (percent) adequate attention to raising agricultural pro- Trade within duction has also been an important reason. Western Europe 55 38 Growth of population and incomes have raised Other Trade among domestic demand while the incentives for rais- Industrialized ing productivity have often been insufficient, Countries 34 24 Trade with and hence developing countries' exporth have Developing Countries 9 29 failed to keep pace with the growth of world de- Trade with Capital mand for agricultural products. Surplus Oil These factors also largely explain the differ- Exporting Countries 3 ences in the growth of exports of different devel- Trade with oping countries. The exports of Low Income Centrally Planned countries, which depend heavily on primary Economies 2 6 commodities, generally rose by less than 5 per- World 100 100 cent a year during 1960-75. At the other extreme, - Negligible. where manufactures have accounted for a large Sources: United Nations Yearbook of International Trade share of exports and policies have not been Statistics (New York: United Nations, UN Statistical Office, biased against exports, growth has been much 1976); and Handbook of International Trade and Development Statistics (Geneva: United Nations Conference on Trade and more rapid. Eight countries had exports increas- Development, 1976). ing faster than 10 percent a year. 14. Developing Countries: Growth of Exports of tion policies in these countries have relied heav- Goods and Non-factor Services, 1960-75 ily upon import substitution, with attendant dis- (At 1975 prices) incentives to exports. Most of the Sub-Saharan Average Annual African countries' manufacturing sectors are Growth Rate (percent) Number of Countries still quite small and unsophisticated, and their Less than 0 3 manufactured exports have risen much more 0-5 26 5-10 30 slowly than those of other developing countries. 10-15 4 The growth of manufactured exports has Above 15 4 helped many developing countries to diversify the composition of their exports, reducing their Fuel contributed about 40 percent of the dependence on primary commodities. Within increase in developing countries' exports in real the category of manufactured exports, the terms during 1960-75. Manufactures contributed expansion has been accompanied by further more than a third of the increase, and now diversification out of textiles and into clothing, amount to about a quarter of total merchandise electronics, and machinery. Furthermore, devel- exports. More countries have shared in the rapid oping countries have also been able to diversify growth of manufactured exports, making this their primary commodity exports: while in one of the most significant aspects of the devel- 1960 nearly half of the developing countries oping countries' performance in the past twenty- depended on a single product for 50 percent five years. or more of their total export earnings, by 1975 Three features of the growth of manufactured less than a fifth of them did so. exports are noteworthy. First, they come from a The growth in export volumes of the develop- rather small number of countries and territories, ing countries has been accompanied by changes all of them industrially advanced compared with in their terms of trade that have eroded the most other developing countries. About 45 per- import purchasing power of their export earn- cent come from the Republic of Korea, the Re- ings.3 The prices of agricultural commodities public of China, Spain, and Hong Kong. Adding (especially tropical beverages and agricultural 10 Yugoslavia, Brazil, India, Mexico, Israel, Portu- raw materials) declined through the 1950s and gal, Singapore, and Greece raises the proportion early 1960s relative to the prices of manufac- to around 80 percent. Second, since 1965, not tured exports of industrialized countries. The only the majority of these countries but also relative prices of minerals and metals have several others, such as Malaysia, Colombia, Tur- fluctuated widely, with no clear trend. The quad- key, and Thailand, have achieved a spectacular rupling of oil prices in 1973 produced a sharp expansion of their manufactured exports. Third, improvement in the terms of trade for net ex- growing numbers of developing countries are porters of oil, while it worsened the terms of exporting manufactures. trade for all other developing countries. The net effect of these factors was that the terms of 15.Numbers of Developing Countries with Exports trade for many developing countries deterio- of Manufactures over Selected Values, 1965-75 rated not only during the 1950s but also in the (At 1975 prices) early 1970s. The deterioration was particularly Manufactured severe for the poorest countries, further limiting Exports Over 1965 1970 1975 the benefits they have derived from the expan- US$2 billion 0 2 9 sion of world trade. US$1 billion 3 6 12 US$500 million 7 11 15 16.Developing Countries: Changes in the US$200 million 12 15 25 Purchasing Power of Exports, 1960-75 US$100 million 18 22 40 (Percent per year) Note: The numbers of countries in each category are cumula- Changes in Growth of tive. For example, in 1975, nine countries had exports over Terms of Purchasing US$2 billion; a further three had exports over US$1 billion, Trade Power making a total of twelve countries in this category. Low Income Countries 0.2 0.7 Middle Income Countries 1.9 7.0 Two groups of countries have fared poorly. Some of the older established exporters of 3Movements in the terms of trade have long been the subject manufactures such as India have increased their of controversy. It is widely recognized that generalizations about long-term declines using the early 1950s as the base exports relatively slowly, and their share in the period are potentially misleading, since the terms of trade total manufactured exports of developing coun- facing developing countries were abnormally favorable in those years, partly because of the commodity boom associ- tries has declined substantially. Industrializa- ated with the Korean War. Capital Flows tries in Middle Income countries and to mineral Flows of capital to the developing countries development. Almost half has gone to Latin on both concessional and market terms have America. Private direct investment has also played a crucial role in supplementing their im- been an important channel for the transfer of port and investment capacity. The past twenty- technology and the introduction of more modern five years have seen the establishment of management techniques. bilateral aid programs in virtually all industrial- Tourism and Remittances ized countries and a growing volume of increas- A by-product of the growing prosperity in the ingly concessional assistance. The number of industrialized countries has been the growth of international agencies concerned with various tourism and the temporary migration of work- aspects of development has increased, as have ers from developing to more developed coun- the resources channeled through them to the tries, yielding substantial remittances of for- developing countries. eign exchange. Revenues from tourism reached However, despite the growth of institutions almost 1 percent of the aggregate income of de- and the rapid expansion of aid flows in the 1950s veloping countries in 1975. For some countries, and early 1960s, resource transfers on conces- tourism revenues are a very important source sional terms have fallen considerably short of of income and foreign exchange: they amounted expectations, of need, and of the capacity to use to over 3 percent of GNP in 16 countries in 1975, them effectively. The target for the United Na- including Egypt, Jamaica, Jordan, Kenya, Mex- tions' First Development Decade was to transfer ico, Morocco, Trinidad and Tobago, and Tunisia. 1 percent of the GNP of industrialized countries In over 20 countries, they were equivalent to in the form of aid and private investment. Sub- over 10 percent of the earnings from exports sequently, a target of 0.7 percent of GNP was of merchandise. accepted for aid flows only. While Official The net flow of workers' remittances was of Development Assistance (ODA) to developing about the same magnitude as tourism receipts. countries from members of the Development Remittances received by six major exporters Assistance Committee of the OECD increased of labor to Western Europe (Algeria, Greece, rapidly in the 1950s from its low initial levels, in the 1960-75 period its real growth was only Morocco, Tunisia, Turkey, and Yugoslavia) 11 reached an estimated US$5 billion in 1975, the 1.4 percent a year. Aid flows as a percentage of equivalent of a quarter of the total exports from donors' GNP declined to less than half of the these countries. Remittances to countries that target of 0.7 percent by 1975. The poorest devel- are the major suppliers of workers to the Middle oping countries, particularly the large South East (Egypt, Jordan, India, Pakistan, Syria, Asian countries, were the ones worst affected Yemen Arab Republic, and the People's Demo- by the slow growth of these flows. cratic Republic of Yemen) have been growing International lending at market terms, from very rapidly in recent years. By 1975, they had private and public sources, has evolved quite differently. It grew quickly in the late 1960s but already reached US$1.5 billion and are esti- mated at US$2.8 billion in 1976. expanded dramatically after 1973, as the sur- pluses of OPEC countries were channeled to Conclusions developing countries to sustain investment lev- In the face of rapidly growing populations, the els and finance balance of payments deficits. substantial progress of the past twenty-five years Because of the more rapid growth of lending in accelerating growth, modernizing economies, from private sources than from official sources, and raising living standards has been neither the maturity structure of the developing coun- sufficiently fast nor sufficiently broad-based to tries' debt has deteriorated. Most of the increase reduce the numbers in absolute poverty. This is in private lending has gone to the Middle In- despite the fact that during this period some of come countries and has consisted of medium- the easier opportunities for increasing output term Eurocurrency loans. The access of the have been used up. For example, part of the agri- developing countries to the international bond cultural growth in the past has been based on market has remained extremely limited. bringing unused land into production and draw- Private direct investment in developing coun- ing on the existing stock of technical knowl- tries has grown at an annual rate of about 6.5 edge in agriculture. Furthermore, even if trends percent in real terms since 1960, and has ac- in reducing fertility remain favorable, the pop- counted for a significant share of the total capi- ulation in developing countries is likely to reach tal flows to many countries. However, it has 3.5 billion by the year 2000, compared with 2.1 mainly been directed to manufacturing indus- billion in 1975. The most important requirement for progress are now a substantial market for exports from in alleviating poverty is the acceleration of the industrialized countries. The growth of this growth in the Low Income countries, which in market has been sustained by the developing the past have grown only half as fast as the countries' ability to borrow in international cap- Middle Income countries. In both groups, it will ital markets; and their capacity to service their be necessary to maintain high levels of saving debt depends on the foreign exchange generated and investment. The scarcity of resources to by their exports, most of which are still sent to deal with the most urgent problems of poverty, the industrialized countries. These structural malnutrition, and disease is most acute in the relations are as important for their future Low Income countries, where there is constantly prospects as the changes which have occurred in a difficult choice between investment to increase their domestic economies. future production capacity and expenditures to The rapid growth of international trade and meet urgent consumption needs. capital flows has made a vital contribution to the The past, of course, is not a clear guide to substantial achievements of developing coun- future development strategies. The successes tries. However, not all countries have benefited and failures have occurred in a wide variety of equally. Those with trade-oriented economies physical settings, initial conditions, and policy have been able to exploit the favorable oppor- environments. While some general lessons stand tunities for expanding exports, and a growing out, many of the interactions between growth number of Middle Income countries have gained and poverty, between income and population access to international capital markets. But in growth, and between incentive systems for pro- the poorer countries, which depend on Official ducers and increases in output, remain unclear. Development Assistance for all or most of their Even more uncertain is the possible nature capital requirements, the very slow rise in the and rate of change of social structures, and supply of these funds has seriously hampered the impact of social change on output and its their growth. distribution. The issue for the future is whether the inter- With their expanding industrial capacity, the national environment will continue to be as sup- developing economies can no longer be viewed portive of development as in the past twenty-five 12 as simple suppliers of primary products. The years. The following chapters explore the pros- growth of modern industry has been accompa- pects for the developing countries, beginning nied by an increasing capability for product de- with a discussion of the fundamental policies sign and development. The developing countries affecting the evolution of the world economy. Chapter 3: International Policy Issues Interdependence in the world economy is not The Growth of the Developed Economies a new phenomenonit has been growing in im- Industrialized Countries portance for decades, if not centuries. But it is The industrialized countries purchased nearly perhaps not yet fully understood how far the two-thirds of all the merchandise exports of de- process has now come, nor how much further veloping countries in 1975. Since the industrial- it will go even in the next decade. The imbal- ized countries' demand for imports depends on ance in world food demand and supply, and the their income, their economic growth is very im- rise in oil prices in recent years, have signaled portant to the export and growth prospects of some of the more dramatic aspects of interde- developing countries. The growth and external pendence. They have made more people aware payments situations of the major industrialized of the importance of maintaining stable trading countries have been very volatile in recent years relationships in these vital commodities. But in- and this gives cause for caution in projecting terdependence characterizes many more aspects their prospects as a group. Most observers agree of international relations. that their economic growth will be slower in the With their expanding industrial capability, next decade than the 5 percent a year they main- increasing numbers of developing countries tained in the 1960s and early 1970s; this is be- are now involved in the massive rearrangement cause of their continued difficulty in managing of international comparative advantage that aggregate demand and combating inflationary started among the industrialized countries. This pressures. The problems of resuming a high rate process of adjustment is very far from being of growth are aggravated by the rapidly chang- completed. Large-scale international labor mi- ing imbalances in external payments. The lack gration and the growth of tourism have helped of consistency among the balance of payments 13 to intensify the economic links between indus- targets of different industrialized countries ap- trialized and developing countries. pears to have given their adjustment policies a There has been a dramatic expansion in the deflationary bias; most of the deficit countries flow of capital on market terms to the develop- have applied deflationary policies, and even ing countries. The international operations of in the surplus countries expansionary policies the leading commercial banksas suppliers of have been far from vigorous. medium-term investment loans to developing countrieshave expanded enormously. Some 17. Industrialized Countries: Growth of Gross Domestic Product, 1960-85 developing countries are technologically back- (Average annual percentage growth rates, at 1975 prices) ward and have more capital than they can in- 1960-70 1970-75 1975-85 vest; other developing countries, despite their North America 4.0 2.4 4.3 extensive modern industrial sectors, have large Japan and Oceania 9.4 5.0 5.6 capital requirements and must borrow interna- Western and tionally to finance their investment and eco- Northern Europe 4.7 2.5 3.5 nomic growth. All Industrialized At present, with the slow recovery from the Countries 4.9 2.8 4.2 turbulence of recent years, there is widespread uncertainty as to how the international economy Though observers differ in their estimates, it will evolve. This chapter discusses the policy appears reasonable to assume that the indus- issues and possible developments in various as- trialized economies will grow at 4.2 percent a pects of the international economy as they affect year, on average, from 1975 to 1985. Allowing the developing countries. It examines the pros- for the rather slow growth in recent years, this pects for economic growth of the industrialized assumes that Japan's economy will grow at countries, the rise of protectionist pressures in about 6 percent a year for the remainder of this those countries and the implications for devel- period, offset by slower growth in Italy, the oping countries' exports, the outlook for food United Kingdom, and some other countries in and energy, and the prospects for flows of cap- Europe. The United States, Germany, and ital from industrialized to developing countries. France are assumed to grow at about the average rate for the group. The growth rates cannot be First, if the CPEs increase their exports of manu- much lower than these projections without caus- factured goods to the industrialized countries at ing intolerably high unemployment and a diver- the same rates as in the past, protectionist senti- gence between the growth of labor productivity ments in Western Europe may be intensified. and wages, resulting in rising unit labor costs. The value of the CPEs' exports of manufactures The interrelations between growth, inflation, to Western Europe rose from US$2.3 billion in wages, and external payments equilibrium are 1970 to US$5.5 billion in 1975more slowly influenced by a wide range of policies, includ- than developing countries' manufactured goods ing monetary, incomes, and trade policies, a dis- exports, but in roughly the same sensitive prod- cussion of which is beyond the scope of this uct categories. Second, the CPEs have borrowed report. Of particular relevance to the growth of sizable amounts of commercial capital in the developing countries, however, is the increasing Eurocurrency market in recent years and they tendency to rely on protection against imports to are expected to continue relying heavily on this cushion the impact of the prolonged recession market. They may, therefore, affect the supply on employment, thereby delaying some of the of medium- and long-term external capital avail- difficult structural adjustments that are neces- able to the developing countries. Third, there is sary if there is to be a return to a higher growth considerable uncertainty about the growth of path. the CPEs' import demand for food and fuels, and If there is a significant increase in protection- its impact on availabilities and international ism, it is unlikely that the economic growth of prices. the industrialized countries will reach the levels assumed here. Open trade policies, which char- Protectionism in the Industrialized Countries acterized the 1960s, make an important contri- Recent Developments bution to the pace of growth in industrialized There has been a marked increase in protec- countries in several ways: by fostering a divi- tionism in the industrialized countries and pres- sion of labor that accelerates the upgrading of sures for further measures are strong. These skills and labor productivity in industry, en- pressures partly stem from the continued slow couraging technological progress; by providing growth of the industrialized countries and their 14 an inflow of manufactured articles at lower consequent high levels of unemployment, and prices, thus increasing real purchasing power are partly the result of the concentration of de- and reducing the inflationary pressures that veloping countries' export growth in relatively inhibit the pursuit of growth through expansion- few categories of manufactured products. The ary monetary and fiscal policies; and by stim- protectionist measures have entailed the use of ulating growth in the developing countries, a wide variety of devices, for example "orderly causing a further expansion in the markets for marketing arrangements" and new import quo- the industrialized countries' exports. tas; price floors on imports, as in the case of steel and agricultural products; new "voluntary" Centrally Planned Economies export restraints; "countervailing duties"; ad- The growth of the centrally planned econ- ministrative obstacles to imports; and subsidies omies (CPEs) does not materially affect the de- to domestic industries to sustain levels of pro- veloping countries. The CPEs accounted for only duction in excess of those justified by demand. about 5 percent of developing countries' exports There have been calls for the control of market in 1975, and about 40 percent of those exports shares on a regional or worldwide basis and consisted of food and beverages. Trade between for extending protection to a wider array of the two groups of countries has not grown as products. All these types of measures adversely rapidly as that between the industrialized and affect developing country exporters: quantita- developing countries, and most of it is between tive restrictions and market sharing agreements relatively few countries.1 The net contribution limit their sales in industrialized countries of aid from the CPEs to the developing countries directly, while subsidies to weak industries do is small. so indirectly. Nonetheless, there are several respects in Although developing countries' exports have which the performance of the CPEs may directly continued to grow rapidly through 1977, recent influence the prospects of developing countries. policy developments affecting the trading en- vironment have been noticeably adverse. They 'Only eight developing countries sent more than 15 percent have taken two main forms with respect to devel- of their exports to the CPEs in 1976: Afghanistan, Egypt, oping countries: increasingly severe restraints Ghana, Mali, Peru, Syria, the Yemen Arab Republic, and Yugoslavia. on their exports, and the creation of an atmos- phere in which more and more producers clamor tions in such countries as Australia, Canada, for protection with an increased probability that France, Sweden, the United States, and the they will get some relief. It is not possible to United Kingdom, while quantitative restrictions forecast how, when, or to what extent the pres- have continued in force, for example in Japan. ent protectionist pressures will be accommo- Communitywide restrictions are being consid- dated, or will abate, but the present situation ered by the European Community. Special pro- and the uncertainty it creates for future exports tective measures have been introduced in steel is of profound concern. by the European Community and the United The restrictions on exports of clothing and States, posing serious difficulties for developing textiles from developing countries are based on countries now emerging as exporters. Imports of a system of bilateral quotas, involving a quota television sets from the Republic of China and on each group of textile products from a partic- the Republic of Korea have been restricted by ular exporting country to a particular import- quotas in the United Kingdom, and are threat- ing country, governed by the internationally ened in the United States and elsewhere. In agreed rules and procedures of the Multi-Fibre the shipbuilding industry, in which developing Arrangement (MFA). The MFA was originally countries have become increasingly competitive, negotiated in 1973 and has recently been extend- some industrialized countries are taking special ed through 1981. The provisions of the MFA measures to support their own firms. There is a designed to protect exporters have been weak- growing demand from producers in industrial- ened, and in the past year more restrictive quo- ized countries for protection in a wide range of tas have been imposed. The new quotas in the other products, from petrochemicals to bicycle European Common Market, for instance, do not tires and tubes. In agriculture and food prod- merely limit growth but actually reduce import ucts, the barriers that most seriously affect levels. For three leading suppliers (the Republic expansion of exports from developing countries of China, Hong Kong, and the Republic of appear to be those on beef, sugar, vegetables, Korea), quotas for 1978 are well below their ac- tobacco, and grains, and on manufactured food tual 1976 trade levels in several major product products of various types. categories. All the significant and potentially Systematic reduction of these barriers re- significant exporters have seen their scope for 15 mains one of the great unfinished tasks in multi- expanding exports severely restricted by quotas lateral trade negotiations and one in which that grow only slowly from past trade levels, developing countries have a large stake. usually by between 0.5 percent and 4 percent a year, compared with the previous norm of 6 per- In addition to direct restrictions, a great vari- cent a year. The new agreements also establish ety of other measures can have a discriminatory low "trigger levels" for further quotas that limit impact on developing countries' exports, even the scope for diversification of exports into new where this is not the original intention. Ex- products. Restrictive new quotas have been im- amples include industrial standards, health posed by other importing countries such as regulations, packaging requirements, customs Australia, Canada, Norway, and Sweden, while valuation practices, administrative entry proce- the United States, in its new bilateral agree- dures, government procurement regulations, ments, has held the quotas of its largest sup- and subsidies on domestic production. The com- pliers at the same level in 1978 as in 1977. plexity of the procedures affecting the entry of Although the growth of imports has been greater imports is itself a deterrent to developing coun- than the limits established in the past, and this tries, especially those that are not already major divergence may also occur in future years, the exporters or do not use transnational firms for recent measures are more restrictive than pre- marketing. The codification of rules, introduc- vious ones and will reduce the growth in textile tion of explicit criteria for their application, and and clothing exports. They will affect exports provision of reasonable time for adjustment by not only from the major exporters but also from foreign suppliers would be among the desirable the smaller, poorer, and less advanced develop- features of a trading system that operated to ing countries where textile products usually the mutual benefit of industrialized and devel- make up a large share of manufactured exports. oping countries. Quotas have been introduced in other cate- The growing restrictions compound the un- gories of products that are of interest to develop- certainty about the future. In an atmosphere ing countries, and there is a danger that more where demands for protection are likely to be will follow. In recent years, imports of footwear accepted, even protests by producers in indus- have been subject to new quantitative restric- trialized countries against the growth of imports can deter investors in developing countries. Federal Republic of Germany has shown that, Countries that rely on export growth will scale with a balanced growth of exports and imports, down their expansion plans in export indus- the loss of employment in import-competing tries and cut back on associated investments. industries was fully offset by the gain in em- Countries that are not yet major exporters will ployment in the exporting industries. be more hesitant about making the long-term Furthermore, if the developing countries' ex- commitment to amending the framework of their port earnings are reduced, the effects on their policies and encouraging the growth of exports. economic growth and demand for imports will be transmitted back to the industrialized coun- Implications for Industrialized Countries tries, with adverse effects on employment. By discouraging the growth of trade, protec- Manufactured exports to industrialized coun- tionist policies will disrupt the increasing divi- tries have been the fastest growing category sion of labor that has been a major source of among developing countries' exports (in real growth for the industrialized countries over the terms), and restrictions on their growth will af- past twenty-five years. By delaying structural fect the ability of developing countries to sus- change, protectionism delays the shift of labor tain their economic growth and to service their out of traditional industries where labor pro- debt. There is no doubt that this would result in ductivity is low, such as textiles, clothing, and smaller exports from industrialized to develop- footwear, into industries where labor produc- ing economies. tivity is higher, such as machinery and chemi- The size of the developing countries' import cals. Labor costs in the latter group of industries market and its importance for the industrialized in the industrialized countries will therefore rise countries is not widely recognized. The total ex- more than they would if greater labor mobility ports of the industrialized countries amounted were permitted, and economic growth will be to about US$550 billion in 1975, and fully one- slower. quarter was purchased by developing countries. Imports from suppliers whose production Of their total manufactured goods exports, 30 costs are low can have a very beneficial effect on percent went to the developing countries. The 16 prices, reducing inflationary pressures and facil- dependence on developing countries' markets is itating the management of demand. For instance, greater than this average for the United States in the two product categories in which the (34 percent) and Japan (45 percent). Not only United States drew a substantial share of its im- are developing countries' markets of great im- ports from the developing countries, prices rose portance to the manufacturing industries in the considerably more slowly than those of other industrialized countries; they have been among goods. The wholesale prices of apparel rose by the most buoyant elements of demand in the only 26 percent in the United States during 19 70- current recessionary period. Developing coun- 76, while other wholesale prices rose by 66 per- tries have been able to maintain their import cent. Over the same period, prices of consumer levels through increased borrowing; had they electronics fell by 2.5 percent. Restrictions on been unable to do so, the demand management imports from developing countries will inevi- problems of the developed economies would tably tend to push prices up in industrialized have been even more difficult. countries, adding to the already difficult prob- Finally, the tremendous difference in the mag- lem of persistent inflation. nitude of the trade in manufactures in the two That reduced growth and more inflation are directions should be noted: exports from indus- costs worth paying to avoid unemployment trialized countries to developing countries were caused by the growth of imports from develop- worth about US$123 billion in 1975; the reverse ing countries is a dubious proposition for a num- flow was only US$26 billion. Thus, limitations ber of reasons. First, in the aggregate, the level on imports from developing countries can be of employment is affected far more by the self-defeating because they put at risk much growth of the economy at large than by imports larger flows of exports in the reverse direction. from developing countries. Second, the employ- These aggregate considerations are important ment that is preserved by protection against im- since they define the likely net costs and bene- ports from developing countries is offset by the fits to the economy as a whole. They cannot, of loss of employment in industries that export to course, allay the concerns about specific sectors these countries. The amount of employment lost or regions where adjustment may be necessary. in this way has often been underestimated, but But even at the sectoral level, the effect on it is large and growing. A detailed study in the employment is small in comparison with that of other influences, including technology and The present efforts in industrialized coun- changes in demand, that are the driving forces tries to facilitate structural adjustment are too for structural shifts and growth in the economy. limited. At present, measures are often designed A number of studies have shown that, within a to support the affected industries rather than to given industry, the amount of employment lost retrain workers and provide economic incentives through competition from imports is generally for shifting labor and capital to other sectors. much smaller than that lost because of techno- Moreover, very few countries have begun to logical changes that increase the productivity look to the adjustments that will be required in of labor. Another German study has shown that, future as the international economy continues to in manufacturing as a whole, during 1962-75 evolve and the capacity of the developing coun- growth of productivity in Germany displaced tries to export manufactured goods expands. forty-eight workers for every one displaced by Only with adequate forward planning can the imports from developing countries. Even in acute frictions accompanying the adjustment clothing, where imports from developing coun- process be reduced, the benefits of trade for tries grew rapidly and production technology both importing and exporting countries real- changed relatively little, this ratio was more ized, and some of the uncertainty removed from than 3 to 1. investment planning in developing countries. Except in very narrowly defined product Since the continuing growth of international groups, imports from developing countries rep- trade is of benefit to all countries, so is the prog- resent only a very small proportion of supply in ress that is made in adjusting to international the importing countries. Even for clothing, the shifts in comparative advantage. It would thus product group that has contributed most to be desirable that actions by industrialized developing countries' export growth and where countries to safeguard their domestic industries the increase in market penetration has been be subject to adequate multilateral surveillance most rapid, the developing countries still sup- to ensure that they are sparingly used; that they plied only about 7 percent of the consumption allow for some reasonable growth in competing of clothing in the United States in 1976up imports; and that they are accompanied by from less than 3 percent in 1970. In textiles and measures that facilitate the shift of labor and clothing together, the proportion was 4 percent capital away from the affected industries so that 17 in the United States in 1974, compared with the safeguards can be dismantled in due course. about 8 percent in Germany, 6 percent in the United Kingdom, 5 percent in Canada, 4 percent Implications for Developing Countries in Japan, and 2 percent in France. Thus these imports have only a modest impact on the in- How strongly the protectionist measures in dustrial structure of the importing countries. the industrialized countries will affect the Their effect on the occupational structure is growth of developing countries' manufactured even smaller because different industries share exports will depend, in part, on how strictly the a common demand for some occupations. negotiated quantitative restrictions are applied. For the economy as a whole, and at the sec- For example, although the Multi-Fibre Arrange- toral level, higher imports have only a small ment initially included provisions by which net effect on employment. But they can pose developing countries' exports of textile products serious problems at the level of the firm, in prod- would grow in volume at annual rates of 6 per- ucts that are very labor-intensive and have cent, the actual growth up to 1976 vastly ex- stable technologiesattributes that work to the ceeded that figure. For many reasons, this advantage of developing countries with low performance is unlikely to be repeated: protec- labor costs and moderate development of skills. tionist sentiment is stronger, the bilateral agree- The difficulty of withstanding competition is ments in force now cover more products and most acute in firms employing unskilled labor, permit lower growth rates, and many of the and where labor productivity does not rise rap- possible gains from upgrading the quality (and idly. Because of the rigidity of wages, unit labor price) of specified products have already been costs in these firms become too high for their used up. How fast exports covered by the Ar- products to compete effectively with imports, rangement can grow in the next decade will and indeed with those of other efficient firms in depend on how existing quotas are administered the industry. However, such cases call for spe- as well as what is done when they expire. cial measures to smooth the process of adjust- A factor with important implications for de- ment rather than broad protective measures that veloping countries' exports is the extent to prevent adjustment. which protectionism in the United States and Europe is really directed against imports from extent offsetting the effects of the protection Japan. Some of the developing countries are in textiles and clothing. following in Japan's path, expanding exports of labor-intensive manufactures as Japan moves Other developing countries that are relatively out of them because of rising labor costs. Their advanced industrially, such as Argentina, opportunities for expanding exports will depend Brazil, Greece, India, Israel, Mexico, Singa- on further shifts by Japan into exports of more pore, Spain, and Yugoslavia, which export a sophisticated products and on the extent to wide range of manufactures both to indus- which protectionist pressures will be moderated trialized and to other developing countries. by a more liberal import policy in Japan. If They are less dependent on exports of textiles Japan faces severe resistance to expansion of its and clothing to industrialized countries. Pres- exports of automobiles, sophisticated electron- ent policies in some of them do not allow ics, and machinery, it is less likely to relinquish their export potential to be fully exploited. its remaining shares in the other types of prod- Thus, apart from the direct effect it has on ucts it currently exports. The same argument demand for their exports, the rise in protec- applies to shifts between developing countries tionism among the industrialized countries at different stages of industrial sophistication. might also discourage a shift in incentives For example, the Republic of Korea and the toward the promotion of exports to improve Republic of China cannot phase down their ex- their growth. ports of garments and footwear unless they can Countries beginning to be successful export- expand adequately in consumer electronics and ers of manufactures, such as Colombia, Ma- metal products. laysia, Morocco, Pakistan, the Philippines, Thus it is incorrect to assume that protection- Thailand, and Turkey. Growth prospects in ist curbs on the growth of textiles and clothing these countries are likely to suffer heavily imports into industrialized countries only affect from increases in protection in textiles and the countries that are currently the major ex- clothing. The complexity of the detailed quota porters of these products. Indeed, the most system in these products means that even 18 painful effect might well be felt in countries that the full use of quotas requires a dynamism, are just emerging as significant exporters of flexibility, and adaptiveness not shown by manufactured goods. many of these countries in the past, and made difficult by their frequently cumbersome and The direct and indirect effects can be better restrictive import regimes. appreciated if one categorizes developing coun- tries by the nature of their manufactured export Economies at a low level of industrial develop- activities as follows: ment, with only a small volume of manufac- tured exports, consisting largely of processed The three major East Asian exporters of cloth- agricultural commodities. The growth of their ing and textiles, the Republic of China, Hong manufactured exports is limited mainly by Kong, and the Republic of Korea, which to- their low level of industrial development and gether account for over one-third of develop- shortage of skills. However, some of these ing countries' manufactured exports and over countries, such as Bangladesh, Indonesia, and three-fifths of their clothing exports to indus- Sri Lanka, are already being affected by quo- trialized countries. Textile products are still tas in textile products. Many of the other a large share of their total exports: in 1976, countries in this category have preferential this share was 44 percent in Hong Kong, 36 arrangements with the European Community percent in the Republic of Korea, and 28 per- and are less affected, but most face at least cent in the Republic of China. However, their some threat of restrictions on textiles and manufactured exports are already quite di- clothing if the present pressures continue. verse and include an increasing share of tech- This discussion has focused on the conse- nically complex products. Severe restrictions quences of the growing protectionism in on their exports of clothing and textiles will industrialized countries, but the reasons why adversely affect their economic growth, but protectionism is essentially self-defeating in the they are likely to redouble their efforts to longer run are of general applicability. Protec- develop their machinery sectors and diversify tionist measures are common in the developing their exports. They are sufficiently advanced countries as well. For many, particularly those in their industrial and manpower develop- still at the early stages of industrialization, pro- ment to succeed in the longer run, to a large tection can be justified. But for those that are well advanced in the development process, the slow growth of import demand, the strong pro- adverse effects of industrial protection on eco- tection against agricultural imports, and the fact nomic efficiency and growth become increasingly that they supply a large share of world primary evident. These developing countries will also commodity exports, makes it exceedingly diffi- face adjustment problems in increasing their cult for developing countries to increase their competitiveness and diversifying their exports. primary exports. Moreover, they are precisely the countries Aside from questions of market access, the that have the greatest stake in avoiding an main concern of primary exporters is the fluctu- increasingly restrictive trading system. To main- ation of commodity prices and export revenues. tain the benefits of liberal trade will demand a Of these problems the more tractable, and cooperative approach. The strength of such an probably the more important, is that of revenue approach would be enhanced if the developing instability. Large fluctuations in export revenues countries were to participate more actively than cannot be adequately handled by individual in the past in multilateral trade negotiations and countries holding foreign exchange reserves, in efforts to reduce barriers to increased trade. and are liable to upset investment and economic growth. This problem is addressed directly by Trade in Primary Commodities Other than Fuel the Compensatory Financing Facility of the Primary commodities occupy a very different International Monetary Fund and by the Stabex place in developing countries' trade from man- program under the Lomé Convention. Although ufactures. Developing countries supply about a more modest in scale, Stabex funds are highly third of the world's exports of primary com- concessional, on a grant basis to the poorest modities other than fuel, whereas they supply countries, and disburse rapidly. Various im- only a tenth of the world's manufactured ex- provements have been made to these schemes ports. About half of the major non-fuel primary in recent years and others are under active dis- exports of developing countries consists of cussion. It would be desirable to extend the commodities that are not produced in indus- coverage of these schemes to more items, and trialized countries. The developing countries' to arrange for longer-term lending for structural share of world trade in primary commodities adjustments necessitated by medium-term fluc- 19 (excluding fuels) has fallen, whereas in manu- tuations in commodity prices. factures it has been rising. The share of primary Price instability is a general problem affecting commodities, excluding fuel, in total developing primary commodities, and is inherent in a situa- country exports of merchandise declined from tion where both demand and supply are insensi- 68 percent in 1960 to 34 percent in 1975, while tive to changes in price in the short run. As the share of manufactures rose from 14 percent shown in Table 18, commodities accounting for to 26 percent during the same period. about a third of developing countries' primary In primary commodities, the problem of mar- exports (other than fuel) experienced price fluc- ket access too is different. In non-agricultural tuations of over 10 percent from one year to the primary products, tariffs are low or non-existent next. Price instability affects both consumers and there generally are no non-tariff barriers. and exporters. Especially in products for which As noted in the previous section, protection synthetic substitutes are available, as for jute, against imports of agricultural commodities is sisal, cotton, and rubber, excessive price fluctua- of long standing. Relatively few countries have tions may lead consumers to seek substitutes, been committed to as free a trade regime in resulting in a long-run decline in demand. If agricultural products as in manufactures, and fluctuations in international prices are allowed very little has been done over the years to re- to influence producer prices in the exporting duce these barriers. Since they are intimately country, they can lead to wasteful cycles in connected with domestic price policies and farm investment and supply. The consequences of support programs, they are likely to be the most instability are difficult to measure, but can be difficult to deal with. The demand for primary very harmful to countries that depend heavily products grows much less rapidly than for man- on primary exportscountries that often have ufactures, and in some commodities there have pressing import needs and inadequate access to been serious excesses in global production. In credit. general, demand for imports of primary prod- But price fluctuations are difficult to moderate, ucts in the industrialized countries grows at as shown by the numerous attempts to reach about the same rate as incomes, whereas that for and sustain agreements among exporters and manufactured imports grows twice as fast. The importers. The problem has been closely studied, 18. Primary Commodities Classified by Degree of Price Instability Index of Instabilitya 0-5 5-10 10-15 Over 15 Tea 1.3 Coffee 6.5 Sugar 13.9 Copper 5.0 Bananas 1.2 Cotton 4.0 Rubber 3.5 Cocoa 2.6 Iron Ore 3.6 Phosphate Rock 2.6 Zinc 0.7 Maize 2.3 Rice 1.6 Fishmeal 0.5 Logs 2.2 Palm Oil 1.4 Copra 0.4 Tobacco 1.9 Beef 0.7 Sisal 0.2 Tin 1.7 Wool 0.6 Oranges 1.4 Coconut Oil 0.5 Soybean Meal 0.8 Groundnut Oil 0.4 Bauxite 0.7 Lead 0.4 Manganese Ore 0.6 Lemons 0.2 Wheat 0.6 Grain Sorghum 0.5 Groundnuts 0.5 Jute 0.2 Total 2.5 27.5 25.8 9.4 Note: The figure shown against each commodity indicates its percentage share in total developing country exports of all primary commodities, excluding fuel, in 1975. The index is based on a five-year moving average of prices for 1955-76. It measures the average percentage deviation of the annual price from the five-year moving average. It does not take account of short-term fluctuations in prices. and specific proposals to reduce the amplitude countries. Table 19 gives an overview of pro- of price fluctuations are now being discussed jected trends in production and consumption, intensively in various international forums. based on the assumption that oil prices will The Energy Outlook remain unchanged in real terms. One of the main features of these trends is a 20 Since the increase in the price of oil in 1973, significant rise in self-sufficiency in Western energy has accounted for a significant share of Europe (mainly because of the increase in North the imports of developing countries, and the Sea oil production), and increased reliance on price of oil will have an important influence on nuclear power, which is likely to supply nearly their balance of payments. 6 percent of the total primary energy consumed 19. Primary Energy Balances, 1965-85 Million Barrels a Day of Average Annual Oil Equivalent Growth Rates (percent) 1975 1965-75 1975-85 Pro- Con- Pro- Con- Pro- Con- duction sumption duction sumption duction sumption Developing Countriesa 24.7 15.4 6.3 7.1 4.9 6.2 (Non-OPEC Developing Countries) (9.1) (13.3) (6.1) (6.9) (8.6) (5.9) Industrialized Countries 45.8 65.8 2.4 3.6 3.2 3.5 Centrally Planned Economies 38.0 36.0 5.2 5.2 4.1 4.4 Capital Surplus Oil Exporters 13.6 0.5 7.9 10.8 5.4 8.8 Total 122.1 117.7 Note: Primary energy here refers to coal and lignite, crude petroleum, natural gas and natural gas liquids, hydro and nuclear electricity, expressed in barrels a day of oil equivalent. Here, as throughout this report, the group of developing countries" excludes only the capital surplus members of the Orga- nization of Petroleum Exporting Countries. Thus the energy balances of other OPEC members-Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Nigeria and Venezuela-are included in those for developing countries. Future energy prices will depend primarily on by the industrialized countries in 1985. developments in supply, on active efforts to In the developing countries, rapid growth in develop production potential in both industrial- energy consumption will be a necessary con- ized and developing countries, and on stronger comitant of industrialization. Energy production efforts to conserve energy in the industrialized in developing countries other than OPEC mem- bers is expected to grow faster than in recent also been accelerated, and generating capacity years. Particularly noteworthy is the sizable oil is now expected to grow by 10 percent a year, production potential in countries that are not compared with 8 percent a year in the early currently exporting oil. 1970s. Countries with major new hydro power The increase in oil prices has provided a great projects are Argentina, Brazil, Pakistan, and incentive for new exploration and development Turkey; there are other projects in Central of indigenous fuel resources in developing coun- America, India, and Yugoslavia. Nepal and many tries. Assuming that the plans based on the African countries have excellent hydro re- results of these efforts will be implemented on sources, which at present levels of domestic schedule, the production of petroleum in non- demand could only be exploited economically OPEC developing countries is projected to more in a regional context. Little effort has been made than double, from 3.7 million barrels a day in in this direction. Nuclear generation capacity is 1976 to 8.3 million barrels a day in 1985. Large projected to grow very rapidly from 1.1 billion increases in production are projected for Brazil, watts of electricity in 1975 to 16.5 billion watts Egypt, India, and Mexico, with smaller but in 1985. Most of this expansion is expected to significant increases in many other countries, take place in countries that are approaching including Angola, Congo, Malaysia, Pakistan, full development of their existing indigenous and Zaire. hydro and fossil fuel resources, such as Brazil, the Republic of China, and the Republic of Thirty to forty countries that do not now pro- Korea. duce petroleum have the potential to do so To realize the projected energy supplies in economically, thereby reducing their depen- developing countries will require concerted dence on fuel imports.2 But most of these coun- action on several fronts: first, technical assis- tries lack the necessary technical skills and tance to help build the institutional capability to financial resources to develop this potential, or plan and implement comprehensive energy de- the expertise required to obtain them from velopment programs; second, a variety of mea- abroad on terms that are both attractive to ex- sures, particularly by the developing countries, ternal sources and commensurate with national to establish a favorable investment climate for interests and objectives. In some countries, the attracting domestic and foreign capital and 21 deposits might be too small to attract interna- know-how to this sector, ensuring that invest- tional companies even though their develop- ments appear not only profitable but secure; ment would be of great domestic importance. and, third, a substantial increase in financial and The potential for an increase in natural gas technical assistance from international lending production is widespread and important, es- institutions which will help to mobilize the nec- pecially in Indonesia, Malaysia, Mexico, and essary capital from other public and private South Asia, but to exploit it commercially will sources. The special characteristics of petrole- require large-scale investments in transport and um exploration and development call for very processing facilities. How far countries can close cooperation between official and private exploit the potential depends on the available organizations to bring this about. technology for substitution and export in the Petroleum and natural gas will inevitably be- next decade. come more costly in the long run as production Present plans call for more rapid growth of moves to more difficult sites. Although there is developing countries' coal production, from 1.5 a wide variety of estimates of both demand and percent a year in the late 1960s and early 1970s supply, the current consensus among experts to about 5.6 percent a year up to 1985. The is that rising costs and growing demand will known reserves of coal are concentrated in a exert pressure for an increase in real oil prices few countries. Colombia, India, Mexico, Mozam- in the mid-1980s, unless investments to expand bique, and Viet Nam are expected to increase global energy supply are rapidly undertaken, as their coal production very substantially; some outlined above. To maintain a balance between of the countries are likely to be able to export supply and demand in the longer run calls for coking coal and steam coal. greater support for research and development activities in alternative sources of energy. The Expansion plans for primary electricity have developing countries must be assured of regular 2Production costs in most oil importing developing countries access to this research, so that they can benefit are estimated to range between US$3 and US$6 a barrel at from it and participate in adapting it to local 1975 prices. They compare favorably with the present price conditions as early as possible. The internation- of imported oil, and with the costs of production in Alaska and the North Sea. al research effort should include work on such potentially low cost and abundant sources as ized countries, which will give rise to a number solar energy, bio-gas and fuel from forestry and of significant problems. agricultural wastes, and such decentralized en- The first consequence will be an increase in ergy sources as small hydro units and windmills the relative price of foodgrainsin both indus- which may be of particular relevance to the trialized and, developing countries. Apart from developing countries, especially for rural areas. a few developing countries the future export- able surpluses of foodgrains will come largely International Food Issues from Canada and the United States. While those Over the past two decades, the growth in countries have the supply potential, the increase production of food in developing countries has in production required can only be realized at not kept pace with the growth in demand result- rising marginal costs, which will be reflected in ing from increases in population and incomes. prices. At low levels of income, a large part of any The increase in the volume and price of food increase in income is spent on food. Thus, while imports will strain the foreign exchange posi- the developing countries as a group were virtu- tion of a number of developing countries. A few ally self-sufficient in food in the 1950s, they foodgrain deficit countries, such as Iran, the were already importing 15 million to 20 million Republic of Korea, and Mexico, are not likely tons of major staple foods by 1970, half of which to have difficulty financing the imports they was in the form of food aid. Although good require. But in most other countries, particularly harvests in the poorer countries in the last few the Low Income countries, mounting demand years have averted a worldwide shortage, the for grains will cause significant pressures on the problem of matching food demand and supply balance of payments. As this demand reflects 20. Developing Countries: Balances in Major Staple Foods, 1975 and 1985 1975 Deficit (estimated) 1985 Deficit (projected) Million As Percentage Million As Percentage Tons of Consumption Tons of Consumption 22 Asia 9 4.5 20 7.2 North Africa and Middle East 10 15.9 15 19.8 4 Sub-Saharan Africa 2 3.7 14 16.8 Latin America 3.7 All Developing Countries 21 5.0 45 8.0 Note: Major staple foods are here defined as unmilled rice, wheat, maize, sorghum, millets, oats, barley, rye, mixed grains, root crops, pulses. and groundnuts. - Negligible. Source: Based on Research Report No. 3, p. 44 (Washington, International Food Policy Research Institute, 1977). at the global level will undoubtedly become urban deficits, it has a very pressing claim on more acute in the coming decade. foreign exchange, competing with debt service Assuming that production of major staple and imports of intermediate goods. Unless the foods continues to rise at about the same rate as domestic production of food is stepped up very population and that consumption per person will rapidly, which implies radical changes in agri- rise somewhat more slowly than before, it has cultural policies in most countries, their capacity been estimated that by 1985 the total production to import capital goods will be affected ad- of the developing countries will fall short of versely, reducing economic growth. Even with their demand by about 45 million tons. Exclud- efforts to raise domestic production, the Low ing Latin America, which is projected to have a Income countries will require increased food slight surplus in the aggregate, the other devel- aid, or other forms of concessional aid which oping regions would need to import about 11 will enable them to purchase food. percent of their consumption demand. The fig- The concentration of exportable surpluses in ures shown in Table 20 are rough estimates and a few countries makes international foodgrain subject to considerable error. Moreover, they do prices more volatile, not only because aggregate not take account of the possibility that food- supply is vulnerable to weather conditions and grain production can be increased more rapidly. policies affecting production in those few coun- The main point, however, is that developing tries, but also because concentration reduces the countries will almost definitely have to purchase ability to increase or decrease world supply large amounts of foodgrains from the industrial- rapidly in response to changes in demand. The latter problem is important because some of the sales. When there are widespread crop failures, larger countries, both developing and centrally Low Income countries are the ones least able planned, depend on imports to offset fluctua- to allocate additional foreign exchange to pur- tions in their domestic supply. The year-to-year chase foodgrains commercially. changes in import demand can then be very large, even if they represent only a small propor- The Supply of External Capital tion of annual consumption in the affected coun- The principal issues in regard to medium- and tries. If unrestrained, the volatility of prices is long-term capital flows to the developing coun- likely to destabilize supplies, resulting in market tries are the uncertainty about the rate of growth uncertainty and higher prices for what is an of lending from private sources, mainly com- essential commodity. mercial banks; the rate of expansion of multi- The policy implications of this state of affairs lateral lending at market terms; and whether the have been extensively discussed in various in- necessary measures will be taken to raise the ternational forums. There is a broad consensus flow of concessional capital. on the need for a number of measures. First, Capital at Market Terms developing countries ought to make additional On the basis of assumptions that are dis- efforts to increase food production, with inter- cussed in the following chapter, it is estimated national support in the form of financial re- that the developing countries' requirements for sources and technical assistance. This is of net disbursements of external medium- and primary importance in the Low Income coun- long-term capital at market terms will grow by tries, which are least able to purchase food com- nearly 5 percent a year in real terms during mercially and where malnutrition is closely 1975-85, or by about 12 percent in nominal associated with the lack of purchasing power terms, assuming an annual rate of inflation of among the poor. Second, with the prospect of nearly 7 percent. During 1970-75, nearly 90 per- growing instability in international grain mar- cent of the increase in net disbursements of such kets, developing countries ought to increase the capital came from private sources. Even allow- size of national buffer stocks. In the many coun- ing for a balanced growth of public and private tries that have food subsidy programs, national capital flows, net annual lending from private buffer stocks are especially important to stabil- 23 sources to developing countries would need to ize the costs of these programs. grow by about 12 percent a year in nominal Third, an international stock of foodgrains terms during 1975-85, Though this rate of ex- should be established to supplement supplies in pansion could be accommodated by the growing an emergency. Although the principle of such capacity of developing countries to service debt, an international food reserve has been accepted, there is considerable uncertainty whether the opinions still differ widely as to its desirable supply of private lending will grow so rapidly. size, composition, location, management, and A nominal growth rate of 12 percent would be financing. Fourth, an expanded capacity to de- substantially slower than that of recent years. liver food to Low Income countries at conces- From 1971 to 1976, net lending by commercial sional terms must be planned for, so as to enable banks to developing countries grew very rapidly: these countries to meet their import require- it is estimated that net lending by private finan- 21. Medium- and Long-term Capital at Market Terms, 1970-85 (Billion current US dollars) Net Disbursements Debt Outstanding and Disbursed 1970 1975 1985 1970 1975 1985 Private 4.7 21.7 67.6 17.3 90.6 358.3 Official, including Multilateral 1.3 3.4 10.6 13.7 25.7 109.8 Total 6.0 25.1 78.2 31.0 116.3 468.1 Note: At 1975 prices 10.0 25.1 40.1 51.4 116.3 239.9 ments. The existence of an international stock- cial institutions to governments and to the pile would be of some help. It would also be private sector against government guarantees important that, when world supplies are scarce, increased by about 50 percent a year. Follow- foodgrain exporters resist pressures to increase ing this explosive growth, there appears to have commercial sales at the expense of concessional been some slowing down in 1977, but the rate of increase in outstanding claims reported by have increased their sales of international banks is still high. bonds. Such rapid growth has caused some problems. Diversifying the sources of lending would The first is that the bulk of the increased lending improve the prospect of a stable flow of com- has gone to about a dozen developing countries, mercial capital to developing countries. Manda- leading to sharp increases in their debt service tory diversification among borrowers, however, obligations and making the lenders particularly poses a potentially serious threat to the pro- sensitive to developments in these countries. jected flows of commercial bank lending. In this Debt problems in any one of these countries connection, changes in the regulatory environ- could easily affect the willingness to lend to all ment could be critical. The danger is that regula- developing countries. While a number of anal- tory measures designed to assure the stability yses have concluded that there is no general of the banks in industrialized countries could problem of developing countries being unable to inadvertently cause abrupt changes in the avail- service debt, individual countries may run into ability of finance to individual developing coun- liquidity problems for reasons within or outside tries, thereby triggering the sort of debt crises their control. Expansion in the resources of the that the regulatory measures are intended to International Monetary Fund would enhance the prevent. capacity to deal with such liquidity crises. A second problem is the potential for insta- Uncertainty about the availability of capital bility created by the projected rapid growth in from private sources and the insufficient matur- the gross disbursements from commercial ities of these loans heighten the importance of banks. This is due largely to the relatively short the growth of capital flows from multilateral maturity of private commercial lending, leading financing institutions and official export credit to high amortization requirements which must agencies. During 1970-75, their gross flows of be financed by additional gross borrowing. non-concessional capital grew at 8.5 percent a Thus, during 1975-85, the projected increase in year in real terms. The future rate of growth of gross disbursements is nearly three times the these flows depends on increasing the capital increase in net disbursements. Improved access base of these institutions. Proposals to do this 24 to the long-term bond markets, a better balance are being considered, but as legislative action is between the lending from private and official necessary the outcome remains uncertain. sources, and measures which would extend av- erage maturities would be helpful in gradually Official Development Assistance reducing the instability of the lending structure. For the Low Income countries and for the Finally, how far the banks will increase their poorer Middle Income countries, the capacity to exposure in developing countries over the next service debt remains limited and they must rely several years depends on the adequacy of their on Official Development Assistance (ODA) at capital base, and the maintenance of a regula- highly concessional terms. As is shown in Table tory environment conducive to continued active 22, net annual flows of ODA from the industrial- lending to the developing countries. Much of the ized countries that make up the Development increase in lending to the developing countries Assistance Committee (DAC) of the OECD are over the past few years has been handled by a projected to increase from US$13.6 billion in relatively small number of banks. Well over half 1975 to US$43.6 billion in 1985an increase in of all outstanding claims on developing coun- real terms of 5 percent a year. As a percentage tries are held by about 30 major banks. Even if of the donors' GNP, the projected increase is concern about the adequacy of capital were to slight, from 0.36 percent to 0.39 percent in the prompt a slowing of growth at some of these same period; but even this modest increase will banks, other banks as well as non-bank private mean an important reversal of recent trends. It investors would welcome an opportunity to will not be easy to achieve the necessary in- increase their share of developing country creases without an early and large increase in financing. Lending to developing countries has commitments by three major countries - the traditionally been dominated by the large money United States, Japan, and Germany. While offi- center banks in the United States. Banks in cial statements have been made in all three in Europe (especially German banks) and Japan support of an enlarged aid effort, they have yet have been increasingly active in lending to to be translated into action. developing countries in the recent past, and In recent years, there has been a marked appear to have the potential for considerable increase in the concessionality of ODA from further growth. A few developing countries DAC members and this has been a very desir- able development. Several DAC members now their GNP. A continued growth in their dis- provide grants, instead of loans, to the poorest bursements is projected, to US$13.2 billion in countries. However, there are still a number of 1985, compared with an estimated US$5.5 bil- ways in which the usefulness of ODA could be lion in 1975, despite a projected decline in the 22. Net Flows of Official Development Assistance from Donors, 1965-85 Average Annual Real Billion Current US Dollars Growth Rate (percent) 1965 1975 1985 1965-75 1975-85 Members of Development Assistance Committee of OECD 6.8 13.6 43.6 3.3 5.1 Members of Organization of Petroleum Exporting Countries 5.5 13.2 . 2.1 Total 6.8 19.1 56.8 6.9 4.3 Note: DAC Flows as Percentage of Donors' GNP 0.34 0.36 0.39 Note: ODA flows in this table include contributions to multilateral agencies, and the value of technical assistance. - Negligible. Not available. Source: World Development Indicators, Table 12. enhanced. The most significant would be to balance of payments surplus of the capital sur- untie procurement: about half of the aid from plus oil exporting countries during this period. DAC sources remains tied to procurement in the In the past few years, the distribution of ODA donor country. flows from members of the Organization of With the increase in oil prices, some of the Petroleum Exporting Countries has broadened, oil exporting countries have become significant with increasing proportions going to non-Arab 25 sources of ODA, contributing over 2 percent of countries. Chapter 4: Prospects for Growth and Alleviation of Poverty The deep uncertainty about how the policy ally understood, but absence of productive issues discussed in the last chapter will be earning opportunities, so that long hours of hard resolved makes it risky to project economic work yield only small incomes. Hence, the growth. Nonetheless, a framework is necessary solution lies not only in accelerating the growth to lend perspective to the discussion of develop- of employment in modern industry but also ment issues and to the scope of actions required. in raising the productivity of those in small It is for this purpose, rather than as a forecast enterprises. of the future, that the projections in this chapter The poor suffer not only from low incomes are presented. but also from inadequate access to public ser- Progress in the developing countries will re- vices essential to their health and productivity. quire a combination of three elements: maintain- As many of these services, such as sanitation ing high rates of growth in incomes; modifying and water supply, cannot be privately pur- the pattern of growth so as to raise the produc- chased, an expanded public program for wider tivity and incomes of the poorer sections of the distribution of services must be an important population; and improving the access of the element of strategies to alleviate poverty. poor to essential public services. The prospects for economic growth are the Rapid economic growth is essential not only subject of the next section of this chapter. A to keep pace with growth in population and global quantitative model has been used to pro- provide productive employment for the growing ject the growth of various groups of countries, labor force, but to generate increased savings on the basis of assumptions about trade and for investment. Raising the rate of economic capital flows which are consistent with the growth is a central element in the continuing assessment of international economic condi- 26 process of modernization, strengthening institu- tions in Chapter 3. Such an aggregative model tions, spreading education, and increasing man- is suitable for the analysis of only some of agement and technical skills. It provides the the important influences on growth, such as resources necessary to improve living standards increases in investment and import capacity. and extend public services. Other important influences, such as the effi- But, in most countries, the poor are apt to be ciency of resource use, institutional measures bypassed by growth: many of them have only to stimulate agricultural productivity, and the weak links to the organized market economy; interaction of demographic trends and growth they own fewer productive assets; they are potential, which can only be treated in qualita- often less educated and frequently in poor tive terms in the context of specific economic health; and with lower incomes they have less settings, are discussed in the succeeding chap- ability to save and invest. Furthermore, rates of ters on development problems and prospects in population increase are often higher among the Low Income Asia, Sub-Saharan Africa, and the poor, so that the productive assets they own Middle Income countries. must be more thinly spread. Modifications in the Following the discussion of aggregate growth pattern of growth to increase the productivity prospects is a projection of their implications of the poor must thus be central to an effective for the alleviation of poverty, extrapolating from attack on poverty. These modifications have two available experience of the relations between essential aspects. The first is to raise the produc- aggregate growth and the distribution of income. tivity of those who have some access to produc- The last section of the chapter discusses the use tive assets such as land, even if only as tenants. of direct measures to alleviate malnutrition and The second is to increase employment opportu- improve the access of the poor to essential pub- nities in both urban and rural areas, particularly lic services. by encouraging more labor-intensive patterns of production. The relative importance of these Growth Projections for the Medium Term two approaches will vary in different countries. The projected rates of income growth are In general, however, it should be recognized that compared in Table 23 with those achieved in the the employment problem in developing coun- past. The aggregate growth rate for all develop- tries is not long-term joblessness as convention- ing countries is projected to remain about the same as in recent years; growth in the Low mobilize domestic resources, including the Income countries is projected to accelerate. reform of taxation systems, introduction of more realistic prices for public-sector products 23. Growth of Gross Domestic Product, 1960-85 and services, restraint in government consump- (Average annual percentage growth rates, tion expenditures, and increased incentives for at 1975 prices) private savings. Increases in the investment 1960-70 1970-75 1975-85 levels of the Low Income countries will depend Low Income Asia 2.4 3.9 5.1 on their success in raising domestic savings Low Income Africa 4.3 2.8 4.1 since the contribution of net foreign resource Middle Income 6.3 6.4 5.9 inflows is expected to decline from the excep- All Developing tionally high levels of recent years. The Middle Countries 5.5 5.9 5.7 Income countries are expected to maintain their Industrialized high rates of domestic savings. But with the Countries 4.9 2.8 4.2 need to limit external borrowing to keep their Centrally Planned foreign debt within manageable limits, the con- Economies 6.8 6.4 5.1 tribution of net foreign resource inflows will decline, and consequently their investment is The projected acceleration in the economic projected to rise more slowly than their income. growth of the Low Income countries hinges on Exports the assumption that their agricultural per- The exports of developing countries are pro- formance can be improved substantially. The jected to grow as shown in Table 25. Exports are prospects for such an acceleration and its impli- the principal determinant of a country's foreign cations for policy are discussed in the next two exchange availability, since they affect both its chapters, on Low Income Asia and Sub-Saharan direct earnings on trade account and its access Africa. The uncertain outlook for trade and cap- to the international capital markets. The growth ital flows poses severe problems for the Middle prospects of the Middle Income countries, Income countries, and is projected to have an which rely heavily on capital from these mar- adverse influence on their growth. Some of the kets, will therefore depend on expanding ex- 27 major Middle Income countries face large debt ports, mainly those of manufactures. Export service obligations arising from the rapid in- earnings below the projected levels would com- creases in external borrowing in recent years. plicate the effective management of their debt For them, it is vital to preserve a stable climate and adversely affect their creditworthiness. 24. Developing Countries: Investment and Savings Rates, 1975 and 1985 (Percentages of gross domestic product, at 1975 prices) Gross Gross Net Foreign Domestic Investment Domestic Savings Resource Inflows 1975 1985 1975 1985 1975 1985 Low Income Asia 19.2 22.5 16.7 20.5 2.5 2.0 Low Income Africa 18.4 19.1 8.4 11.4 10.0 7.7 Middle Income 26.4 24.4 22.1 21.8 4.3 2.6 All Developing Countries 25.2 24.1 21.0 21.5 4.2 2.6 for commercial capital flows to avert severe Reduced investments and slower growth would balance of payments problems and a sharp follow. decline in their economic growth. The main For the purposes of these growth projections, issues involved in the Middle Income countries' the price of oil is projected to remain at its pres- reassessment of development strategies in re- ent level in real terms. Though a large expansion sponse to the uncertain international environ- of energy production capacity is planned in ment are discussed in Chapter 7. countries that are not at present large-scale Savings and Investment exporters of oil, most of their incremental pro- To achieve the projected rates of growth it will duction will be for domestic use. As shown in be essential to sustain high domestic savings Table 25, fuel exports from developing countries rates. Particularly in the Low Income countries, (which exclude the major capital surplus oil which will need to raise their savings rates exporters) are expected to grow much more substantially, this will require major efforts to slowly than over the past fifteen years. 25. Developing Countries: Growth of Merchandise Exports, 1960-85 (Percentages, at 1975 prices) Share of Share of Commodity Commodity Group Average Group in in Increase of Annual Growth Rate Exports Exports 1960-75 1975-85 1975 1960-75 1975-85 Food and Beverages 2.8 3.0 21 13 9 Non-food Agricultural Products 2.6 3.4 6 3 3 Non-fuel Minerals and Metals 4.8 5.8 7 6 6 Fuel and Energy 6.2 3.4 40 42 18 Manufactures 12.3 12.2 26 36 64 Total Merchandise 5.9 6.4 100 100 100 Exports of foodgrains from developing coun- factured exports has been so unpredictably tries are also projected to grow more slowly dynamic in the past decade that projected mag- than before, reflecting the rapid growth of nitudes can only be regarded as illustrative. domestic demand due to increases in population Nonetheless, it is useful to examine the poten- and incomes. Favorable market prospects for tial for export growth in various categories of timber, rubber, and bauxite are projected to lead manufactured products and to identify some to an increase in developing countries' shares of of the problems that must be surmounted in world trade in primary commodities other than order to achieve this potential. The approach foodgrains. adopted is to make assumptions on the growth Manufactured goods, which are projected to of textiles, clothing, chemicals, steel, and the expand by about 12 percent a year, are expected miscellaneous category of "other" manufac- to be the most vigorous element in the growth of tures, and then considerthefeasibilityofachiev- developing countries' exports. While the share ing the growth that would be required in the 28 of developing countries in world merchandise category that has expanded most vigorously in trade remains about the same, their share in the past: machinery and transport equipment. world exports of manufactures is projected to Assuming that the present quantitative re- rise, from 9 percent to about 13 percent. strictions will be implemented fairly strictly 26. Manufactured Exports of Developing Countries as a Share of Markets in Industrialized Countries, 1960-85 (Percentags) Share in Market Growth 1960 1970 1975 1985 1960-70 1970-75 1975-85 In Imports 5.9 5.8 8.9 13.6 5.8 18.6 17.5 In Consumption 0.4 0.7 1.2 2.7 1.0 7.1 5.4 The industrialized countries are projected to and extended up to 1985, an annual growth of obtain a gradually rising share of their imports 4 percent in the volume of clothing exports and of manufactures from developing countries. of 3.5 percent in textiles is projected. It is also Even so, these imports will continue to account assumed that the quality of these products will for an extremely small share of their total con- be upgraded somewhat, raising the projected sumption of manufactures. On the assumption real annual growth to 5.5 percent in clothing and that trade barriers remain roughly as they are 4.5 percent in textiles. These growth rates are now, manufactured exports from developing applied to the actual exports of 1976, which countries are projected to grow more slowly were about 30 percent higher than in 1975, to than between 1970 and 1975, and to supply a give the projected growth rates of clothing and smaller share than before of the growth of con- textile exports for 1975-85 that are shown in sumption in the industrialized countries. They Table 27. The growth of exports in these cate- are expected to account for only 2.7 percent of gories could be slightly higher if there is some the market in industrialized countries by 1985. flexibility in the application of the import quotas. The growth and country composition of manu- If exports of iron and steel, chemicals, and 27. Developing Countries: Growth of Manufactured Another structural factor of some importance Exports, 1970-85 could be the evolution of technology that affects (Average annual percentage growth rates, the labor intensity of electronics assembly, and at 1975 prices) hence the cost advantage hitherto enjoyed by 1970-75 1975-85 developing countries. Though these factors sug- gest caution in projecting high rates of growth Clothing 20.3 8.3 for developing countries' exports of electronics, Textiles 17.8 6.2 the field is a rapidly growing one, where tech- Chemicals 16.5 13.0 nology changes quickly and new products can Iron and Steel 10.7 14.5 readily emerge. Provided there are adequate Machinery and Transport links to ensure the transfer of technology and Equipment 20.3 17.3 to keep marketing channels openin both of Other 10.2 10.0 All Manufactures 14.9 12.2 which transnational firms will undoubtedly play an important partcontinued rapid export growth is conceivable. "other" miscellaneous manufactures grow at the Developing countries' exports of other engi- rates shown in Table 27, developing countries' neering products are extremely heterogeneous, penetration of industrialized countries' markets and a significant share, perhaps one-third, goes for these products will still be modest.1 To to other developing countries. In this category, achieve the projected aggregate growth of man- developing countries supply a very small share ufactured exports at 12.2 percent a year from of the market in industrialized countries: about 1975 to 1985, the required annual growth of 3 percent of imports and less than 1 percent of machinery and transport equipment would have consumption. Except in shipbuilding, penetra- to be about 17 percent, compared with a rate of tion rates in specific products are low and the growth of 20 percent a year during 1970-75. potential market in industrialized countries is Over one-half of developing countries' ex- still large. The essential problems in expanding ports of machinery and transport equipment to these exports are technological and organiza- industrialized countries consists of electronics tional. The great diversity and complexity of a category that has grown extraordinarily rapid- technology in this area; the close links between ly in recent years to a value of over Us$3 billion the scale of manufacture, quality of product, in 1975. These imports accounted for 14 percent and ability to market; the importance of mod- of the total imports of electronics products and ern management techniques, engineering design for about 4 percent of the total consumption in capabilities and, in some cases, the need to ex- the industrialized countries. In specific cate- tend credit to importers are among the factors gories, the penetration is much higher, espe- that make the expansion of machinery exports a slow and difficult task. Without a large indus- cially in the United States. About half the radios and monochrome television sets purchased by trial base, it is difficult to export machinery. United States consumers come from developing Hence relatively few developing countries will countries. Given that this market is practically have the opportunity to diversify into these saturated, further rapid growth in developing areas in any sizable volume during the next decade. countries' exports of these items depends on On balance, the projected growth of manu- their ability to displace producers in industrial- ized countries, especially Japan, and to a lesser factured exports seems feasible, but it will re- quire great efforts by the developing countries extent in Europe. to diversify commodities and markets. If they Exports of these and other electronics prod- face an increase in protection, it will be ex- ucts, such as office equipment and calculators, tremely difficult for them to diversify enough to and especially electronic components, are most- achieve this growth. Even small reductions in iy organized by transnational firms. The pros- the quantitative restrictions on textiles and pects for exports thus depend largely on the clothing, or small improvements in the way they decisions made by these firms on subcontract- are administered, can make a big difference to ing, the economics of which is influenced by the export prospects of newly emerging export- the tax laws of the industrialized countries. ers of manufactures. The more restrictive the It is impossible to make an informed estimate of future international trade environment, the fewer the growth in "other" manufactured exports, a category that countries that will have the flexibility neces- includes a wide variety of products including footwear, ply- sary to exploit the remaining opportunities for wood, toys, watches and simple products made of metal and plastic. growth in exports of manufactures. External Capital Flows 28. Developing Countries: Despite the rather optimistic assumptions External Financing Requirements, 1970-85 made about external trade, and despite the (Billion current US dollars) somewhat lower rates of economic growth pro- 1970 1975 1985 jected for the Middle Income countries, the de- Net Imports 8 44 103 veloping countries' requirements for external (Imports of Goods and finance are projected to increase significant- Non-factor Services) (62) (280) (900) ly. The estimated financing requirements are Less: (Exports of Goods and US$276 billion at current prices (US$141 billion Non-factor Services) (55) (236) (797) at 1975 prices) in 1985, compared with US$63 Interest on Medium- and billion in 1975, as shown in Table 28. Long-term Loans 3 8 37 More than half of the increased financing re- Amortization 6 16 108 quirements from 1975 to 1985 represents the Increase in Reserves -1 -5 28 payment of interest and the amortization (i.e., Total to be Financed 63 276 repayment of principal) of external debt, the Net Factor Income, excluding latter reflecting the growing share of medium- Interest on Medium- and term private debt at maturities that are less than Long-term Loans -4 2 12 Transfers (net) 3 10 26 half as long as those of official loans. Another Direct Investment and 15 percent of the increase is needed for the Other (net) 3 2 30 accumulation of international reserves in line Medium- and Long-term with the growth of imports. Loans (gross) 15 49 208 The bulk of the financing requirements will Sources of Finance 17 63 276 continue to be met by inflows of loans with maturities exceeding one year. Net disburse- Note: Totals may not add due to rounding. The assumed an- ments of medium- and long-term loans and of- nual rate of inflation between 1975 and 1985 is about 7 percent. ficial grants are projected to grow at 4.6 percent a year in real terms, to US$118 billion at current source for about three-quarters of their net prices (US$61 billion in 1975 prices) in 1985. medium- and long-term external capital, and 30 29. Net Disbursements of Medium- and Long-term Capital to Developing Countries, 1970-85 Billion Current Average Annual US Dollars Real Growth Rate (percent) 1970 1975 1985 1970-75 1975-85 Official Grants 2.1 6.0 18.5 11.5 4.7 Concessional Loans 2.4 7.6 21.7 13.9 3.9 Bilateral ODA 2.2 6.3 17.4 11.7 3.5 Multilateral 0.2 1.3 4.3 32.0 5.4 Loans at Market Terms 6.0 25.1 78.2 20.0 4.8 Multilateral 0.5 2.3 9.4 23.5 7.6 Official Export Credits 0.8 1.0 1.2 -5.1 -5.0 Private 4.7 21.7 67.6 23.0 4.8 Total 10.5 38.8 118.4 17.4 4.6 Note: At 1975 prices 17.4 38.8 60.7 Note: Totals may not add due to rounding. The data on official grants and concessional loans in this table are not comparable with those in Table 22. Table 22 shows disbursements by donor countries for all purposes; Table 29 shows receipts of medium- and long-term capital by developing countries. The principal differences are that Table 22 covers technical assistance and contributions to multilateral institutions, including paid-in capital. The latter is the basis for multilateral lending at market terms. The data on official grants and concessional loans in Table 29 do not include technical assistance; they are net of the outflow of official grants from developing countries; and they include the disbursements of concessional loans from multila- teral institutions. As shown in Table 29, the projected growth in which absorb almost all the private lending to each category of capital is much slower than developing countries. As emphasized in Chap- what was achieved in 1970-75. ter 3, for these countries to manage their debt The projected slowdown in the growth of satisfactorily, the average maturities of their private lending is of enormous importance for external borrowing must be lengthened. Ex- the Middle Income countries, which rely on this tending the maturities of loans from banks, improving access to the bond market, and rais- countries would be only 18 percent of exports, ing the share of official loans, which are lent at rather than 22 percent, in 1985. market interest rates but with much longer maturities, can make an important contribution Alternative Scenarios in this regard. The Low Income countries rely The scenario described above is based on a heavily on official grants and concessional set of assumptions that can be varied in in- loans, and the projections assume a moderate numerable ways. Some of the assumptions per- increase in their share of these categories of tain to the internal policies of the developing 30. Net Disbursements of Medium- and Long-term Capital to Developing Countries, by Type of Capital and Country Income Group, 1970-85 (Percentages) Low Income Middle Income All Developing Countries Countries Countries 1970 1975 1985 1970 1975 1985 1970 1975 1985 A, Distribution of Capital by Category Official Grants 38 28 39 13 12 11 20 16 16 Concessional Loans 42 39 52 17 14 11 23 19 18 Loans at Market Terms 15 29 8 71 74 78 57 64 66 Official 11 1 7 12 11 9 12 9 9 Private 4 28 1 59 63 68 45 56 57 Total 100 100 100 100 100 100 100 100 100 B. Distribution of Capital by Income Group' Official Grants 50 38 42 50 63 58 100 100 100 Concessional Loans 46 43 48 54 56 52 100 100 100 Loans at Market Terms 7 10 2 92 91 98 100 100 100 Official Private Total 23 2 25 3 11 21 -13 17 69 98 74 100 89 79 87 100 83 100 100 100 100 100 100 100 100 100 31 Note: Totals may not add due to rounding. Negligible. aThe distribution of concessional capital by income group is highly sensitive to the criterion used in classifying countries into Low and Middle Income groups. capital (see Table 30). To achieve the projected countries, and are discussed in subsequent net disbursements, the gross flows of conces- chapters on the supposition that the external sional loans to Low Income countries would conditions are as outlined above. However, to need to grow by 5.2 percent a year in real terms emphasize the sensitivity of the projections for during 1975-85 (or by 12.4 percent a year in nom- the developing countries to the assumptions inal terms, to reach US$12.3 billion in 1985). made about external conditions, the implications On the assumptions about the size of the 31. Developing Countries: Debt Service financing requirements of developing countries Ratios, 1970-85 and the terms on which they are met, reflected As Percentage of in Tables 28-30, debt service obligations will Exports of As Percentage Goods and of Gross rise in relation to both exports and GNP, espe- Non-factor National cially for the Middle Income countries (see Services Product Table 31). The projected ratios are not unac- 1970 1975 1985 1970 1975 1985 ceptably high, however, and should pose no Low Income general problem of debt management provided Asia 16.8 12.6 12.6 1.0 1.3 1.4 exports can grow at the projected rates. A mod- Low Income est lengthening of the maturities of private flows Africa 4.8 6.7 9.6 1.2 1.5 2.5 would result in considerably lower debt service Middle Income 15.6 11.8 22.0 2.4 2,7 4.8 ratios than projected. For example, if the aver- All Developing age initial maturity of new disbursements of Countries 15.2 11.8 21.0 2.1 2.4 4.3 private loans were to rise from five to seven Note: Debt service on public and publicly guaranteed years, the debt service of the Middle Income medium- and long-term loans only. of change in one major factor-growth in the of developing countries are assumed to grow industrialized countries-have been assessed. slightly more rapidly. Most of the increase would be in manufactures. Because of the faster 32. Alternative Assumptions on Average Annual growth of income in industrialized countries, Growth Rates, 1975-85 the availability, of ODA would grow more rap- (Percentages) idly. The developing countries' requirements for Low High capital would rise, largely to maintain reserves Base Growth Growth in line with the increases in imports. The prin- Scenario Scenario Scenario cipal impact of these changes would be to raise GDP of the rates of growth of the developing countries, Industrialized with the Middle Income countries as the prime Countries 4.2 3.7 4.7 beneficiaries. World Trade 6.4 5.7 7.4 Developing Countries' 33. Implications of Alternative Global Assumptions Exports 6.3 5.4 7.4 for Developing Countries Average Annual Percentage Growth Rates, 1975-85 As shown above, in one alternative the indus- trialized countries are projected to grow at an Low High Base Growth Growth annual rate of 3.7 percent instead of the 4.2 per- Scenario Scenario Scenario cent previously assumed. Despite the intentions GDP and best efforts of their governments, such a Developing result is not implausible, though it obviously is Countries 5.7 5.2 6.1 highly undesirable. Still lower growth rates are Low Income not considered here, not only because they are Countries 5.0 4.8 5.1 thought to be unlikely but also because they Middle Income would be associated with structural changes Countries 5.9 5.3 6.3 in trade and other relations between countries Gross Investment 5.3 4.4 5.7 32 that could not be captured in the present analyti- Low Income cal framework. In the second alternative, higher Countries 6.5 5.8 6.7 average growth rates are postulated: 4.7 percent Middle Income annually instead of 4.2 percent. However, these Countries 5.1 4.2 5.6 rates seem improbable in view of the per- Imports 5.6 4.8 6.5 formance in 1976-77 and the estimated results Low Income for 1978. Countries 5.7 4.8 6.3 In the lower growth case, the growth of world Middle Income Countries 5.6 4.9 6.5 trade is reduced in the same proportion as the decline in growth of industrialized countries, and there is a slightly larger drop in the growth The impact on the Middle Income countries rate of developing countries' exports. Regarding is much greater than on the Low Income coun- capital flows, it is assumed that the same per- tries because the former are more sensitive to centage of industrialized countries' GNP will changes in the growth of external trade. In the be allocated to concessional assistance as in the low growth alternative, their reduced import original scenario, hut because of their lower capacity slows the growth of their incomes. It levels of GNP the projected growth rate of also causes a more than proportionate decline bilateral ODA during 1975-85 is reduced from in savings and investment. Since many Middle 3.5 percent a year to 2.8 percent a year in real Income countries now produce most of their terms. No alternative assumptions have been consumer goods domestically, their imports made for other capital flows. The principal im- largely consist of capital goods and raw mate- pact of these changes would be a reduction in rials. As reductions in the latter lead to an the economic growth of the developing coun- immediate reduction in production and employ- tries, with the Middle Income countries bearing ment, it is generally capital goods imports, the brunt of the decline. mostly from industrialized countries, that are The higher growth case is virtually the mirror curtailed in response to balance of payments image. World trade growth is assumed to in- pressures, with adverse consequences for future crease proportionately to the increase in growth growth. in industrialized countries, while the exports There is small scope for offsetting slower growth of export earnings by additional borrow- erately rapid growth, the distribution of income ing, because of the difference in magnitudes. has initially worsened, as demonstrated by For example, a 10 percent increase in net inflows analyses of the experience of Brazil, Kenya, of medium- and long-term capital in 1985 would Mexico, the Philippines, and Turkey. raise the Middle Income countries' capacity to Assuming that the rates of growth projected purchase imports by only 1 percent, whereas a for the period 1975-85 hold to the end of this 10 percent increase in exports would increase century, and assuming the relation between their import capacity by almost 9 percent. income distribution and aggregate growth just described, the proportion of population living in The Impact on Poverty absolute poverty in the year 2000 is projected Even if the developing countries' incomes as shown in Table 34. grow as in the base scenario, absolute poverty On the assumptions above, which constitute will continue to be a problem of immense di- the "base scenario" in Table 34, the proportion mensions. A sense of these dimensions is given of the absolute poor in the total population is by the results of a simulation model that pro- projected to decline by one-half in the Low In- jects the proportion of population in absolute come countries and by three-quarters in the poverty under alternative assumptions. Such Middle Income countries. Despite this, the num- projections unavoidably have large margins of ber of people in poverty declines only slightly error, since so little is known about the inter- because of the growth of population. This is a action of economic and social structures with disturbing result, especially since the projected development policies, which produces particu- income growth rates for the Low Income coun- lar patterns of economic growth with different tries are, if anything, somewhat optimistic. effects on the poor. Nonetheless, the projections The "alternative scenario" shown in Table 34 give a sufficient indication of aggregate trends shows the reduction in poverty that is implied to be of interest. by much more favorable assumptions about the The model combines the GNP growth rates pattern of growth. In the base scenario, the poor- projected for different groups of countries with est 60 percent of the population received 18 to 33 34. Projected Decline in Absolute Poverty, 1975-2000 Simulated Result in 2000 1975 Base Scenario Alternative Scenario Number of Number of Number of Percentage Absolute Percentage Absolute Percentage Absolute of Poor of Poor of Poor Population (millions) Population (millions) Population (millions) Low Income Countries Middle Income Countries All Developing Countries 52 16 37 630 140 770 27 4 17 540 60 600 -13 - 260 7 260 - Negligible. the assumption that the inequality of incomes 25 percent of the increments to income; in the is likely to increase in the early stages of de- alternative scenario, their share is assumed to velopment, and then to decrease in the later be as much as 45 percent. This is the highest stages of development, implying that the in- known to have been achieved by any develop- comes of the poorer sections of the population ing country apart from the centrally planned will grow more slowly than average income per economies. Under these conditions, absolute person over the projection period. This as- poverty could be virtually eliminated in the sumption can be supported by tests based on Middle Income countries, but would still afflict cross-country comparisons relating measures of 13 percent of the population in the Low Income income equality to the average income levels in countries in the year 2000. The extreme opti- each country. Though there are too few studies mism of the assumptions underlying the alter- of changes in the distribution of income within native scenario should be underlined. individual countries over a period of time to Given the obstacles they face, elimination of establish its validity, it is consistent with the absolute poverty in the Low Income countries results of the studies that do exist. In most by the end of this century seems impossible. A developing economies that have sustained mod- more realistic target would be to reduce the proportion of their populations living in poverty tion is the extent to which increases in incomes to about 15 to 20 percent by the year 2000, which can be relied upon to eliminate widespread de- would still leave nearly 400 million people in ficiencies, and how far specific programs are absolute poverty. To realize even this gain will necessary. require massive efforts to raise the productivity Programs tn raise incomes must generally and incomes of the poor. play an important role in relieving malnutrition, for many reasons. First, poor people who are Policies for Reducing Poverty undernourished will typically spend a large part While poverty could be reduced to low levels of any increases in their income on food, and in the Middle Income countries by the end of hence income increases may well be the most this century, it will continue to plague the Low efficient way of improving the nutrition levels Income countries. Improvements in the pattern of a large mass of the population. Second, the of growth are necessary in both groups of cotin- nutritional status of subsistence farmers, who tries. But especially in the Low Income coun- are a substantial part of the population in the tries, where the numbers in poverty are so Low Income countries, depends critically on enormous, such improvements can only make a their own productivity. Third, increases in significant contribution if growth itself is more income will help improve health and education, rapid. Policies for accelerating growth through which can contribute significantly to the ef- efficient use of resources, and for ensuring that fective nutrition gained from given levels of aggregate growth leads to rising income levels expenditures. for the poor, are discussed in the following But although over the very long run income chapters dealing with the problems of separate growth may eliminate malnutrition in most groups of countries. In this section, the discus- places, countries where large numbers of people sion focuses on the use of those direct measures are undernourished cannot wait that long. Mea- to improve living standards that must supple- sures to improve the nutrition of the poor with- ment measures designed to increase the incomes out necessarily increasing their incomes can be of the poor. broadly divided into two groups: those that There normally must be a close interaction increase food consumption without increas- between improvements in individuals' produc- ing household food expenditures; and those tivity and incomes and improving their living that improve the nutritional value of given standards through direct intervention. The pat- food levels. tern of growth influences the structure of The most prominent example of the first production and demand, affecting a country's group is the use of government procurement, ability to invest and to sustain rapid aggregate fiscal subsidies, and price controls to reduce the growth; increases in the income of the poor may retail price of foodgrains and permit greater be necessary for them to take full advantage of consumption for given levels of food expendi- even "free" public services; faster growth can ture. Such measures have been widely used, but make it easier to mobilize resources to finance the experience has not been evaluated suffi- the expansion of public services; broadening ciently to permit a definitive judgment on their access to public services such as health and benefits. They are apt to be very expensive, education can increase productivity, as well as but in several countries, notably Egypt and Sri reducing fertility rates and population growth Lanka, they have contributed to dramatic im- in the longer run, improving the prospects of provements in nutrition and life expectancy. increasing income per person. A notable exam- The problems with these types of measures are pie of the importance of the interaction between many and serious: the distribution schemes are income growth and the use of direct measures generally restricted to urban areas and do not to alleviate poverty is nutrition. benefit the majority of the really poor, many of whom live in rural areas; the schemes often rely Nutrition on low procurement prices and increased im- The most widespread form of malnutrition is ports, which may discourage the growth of protein-calorie deficiency, which in general re- domestic agriculture and deplete foreign ex- sults from inadequate intake of calories.2 An change reserves; if they do not rely on low pro- important strategic issue in combating malnutri- curement prices, they often require very high 2Malnutrition is defined by a complex set of relations be- government subsidiesin some cases up to tween such factors as the nutritive value of the quantity 3 percent of GNP; and some of the subsidies are and types of foods consumed, the sex and age of the con- apt to go to undeserving households because sumers, the type of work undertaken in different climatic en- vironments, and the health status of the affected population. of the administrative difficulties of distinguish- ing between rich and poor households even Public Services within urban areas. It is at times possible to While malnutrition can be largely overcome reduce some of these problems by restricting if the incomes of individuals are raised, inade- subsidies to foods that are generally consumed quate access to essential public services cannot. by the poor, for example coarse grains and Safe drinking water, sanitation, health, and edu- broken, unpolished rice. But, in general, fiscal cation are supplied by public agencies, and the and administrative considerations limit the ex- complete absence or poor quality of these ser- tent to which large-scale food subsidy programs vices afflicts the poor even in Middle Income can be effectively used to reach the poor. countries. A vital component of any strategy for Programs to feed specific groups that are vul- poverty alleviation is thus a concerted attempt nerablepre-school children, pregnant women, to bring these services to the poor at a price and lactating mothershave promise but have they can afford. not yet been extensively used in developing One aspect of the problem is to seek design countries, and their effectiveness is not estab- standards and technology that will permit a lished. The main problems are administrative. wide extension of such services at low unit costs Though school children are relatively easy to (for example, installing public standpipes wide- reach, attempts to reach pre-school children and ly, rather than house connections for piped women directly have not generally been suc- water in only a few areas). Equally important cessful, although these groups may benefit in- are the problems of administration associated directly from school feeding programs if food with implementing such systems. at home is diverted toward them as a result. For example, it is now widely accepted that A wide range of measures can improve the more extensive use of paramedical staff, rather nutrition derived from a given expenditure on than doctors and nurses, can effectively broaden food. A simple one is the fortification of com- access to health facilities at lower public cost. monly consumed foods with special nutrients: However, experience suggests that the simpler the iodization of salt dramatically reduced the the training and facilities for providing health incidence of goiter in some areas of India; and care, the more important is the quality of the enrichment of rice with thiamine eliminated administration in supervising and supporting ben-ben in a province in the Philippines. Prod- the entire system. Paramedical personnel can 35 ucts fortified with vitamin A include milk in be trained to identify the types of health prob- Brazil and India, sugar in Guatemala, and tea, lems they are able to handle, to provide the margarine, and cooking oils in other countries. appropriate care in a relatively short time, and India has recently developed a technology to to refer cases that are beyond their ability to fortify salt with iron. With all its effectiveness, more qualified diagnosis and care. Their diffi- however, fortification has the obvious disadvan- culties lie more in adhering to the principles of tage that it can only be applied to foods that their training in the face of the criticism and are centrally processed; moreover, it cannot folklore of elders and other prestigious persons, reduce calorie deficits. while obtaining and keeping the confidence of Also of importance for nutrition are health their patients. Equally important and difficult and education. Gastro-intestinal diseases seri- administrative problems are the maintenance ousiy impede the absorption of food by large of adequate supervision, of material and moral numbers of the poor. Control of these diseases support for the paramedical staff, and of finance, through improvements in water supply and per- staff, equipment, and supplies to permit the full sonal hygiene, which requires better education, use of clinics and small hospitals, particularly can do much toward reducing malnutrition in in rural areas. the poorer countries. Although there is some The roots of these problems vary from the evidence that the diets of the poor are often re- unwillingness of doctors and other highly markably well balanced, given their low expen- trained personnel (needed for supervision and ditures on food, increasing people's awareness for staffing local or regional hospitals) to live of the nutrient needs of various family members outside major cities, to the temptation to put (for example, the importance of breast feeding, too large a share of the health budget into high and of introducing supplementary foods at the technology equipment and services to major appropriate age) can help improve their diets. teaching hospitals and urban medical care. The It is difficult to overcome strongly held personal unmet demands for medical services in cities prejudices through education, but given its im- have enabled health workers to choose urban portance and some, albeit few, successes, the jobs, and efforts to compel them to serve in effort should be made. rural areas have generally been unsuccessful. Attempts to upgrade locally recruited personnel they are meant to benefit. Moreover, there fre- and to introduce career ladders for them have quently is a lack of clearly defined objectives too often resulted in inadequate attention to and realistic implementation schedules. This their current duties, and excessive attention to need not be so. It is more difficult to specify preparation for examinations and possible ad- the actions .needed to increase the purchasing mission to medical school. Usually more than power of the rural poor than to specify the num- 50 percent of the health budget in countries with ber of villages to be supplied with potable water basic health care systems goes into the opera- in each of the next ten years. But if more prog- tion of one or more teaching hospitals, and at ress is to be made in alleviating poverty, it is least another 20 percent into district or regional essential that objectives be defined so that gov- hospitals and bedded clinics. Basic health ser- ernments can monitor them regularly. Large vices usually account for only 8 to 10 percent of amounts of resources and energy can be dissi- central government health expenditures. pated if operational clarity is lacking about tar- The fact remains, however, that even with gets, designs, and plans for the execution of better technology, design and administration, poverty programs. Without such clarity, it is any sizable improvement in the distribution difficult either to assign administrative respon- of public services will require an enormous sibility for implementation or to evaluate the increase in expenditures. The financial costs effectiveness of different approaches to pov- could be reduced if local participation could be erty alleviation, and impossible to learn from effectively mobilizedas is the case with the experience. site-and-services approach to urban housing, One step that many countries have already various rural works, and community building taken is to define the areas of deficiency and of schools. Indeed, in the poorer countries, there to formulate a realistic program for improve- may be no hope of meeting even modest targets ment. Such specific targets might initially in- for the provision of services unless there is volve the supply of potable water and local community participation. The experience of health facilities, and be gradually extended to nationwide participatory programs is far from improvements in other public services. A sec- 36 encouraging, since they require effective local ond step would be to define a precise set of leadership and adequate central support, which objectives for programs designed to raise the have often been lacking. Even if such an effort incomes of low income groups. can be mounted, a large increase in public ex- Monitoring and evaluation are particularly penditures would seem to be necessary. While important in anti-poverty programs since infor- there are no reliable estimates of either the mation on the characteristics of the absolute investments required or the recurrent expendi- poor, and how their conditions are affected by tures that would be needed to operate such a particular programs and policies, is scarce. To vastly expanded system, it seems clear that the monitor progress and evaluate the effectiveness costs would far exceed the resources currently of programs requires the establishment of a available, especially in the Low Income coun- strong nationwide statistical base, drawing on tries. Obviously the resources for public ser- detailed household surveys that will measure vices could be increased if the industrialized changes in income, expenditure, and consump- countries were to expand their aid flows. How- tion in real terms, as well as access to public ever, to redirect presently planned flows of aid services. toward programs of this type would reduce the A monitoring system must also involve re- availability of finance for other sectors whose view of the implementation of specific programs development is also essential to improve the to establish how far their benefits actually reach conditions of the poor. the poor. There are a host of such activities in each country that are worth monitoring. They Monitoring Performance include rural development projects, irrigation Programs for alleviating poverty are often works, credit institutions, public works, provi- hampered by scarcity of resources, conflicts sion of school meals, food subsidies, health between different interests and objectives, clinics, housing projects, and labor training. uncertainty about how to resolve conflicting Funds for their evaluation should ideally be objectives over an acceptable period of time, built into the budgets of such programs at the administrative structures that are too weak to outset and the findings should be widely shared support more extensive intervention and ser- to assist in improving the design of subsequent vices, and incomplete knowledge about the efforts. Understanding of the cost, efficiency, actual effects of different policies on the people and social impact of anti-poverty programs is still so limited that many years' experimentation of essential services but also, more broadly, to and evaluation will be necessary before they questions of relative emphasis in the design of can be designed with confidence. development strategies. The latter are the sub- The need for a precise definition of objectives ject of the next three chapters, which examine and how they are to be met applies not only the principal choices and priorities for different to public programs for extending the provision groups of countries. 37 Chapter 5: Low Income Asia Of the more than one billion people in the 36. Marginal Farmers and Landless Households Low Income countries of Asia, about half live in in Low Income Asian Countries absolute poverty. Four large countriesBangla- (Percentage of rural households) desh, India, Indonesia, and Pakistancontain Bangla- Indo- Paki- desh India nesia stan about two-thirds of the world's absolute poor. 1967-68 1971 1971 1972 The main reason for the stagnation in the living Landless 31 10 33 34 standards of the Asian poor has been slow eco- Less than nomic growth. 0.5 Hectare 22 30 31 3 In these predominantly rural economies, the 0.5-1 1-lectare 17 16 4 key to alleviating poverty is to accelerate the Total 70 56 64 41 growth of agricultural incomes, because the Number of majority of the populations and of the poor live Households in rural areas and earn incomes directly linked (millions) 7 44 13 3 to the growth of agriculture. The growth of non- Note: The data in this table come from official sources in farm incomes in rural areas (from rural services each of the countries. They are not strictly comparable and should be construed only as orders of magnitude. A marginal farm in Indonesia is defined as less than 0.5 35. Dependence on Agriculture in Low Income hectare. Asian Countries Percentage of Agricultural marginal farmers and the landless cannot be Population in Product as isolated from those of the rest of agriculture, Rural Areas, Percentage of and specific programs to help these disadvan- 38 1975 GDP, 1976 taged groups cannot succeed without growth Bangladesh 91 59 and change in agriculture as a whole. The rural Burma 78 47 poor are part of an ancient and well-established India 78 47 social structure, and efforts to improve their productivity without regard to this structure are Indonesia 81 29 likely to be frustrated. Also, much of the develop- Pakistan 73 32 ment needed in agriculture requires investments Viet Nam 83 that are not divisible, especially irrigation Not available. programs for both surface and ground water. Source: World Development Indicators, Tables 14 and 3. Therefore, agricultural development programs must be designed to raise agricultural produc- tivity across the board while ensuring that the and ancillary manufacturing activities, for small farmer has equitable access to modern example) also depends on the pace of agricul- technology and inputs, and that the potential tural growth. These sources of income can be for employment is not lost through uneconomic extremely important to the very poor in rural use of labor-saving farm equipment. areas who do not own land and to small The next section considers the potential for farmers who rely on wage employment as a more rapid agricultural growth and the condi- source of supplementary income. The growth of tions for greater industrial dynamism. It is fol- agriculture also is an important factor in indus- lowed by three sections that consider issues trial growth: a large part of domestic consumer relating to the distribution of the benefits of demand for industrial products depends on agri- growth: raising the productivity and incomes of cultural prosperity, and a significant proportion small farmers, especially tenants; policies to of manufacturing activity (an estimated 40 per- encourage the growth of employment, including cent in India, for example) is based on agricul- the use of public works schemes; and the demo- tural raw materials. graphic pressures on scarce resources. Within the rural sector, at the core of the poverty problem are families who either own Accelerating Growth and cultivate very small holdings of land or The projections in Chapter 4 show a rapid own no land at all. However, the fortunes of the increase in the rate of economic growth in Low Income Asian countries. The increase is predi- systems could increase yields in the densely cated on a large rise in domestic savings and, populated islands, especially of food crops such most importantly, on a doubling of the rate of as maize, soybeans, and cassava, Indonesia's growth of agriculture. major source of accelerated agricultural growth 37. Growth in Low Income Asia, 1960-85 will be the development of the other islands. (Average annual percentage growth rates, Encouragement of migration is a part of official at 1975 prices) policy but the actual movement of people is 1960-70 1970-75 1975-85 still very small, probably not more than 30,000 Gross Domestic Product 2.4 3.9 5.1 families a year. Agriculture 1.4 1.5 3.0 In South Asia, an immediate source of gains in productivity is the improvement of simple Agriculture crop management practices, beginning with in- The burst of agricultural expansion in some creased plant density and proper plant spacing, parts of Asia in the 1960s based on the intro- followed by the use of good seeds, seed treat- duction of high-yielding seed varieties, which ment, proper tilling, weeding, and better prep- has been dubbed the Green Revolution, appears aration of seed beds and nurseries. These to have slowed down, and agricultural produc- improvements are capable of raising yields sub- tion has grown rather slowly during 1970-75. stantially without any increase in inputs other Most observers agree that this performance is than labor and better use of information. Re- well below the potential of the region, taking cent experience in India suggests that yields account of technological conditions and the could be increased through such measures by existing infrastructure. The remarkable tech- 10 to 30 percent on rainfed land and by 25 to nological advances in genetic adaptation and 50 percent on irrigated land. How fast the in- cultivation practices over the last two decades creases can be realized will depend on how have created yield potentials for both small and rapidly agricultural extension services can be large farmers that have still not been fully made more effective. Efforts to improve the exploited, although urgent attention must be extension service in India by enforcing rigid given to further seed development covering a visit schedules and relieving extension agents larger number of crops. With concerted efforts of other tasks have proved remarkably encour- 39 to remove obstacles that are already well recog- aging. While it is still early to make a definitive nized, it should be possible to raise agricultural judgment, it would appear that production in- growth rates to, and possibly even beyond, creases of 1.5 to 2 percent a year in agriculture the projected 3 percent a year during the next for a decade or more might be possible solely decade. on the basis of existing infrastructure and levels The sources of potential growth in agricul- of inputs, if there is substantially better trans- tural production are very different in Indonesia mission of knowledge and more intensive use and South Asia. In the latter, the extension of of labor. cultivated area has now approached its limits Further increases in yields can be obtained by and further increases in production will depend making fuller use of scarce land through mul- on increases in yields. In Indonesia, only about tiple cropping. One of the most important pre- half of the cultivable area is so far under cul- requisites for this is water. At present, only 10 tivation. The problem lies in the extreme con- to 15 percent of the agricultural land is used for centration of population in a few islands while multiple cropping in India and Pakistan, and the land in the other islands is underused: about 40 percent in Bangladesh, compared with Java, Bali, and Madura have two-thirds of Indo- nearly 90 percent in the Republic of China, nesia's population on only 7 percent of the land. where the irrigation system is well developed. Because of fertile soils and favorable climatic In currently irrigated areas, increases in crop- conditions that permit multiple cropping, Indo- ping intensity require improved arrangements nesia's rice yields are high, enabling these is- for sharing water: farmers, including those with lands to support a population denser than in downstream holdings, need to be confident in Bangladesh. But with rising demographic pres- advance of planting decisions that they will sure, land has been fragmented into smaller and receive their entitlement of irrigation water. smaller holdings: the average farm size in Java, Multiple cropping generates a very high demand Bali, and Madura is only 0.6 hectare and rural for labor, with significant benefits for under- households depend heavily on non-farm in- employed smallholders and for the landless who comes for their minimum consumption needs. depend entirely on wage incomes. But raising Although rehabilitation of the old irrigation cropping intensity to more than two crops a year is difficult. It depends on varieties of crops that tury old irrigation system in the Indus Basin. mature quickly, and requires careful and scien- Wasteful water management and poor mainte- tific management so that activities are appro- nance can be blamed in large part on the hier- priately timed. Efficient marketing arrangements archy of social relationships among farmers. need to be complemented by distribution net- Large and influential farmers are usually able works that ensure that inputs and services are to get their water allocations in full and on time, available on time and to all, including small regardless of the total amount of water avail- farmers. able; their allocations are likely to be larger than Further productivity increases beyond those are needed for economic use (although not from obtained by changing cropping practices require the users' viewpoint) because nominal water additional inputs such as better seeds, nutrients, charges are unrelated to the amounts used. and pesticides, as well as water. With water There is a huge waste of water; as a result the available at the right time, and increased use of supply to a large section of the command area high yielding seeds and nutrients, yields that is inadequate and erratic, and the size of the are 20 to 120 percent higher are possible under command area itself is uneconomically limited. irrigated conditions, depending upon the crop Farmers favorably placed in this system, who and variety sown. In most rainfed areas, the are usually also those with most influence on its potential is far smaller, unless there is a major care and operation, have little incentive to main- research breakthrough. Increased irrigation and tain the irrigation channels. This has led to better water management are thus central to serious deterioration of the watercourses. Con- raising yields and absorbing more labor in tributing to the deterioration is the grossly agriculture. inadequate provision of public funds for main- There is a very large and undeveloped poten- tenance, and legislative and administrative pro- tial for irrigation in this region. About a quarter visions that curtail the responsibility of irri- of India's present farmland is irrigated and it gation authorities for the condition of the is known to be possible to raise this to a half. distribution systems below the head regulators. The development of Pakistan's irrigation poten- Efficiency of water use in the command area of tial is much further advanced after a century the Indus Basin area of Pakistan has been esti- 40 of irrigation from the waters of the Indus river mated at 20 to 25 percent below its potential. system, but more land could be irrigated, espe- In many places, irrigation systems are less cially with further groundwater development. efficient than they might be, because their de- In Bangladesh, water resources are abundant sign characteristics are antiquated, or because but unruly: long, dry periods are followed by farm holdings are fragmented into large num- flooding from the enormous Ganges-Brahma- bers of irregular plots. Many of the systems are putra-Meghna river systems which spread out old, or built to design philosophies not suitable over the vast, flat alluvial deltas. Drainage, flood to intensive agriculture. Modern designs for new control, and minor irrigation projects are re- systems and renovation of old systems can add quired to harness the water resources more substantially to the amounts of water available effectively. In Indonesia there is potential for at the lower end of the command area, thus doubling the present irrigated area with the con- easing the redistribution of water and expand- struction of new gravity systems, and develop- ing the total irrigated area. ment of swamps and tidal land outside Java. Fragmented holdings reduce the profitability Extensive groundwater systems can also be of investing in tubewells and pumps. Innova- exploited in the longer run. Burma has a large tive small-scale technologies, such as shallow potential for rapid expansion of high yielding tubewells, still need to serve a minimum area agriculture, especially in the reclamation and of three to four hectares to be economic, development of the vast paddy regions of Lower whereas the average farm holdings, to say noth- Burma, where there are still about a quarter of ing of farm "fragments," are frequently smaller a million hectares of abandoned ricelands. than this. In northeastern India, where the Even where irrigation capacity has been built, groundwater potential is great, the average farm water is often used inefficiently. India has iden- is less than two hectares, and this may be di- tified about fifty large irrigation projects built vided into half a dozen separate plots. Tubewell over the past quarter century or more in which development is thus limited unless there are productivity could be greatly increased with satisfactory arrangements for sharing water better use of available water. An example of the among farmersarrangements that are diffi- factors that reduce the efficiency of water use cult to reconcile with rural social hierarchies to throughout the region is found in Pakistan's cen- the satisfaction of smaller cultivators and credit institutions. In Indonesia, the average farm is irrigation, it will also be necessary to include in oniy about one hectare and divided into three current programs adequate resources for the parcels. In all countries, population growth is preparatory work for major new facilities, with- likely to increase fragmentation with present out which the momentum of irrigation develop- inheritance patterns. Legislation on the mini- ment will suffer. The expansion of irrigation is mum size of plots could help to mitigate these unlikely even to approach the scale required effects. without large increases in international financial Consolidation of fragmented holdings has assistance on concessional terms, on an assured been an objective of agrarian policy for many long-term basis to permit the necessary planning. decades in Low Income Asian countries. It serves other objectives besides efficient water distri- Industry butionfor example, land leveling and shaping, There have been periods of rapid industrial- reducing the land used in boundaries, and cut- ization in the past two decades, but in recent ting the time required to travel among plots. It years growth of production has been uneven also simplifies land use planning. But little land and generally sluggish, while the contribution has actually been consolidated. Even where it of industry to employment has been modest. A has, the consolidation has generally been incom- common element in the industrialization strate- plete and not in accordance with any systematic gies of Low Income Asian countries has been a plan for land, soil, and water development. high level of protection from import competi- One requirement for greater progress in con- tion and a preoccupation with the expansion of solidation is an accurate updating of land rec- physical capacity rather than competitive effi- ords to establish land and cultivation rights. ciency. There have also been differences in This is a difficult task for tenanted land but is strategy: India has emphasized industrial self- manageable with official support. The latter, sufficiency based on major government invest- however, is sometimes lacking, because of land- ments in industry and detailed planning of owners' concern that the enforcement of ten- inter-industrial linkages; Pakistan up to 1970 ants' security and other tenancy reform regula- relied mainly on the growth of private enter- tions may portend the implementation of land prise induced by large incentives tailored to the ceiling legislation. Nevertheless, both tenants requirements of individual industries. Despite 41 and landlords benefit from the productive ad- these different approaches, the main character- vantages of consolidation. The possibilities for istics of the industrial structure today are high enlisting their common interest in support of production costs and excess capacities. The consolidation have been demonstrated in a few poorest industrial performance in recent times places in India, and could be much more widely has been in the manufacturing of consumer pursued in South Asia. Consolidation would be goods. This reflects the slow and uncertain facilitated if it were made a compulsory part of growth of demand from agriculture and the lack a package of public land and water develop- of sustained and reinforcing momentum within ment, which simultaneously provided employ- the industrial sector. ment for surplus rural labor while enhancing the With a more favorable policy environment, value of land. industry can clearly grow much faster than it Throughout Low Income Asia, increased em- has. Some of the countries in the region have phasis must be given to projects that will yield well-developed infrastructures, including a so- quick results in order to increase farm incomes, phisticated network of financial and commercial including completing work on large-scale irri- services, a broadly based capability in science gation projects started earlier, so that water can and engineering, and extensive managerial and reach the farms. It will also involve accelerating industrial skills. These are assets lacking in programs for installation of tubewells and low many other developing countries even at higher lift pumps, rehabilitation of water tanks, and levels of income. Although, as noted earlier, extension of existing command areas. While such average production costs tend to be high in rela- investments can yield relatively quick returns, tion to international prices, in most industries accelerating development in these areas will there are many firms, both public and pri- require large increases in investment and a great vate, which have achieved high standards of expansion in the number of trained technical efficiency. and administrative personnel. The latter are In India and Pakistan, the efficiency of some unlikely to become available unless there is con- firms demonstrates that vigorous industrial fidence that increased levels of investment can growth is possible. However, they have been, be financed. To maintain accelerated growth in and continue to be, impeded by industrial policies that rely on extensive systems of increase the extent of multiple cropping de- licensing and controls. These systems enjoy a pends on whether he is assured of adequate considerable measure of support from both and timely irrigation. Even when the general official circles and industrial interests, where irrigation infrastructure exists, the small farmer the fairly widespread aversion of private indus- suffers two major handicaps in using water. The try to competition, whether internal or external, first, which applies primarily to surface irriga- links up with socially motivated official desires tion, but also to public tubewells, is that he is to contain the economic power of the more effi- generally discriminated against because of the cient firms. A major dilemma in planning indus- small size of his holding and the usually partisan trial strategy is how to resolve the conflict allocation of water in surface irrigation systems. between these social objectives and the require- In referring to this problem above, it was noted ments for a dynamic, efficient industrial sector that it led to considerable waste of water. The that can play a significant role in creating new direct effect on the small farmer is, of course, employment opportunities and in reducing the more severe. Uncertain as to when he will prices of industrial goods to agricultural con- receive his allocation of water and how much sumers, thereby stimulating additional domes- he will receive, he is reluctant to adopt cropping tic demand. practices that rely on the timely application of water, and thus continues to produce well below Small Farmer Productivity and Incomes his potential yield. Greater community partici- Small farmers cannot participate fully in ex- pation in the decisions on water use, backed by ploiting the potential for productivity gains in official irrigation and extension services, has agriculture without institutional support that is proved helpful in assuring a more equitable responsive to their needs. The small farmer has and efficient distribution of water. This, in many characteristic disadvantages. He is short turn, has permitted the same volume of water of cash and has less access to medium-term to irrigate a larger area through more efficient institutional credit. This limits his ability to use and through better private maintenance of undertake on-farm investments or use modern water channels. inputs to the same extent as larger farmers. He A further handicap for small farmers is the 42 is more vulnerable to risk, and hence more cau- lack of savings and medium-term credit to tious about innovations of uncertain profitabil- invest in wells and other on-farm requirements ity and about decisions whose outcome will be to take advantage of the irrigation potential. affected by such uncertainties as the weather. Such loans, because of their large size and long Despite these disadvantages, experience has maturity, are not as readily available from shown that with adequate access to basic inputs, moneylenders as seasonal crop loans. Medium- the small farmer is fully capable of raising term credits for equipment and farm improve- yields as high as those of larger farmers, and ments must come mainly from official and coop- frequently higher. The intensity of multiple erative institutional channels, which so far have cropping is, on average, greater for small than seldom catered to and often been inaccessible for large farmers, a fact of major importance to small farmers. when land is as scarce as it is in the agricultural The need here is not to subsidize interest areas of this region. In the areas penetrated by rates but to increase the availability of medium- the high yieldingvarieties, small farmers' accept- term credits, avoiding institutional forms that ance has caught up with the rest after some are highly bureaucratic and inflexible. India has initial delays, suggesting that small farmers are moved a long way in this direction through the not averse to adopting innovations once their large and extensive credit services provided by reliability and profitability have been demon- the Agricultural Refinance and Development strated convincingly. To spread the acceptance Corporation, whose assistance is aimed to of innovations more widely, small farmers must include small farmers. In Indonesia, the BIMAS receive strong institutional support to help meet and INMAS programs have been established to their demands for vital inputswater, credit, provide support in the form of credit and mod- and information on improved cropping practices. ern inputs. Such institutional support is, how- Of all the numerous constraints on the pro- ever, not yet well developed elsewhere in ductivity of the small farmer, perhaps the most South Asia. important is poor access to water. How far he An important institutional handicap in lend- can take advantage of the improved varieties of ing to small farmers is collateral. If land is seed (which respond best to input-intensive required as collateral, credit becomes much less cultivation practices), use more fertilizer, or accessible to small farmers, especially tenants, whose rights to land are seldom properly strated recently when the introduction of the recorded and are not always acknowledged. If Green Revolution technologies in parts of India credit institutions are to play their role in trans- and Pakistan led to some eviction of tenants and forming agriculture, they will have to be recep- the resumption of land by landlords for cultiva- tive to continued innovation in collateral pro- tion using more mechanized techniques. The cedures. Alternatives to land as loan security second reason is that as the landlord has in- need to be explored along such lines as closer creasingly tended to take a share of the output contact with borrowers and supervision of instead of a fixed amount of rent, the tenant credit use, with extended crop liens for medium- finds it less profitable to use purchased inputs. term loans. The force of the latter reason is greatly dimin- The present systems for transferring techno- ished, however, when the landlord also con- logical innovations to small farmers are fre- tributes a share of the input costs, as has begun quently cumbersome and ineffectual. There are to happen in recent years. two aspects to this problem. First, small farmers While the problems created by tenancy are tend to be less familiar with known crop man- significant, they should not be exaggerated in the agement practices for improving yields because context of the development goals of accelerat- they are less educated and tend to be neglected ing growth and alleviating poverty. With some by the extension agents. Since extension agents exceptions, tenancy prevails in only a small part are poorly paid, they are beholden to the larger of the agricultural sector, and most farmers are farmers in many ways and hence more solic- as likely to lease land out as to rent it. There is itous of their needs. They spend little time with thus no sharp dichotomy between landlord and small farmers, who in any case rarely regard tenant in most areas in this region. Less than them as reliable sources of information about 6 percent of the agricultural land in Bangladesh, cropping practices. This can be remedied. Fairly India, and Indonesia is cultivated by tenants wide experimentation in India has demonstrated who do not also own or rent out land; in Paki- that the small farmers can be reached effectively stan, where the average size of tenant holdings with different organization and procedures for is considerably larger, the proportion is under handling agricultural extension, if greater 30 percent. Further, the area under tenancy has responsibility is placed on the community for been declining in the last decade or so. Where 43 monitoring the regularity and quality of service. new technologies have penetrated, not only does This arrangement can and should be applied the scale of tenancy decline but the relations much more widely to reach small farmers in between landlord and tenant are redefined, the other parts of Asia. sharing of input costs being a prominent exam- The second aspect of the technology issue is ple of changes that take place. the relevance of agricultural research to prob- lems of particular importance to small farmers. The responsiveness of tenancy relations to One area of wide relevance is the development changes in the available technology and the of high yielding varieties of crops, including extreme difficulty of enforcing reform legisla- tropical root crops, suitable for arid agricultural tion dealing with tenant rights, such as ceilings systems. Another is research on cropping sys- on rent, suggest that official action should con- tems and practices that are practical for the centrate on measures that are likely to prove of small farmer who may be short of cash but has tangible and lasting benefit to the tenant. The abundant labor. This is especially important for most promising line of action would be to com- the efficient use of water and nutrients in multi- bine the creation of an environment for rapid pie cropping systems. Such research has to be technological change and productivity growth done locally, to take account of ecological differ- with attempts to tie the landlord's share of out- ences. Hence, widely dispersed and adequately put, which is generally around one-half, more staffed research institutions are necessary. Their closely to his share of input costs, which tends establishment will require additional invest- to vary widely but is generally quite low. ment and support. Marketing and distribution is another area in The farmer who cultivates land as a tenant which the small farmers are handicapped. This has less incentive to raise his productivity than is particularly true in the case of products which one who owns his land, for two main reasons. must be processed relatively quickly to avoid First, as the duration of his lease is uncertain, spoilage. Generally, the small farmer does not he is less inclined to undertake investments on have the physical or financial capacity to hold the farm that do not have a very early payoff. his produce off the market at the time of peak The legitimacy of this concern was demon- supply. The trader orprocessorwho canpurchase at those times stands to benefit substantially. can play an important role in this regard. But the In addition, procurement is often a monopoly available evidence suggests that unless agricul- in a specific area, further reducing the ability tural growth exceeds 3 to 4 percent a year, and of the small farmer to obtain a remunerative unless this rate is sustained for about a decade, price. the additional wage employment generated There are numerous examples of how small would remain too small to contribute much to farmers can combine forces but few experi- the solution of rural unemployment problems ments have been successfully sustained. One in the subcontinent. This reinforces the need to such, a dairy cooperative at Anand in India, has step up investment in agriculture, particularly been in operation for thirty years, has expanded in irrigation, as part of a strategy to instill more its system to several States, and is about to be- dynamism in the sector. come a national program. By owning its pur- Growth of medium- and large-scale industry chasing, processing, and marketing facilities, cannot be relied upon to make more than a small the cooperative assures the members a reason- difference to the employment situation in the able price throughout the year since it has the next decade or so, as in most countries in the capacity to convert milk to powder and other region it accounts for less than 10 percent of storable products in times of peak supply. By total employment. Some gains could be realized combining cooperative participation with hired from a more labor-intensive pattern of industrial professional management for all aspects of the growth. To achieve this will generally mean operation, it increases the income of small farm- encouraging small enterprises which, as a group, ers and landless laborers while remaining a employ the majority of industrial workers and profitable enterprise. These underlying princi- use more labor per unit of output than larger pies are more broadly applicable to other prod- enterprises. Policies for the promotion of small ucts and other countries. enterprises will have to be carefully designed, however, to avoid subsidizing enterprises that Employment are engaged in production that is very capital- Gains in the productivity of small farmers, intensive, or in the manufacture of goods that 44 even if equitably distributed, will not suffice in can only be efficiently produced on a large scale. dealing with the problems of absolute poverty It is best to rely on measures that will give small in rural Low Income Asia. A significant propor- enterprises full access to scarce inputs on the tion of rural households do not have any land same terms as large enterprises so that they can and thus cannot participate directly in these compete on equal terms, and to provide tech- productivity gains. Further, productivity in- nical and institutional support in the areas of creases alone will not be enough to raise the credit, training, and technological information. incomes of those with very small farms above Small enterprises flourish best where there is poverty levels. These households have to rely rapid growth in demand, and in a comple- on non-farm sources of income. mentary relation to agricultural growth and Measures to increase rural employment will growth of larger scale enterprises, by supplying form a very important part of a strategy for labor-intensive ancillaries. Insufficient recogni- alleviating poverty in South Asia. All of the tion of these complementarities, and the over- income of the landless households and a large zealous promotion of small enterprises as part of the income of very small farmers is principal instruments for employment creation derived from sources other than cultivation on or regional development, may frustrate the pur- their own farms. The smaller the farm, the pose by fostering productive inefficiency. greater the proportion of total household income Even if economic growth were accelerated to derived from outside sources. These include about 5 percent a year and the policies pertain- working on larger farms, raising poultry, small ing to small farmer productivity suggested in livestock and dairying, fisheries, forestry, rural this chapter were fully implemented, unem- handicrafts and manufactures, services and ployment would remain a very severe problem processing activities, and remittances received in Low Income Asia. The real problem is not from family members in urban employment. long-term joblessness, as conventionally under- Since most of these activities are either agri- stood, but absence of earning opportunities in cultural or closely related to agriculture, fast the off-peak seasons of the year. In most of Low agricultural growth is obviously the first require- Income Asia, nearly all the rural workers find ment for raising non-farm incomes more rapidly. some employment during seasonal agricultural Faster growth in output even on larger farms, peaks, but spend the rest of the year intermit- provided they are not excessively mechanized, tently idle, or working on their own farms or in casual jobs. In these jobs, productivity and From a small start in the early 1970s, the scheme earnings per worker are low, because they are has grown to generate 152 million mandays of spread thinly among a seasonally surplus labor employment in 1977, equivalent to about a fifth supply. Both expansion of multiple cropping, to of the estimated rural unemployment and under- moderate the seasonal fluctuations in demand employment in the State. Present plans call for for labor, and rural industrial growth would raising this proportion to over one-third in the help to reduce unemployment as, of course, next five years. would more rapid and labor-intensive urban The essence of the scheme is a strong polit- development. But a major part of the rural labor ical commitment by the State Government to a force would still be left without enough work statutory guarantee of local employment at a throughout the year for a tolerable existence. minimum wage to all rural residents. The em- Alternative rural employment during off-peak phasis is on works which directly enhance seasons is, therefore, a necessary component of productivity, mainly irrigation and land devel- a development strategy which places poverty opment, and on financing by additional urban alleviation high among its objectives. taxation, so as to minimize the inflationary con- It is in this context that the potential of large- sequences while transferring resources from scale public works programs, which can provide urban to rural areas. The scheme has some prob- employment in rural areas while at the same lems, mainly the immobility of labor, and the time constructing assets to enhance economic difficulty of designing and implementing pro- growth, must be developed. Employment-creat- ductive projects to coincide with the times ing public works programs have frequently been and places where employment is required. Fi- used in Low Income Asia, but for the most nancing the program absorbed 7 to 10 percent part the experience has not been encouraging. of Maharashtra's total development plan expen- Though they succeeded in significantly raising diture in the last three years. Though the details the incomes of those employed, and in con- of the scheme's operation have not yet been structing economic infrastructure (mostly rural fully evaluated, its scale and several features of roads), they suffered from a number of flaws. its administrative structure set it apart from The basic problem was that they were planned previous public works programs, and offer hope and implemented in isolation, usually as disaster that effective programs to deal with massive 45 relief, rather than as part of a broader and sus- rural unemployment can be designed. tained strategy to create new rural assets and attack the fundamentals of the unemployment Demography problem. Thus they were too small to make a Population pressures will continue to be a real difference and were vulnerable to the pres- severe impediment to economic development in sures of local elites (landowners and rural the Low Income countries of Asia. By the year contractors) who altered the programs to serve 2000, the population of the six largest countries their own interests. will have risen to 1.6 billion from the current Despite these failures, interest in public level of slightly less than I billion. The demo- works programs has been rekindled by an inno- graphic outlook is not uniformly bleak, how- vative, and apparently successful, program in ever. Fertility rates have begun to decline in Maharashtra State in India, which has a popula- some countriesamong them Burma, India, In- tion of 58 million, of whom 38 million are rural. donesia, and Sri Lankafor a variety of rea- 38. Demographic Indicators in Low Income Asian Countries Crude Crude Population Total Birth Death Growth Fertility Population Rate Rate Rate Rate (millions) 1975 1975 1960-75 1975 1976 2000 Bangladesh 46 18 2.5 6.6 80 146 Burma 34 11 2.2 5.5 31 50 India 36 15 2.2 5.7 620 958 Indonesia 40 17 2.2 5.5 135 198 Pakistan 47 16 2.9 7.2 71 135 Viet Nam 41 16 2.7 6.2 48 86 'The assumptions underlying these projections are described in the Notes to Table 16 in World Development Indicators. Source: World Development Indicators, Tables 13, 15, and 16. Sons, including improved nutrition, health care The prospect of large additions to the popula- and female education, falling infant mortal- tion, to be supported by scarce resources, un- ity, and organized family planning efforts. But derlines the urgency of strengthening family fertility continues to be high in Bangladesh planning programs, of establishing the institu- and Pakistan. Both have total fertility rates of tional framework for sustained improvements around 7 and crude birth rates in the mid- and in agricultural productivity, especially among upper-40s. Neither country has advanced very small farmers, and of implementing special pro- far in providing the social services usually asso- grams for employment and the distribution of ciated with demographic change, nor have their essential public services directed at the poorest family planning programs been very effective. sections of society. 46 Chapter 6: Sub-Saharan Africa The approximately forty developing countries countries, the African Middle Income coun- of this region form a much more diverse group tries clearly are poorer than most other coun- than the poor countries of Asia intheireconomic tries in that group, and at much earlier stages structure, income levels, policies, and perform- of development. ance. Some, like Gabon, Guinea, Liberia, Mauri- Also common to the Sub-Saharan countries tania, Nigeria, Zaire, and Zambia, have large is their predominantly rural character and their reserves of minerals to support their economies; low level of industrial development. Most of the some, like Ivory Coast and Kenya, have suc- work force (60 to 90 percent) and around half cessfully developed agricultural exports; others, of output usually is in agriculture. These are such as Chad, Mali, and Upper Volta in the mainly small, open economies with most of their Sahel region, are doubly disadvantaged by poor rural populations engaged in cultivating primary resources and a landlocked location which agricultural exports (cocoa, coffee, cotton, oil- makes transport costs high. These physical dif- seeds, palm oil, sisal, and tea). Exports still ferences are further accentuated by varied colo- mainly consist of primary commodities for nial and cultural heritages and post-colonial which demand grows slowly, and amount to philosophies of economic development. over a fifth of GDP in the poorest countries, Within this diversity, however, there are which have about half the Sub-Saharan popu- important common elements, many of which lation. A major problem for most countries is distinguish the developing countries of Sub- their vulnerability to changes in the terms of Saharan Africa from those in other continents. trade. 39. Sub-Saharan Africa: Selected Development Indicators (Median values) 47 Low Income Middle Income Developing Countries Developing Countries Africa Other Africa Other Income per Person, 1976 (US dollars) 145 155 390 990 Share of Agriculture in GDP, 1976 (percent) 41 47 28 18 Share of Population in Urban Areas, 1975 (percent) 11 18 24 47 Share of Manufactures in Exports, 1975 (percent) 5 14 5 24 Life Expectancy at Birth, 1975 41 45 44 61 Total Fertility Rate, 1975 6.3 6.2 6.5 5.8 Percentage of Primary School Age Children Attending School, 1975 53 51 79 103 Adult Literacy Rate, 1974 23 22 15 72 Source: World Development Indicators. Almost all of the countries in this region are The economic growth rates in the region dur- poor; many have levels of income per person ing 1960-75 averaged about 4 percent a year, or above those of South Asia, but with severe pov- less than 2 percent per person with the increase erty among large parts of the population. In few in population. Agriculture did poorly in this countries in the region are the numbers in abso- period with annual rates of increase averaging lute poverty less than a third of the population, only about 1.5 percent. The growth of agricul- and in most of East Africa they run well over ture was somewhat better in the 1960s but the half. The figures on income per person in most entire region, especially the Sahel countries of of the Middle Income countries of Sub-Saharan Chad, Mali, Mauritania, Niger, Senegal, and Africa are deceptive, for with a few exceptions Upper Volta, was afflicted by severe drought these are actually poor countries with a mineral which reduced agricultural growth during the enclave that employs only a small fraction of early 1970s. Economic growth rates varied con- the work force. The indicators in the Table above siderably among countries. Apart from the min- show that while the poorer African countries eral exporters, the fast growing economies were share characteristics typical of all Low Income those where agriculture expanded rapidly. The handicaps in development have been re- poor soils and scanty and uncertain rainfall that inforced by failures of economic policy, some have discouraged land-intensive, settled agri- of which have their roots in the colonial era. In culture in many parts of the region; the abun- most countries, agricultural development is hin- dance of land, that permitted shifting cultivation dered, as it has been for many decades, by the relying on bush fallowing and slash-and-burn inadequacy of research and extension services techniques to restore soil quality; the impor- (except those for tree crops), and insufficient tance of root crops and coarse grains in which, incentives for agricultural investment. The dif- unlike wheat, rice, and maize, genetic research ficulty of making drastic changes in the colonial has not yet proceeded very far; and the high salary structures in the transitional period has cost of irrigation because of the scarcity of led to severe rigidities and distortions in urban ground water. The distinctive and varied agro- labor markets and excessive growth in bureau- climatic and socioeconomic environments in cratic employment rather than industrial skills. Africa make it difficult to introduce agricultural Many countries have adopted a protective and technologies from elsewhere. This applies par- interventionist policy framework for industry ticularly to the biological and chemical innova- that dampens entrepreneurial initiative, or at tions that are needed to increase crop yields, least diverts it away from industries and tech- by introducing intensive systems of continuous nologies that would help to expand industrial cultivation and replacing the bush fallow sys- employment quickly. tems with other and more productive ways to The great heterogeneity within Sub-Saharan maintain soil fertility. Innovations developed Africa makes it difficult to discuss policy op- in one area may not be transferable on any broad tions in general terms. While the analysis of scale, since there are drastic differences in rain- common problems can be helpful, each general fall, soils, and other ecological factors, not to issue has its local variation, and policies must mention cultural diversities, which have pro- be adapted specifically to the needs of countries duced wide variations in the dominant and sec- that are tremendously diverse in environment, ondary food crops of different areas. Hence, resources, and economic performance. Through- research to generate and test innovations in out the region, however, development prospects materials and practices must often be tailored 48 will depend crucially on agriculture. The labor to specific locations. force is still predominantly rural, and even if There are also difficulties in identifying and industry and services grow more rapidly than introducing simple, inexpensive mechanical in- in the past, they will not be able to provide pro- novations adapted to the needs of African small- ductive employment for more than a small pro- holders. For instance, the relative ease with portion of the population in the near future. which tractor-based technologies can be trans- Poverty too is mainly a rural phenomenon. The ferred, and the weakness in the agricultural success of efforts to raise incomes, to improve extension services in transmitting information nutrition, to provide other basic services, and to on appropriate cultural practices, have encour- achieve the widespread economic and social aged an inappropriate emphasis on capital-in- modernization required for self-sustained tensive equipment. There has been a neglect growth and the eradication of poverty will be of mechanical innovations capable of raising the problematic at best without a broadly based productivity of small farmers who operate the agricultural development strategy. majority of farms. The next two sections examine the structural Adaptive research in agriculture has not re- and policy environment for the development of ceived the allocation of money and manpower agriculture and industry. They are followed by that is commensurate with the dominant posi- a discussion of issues in international trade, tion of agriculture in these economies, or with and demographic trends. The last two sections the potential that exists for obtaining high re- outline development priorities and some impor- turns from investments in research. Expendi- tant ways in which external assistance is needed tures on agricultural research are low and the to help overcome the formidable constraints on institutional base is weak. Strengthening na- development. tional and regional research capabilities to evolve an appropriate sequence of feasible and Development of Agriculture profitable innovations in agriculture is espe- There are many reasons for the generally cially crucial to the long-term development backward technology of cultivation in the re- prospects of the region. gion: the high incidence of diseases (especially A large part of Africa's land resources is trypanosomiasis) that kill draft animals; the in semi-permanent or permanent pastures, and animal products account for an important part ambivalence about letting supply respond to of the diet and economic livelihood of small- changes in international prices, for fear that this holders in Africa. Livestock activities are com- might reinforce a pattern of export specializa- plementary to crop production. They allow idle tion in agricultural raw materials, a condition land to be used productively and provide the that has been identified with colonialism. draft power for crop production, allowing land resources to be used more fully. The develop- Industrialization ment of livestock (dairy and beef cattle, goats, Agricultural interests have often been sub- sheep, and pigs) can play an important role in ordinated in the course of widespread attempts alleviating malnutrition and rural poverty and, to force the pace of industrialization by provid- in some cases, can be a source of foreign ex- ing high levels of protection. However, the re- change. The main drawbacks are disease, poor sults of protectionist policies so far, judging quality of stock, and traditional management from the employment created and the domestic systems that have kept animal yields low. resource costs of import saving, have generally In addition to environmental and technolog- been unsatisfactory. There is very little manu- ical constraints on agricultural growth, gov- facturing for export outside the region, except ernment policy has frequently had an adverse for some processing of primary commodities, effect. In most countries, colonial policies for despite the fact that manufactured products agricultural research, transport, and producer from many of the countries have had prefer- and consumer pricing were designed to favor ential access to markets in Europe. Typically, the extraction of primary products for export, three-quarters or more of industrial value added correspondingly neglecting the development of is in import substitutes, principally in relatively food crops. Official marketing boards, which llnsophisticated goods such as processed foods were originally established to protect farmers' and beverages, textiles, garments, wood and interests, were gradually transformed into in- leather products, cement, paper, and printing. struments of agricultural taxation. Much of this In some countries, especially where the pace policy inclination has continued. In addition, of industrialization has been pressed through policies concerning exchange rates, taxes, sub- government participation and intervention, in- sidies, and tariffs, along with controls affecting dustrial programs have tended to include capi- 49 foreign and domestic trade, provided incentives tal-intensive projects in fertilizers, metal prod- to industrial or commercial, rather than agricul- ucts and processing, petroleum refining, and tural, activities. rubber, chemical, and electrical productssec- Of course, there are exceptions. Some gov- tors in which particularly acute transition dif- ernments have supported agricultural develop- ficulties have tended to require high effective ment and created an environment in which protection. smallholder cultivators have flourished. This is The inefficiency of this industrial activity has shown by the rapid growth and diversification many causes in addition to the usual "start-up" of agriculture in Ivory Coast (both for export problems in developing countries. High and and domestic consumption) and the successful sustained levels of protection have removed spread of tea and hybrid maize cultivation competitive pressures to improve efficiency. In among smallholders in parts of Kenya. In cer- some countries, the form and extent of govern- tain other countries, government efforts to ment intervention has been an adverse influ- promote development have emphasized large ence. Other disadvantages are high transport capital-intensive schemes at the expense of costs in such landlocked countries as Mali, broadly based smallholder development. This Niger, and Upper Volta, and in others where seems to have been the case, for example, with infrastructure is poor; and social pressures to the state farms in Ghana in the 1960s and the expand employment and share business earn- large irrigation schemes in Sudan which have ings with members of the extended family or absorbed much scarce capital and skilled man- tribe. power. The inefficiency of parastatals and state- A major handicap faced by African industry sponsored cooperatives acting as marketing is the scarcity and high cost of suitably skilled intermediaries for farmers has typically been labor and management. In the colonial era, mod- accommodated by widening the transport and ern industry was exclusively the preserve of marketing margins at the expense of the farmer. non-Africans in East and Central Africa; and Other considerations adversely affecting farm even in West Africa, where crafts and simple price incentives have been the perennial pres- manufacturing flourished from pre-colo- sure for cheap food in urban centers, and nial times, large- and medium-scale enterprises were dominated by non-Africans. The countries beverages, and minerals constitute a much where manufacturing has prospered best are greater share of exports than for all developing also those where expatriates have continued to countries as a group, or even for the Low In- play a relatively larger role since independence. come countries in Asia. This influences the No doubt this is a temporary phenomenon and an increasing number of Africans now engaged 40. Developing Countries: Product Composition of Non-fuel Exports, 1975 in commercial activities may be expected to (Percentages) become industrial entrepreneurs, as has oc- Food Non- Metals curred in other countries that are further along and food and Manu- in the process of industrialization. Bever- Agri- Mm- fac- ages culture erals tures Total One of the most serious obstacles to early industrialization in Africa is the high wage and Sub-Saharan Africa 52 13 26 9 100 salary structure. The high salaries in govern- Low Income ment and in administrative positions generally Asia 32 17 9 42 100 were derived from the colonial era, and have All Developing been sustained by the large role that expa- Countries 36 9 12 43 100 triates have maintained in manufacturing in some countries. These salary levels have fueled relative importance of the various international a strong demand for secondary education to trade issues in the African context. The small qualify for such positions. Another effect of share of manufactures is primarily the result this salary and wage structure has been to of elements of economic structure and policy raise governments' consumption expenditure that have already been discussed: the high and thus reduce budgetary savings. wages of unskilled workers in relation to their For unskilled workers in industry, wages are productivity; the scarcity of managers and high relative to their productivity. The resulting skilled workers and reliance on expensive ex- high production costs could only be accommo- patriate personnel, which adds significantly to dated by increased protection. This, in turn, has production costs; the weak tradition of African diluted competitive pressures for industrial effi- entrepreneurship in manufacturing industry; 50 ciency. The trend toward high and protected the high costs of transportation due to the prices of manufactures has also tended to shift inadequacy of infrastructure and disadvantages the domestic terms of trade against agriculture. of location, especially in landlocked countries; While high wages are available to only a and policy biases against export promotion and small proportion of the work force, they are in favor of import substitution. more regular and sufficiently above the real In the short run, it will be difficult for coun- earnings of smallholder peasants to draw large tries in Sub-Saharan Africa to overcome the numbers to urban centers, where they are pre- obstacles to expanding manufactured exports. pared to wait long periods for a chance at the Consequently, their preferential access to indus- relatively few well-paid regular jobs. This, in trialized countries' markets, as made available combination with the natural increase in the under the Lomé Convention, is of particular urban population, has increased urban unem- importance. While only limited progress has ployment and poverty both relatively new been made so far, development of resource- phenomena in Sub-Saharan Africa. based manufacturing exports through additional The allocation of labor has been even more processing of primary products offers potential. distorted in countries with widespread govern- African countries are vulnerable to imp erfec- ment ownership of industrial and commercial tions in primary commodity markets and they enterprises. Parastatal enterprises are under depend heavily on commodities with unstable pressure to increase their employment and, pricesa problem at which the Stabex scheme together with the government, form a large is specifically directed. In the case of six com- proportion of the "modern" sector. Their em- modities whose prices fluctuated most (see ployment policies, especially their wage levels Table 18), Sub-Saharan African countries sup- and entry requirements, have a dominant influ- plied over a quarter of the total exports of de- ence on the aspirations of job seekers and on veloping countries; for three of these unstable the types of skills that are demanded of the commodities (cocoa, copper, and sisal), the re- educational system. gion's share of exports was over one-half. For countries whose exports are highly concen- Trade trated in these commodities, the problem of For the Sub-Saharan African countries, food, price instability is even more acute. Copper, for example, accounted for over 90 percent of there is increasing reason to question the tradi- Zambia's exports and 69 percent of Zaire's tional opinion that land is abundant in Sub- in 1973-75; cocoa represented 60 percent of Saharan Africa. There are, of course, many Ghana's exports, and around one-fifth of the regions where considerable scope still exists for exports of Cameroon, Ivory Coast, and Togo. expanding the area under cultivation. However, With concentrations such as these, a country's these usually require expensive roads and other balance of payments is severely affected by the types of infrastructure; and trypanosomiasis international market for specific commodities. often poses a difficult problem until population and cultivation have expanded sufficiently to Demography reduce the tree cover which provides a habitat The slow and uncertain patterns of agricul- for the tsetse fly. There are already indications tural and industrial development in Sub-Saharan of pressure on the traditional farming systems Africa are made even more serious by the pros- because of growth in population and extended pect of rising rates of population growth. Such cultivation. Studies carried out in many local- growth, although already high at over 2.5 per- ities report that fallow periods have been cent a year, has been checked so far by high reduced substantially, leading to a decline in 41. Demographic Indicators in Selected Countries in Sub-Saharan Africa Crude Birth Crude Death Total Rate per Rate per Fertility Population thousand thousand Rate (millions) 1975 1975 1975 1976 2OOO Ethiopia 49 25 6.7 29 54 Ghana 49 21 6.7 10 20 Ivory Coast 45 20 6.2 7 14 Kenya 50 15 7.6 14 31 Mali 50 25 6.7 6 11 Nigeria 49 22 6.7 77 154 51 Senegal 47 22 6.3 5 9 Sudan 49 17 7.0 16 30 Tanzania 47 19 6.7 15 32 Upper Volta 49 25 6.5 6 9 Zaire 44 20 5.9 25 47 All Sub-Saharan 63h 21b 313C 604C Africa The assumptions underlying these projections are described in the Notes to Table 16 in World Development Indicotors. bMedian values for countries with populations over one million in 1976. eTotal for countries with populations over one million in 1976. Source: World Development Indicators, Tables 15 and 16. mortality rates associated with the high in- soil fertility, more difficulty in controlling cidence of communicable diseases, especially weeds, and consequently declining crop yields. gastric diseases, malnutrition, and poor tradi- With the rapid rate of population growth, it is tional midwifery and weaning practices. As not surprising that an increasing number of rural health conditions improve, population growth areas are beginning to feel population pressures. can be expected to accelerate as mortality Land scarcity and lack of employment oppor- declines and fertility increases. In addition, pro- tunities in a number of Kenya's "high potential" natal feelings have traditionally been important agricultural areas are responsible for shifts of in Africa and there is no evidence as yet that population to semi-arid areas where land is still they have diminished. Ultimately, as child available, even though food production is haz- mortality declines and families recognize that ardous because rainfall is limited and erratic. they cannot afford to educate large numbers of Similar evidence of population pressure has children, they are likely to decide to reduce been noted in other African countries, especially their fertility. In the meantime, economic policy in East Africa but also in Ghana and Nigeria. must contend with high rates of population A dramatic symptom of the growing popula- expansion. tion pressures in the region is the emergence of With the growing demographic pressures, large food deficits in some of the more populous countries. Production of food in Africa has not support in the form of physical infrastructure, only failed to keep pace with population growth extension services, credit, and market integra- but has also lagged behind that in other regions. tion. With the emerging demographic pressures, While some of the decline in output is due to the however, it is becoming clear that growth in unfavorable weather of recent years, it is clear farm productivity and output cannot be sus- that the traditional farming systems have been tained for very long without a large expansion unable to respond adequately to the demands in the use of technologies adapted to African resulting from rapid population growth. conditions and increased reliance by farmers on productive and appropriate purchased inputs. 42. Indexes of Food Production per Person, There is as yet little of the specific knowledge 1966-70 and 1971-76 and guidance necessary to make the transition (1961-65 = 100) from a traditional land-intensive system of agri- Average Average culture to one which uses scientific information 1966-70 1971-76 to increase yields. The necessary local orienta- Africa 99 96 tion of research and extension will require more North and Central America 105 110 active leadership from governments, but it will South America 104 also need strong financial and technical support 104 Asia 104 107 from abroad. The research required to increase agricultural productivity in dry farming condi- Source: United Nations Food and Agriculture Organization. tions should be a major international priority. The development of a new and reliable high The food prospects for Sub-Saharan Africa yielding millet can contribute as much to raising would be gloomy if the past semi-stagnant the living standards of millions of poor people trends in food production were to continue. as the changes in structure and policy that are Assuming only a small improvement in food also necessary. Aside from research at interna- consumption per person, the International Food tional research centers, more emphasis is needed Policy Research Institute (IFPRIJ has estimated on local adaptive research and on the systematic that the food deficits of the Sub-Saharan deficit study of the characteristics of existing farming 52 countries would rise from 2 million tons in 1975 systems. Research is also required on equip- to about 24 million tons in 1990. Nearly two- ment and tillage techniques for conserving mois- thirds of the estimated 1990 deficit would be in ture and soil, to replace the still predominant Nigeria. IFPRI's estimates are based on the hoe cultivation, and on the means to improve assumption that Nigeria's agriculture will con- the conditions for rearing livestock. In the tinue to stagnate, as it did between 1960 and longer run, irrigation will have a significant role 1975 when food production rose by only 0.5 and collection of the necessary hydrological percent annually. This performance could be data for this purpose should be accelerated. But, improved, and the deficits reduced. In any case, for the near future, in most parts of the region the estimates dramatically demonstrate the need excluding the Sahel, there is still a large unused for a much more rapid increase in agricultural potential in rainfed cultivation which should be production in Sub-Saharan Africa in the future. tapped before major commitments need to be made to expensive and technically demanding Strategic Development Priorities irrigation works. Even more than in Asia, accelerating growth The research base for a modernized agricul- and alleviating poverty in Sub-Saharan Africa ture must be accompanied by development of will depend primarily on the provision of addi- an institutional structure, at present quite weak tional impetus to agriculture, particularly the in most of Africa, to disseminate improved smaliholder sector, and secondarily on the pace methods and to deliver the necessary supplies of employment creation in industry and direct and services. Furthermore, the benefits from the action to improve the supply of essential public adoption of more modern practices must seem services. attractive enough to induce farmers to pay for The experience of several countries in the these additional supplies and services. region testifies that smallholder incomes in The contention that traditional smaliholders agriculture could be raised quite rapidly if pro- are indifferent to price incentives is not sup- ducers were given more incentives1 and better ported by a number of empirical studies in Sub- Saharan Africa on such crops as cocoa, coffee, 1The various sources of bias against agriculture in the system of incentives are discussed at greater length in the next cotton, groundnuts, maize, palm oil, rubber, chapter. sisal, and tobacco, which all show that supply responds positively. Failure to recognize this cable in countries which are big importers of has been one of the serious shortcomings of past foodgrains. In the short run, a country might agricultural policy in Sub-Saharan countries. gain foreign exchange by a policy that maxi- There have been many examples of how defi- mizes agricultural production, even if on large cient price incentives have kept production farms. But the resulting dualism could well below its potentialamong Tanzania's export delay the broadly based improvement in agri- crops, except tobacco, in the late 1960s and early cultural productivity that is required for sus- 1970s;in Ghana with inadequate planting and tained development and better rural income maintenance of cocoa; in Senegal with reduced distribution. groundnut production; and in Guinea with the One of the requirements for efficient growth extensive diversion of farm products from of manufacturing in the region will be to bring official channels into smuggling and black mar- urban wages in the modern sector more closely kets because of price controls. Ivory Coast is into line with workers' skills and productivity. one of the few countries to have maintained The complex set of factors responsible for the attractive producer prices, and these have con- present imbalance have been noted. Corrective tributed to fairly vigorous agricultural expan- action will be needed on a wide front, encom- sion. Several African countries are now show- passing educational structure, curriculum, and ing an increasing awareness of the supply re- financing; government salaries; industrial sponses that may be expected from generous wages; and industrial incentive policies. A bet- agricultural incentives and are shifting their ter adjustment between productivity and wages policies accordingly. will be necessary if exports of manufactures are Another issue of crucial importance is the to be competitive in international markets. choice between a development strategy concen- Some countries have attempted to disregard trating on small farmers, which would seek internationally competitive efficiency by em- agricultural modernization for the mass of the phasizing production for the domestic market, farm population, and an exclusively production- but their experience has not been encouraging. oriented strategy that confined resources and Obviously some domestic-oriented manufactur- rapid growth of output to large and relatively ing can be efficient, but the range of industries capital-intensive farm units within a dualistic that can be efficient is likely to be limited by 53 agricultural structure. economies of scale and by vocational, technical, Even if large-scale and highly commercialized and managerial skills and infrastructure. Ghana farms were more efficient, which is not always and Tanzania, for example, have attempted to the case, there are reasons for preferring a force the pace of industrialization beyond these strategy that emphasizes the growth of small- economic limits. While failing to accelerate in- holder agriculture. First, the large farms tend to dustrial growth significantly, such policies have be highly mechanized. Tractor technologies are nurtured inefficient enterprises that make it attractive because they can be transferred from more difficult to reorient industrial incentives the industrialized countries with relative ease toward competitive efficiency, and thus inhibit and tractors tend to be looked upon as symbols future growth. In contrast, countries whose pol- of modern agriculture. But while some mechani- icies did not give primary emphasis to indus- zation of agriculture (not necessarily including trialization actually attained relatively rapid the use of tractors) may well be desirable, industrial growth rates. The share of manufac- agriculture for the next decade must be the turing in GDP rose from 7 percent in 1960 to 14 principal source of employment and incomes for percent in 1974 in Ivory Coast, whereas it stag- the majority of the population. Second, large nated around 10 percent in Ghana. commercial farms could capture a large share of One of the limitations on African industrial the urban market, diminishing the extent to growth has been the relatively small size of the which smallholders can sell their produce for market for industrial products in individual the cash necessary to purchase inputs and up- countries. Recognition of this difficulty has grade their farming technology. The growth of spurred numerous schemes for regional eco- the cash incomes of small farmers is important nomic integration. One scheme, the East African in expanding the markets for urban industrial Common Market, comprising Kenya, Tanzania, products and promotes a healthy interaction and Uganda, ran into political and economic dif- between agriculture and manufacturing. ficulties and has since been disbanded. Several The argument against letting large-scale farms schemes now exist in West and Central Africa. preempt markets is less applicable for exports Two of these are confined to Francophone coun- than domestic sales, and probably less appli- tries: the West African Economic Community (CEAO) of Ivory Coast, Mali, Mauritania, Niger, to bridge the gap between the work of the inter- Senegal, and Upper Volta, and the Central Afri- national centers and the location-specific re- can Customs and Economic Union (UDEAC) search required to identify and test innovations comprising Cameroon, the Central African Em- suitable for farmers of particular localities. In- pire, the People's Republic of Congo, and Gabon. ternational support for research covering eco- The new sixteen-member Economic Community logical zones common to many countries will of West African States (ECOWAS) comprises be particularly valuable. There is much to be the members of CEAO plus Benin, Cape Verde, learned from experience with existing regional Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, programs, such as those undertaken with the Nigeria, Sierra Leone, and Togo, making it the assistance of the French Government's organi- most ambitious effort at regional integration in zation to support research on vegetable oils West Africa. (IRHO), and the West African Rice Develop- All these schemes aim at establishing common ment Association (WARDA). markets with particular emphasis on industrial The requirements for concessional capital development. Their members are diverse in their assistance in Sub-Saharan Africa will continue resources and levels of economic development, to be high. Many of the countries are too poor with comparatively rich coastal countries along- to finance their needs at commercial terms. Con- side the landlocked and very poor countries. cessional capital may also be increasingly nec- Each treaty provides for fair sharing in the ben- essary for the Middle Income African countries efits of regional development, with mechanisms whose export growth is likely to be modest to compensate for losses in revenues due to since it depends heavily on a few primary prod- changes in trade shares as well as development ucts, but which still have to undertake large funds to assist the poorer member countries in investments in infrastructurefor transport particular. It is still too early to assess the con- and health services, for examplethat are tribution these schemes could make toward vital to their development. In the emphasis on exploiting economies of scale through market alleviating poverty, there could be a danger that integration. external financing agencies would neglect these 54 needs in search of projects that "directly" benefit the rural poor. Investment in infrastruc- International Assistance ture often is an integral part of a poverty- This review of development problems in agri- oriented strategy, and in many African coun- culture and industry in Sub-Saharan African tries is a precondition to effective programs for countries has outlined the immense difficulties the poor. they face in accelerating their growth. Interna- The importance to African countries of prob- tional assistance can speed their development lems affecting primary commodities has been in a variety of ways. discussed earlier. In addition to mechanisms for Perhaps most important is financial and tech- stabilizing prices and earnings from exports, nical assistance to increase both the amount of international action can stimulate the growth agricultural research and its relevance to the of earnings from primary commodities by as- needs of small farmers under various agrocli- sisting in the expansion of output and market matic conditions. The international agricultural shares. While more investment, improved tech- research centers, such as the International In- nology, and better incentives are required to stitute of Tropical Agriculture (IITA), the Inter- increase supply from Africa, parallel action national Crop Research Institute for the Semi- might be needed to prevent global oversupply Arid Tropics (ICRISAT), and the Interna- of some of the commodities. In several cases tional Maize and Wheat Improvement Center bauxite, phosphates, and timber, for example-- (CIMMYT), are an important response to both - international import demand is expected to grow those needs. They can provide plant material, quite rapidly, and a fairly rapid increase in ideas, technical assistance, and training facili- African output could probably be absorbed ties to strengthen food crop research programs without disturbing the market and affecting in individual countries; and IITA and ICRISAT prices. But in other cases, preeminent examples are emphasizing research to guide the evolution of which are tea and coffee, rapid growth of of more productive farming systems. African output and exports cannot be accom- More research with a bearing on livestock modated unless other nations reduce their shares development, including livestock diseases, is of the market. This has been happening to some also needed. In addition assistance is needed extent. Brazil's share of world coffee exports to strengthen national research programs, and has fallen from 38 percent to 26 percent between 1961 and 1976, with Africa's share rising from provided to other major exporters, which have about 19 percent to 27 percent in the same pe- alternative investment opportunities, for di- riod. The share of India and Sri Lanka in tea versification into alternative crops. Where di- exports declined from 73 percent in 1961-63 to versification appears advantageous, additional 52 percent in 1972-74, while Africa's share rose finance and other international assistance for from 6 percent to 15 percent, the main exporters projects that would employ displaced workers being Kenya, Tanzania, and Uganda. These would benefit both the present exporters and trends can be accelerated, to the benefit of the the African countries that could increase their poorer African countries, if assistance can be production of these commodities. 55 Chapter 7: Development Priorities in the Middle Income Developing Countries "Middle Income" is an omnibus term for the possible benefits for countries with different countries with diverse economic characteristics economic structures and policy environments and at very different stages of development. are illustrative, as are the country examples Countries such as Bolivia, Egypt, Sudan, and used. Thailand are predominantly rural and have sig- nificant proportions of their population still at Industrial and Trade Policy subsistence levels. By contrast, at the upper end A country's best response to a deterioration of the income spectrum are countries with aver- in export prospects depends not only on how age income per person of over US$2,500, such dependent its economy is on trade but also on as Singapore, Venezuela, and some countries in its economic structure and on its trade policy. Southern Europe. Included in the Middle In- Large countries tend to be less trade-oriented come group are mineral exporting countries, and to industrialize more rapidly than small ones, whose average incomes are particularly decep- because they generally have more diverse en- tive because there are extreme differences be- dowments of resources and can rely on larger tween the mineral and non-mineral sectors of domestic markets to justify production on an the economy. Levels of industrial development economic scale. Countries rich in natural re- vary, from some African economies with only sources tend to industrialize more slowly than rudimentary manufacturing capacity to major those poor in resources, which must export industrial countries, such as Brazil or Yugo- manufactures from an early stage in order to slavia, that export machinery. The demographic meet their import needs. The extent of differ- characteristics also vary, from countries whose ences among Middle Income countries in the 56 fertility rates have already declined to quite low size of their markets and their degree of open- levels to countries where they are still rising. ness is illustrated in Table 43, by data for a Amid this diversity, however, most of the Mid- small sample of countries. The market for in- dle Income countries share two common char- dustrial products in Argentina is 150 times as acteristics as distinct from the Low Income large as the market in Togo. The contrast in the countries: their growth prospects are more sen- degrees of openness of the different economies sitive to economic conditions in the industrial- is illustrated by the fact that in Malaysia and ized countries, particularly the environment for Colombia, which have markets of approximate- trade and commercial capital flows; and they 1y equal size, the import ratios differ widely. have more resources to raise the living stand- ards of the poor. 43. Size of Industrial Markets and Import Ratios in The first of these characteristics contributed Middle Income Countries, 1975 greatly to the growth of the Middle Income coun- Market for Imports as tries in the last two decades, when the interna- Industrial Percentage of Products Market for tional environment favored the rapid growth (million Industrial of earnings from exports, tourism, and workers' US dollars) Products remittances. In the next five to ten years, the Togo 249 52 environment for international trade is likely to Ghana 2,005 26 be less favorable. This chapter explores the im- Malaysia 5,297 42 plications for policies to sustain rapid growth Colombia 7,534 16 and raise export earnings. It then discusses Korea, strategies for alleviating poverty, centering on Republic of 12,736 29 measures that modify the patterns of growth Turkey 18,282 17 so as to benefit the low income groups. Yugoslavia 23,736 22 In any particular country, the appropriate Argentina 39,013 7 composition of investment and the policy priori- Note: The market for industrial products is defined as gross ties will depend on a complex set of circum- industrial output plus imports minus exports. The data in this stances that would require detailed analysis. table are drawn from a variety of sources and are based on definitions that are not strictly consistent. Thus the com- The areas of action suggested in this chapter and parisons only indicate broad orders of magnitude. In general, it will be necessary to find ways of equalizing the incentives for sales in domestic preserving the growth of foreign exchange earn- and foreign markets. Even though the outlook ings, while pursuing policies that will sustain for manufactured exports is less favorable than economic growth as foreign exchange becomes before, in countries approaching the economic scarcer. Measures of the first sort include in- limits of import substitution it would be desir- creasing export incentives, negotiating strate- able to shift the structure of incentives in favor gies to improve access to markets in industrial- of exports. ized countries, increasing trade with other de- In addition to the usual instruments of trade veloping countries and increasing the domestic incentive policyexchange rate intervention, value added in existing exports. Policies to sus- protection against imports, and export subsidies tain economic growth based on domestic the instruments available for industrial policy, demand include the promotion of engineering such as investment incentives, production and industries, services, and agriculture. Some of wage subsidies, and government promotional these in fact have implications for export earn- activities, can strongly influence the structure of ings as well: the promotion of engineering prod- industrial investment even in the relatively ucts may be an important means of diversifying market-oriented developing economies. Govern- the composition of manufactured exports away ment promotional activities include project from products that face protectionist barriers; identification, preparation, finance, and imple- and the stimulation of agriculture may increase mentation; the design and location of infra- supplies of products for which export demand structure such as ports, highways, power gen- is expected to be strong. eration facilities, and industrial estates; and the organization of research, marketing, and the Increasing Export Incentives import of technology. As countries progressively substitute domes- A structure of industrial incentives which tically produced goods for imports, it gradually rewards firms that are efficient and can compete becomes less efficient to use domestic resources internationally tends to foster rapid growth in to save foreign exchange through displacing im- industrial employment and in incomes; a strong ports than to earn foreign exchange through in- bias toward protection in the structure of creasing exports. Where there is little further industrial incentives tends not to favor long- 57 scope for industrial import substitution, and term sustained growth at high rates. Changes simultaneously exports are growing slowly or in strategies will involve changes in industrial not at all, scarcity of foreign exchange quickly structure that will cause dislocation, including becomes the principal bottleneck for further the loss of employment in industries where development. domestic production is very inefficient. This can Argentina and Turkey are among the several be extremely painful, especially in countries countries that have been in this position. Do- where unemployment and underemployment mestic industry has been protected by a com- are already very high, making it very difficult plex system of tariffs, non-tariff levies, quotas, for displaced workers to find alternative em- import prohibitions, differential exchange rates, ployment. Measures can be devised to ease the and prior deposits on imports. On the available transition, and to reduce the social costs asso- evidence, the levels of effective protection are ciated with structural change. The justifica- high and vary among industries; and industrial tion for incurring these costs is the higher rates products are much more expensive than they of growth and employment that they can help are internationally. Since there has been con- achieve. tinued pressure to reduce imports, the items that continue to be imported are critical inter- Increasing Value Added in Exports mediate and capital goods that would be ex- Countries that already export manufactured tremely costly to make locally. Economic growth goods can raise their net earnings of foreign thus depends heavily on the availability of exchange through increasing both the volume imports. This, combined with unavoidable fluc- and value added content of these exports. tuations in foreign exchange earnings, results in Raising the value added domestically does not persistent balance of payments problems and increase market penetration in the industrialized erratic growth rates. countries, and has obvious advantages in the To strengthen the balance of payments in case of products that are subject to quantitative these countries, it would be necessary to reduce import restrictions in industrialized countries. the bias against production for export relative However, in textiles and clothing, as noted to domestic sales, with the long-run goal of in Chapter 3, the developing countries have already taken the upgrading of quality and unit capital-intensive investments. Exporters of tim- price a long way, so that there are unlikely to be ber appear to have favorable prospects for further large gains. increasing domestic processing. Further pro- Another method of raising value added is to cessing of tropical beverages by producers is undertake additional stages of production and rendered extremely difficult by the fact that the marketing. Here, too, there are economic limits processing companies in consuming countries which must be recognized. Investments in the control the marketing networks. It is unlikely production of intermediate goods designed to that producers could establish alternative net- replace imports need to be evaluated particular- works in importing countries. ly carefully for economic efficiency. The produc- Even though in some of the important mar- tion of basic intermediates such as petrochem- kets the differences are modest, as Table 44 icals and steel must be on a very large scale if shows, import tariffs that are higher on pro- it is to be economic, and a premature attempt to cessed than on raw materials can be an impor- manufacture them domestically can jeopardize tant handicap for increased processing in the the international competitiveness of the export developing exporting countries. industries which use these intermediates. In this regard, the larger and more advanced semi- Trade Negotiations industrialized countries have an advantage It was emphasized in Chapter 3 that the ex- over countries whose industrial markets are port prospects of the developing countries were still small. affected not only by quantitative restrictions Almost all countries that export primary but also by the complexity of the proliferating commodities seek to increase their export earn- barriers to trade; and that the adverse effects ings by undertaking additional processing of the of the new protectionism would be felt not only products before export. Whether they can do so by the major exporters of manufactures but also efficiently can only be assessed separately for by countries that were just starting to be suc- each country and commodity. It depends on a cessful exporters of manufactures, such as the number of technical and institutional circum- Philippines or Tunisia. Maintenance of access stances, among them the scale and capital inten- to markets in industrialized countries and the 58 sity of the processing to be undertaken, and its rolling back of non-tariff barriers are of over- energy needs, and marketing and freight ar- riding importance to developing countries. To rangements. The major mineral exporters have make progress in the face of protectionist pres- already exploited the scope for domestic pro- sure from producers in the industrialized coun- cessing, and localizing further stages of pro- tries requires, at a minimum, active participa- duction will probably involve large-scale and tion in future trade negotiations. So far, this has generally been lacking. 44. Industrialized Countries: Average Tariff Levels In the past, the main objective of developing in Broad Classes of Products, including countries in multilateral trade negotiations has Raw Materials, 1973 been to acquire special preferences. This led Semi-finished Finished to the Generalized System of Preferences es- Raw Manu- Manu- Materials factures factures tablished in 1971. Two aspects of the scheme European are worth noting here. The first is its very lim- Community 0.5 8.1 9.3 ited scope, since each industrialized country United States 2.7 7.6 7.9 has established its own restrictions on the pref- Japan 5.9 8.6 11.2 erences granted, excluding some developing Canada 0.3 8.4 10.2 countries and some products, especially agri- Australia 0.9 11.1 21.0 cultural products, textiles, clothing, shoes, and Sweden 0.0 4.5 6.6 petroleum products. In addition, there are limits Austria 5.9 8.4 16.0 on the amounts of imports receiving preferen- Switzerland 0.3 4.4 3.6 tial treatment, for individual products or sup- Finland 0.0 4.1 8.0 plying countries, or sometimes for both simul- Norway 0.1 4.8 7.4 taneously. Second, analysis has shown that New Zealand 0.6 8.5 32.6 most of the benefits from the scheme are de- Combined rived not from its preferential features but from Average 2.0 8.0 9.8 the additional trade that has resulted from the reduction of import tariffs. These findings prob- Source: Summary by Industrial Product Categories; Tariff ably apply more generally to unilateral prefer- 1973, Imports 1970 and 1971. (Geneva; General Agreement on Tariffs and Trade, March 1974.) ential schemes, which are apt to be designed so as to avoid harming producer interests in developing country exporters; industrialized countries. They emphasize that Limitations on permissible measures to pro- although efforts to retain tariff preferences can mote exports, with continued exceptions for be important to fledgling exporters of manufac- less advanced developing countries to enable tures, it is even more important to assure access them to subsidize their export industries to to markets in industrialized countries. redress the effects of excessively protective The major trade issues facing developing trade regimes; countries are not how to gain preferential tariff Agreements facilitating the growth of trade treatment from industrialized countries, but among developing countries. rather how to prevent the further growth of By participating more fully in multilateral non-tariff barriers against imports. The concen- trade negotiations on a reciprocal basis, the tration of multilateral tariff cuts on products more advanced developing countries can help that are not of central concern to developing to ensure that the international trading envi- countries, and the imposition of quantitative ronment will better reflect developing countries' restrictions on major exports of developing interests, and can attempt to counter the in- countries, may be attributed in part to their lack creasing discrimination against imports from of active participation in trade negotiations. developing countries. If this can be achieved, The negotiating position of the developing more countries could derive substantial bene- countries would undoubtedly be strengthened fits from a strategy where trade is the engine and the protectionist pressures in importing of growth. countries could be more effectively addressed if non-tariff barriers were negotiated on the basis Trade Among Developing Countries of reciprocal concessions from developing coun- Nearly a quarter of the exports of developing tries. The different interests of countries at dif- countries goes to other developing countries. ferent stages of industrialization suggest that The most dynamic category of these exports is they can reach bargains that benefit them both. manufactures: as shown in the last column in The agenda for negotiations could usefully in- Table 45, these accounted for about 39 percent clude the following elements: of the real increase in trade among developing Assured growth in the volume of industrial- countries during 1960-75. Acceleration of the 59 ized countries' imports of currently restricted growth of trade among developing countries products that are of special interest to devel- must be led by manufactured exports. oping countries; Trade in manufactures among developing Strict rules to prevent the creation of new countries has increased rapidly during the last non-tariff barriers, except for brief periods decade or so. It grew by 10.6 percent a year under agreed criteria and under strict multi- during 1960-75, accounting for a rising share lateral surveillance; of developing countries' imports of manufac- Progressive removal of present quantitative tures, which rose by 7.3 percent a year. Between restrictions on imports and rationalization of 1970 and 1975, nearly a third of the growth in administrative procedures; the trade in manufactures among developing Progressive liberalization of imports by major countries was in machinery and transport equip- 45. Developing Countries: Product Composition of Merchandise Trade, 1975 Product Composition of Increase in Trade Imports from Imports from Imports from between Developing Industrialized Other Developing Developing Countries Countries Countries, as Countries, 1960-75 Percentage of (percent, at (billion US dollars) Total Imports 1975 prices) Food and Beverages 9.2 15.7 33 16 Non-food Agricultural Products 2.9 3.4 41 5 Non-fuel Minerals and Metals 1.8 2.8 37 5 Fuel 20.7 2.4 57 35 Manufactures 13.1 123.3 9 39 Total 47.8 147.6 22 100 ment. However, apart from textiles and cloth- but trade among them is only likely to expand ing, not more than 15 percent of developing vigorously on the basis of specialization. More countries' imports of manufactures come from detailed cooperation in the planning of indus- other developing countries, and the proportion trial expansion and more liberal policies toward is especially low in the machinery sector, as imports from one another will be required if shown in the last column of Table 46. trade among developing countries is to expand rapidly. 46. Product Composition of Trade in Manufactured To increase trade in engineering products Goods among Developing Countries, 1975 among developing countries will also require a (Percentages) considerable effort to overcome technical and Share of marketing problems. Some of these problems, Total Developing Imports especially inadequacy of local capacity for Developing Countries' Obtained By engineering design and product development, Countries' Imports Developing Imports from Countries hamper the development of this sector for do- from Other Industri- from Other mestic as well as export sales; they are dis- Developing alized Developing cussed in the following section. Problems that Countries Countries Countries pertain especially to trade among developing Textiles 14 4 28 countries are licensing arrangements that pre- Clothing 5 1 39 vent sales outside the domestic market; restric- Machinery tions on the use of external financial assistance and Transport Equipment 31 55 6 that require developing countries to purchase Chemicals 13 12 11 their equipment from industrialized countries; Iron and Steel 6 10 7 and the difficulties faced by capital deficit Other Manu- countries in financing export credits, which factures 31 19 15 place them at a disadvantage in relation to sup- Total 100 100 9 pliers in industrialized countries. None of these problems is overwhelmingas attested by the growth of trade in the past. But they do impede 60 Much of the growth of trade in manufactures the rate of expansion and will have to be tackled among developing countries has been based on at the international level if trade among de- preferential treatment in regional arrangements. veloping countries is to expand at its potential Significant expansion of trade among develop- rate. ing countries will require stronger regional understanding, or a more general liberalization Promotion of Engineering Industries of imports. Metal working and electrical machinery in- Recent structural developments in certain dustries play a very important role in industrial groups of developing countries favor the growth development, as countries progress from repair of mutually beneficial trade. Some developing workshops to making replacement parts and countries have greatly increased their industrial simple implements and then to a wide variety capabilities and can supply an increasing pro- of industrial equipment. Most developing coun- portion of the capital goods required by other tries have tended to discriminate against the en- developing countries, possibly at lower cost and gineering industries in favor of other branches with design characteristics that are more suited of manufacturing. Not only are many simple to operating conditions in those countries. The products produced in small enterprises that tremendous expansion of developing countries' operate under many disadvantages; in most exports to major oil exporters illustrates the countries, lowering the effective cost of im- potential for such growth. ported machinery has been a principal means The more advanced Middle Income countries of encouraging modern manufacturing activi- could realize sizable gains from trade with other ties. With over half of the imports of develop- developing countries, particularly in products ing countries from industrialized countries con- such as chemicals where economies of scale can sisting of machinery and transport equipment, be overwhelmingly important. Exploiting such their poorer export prospects will encourage opportunities will require changes in industrial more developing countries to attempt local man- and trade policy. For example, these countries, ufacture of these goods in order to reduce their which are at roughly similar levels of industrial dependence on imports. development, all have plans to promote do- The appropriate policies will differ according mestic production of machinery and chemicals, to the level of industrial development. Most of the poorer Middle Income countries mainly The second group, consisting of more com- need to foster the development of metal work- plex products, are almost exclusively designed ing skills and to improve the organization and and developed in industrialized countries, and technical competence of small workshops, par- production in developing countries is typi- ticularly in rural areas, since a major source of cally undertaken under license from companies demand will be agricultural. Local production in industrialized countries. The more advanced of even rudimentary agricultural tools and developing countries should give priority to equipment can serve an important function in developing a capacity for design and technolog- the diffusion of technology, as well as providing ical innovation that will permit them to over- employment and supplying implements that are come the licensing restrictions on exports and adapted to the needs of local farming systems thus to take a bigger share in the growth of and make full use of locally available materials. trade in engineering products, both with indus- In the more industrially advanced developing trialized and other developing countries. countries the promotion of efficient engineering As their industrial labor skills improve, the industries involves a different set of considera- developing countries may benefit from an in- tions. Trained workers are not as scarce as in crease in subcontracting of the production of the Low Income countries, although training in- components from firms in industrialized coun- stitutions will undoubtedly need to be upgraded tries. This is how the trade in electronics has and made more responsive to the demands for grownby shifting the assembly phases of a specific skills. The main problems in these production process to the developing countries. countries are likely to lie in design, marketing, and the economic scale of production. It is strik- Investment in Infrastructure ing that even advanced producers of capital Another way of sustaining high rates of goods such as Argentina, Brazil, India, the growth when the prospects for exports are rela- Republic of Korea, and Mexico have a relatively tively poor is to raise investment in infrastruc- limited capacity for design and development of ture, such as communications, electric power, engineering products, making it especially dif- and housing, for all of which there is generally ficult for them to remain competitive interna- a latent demand in developing countries. The tionally in products whose characteristics main problem this raises is, of course, the scar- 61 change rapidly with technical advances. Some- city of resources, whether of government sav- times even the facilities for accurate measure- ings to finance public investment; or of the ment and testing of such standardized products credit that can be extended to the private sector as screws or hand tools are inadequate. to finance private investment; or of foreign The machinery sector in the more advanced exchange to pay for the additional imports ne- developing countries has an excellent potential cessitated directly by the investment and indi- for exporting as well as meeting domestic de- rectly by the expenditure of the incomes that mand. The policy priorities in expanding ex- it may generate. In general, expanding invest- ports of machinery differ between the standard- ment in infrastructure will require new efforts ized products whose specifications are fairly to raise government resources, either through stable and the more complex products whose taxation or through fees charged to the users of characteristics change continually and rapidly. the services. Because of rapid urban growth, Among the standardized products, those sold current plans for the construction of infrastruc- to producers are likely to be much more dif- ture already strain the resources of govern- ficult to market than those sold to consumers. ments, especially local governments which are Exports of consumer goods have been facilitated responsible for a large part of investment in by the efforts of large wholesale and retail orga- these sectors. nizations in the industrialized countries that have scoured the developing countries for low Agriculture cost sources of supplies. But to expand exports The major issues in agricultural development of producer goods will require producing coun- in the Middle Income countries are how to sus- tries to identify potential purchasers, and will tain a rate of growth that allows for a balanced mean they must ensure that the technical ser- expansion of all parts of the economy, and how vices and financing conform exactly to pur- to ensure that the pattern of agricultural growth chasers' needs. In producer goods, lower prices is such as to make a strong and direct impact cannot make up for poor qualitya casting on rural poverty and, indirectly, on the migra- that is not sufficiently durable for a high speed tion of the poor to urban areas. loom cannot gain acceptance by a lowered price. In the drive to industrialize, it has been easy to overlook the critical role of the agricultural tinues to have high priority in many Middle sector in development and to neglect the inter- Income countries, for example Brazil, Colombia, relation between policies to encourage the Ghana, Iran, Nigeria, and Venezuela. As most growth of domestic industry and the perform- of the arable land area is drawn into cultivation, ance of agriculture. Despite the recent rapid and growth requires more intensive cropping rise of industry and growth of cities, there are practices, the need for effective research and few developing countries in which the share of extension services becomes more evident. Even population in rural areas is much below half. where agricultural technologies can be im- Agriculture is still the single most important ported, they have to be further researched and source of livelihood in most semi-industrial adapted to local conditions. Relatively few countries. In several countries, its share in do- countries have so far established the institutions mestic product is about the same as, or larger capable of doing such research. than, that of industry. In a large number of countries, it will be neces- Though agriculture in the Middle Income sary to reform the policy framework affecting countries has generally grown more rapidly agriculture in order to accelerate growth and to than in the Low Income countries, much of this ensure that it is more broadly based than in the growth has typically been in the commercial past. The deficiencies in policy are deep-seated farming sector and has stemmed from exten- and essentially derive from a tendency to view sions in cropped area rather than increases in the agriculture sector as a source of revenue, yields. As with other generalizations about Mid- foreign exchange, and cheap labor with which dle Income countries, this needs an important to support rapid industrialization. Agriculture qualification: extension of the cropped area has is taxed in many ways, both explicit and implicit, relied heavily on the spread of irrigation in some and agricultural investment discouraged, countries, for example Iran and Mexico; and through overvalued exchange rates to protect yield increases have been important in some industry; taxes on agricultural exports; and countries, such as Egypt, Ivory Coast, the domestic terms of trade that support industrial Republic of Korea, Malaysia, and Thailand. profits and assure cheap food in urban areas at Even where agriculture represents a relatively the expense of agricultural producers. The ad 62 small proportion of the domestic product, as in hoc measures sometimes taken to offset these the most advanced of the Middle Income coun- policy biasescheap agricultural credit, sub- tries, the rate and pattern of agricultural growth sidized fertilizer, and price supports for crops have important implications for income dis- are difficult to sustain because they impose a tribution and poverty. Disparities between agri- heavy fiscal burden; they also accentuate rural cultural and non-agricultural incomes are often inequalities as they primarily benefit the larger a major source of inequities in income distribu- farmers engaged in commercial production. Of tion, and in most of these countries extreme course, these problems do not exist in all coun- poverty tends to be concentrated in the agri- tries. Malaysia, Ivory Coast, and the Republic cultural sector. Furthermore, differences in of Korea are among those that have used price income levels within agriculture are frequently policies fairly successfully to encourage broadly at the heart of the problems of regional poverty based agricultural growth. that plague policymakers in many countries Excessive protection of industry involves a (for example, in Brazil, Ivory Coast, Malaysia, strong inherent bias against agricultural growth Thailand, or Turkey; and the problems of the which is exceedingly difficult to offset by other Sierra in countries on the west coast of South measures. Moreover, while it is obviously neces- America). sary to tax agriculture, it is desirable to do so An important consequence of the failure to without adversely affecting the incentives to deal with rural poverty is accelerated migration produce. This implies a reliance on income taxes to cues. This is one of the principal causes of and land taxes rather than taxes on exports and the continued rapid expansion of urban areas manipulation of the domestic terms of trade. which places a heavy fiscal and administrative In addition, industrial incomes should be made burden on the economy. to bear a share of the tax burden commensurate Sustaining rapid growth in agriculture will with their share in national income. This cannot require a range of measures. Where there is still be achieved without a properly enforced income scope for further increases in the cultivated tax or value added tax, both of which are still area, substantial investments in transportation, uncommon even in economies with sophisti- power, irrigation, and marketing will be neces- cated industrial capacities. sary. Expansion of the cultivated area con- Rural inequality is very much greater in some countries than in others, primarily because of last few decades. The other solution, resettle- differences in agrarian structure. Two broad ment schemes, has been tried in Malaysia and structural patterns can be distinguished, which Brazil, for example. The main problem is the have been termed unimodal and bimodal. In high cost per resettled family because of the countries with unimodal agricultural sectors, need to extend infrastructure and technical land is fairly evenly distributed, most farmers support to frontier areas. In addition, where use rather similar cropping technologies and there are large differences between urban and have similar relations with industrial and ex- rural income levels, the settlement schemes port activities. Bimodal agricultural structures, have to provide income opportunities attractive by contrast, are characterized by highly unequal enough to compare with those that might be distribution of land and extreme dualism in obtained from migration to cities. access to markets, technology, credit, and other At a minimum, countries with bimodal agra- services. Table 47 illustrates the sharp differ- rian structures should seek to redirect invest- ences among countries in the most important ments in infrastructure and institutional activ- element of agrarian structurethe distribution ities toward the needs of the small farmer. of land holdings. The allocation of credit is a case in point. Agri- 47. Distribution of Holdings by Size and Area in Selected Middle Income Countries Size of Holding 0-5 Hectares 5-50 Hectares Over 50 Hectares Percentage Percentage Percentage Percentage Percentage Percentage of of of of of of Holdings Area Holdings Area Holdings Area Brazil 28 1 52 13 20 86 Chile 38 1 30 5 32 94 Egypta 97 67 3 27 6 Korea, Republic of 100 100 Turkey 79 27 20 59 1 14 63 Venezuela 36 1 43 7 21 92 Note: The data in this table are drawn from different official national sources. They are not strictly comparable and should be construed only as orders of magnitude. The categories used for this country are 0-4 hectares, 4-40 hectares. and over 40 hectares. Unimodal structures are typical of the densely cultural credit extended by formal institutions populated East Asian countriesthe Republic is subsidized and is almost always captured by of Korea and the Republic of China, other ex- the larger farmers. Small farmers meet numer- amples being Egypt and Malaysia. In these ous bureaucratic obstacles that deny them sub- countries, policies that accelerate agricultural sidized credit, forcing them to rely on informal growth almost certainly help to reduce poverty credit channels that are very much more expen- as well, because their effects are spread rela- sive. Thus the credit system, as it now operates, tively widely in the rural economy. This is not frequently worsens existing income inequalities necessarily true in the bimodal agrarian struc- in agriculture. tures of many countries in Latin America (Bra- zil, Colombia, and Venezuela are examples) and other countries such as Turkey and Iran. Here Distributing the Benefits of Growth the benefits of agricultural growth have been The issues of development strategy discussed unevenly spread and policies to promote further above have a crucial influence on how different growth will have only a slight impact on poverty sections of society participate in a country's unless they explicitly favor the smaliholder. economic growth. It is this, rather than extreme The crux of the problem in bimodal struc- poverty, that is the main problem confronting tures, the uneven distribution of land, can be policy makers in the Middle Income developing addressed only by effective land reform or by countries. The close interaction between poi- shifting smaliholders to new settlements. The icies affecting industrialization, external trade, political difficulties in enforcing land redistribu- and agriculture can result in inequities in the tion are well known and there have been very pattern of economic growth which are quite few instances of successful land reform in the unintended but nevertheless large enough to offset the attempts to improve the well-being of try. Most of the others earn meager incomes in the relatively poor through welfare measures. service occupations, so purchasing power does A striking example of the problem is the effect not rise as fast as the number of people. Third, of a strong policy bias toward import substitu- city administrations devote little finance or ad- tion in industry which, over a long period of time, ministrative talent to improving the conditions tends to encourage investment in sectors which of the poor, most of whom live in squatter set- are not justified on the basis of the country's tlements in otherwise open areas or on the comparative advantage. Investments to produce outskirts of the city. The distribution of public substitutes for imports become increasingly in- services is more skewed in countries with tensive in capital and technology rather than workers' insurance schemes that subsidize labor, keeping the growth of employment slower housing and hospital care for workers in the than it could otherwise be. The failure of em- modern sector but not for others. ployment to keep pace with the expansion of A prerequisite for improving the availability of the labor force, even when output has grown essential public services to the poor in the Mid- rapidly, is one of the most serious problems fac- dle Income countries is a strong commitment ing many Middle Income countries. At the same to mobilizing financial resources. While these time, workers who are fortunate enough to find countries have more resources than Low Income employment in the modern industrial sector countries, relatively few of them have fiscal begin to form an elite; they organize and obtain systems capable of mobilizing funds efficiently supporting labor legislation and social insurance on an adequate scale. Part of the reason for this schemes. This often leads to wage rates incon- weakness is the heavy reliance on taxes on in- sistent with current levels of productivity and ternational trade, which cannot be raised with- opposition to adjustments in the industrial out seriously distorting the allocation of private structureboth of which tend to make the long- investment in the economy. A direct approach term prospects for employment more difficult. to alleviating poverty would have to include a reform of the fiscal system. A policy bias in favor of import substitution Fiscal reform needs to be undertaken with the in industry also tends to discriminate against commitment to direct a much greater share of 64 agriculture, particularly small farmers growing public expenditures toward the poor. This ap- food. Price controls tend to accentuate this bias, plies most forcefully to the extension of water causing increasing inequalities in agriculture. supply and sanitation facilities to the urban Another consequence is a growth in migration fringes where the poor live and the establish- from rural to urban areas. Added to the natural ment of health care and housing facilities that growth of urban population, this results in very the poor can afford. To extend these services, rapid urbanization. it would be desirable for governments in Middle Rapid urbanization poses very difficult prob- Income countries to devote substantially more lems. First, urban population growth rates of attention and resources to the research and de- about 5 percent or more a year are common in velopment of cheaper alternative designs and developing countries, and lead to correspond- more effective administrative and institutional ing increases in the need for housing, sanitation, arrangements. This will involve a good deal of roads, and other infrastructure, straining the experimentation and continued evaluation of fiscal and administrative capacities of local gov- programs in many countries. It will be necessary ernments. Second, rapid urban growth is asso- to strengthen collaboration between developing ciated with growing dualism within the city, as and industrialized countries, particularly in find- only a small proportion of the increase in the ing solutions to the problems of technology work force finds employment in modern indus- and design. Chapter 8: Conclusions The development progress of the past twenty- ers. In rainfed areas, too, there is considerable five years has exceeded early expectations in scope for progress with present knowledge. But many respects. Nonetheless about 800 million in the drought prone areas of Sub-Saharan people, more than one-third of the total popu- Africa and Asia, major technological problems lation of the developing world, still live in ab- remain to be resolved if long-term agricultural solute poverty. The central objectives of the growth is to be achieved. international development task must be rapid Measures to make crop cultivation more pro- economic growth and the reduction of poverty. ductive should be supplemented by dairy, This report has discussed the policies and poultry, and fisheries programs which are par- prospects for development progress in these ticularly important in raising the incomes of main areas: small and marginal farmers and the landless. Sustaining rapid economic growth; But even on optimistic assumptions about the Modifying the pattern of economic growth so growth of agriculture, underemployment will be as to raise the productivity and incomes of a growing problem in Low Income Asia, calling the poor; for greater emphasis on creating non-farm jobs Improving the access of the poor to essential in rural areas and systematic expansion of public services; large-scale public works programs. Maintaining an international environment Strengthening rural and urban infrastructure supportive of development by improving the to support these development efforts will be framework for international trade, facilitating highly demanding of investment funds in indus- an expansion of lending at market terms, and try as well as in agriculture. Capital needs to expanding the volume of concessional be used more efficiently, but rapid increases assistance. in investment rates will still be essential. To 65 Rapid growth is fundamental to any develop- achieve the necessary levels of investment will ment strategy. In the Low Income countries, in require an increase in domestic savings, both particular, substantial and sustained progress in public and private, supplemented by large in- reducing poverty will be impossible without flows of concessional capital. accelerating growth rates. But growth alone is The uncertainty about international trade and not enough. Because the poor tend to share less capital movements in the next few years poses than proportionately in growth, since they have strategic choices for the Middle Income coun- only limited access to productive assets, educa- tries, which are more affected by changes in tion, and employment, deliberate action is neces- international economic conditions. In most of sary in areas that affect the distribution of them, efforts to sustain the growth of export increases in income. These include the structure earnings will have to be supplemented by meas- of economic incentives, the allocation of invest- ures to achieve a more broadly based expansion ments, and the creation of special institutions of domestic demand. This will require a more and programs to increase the productivity of the balanced growth strategy, including the acceler- poor and their opportunities for employment. ation of agricultural development. Greater pri- In the Low Income countries, with their large ority will need to be given to investments in the numbers of rural poor and heavy dependence on physical infrastructure supporting agriculture, agriculture, the main emphasis must be placed the creation of a more satisfactory set of incen- on raising productivity in the rural economy, tives and relative prices, and much improved particularly the productivity of small farmers. support services. Measures to preserve the In parts of Asia where a large potential for irri- growth of foreign exchange earnings include gation can be tapped, output can be increased raising export incentives; increasing the domes- rapidly by stepping up irrigation investments. tic value added in manufactured goods exports; Changes will be necessary in the administration and, particularly for the more advanced coun- and organization of agricultural support ser- tries, exporting a more diverse range of manu- vices, to assure that information is disseminated factured goods. Measures to further the growth broadly and quickly and that the services are of trade among developing countries will also responsive to the special needs of small farm- be important. The poor in both the Middle Income and Low reasons for this are the faltering pace of eco- Income countries have very inadequate access nomic recovery in the industrialized countries to such public services as health facilities, pot- and the rise of protectionist pressures. A coordi- able water, sanitation, and education. Programs nated approach to the demand management designed specifically to make these services problems of industrialized countries is essential accessible to the poor should be an important if they are to avoid a protracted period of part of development. In nearly all countries, slow growth, with its extremely adverse con- there is a good deal of scope for extending such sequences for the growth of trade, including an services more widely within the same budgetary increase in import barriers. The need for such allocations, by adapting successful experiments an approach has been discussed in several in low cost delivery systems, by using suitable forums, including the OECD and the Interim technologies and design standards, and by rely- Committee of the International Monetary Fund, ing more heavily on the participation and self- but progress has been modest so far. help efforts of the communities who are to bene- In considering how to accelerate growth in fit. Nonetheless, extending the supply of public industrialized countries, the importance of links services to the full population will require with the developing countries should be recog- substantial additional investments in all types nized. Twenty-five years ago, these links were of infrastructure, and large increases in public imperceptible; today they are significant. Import expenditures to operate and maintain these demand in developing countries has remained systems. buoyant enough in recent years to help maintain Measures to alleviate poverty will run into production and employment levels in important social, political, and administrative obstacles export-oriented industries of the OECD coun- which must not be underestimated. The strength tries. With more purchasing power, the devel- of deep-seated traditions, weaknesses in admin- oping countries can help to stimulate demand istration, and opposition from affected groups further. can make it formidably difficult for even the The international community faces a long most dedicated governments to modify the period of shifting comparative advantage, and patterns of economic growth or to alter the dis- it is essential that countries be ready to accept 66 tribution of essential public services. These and facilitate the changes in industrial struc- problems are even more severe when economic tures that this will involve. A few countries growth is slow and the resources available for have undertaken studies of the direction these investment and public services remain relatively changes are likely to take over the longer run. stagnant. Others should do the same since such informa- Serious though these obstacles may be, they tion is necessary for framing and implementing are no justification for inaction. Success is far appropriate adjustment policies. It would im- more likely if governments set themselves ex- part a desirable sense of urgency if governments plicit targets for the growth of incomes of the were to commit themselves to formulating such poorest groups and for the extension of basic policies and agree to consult on their implemen- public services, and then monitor progress regu- tation in an international forum such as the larly. The paucity of data on incomes, nutri- OECD. tional deficiencies, and access to public services The developing countries, too, face problems reflects the absence until recently of policy con- in adjusting to changing international trade pat- cern with the poor and of anti-poverty programs terns. The more advanced of them need to step with specific objectives. The collection of data up programs to diversify the product composi- on the conditions of the poor is within the ca- tion and markets of their manufactured exports. pacity of most countries and will be vital to To promote trade among developing countries them in evaluating their policies, programs, and will require changes in industrial incentive investments. structures, reduction of trade barriers, and However, progress in the developing coun- strengthening of the institutional infrastructure tries does not depend solely on domestic efforts. in transport, communications, and credit. The latter must be reinforced by international In addition, countries must move jointly to action in a number of areas. strengthen the international framework govern- The most important of these areas is interna- ing trade relations so as to assure that the bar- tional trade. The scope for the growth of exports riers to trade, which exist in both industrialized from developing to industrialized countries is and developing countries, will be gradually likely to be much more limited for the next dismantled, and that explicit criteria are estab- decade than it was in the last two. The main lished for those barriers which must be imposed to deal with temporary difficulties. As interna- special importance to the Middle Income coun- tional specialization increases, active partici- tries. The projected increase from US$25 billion pation by developing countries in international in 1975 to US$78 billion in 1985 (at current trade discussions will become more and more prices) assumes that lending by the private sec- important to offset protectionist pressures and tor and multilateral lending institutions will progressively reduce the impediments to the grow at 12 percent a year. This involves a num- growth of trade. For countries that still depend ber of issues. heavily on exports of a few primary commodi- Much of the recent growth in private lending ties, action to reduce fluctuations of prices to developing countries has come from a rela- and to improve the systems which compensate tively small number of large banks, mainly in the for temporary declines in earnings is of great United States. Future lending from these banks importance. to the developing countries may be limited by Even with a steady expansion of earnings the growth of the banks' own capital and by from trade, the resources available to the de- internal considerations of appropriate balance veloping countries must be supplemented by an in their portfolios. Other banks, including some adequate inflow of external capital. In this area, in Europe and Japan, and non-bank private in- too, there are uncertainties. They relate to the vestors are increasing their share of developing rate of growth of private lending, the expansion country financing. If the projected increase in of the lending capacity of the multilateral financ- private lending is to materialize, it is important ing institutions, and the increased availability that this trend continues. of Official Development Assistance. The projected growth of net lending from Net disbursements of Official Development private banks to developing countries involves Assistance are projected to rise from US$19 an even more rapid expansion of gross lending, billion in 1975 to US$57 billion in 1985 (in cur- due to the rather short average maturity of pri- rent prices), with a gradually rising share of the vate financing in recent years. The high ratio total going to the Low Income countries. Official of gross to net lending has the potential for Development Assistance from members of the serious instability. To reduce this will require DAC is projected to rise from US$14 billion in measures which will extend the average 1975 to US$44 billion in 1985. Despite this in- maturity of private lending to the developing 67 crease, ODA as a share of their gross national countries, including improved access to the product would rise only slightlyfrom 0.36 per- long-term bond markets. cent in 1975 to 0.39 percent in 1985. This still Whether the projected net flow of private falls far short of internationally declared objec- lending to developing countries will be achieved tives. Even the projected availability of ODA is depends on a fragile mixture of fact and psy- not likely to be realized unless three large con- chology. The concentration of past lending in a tributorsthe United States, Germany, and relatively few large borrowing countries has Japanincrease their commitments substan- made lenders sensitive to developments there. tially. Statements have been made in all three A debt management problem in any one major countries in support of an enlarged aid effort, borrower could easily affect the willingness of but they have yet to be translated into action. private lenders to lend to other developing coun- Additional concessional resources would per- tries. Present prospects do not suggest a gen- mit both a higher rate of growth and greater eral problem of debt servicing capacity, but progress in dealing with poverty. The large in- individual countries could encounter short-term vestments necessary to accelerate growth in liquidity problems. Expansion of the resources agriculture and expand public services require of the International Monetary Fund would aug- an increased flow of concessional capital to the ment the capacity to deal with such problems. Low Income and to the poorer of the Middle More general difficulties might arise if the Income countries. Although at particular times, trade regime were to deteriorate further, since in individual countries, there may be temporary this would affect countries' export earning problems of absorptive capacity, there is no capacity and hence their capacity to service doubt that additional resources could be used debt. The willingness of private institutions to effectively. Additional external resources can- lend might also be affected by the regulatory not guarantee either accelerated growth or suc- environment in the capital exporting countries cess in dealing with poverty, but the absence of and by their governments' attitudes to lending adequate resources greatly increases the prob- to developing countries. Some actions designed ability of failure. to assure the stability of the banking system in The net flow of capital at market terms is of the capital exporting countries could, by calls- ing abrupt changes in the availability of finance their.importance for the prospects of developing to the developing countries, trigger the sort of countries. But it should be obvious that the in- debt crises that they are intended to prevent. dustrialized countries too have a large stake in International lending institutions are the prin- the rapid growth of the volume of tradein a cipal source of long-term capital for the devel- liberal, nondiscriminatory trading environment oping countries. Their declining share in the and in more stable commodity prices. While total supply of capital is reflected in the dete- their rate of economic growth is not as sensitive riorating maturity profile of the debt of Middle to short-term changes in international trade, ex- Income countries. The achievement of a better ports play a major role in their economies, and balance between medium-term lending from the developing countries are increasingly im- private sources and long-term lending from the portant markets for export industries. The main- international institutions crucially depends on tenance of a liberal, non-discriminatory trading the capacity of the latter to increase their lend- system facilitates the continued growth of labor ing. This requires early agreement to expand productivity and helps to ease inflationary pres- the capital of these institutions. Action to do sures. Increasing the supply of energy and food this is now under consideration. Increased lend- to meet growing demand from both industrial- ing by the international financial institutions not ized and developing countries is of vital impor- only helps to improve the maturity structure of tance to both. The developing countries not only debt but also provides assurance to private are important customers for the exports of in- lenderseither through cofinancing activities or dustrialized countries; they are an important indirectlyabout the quality of investment pro- element in the world capital markets, and have grams and debt management in the developing helped to invest the vastly expanded supply of countries. savings productively. One special aspect of the availability of capi- The interdependence between the developing tal is the financing of energy development, par- and the industrialized countries is not a new ticularly for oil and gas resources. Sometimes phenomenonit has been growing in impor- the known or suspected deposits of petroleum tance for decades. But it is perhaps not yet and gas in developing countries are too small fully understood how far the process has come, 68 to attract the major international companies nor how much further it will go in the next even if they are of importance to the countries decades. At present, there is concern with the themselves; or the risk of exploration within short-term disruptions caused by shifts in trade the limited territory of a small country cannot patterns, rather than recognition of the vital be offset by exploration in adjoining tracts in contribution of trade to long-run growth in pro- neighboring countries; or the investment climate ductivity; concern with the growing indebted- is too risky. To finance the development of ness of some developing countries, rather than energy resources in developing countries will emphasis on strengthening institutional capacity demand substantial amounts of external capital for financial intermediation in line with global and expertise. Private risk capital, which in the needs; fear about the implications of shifting past has been a major source of finance, is now economic strengths, rather than acknowledge- less readily available. The World Bank has ment of the benefits of accelerated progress in begun to provide financing for this purpose, and the developing countries. But the current need plans to expand such operations in association to adjust is not a transient problem: it reflects a with private capital. Other international insti- continuing, long-term, structural shift. It is im- tutions are considering similar programs. Such portant, therefore, that the implications and programs ought to be expanded rapidly and gov- benefits of global interdependence be fully ernments should consider whether expanded recognized. It will be to the advantage of all insurance and guarantee provisions could aug- countries to sustain an international environ- ment the flow of private capital. ment that supports the efforts of developing The above discussion of the areas in which countries to sustain rapid growth and alleviate international action is needed has emphasized poverty as rapidly as possible. Annex World Development Indicators Index of Countries Reference Reference Reference N urn be ra N urn bera N urn bera Afghanistan 20 Guinea 17 Panama 78 Albania 117 Haiti 26 Papua New Guinea 51 Algeria 69 Honduras 45 Paraguay 61 Angola 40 Hong Kong 86 Peru 66 Argentina 82 Hungary 120 Philippines 47 Australia 101 India 18 Poland 123 Austria 99 Indonesia 31 Portugal 84 Bangladesh 6 Iran 85 Rhodesia 54 Belgium 104 Iraq 79 Romania 81 Benin 14 Ireland 94 Rwanda 7 Bhutan Israel 92 Saudi Arabia 112 Bolivia 44 Italy 95 Senegal 46 Brazil 77 Ivory Coast 56 Sierra Leone 28 Bulgaria 121 Jamaica 74 Singapore 90 70 Burma 10 Japan 98 Somalia 8 Burundi 11 Jordan 57 South Africa 93 Cambodia 2 Kenya 32 Spain 91 Came roo n 38 Korea, Republic of 62 Sri Lanka 29 Canada 108 Korea, Democratic Republic of 116 Sudan 39 Central African Empire 30 Kuwait 114 Sweden 110 Chad 12 Lao People's Democratic Switzerland 111 Chile 72 Republic 3 Syrian Arab Republic 65 China, People's Republic of 115 Lebanon 75 Tanzania 25 China, Republic of 73 Lesotho 22 Thailand 43 Colombia 58 Liberia 49 Togo 35 Congo, People's Republic Libya 113 Trinidad and Tobago 87 of the 52 Madagascar 27 Tunisia 67 Costa Rica 71 Malawi 15 Turkey 70 Cuba 118 Malaysia 68 Uganda 33 Czechoslovakia 124 Mali 5 United Kingdom 96 Den mark 107 Mauritania 41 United States 109 Dominican Republic 64 Mexico 76 Upper Volta 9 Ecuador 60 Mongolia 119 Uruguay 80 Egypt, Arab Republic of 36 Morocco 53 Union of Soviet Socialist El Salvador 50 Mozambique 23 Republics 122 Ethiopia 4 Nepal 13 Venezuela 88 Finland 100 Netherlands 102 Viet Nam, Socialist Republic of 19 France 103 New Zealand 97 Yemen Arab Republic 34 German Democratic Republic 125 Nicaragua 63 Yemen, People's Democratic Germany, Federal Republic of 105 Niger 21 Republic of 37 Ghana 55 Nigeria 42 Yugoslavia 83 Greece 89 Norway 106 Zaire 16 Guatemala 59 Pakistan 24 Zambia 48 aln the tables, countries will be listed within their group in ascending order of income per capita. The reference numbers indicate that order. World Development Indicators Annex to the World Development Report Contents Page Introduction 73 Key to Tables 75 Table 1: Basic Indicators 76 Population, Mid-1976 Are a Gross National Product Per Capita, 1976 Growth of Gross National Product Per Capita, 1960-76 Index of Per Capita Food Production, Average 1974-76 Growth of Energy Production, 1960-75 Energy Consumption Per Capita, 1975 Average Annual Rate of Inflation, 1960-70 and 1970-76 Table 2: Growth of Production 78 Growth of Gross Domestic Product, 1960-70 and 1970-76 Growth of Agriculture, 1960-70 and 1970-76 Growth of Industry, 1960-70 and 1970-76 Growth of Services, 1960-70 and 1970-76 Table 3: Structure of Production 80 Agriculture as a Percentage of Gross Domestic Product, 1960 and 1976 71 Industry as a Percentage of Gross Domestic Product, 1960 and 1976 Services as a Percentage of Gross Domestic Product, 1960 and 1976 Table 4: Growth of Selected Demand Aggregates 82 Growth of Public Consumption, 1960-70 and 1970-76 Growth of Private Consumption, 1960-70 and 1970-76 Growth of Gross Domestic Investment, 1960-70 and 19 70-76 Table 5: Structure of Demand 84 Public Consumption as a Percentage of Gross Domestic Product, 1960 and 1976 Private Consumption as a Percentage of Gross Domestic Product, 1960 and 1976 Gross Domestic Investment as a Percentage of Gross Domestic Product, 1960 and 1976 Gross Domestic Savings as a Percentage of Gross Domestic Product, 1960 and 1976 Resource Balance as a Percentage of Gross Domestic Product, 1960 and 1976 Table 6: Growth of Merchandise Trade 86 Export Values, 1976 Import Values, 1976 Growth of Exports, 1960-70 and 1970-76 Growth of Imports, 1960-70 and 1970-76 Terms of Trade, 1960 and 1976 Table 7: Structure of Merchandise Trade 88 Primary Commodity Exports as a Percentage of Merchandise Exports, 1960 and 1975 Manufactured Exports as a Percentage of Merchandise Exports, 1960 and 1975 Food Imports as a Percentage of Merchandise Imports, 1960 and 1975 Fuel Imports as a Percentage of Merchandise Imports, 1960 and 1975 Table 8: Destination of Merchandise Exports 90 Percentage of Exports to Developed Countries, 1960 and 1976 Percentage of Exports to Developing Countries, 1960 and 1976 Percentage of Exports to Centrally Planned Economies, 1960 and 1976 Page Table 9: Balance of Payments and Debt Service Ratios 92 Current Account Balance Before Interest Payments on External Public Debt, 1970 and 1976 Interest Payments on External Public Debt, 1970 and 1976 Debt Service as a Percentage of Gross National Product, 1970 and 1976 Debt Service as a Percentage of Exports of Goods and Services, 1970 and 1976 Table 10: Flows of External Capital 94 Gross Inflow of Public Medium- and Long-term Loans, 1970 and 1976 Repayment of Principal on External Public Debt, 1970 and 1976 Net Inflow of Public Medium- and Long-term Loans, 1970 and 1976 Net Inflow of Direct Private Investment, 1970 and 1976 Table 11: External Public Debt and International Reserves 96 External Public Debt Outstanding and Disbursed, 1970 and 1976 External Public Debt Outstanding and Disbursed as a Percentage of Gross National Product, 1970 and 1976 Gross International Reserves, 1970 and 1976 Gross International Reserves Measured in Months of Import Coverage, 1976 Table 12: Official Development Assistance from Members of the OECD 98 Value of Official Development Assistance, 1960-76, and Estimated 1977-80 Official Development Assistance as a Percentage of Donors' Gross National Product, 1960-76, and Estimated 1977-80 Table 13: Population and Labor Force Growth 100 Growth of Population, 1960-70 and 1970-75 Growth of Urban Population, 1960-70 and 1970-75 Growth of Labor Force, 1960-70 and 19 70-75 Table 14: Structure of Population 102 Percentage of Population in Urban Areas, 1960 and 1975 Percentage of Population Below Age 15, 1960 and 1975 72 Working Age Population as a Percentage of Total Population, 1960 and 1975 Percentage of Labor Force in Agriculture, 1960 and 1970 Table 15: Demographic Indicators 104 Crude Birth Rate, 1960 and 1975 Crude Death Rate, 1960 and 1975 Percentage Change in Crude Birth Rate, 1960 to 1975 Percentage Change in Crude Death Rate, 1960 to 1975 Total Fertility Rate, 1975 Table 16: Population Projections, 1976-2000, and Hypothetical Stationary Population 106 Population, Mid-1976 Projected Population in Year 2000 Hypothetical Size of Stationary Population Table 17: Health-Related Indicators 108 Life Expectancy at Birth, 1960 and 1975 Infant Mortality Rate, 1960 and 1975 Child Mortality Rate, 1960and 1975 Population Per Physician, 1960 and 1974 Population Per Nursing Person, 1960 and 1974 Percentage of Population with Access to Safe Water, 1975 Table 18: Education 110 Numbers Enrolled in Primary School as a Percentage of Age Group (Total and Female), 1960 and 1975 Numbers Enrolled in Secondary School as a Percentage of Age Group, 1960 and 1975 Numbers Enrolled in Higher Education as a Percentage of Population Aged 20-24, 1960 and 1975 Adult Literacy Rate, 1960 and 1974 Technical Notes 113 Bibliography of Data Sources 121 Introduction This volume of statistics has been prepared, in details of the growth, structure and direction of conjunction with the World Development Re- trade, the balance of payments, capital flows, port, to provide concise information of general debt, and aid. Tables 13-16 on population relevance about the main features of economic growth, structure, and change show the compo- and social development. The selection of the nents of the population growth rate, the dynam- indicators has been based on data being avail- ics of the population structure, and develop- able for a large number of countries, on the ments in the labor force. The social indicators availability of historical series to allow the mea- in Tables 17 and 18 provide some information on surement of growth and change, and on the health conditions and on the availability of relevance of data to the principal processes health and education services. The data in these of economic and social development. Rates of areas are sparse, and reliable information on change and ratios are given to illustrate trends; such other basic amenities as housing, or on absolute values are reported only in a few in- such a fundamental requirement as adequate stances. To facilitate comparison, the median nutrition, is not available for most countries. value of the indicator is shown for each country The collection of such data, which help to define 73 group. The most current data available have the shortfall in meeting the basic needs of the been used. Information has been drawn from population, is an urgent matter. the data files and publications of various inter- The country groups used in the tables are: low national agencies, including the World Bank's income developing countries, with per capita in- data files which have been built up systemat- comes of USS25O or below in 1976; middle in- ically in the course of economic missions to come developing countries, with per capita member countries. incomes above that level; industrialized coun- Although the statistics presented are drawn tries; major capital surplus oil exporting coun- from sources generally judged the most authori- tries; and centrally planned economies. Within tative and reliable, some of them, particularly each group, countries are listed in order of their those describing social features, may have a con- per capita income in 1976, starting with the poor- siderable margin of error. While readers should est. The alphabetical index on the page preceding not attribute a degree of precision to the data the table of Contents shows the reference num- that may not be merited, the statistics are none- ber of each country which is used in all tables. theless useful to describe orders of magnitude, Readers are urged to refer to the Technical indicate trends, and characterize certain major Notes at the end of the volume, which outline differences between countries. the concepts, definitions, and methods used. The Three types of information are included in the Bibliography gives details of the data sources. tables. The profiles of countries in Table 1 pro- While this handbook is not designed as an vide an overview of population, per capita in- exhaustive statistical compendium, it is hoped come and its growth, changes in food and en- that policy makers will find it a useful source for ergy production, energy consumption per capita, ready reference. It is intended to update the and inflation rates. Tables 2-5 on the growth and handbook annually. To improve its utility, com- structure of production and demand show his- ments and suggestions from users will not only torical data for the 1960-70 and 1970-76 periods. be welcome but will be essential to meet their Tables 6-12 on the international accounts give requirements more effectively. Key to Tables Figures in the blue bands are the median values of indicators for each group of countries, Not available. (.) Less than half the unit shown. All growth rates are shown in real terms. Italics: Figures in italics refer to 1975 rather than 1976. 75 Table 1: Basic Indicators Popula- Area GNP Per Capita Index of Energy Average Annual tion Per Rate of Inflation Capita Average Per Capita Average Food Annual Consump- (thousand Annual P rod u c- Growth tb n square Growth tb n, of Pro-(kilog rams kilo- (US (per- 1965-67 duction dl coal (millions) meters) dollars) cent) = 100 (percent) equivalent) (percent) Mid-1976 1976 1960-76 Av .1974-76 1960-75 1975 1960-70 1970-76 Low Income Countries 150 0.9 96 9.4 52 3.1 9.8 1 Bhutan 1.2 47 70 -0.3 2 Cambodia 8.1 181 3.8 98.6 3 Lao PDR 3.3 237 o i'. 103 .. 63 5.6 22.3 4 Ethiopia 28.7 1,222 100 1.9 83 12.5 29 2.1 2.3 5 Mali 5.8 1,240 100 0.9 71 15.8 25 5.0 7.1 6 Bangladesh 80,4 144 110 -0.4 95 .. 28 3.1 20.] 7 Rwanda 4.2 26 110 0.8 114 21.4 14 13.1 10.6 8 Somalia 3.3 638 110 -0.3 91 36 4.5 8.9 9 Upper Volta 6.2 274 110 0.8 84 .. 20 1.3 6.3 10 Burma 30.8 677 120 0.7 98 4.5 51 2.7 16.1 11 Burundi 3.8 28 120 2.3 101 13 2.8 8.7 12 Chad 4.1 1,284 120 -1.1 76 .. 39 4.6 6.6 13 Nepal 12.9 141 120 0.2 98 20.1 10 8.5 8.4 14 Ben n 3.2 113 130 0.1 83 52 1.9 8.3 15 Malawi 5.2 119 140 4.1 107 28.2 56 2.3 9.8 16 Zaire 25.4 2345 140 1.4 93 2.8 78 29.9 15.7 17 Guinea 5.7 246 150 0.4 94 10.4 92 1.7 7.2 18 India 620.4 3,288 150 1.3 107 4.1 221 6.9 9.2 19 Viet Nam 47.6 333 0.5 20 Afghanistan 14.0 648 10 olo 94 34.1 52 3.1 21 Niger 4.7 1,267 160 -1.1 67 35 2.3 1.7 22 Lesotho 1.2 30 170 4.6 102 2.5 8.8 23 Mozambique 9.5 783 170 1.4 95 3.3 1 2.8 6.9 24 Pakistan 71.3 804 170 3.1 114 8.9 183 3.3 15.2 25 Tanzania 15.1 945 180 2.6 113 9.0 70 1.8 11.7 26 Haiti 4.7 28 200 0.1 103 30 3.8 13.5 76 27 Madagascar 9.1 587 200 -0.1 90 5.5 71 3.2 10.2 28 Sierra Leone 3.1 72 200 1.1 97 116 2.9 10.2 29 Sri Lanka 13.8 66 200 2.0 110 9.8 127 1.8 11.5 30 Central African Emp, 1.8 623 230 0.3 103 13.3 34 4.2 8.3 31 lndonesa 135.2 1,904 240 3.4 117 8.5 178 180.0 22.7 32 Kenya 13.8 583 240 2.6 88 9.9 174 1.4 11.1 33 Uganda 11.9 236 240 1.0 89 5.1 55 3.0 17.1 34 Yemen Arab Rep. 6.0 195 250 101 49 Middle Income Countries 750 2.8 104 8.5 524 3.2 12.5 35 Togo 2.3 56 260 4.1 59 65 1.7 8.6 36 Egypt 38.1 1,001 280 1.9 104 7.4 405 3.5 5.2 37 Yemen, PDR 1.7 333 280 -6.3 97 328 38 Cameroon 7.6 475 290 2.8 108 104 3.7 39 Sudan 15.9 2,506 290 0.4 117 11.7 140 3.7 3.5 40 Angola 5.5 1,247 330 3.0 92 30.0 174 3.3 13.5 41 Mauritania 1.4 1,031 340 3,7 68 108 1.6 10.3 42 Nigeria 77.1 924 380 3.5 89 29.5 90 2.6 16.1 43 Thailand 43.0 514 380 4.5 106 17.2 284 1.9 10.3 44 Bolivia 5.8 1,099 390 2.3 119 16.1 303 3.8 25.9 45 Honduras 3.0 112 390 1.5 102 23.9 232 3.0 5.5 46 Senegal 5.1 196 390 -0.7 96 195 1.6 12.1 47 Philippines 43.3 300 410 2.4 108 3.3 326 5.8 15.1 48 Zambia 5.1 753 440 1.] 104 34.1 504 7.6 3.8 49 Liberia 1.6 111 450 2.0 108 26.3 404 1.9 10.3 50 El Salvador 4.1 21 490 1.8 108 5.0 248 0.3 7.1 51 Papua New Guinea 2.8 462 490 3.5 99 11.0 278 3.6 7.8 52 Congo, People's Rep. 1.4 342 520 2.8 93 17.9 209 3.9 9.3 53 Morocco 17.2 447 540 2.1 103 1.6 274 2.2 9.3 54 Rhodesia 6.5 391 550 2.2 107 0.6 764 1.3 7.5 55 Ghana 10.1 239 580 -0.1 93 27.3 182 7.6 23.5 56 Ivory Coast 7.0 323 610 3.4 124 9.0 366 2.8 11.0 57 Jordan 2.8 98 610 1.6 47 408 1.1 9.6 58 Colombia 24.2 1,139 630 2.8 106 2.6 671 11.9 20.7 59 Guatemala 6.5 109 630 2.4 114 9.9 237 0.2 9.4 60 Ecuador 7.3 284 640 3.6 97 20.3 442 4.6 13.6 61 Paraguay 2.6 407 640 2.2 94 44.0 153 3.0 13.6 62 Korea, Rep. of 36.0 99 670 7.3 104 6.2 1,038 16.7 17.5 63 Nicaragua 2.3 130 750 2.4 103 20.9 479 1.9 10.8 64 Dominican Rep. 4.8 49 780 3.4 111 8.0 458 2.1 8.9 65 Syrian Arab Rep. 7.7 185 780 2.2 113 70.9 477 1.8 18.8 Popula- Area GNP Per Capita Index of Energy Average Annual tion Per Rate of Inflation Capita Average Per Capita Average Food Annual Consump- (thousand Annual Produc- Growth tion square Growth tion, of Pro- (kilograms kilo- (US (per- 1965-67 duction of coal (millions) meters) dollars) cent) = 100 (percent) equivalent) (percent) Mid-1976 1976 1960-76 Av.1974-76 1960-75 1975 1960-70 1970-76 66 Peru 15.8 1,285 800 2.6 99 2.0 682 9.9 15.6 67 Tunisia 5.7 164 840 4.1 134 5.5 447 3.7 7.7 68 Malaysia 12.7 330 860 3.9 146 34.6 560 -0.2 7.0 69 Algeria 16.2 2,382 990 1.7 100 10.1 754 2.3 14.8 70 Turkey 41.2 781 990 4.2 114 6.8 630 5.5 19.8 71 Costa Rica 2.0 51 1,040 3.4 130 8.9 544 1.9 13.7 72 Chile 10.5 757 1,050 0.9 92 -1.0 765 32.9 273.6 73 China Rep. of 16.3 36 1,070 6.3 .. 1427 4.1 11.9 74 Jamaica 2.1 11 1,0]0 1.9 89 -0.6 1,427 3.8 17.5 75 Lebanon 3.2 10 3.1 95 11.1 928 1.4 4.4 76 Mexico 62.0 1,973 1,090 3.0 98 6.0 1,221 3.5 14.2 77 Brazil 110.0 8,512 1,140 4.8 114 7.1 670 46.0 26.1 78 Panama 1.7 76 1310 3.7 114 13.6 865 1.6 11.2 79 Iraq 11.5 435 1,390 3.6 89 5.2 713 1.7 17.5 80 Uruguay 2.8 178 1,390 0.6 110 3.0 942 51.1 70.5 81 Romania 21.4 238 1,450 8.4 117 4.2 3,803 82 Argentina 25.7 2,767 1,550 2.8 104 5.8 1,754 21.8 88.7 83 Yugoslavia 21.5 256 1,680 5.6 120 4.0 1,930 12.6 16.3 84 Portugal 9.7 92 1,690 6.5 103 1.3 983 2.9 11.9 85 Iran 34.3 1,648 1,930 8.2 109 13.0 1,353 1.1 25.2 86 Hong Kong 4.5 1 2,110 6.5 84 .. 1,119 2.3 8.6 87 Trinidad and Tobago 1.1 5 2,240 2.6 92 2.9 3,132 3.6 18.8 88 Venezuela 12.4 912 2,570 2.6 113 0.3 2,639 1.3 13.4 89 Greece 9.1 132 2,590 6.1 131 13.2 2,090 3.2 13.3 90 Singapore 2.3 1 2,700 7.5 208 .. 2,151 1.1 8.1 91 Spain 35.7 505 2,920 5.5 125 1.1 2,147 6.3 12.8 92 Israel 3.6 21 3,920 4.3 126 32.8 2,806 5.9 23.7 77 Industrialized Countries 6,200 3.4 110 3.0 5,016 4.2 9.3 93 South Africa 26.0 1,221 1,340 3.0 102 3.8 3.1 11.3 94 Ireland 3.2 70 2,560 3.3 126 -0.1 3,097 5.2 13.9 95 Italy 56.2 301 3,050 3.8 107 3.1 3,012 4.4 12.9 96 United Kingdom 56.1 244 4,020 2.2 110 -1.3 5,265 4.1 13.3 97 New Zealand 3.1 269 4250 1.6 102 2.8 3,111 3.2 11.6 98 Japan 112.8 372 4,910 7.9 107 -3.9 3,622 4.8 10.1 99 Austria 7.5 84 5,330 4.3 117 0.3 3,700 3.6 7.9 100 Finland 4.7 337 5,620 4.5 113 3.2 4,766 5.6 13.6 101 Australia 13.7 7,687 6,100 3.0 112 10.4 6,485 3.1 13.5 102 Netherlands 13.8 41 6,200 3.7 136 15.3 5,784 5.3 8.9 103 France 52.9 547 6,550 4.2 107 -2.8 3,944 4.2 9.3 104 Belgium 9.8 31 6,780 4.2 119 -7.6 5,584 3.6 8.8 105 Germany, Fed. Rep. 62.0 249 7,380 3.4 111 -0.8 5,345 3.1 6.4 106 Norway 4.0 324 7,420 3.9 105 8.7 4,607 4.2 8.6 107 Denmark 5.1 43 7,450 3.3 99 -20.5 5,268 6.0 9.8 108 Canada 23.2 9,976 7,510 3.5 94 8.6 9,880 3.1 9.2 109 United States 215.1 9,363 7,890 2.3 114 2.9 10,999 2.8 6.8 110 Sweden 8.2 450 8,670 3.1 110 3.5 6,178 4.3 8.8 111 Switzerland 6,4 41 8,880 2.2 102 4.3 3,642 4.5 7.4 Capital Surplus Oil Exporters 6,310 7.0 12.8 1,398 1.0 33.3 112 Saudi Arabia 8.6 2,150 4,480 7.0 102 12.8 1,398 1.0 33.3 113 Libya 2.5 1,760 6,310 10.2 96 21.7 1,299 5.3 16.5 114 Kuwait 1.1 18 15,480 -3.0 3.4 8,718 0.6 35.6 Centrally Planned Economies 2,280 3.5 114 4.6 3,624 115 China, People's Rep. 835.8 9,597 410 5.2 108 4.6 693 116 Korea, Oem. Rep. 16.3 121 470 3.5 110 9.5 2,808 117 Albania 2.5 29 540 4.5 114 9.2 741 118 Cuba 9.5 115 860 -0.4 95 18.5 1,157 119 Mongolia 1.5 1,565 860 1.0 9.8 1,091 120 Hungary 10.6 93 2,280 3.0 133 1.9 3,624 121 Bulgaria 8.8 111 2,310 4.6 100 3.0 4,781 122 USSR 256.7 22,402 2,760 3.8 113 5.7 5,546 123 Poland 34.3 313 2,860 4.1 115 3.9 5,007 124 Czechoslovakia 14.9 128 3,840 2.6 123 1.3 7,151 125 German Dem. Rep. 16.8 108 4,220 3.2 120 0.6 6,835 Table 2: Growth of Production Average Annual Growth Rates (percent) GDP Agriculture Industry Services 1960-70 1970-76 1960-70 1970-76 1960-70 1970-76 1960-70 1970-76 Low Income Countries 3.6 2.9 2.3 1.6 6.7 4.5 3.6 3.4 1 Bhutan 2 Cambodia 8.4 3 Lao PDR 4 Ethiopia 5 Mali 2.9 3.5 1.3 -0.8 4.0 8.9 4.4 5,5 6 Bangladesh 3.6 1.6 2.7 0.5 7.9 1.8 3.6 2.2 7 Rwanda .. 3.4 .. 3.3 .. 8.4 .. 3.5 8 Somalia 1.0 2.1 -1.5 -1.2 3.3 10.3 2.1 8.0 9 Upper Volta 1.5 3.3 0.0 3.2 3.8 7.0 2.3 1.8 10 Burma 2.6 3.3 4.1 2.5 2.8 2.8 1.3 3.0 11 Burundi 5.4 1.4 . . 1.0 . . 4.3 .. 1.1 12 Chad 2.5 0.8 1.8 -1.3 3.9 8.1 2.9 -0.6 13 Nepal 2.5 2.7 1.9 14 Benin 2.6 2.3 .. -0.3 .. 9.8 .. 6.0 15 Malawi 5.2 8.9 2.9 5.5 13.9 12.4 8.9 11.4 16 Zaire 4.7 4.3 3.9 1.9 35.9 5.0 -2.5 5.0 17 Guinea 3.2 5.3 2.1 10.2 6.2 3.9 2.2 3.2 18 India 3.6 2.7 1.9 1.4 5.5 3.8 3.9 2.4 19 Viet Nam .. 20 Afghanistan 2.1 4.4 21 Niger 2.7 -0.4 3.3 -4.0 11.1 10.0 0.6 0.8 22 Lesotho 7.0 4.3 .. .. 23 Mozambique 4.8 -2.0 2.1 2.1 10.8 -3.8 5.8 -2.1 24 Pakistan 6.7 3.6 4.9 1.6 10.1 4.1 6.2 5.0 25 Tanzania 5.4 4.2 3.7 2.5 8.0 2.9 5.3 2.8 26 Haiti 0.7 3.2 0.8 1.6 0.4 8.8 0.7 2.4 27 Madagascar .. 0.3 .. 1.2 .. 2.0 4.5 28 Sierra Leone 3.5 2.0 1.4 2.0 2.7 -3.0 4.2 4.0 78 29 Sri Lanka 4.6 2.9 3.0 1.2 6.7 3.0 5.1 3.7 30 Central African Emp. 1.2 0.9 0.8 1.9 5,5 4.7 0.1 -1.8 31 Indonesia 3.5 8.3 2.7 4.0 4.7 12,4 3.5 7.3 32 Kenya 7.1 4.8 5.9 1.6 7.5 9.8 7.9 5.1 33 Uganda 5.1 -0.1 2.8 1.3 7.8 -6.7 8.3 -3.2 34 Yemen Arab Rep. Middle Income Countries 5.7 6.0 3.6 3.2 7.6 7.2 5.8 6.9 35 Togo 8.5 4.1 4.3 3.0 7,3 7.0 8.8 3.7 36 Egypt 4.5 7.6 2.9 3.0 5.4 4.3 6.1 13.4 3] Yemen, PDR 0.4 3.8 .. 6.2 .. 17.7 .. -0.9 38 Cameroon 5.2 2.7 6.5 3.4 7.] 3.3 11.1 0.7 39 Sudan 2.9 6.1 3.3 8.8 1.7 2.8 -2.2 7.5 40 Angola 5.1 1.0 4.0 -0.7 9.8 11.6 3.9 3.0 41 Mauritania 8.1 4.3 2.4 -2.1 15.8 7.1 13.0 -1.0 42 Nigeria 3.1 7,4 -0.5 -0.2 13.8 12.6 5.2 9.5 43 Thailand 8.2 6.5 5.5 4.3 11.7 8.2 9.2 6.9 44 Bolivia 5.2 6.0 3.0 5.6 6.5 4.9 5.8 7.3 45 Honduras 5.1 2.9 5.7 -0.6 5.2 7.2 5.0 3.0 46 Senegal 2.6 1.8 1.9 3.4 3.7 3.9 2.5 -0.1 47 Philippines 5.1 6.3 4.3 4.6 6.0 8.7 5.0 5.1 48 Zambia 4.0 3.1 2.0 3.2 -0.1 3.4 8.1 4.4 49 Liberia 6.4 2.9 6.3 4.9 7.8 0.3 2.6 9.4 50 El Salvador 5.9 5.0 3.0 4.2 8.5 6.3 6.5 4.8 51 Papua New Guinea .. .. 52 Congo, Peoples Rep. 4.6 8.3 4.6 -7.2 7.6 22.6 2.4 7.0 53 Morocco 4.1 4.8 4.2 0.6 4.2 7.8 3.9 5.5 54 Rhodesia 55 Ghana 2.1 2.0 3.7 1.3 6.] 4.2 -1.4 3.8 56 Ivory Coast 8.0 6.5 4.2 3.5 11.6 7.9 10.0 7.7 5] Jordan 6.6 5.1 5.0 2.6 9.9 16.0 5.6 2.9 58 Colombia 5.1 6.5 3.5 4.5 6.0 6.7 5.8 8.1 59 Guatemala 5.6 5.9 .. 60 Ecuador 5.9 10.7 4.0 5.7 7.6 14.2 5.1 14.0 61 Paraguay 4.3 6.5 2.1 5.9 5.5 7.7 5.2 6.8 62 Korea, Rep. of 8.5 10.3 4.5 4.8 17.2 17.1 8.4 8.6 63 Nicaragua 7.2 5.7 6.7 5.7 11.0 7.3 5.8 4.8 64 Dominican Rep. 4.4 8.9 2.2 3.0 6.2 14.1 5.1 9.7 65 Syrian Arab Rep. 5.7 7.0 4.4 6.4 5.9 11.1 4.7 4.3 Average Annual Growth Rates (percent) GDP Agriculture Industry Services 1960-70 1970-76 1960-70 1970-76 1960-70 1970-76 1960-70 1970-76 66 Peru 5.4 5.7 1.9 0.6 5.5 6.2 5.8 8.4 67 Tunisia 4,6 9.4 2.0 9.2 8.7 10.1 2.9 9.7 68 Malaysia 6.5 7.8 6.8 6.4 6.4 9.6 6.2 7.6 69 Algeria 4.4 6.2 -1.6 -8.7 10.5 16.4 2.3 -4.6 70 Turkey 6.0 7.2 2.8 4.9 7.8 9.5 6.9 10.6 71 Costa Rica 6.5 6.5 5.7 3.8 9.3 8.0 6.0 7.1 72 Chile 4.2 -1.2 2.6 0.5 5.0 -2.2 4.3 -1.3 73 China, Rep. of 9.2 7.8 3.4 1,5 16.4 14.1 7.1 5.5 74 Jamaica 4.5 0.5 1.4 1.3 5.3 -3.0 3.1 -1.5 75 Lebanon 4.9 8.6 6.3 4.5 4.6 76 Mexico 7.3 5.5 3.9 1.4 9.3 6.6 6.9 4.3 77 Brazil 8.0 10.6 1.9 5.5 9.7 11.6 8.4 13.1 78 Panama 7.8 5.2 5.7 .. 10.1 .. 7.2 79 Iraq 6.1 9.5 5.7 -2.0 4.7 10.0 6.9 10.4 80 Uruguay 1.2 0.7 1.9 -0.7 1.1 1.7 -0.2 3.9 81 Romania 8.4 11.2 .. 8.9 12.3 .. 10.6 82 Argentina 4.2 3.2 2.3 2.4 6.0 3.4 3.2 3.4 83 Yugoslavia 6.8 6.3 3.3 3.4 6.3 6.5 8.7 12.7 84 Portugal 6.3 5.2 1.4 1.5 8.8 6.8 6.2 12.8 85 Iran 11.3 8.9 8.1 5.8 21.4 5.6 9.7 20.5 86 Hong Kong 10.0 7.5 -3.4 -5.1 8.2 7.1 12.4 8.6 87 Trinidad and Tobago 3.4 3.5 3.5 0.5 .. 5.7 88 Venezuela 5.9 5.3 5,7 3.1 4.5 2.4 4.1 6.7 89 Greece 6.9 5.2 4.6 2.7 9.4 6.3 7.2 5.9 90 Singapore 8.8 8.9 5.0 0.3 12.6 9.1 7.4 8.6 91 Spain 7.3 5.4 2.5 2.6 9.4 6.3 8.2 9.3 92 Israel 8.5 5.4 5.0 6.6 15.6 5.3 1.5 4.5 Industrialized Countries 4.7 3.2 1.5 1.8 5.7 3.2 4.7 3.5 93 South Africa .. .. 79 .. .. 94 Ireland 4.2 2.8 0.8 2.0 6.1 4.0 3.2 2.9 95 Italy 5.3 2.9 2.8 1.6 6.3 2.3 8.5 3.4 96 United Kingdom 2.9 2.3 2.3 1.6 3.2 0.5 1.1 1.5 97 New Zealand 3.9 2.0 98 Japan 10.5 5.6 4.0 2.5 10.9 4.8 11.7 5.3 99 Austria 4.5 4.3 1.2 2.7 5.1 3.9 4.3 3.7 100 Finland 4.6 4.6 0.6 2.5 5.5 3.8 4.7 5.0 101 Australia 5.4 3.5 2.7 -2.1 6.5 1.0 5.9 5.4 102 Netherlands 5.3 3.4 5.2 4.9 5.8 3.3 4.6 3.3 103 France 5.4 3.9 1.6 0.3 6.6 3.1 5.5 3.6 104 Belgium 4.7 4.0 -0.5 -0.4 5.5 3.3 4.6 3.8 105 Germany, Fed. Rep. 4.6 2.2 1.5 2.0 5.3 0.2 4.1 2.0 106 Norway 4.9 4.5 0.3 2.0 5.0 5.4 5.5 4.2 107 Denmark 4.7 2.2 0.5 1.4 5.7 1.2 4.9 3.1 108 Canada 5.6 4.8 1.5 0.4 6.2 4.7 5.6 4.7 109 United States 4.3 2.5 0.3 2.0 4.9 0.9 4.2 3.2 110 Sweden 4.4 2.6 2.5 -0,2 5.6 2.4 4.2 2.7 111 Switzerland 4.0 1.3 Capital Surplus Oil Exporters 112 Saudi Arabia 9.9 14.4 3.6 16.5 .. 10.4 113 Libya 23.3 3.8 2.2 23.5 31.3 -7.4 10.9 20.3 114 Kuwait Centrally Planned Economies 4.3 3.9 115 China, Peoples Rep, 6.2 6.6 116 Korea, Dem, Rep. 7.9 3.4 117 Albania 7.3 6.1 118 Cuba 1.1 3.4 119 Mongolia 2.8 4.6 120 Hungary 3.8 3.2 121 Bulgaria 5.9 4.7 122 USSR 5.2 3.9 123 Poland 4.3 6.5 124 Czechoslovakia 3.1 3.2 125 German Dem. Rep. 3.1 3.4 Table 3: Structure of Production Distribution of Gross Domestic Product (percent) Agriculture Industry Services 1960 1976 1960 1976 1960 1976 Low Income Countries 52 45 12 19 35 39 1 Bhutan 2 Cambodia 51 3LaoPDR 4 Ethiopia 65 50 35 5Mali 55 38 10 17 35 45 6 Bangladesh 61 59 8 8 31 33 7 Rwanda 81 52 7 22 12 26 8 Somalia 45 31 17 8 38 61 9 Upper Volta 55 34 13 19 32 47 10 Burma 33 47 12 11 55 42 11 Burundi 64 15 21 12 Chad 55 52 12 14 33 34 13 Nepal 65 10 25 14 Benin 39 20 41 15 Malawi 58 45 11 22 31 33 16 Zaire 30 16 27 30 43 54 17 Guinea 43 33 24 18 India 50 47 20 23 30 30 19 Viet Nam 20 Afghanistan 55 14 31 21 Niger 66 47 10 24 24 29 22 Lesotho 73 38 8 54 23 Mozambique 55 45 9 15 36 40 24 Pakistan 46 32 16 24 38 44 25 Tanzania 57 45 11 16 32 39 26 Haiti 50 45 14 19 36 36 27 Madagascar 37 29 10 20 53 51 80 28 Sierra Leone 32 23 45 29 Sri Lanka 38 37 16 21 46 42 30 Central African Emp. 45 37 12 23 43 40 31 Indonesia 45 29 17 34 38 37 32 Kenya 38 30 18 23 44 47 33 Uganda 52 55 13 8 35 37 34 Yemen Arab Rep. Middle Income Countries 26 21 23 32 46 45 35 Togo 55 16 21 29 54 36 Egypt 30 29 24 30 46 41 37 Yemen, PDR 23 16 61 38 Cameroon 48 33 10 20 42 47 39 Sudan 58 41 15 16 27 43 40 Angola 50 29 8 27 42 44 41 Mauritania 57 35 21 37 22 28 42 Nigeria 63 23 11 50 26 27 43 Thailand 40 30 19 25 41 45 44 Bolivia 30 28 28 32 42 40 45 Honduras 37 29 19 28 44 43 46 Senegal 30 28 20 24 50 48 47 Philippines 26 29 28 34 46 37 48 Zambia 11 14 63 41 26 45 49 Liberia 40 29 37 37 23 34 50 El Salvador 32 26 19 21 49 53 51 Papua New Guinea 28 52 Congo, People's Rep. 16 15 18 43 66 42 53 Morocco 29 21 24 31 47 48 54 Rhodesia 18 16 35 40 47 44 55 Ghana 41 49 19 25 40 26 56 Ivory Coast 43 25 14 20 43 55 57 Jordan 16 14 14 28 70 58 58 Colombia 34 27 26 30 40 43 59 Guatemala 60 Ecuador 33 22 19 26 48 52 61 Paraguay 36 35 20 22 44 43 62 Korea, Rep. of 40 27 19 34 41 39 63 Nicaragua 24 23 21 28 55 49 64 Dominican Rep. 27 21 23 32 50 47 65 Syrian Arab Rep. 25 1] 21 36 54 47 Distribution of Gross Domestic Product (percent) Agriculture Industry Services 1960 1976 1960 1976 1960 1976 66 Peru 26 16 29 31 45 53 67 Tunisia 24 21 18 30 58 49 68 Malaysia 40 29 18 30 42 41 69 Algeria 21 7 24 57 55 36 70 Turkey 41 29 21 28 38 43 71 Costa Rica 29 21 19 26 52 53 72 Chile 11 10 38 39 51 51 73 China, Rep. of 28 12 29 45 43 43 74 Jamaica 10 8 38 40 52 52 75 Lebanon 12 20 68 76 Mexico 16 10 29 35 55 55 77 Brazil 16 8 35 39 49 53 78 Panama 23 21 56 79 Iraq 17 8 52 66 31 26 80 Uruguay 19 15 28 32 53 53 81 Romania 13 63 24 82 Argentina 17 15 38 41 45 44 83 Yugoslavia 24 15 45 43 31 42 84 Portugal 25 18 38 43 37 39 85 Iran 29 9 33 59 38 32 86 Hong Kong 4 2 34 34 62 64 87 Trinidad and Tobago 8 .. 51 41 88 Venezuela 6 6 22 48 72 46 89 Greece 23 18 26 31 51 51 90 Singapore 4 2 18 35 78 63 91 Spain 21 9 39 39 40 52 92 Israel 11 8 32 43 57 49 Industrialized Countries 9 6 41 41 47 52 81 93 South Africa 12 9 42 23 46 68 94 Ireland 25 16 30 37 45 47 95 Italy 15 8 38 41 47 51 96 United Kingdom 4 4 48 58 48 38 97 New Zealand .. 98 Japan 15 5 45 43 40 52 99 Austria 11 9 49 50 40 41 100 Finland 20 10 40 44 40 46 101 Australia 14 7 41 39 45 54 102 Netherlands 8 7 45 44 47 49 103 France 9 6 48 43 43 51 104 Belgium 7 3 41 42 52 55 105 Germany, Fed. Rep. 6 3 54 52 40 45 106 Norway 9 6 36 37 55 57 107 Denmark 14 7 39 36 47 57 108 Canada 6 4 34 40 60 56 109 United States 4 3 38 32 58 65 110 Sweden 7 4 38 38 55 58 111 Switzerland .. Capital Surplus Oil Exporters 112 Saudi Arabia .. I .. 86 .. 13 113 Libya 14 3 9 68 77 29 114 Kuwait Centrally Planned Economies 115 China, People's Rep. 116 Korea, Dem. Rep. 117 Albania 118 Cuba 119 Mongolia 120 Hungary 121 Bulgaria 122 USSR 123 Poland 124 Czechoslovakia 125 German Dem. Rep. Table 4: Growth of Selected Demand Aggregates Average Annual Growth Rates (percent) Public Private Gross Domestic Consumption Consumption Investment 1960-70 1970-76 1960-70 1970-76 1960-70 1970-76 Low Income Countries 4.6 2.4 3.6 2.5 5.7 3.1 1 Bhutan 2 Cambodia 2.6 3.2 .. 0.3 3LaoPDR .. .. 4 Ethiopia 4.7 3.4 4.7 3.4 5.7 -d.i 5 Mali 6.2 .. 2.8 3.5 6 Bangladesh a a 3.4 1.7 11.1 -7.8 7 Rwanda 1.1 4.2 .. 3.5 8 Somalia 3.7 16.5 -0.5 -1.1 4.3 15.5 9 Upper Volta 3.7 .. 4.5 .. 4.7 10 Burma a 2.8 3.1 3.6 -0.9 11 Burundi 19.2 2.4 3.1 1,7 6.0 8.0 12 Chad 4.4 0.6 -0.7 2.5 2.3 3.1 13 Nepal .. .. .. .. 14 Benin 1.7 -2.4 4.9 0.7 4.2 4.4 15 Malawi 6.1 -0.9 4.8 8.0 12.8 9.7 16 Zaire 8.4 1.6 3.7 1.0 9.6 7.8 17 Guinea .. . . .. . . 18 India -1.0 0.7 3.6 1.9 5.7 4.6 19 VietNam .. .. .. 20 Afghanistan a 9.9 2.2 2.2 -1.0 5.6 21 Niger 1.9 10.0 3.5 1.7 3.0 -0.2 22 Lesotho 0.1 4.0 5.3 8.3 18.0 8.2 23 Mozambique 6.8 -6.5 4.6 -3.3 8.3 -3.4 24 Pakistan 7.3 3.4 7.1 4.2 6.9 -4.2 25 Tanzania 8.2 a 4.7 5.7 9.8 2.9 26 Haiti -3.9 4.2 .. 12.5 82 27 Madagascar -3.4 -5.0 5.4 -2.4 28 Sierra Leone -5,4 29 Sri Lanka a 3.5 2.5 6.6 -0.3 30 Central African Emp. 2.5 .. 1.9 1.8 4.0 31 Indonesia 1.5 13.4 3.5 6.8 3.2 17.9 32 Kenya 10.0 4.4 4.9 5.2 7.0 -1.7 33 Uganda 5,9 0.5 5.6 0.3 9.8 -11.5 34 Yemen Arab Rep. Middle Income Countries 6.7 7.2 5.1 5.4 7.4 8.9 35 Togo 6.7 14.9 7.6 1.7 11.1 13.6 36 Egypt 10.3 3.3 4.2 3.9 3.1 23.6 37 Yemen, PDR 37.5 38 Cameroon 8i 1.1 4.5 39 Sudan 12.1 -6.1 -0.8 6.8 -1.3 12.5 40 Angola 9.1 6.4 4.0 0.1 9.7 -4.3 41 Mauritania 1.0 .. 6.0 .. -2.1 42 Nigeria 10.0 24.4 0.9 1.6 6.5 19.0 43 Thailand 9.6 7.0 7.0 6.5 15.4 6.6 44 Bolivia 8.9 10.4 3.7 6.0 9.6 8.0 45 Honduras 4.6 6.1 4.6 3,3 11.0 2.4 46 Senegal 4.6 -1.4 2.4 1.2 -1.0 3.4 47 Philippines 5.0 10.5 4.8 4.5 8.2 12.2 48 Zambia 8.0 5.9 5.8 0.6 10.6 -8.5 49 Liberia 5.6 1.5 0.4 3.6 -4.5 16.2 50 El Salvador 5.] 6.1 3.7 51 Papua New Guinea 6.5 0.2 6.9 -0.9 20.3 -18.0 52 Congo, People's Rep. 7.3 2.3 3.2 53 Morocco 4.4 8.2 3.7 3.1 9.1 18.2 54 Rhodesia 55 Ghana 6.1 -0.6 2.0 3.5 -3.2 -0.3 56 Ivory Coast 11.8 8.6 7.5 5.0 12.7 9.0 57 Jordan 8.9 3.1 5.4 3.5 9.9 5.8 58 Colombia 5.5 3.9 5.1 8.1 4.5 0.4 59 Guatemala 4.7 4.4 4,7 5.0 7.9 8.8 60 Ecuador .. 7.1 .. 9.6 .. 10.4 61 Paraguay 6.9 2.3 4.5 6.0 5.8 20.1 62 Korea, Rep. of 5.9 8.5 7.3 7.0 23.1 11.6 63 Nicaragua 3.6 12.8 6.8 4.8 10.7 6.8 64 Dominican Rep. 1.9 4.2 6.1 7.0 11.4 18.2 65 Syrian Arab Rep. 14.1 .. 7,5 13.5 Average Annual Growth Rates (percent) Public Private Gross Domestic Consumption Consumption Investment 1960-70 1970-76 1960-70 1970-76 1960-70 1970-76 66 Peru 8.8 6.3 6.7 7.3 2.4 11.5 67 Tunisia 5.5 7.8 3.0 9.6 4.5 13.5 68 Malaysia 7.4 9.8 4.1 5.9 7.5 7.8 69 Algeria 2.4 8.4 3,9 8.0 2.6 18.1 70 Turkey 8.2 8.8 5.1 7.3 10.2 12.0 71 Costa Rica 7.2 8.4 6.1 4.1 7.1 7.0 72 Chile .. .. . .. 4.2 -8.0 73 China, Rep. of 4.5 3.7 8.3 7.1 16.2 10.4 74 Jamaica 8.6 10.8 3.1 0.6 7.8 -4.0 75 Lebanon 5.9 4.4 6.2 76 Mexico 8.8 11.3 6.7 4.4 9.8 10.3 ]7 Brazil 3.6 9.8 5.1 10.3 6.2 16.3 78 Panama 7.8 7.2 6.7 3.4 12.4 4.2 79 Iraq 8.1 4.9 3.0 36.8 80 Uruguay 4.4 0.7 -d. -1.8 -0.8 81 Romania 10.8 82 Argentina 1.Ô 3.7 4 4.1 2.5 83 Yugoslavia 0.6 4.4 9.7 8.8 4.7 5.6 84 Portugal 7.7 9.1 6.6 6.2 6.2 -2.6 85 Iran 16.0 21.3 7,4 15.5 12.2 24.8 86 Hong Kong 8.7 8.2 8.9 6.9 7.4 10.0 87 Trinidad and Tobago 6.2 .. 4.4 .. -2.8 88 Venezuela 6.3 8.6 4.9 7.6 7.3 9.8 89 Greece 6.6 8.0 7.1 5.4 10.4 1.4 90 Singapore 12.6 6.4 5.5 7.4 20.5 8.8 91 Spain 5.5 6.3 7.0 5.4 10.5 6.0 92 Israel 14.7 7.2 7.2 6.2 5.7 8.6 Industrialized Countries 4.8 3.6 4.3 3.4 5.7 0.7 83 93 South Africa 7.0 ,. ., ,. 9.3 6.1 94 Ireland 3.9 5,9 3.7 2.3 8.8 -1.3 95 Italy 3.9 2.8 5.8 2.7 3.8 -1.1 96 United Kingdom 2.2 3.6 2.3 1.9 5.0 0.5 97 New Zealand 98 Japan 6.0 6.3 9.1 6.0 14.0 2.4 99 Austria 3.1 3.6 4.3 4.7 5.6 3.3 100 Finland 5.7 5.4 4,3 4.7 4.2 0.7 101 Australia 6.9 6.0 5.0 4.3 6.5 0.7 102 Netherlands 3.1 2.0 6.1 3.4 6.8 -2.4 103 France 3.5 3.2 5.6 4.6 6.9 1.4 104 Belgium 5.7 5.4 3.8 4.2 6.0 1.8 105 Germany, Fed. Rep. 3.8 4.4 4.6 2.8 4.7 -1.7 106 Norway 6.4 4.2 4.1 4.1 5.1 7.4 107 Denmark 6.3 2.2 4.3 2.7 6.1 -0.5 108 Canada 6.2 4.1 4.9 6.1 5.8 6.1 109 United States 4,1 1.2 4.4 3.1 4.8 -0.3 110 Sweden 5,4 3.2 3.8 2.7 5.0 0.6 111 Switzerland 4.2 2.8 4.3 1.5 3.0 -4.3 Capital Surplus Oil Exporters 15.2 31.7 112 Saudi Arabia a 15.2 .. 33.6 113 Libya 29.4 20.4 15.4 31.7 114 Kuwait 8.9 5.9 9.2 8.1 Centrally Planned Economies 115 China, People's Rep. 116 Korea, Dam. Rep. 117 Albania 118 Cuba 119 Mongolia 120 Hungary 121 Bulgaria 122 USSR 123 Poland 124 Czechoslovakia 125 German Dem. Rep. a Separate figures are not available for public consumption, which is therefore included in private consumption. Table 5: Structure of Demand Distribution of Gross Domestic Product (percent) Gross Gross Public Private Domestic Domestic Resource Consumption Consumption Investment Savings Balance 1960 1976 1960 1976 1960 1976 1960 1976 1960 1976 Low Income Countries 13 13 79 81 12 15 9 8 34 1 Bhutan 2 Cambodia 12 3 Lao PDR -r 9 Lj 4 Ethiopia 5 Mali fle 12 18 79 82 -2 14 19 10 .i (.) 4 19 6 Bangladesh 6 a 86 101 7 6 81.. 71 7 Rwanda 8 Somalia 10 -. 82 .. 6 -. 34 8 8 4 7 30 13 29 2 1 2 43 73 53 15 9 Upper Volta 20 17 23 87 90 10 16 3 13 10 Burma 11 Burundi a a 89 91 12 11 11 53 5 9 7 1 6 4 18 56 3 13 92 80 6 11 a 82 103 15 12 Chad 13 11 a 94 97 8 9 3 3 13 Nepal 3 16 14 Benin 15 Malawi 16 16 10 11 75 88 86 78 15 10 20 27 4 8 11 4 14 16 21 3 1 16 Zaire 18 25 62 62 12 34 21 13 9 17 Guinea 14 18 79 71 5 12 7 11 2 18 India 19 Viet Nam 20 Afghanistan .... 7 a 11 6 79 87 70 86 17 16 19 10 14 13 19 8 32 (.) 11 21 Niger 13 20 .... 75 16 9 5 1 71 . 79 8 1 9 22 Lesotho - - - - 23 Mozambique 11 12 81 80 9 9 8 8 24 Pakistan 11 11 84 81 12 17 5 8 2 25 Tanzania 26 Haiti 9 a a 7 a 72 94 81 86 14 8 21 11 19 6 19 14 7 2 6 94 5 3 2 27 Madagascar 20 75 86 11 13 5 1 28 Sierra Leone .. 15 .. 79 .. 15 .. 6 .. 84 29 Sri Lanka 30 Central African Emp. 14 19 12 a 75 68 75 91 15 18 15 22 12 13 13 9 5 13 31 Indonesia 32 Kenya 11 11 9 17 a 76 72 66 63 11 19 23 19 6 13 17 16 25 20 8 2 2 5 2 1 2 33 Uganda 9 75 92 11 34 Yemen Arab Rep. .. 2 4 - - Middle Income Countries 11 14 75 70 17 24 14 20 35 Togo 8 15 88 74 11 13 27 24 4 12 11 12 7 16 1 12 36 Egypt 17 23 71 65 21 45 37 Yemen, PDR 38 Cameroon . - 14 25 15 . - 72 96 71 78 .. 11 9 24 17 18 . - 14 9 14 8 3 -. 3 (.) 10 39 Sudan 6 14 85 40 Angola 41 Mauritania 9 16 77 57 54 12 36 8 42 314 27 39 5 31 2 15 2 4 23 35 80 11 42 Nigeria 13 33 37 4 8 5 6 17 87 46 8 43 Thailand 10 11 73 68 16 26 14 22 44 Bolivia 45 Honduras 11 9 17 14 85 77 68 73 15 14 20 19 12 7 15 13 2 166 46 Senegal 47 Philippines 13 8 14 10 73 76 77 65 59 15 16 24 15 31 16 14 16 39 9 25 18 6 (.) 15 2 48 Zambia 11 23 50 49 Liberia 7 12 65 57 21 28 28 32 7 4 50 El Salvador 10 11 79 69 16 14 19 20 11 2 20 14 5 6 12 1 51 Papua New Guinea 28 32 70 54 52 Congo, People's Rep. .16 28 84 57 45 33 (.) 15 45 18 22 53 Morocco 13 17 75 76 11 29 12 7 3 1 54 Rhodesia 55 Ghana 11 10 12 12 66 73 67 80 23 24 23 9 23 17 20 22 8 71 (.) 1 56 Ivory Coast 4 7 79 71 15 23 17 18 12 35 43 2 25 57 Jordan 28 33 90 79 17 31 a 80 20 21 20 2 58 Colombia 6 73 18 1 59 Guatemala 8 7 84 78 10 20 8 15 60 Ecuador 61 Paraguay 10 8 10 6 74 76 65 74 14 16 23 25 15 16 25 20 9 1 (.)5 1 2 62 Korea, Rep. of 63 Nicaragua 15 9 13 9 84 79 65 72 11 15 12 25 19 23 12 19 2 24 19 22 3 7 1(.) 64 Dominican Rep. 13 7 68 71 65 Syrian Arab Rep. -. 25 .. 65 -. 30 -. 10 20 Distribution of Gross Domestic Product (percent) Gross Gross Public Private Domestic Domestic Resource Consumption Consumption Investment Savings Balance 1960 1976 1960 1976 1960 1976 1960 1976 1960 1976 66 Peru 67 Tunisia 8 17 13 14 68 36 77 60 21 17 16 31 24 8 10 26 95 36 68 Malaysia 69 Algeria 11 20 ii 15 14 62 65 53 41 14 35 22 50 27 15 32 45 20 13 2 5 6 10 4 9 a 84 22 14 16 70 Turkey 76 16 71 Costa Rica 10 17 76 70 18 22 14 14 13 15 3 7 4 48 72 Chile 11 14 75 71 17 11 73 China, Rep. of 19 17 68 53 20 28 13 30 2 74 Jamaica 7 21 69 70 28 17 24 9 11 75 Lebanon 10 -. 85 16 5 2 2 - - - 76 Mexico 77 Brazil 78 Panama 6 12 11 11 13 a 76 67 78 65 77 65 20 22 16 26 26 28 18 21 11 24 23 23 1 553 79 Iraq 80 Uruguay 18 9 - 12 - 48 79 -. 75 20 18 12 34 12 13 614 1 ,... .. .. 29 1 (.) 4 4 81 Romania 29 82 Argentina 9 a 71 76 21 22 20 25 3 83 Yugoslavia 84 Portugal 19 11 17 a 49 7] 69 74 85 36 19 30 10 30 32 12 2 26 42 7 12 4 12 85 Iran 10 19 39 17 21 86 Hong Kong 7 7 92 68 19 24 1 25 18 1 87 Trinidad and Tobago 11 .. 51 36 - - 38 . . 2 - - 88 Venezuela 89 Greece 14 12 15 15 53 77 48 70 20 19 32 25 33 3 29 11 37 15 8 10 14 13 12 5 90 Singapore 91 Spain 8 7 11 10 89 70 60 70 62 11 21 27 41 24 28 2320 14 6 4 13 34 2 92 Israel 18 42 68 Industrialized Countries 13 16 63 58 24 23 25 24 1 1 93 South Africa 94 Ireland 9 12 17 - - 64 7] 70 65 -. 22 16 24 21 18 - - 27 11 24 - 15 23 - 56 (.) 5 5 85 95 Italy 12 13 64 1 96 United Kingdom 97 New Zealand 17 13 19 . - 66 65 60 -. 18 24 17 - - 17 22 19 - - 2 2 98 Japan 9 9 57 57 34 33 34 38 (.) 5 99 Austria 13 59 56 28 27 28 27 (,) (.) 100 Finland 13 14 18 58 51 30 23 29 25 27 22 1 1 1 3 101 Australia 10 15 65 58 26 23 102 Netherlands 13 15 57 58 27 20 30 27 3 7 103 France 13 13 61 62 24 23 26 24 2 1 62 19 18 22 2 4 104 Belgium 13 16 69 21 1 105 Germany, Fed. Rep. 55 27 24 29 26 2 2 1 1 14 18 57 106 Norway 14 15 58 54 30 35 28 31 107 Denmark 12 20 66 59 23 21 22 20 108 Canada 14 18 65 58 23 23 22 24 1 1 2 18 109 United States 110 Sweden 18 16 17 23 63 60 64 54 25 20 25 16 19 24 18 23 24 1 1 1 3 111 Switzerland 10 12 63 63 26 27 1 Capital Surplus Oil Exporters 16 18 9 66 - 58 112 Saudi Arabia - 12 .. 11 12 9 77 - - 68 113 Libya -. 32 -. 32 -. 30 - - 36 -. 6 114 Kuwait 16 16 23 18 10 8 61 66 51 58 Centrally Planned Economies 115 China, People's Rep. 116 Korea, Dem, Rep. 117 Albania 118 Cuba 119 Mongolia 120 Hungary 121 Bulgaria 122 USSR 123 Poland 124 Czechoslovakia 125 German Dem. Rep. a Separate figures are not available for public consumption, which is therefore included in private consumption. Table 6: Growth of Merchandise Trade Merchandise Trade Average Annual Growth Ratesa Terms of Trade (million US dollars) (percent) 1970 - 100 Exports Imports Exports Imports 1976 1976 1960-70 1970-76 1960-70 1970-76 1960 1976 Low Income Countries 3.6 -0.4 4.6 -1.4 1 Bhutan .. .. .. .. 2 Cambodia 30 100 -3.3 -2.8 -3,0 -1.5 102 178 3LaoPDR 6 46 .. .. .. 4 Ethiopia 278 353 3.4 3.5 6.4 -3.1 91 87 5 Mali 97 150 3.6 0.8 -0.3 12.0 100 109 6 Bangladesh 414 764 3.8 -11.0 7.0 -11.9 97 72 7 Rwanda 81 103 15.2 5.7 19.3 11.0 84 116 8 Somalia 85 .. 2.5 14.5 2.8 3.2 112 83 9 Upper Volta 53 144 16.4 13.9 7.7 12.3 87 103 10 Burma 187 117 -11.1 -3.5 -5.6 -20.0 104 81 11 Burundi 55 58 .. .. . . 12 Chad 63 116 6.6 -11.9 5.1 -1.3 117 148 13 Nepal 98 163 .. 13.2 .. 13.6 14 Benin 51 223 5.0 1.9 7.5 5.5 87 97 15 Malawi 148 205 9.1 3.8 8.8 3.6 99 110 16 Zaire 930 827 -0.4 -1.2 4.2 -6.4 70 56 17 Guinea 202 123 .. .. . . 18 India 5,424 5515 1.6 5.0 -0.9 1.4 77 73 19 Viet Nam .. .. .. .. .. 20 Afghanistan 210 298 2.4 3.3 -1.2 7.1 103 128 21 Niger 86 173 6.8 4.6 12.0 -1.7 95 97 22 Lesotho 15.0 80.0 -. .. .. 23 Mozambique 303 334 5.3 -10.1 7.9 -11.8 96 103 24 Pakistan 1144 2134 8.7 -4.4 4.3 3.4 102 111 25 Tanzania 459 570 3.5 -8.5 6.1 -0.8 97 114 26 Haiti 125 . .. .. .. 27 Madagascar 292 214 4.5 0.2 4.2 -7.6 108 101 28 Sierra Leone 112 156 0.3 -6.1 2.0 -5.7 89 81 86 29 Sri Lanka 527 548 0.5 -3.6 -0.2 -5.3 138 92 30 Central African Emp. 52 50 7.5 -1.2 4.6 -2.8 89 113 31 Indonesia 8,547 5,673 2.0 8.2 2.0 20.6 120 238 32 Kenya 656 941 5.8 -1.0 6.4 -4.5 99 102 33 Uganda 360 80 3.6 -11.4 6.3 -13.7 83 127 34 Yemen Arab Rep. 8 410 Middle Income Countries 5.2 3.8 6.6 6.3 35 Togo 135 202 8.3 -4.3 8.6 2.6 88 154 36 Egypt 1,522 3,808 2.2 -6.6 -0.9 15.4 98 109 37 Yemen, PDR 288 254 -. .. . - 38 Cameroon 511 609 5.8 0.6 9.3 2.6 91 118 39 Sudan 554 980 0.8 -9.0 1.1 7.8 22 125 40 Angola 535 317 7.7 -13.0 11.6 -17.1 77 169 41 Mauritania 178 180 55.3 3.3 4.6 13.3 111 74 42 Nigeria 10,567 8,199 4.6 3.2 1.9 21.1 96 322 43 Thailand 2,980 3,572 5.2 9.5 11.3 3.5 97 82 44 Bolivia 513 587 10.4 0.2 8.2 11.2 68 133 45 Honduras 392 453 10.3 -1.4 11.7 -2.0 91 86 46 Senegal 426 713 1.1 6.0 2.8 5.1 92 110 47 Philippines 2,433 3,950 2.9 3.4 7.2 4.6 108 69 48 Zambia 1,043 654 3.4 -1.5 9.9 -2.1 58 47 49 Liberia 476 399 18.3 4.0 3.0 -1.8 195 78 50 El Salvador 721 705 4.9 3.3 6.4 6.2 90 113 51 Papua New Guinea 573 430 .. .. .. .. .. -. 52 Congo, People's Rep. 182 17] 4.9 22.3 -0.9 4.4 97 124 53 Morocco 1,262 2,618 2.5 2.6 3.4 14.0 98 105 54 Rhodesia -. .. .. .. .. 87 55 Ghana 804 845 -1.4 -3.3 -1.4 1.1 101 101 56 Ivory Coast 1,620 1,296 6.9 6.7 9.9 7.9 81 107 57 Jordan 209 1,022 10.3 19.6 3.6 10.0 95 100 58 Colombia 1,694 1,572 2.3 0.5 2.5 -3.8 89 128 59 Guatemala 760 808 8.4 3.5 7.1 6.7 93 107 60 Ecuador 1,127 993 4.1 10.9 11.8 12.3 110 143 61 Paraguay 179 220 5.1 5.5 7.6 6.9 88 90 62 Korea, Rep. of 7,716 8,774 35.7 31.7 20.0 12.2 82 78 63 Nicaragua 542 532 9.8 5.2 10.5 4.5 91 101 64 Dominican Rep. 716 764 -2.5 4.0 10.0 6.9 75 118 65 Syrian Arab Rep. 1,065 1,986 3.7 10.5 4.2 17.6 103 154 Merchandise Trade Average Annual Growth Ratesa Terms of Trade (million US dollars) (percent) 1970 = 100 Exports Imports Exports Imports 1976 1976 1960-70 1970-76 1960-70 1970-76 1960 1976 66 Peru 1,365 2,183 2.9 -5.3 3.8 7.4 68 80 67 Tunisia 789 1,529 3.7 2.1 2.4 13.8 101 152 68 Malaysia 5,707 4,245 8.9 4.3 5.6 6.5 115 87 69 Algeria 5,061 5,312 1.3 -2.3 -0.9 19.0 91 308 70 Turkey 1,960 4,993 5.5 1.9 1.6 13.6 82 71 Costa Rica 584 774 9.0 4.0 10.0 1,5 101 97 72 Chile 1,684 2,071 2.3 7.9 4.9 -4.0 63 43 73 China, Rep. of 8,156 1,609 23.7 16.2 17.9 12.6 74 Jamaica 633 913 5.6 -4.4 8.2 -3.6 98 106 75 Lebanon 800 810 14.2 6.2 5.2 -7.7 78 86 76 Mexico 3298 6,030 3.2 2.9 6.8 5.5 87 91 77 Brazil 10,128 13,622 4.6 10.3 5.0 12.6 90 99 78 Panama 227 838 10.9 3.1 10.5 -3.7 81 72 79 Iraq 8,835 3,461 3.7 6.3 1.5 30.2 98 451 80 Uruguay 536 599 2.5 -0.1 -2.8 -1.6 102 82 81 Romania 6,138 6,095 .. .. .. 82 Argentina 3,916 3,033 3.3 1.6 0.4 -1.1 100 96 83 Yugoslavia 4,878 7,367 8.1 5.8 9.0 4.7 96 93 84 Portugal 1,820 4,317 10.7 4.7 9.6 3.8 83 95 85 Iran 23,380 12,894 9.8 5.0 11.3 28.3 94 406 86 Hong Kong 8,526 8,882 12.7 8.6 9.2 9.3 .. 105 87 Trinidad and Tobago 2,213 1,976 2.2 -0.3 3.2 -4.9 92 111 88 Venezuela 9,149 6,023 -0.6 -10.0 4.4 12.5 85 323 89 Greece 2,543 6,013 10.7 12.3 10.0 2.9 92 83 90 Singapore 6,585 9,070 4.2 14.1 5.9 13.9 .. 102 91 Spain 8,727 17,463 9.8 11.3 16.3 6.4 93 69 92 Israel 2,310 4,052 10.9 9.0 8.8 5.4 91 88 Industrialized Countries 7.6 7.8 8.6 9.5 93 South Africa 4,776 6,751 5.2 3.7 8.0 -0.8 100 88 87 94 Ireland 3,313 4,192 5.4 3.4 6.3 0.8 94 106 95 Italy 36,969 43,428 13.4 2.7 9.7 -1.1 104 77 96 United Kingdom 46,271 55,986 3.0 0.6 3.2 -1.9 95 83 97 New Zealand 2,795 3,254 2.7 1.2 0.6 4,7 115 90 98 Japan 67,225 64,799 17.2 14.3 13.8 9.5 102 71 99 Austria 8,507 11,523 9.9 15.8 9.8 15.6 100 95 100 Finland 6,342 7,393 3.7 4.0 3.7 6.0 98 101 101 Australia 12,868 11,084 7.2 7.8 6.3 5.4 116 86 102 Netherlands 40,167 39,574 10.2 14.6 10.1 10.0 100 91 103 France 55,817 64,404 7.6 11.7 10.3 11.4 93 95 104 Belgium 32,847 35,368 10.7 11.7 10.5 12.1 110 93 105 Germany, Fed. Rep. 102,032 87,782 12.6 15.1 11.0 13.6 90 101 106 Norway 7,917 11,109 10.4 13.3 9.1 11.8 91 102 107 Denmark 9,113 12,419 6.2 9.7 6.8 11.9 108 94 108 Canada 38,128 37,910 9.2 3.8 8.6 9.7 98 111 109 United States 113,323 128,872 5.7 5.6 9.7 5.2 93 82 110 Sweden 18,440 19,334 7.8 7.3 7.1 8.2 109 102 111 Switzerland 14,845 14,774 7.0 15.3 7.2 11.5 91 108 Capital Surplus Oil Exporters 7.6 -9.1 11.1 28.3 112 Saudi Arabia 36,119 11,579 7.6 11.8 11.1 45.5 97 432 113 Libya 8,438 3,950 60.1 -10.7 15.5 28.3 93 337 114 Kuwait 9,843 3,321 5.3 -9.1 10.6 17.6 99 462 Centrally Planned Economies 10.4 .. 10.5 115 China, People's Rep. 116 Korea, Dem. Rep. 117 Albania .. .. 118 Cuba 0.6 -0.8 5.4 2.4 81 116 119 Mongolia 120 Hungary 4,934 5,529 13.5 10.5 85 121 Bulgaria 5,382 5,626 10.4 12.6 122 USSR 37,169 38,108 7.9 11.3 123 Poland 11,017 13,867 14.7 19.4 124 Czechoslovakia 9,035 9,706 6.3 6.4 125 German Dem. Rep. 10,087 11,290 17.9 8.3 a See Technical Notes. Table 7: Structure of Merchandise Trade Percentage Shares of Percentage Shares of Merchandise Exports Merchandise Imports Primary Commodities Manufactures Food Fuel Other 1960 1975 1960 1975 19608 1975 19608 1975 19608 1975 Low Income Countries 99 94 1 8 17 21 7 10 76 68 1 Bhutan .. .. 2 Cambodia 100 0 10 7 83 3LaoPDR .. .. .. .. .. .. 4 Ethiopia 100 98 0 2 2 5 10 17 88 78 5 Mali 97 92 3 8 20 5 .. 75 6 Bangladesh 37 63 .. 51 8 .. 41 7 Rwanda 97 3 .. 19 .. 8 .. 73 8 Somalia 88 97 12 3 24 .. 4 .. 72 9 Upper Volta 100 94 0 6 19 21 5 9 76 70 10 Burma 98 97 2 3 14 4 .. 82 11 Burundi 12 Chad 1oo 3 19 12 69 13 Nepal 12 14 Benin 100 100 0 17 10 73 15 Malawi 94 5 16 Zaire 99 97 1 3 16 17 10 10 74 73 17 Guinea 100 99 0 1 10 8 82 18 India 56 55 44 45 21 26 6 23 73 51 19 Viet Nam 100 0 .. .. 20 Afghanistan 86 85 14 15 14 7 79 21 Niger 100 91 0 9 24 22 5 13 71 65 22 Lesotho 0 23 Mozambique 100 96 0 4 13 5 .. 82 24 Pakistan 78 45 22 55 22 24 10 18 68 58 25 Tanzania 88 12 12 20 9 11 79 69 26 Haiti 100 66 0 34 .. 29 .. 9 .. 62 27 Madagascar 94 95 6 5 17 .. 6 .. 77 28 Sierra Leone 35 42 65 58 23 . 12 . 65 88 29 Sri Lanka 99 89 1 11 39 50 7 17 54 33 30 Central African Emp. 98 76 2 24 15 16 9 1 76 83 31 Indonesia 100 99 0 1 23 13 5 5 72 82 32 Kenya 88 87 12 13 12 6 11 28 77 66 33 Uganda 100 100 0 .. 6 5 8 2 86 93 34 Yemen Arab Rep. 93 7 .. 45 .. 5 50 Middle Income Countries 95 82 5 17 16 14 8 14 77 71 35 Togo 97 94 3 6 16 14 6 7 78 79 36 Egypt 90 66 10 34 23 36 11 7 66 57 37 Yemen, PDR .. 18 .. 46 36 38 Cameroon 96 89 4 11 20 11 8 10 72 79 39 Sudan 100 99 0 1 17 19 8 4 75 77 40 Angola 100 93 0 7 16 .. 6 .. 78 41 Mauritania 73 96 27 4 5 3 .. 92 42 Nigeria 97 99 3 1 14 10 5 3 81 87 43 Thailand 98 77 2 23 10 4 11 22 79 74 44 Bolivia 99 97 1 3 45 Honduras 98 89 2 11 13 13 9 17 78 70 46 Senegal 97 78 3 22 30 18 5 29 65 53 47 Philippines 93 83 17 10 22 75 67 48 Zambia 49 Liberia .. 100 99 98 .0 7 1 2 15 .. 16 11 8 14 .. 4 14 15 .. 80 78 71 50 El Salvador 94 71 6 29 17 .. 6 .. 77 51 Papua New Guinea 92 .. 8 .. 30 .. 6 .. 64 52 Congo, People's Rep. 91 88 9 12 18 16 6 8 76 76 53 Morocco 92 87 8 13 27 30 8 11 65 59 54 Rhodesia .. 55 Ghana 90 98 10 2 19 14 5 17 76 69 56 Ivory Coast 99 88 1 12 18 15 6 14 76 71 57 Jordan 96 80 4 20 32 25 8 11 60 64 58 Colombia 98 79 2 21 8 9 3 1 89 90 59 Guatemala 97 75 3 25 12 .. 10 .. 78 60 Ecuador 99 97 1 3 13 .. 3 .. 84 61 Paraguay 100 90 0 10 15 .. 11 .. 74 62 Korea, Rep. of 86 18 14 82 10 14 7 19 83 67 63 Nicaragua 98 83 2 17 9 9 10 14 81 77 64 Dominican Rep. 98 83 2 17 5 .. 10 .. 85 65 Syrian Arab Rep. 81 91 19 9 24 21 8 7 68 72 Percentage Shares of Percentage Shares of Merchandise Exports Merchandise Imports Primary Commodities Manufactures Food Fuel Other 1960 1975 1960 1975 1960a 1975 1960a 1975 196O 1975 66 Peru 99 95 1 5 11 3 86 67 Tunisia 90 80 10 20 20 19 9 10 71 71 68 Malaysia 94 82 6 18 .. 18 12 .. 70 69 Algeria 93 98 7 2 23 9 68 70 Turkey 75 64 25 36 7 7 11 18 82 75 71 Costa Rica 95 74 5 26 13 10 6 11 81 79 72 Chile 96 82 4 8 10 10 80 73 China, Rep. of 86 14 13 7 80 74 Jamaica 95 45 5 55 22 20 8 19 70 61 75 Lebanon 59 53 41 47 16 .. 9 75 76 Mexico 88 48 12 52 4 2 94 77 Brazil 97 73 3 27 14 6 19 26 67 68 78 Panama 100 0 15 7 10 42 75 51 79 Iraq 100 100 0 (.) 18 18 1 (.) 81 82 80 Uruguay 83 70 17 30 8 18 74 81 Romania 78 59 22 41 82 Argentina 96 75 4 25 3 5 13 13 84 82 83 Yugoslavia 56 28 44 72 11 7 5 12 84 81 84 Portugal 45 29 55 71 15 23 10 15 75 62 85 Iran 97 99 3 1 13 16 1 (.) 86 84 86 Hong Kong 20 3 80 97 27 21 3 6 70 73 87 Trinidad and Tobago 96 94 4 6 16 10 34 51 50 39 88 Venezuela 100 99 0 1 18 12- 1 1 81 87 89 Greece 91 52 9 48 11 10 8 22 81 68 90 Singapore 74 57 26 43 21 11 15 25 64 64 91 Spain 78 30 12 70 16 17 22 26 62 57 92 Israel 39 17 61 83 20 16 7 15 73 69 Industrialized Countries 48 24 52 76 17 11 10 17 73 73 93 South Africa 71 76 29 24 6 4 3 (.) 87 96 89 94 Ireland 72 54 28 46 18 14 12 14 70 72 95 Italy 27 17 73 83 20 19 14 27 66 54 96 United Kingdom 16 17 84 83 36 19 11 18 53 63 97 New Zealand 97 86 3 14 8 7 8 14 84 79 98 Japan 11 4 89 96 17 18 17 44 66 38 99 Austria 48 15 52 85 16 8 10 13 74 79 100 Finland 53 23 47 77 13 8 10 19 77 73 101 Australia 92 83 8 17 6 5 10 10 84 85 102 Netherlands 50 46 50 54 18 16 13 18 69 66 103 France 27 24 73 76 25 13 17 23 58 64 104 Belgium 24 22 76 78 15 13 10 14 75 73 105 Germany, Fed. Rep. 13 11 87 89 26 16 8 18 66 66 106 Norway 55 38 45 62 12 7 9 10 79 83 107 Denmark 65 43 35 57 18 10 12 19 70 71 108 Canada 70 53 30 47 12 8 9 12 79 80 109 United States 37 31 63 69 24 11 10 27 66 62 110 Sweden 39 22 61 78 13 8 14 17 73 75 111 Switzerland 10 8 90 92 18 13 8 10 74 77 Capital Surplus Oil Exporters 99 1 112 Saudi Arabia 100 99 0 1 .. .. .. .. 113 Libya 100 100 0 0 13 17 5 2 82 81 114 Kuwait 92 8 .. 17 1 .. 82 Centrally Planned Economies 65 47 35 53 11 . 10 80 115 China, People's Rep. .. .. 116 Korea, Dem. Rep. .. .. .. .. .. 117 Albania 94 .. 6 .. 9 .. 13 78 llBCuba 95 99 5 1 119 Mongolia .. 120 Hungary 44 43 56 57 8 8 12 14 80 78 121 Bulgaria 69 48 31 52 2 .. 6 .. 92 122 USSR 68 77 32 33 12 23 4 4 84 73 123 Poland 62 47 38 53 13 10 7 10 80 80 124 Czechoslovakia 35 34 65 66 26 11 28 13 46 76 125 German Dem. Rep. 37 35 63 65 .. aFigures in italics in these columns refer to 1961, rather than 1960. Table 8: Destination of Merchandise Exports (percentage of total) To Developed Developing Centrally Planned Countriesa Countriesa Economiesa From --. 1960 1976 1960 1976 1960 1976 Low Income Countries 71 65 25 30 1 1 1 Bhutan 2 Cambodia 3 Lao PDR 0 32 100 68 0 0 4 Ethiopia 69 65 30 32 1 3 5 Mali 93 70 7 13 0 17 6 Bangladesh 49 42 9 7 Rwanda .. 95 .. 5 () 8 Somalia 85 19 15 76 0 5 9 Upper Volta 4 72 96 27 0 1 10 Burma 23 28 71 71 6 1 11 Burundi .. 94 .. 3 .. 3 12 Chad 73 65 27 35 0 0 l3Nepal 31 .. 69 .. 0 14 Benin 98 63 2 28 0 9 15 Malawi 85 .. 15 .. (.) 16 Zaire 95 96 5 4 (.) (.) 17 Guinea 63 75 19 25 18 0 18 India 66 54 26 33 8 13 19 Viet Nam .. 20 Afghanistan 48 50 24 31 28 19 21 Niger 74 86 26 14 0 0 22 Lesotho 23 Mozambique 31 63 69 37 (.) (.) 24 Pakistan 60 40 32 55 8 5 25 Tanzania 75 57 24 38 1 5 26 Haiti 98 99 0 1 2 0 90 27 Madagascar 79 79 20 21 1 0 28 Sierra Leone 99 97 1 3 0 0 29 Sri Lanka 76 51 13 38 11 11 30 Central African Emp. 85 75 15 24 0 1 31 Indonesia 54 78 38 21 8 1 32 Kenya 79 55 20 44 1 1 33 Uganda 63 86 33 10 4 4 34 Yemen Arab Rep. 46 21 36 46 18 33 Middle Income Countries 81 72 15 24 1 1 35 Togo 74 87 26 12 0 1 36 Egypt 26 39 29 17 45 44 37 Yemen, PDR .. 86 .. 12 .. 2 38 Cameroon 93 73 6 19 1 8 39 Sudan 59 56 27 34 14 10 40 Angola 64 70 34 29 2 1 41 Mauritania 89 86 11 14 0 0 42 Nigeria 95 82 4 17 1 1 43 Thailand 47 60 51 38 2 2 44 Bolivia 88 60 12 40 0 0 45 Honduras 77 85 23 15 0 (.) 46 Senegal 89 83 11 17 0 (.) 47 Philippines 94 83 5 12 1 5 48Zambia .. 91 .. 9 .. 0 49 Liberia 100 89 0 10 0 1 50 El Salvador 88 79 12 20 0 1 51 Papua New Guinea .. 91 .. 7 .. 2 52 Congo, People's Rep. 93 72 7 27 0 1 53 Morocco 75 66 21 22 4 12 54 Rhodesia 55 Ghana 90 73 3 12 7 15 56 Ivory Coast 85 76 15 22 0 2 57 Jordan 1 10 88 79 11 11 58 Colombia 94 79 6 20 (.) 1 59 Guatemala 94 69 6 30 0 1 60 Ecuador 91 60 9 37 0 3 61 Paraguay 61 68 39 32 0 0 62 Korea, Rep. of 89 78 11 22 0 0 63 Nicaragua 91 73 9 27 (.) (.) 64 Dominican Rep. 92 93 8 7 0 0 65 Syrian Arab Rep. 34 61 42 23 24 16 Developed Developing Centrally Planned io Countriesa Countriesa Economiesa From -. 1960 1976 1960 1976 1960 1976 66 Peru 84 63 16 21 (.) 16 67 Tunisia 77 66 20 30 3 4 68 Malaysia 59 62 35 34 6 4 69 Algeria 92 89 7 9 1 2 70 Turkey 71 73 17 20 12 7 71 Costa Rica 93 72 7 27 0 1 72 Chile 91 64 9 35 (.) 1 73 China, Rep. of 56 73 44 27 0 0 74 Jamaica 96 85 4 14 0 1 75 Lebanon 24 7 70 88 6 5 76 Mexico 93 78 7 21 (.) 1 77 Brazil 82 62 12 30 6 8 78 Panama 99 72 1 28 0 (.) 79 Iraq 85 56 14 44 1 (.) 80 Uruguay 83 52 7 44 10 4 81 Romania 20 31 9 25 71 44 82 Argentina 75 47 19 46 6 7 83 Yugoslavia 48 39 19 21 33 40 84 Portugal 57 80 41 16 2 4 85 Iran 70 76 2] 24 3 0 86 Hong Kong 55 74 42 25 3 1 87 Trinidad and Tobago 80 82 20 18 0 (.) 88 Venezuela 62 6] 38 33 0 (,) 89 Greece 65 62 13 28 22 10 90 Singapore 39 49 54 49 7 2 91 Spain 80 65 17 32 3 3 92 Israel 77 75 21 24 2 1 Industrialized Countries 73 71 19 21 4 5 91 93 South Africa 71 79 27 21 2 (.) 94 Ireland 96 90 4 9 (.) 1 95 Italy 66 67 28 28 6 5 96 United Kingdom 61 67 36 30 3 3 97 New Zealand 92 71 7 23 1 6 98 Japan 46 47 52 46 2 7 99 Austria 70 65 15 20 15 15 100 Finland 70 67 11 9 19 24 101 Australia 76 70 19 23 5 7 102 Netherlands 79 85 19 13 2 2 103 France 53 66 43 29 4 5 104 Belgium 79 84 17 14 4 2 105 Germany, Fed. Rep. 71 71 24 23 5 6 106 Norway 81 82 14 15 5 3 107 Denmark 83 82 13 15 4 3 108 Canada 91 88 8 9 1 3 109 United States 62 58 37 39 1 3 110 Sweden 80 76 15 18 5 6 111 Switzerland 73 68 23 27 4 5 Capital Surplus Oil Exporters 75 72 25 28 0 (.) 112 Saudi Arabia 75 72 25 28 0 0 113 Libya 6] 82 26 18 7 (.) 114 Kuwait 91 59 9 41 0 (.) Centrally Planned Economies 18 7 72 115 China, Peoples Rep. 15 24 61 116 Korea, Dem. Rep. 117 Albania 1 1 118 Cuba 72 9 19 119 Mongolia 120 Hungary 23 6 .. 71 121 Bulgaria 13 3 84 122 USSR 18 .. 7 75 123 Poland 30 7 63 124 Czechoslovakia 17 11 72 125 German Dem. Rep. 20 4 76 a For the composition of these country groups, see Technical Notes. Table 9: Balance of Payments and Debt Service Ratios Current Account Interest Debt Service as Percentage of:a Balance before Payments on Interest Payments External Public on External Public Debt Exports of Debt Goods and (million US dollars) (million US dollars) GNP Services 1970 1976 1970 1976 1970 1976 1970 1976 Low Income Countries 1.0 1.1 4.6 7.2 1 Bhutan 2 Cambodia 3 Lao PDR 4 Ethiopia 5 Mali -6 -2 - -32 (.) 'ii 9 1.2 0.4 6.6 0.5 11.3 1.8 3.2 6 Bangladesh -231 29 1.3 13.4 7 Rwanda 16 (0) (.) (. (.) 1.3 0.6 8 Somalia -69 2.0 3.0 9 Upper Volta 9 -40 (. ) 0.6 0.7 3.9 4.8 10 Burma -61 -22 3 8 1.0 1.0 16.1 16.3 11 Burundi (.) 1 0.2 0.6 12 Chad (.) 2 1.0 1.4 13 Nepal 39 (.) 1 0.3 0.1 2.3 14 Benin 1 -21 (.) 1 0.7 1.7 4.9 15 Malawi -32 -71 3 6 1.8 1.9 7.0 7.2 16 Zaire -54 -544 9 35 2.2 1.6 4.6 12.9 17 Guinea 3.6 16.7 3.8 6.1 18 India -i66 i,o6 189 253 0.9 0.9 22.0 12.0 19 VietNam 20 Afghanistan 64 2.1 25.2 i.: 21 Niger 1 -8 1 2 0.9 0.9 3.8 7.3 22 Lesotho (0) (.) 0.5 0.2 23 Mozambique 24 Pakistan -5 -634 M 1 '.6 2.Ô 23.6 25 Tanzania -29 10 6 13 1.3 1.1 5.0 43 26 Haiti -14 (.) (.) 1.0 1.2 7.7 8.2 27 Madagascar 2 92 28 Sierra Leone 29 Sri Lanka -6 -47 -6 3 5 4 0.8 3.0 0.7 3.7 3.5 10.0 8.3 17 12 23 1,7 4.1 9.6 20.1 30 Central African Emp. 9 (.) 2 0.9 1.8 3.2 7.2 31 Indonesia -289 -932 21 354 0.9 2.3 6.6 7.1 32 Kenya -38 -61 11 23 1.2 1.4 3.7 3.6 33 Uganda 24 -45 4 2 0.6 0.2 2.5 1.6 34 Yemen Arab Rep. 297 Middle Income Countries 1.4 2.0 7.5 8.0 35 logo 4 -61 1 4 0.9 2.0 2.9 9.9 36 Egypt -116 -730 38 77 4.1 6.0 28.7 17.6 37 Yemen, PDR (.) (0) 38 Cameroon -26 -83 4 19 1.8 3.1 6:6 39 Sudan -30 -110 12 55 1.2 2.6 10.3 16.7 40 Angola 41 Mauritania -12 -52 (.) 3 15 3.2 33.2 42 Nigeria -348 -311 20 39 0.7 0.9 4.1 2.3 43 Thailand -234 -426 16 44 0.6 0.6 3.3 2.4 44 Bolivia -15 -83 6 35 2.7 4.3 10.9 16.4 45 Honduras -61 -94 15 0.8 2.5 2.8 6.3 46 Senegal -15 -37 18 0.7 2.1 2.4 5.7 47 Philippines 2 -1,019 26 87 1.5 1.3 7.6 6.6 48 Zambia 131 -571 23 52 3.2 2.4 5.4 8.9 49 Liberia 6 6 5.5 2.7 50 El Salvador 12 34 4 12 0.9 1.7 3.6 4.2 51 Papua New Guinea 19 (.) 2.2 52 Congo, Peoples Rep. .. -218 6 3.2 2.3 5.3 53 Morocco -101 -1,308 23 89 1.8 2.5 7.7 12.6 54 Rhodesia 4 2 0.6 0.2 55 Ghana -56 -72 12 17 1.1 0.5 4,9 4.6 56 Ivory Coast -26 -139 12 66 2.7 4.0 6.7 9.1 57 Jordan 18 90 2 8 0.7 1.8 3.6 2.8 58 Colombia -250 477 43 125 1.7 1.8 11.6 9,4 59 Guatemala -2 -193 6 13 1.4 0.4 7.4 1.8 60 Ecuador -106 24 7 25 1.5 1.7 9.0 5.8 61 Paraguay -14 -87 3 7 1.7 1.1 11.1 8.7 62 Korea, Rep. of -546 33 77 345 3.7 3.8 22.0 8.9 63 Nicaragua -33 -22 7 44 3.0 4.6 10.4 12.2 64 Dominican Rep. -121 -36 4 12 1.1 1.4 6.4 7.5 65 Syrian Arab Rep. -64 -746 6 27 2.1 1.7 11.0 7.9 Current Account Interest Debt Service as Percentage of:° Balance before Payments on Interest Payments External Public on External Public Debt Exports of Debt Goods and (million US dollars) (million US dollars) GNP Services 1970 1976 1970 1976 1970 1976 1970 1976 66 Peru 248 -1,012 46 178 2.8 3.5 13.6 21.6 67 Tunisia -36 -147 17 41 4.4 2.4 17.1 6.8 68 Malaysia 33 -126 21 120 1.3 2,2 3.0 4.3 69 Algeria -116 -542 10 341 0.9 5.7 3.2 14.1 70 Turkey -28 -1,785 42 114 1.3 0.7 21.4 11.2 71 Costa Rica -67 -178 7 28 2.9 3.0 9.7 9.4 72 Chile -13 252 78 209 2.8 8.4 18.9 32.9 73 China Rep. of 24 538 23 145 1.4 1.9 4.5 3.5 74 Jamaica -145 -248 8 54 1.3 4.5 2.9 11.1 75 Lebanon 1 2 0.2 0.5 76 Mexico -851 -2,413 217 1,070 2.1 3.1 23.6 32.3 77 Brazil -438 677 124 734 1.0 1.3 14.1 14.8 78 Panama -134 7 60 3.0 4.2 7.7 8.1 79 Iraq 110 298 9 13 0.9 0.4 2.2 0.9 80 Uruguay -29 -17 16 57 2.6 5.7 21.5 29.2 81 Romania 106 122 82 Argentina -39 869 120 258 oi 21.4 83 Yugoslavia -276 -915 72 141 1.7 1.4 8.2 5.5 84 Portugal -1,185 28 41 1.3 0.7 27.2 5.1 85 Iran -423 5,396 84 332 3.0 1.5 12.2 4.3 86 Hong Kong 2 0.1 2.6 87 Trinidad and Tobago 88 Venezuela 89 Greece - -364 1,5 -906 6 41 41 10 122 177 1: 0.8 1.0 3.0 1.3 2.2 2.ó 2.9 10.1 3.9 11.2 90 Singapore -566 -841 6 35 0.6 1.3 0.6 0.8 91 Spain 151 -4,169 72 267 0.5 0.5 3.6 3.6 92 Israel -560 -835 13 196 0.7 4.0 2.6 12.1 Industrialized Countriesa 93 93 South Africa -1,215 -1,965 94 Ireland -183 -66 95 Italy 762 -2,846 96 United Kingdom 1,760 -2,502 97 New Zealand 36 -542 98 Japan 1,970 3,691 99 Austria -22 -1,505 100 Finland -239 -1,168 101 Australia -854 -1,397 102 Netherlands -522 2,367 103 France -152 -6,034 104 Belgium 715 -301 105 Germany, Fed. Rep. 848 3,384 106 Norway -242 -3,729 107 Denmark -544 -1,904 108 Canada 1,077 -4,361 109 United States 2,357 3,477 110 Sweden -266 -1,966 111 Switzerland 70 3,500 Capital Surplus Oil Exporters 112 Saudi Arabia 71 13,629 113 Libya 645 1,698 114 Kuwait Centrally Planned Economiesa 115 China, People's Rep. 116 Korea, Dem. Rep. 117 Albania 118 Cuba 119 Mongolia 120 Hungary 121 Bulgaria 122 USSR 123 Poland 124 Czechoslovakia 125 German Dem. Rep. a5ee Technical Notes. Table 10: Flows of External Capital Public and Publicly Guaranteed Medium- and Long-term Loans Net Direct (million US dollars) Private Investment Repayment of (million Gross Inflow Principal Net Inflow US dollars) 1970 1976 1970 1976 1970 1976 1970 1976 Low Income Countries 1 Bhutan 2 Cambodia 3LaoPDR .. .. 4 Ethiopia 27 73 15 14 12 59 4 4 5 Mali 21 39 1 3 20 36 3 6 Bangladesh 347 36 311 7 Rwanda (.) 14 (.) (.) (.) 14 (.) 8 Somalia 4 56 1 2 3 54 5 9 Upper Volta 10 Burma 2 16 25 61 2 18 3 25 2(.) 22 36 (.) 11 Burundi 1 4 (.) 2 1 2 . . - 12 Chad 26 5 4 21 27 6 2 1 1 13 Nepal 1 12 2 1 11 14 Benin 2 31 1 6 1 25 7 15 Malawi 38 36 3 7 35 29 9 16 Zaire 32 329 30 14 2 315 42 17 Guinea 110 661 10 37 102 642 - 18 India 1,329 307 502 583 827 6 19 Viet Nam 890 1-. 20 Afghanistan 35 119 14 18 21 101 21 Niger 16 12 2 4 14 8 1 22 Lesotho (.) 2 (.) (.) (.) 2 23 Mozambique - .. - - 24 Pakistan 481 883 114 140 367 743 23 8 25 Tanzania 50 117 10 15 40 102 26 Haiti 4 40 4 11 (.) 29 3 5 94 27 Madagascar 28 Sierra Leone 29 Sri Lanka 11 8 61 20 24 190 5 10 25 9 17 104 26 36 11 86 7 20 (.) 8 -. 30 Central African Emp. 10 23 2 5 8 18 1 4 31 Indonesia 379 2,366 57 435 322 1,931 83 - - 32 Kenya 33 Uganda 30 26 204 31 7 4 20 3 23 22 184 28 14 4 7 42 34 Yemen Arab Rep. - Middle Income Countries 35 Togo 5 62 2 9 3 53 1 36 Egypt 302 1,418 247 552 55 866 42 37 Yemen, PDR 1 118 - - 38 Cameroon 28 193 4 22 24 171 16 31 39 Sudan 39 389 21 63 18 326 40 Angola .. 41 Mauritania 4 - 158 3 - - 65 1 93 146 1 205 50 42 Nigeria 61 65 36 211 25 387 43 Thailand 55 242 23 43 32 199 43 79 44 Bolivia 54 288 17 70 37 218 76 12 45 Honduras 29 84 3 13 26 71 8 8 46 Senegal 19 70 5 24 14 46 5 -. 47 Philippines 123 890 76 136 47 754 29 127 297 48 Zambia 49 Liberia 335 7 270 34 31 11 45 14 4 304 225 20 50 El Salvador 8 91 6 23 2 68 4 10 51 Papua New Guinea 50 34 0 7 50 27 52 Congo, People's Rep. 30 53 6 10 24 43 53 Morocco 163 707 36 128 127 579 20 38 54 Rhodesia 5 6 55 Ghana 40 47 12 23 28 24 68 13 56 Ivory Coast 76 355 27 109 49 246 31 50 57 Jordan 16 145 3 20 13 125 -. 7 58 Colombia 235 250 75 150 160 100 39 49 59 Guatemala 37 58 20 6 17 52 29 96 60 Ecuador 42 239 16 56 26 183 89 80 61 Paraguay 15 59 7 12 8 47 4 32 62 Korea, Rep. of 462 1,701 235 495 227 1,206 38 173 63 Nicaragua 43 76 16 33 27 43 15 12 64 Dominican Rep. 42 118 12 42 30 76 72 65 Syrian Arab Rep. 60 392 30 82 30 310 Public and Publicly Guaranteed Medium- and Long-term Loans Net Direct (million US dollars) Private Investment Repayment of (million Gross Inflow Principal Net Inflow US dollars) 1970 1976 1970 1976 1910 1976 1970 1916 66 Peru 168 886 122 202 46 684 70 170 67 Tunisia 82 365 44 69 38 296 16 68 Malaysia 44 445 32 118 12 327 94 69 Algeria 292 1938 33 433 259 1,505 45 70 Turkey 321 511 129 154 192 357 58 28 71 Costa Rica 72 Chile 73 China, Rep. of 30 397 154 156 428 755 21 163 54 40 548 174 9 234 100 116 120 581 79 26 61 5 69 55 74 Jamaica 75 Lebanon 15 12 196 8 2 51 6 7 10 6 145 161 17 1 76 Mexico 782 5,506 475 1,217 307 4,289 323 689 77 Brazil 992 4,126 316 924 676 3,202 131 1,009 78 Panama 67 362 24 38 43 324 33 79 Iraq 80 Uruguay 63 37 47 218 18 47 48 148 10 45 170 24 81 Romania .. .. .. 82 Argentina 489 1,908 341 590 148 1,318 11 83 Yugoslavia 180 538 168 364 12 174 84 Portugal 20 236 62 93 42 143 .. 55 85 Iran 914 1,118 235 655 679 463 25 86 Hong Kong .. 44 1 2 1 42 87 Trinidad and Tobago 8 11 6 62 2 51 83 82 88 Venezuela 224 1,041 42 287 182 754 23 828 89 Greece 164 256 61 310 103 54 50 10 90 Singapore 49 189 5 39 44 150 93 722 91 Spain 268 1,533 123 255 145 1,278 139 165 92 Israel 410 1,240 25 337 385 903 39 35 Industrialized Countriesa 93 South Africa 94 Ireland 318 gs 95 32 95 Italy 496 60 96 United Kingdom 460 2,026 97 New Zealand 22 179 98 Japan 261 1,786 99 Austria 84 50 100 Finland 101 Australia 34 27 787 784 102 Netherlands 19 645 103 France 249 391 104 Belgium 162 473 105 Germany, Fed. Rep. 278 927 106 Norway 32 185 107 Denmark 75 92 108 Canada 566 965 109 United States 6,125 7,335 110 Sweden 105 495 111 Switzerland Capital Surplus Oil Exporters 112 Saudi Arabia .. 20 401 113 Libya 139 523 114 Kuwait .. .. .. .. Centrally Planned Economiesa 115 China, People's Rep. 116 Korea, Dem. Rep. 117 Albania 118 Cuba 119 Mongolia 120 Hungary 121 Bulgaria 122 USSR 123 Poland 124 Czechoslovakia 125 German Dem. Rep. aSee Technical Notes. Table 11: External Public Debt and International Reserves External Public Debt Gross International Reserves Outstanding and Disbursed In months As Percentage of import (million US dollars) of GNP (million US dollars) coverage 1970 1976 1970 1976 1970 1976 1976 Low Income Countries 14.2 20.9 2.4 1 Bhutan 2 Cambodia 3LaoPDR 4 Ethiopia 169 431 9.5 14.9 71 306 7.5 5 Mali 236 376 87.7 49.5 1 7 0.4 6 Bangladesh .. 1,943 .. 39.0 289 3.6 7 Rwanda 2 35 0.8 8.1 8 64 4.7 8 Somalia 77 277 41.0 70.9 21 85 4.6 9 Upper Volta 21 84 6.3 12.4 36 71 3.2 10 Burma 102 321 4.7 9.7 94 126 6.1 11 Burundi 7 24 2.9 5.1 15 49 12 Chad 32 94 11.9 19.7 2 23 1.3 13 Nepal 3 44 0.3 3.2 97 135 9.0 14 Benin 41 95 17.2 23.2 16 19 1.0 15 Malawi 121 258 37.7 37.5 29 26 2.4 16 Zaire 309 2,002 17.3 63.8 186 105 0.4 17 Guinea 320 872 85.8 99.1 . . 18 India 7,935 12,392 14.8 14.6 1,006 3,074 2.6 19 Viet Nam .. 240 .. .. 241 20 Afghanistan 529 911 58.5 37.2 47 169 7,0 21 Niger 36 112 ,9.8 16.1 19 83 2.4 22 Lesotho 8 15 8.1 8.5 23 Mozambique .. .. .. .. 24 Pakistan 3,060 5,968 30.5 45.1 190 532 2.2 25 Tanzania 237 914 18.5 35.7 65 112 2.0 26 Haiti 40 92 10.0 9.5 4 28 1.5 27 Madagascar 94 181 10.9 10.2 37 42 96 28 Sierra Leone 59 159 14.2 27.7 39 25 1.5 29 Sri Lanka 311 682 14.6 22.1 43 92 1.6 30 Central African Emp. 20 79 9.4 18.7 1 19 1.6 31 Indonesia 2,505 10,141 27.8 29.1 160 1,499 0.9 32 Kenya 284 688 18.5 22.2 220 276 2.6 33 Uganda 125 212 9.6 6.8 57 34 Yemen Arab Reo. .. 274 720 14.9 Middle Income Countries 13.2 17.0 2.6 35 Togo 40 167 15.3 28.5 35 67 1.7 36 Egypt 1,639 5,043 23.7 48.1 167 339 0.8 37 Yemen, PDR 1 226 0.3 48.8 59 82 38 Cameroon 131 529 13.1 23.3 81 44 0.7 39 Sudan 293 1,268 11.0 23.4 22 24 0.3 40 Angola .. .. .. .. 41 Mauritania 27 354 15.6 76.7 3 82 2.6 42 Nigeria 494 954 6.6 3.3 222 5,203 5.6 43 Thailand 322 822 4.9 5.2 906 1,893 5.5 44 Bolivia 477 1,000 54.9 41.4 46 168 2.6 45 Honduras 90 335 13.0 29.1 20 131 2.7 46 Senegal 103 336 12.3 17.0 22 25 0.5 47 Philippines 635 2,126 9.5 12.3 251 1,640 4.1 48 Zambia 548 1,184 32.0 53.7 514 100 1.3 49 Liberia 156 191 49.2 25.7 17 50 El Salvador 88 272 8.6 12.9 63 205 2.9 51 Papua New Guinea 61 289 10.4 23.3 .. 202 52 Congo, People's Rep. 128 405 46.6 56.5 9 12 0.3 53 Morocco 713 2,131 21.4 24.6 140 491 1.6 54 Rhodesia 227 156 15.4 4.5 55 Ghana 486 594 22.4 7.5 58 104 1.3 56 Ivory Coast 256 1,183 18.2 27.2 119 77 0.5 57 Jordan 120 447 19.2 28.7 256 491 4.5 58 Colombia 1,250 2,449 18,1 15.6 206 1,158 5.2 59 Guatemala 106 212 5.7 5.0 78 511 5.0 60 Ecuador 209 639 13.3 13.0 83 515 4.3 61 Paraguay 98 222 16.7 13.1 18 158 5.9 62 Korea, Rep. of 1,904 6,690 22.8 26.7 610 2,961 3.5 63 Nicaragua 146 642 19.4 37.8 49 147 2.5 64 Dominican Rep. 215 528 14.7 14.1 32 127 2.0 65 Syrian Arab Rep. 232 968 13.] 15.2 55 361 1.7 External Public Debt Gross International Reserves Outstanding and Disbursed In months As Percentage of import (million US dollars) of GNP (million US dollars) coverage 1970 1976 1970 1976 1970 1976 1976 66 Peru 898 3,379 14,8 31.3 336 330 1.3 67 Tunisia 524 1,356 37.3 30.3 60 371 2.6 68 Malaysia 364 1,619 9.2 12.1 664 2,472 6.8 69 Algeria 937 5,853 20.6 37.4 339 1,987 3.0 70 Turkey 1,841 3,569 14.4 8,8 431 1,123 2.3 71 Costa Rica 134 534 13.8 24.0 16 98 1.3 72 Chile 2,066 3,527 24.0 39.1 389 460 2.4 73 China, Rep. of 609 2,236 10.8 13.0 622 1,607 2.2 74 Jamaica 129 855 10.3 36.6 139 32 0.3 75 Lebanon 64 40 4.2 .. 386 1,677 76 Mexico 3,228 15,547 9.8 20.8 744 1,253 1.4 77 Brazil 3,680 14,852 8.0 11.7 1,187 6,541 4.5 78 Panama 193 1,091 18.9 46.9 17 79 Iraq 274 391 8.8 2.4 462 4,601 5.2 80 Uruguay 267 688 11.0 19.0 175 315 4.8 81 Romania .. .. .. .. 82 Argentina 1,872 4,255 7.5 4.6 673 1,608 4.8 83 Yugoslavia 1,199 2,488 8.5 6.8 140 2,049 1.2 84 Portugal 473 875 7.1 5.4 1,504 1,302 3.2 85 Iran 2,167 4,271 20.6 6.5 208 8,833 6.2 86 Hong Kong 2 62 0.1 0.7 87 Trinidad and Tobago 78 99 9.7 4.1 43 1,014 4.9 88 Venezuela 729 2,970 6.7 9.4 1,021 8,578 11.6 89 Greece 905 2,377 8.9 10.4 310 925 1.9 90 Singapore 141 687 7.3 11.8 1,012 3,364 4.1 91 Spain 1,209 4,761 3.3 4.6 1,817 5,284 3.2 92 Israel 2,274 6,828 41.2 51.1 449 1,373 2.1 Industrialized Countriesa 1 .6 97 93 South Africa 1,012 940 0.9 94 Ireland 697 1,837 4.2 95 Italy 5,352 6,654 1.6 96 United Kingdom 2,827 4,230 0.7 97 New Zealand 258 492 1.5 98 Japan 4,840 16,605 2.6 99 Austria 1,751 4,410 3.6 100 Finland 460 498 0.7 101 Australia 1,693 3,170 2.4 102 Netherlands 3,241 7,387 1.9 103 France 4,960 9,728 1.5 104 Belgium 2,847 5,206 1.7 105 Germany, Fed. Rep. 13,610 34,801 3.7 106 Norway 813 2,229 1.6 107 Denmark 484 915 0.7 108 Canada 4,679 5,843 1.4 109 United States 14,487 18,320 1.4 110 Sweden 761 2,491 1.2 111 Switzerland 5,132 12993 8.6 Capital Surplus Oil Exporters 112 Saudi Arabia 662 27,025 14.7 113 Libya 1,590 3,206 5,4 114 Kuwait 203 1,929 Centrally Planned Economiesa 115 China, People's Rep. 116 Korea, Dem. Rep. 117 Albania 118 Cuba 119 Mongolia 120 Hungary 121 Bulgaria 122 USSR 123 Poland 124 Czechoslovakia 125 German Oem. Rep. a See Technical Notes. Table 12: Official Development Assistance from Members of the OECDa 1960 1965 1970 1971 1972 In Millions of US Dollars 95 Italy 77 60 147 183 102 96 United Kingdom 407 472 447 562 609 97 New Zealand 14 17 21 98 Japan 105 244 458 511 611 99 Austria 10 11 12 18 100 Finland 2 7 13 20 101 Australia 59 119 202 202 267 102 Netherlands 35 70 196 216 30] 103 France 823 752 971 1,075 1,320 104 Belgium 101 102 120 146 193 105 Germany, Fed. Rep. 223 456 599 734 808 106 Norway 5 11 37 42 63 107 Denmark 5 13 59 74 96 108 Canada 75 96 346 391 492 109 United States 2,702 3,418 3,050 3,324 3,349 110 Sweden 7 38 117 159 198 111 Switzerland 4 12 30 28 65 TOTAL 4,628 5,875 6,811 7,689 8,539 98 As Percentage of Donor GNP 95 Italy .22 .10 .16 .18 .09 96 United Kingdom .56 .47 .37 .41 .39 97 New Zealand .23 .23 .25 98 Japan .24 .27 .23 .23 .21 99 Austria .11 .07 .07 .09 100 Finland .. .02 .07 .12 .15 101 Australia .38 .53 .59 .53 .59 102 Netherlands .31 .36 .61 .58 .67 103 France 1.38 .76 .66 .66 .67 104 Belgium .88 .60 .46 .50 .55 105 Germany, Fed. Rep. .31 .40 .32 .34 .31 106 Norway .11 .16 .32 .33 .43 107 Denmark .09 .13 .38 .43 .45 108 Canada .19 .19 .42 .42 .47 109 United States .53 .49 .31 .32 .29 110 Sweden .05 .19 .38 .44 .48 111 Switzerland .04 .09 .15 .12 .21 Summary ODA (billion US dollars, nominal prices) 4.6 5.9 6.8 7.7 8.5 ODA as a Percentage of GNP .52 .44 .34 .35 .33 ODA (billion US dollars, constant 1977 prices) 12.2 14.1 14.4 15.5 15.8 GNP (trillion US dollars, nominal prices) .9 1.3 2.0 2.2 2.6 ODA Deflatorb .38 .42 .47 .50 .54 Official Development Assistance from members of the Organization of Petroleum Exporting Countries totalled US$5.5 billion in 1975 and US$5.2 billion in 1976. See Technical Notes. b See Technical Notes. Estimated 1973 1974 1975 1976 1977 1978 1979 1980 In Millions of US Dollars 192 216 182 226 234 237 248 271 603 717 863 835 907 949 1073 1194 29 39 66 53 53 67 81 92 1,011 1,126 1,148 1,105 1,421 2,092 2530 3,029 40 59 64 48 118 98 110 132 28 38 48 51 49 63 73 90 286 430 507 385 429 505 582 669 322 436 604 720 899 1,167 1,338 1,509 1,461 1,616 2,091 2,146 2,394 2,665 3,002 3,374 235 271 378 340 369 507 644 749 1,102 1,433 1,689 1,384 1,386 1,883 2,092 2,313 87 131 184 218 295 406 464 538 132 168 205 214 255 328 386 430 515 713 880 887 994 1,341 1,582 1,818 2,968 3,439 4,007 4,334 4,123 5,492 6,171 6,896 275 402 566 608 782 909 1,047 1,162 65 68 104 112 94 104 123 141 9,351 11,302 13,586 13,668 14,802 18,813 21,546 24,407 99 As Percentage of Donor GNP .14 .14 .11 .13 .12 .11 .10 .10 .34 .37 .37 .38 .37 .37 .38 .38 .27 .31 .52 .43 .37 .45 .48 .49 .25 .25 .23 .20 .21 .27 .29 .30 .15 .18 .17 .12 .24 .18 .18 .19 .16 .17 .18 .18 .17 .17 .18 .20 .44 .55 .60 .42 .45 .47 .48 .49 .54 .63 .75 .82 .85 1.00 1.02 1.03 .57 .59 .62 .62 .63 .62 .62 .63 .51 .51 .59 .51 .46 .64 .65 .67 .32 .37 .40 .31 .27 .32 .32 .31 .43 .57 .66 .71 .82 .96 .97 .98 .48 .55 .58 .56 .60 .67 .70 .70 .43 .50 .54 .46 .51 .61 .64 .66 .23 .24 .26 .25 .22 .26 .26 .26 .56 .72 .82 .82 1.00 .97 1.00 1.00 .16 .14 .19 .19 .15 .16 .17 .17 9.4 11.3 13.6 13.7 14.8 18.8 21.5 24.4 .30 .33 .36 .33 .32 .35 .36 .37 14.3 14.2 15.1 14,8 14.8 17.4 18.6 19.7 3.1 3.4 3.8 4.1 4.6 5.3 5.9 6.6 .66 .80 .90 .93 1.00 1.08 1.16 1.24 Table 13: Population and Labor Force Growth Average Annual Growth Rates (percent) Total Urban Labor Population Population Force 1960-70 1970-75 1960-70 1970-75 1960-70 1970-75 Low Income Countries 2.4 2.4 5.4 5.5 1.9 2.0 2.3 2.3 4.3 4.6 1.8 2.0 1 Bhutan 2.7 2.8 9.5 6.1 2.1 2.4 2 Cambodia 2.4 2.5 5.0 4.9 1.4 1.6 3 Lao FOR 2.0 2.6 6.1 5.6 2.0 2.0 4 Ethiopia 2.5 4.2 4.6 1.9 2.0 5 Mali 2.1 2.8 2.0 4.8 3.8 2.4 1.6 6 Bangladesh 2,3 7.3 7.7 2.5 2.5 7 Rwanda 3.6 2.7 2.4 2.4 6.0 4.7 1.6 8 Somalia 1.8 2.3 5.1 5.2 1.7 9 Upper Volta 2.1 2.2 2.2 3.8 4.8 1.2 1.6 10 Burma 2.1 6.7 6.1 1.1 1.7 11 Burundi 2.0 1.3 1.5 12 Chad 1.7 2.1 7.5 6.3 2.1 4.0 5.6 1.8 2.1 13 Nepal 2.1 2.7 2.7 7.3 6.6 2.0 2.0 14 Benin 1.9 2.3 4.8 5.3 1.8 15 Malawi 2.6 2.7 2.7 4.0 6.4 2.2 1.9 16 Zaire 2.8 2.8 7.5 6.6 1.7 1.7 17 Guinea 2.3 2.1 3.5 3.8 1.7 2.0 18 India 2.8 2.6 4.3 4.6 1.1 1.6 19 Viet Nam 20 Afghanistan 2.2 2.2 5.2 5.4 1.9 2.1 21 Niger 2.7 2.7 6.9 5.4 2.5 2.5 22 Lesotho 2.2 2.2 8.3 6.7 1.5 1.4 2.4 6.4 6.1 1.9 1.5 23 Mozambique 1.9 2.8 3.0 2.9 5.3 1.9 2.6 24 Pakistan 2.7 5.6 7.5 2.3 2.4 25 Tanzania 3.0 1.6 3.8 3.6 0.6 1.4 26 Haiti 1.6 27 Madagascar 2.6 3.1 5.5 6.0 2.3 2.3 28 Sierra Leone 2.2 2.5 3.8 4.4 1.6 1.8 100 29 Sri Lanka 2.4 1.7 4.5 4.3 2.1 2.5 30 Central African Emp. 2.2 2.2 7.0 5.8 1.7 1,8 2.2 2.4 4.4 4.7 2.2 2.2 31 Indonesia 3.5 6.3 6.3 3.2 2.6 32 Kenya 3.1 33 Uganda 2.7 3.3 7.1 6.8 2.4 2.4 34 Yemen Arab Rep. 2.3 1.9 9.0 8.0 2.3 2.4 Middle Income Countries 2.7 2.7 4.8 4.5 2.3 2.7 35 Togo 2.7 2.6 5.4 5.0 2.6 2.1 36 Egypt 2.6 2.2 4.3 3.9 2.2 2.5 37 Yemen, PDR 3.4 2.7 5.5 5.4 2.3 2.3 38 Cameroon 2.1 1.9 6.2 5.2 1.3 1.4 39 Sudan 2.2 2.1 6.2 5.5 2.6 2.7 5.8 6.2 1.7 2.0 40 Angola 1.3 0.1 2.7 5.5 5.0 1.8 1.8 41 Mauritania 1.8 42 Nigeria 2.5 2.5 4.8 7.0 1.8 2.1 43 Thailand 3.1 2.9 4.8 5.3 2.1 2.9 44 Bolivia 2.6 2.7 4.1 4.0 2.1 2.4 45 Honduras 2.7 2.7 4.7 4,5 2.8 3.0 2.7 4.0 4.1 1.8 1.7 46 Senegal 2.6 47 Philippines 3.0 2.8 4.3 4.8 2.3 2.7 48 Zambia 2.9 2.9 8.7 6.8 2.4 2.4 49 Liberia 3.3 3.3 6.1 5.8 1.3 1.5 3.5 3.9 2.9 3.3 50 El Salvador 3.5 3.1 51 Papua New Guinea 2.3 2.6 12.9 10.1 1.8 1.9 52 Congo, Peoples Rep. 2.6 2.2 5.0 4.5 1.7 2.0 2.4 4.2 5.1 1.7 2.8 53 Morocco 2.4 3.3 3,5 5.2 5.9 3.3 2.7 54 Rhodesia 2.6 2.7 4.6 5.5 1.8 2.1 55 Ghana 3.4 4.2 7.3 6.5 1.9 1.9 56 Ivory Coast 57 Jordan 3.3 3.2 5.1 4.9 2.7 2.9 58 Colombia 2.9 2.8 5,4 4.9 3.0 3.2 3.2 3.2 3.5 4.0 2.6 2.9 59 Guatemala 3.3 3.5 4.3 3,9 3.1 3.2 60 Ecuador 2.6 2.7 3.0 3.7 2.4 3.0 61 Paraguay 62 Korea, Rep. of 2.6 1.8 6.2 4.9 2.9 2.9 3.3 4.1 4.5 2.6 3.2 63 Nicaragua 2.9 64 Dominican Rep. 2.9 2.9 6.3 5.5 2.6 3.1 65 Syrian Arab Rep. 3.7 3.3 4.8 4.2 2.6 2.6 Average Annual Growth Rates (percent) Total Urban Labor Population Population Force 1960-70 1970-75 1960-70 1970-75 1960-70 1970-75 66 Peru 2.9 2.9 4.3 4.2 2.1 3.0 67 Tunisia 2.1 2.3 4.9 4.2 0.7 2.3 68 Malaysia 2.9 2.7 3.6 4.7 2.] 3.2 69 Algeria 3.2 3.2 6.6 5.7 1.2 2.8 70 Turkey 2.5 2.5 5.2 4.2 1.2 1.8 71 Costa Rica 3.5 2.5 4.6 3.8 3.5 3.8 72 Chile 2.1 1.8 3.7 2.7 1.4 2.5 73 China, Rep. of 3.1 2.0 5.6 5.6 4.2 5.0 74 Jamaica 1.7 1.8 4.7 3.8 0.5 1.1 75 Lebanon 2.5 3.0 7.4 5.4 2.1 3.0 76 Mexico 3.4 3.5 5.0 4.6 2.8 3.3 77 Brazil 2.9 2.9 5.0 4.5 2.8 2.9 78 Panama 3.1 3.1 4.8 4.2 3.3 2.7 79 Iraq 3.2 3.3 6.3 5.0 2.9 3.0 80 Uruguay 0.6 0.4 1.9 1.7 0.8 1.0 81 Romania 1.0 0.9 2.9 2.8 0.8 0.6 82 Argentina 1.4 1.3 2.3 2.0 1.3 1.2 83 Yugoslavia 1.0 0.9 3.4 2.9 1.0 1.3 84 Portugal 0.1 0.8 1.5 1.7 0.6 0.2 85 Iran 2.9 2.8 5.0 4.7 2.5 2.6 86 Hong Kong 2.5 1.9 3.1 1.7 3.2 2.9 87 Trinidad and Tobago 2.1 1.1 2.2 1.9 1.1 2.4 88 Venezuela 3.4 3.1 4.9 3.9 2.4 3.7 89 Greece 0.6 0.7 2.7 1.7 0.1 0.1 90 Singapore 2.3 1.7 4.7 2.5 2.8 3.2 91 Spain 1.1 1.0 2.6 1.9 0.2 1.0 92 Israel 3.3 3.3 4.0 3.4 3.5 2.8 Industrialized Countries 1.0 0.8 1.9 1.8 1.0 1.0 93 South Africa 3.1 2.6 3.3 3./ 3.5 2.6 101 94 Ireland 0.4 1.2 1.8 2.3 0.1 1.3 95 Italy 0.7 0.8 1.5 1.3 0.1 0.6 96 United Kingdom 0.6 0.2 0.4 0.5 0.6 0.3 97 New Zealand 1.7 1.8 2.5 1.9 2.2 1.9 98 Japan 1.0 1.4 2.4 2.3 1.9 1.4 99 Austria 0.5 0.4 0.9 0.8 -0.6 0.7 100 Finland 0.4 0.5 3.3 1.9 0.5 0.9 101 Australia 2.0 1.5 2.5 2.2 2.6 2.1 102 Netherlands 1.3 0.9 1.6 1.2 1.6 1.2 103 France 1.0 0.8 2.6 1.8 0.6 1.3 104 Belgium 0.6 0.3 1.1 1.0 0.3 0.8 105 Germany, Fed. Rep. 1.0 0.2 1.4 0.8 0.5 0.9 106 Norway 0.8 0.7 2.1 2.0 0.5 0.7 107 Denmark 0.8 0.5 1.5 1.0 1.1 0.6 108 Canada 1.8 1.4 2.8 2.0 2.6 2.1 109 United States 1.2 0.8 1.8 1.5 1.8 1.7 110 Sweden 0.7 0.4 1.9 1.2 1.0 0.5 111 Switzerland 1.3 0.8 2.3 1.9 2.0 1.0 Capital Surplus Oil Exporters 4.0 4.2 6.6 6.3 3.4 2.4 112 Saudi Arabia 1.7 2.4 6.6 6.3 2.3 2.4 113 Libya 4.0 4.2 5.8 5.0 3.4 2.4 114 Kuwait 9.7 6.2 13.0 8.2 7.7 4.7 Centrally Planned Economies 1.2 0.9 3.2 2.8 0.9 1.5 115 China, People's Rep. 1.6 1.7 3.2 3.3 1.4 1.5 116 Korea, Dem. Rep. 2.8 2.7 5.8 5.1 2.3 3.0 117 Albania 2.8 2.4 3.8 4.9 2.2 2.8 118 Cuba 2.1 1.8 3.5 2.9 0.9 1.8 119 Mongolia 2.8 3.0 5.3 5.4 2.1 2.4 120 Hungary 0.3 0.4 1.6 1.5 0.5 0.8 121 Bulgaria 0.7 0.5 4.1 2.8 0.7 0.7 122 USSR 1.2 0.9 2.7 2.4 0.7 1.5 123 Poland 1.0 0.9 2.1 2.2 1.7 1.8 124 Czechoslovakia 0.5 0.7 2.0 1.7 0.9 1.1 125 German Oem. Rep. 0.1 -0.3 0.1 0.5 0.4 0.4 Table 14: Structure of Population Percentage of Population Percentage of In Urban Of Working Age Labor Force in Areas Below Age 15 (15-64 years) Agriculture 1960 1975 1960 1975 1960 1975 1960 1970 Low Income Countries 8 13 43 44 54 54 88 85 1 Bhutan 3 3 41 42 56 55 95 94 2 Cambodia 10 23 45 45 53 52 82 78 3 Lao PDR 8 11 41 42 56 55 83 79 4 Ethiopia 7 11 43 44 54 54 88 84 5 Mali 10 14 44 44 54 53 94 91 6 Bangladesh 5 9 44 46 53 49 87 86 7 Rwanda 2 4 45 44 52 53 95 93 8 Somalia 18 28 44 45 54 53 88 85 9 Upper Volta 5 8 42 43 55 54 92 87 10 Burma 17 22 38 41 59 56 68 67 11 Burundi 2 4 43 43 55 54 90 87 12 Chad 7 14 45 40 53 57 94 90 13 Nepal 3 5 42 42 56 55 95 94 14 Benin 10 18 44 45 53 52 55 50 15 Malawi 4 6 40 45 56 51 93 88 16 Zaire 20 26 44 44 53 53 83 79 17 Guinea 10 20 42 43 55 54 88 85 18 India 18 22 41 42 56 55 74 69 19 Viet Nam 13 17 36 41 61 55 82 76 20 Afghanistan 8 12 42 44 55 53 85 82 21 Niger 6 9 46 46 52 52 95 93 22 Lesotho 1 3 38 38 57 56 93 90 23 Mozambique 4 6 42 43 56 54 81 74 24 Pakistan 20 27 44 47 52 51 61 59 25 Tanzania 5 7 46 47 51 51 89 86 26 Haiti 15 21 39 40 58 56 80 74 27 Madagascar 12 18 45 45 53 52 93 89 102 28 Sierra Leone 12 15 42 43 54 54 78 72 29 Sri Lanka 18 24 42 39 54 57 56 55 30 Central African Emp. 19 36 42 42 54 55 94 91 31 Indonesia 15 19 41 44 56 54 75 66 32 Kenya 7 11 47 47 51 51 86 82 33 Uganda 5 8 44 44 53 53 89 86 34 Yemen Arab Rep. 4 9 43 45 54 53 83 79 Middle Income Countries 32 43 44 44 53 53 60 51 35 Togo 10 14 45 46 53 52 80 73 36 Egypt 38 48 42 41 55 56 58 54 37 Yemen, PDR 20 29 43 45 54 53 71 65 38 Cameroon 13 24 39 40 59 57 88 85 39 Sudan 9 13 44 45 53 52 86 82 40 Angola 10 18 43 42 55 55 69 64 41 Mauritania 7 11 42 42 55 55 91 88 42 Nigeria 18 29 45 45 54 53 71 62 43 Thailand 13 17 45 46 53 51 84 80 44 Bolivia 29 37 43 43 54 54 61 56 45 Honduras 23 28 46 47 52 50 70 67 46 Senegal 22 28 43 43 56 54 84 80 47 Philippines 30 36 45 46 52 51 61 53 48 Zambia 18 37 47 48 51 50 79 73 49 Liberia 9 28 41 41 56 55 81 76 50 El Salvador 38 40 46 47 51 50 62 56 51 Papua New Guinea 3 13 41 42 57 55 89 86 52 Congo, People's Rep. 27 40 42 42 55 54 52 42 53 Morocco 30 38 45 47 53 49 63 57 54 Rhodesia 16 20 48 48 49 51 69 64 55 Ghana 23 32 47 48 52 50 64 58 56 Ivory Coast 11 20 42 43 55 54 89 85 57 Jordan 43 56 44 47 52 51 44 34 58 Colombia 47 62 46 46 51 52 51 38 59 Guatemala 32 35 46 44 52 53 67 61 60 Ecuador 34 42 45 46 52 51 57 51 61 Paraguay 35 37 46 45 51 52 56 53 62 Korea, Rep. of 28 47 43 37 54 60 66 51 63 Nicaragua 40 48 48 48 50 49 62 51 64 Dominican Rep. 30 44 47 48 50 49 67 61 65 Syrian Arab Rep. 37 46 44 46 52 50 54 51 Percentage of Population Percentage of In Urban Of Working Age Labor Force in Areas Below Age 15 (15-64 years) Agriculture 1960 1975 1960 1975 1960 1975 1960 1970 66 Peru 47 57 44 44 52 53 53 45 67 Tunisia 32 47 43 44 53 52 57 50 68 Malaysia 26 30 45 44 51 53 63 50 69 Algeria 31 50 44 48 52 49 67 61 70 Turkey 30 43 41 42 55 54 79 71 71 Costa Rica 34 40 48 42 49 55 51 42 72 Chile 69 83 39 36 57 59 30 24 73 China, Rep. of 35 64 45 39 52 61 56 37 74 Jamaica 30 45 42 46 54 48 39 30 75 Lebanon 35 60 41 43 53 52 38 20 76 Mexico 50 63 46 46 51 51 55 45 77 Brazil 45 60 44 42 54 55 52 46 78 Panama 41 51 44 43 52 53 51 42 79 Iraq 43 62 46 47 51 51 53 47 80 Uruguay 73 81 28 28 64 63 21 15 81 Romania 34 45 25 25 65 65 65 49 82 Argentina 71 80 31 29 64 64 20 16 83 Yugoslavia 28 39 31 26 63 66 64 50 84 Portugal 23 29 29 27 63 62 44 33 85 Iran 33 44 45 46 51 51 54 46 86 Hong Kong 88 95 41 32 56 64 8 4 87 Trinidad and Tobago 21 25 43 39 53 56 22 19 88 Venezuela 68 82 46 45 51 53 35 26 89 Greece 43 65 27 23 65 64 56 41 90 Singapore 69 90 43 33 55 63 8 3 91 Spain 57 70 27 27 64 62 42 26 92 Israel 78 84 36 33 59 60 14 10 Industrialized Countries 66 76 26 24 63 64 15 11 103 93 South Africa 47 50 40 41 56 55 32 31 94 Ireland 46 55 31 30 58 59 36 27 95 Italy 59 67 25 24 66 64 31 19 96 United Kingdom 78 78 23 24 65 62 4 3 97 New Zealand 76 83 33 30 59 61 15 12 98 Japan 63 75 30 25 64 68 33 20 99 Austria 50 53 22 24 66 61 24 15 100 Finland 38 55 30 22 62 67 36 21 101 Australia 80 86 30 28 61 63 11 8 102 Netherlands 75 79 30 26 61 64 11 8 103 France 62 76 26 24 62 63 22 14 104 Belgium 66 72 24 23 65 63 8 5 105 Germany, Fed. Rep. 78 83 21 22 68 64 14 8 106 Norway 3] 46 26 24 63 62 20 12 107 Denmark 74 82 25 22 64 64 18 11 108 Canada 69 78 34 27 59 65 13 8 109 United States 70 76 31 25 60 64 7 4 110 Sweden 72 84 22 21 66 64 14 8 111 Switzerland 51 57 24 23 66 65 11 8 Capital Surplus Oil Exporters 23 31 43 45 54 53 53 32 112 Saudi Arabia 12 21 43 45 54 53 72 66 113 Libya 23 31 43 44 53 53 53 32 114 Kuwait 69 89 35 47 63 51 2 2 Centrally Planned Economies 40 57 33 26 61 61 48 39 115 China, People's Rep. 19 24 37 33 58 61 75 68 116 Korea, Dem. Rep. 29 43 44 42 53 55 62 55 117 Albania 31 38 41 41 54 55 71 66 118 Cuba 51 62 36 38 61 56 39 31 119 Mongolia 37 51 42 44 54 53 70 62 120 Hungary 40 48 25 20 66 67 38 25 121 Bulgaria 38 58 26 22 67 67 57 47 122 USSR 49 61 31 26 63 65 42 26 123 Poland 47 57 33 24 61 67 48 39 124 Czechoslovakia 47 58 28 23 64 65 26 17 125 German Oem. Rep. 72 75 21 22 65 61 18 13 Table 15: Demographic Indicators Crude Birth Crude Death Percentage Change in: Rate Per Rate Per Crude Crude Total Thousand Thousand Birth Death Fertility Population Population Rate Rate Rate 1960 1975 1960 1975 1960-1975 1960-1975 1975 Low Income Countries 48 47 26 20 -2.1 -21.1 6.2 1 Bhutan 45 43 27 20 -4.5 -25,9 6.2 2 Cambodia 49 47 22 18 -4.1 -18.2 6.7 3 Lao PDR 44 42 23 22 -4.6 -4.4 6.2 4 Ethiopia 51 49 31 25 -3.9 -19.4 6.7 5 Mali 50 50 30 25 0.0 -16.7 6.7 6 Bangladesh 51 46 25 18 -9.8 -28.0 6.6 7 Rwanda 52 51 28 22 -1.9 -21.4 6.9 8 Somalia 48 48 26 21 0.0 -19.2 6.1 9 Upper Volta 50 49 31 25 -2.0 -19.4 6.5 10 Burma 43 34 22 11 -20.9 -50.0 5.5 11 Burundi 48 48 30 24 0.0 -20.0 6.3 12 Chad 45 44 26 24 -2.2 -7.7 5.3 13 Nepal 46 46 26 20 0.0 -23.1 6.2 14 Benin 51 49 29 22 -3.9 -24.1 6.7 15 Malawi 49 54 30 26 10.2 -13.3 6.1 16 Zaire 47 44 25 20 -6.4 -20.0 5.9 17 Guinea 47 46 29 22 -2.1 -24.1 6.2 18 India 44 36 21 15 -18.2 -28.6 5.7 19 Viet Nam 42 41 21 16 -2.4 -23.8 6.2 20 Afghanistan 48 51 34 31 6.3 -8.8 6.9 21 Niger 52 52 27 25 0.0 -7.4 7.1 22 Lesotho 38 40 24 19 5.3 -20.8 5.1 23 Mozambique 43 43 24 20 0.0 -16.7 5.7 24 Pakistan 49 47 23 16 -4.1 -30.4 7.2 25 Tanzania 51 47 27 19 -7.9 -29.6 6.7 26 Haiti 39 45 20 16 15.4 -20.0 4.9 27 Madagascar 50 50 27 20 0.0 -25.9 6.7 104 28 Sierra Leone 45 45 25 20 0.0 -20.0 5.9 29 Sri Lanka 36 27 10 9 -25.0 -10.0 4.2 30 Central African Emp. 46 43 29 22 -6.5 -24.1 5.5 31 Indonesia 47 40 23 iT -14.9 -26.1 5.5 32 Kenya 49 50 20 15 2.0 -25.0 7.6 33 Uganda 49 47 21 15 -4.1 -28.6 6.1 34 Yemen Arab Rep. 51 50 28 20 -2.0 -28.6 7.2 Middle Income Countries 45 40 17 12 -9.2 -27.3 6.1 35 Togo 51 50 29 23 -2.0 -20.7 6.7 36 Egypt 44 35 19 13 -20.5 -31.6 5.2 37 Yemen, PDR 51 49 28 20 -3.9 -28.6 7.2 38 Cameroon 43 41 26 21 -4.7 -19.2 5.5 39 Sudan 50 49 22 17 -2.0 -22.7 7.0 40 Angola 50 47 31 24 -6.0 -22.6 6.5 41 Mauritania 45 45 26 24 0.0 -7.7 5.9 42 Nigeria 50 49 26 22 -2.0 -15.4 6.7 43 Thailand 46 34 17 10 -26.1 -41.2 6.3 44 Bolivia 45 44 21 17 -2.2 -19.1 6.2 45 Honduras 53 48 23 14 -9.4 -39.1 7.3 46 Senegal 48 47 25 22 -2.1 -12.0 6.3 47 Philippines 45 36 15 10 -20.0 -33.3 6.4 48 Zambia 50 51 23 19 2.0 -17.4 6.9 49 Liberia 43 50 26 20 16.3 -23.1 5.7 50 El Salvador 49 40 17 10 -18.4 -41.2 6.2 51 Papua New Guinea 44 41 23 17 -6.8 -26.1 6.0 52 Congo, People's Rep. 44 45 26 20 2.3 -23.1 5.8 53 Morocco 50 48 21 14 -4.0 -33.3 7.1 54 Rhodesia 48 47 17 14 -2.1 -17.7 6.6 55 Ghana 50 49 26 21 -2.0 -19.2 6.7 56 Ivory Coast 46 45 25 20 -2.2 -20.0 6.2 57 Jordan 47 47 20 14 0.0 -30.0 7.1 58 Colombia 45 33 12 8 -26.7 -33.3 5.9 59 Guatemala 45 43 17 13 -4.5 -23.5 6.1 60 Ecuador 46 45 14 10 -2.2 -28.6 6.3 61 Paraguay 43 39 13 9 -9.3 -30.8 6.2 62 Korea, Rep. of 41 24 13 8 -41.5 -38.5 4.0 63 Nicaragua 51 46 19 13 -9.8 -31.6 6.9 64 Dominican Rep. 49 38 16 10 -22.5 -37.5 6.9 65 Syrian Arab Rep. 47 46 18 14 -2.1 -22.2 7.1 Crude Birth Crude Death Percentage Change in: Rate Per Rate Per Crude Crude Total Thousand Thousand Birth Death Fertility Population Population Rate Rate Rate 1960 1975 1960 1975 1960-1975 1960-1975 1975 66 Peru 43 42 17 13 -2.3 -23.5 5.8 67 Tunisia 47 34 19 13 -27.7 -31.6 6.2 68 Malaysia 39 31 9 6 -20.5 -33.3 5.7 69 Algeria 51 48 20 14 -5.9 -30.0 7.2 70 Turkey 43 34 16 12 -20.9 -25.0 5.8 71 Costa Rica 47 29 10 6 -38.3 -40.0 4.6 72 Chile 37 23 12 8 -37.8 -33.3 3.7 73 China, Rep. of 40 23 7 5 -42.5 -28.6 2.8 74 Jamaica 39 30 10 7 -23.1 -30.0 5.4 75 Lebanon 43 40 14 9 -7.0 -35.7 6.3 76 Mexico 44 40 10 8 -9.1 -20.0 6.5 77 Brazil 40 38 11 8 -5.0 -27.3 5.2 78 Panama 41 31 10 7 -24.4 -30.0 5.1 79 Iraq 49 48 20 14 -2.1 -30.0 7.1 80 Uruguay 23 20 9 9 -13.1 0.0 2.9 81 Romania 22 19 10 9 -13.6 -10.0 2.6 82 Argentina 24 21 9 8 -12.5 -11.1 3.0 83 Yugoslavia 24 18 10 9 -25.0 -10.0 2.4 84 Portugal 24 20 8 11 -16.7 37.5 2.6 85 Iran 47 45 21 15 -4.3 -28.6 6.9 86 Hong Kong 35 18 7 5 -48.6 -28.6 3.0 87 Trinidad and Tobago 38 23 9 6 -39.5 -33.3 3.4 88 Venezuela 46 37 10 7 -19.6 -30.0 5.3 89 Greece 19 16 8 10 -15.8 25.0 2.3 90 Singapore 38 18 8 5 -52.6 -37.5 2.8 91 Spain 21 19 9 9 -9.5 0.0 2.9 92 Israel 27 26 6 7 -3.7 16.7 3.7 Industrialized Countries 18 16 10 10 -13.6 0.0 2.3 93 South Africa 42 42 17 15 0.0 -11.8 5.6 94 Ireland 105 22 22 12 10 0.0 -16.7 3.7 95 Italy 18 16 10 10 -11.1 0.0 2.3 96 United Kingdom 17 15 12 11 -11.8 -8.3 2.4 97 New Zealand 26 21 9 8 -19.2 -11.1 3,0 98 Japan 18 18 8 7 0.0 -12.5 2.2 99 Austria 18 14 13 12 -22.2 7.7 2.2 100 Finland 19 14 9 9 -26.3 0.0 1.7 101 Australia 22 19 9 8 -13.6 -11.1 2.8 102 Netherlands 21 15 8 8 -28.6 0.0 2.3 103 France 18 16 12 10 -11.1 -16.7 2.5 104 Belgium 17 14 12 12 -17.7 0.0 2.2 105 Germany, Fed. Rep. 17 12 11 12 -29.4 9.1 1.8 106 Norway 18 16 9 10 -11.1 11.1 2.0 107 Denmark 17 15 9 10 -11.8 11.1 1.9 108 Canada 27 17 8 8 -37.0 0.0 2.4 109 United States 24 16 9 9 -33.0 0.0 2.2 110 Sweden 15 13 10 11 -13.3 10.0 2.4 111 Switzerland 18 14 10 10 -22.2 0.0 2.0 Capital Surplus Oil Exporters 48 46 19 14 -5.9 -32.1 7.2 112 Saudi Arabia 51 48 28 19 -5.9 -32.1 7.2 113 Libya 48 44 19 14 -8.3 -26.3 6.8 114 Kuwait 44 46 10 5 4.5 -50.0 7.2 Centrally Planned Economies 24 18 10 9 -16.1 0.0 2.4 115 China, People's Rep. 31 26 16 9 -16.1 -43.8 3.8 116 Korea, Dem. Rep. 41 37 13 9 -9.8 -30.8 5.2 117 Albania 40 32 11 7 -20.0 -36.4 4.9 118 Cuba 33 21 9 6 -36.4 -33.3 4.0 119 Mongolia 41 38 17 9 -7.3 -47.1 5.6 120 Hungary 16 16 10 12 0.0 20.0 2.0 121 Bulgaria 18 16 9 10 -11.1 11.1 2.2 122 USSR 24 18 8 8 -25.0 0.0 2.4 123 Poland 24 18 9 9 -25.0 0.0 2.1 124 Czechoslovakia 17 17 10 11 0.0 10.0 2.2 125 German Dem. Rep. 17 12 13 13 -29.4 0.0 2.1 Table 16: Population Projections, 1976-2000, and Hypothetical Stationary Populationa Mid-1976 Projected Hypothetical Assumed Year Year when Population Population Size of when Net Stationary in year 2000 Stationary Reproduction Population Population Rate of 1 is Reached (millions) (millions) (millions) is Reached Low Income Countries 1 Bhutan 1 2 5 2035 2165 2 Cambodia 8 15 33 2035 2160 3 Lao PDR 3 5 11 2035 2180 4 Ethiopia 29 54 184 2050 2175 5 Mali 6 11 37 2050 2175 6 Bangladesh 80 146 334 2035 2165 7 Rwanda 4 8 26 2050 2170 8 Somalia 3 7 22 2050 2170 9 Upper Volta 6 9 26 2050 2175 10 Burma 31 50 91 2020 2145 11 Burundi 4 7 19 2050 2175 12 Chad 4 6 14 2035 2180 13 Nepal 13 22 50 2035 2160 14 Benin 3 5 12 2035 2170 15 Malawi 5 9 28 2050 2175 16 Zaire 25 47 157 2050 2165 17 Guinea 6 10 29 2050 2170 18 India 620 958 1,593 2020 2150 19 Viet Nam 48 86 201 2035 2125 20 Afghanistan 14 24 68 2050 2175 21 Niger 5 9 33 2050 2175 22 Lesotho 1 2 5 2035 2160 23 Mozambique 10 17 50 2040 2135 24 Pakistan 71 135 315 2035 2155 25 Tanzania 15 32 113 2050 2160 26 Haiti 5 9 19 2035 2130 106 27 Madagascar 9 19 70 2050 2165 28 Sierra Leone 3 5 12 2035 2160 29 Sri Lanka 14 21 28 2010 2095 30 Central African Emp. 2 3 10 2050 2175 31 Indonesia 135 198 330 2020 2165 32 Kenya 14 31 121 2050 2120 33 Uganda 12 23 61 2035 2150 34 Yemen Arab Rep. 6 9 26 2050 2145 Middle Income Countries 35 Togo 2 4 12 2040 2150 36 Egypt 38 59 89 2005 2100 37 Yemen, PDR 2 3 9 2040 2130 38 Cameroon 8 13 37 2040 2155 39 Sudan 16 30 67 2025 2115 40 Angola 6 12 37 2040 2160 41 Mauritania 1 2 6 2040 2155 42 Nigeria 77 154 478 2040 2155 43 Thailand 43 76 129 2015 2080 44 Bolivia 6 9 25 2040 2100 45 Honduras 3 7 20 2040 2100 46 Senegal 5 9 24 2040 2155 47 Philippines 43 75 126 2015 2080 48 Zambia 5 11 38 2040 2135 49 Liberia 2 3 9 2040 2135 50 El Salvador 4 7 13 2015 2075 51 Papua New Guinea 3 5 10 2025 2120 52 Congo, People's Rep. 1 3 8 2040 2135 53 Morocco 17 35 72 2025 2115 54 Rhodesia 7 15 48 2040 2105 55 Ghana 10 20 59 2040 2135 56 Ivory Coast 7 14 41 2040 2135 57 Jordan 3 5 11 2025 2110 58 Colombia 24 37 53 2005 2065 59 Guatemala 7 12 26 2025 2090 60 Ecuador 7 15 31 2025 2080 61 Paraguay 3 5 8 2015 2075 62 Korea, Rep. of 36 53 73 2005 2070 63 Nicaragua 2 5 12 2025 2110 64 Dominican Rep. 5 9 17 2015 2075 65 Syrian Arab Rep. 8 15 31 2025 2085 Mid-1976 Projected Hypothetical Assumed Year Year when Population Population Size of when Net Stationary in year 2000 Stationary Reproduction Population Population Rate of 1 is Reached (millions) (millions) (millions) is Reached 66 Peru 16 29 56 2025 2085 67 Tunisia 6 9 15 2005 2095 68 Malaysia 13 19 28 2005 2095 69 Algeria 16 35 100 2040 2100 70 Turkey 41 63 97 2005 2095 71 Costa Rica 2 3 5 2005 2065 72 Chile 11 15 20 2005 2065 73 China, Rep. of 16 25 33 2005 2065 74 Jamaica 2 4 6 2005 2065 75 Lebanon 3 5 9 2010 2070 76 Mexico 62 126 254 2020 2075 77 Brazil 110 205 353 2010 2070 78 Panama 2 3 4 2005 2070 79 Iraq 12 25 65 2030 2090 80 Uruguay 3 4 4 2005 2065 81 Romania 21 26 32 2005 2075 82 Argentina 26 33 40 2005 2070 83 Yugoslavia 22 26 30 2005 2095 84 Portugal 10 12 14 2005 2090 85 Iran 34 60 103 2010 2100 86 Hong Kong 5 6 8 2005 2060 87 Trinidad and Tobago 1 2 2 2005 2065 88 Venezuela 12 24 43 2010 2070 89 Greece 9 10 11 2005 2065 90 Singapore 2 3 4 2005 2060 91 Spain 36 45 56 2005 2065 92 Israel 4 5 7 2005 2060 Industrialized Countries 107 93 South Africa 26 46 81 2010 2075 94 Ireland 3 4 6 2005 2095 95 Italy 56 63 68 2005 2065 96 United Kingdom 56 61 66 2005 2040 97 New Zealand 3 4 6 2005 2070 98 Japan 113 133 141 2005 2045 99 Austria 8 8 8 2005 2035 100 Finland 5 5 5 2005 2015 101 Australia 14 17 21 2005 2070 102 Netherlands 14 16 17 2005 2030 103 France 53 60 66 2005 2055 104 Belgium 10 10 11 2005 2030 105 Germany, Fed. Rep. 62 63 63 2005 2005 106 Norway 4 4 5 2005 2045 107 Denmark 5 6 6 2005 2030 108 Canada 23 28 31 2005 2040 109 United States 215 254 276 2005 2035 110 Sweden 8 8 9 2005 2015 111 Switzerland 6 7 7 2005 2015 Capital Surplus Oil Exporters 112 Saudi Arabia 9 19 48 2030 2120 113 Libya 3 5 13 2030 2090 114 Kuwait 1 2 7 2030 2090 Centrally Planned Economies 115 China, People's Rep. 836 1,093 1,398 2005 2090 116 Korea, Dem. Rep. 16 26 40 2005 2095 117 Albania 3 4 6 2005 2065 118 Cuba 10 14 19 2005 2070 119 Mongolia 2 2 4 2005 2070 120 Hungary 11 11 12 2005 2030 121 Bulgaria 9 10 11 2005 2075 122 USSR 257 320 373 2005 2065 123 Poland 34 41 47 2005 2060 124 Czechoslovakia 15 17 20 2005 2075 125 German Dem. Rep. 17 17 17 2005 2010 TOTAL 4,020 5,916 10,059 aFor the assumptions used in the projections, see Technical Notes. Table 17: Health-Related Indicators Life Mortality Rates Per Thousanda Population Per: Percentage of Expectancy Population with at Birth Infants Children Access to Safe Aged 0-1 Aged 1-4 Physiciana Nursing Persona Water 1960 1975 1960 1975 1960 1975 1960 1974 1960 1974 1975 Low Income Countries 36 44 142 122 37,000 21,185 4,515 6,710 1 Bhutan 36 44 2 Cambodia 41 45 15,91Ô 3 Lao PDR 40 40 21,570 4 Ethiopia 34 38 91,000 69,340 8 5 Mali 35 38 123 120 39,000 33,000 1,490 2,480 6 Bangladesh 39 42 140 .. 9,350 .. 75,460 56 7 Rwanda 36 41 133 144,000 53,550 11,680 11,480 68 8 Somalia 35 41 30,000 15,560 2,010 .. 38 9 Upper Volta 32 38 182 100,000 59,570 4,370 4,520 25 10 Burma 43 50 56 31 9,900 6,910 .. 7,040 17 11 Burundi 34 39 138 63,000 45,990 7,090 12 Chad 34 39 70,000 44,370 .. 6,990 26 13 Nepal 36 44 72,000 36,450 .. 36,770 8 14 Benin 34 41 110 45 47,000 36,060 .. 3,220 34 15 Malawi 35 41 142 33,000 .. .. 6,550 16 Zaire 40 44 104 63,000 27,950 .. 11,770 19 17 Guinea 34 41 156 48,000 22,380 .. 4,230 14 18 India 42 50 139 122 44 5,800 4,160 9,610 6,530 31 19 Viet Nam 40 45 .. .. 20 Afghanistan 33 35 .. 269 .. 24 40,000 26,100 32,030 28,410 9 21 Niger 36 39 200 162 71,000 41,060 8,800 4,840 27 22 Lesotho 38 46 .. 114 .. 20,320 .. 2,970 17 23 Mozambique 36 44 .. 93 21,000 16,680 4,660 24 Pakistan 42 51 142 113 .. 17 11,000 3,970 .. 11,350 25 25 Tanzania 37 45 190 .. 20,000 20,800 .. 3,180 39 26 Haiti 43 50 200 150 27 .. 10,600 8,510 11,880 6,920 12 108 27 Madagascar 36 44 69 53 8,800 11,610 3,130 3,580 25 28 Sierra Leone 36 44 26,000 .. 29 Sri Lanka 61 68 57 45 1 4,500 6,295 4,150 2,532 19 30 Central African Emp. 35 41 200 27 37,000 27,970 4,300 2,260 31 Indonesia 40 48 82 41,000 18,160 .. 8,630 11 32 Kenya 43 50 .. 51 2 10,000 5,800 2,320 1,300 17 33 Uganda 43 50 160 , 15,000 20,690 9,450 6,870 35 34 Yemen Arab Rep. 37 45 .. 160 .. 26,440 .. 11,400 Middle Income Countries 49 58 72 46 10 5 3,050 2,430 2,235 1,570 52 35 Togo 34 41 127 121 45 34,000 22,280 .. 2,490 16 36 Egypt 45 52 109 101 39 2,600 2,340 .. 4,420 37 Yemen, PDR 37 45 40 .. 38 Cameroon 36 41 72 34,000 26,220 5,210 2,270 39 Sudan 41 49 159 132 31,000 12,370 .. 1,550 40 Angola 32 39 24 14,000 15,170 .. 1,870 41 Mauritania 36 39 30,000 17,770 7,130 3,790 42 Nigeria 34 41 207 163 32,000 25,440 6,020 6,230 43 Thailand 49 58 49 27 10 5 7,800 8,530 4,900 4,330 25 44 Bolivia 42 47 11 7 3,900 2,120 .. 3,520 34 45 Honduras 41 54 52 34 14 9 5,400 3,360 1,790 1,540 41 46 Senegal 36 40 193 158 35,000 15,360 4,110 1,920 47 Philippines 49 58 85 72 10 7 1,600 .. 1,590 .. 40 48 Zambia 39 45 12,860 8,110 .. 2,430 42 49 Liberia 37 44 159 29 17 12,000 11,500 5,710 4,500 50 El Salvador 47 58 76 58 17 7 5,400 4,070 2,030 1,140 53 51 Papua New Guinea 39 48 .. 11,340 .. 2,290 20 52 Congo, People's Rep. 36 44 200 13,000 6,160 1,460 640 38 53 Morocco 45 53 149 117 9,700 13,800 2,190 54 Rhodesia 44 52 .. 5,700 55 Ghana 37 44 113 63 21,000 11,220 .. 870 35 56 Ivory Coast 36 44 22,000 15,270 3,170 2,220 57 Jordan 46 53 54 22 5 5,900 2,440 .. 1,020 58 Colombia 55 61 100 56 12 8 2,400 2,180 3,741 1,920 64 59 Guatemala 44 53 92 75 28 26 4,200 .. .. .. 39 60 Ecuador 51 60 100 70 22 15 2,600 2,840 2,280 2,880 36 61 Paraguay 54 62 90 84 6 3 2,300 2,220 .. 2,340 13 62 Korea, Rep. of 53 61 58 38 3,000 2,010 .. 1,500 66 63 Nicaragua 46 53 70 46 9 .. 2,700 1,720 .. 760 46 64 Dominican Rep. 49 58 101 43 12 6 1,600 1,870 .. 55 65 Syrian Arab Rep. 46 54 31 22 .. 4 4,600 2,910 2,620 Life Mortality Rates Per Thousanda Population Per: Percentage of Expectancy Population with at Birth Infants Children Access to Safe Aged 0-1 Aged 1-4 Physiciana Nursing Persona Water 1960 1975 1960 1975 1960 1975 1960 1974 1960 1974 1975 66 Peru 49 56 92 65 16 6 1,800 2,870 47 67 Tunisia 46 54 74 63 10,000 6,350 980 68 Malaysia 52 59 69 35 6 6,500 4,400 2,600 1,570 34 69 Algeria 46 53 36 12 8,770 77 70 Turkey 49 57 16 3,000 2,130 1,240 68 71 Costa Rica 72 Chile 61 68 71 38 73 2,600 1,580 1700 640 72 73 China, Rep. of 74 Jamaica 56 64 63 63 71 70 125 31 52 79 14 20 82 10 3 8 1,810 1,690 2,600 2,420 1,592 3,510 650 7,270 440 470 3,740 540 70 86 75 Lebanon 57 63 12 8 1,000 1,330 3,670 76 Mexico 56 63 74 50 15 10 1,700 .. 7,210 62 7] Brazil 56 61 70 3,600 1,660 78 Panama 67 57 36 2,700 1,240 .. 1,440 79 Iraq 80 Uruguay 61 45 67 53 70 .. 47 104 48 2.. 16 21 5,600 1,100 2,370 910 6,680 3,310 77 66 98 81 Romania 82 Argentina 64 69 68 75 62 35 59 52 43 740 660 630 300 180 83 Yugoslavia 84 Portugal 65 62 62 68 68 88 78 41 38 52 52 1,500 1,300 450 850 850 760 1,350 1,430 1,040 450 810 66 85 Iran 44 51 .. 120 3,800 2,570 1,910 51 86 Hong Kong 63 70 38 15 2 3,100 1,490 3,040 1,550 87 Trinidad and Tobago 62 70 45 38 3 2 2,550 88 Venezuela 57 65 54 46 6 5 1,500 870 .. 470 89 Greece 68 72 40 24 790 500 1,260 1,280 90 Singapore 63 70 35 14 2 2,400 1,400 650 390 91 Spain 68 72 44 12 1,000 670 166 92 Israel 68 71 31 22 410 350 Industrialized Countries 70 72 25 15 1 1 860 650 390 230 93 South Africa 47 52 2,000 1,970 490 440 log 94 Ireland 69 72 29 18 950 850 180 95 Italy 69 72 44 21 2 610 500 920 390 96 United Kingdom 70 72 23 16 960 750 420 270 97 New Zealand 71 72 23 16 700 850 160 98 Japan 67 73 31 10 3 920 870 460 330 99 Austria 68 71 38 21 550 500 600 300 100 Finland 68 70 21 10 1,600 750 220 130 101 Australia 70 72 20 17 860 720 102 Netherlands 73 74 18 11 900 670 320 103 France 70 73 2] 14 930 680 190 104 Belgium 70 73 31 15 780 570 105 Germany, Fed. Rep. 69 71 34 20 690 520 450 280 106 Norway 73 75 19 11 840 610 330 150 107 Denmark 72 74 22 10 810 620 270 120 108 Canada 71 72 2] 15 910 600 300 140 109 United States 70 71 26 16 780 610 340 160 110 Sweden 72 73 17 8 1,100 650 150 111 Switzerland 71 72 21 11 740 590 390 300 Capital Surplus Oil Exporters 45 53 5,800 1,140 340 87 112 Saudi Arabia 37 45 13,000 6,660 5,510 64 113 Libya 45 53 5,800 1,140 2,040 340 8] 114 Kuwait 58 67 44 760 1,140 190 290 89 Centrally Planned Economies 66 70 830 480 530 245 115 China, Peoples Rep. 51 62 116 Korea, Dem. Rep. 53 61 117 Albania 61 69 3,600 1,200 530 520 118 Cuba 62 70 1,200 910 119 Mongolia 50 61 120 Hungary 67 70 640 460 440 220 121 Bulgaria 67 72 710 480 550 270 122 USSR 68 70 520 340 340 210 123 Poland 66 70 1,100 590 660 270 124 Czechoslovakia 69 70 570 430 280 170 125 German Dem. Rep. 68 73 950 560 aData reported for a number of countries are for years other than those specified. See Technical Notes. Table 18: Education Numbers Enrolled in Numbers Numbers Adult Primary School Enrolled in Enrolled in Literacy as Percentage of Secondary Higher Education Rate8 Age Groupa School as as Percentage Percentage of of Population Total Female Age Groupa Aged 2024a (percent) 1960 1975 1960 1975 1960 1975 1960 1975 1960 1974 Low Income Countries 30 52 16 41 2 8 (.) 1 10 23 1 Bhutan 3 8 (.) 4 2 Cambodia 64 38 41 32 3 9 1 2 3 Lao PDR 25 57 t6 47 1 5 (.) (.) 20 4 Ethiopia 5 23 3 14 1 6 (.) (.) .. 7 5 Mali 7 22 4 16 2 3 1 5 10 6 Bangladesh 47 73 26 51 8 25 1 3 23 7 Rwanda 49 58 30 54 2 2 .. (.) 10 23 8 Somalia 9 58 5 41 1 4 (.) 1 50 9 Upper Volta 8 14 5 11 1 2 (.) 7 10 Burma 56 85 52 81 10 26 1 2 58 67 11 Burundi 18 23 9 17 1 3 (.) (.) 10 10 12 Chad 16 37 4 20 (.) 2 (.) .. 15 13 Nepal 10 27 3 10 6 18 1 2 10 19 14 Benin 26 44 15 28 2 11 1 10 15 Malawi 63 61 45 48 1 3 (.) 25 16 Zaire 60 90 38 66 3 11 (.) 1 . 15 17 Guinea 30 28 16 18 2 14 1 7 18 India 41 65 27 52 23 29 2 5 24 36 19 Viet Nam .. .. 20 Afghanistan 9 23 2 7 1 8 (.) 1 8 14 21 Niger 5 17 3 12 (.) 2 .. (.) 5 22 Lesotho 83 102 103 144 3 12 (.) 1 40 23 Mozambique 48 52 36 35 2 6 (.) 24 Pakistan 30 51 13 31 11 15 1 3 16 21 25 Tanzania 24 57 16 46 2 3 .. (.) 17 63 26 Haiti 46 50 42 44 4 4 (.) .. 10 20 110 27 Madagascar 52 80 45 85 4 11 (.) 1 40 28 Sierra Leone 23 35 15 28 3 11 (.) 1 7 15 29 Sri Lanka 95 77 90 77 27 54 1 1 61 78 30 Central African Emp. 32 79 12 53 1 8 (.) 15 31 Indonesia 67 81 55 75 6 18 1 2 47 62 32 Kenya 47 109 30 101 2 13 (.) 1 .. 40 33 Uganda 49 53 32 43 3 6 (.) 1 25 25 34 Yemen Arab Rep. 8 25 (.) 6 (.) 3 .. (.) 10 10 Middle Income Countries 79 97 74 91 12 35 2 7 61 63 35 logo 44 98 24 68 2 19 .. (.) 10 12 36 Egypt 66 72 52 55 16 40 5 13 20 40 37 Yemen, PDR 13 78 5 48 5 19 .. 1 10 38 Cameroon 65 111 43 97 2 12 .. 1 12 39 Sudan 25 40 14 27 3 11 (.) 2 15 40 Angola 21 79 13 57 2 11 (.) 1 . 41 Mauritania 8 17 3 9 (.) 3 .. 5 10 42 Nigeria 36 49 27 39 3 1C (.) 1 25 43 Thailand 136 78 128 75 8 25 2 2 68 82 44 Bolivia 64 72 50 65 12 31 4 10 40 45 Honduras 67 89 67 88 8 13 1 4 47 61 46 Senegal 27 53 17 42 3 11 1 2 5 10 47 Philippines 95 105 93 103 26 56 13 20 72 87 48 Zambia 48 96 38 86 1 14 1 41 43 49 Liberia 31 62 18 44 2 16 (.) 2 9 15 50 El Salvador 80 71 77 69 11 18 1 8 51 63 51 PapuaNewGuinea 70 59 60 44 1 12 .. 3 .. 32 52 Congo, People's Rep. 78 153 53 140 4 46 1 3 .. 50 53 Morocco 47 61 27 44 5 16 1 3 17 26 54 Rhodesia 98 99 87 87 6 9 (.) .. 55 Ghana 59 60 39 53 3 35 (.) 1 .. 25 56 Ivory Coast 46 86 24 64 2 17 (.) 2 9 20 57 Jordan 78 83 59 77 25 42 1 4 32 62 58 Colombia 77 105 77 108 12 36 2 7 .. 74 59 Guatemala 45 62 40 56 7 13 2 4 38 47 60 Ecuador 83 102 79 100 12 38 3 8 67 69 61 Paraguay 98 106 90 102 11 20 2 6 74 81 62 Korea, Rep. of 94 109 88 109 27 59 5 10 71 92 63 Nicaragua 66 85 66 87 7 21 1 6 38 57 64 Dominican Rep. 98 104 98 105 7 19 1 9 .. 51 65 Syrian Arab Rep. 65 102 39 81 16 48 4 11 30 53 Numbers Enrolled in Numbers Numbers Adult Primary School Enrolled in Enrolled in Literacy as Percentage of Secondary Higher Education Ratea Age Groupa School as as Percentage Percentage of of Population Total Female Age Groupa Aged 2024a (percent) 1960 1975 1960 1975 1960 1975 1960 1975 1960 1974 66 Peru 83 111 71 106 18 46 4 14 61 72 67 Tunisia 66 95 43 75 12 20 1 4 55 68 Malaysia 96 93 83 91 19 41 1 3 23 60 69 Algeria 46 89 37 72 8 19 (.) 3 35 70 Turkey 75 104 58 94 14 30 3 7 40 55 71 Costa Rica 96 109 95 109 21 52 5 17 84 89 72 Chile 109 119 107 118 24 48 4 17 84 90 73 China, Rep. of 67 47 37 54 82 74 Jamaica 82 111 83 112 43 54 2 7 82 86 75 Lebanon 109 132 104 125 19 38 6 23 68 76 Mexico 80 112 77 109 11 35 3 9 62 76 77 Brazil 95 90 93 90 11 18 2 10 61 64 78 Panama 96 124 94 120 29 54 5 18 78 82 79 Iraq 65 93 36 63 19 35 2 9 15 26 80 Uruguay 111 103 112 103 37 62 8 14 90 91 81 Romania 98 109 95 109 24 62 5 9 98 82 Argentina 98 108 99 109 31 55 11 28 91 93 83 Yugoslavia 96 97 91 93 34 54 9 19 77 85 84 Portugal 131 96 129 94 20 81 4 9 62 70 85 Iran 41 90 27 67 12 37 1 5 15 50 86 Hong Kong 91 120 85 119 24 69 4 9 71 90 87 Trinidad and Tobago 110 111 109 111 22 39 1 3 90 88 Venezuela 100 96 100 96 21 43 4 19 65 82 89 Greece 105 105 103 104 41 36 4 14 80 82 90 Singapore 112 111 102 108 32 53 6 8 75 91 Spain 111 115 116 115 23 78 4 18 87 94 92 Israel 98 128 97 129 48 39 10 24 84 84 Industrialized Countries 108 104 106 103 53 83 9 22 99 93 South Africa 89 107 85 107 15 96 3 5 111 94 Ireland 110 108 113 108 35 65 9 16 98 95 Italy 111 107 110 106 34 71 7 24 91 98 96 United Kingdom 95 116 94 116 67 76 9 16 98 97 New Zealand 108 111 106 110 73 83 13 27 99 98 Japan 103 100 103 100 74 95 10 25 98 99 99 Austria 105 102 105 102 50 75 8 17 99 100 Finland 97 87 95 84 75 107 7 17 99 100 101 Australia 103 98 104 98 51 71 13 22 100 102 Netherlands 105 100 104 100 58 86 13 24 99 103 France 144 109 143 109 46 85 8 18 99 104 Belgium 109 105 108 105 69 84 9 22 99 105 Germany, Fed. Rep. 133 129 134 128 53 70 6 20 99 106 Norway 118 102 119 102 53 90 7 21 99 107 Denmark 105 102 104 102 56 59 10 28 99 108 Canada 118 104 115 103 50 94 16 35 98 109 United States 118 104 64 91 32 54 98 99 110 Sweden 96 97 97 98 55 70 9 22 99 111 Switzerland 118 92 119 93 38 69 7 8 99 Capital Surplus Oil Exporters 59 90 24 84 9 45 (.) 7 112 Saudi Arabia 12 44 2 32 2 16 (.) 3 15 113 Libya 59 145 24 135 9 45 1 7 22 114 Kuwait 119 90 110 84 38 60 0 7 47 55 Centrally Planned Economies 100 99 100 99 47 62 9 16 115 China, People's Rep. .. .. .. .. 116 Korea, Dem. Rep. .. .. .. .. .. 117 Albania 94 106 86 103 20 43 5 17 118 Cuba 109 126 109 123 14 35 3 9 119 Mongolia 79 85 80 85 51 94 8 6 120 Hungary 101 99 100 99 47 62 7 11 97 98 121 Bulgaria 93 96 92 96 55 87 11 19 122 USSR 100 99 100 99 73 71 11 22 98 99 123 Poland 109 100 107 99 50 53 9 16 98 98 124 Czechoslovakia 93 96 93 97 25 35 11 11 95 125 German Dem. Rep. 112 95 113 96 39 90 16 25 a Data reported for a number of countries are for years other than those specified. See Technical Notes. Technical Notes These notes outline the scope of the data pre- small countries which are members of the sented in the tables and indicate the methodol- United Nations and/or the World Bank are given ogy and concepts used in their preparation. The in the Notes to Table 1 below. sources cited in the Bibliography following the notes carry comprehensive definitions and de- Calculation of Growth Rates scriptions of the concepts employed. While the statistics and measures in this vol- Most growth rates have been calculated for ume have been selected carefully, consistent two time periods: 1960 to 1970, and 1970 to 1976, with coverage of a large number of countries or 1975 when data for 1976 were not available. over extended time periods, readers are urged All growth rates shown are in real terms and have to exercise great care in interpreting them, par- been computed using the least-squares method.2 ticularly in comparing indicators across coun- By using the least-squares method, all observa- tries, since statistical practices, definitions, tions within the relevant time period have been methodology, and coverage differ widely among taken into account, and the resulting growth countries. The statistical systems in many de- rates reflect general trends without being un- veloping countries still are weak, and this affects duly influenced by cyclical factors or excep- the reliability of the data. tional variations in a particular year. Median Values Country Groupings and Coverage The median value is the central value of a set The 125 countries covered are grouped as of values that have been arranged in order of follows: magnitude. For each indicator and group of Developing Countries with populations over countries, the values for individual countries are 113 a million1 are divided on the basis of 1976 simply arranged from the largest to the smallest per capita gross national product (GNP) and the median located as that which exceeds into: half the values and is exceeded by half the Low Income Countrieswith per capita values. Where there is an odd number of coun- income of US$250 and below (34 tries, the median is the middle item; where there countries) is an even number, the median is half-way be- Middle In come Countrieswith per cap- tween (i.e., the mean of) the two middle items. ita income above US$250 (58 countries) Industrialized Countries (19 countries) Table 1: Basic Indicators Major Capital Surplus Oil Exporting Coun- tries (3 countries) The population estimates for mid-1976 are CentrallyPlanned Economies (11 countries)1 from the World Bank Atlas, 1977, with minor revisions to reflect more recent information. Within each group, countries are listed in as- The data on area are from the UN Demo- cending order of per capita GNP in 1976 (see graphic Yearbook, 1975. World Bank Atlas, 1977), except for Cambodia, Gross national product (GNP) measures the Lebanon, and Viet Nam, for which 1974 esti- total domestic and foreign output claimed by mates of per capita GNP are the most recent residents of a country. It comprises Gross Do- available. Countries are listed in this same order mestic Product (see below) plus the factor in- in all the tables. They are shown alphabetically, with their reference numbers, on the page pre- 2The least-squares growth rate is calculated by regressing all the values of the variable studied within the relevant period ceding the table of Contents. over time using the following logarithmic form: Countries with populations under one million Log Xt = a + bt + et where: are not covered in the tables, but basic data for Xt = variable t = time 1Albania, Cuba, the Democratic Republic of Korea, Mongolia, e = error term and the People's Republic of China are grouped with other b slope coefficient centrally planned economies. Romania and Yugoslavia are then, r = (antilog b) - I grouped with the developing countries. Capital surplus oil Thus, (ant. b) - 1 provides a least-squares estimate of the exporting countries are shown in a separate category. growth rate. come (such as investment receipts and workers' in the following manner: 1976 GNP in national remittances) accruing to residents from abroad, currency units is first expressed in weighted less the income earned in the domestic economy average prices for the base period 1974-76, con- accruing to persons abroad. verted into US dollars at the weighted average Gross domestic product (GDP) measures the exchange rate for this period, and then adjusted total final output of goods and services produced for US inflation between the 1974-76 base pe- by the country's economy-that is, within the riod and the current year, 1976. The resulting country's territory by residents and non-resi- estimate of GNP is then divided by the mid-1976 dents, regardless of its allocation between do- population. This method is designed to reduce mestic and foreign claims. The value of both the impact of temporary under- or over-valua- GDP and GNP is calculated without making de- tions of a particular national currency and gen- ductions for the value of expenditure on capital erally assures a greater degree of comparability goods for replacement purposes. of GNP per capita estimates among countries. Population, incomes, and surface area of small The conversion of the GNP of different coun- UN/World Bank member countries are as tries to a common denominator is known to follows: create distortions. The UN's International Com- UN/World Bank Members with parison Project (ICP), in which the World Bank Population Under 1 Million has been a major participant, is designed to pro- Population GNP Per Area vide more realistic comparisons of income levels Capita (thousand based on comparisons of purchasing power.1 To square date work has been completed for 16 countries, (millions) (US dollars) kilometers) based on 152 detailed categories of expenditure Mid-1976 1976 in each country. Maldives 0.1 120 (.) The table on the next page provides examples Guinea-Bissau 0.5 140 36 Como ros 0.3 180 2 of the differences between the conventionally Gambia, The 0.5 180 11 computed GNP per capita data for 1970 and Cape Verde 0.3 270 4 1973, and incomes as calculated using the ICP Equatorial methodology. 114 Guinea 0.3 330 28 The index of per capita food production shows Western Samoa 0.2 350 3 Botswana 0.7 410 600 the average annual quantity of food produced Grenada 0.1 420 (.) per capita in the years 1974-76 as a percentage of Swaziland 0.5 470 17 the average annual amount produced in 1965-67. Sao Tome The estimates are derived from those of the UN and Principe 0.1 490 1 Food and Agriculture Organization, which are Guyana 0.8 540 215 Seychelles 0.1 610 (.) calculated by dividing indexes of the quantity Mauritius 0.9 680 2 of food production (comprising cereals, starchy Fiji 0.6 1,150 18 roots, sugar, pulses, edible oil crops, nuts, fruits, Surinam 0.4 1,370 163 vegetables, wine, beverages, livestock, and live- Cyprus 0.6 1,480 9 stock products) by indexes of population. Barbados 0.2 1,550 (.) Malta 0.3 1,780 [.) The data on growth of energy production and Bahrain 0,3 2,140 1 the per co pita consumption of energy are taken Dj ibouti 0.1 2,160 22 from the UN. They refer to commercial forms of Gabon 0.5 2,590 268 primary energy: coal and lignite, crude petro- Oman 0.8 2,680 213 leum, natural gas and natural gas liquids, and Bahamas 0.2 3,310 14 Iceland 0.2 6,100 103 hydro and nuclear electricity, converted into Luxembourg 0.4 6,460 3 coal equivalent. The use of firewood and other Qatar 0.2 11,400 11 traditional fuels, substantial in certain develop- United Arab ing countries, is not taken into account. Emirates 0.7 13990 84 The average annual rate of inflation is the The estimates of GNP underlying the 1976 GNP "implicit GDP deflator," which is calculated by per capita figures and the real growth rates of dividing, for each year of the period in question, GNP per capita have been prepared by the World the value of GDP in current market prices by the Bank on the basis of national accounts series compiled by national statistical offices, supple- 'For a detailed description of the methodology, see I. B. Kravis, A. Heston, and R. Summers, International Compari- mented by data gathered on World Bankmissions. Sons of Real Product and Purchasing Power (Baltimore and The 1976 GNP per copito figures are taken London: The Johns Hopkins University Press, 1978). This book contains the results of Phase 2 of the United Nations from the World Bank Atlas, 1977, and calculated International Comparison Project. Per Capita GNP Converted to US Dollars at Official Exchange Rates, and Per Capita GDP in "International" Dollars, 1970 and 1973 1970 1973 (1) (2) (3) (1) (2) (3) Us International Ratio US International Ratio Dollarsa Dollarsb (2) (1) Dollarsa Dollarsb (2) (1) Kenya 143 303 2.1 183 378 2.1 India 97 335 3.5 112 404 3.6 Philippines 228 572 2.5 294 763 2.6 Korea, Rep. of 277 593 2.1 411 932 2.3 Colombia 347 858 2.5 452 1,126 2.5 Malaysia 437 915 2.1 609 1,185 1.9 Iran 665 975 1.5 1,156 1,797 1.6 Hungary 1,326 2,045 1.5 1,712 2,796 1.6 Italy 1,908 2,326 1.2 2,398 2,889 1.2 Japan 2,630 2,833 1.1 3,760 4,022 1.1 United Kingdom 2,503 3,027 1.2 3,204 3,742 1.2 Netherlands 3,774 3,293 0.9 4,813 4,239 0.9 Belgium 3,804 3,344 0.9 5,121 4,538 0.9 France 3,671 3,483 0.9 4,860 4,695 0.9 Germany, Fed. Rep. 4,421 3,738 0.8 5,690 4,789 0.8 United States 4,810 4,854 1.0 6,224 6,240 1.0 aWorld Bonis Atlas Series. blnternatjonal Comparison Project. value of GDP in constant market prices, both in value of all goods and services purchased or re- national currency. ceived as income in kind, by households and non-profit institutions. It includes the imputed Tables 2 and 3: Growth and Structure of rent for owner-occupied dwellings. Production Gross domestic investment consists of the National accounts series in national currency outlays for additions to the fixed assets of both units have been used to calculate the indicators the private and public sectors, plus the net value 115 in these tables. The growth rates in Table 2 are of inventory changes. calculated in constant prices; the shares of GDP Gross domestic savings shows the amount of in Table 3 are expressed in current prices. gross domestic investment financed from do- Gross domestic product is defined in the Notes mestic output. It is calculated as the difference to Table 1 above. between gross domestic investment and the def- The agricultural sector covers agriculture, for- icit on current account of goods and non-factor estry, hunting, and fishing. The industrial sector services (excluding net current transfers). It comprises mining, manufacturing, construction, comprises both public and private savings. and electricity, water, and gas. All other branches The resource balance is the difference be- of economic activity are regarded as services. tween exports and imports of goods and non- factor services. Exports or imports of goods and Tables 4 and 5: Growth of Selected Demand non-factor services represent the value of all Aggregates; Structure of Demand goods and non-factor services sold to or pur- National accounts series in national currency chased from the rest of the world; this includes units have been used to compute the indicators merchandise, freight, insurance, travel, and other in these tables. The growth rates in Table 4 are non-factor services. The value of factor services calculated in constant prices; the shares of GDP (such as investment receipts and workers' re- in Table 5 are expressed in current prices. Most mittances from abroad) is excluded from this of the definitions employed are those of the UN measure. System of National Accounts (SNA). Gross domestic product is defined in the Notes Table 6: Growth of Merchandise Trade to Table 1 above. The merchandise trade statistics are from the Public consumption [General Government UN trade data system, supplemented by the consumption in SNA terminology) includes all International Monetary Fund's (IMF) Direction current expenditure for purchases of goods and of Trade and International Financial Statistics. services by all levels of government. Capital ex- Merchandise exports and imports cover, with penditure on national defense is regarded as a a few exceptions, all international changes in consumption expenditure. ownership of merchandise passing across the Private consumption consists of the market customs borders of the compiling country. Ex- ports are valued f.o.b. (free on board), imports to Table 6 above. The measure includes the c.i.f. (cost, insurance, and freight). These values value of re-exports. are expressed in current US dollars. All the trade shares in this table are calculated The growth rates of merchandise exports and on the basis of trade value statistics (in current imports are in real terms. Those for the majority US dollars) published by the IMP in its Direc- of countries are calculated from quantum in- tion of Trade. Reflecting the practice used in the dexes of exports and imports taken from the data source, the country groups shown as the United Nations Conference on Trade and Devel- destinations of merchandise exports differ some- opment (UNCTAD) Handbook of International what from those used elsewhere in the volume. Trade and Development Statistics. The growth Specifically, rates for developed countries are obtained by Developed countries include Gibraltar and deflating annual export (or import) values, ex- Iceland in addition to those referred to as pressed in current US dollars, using indexes of "industrialized" elsewhere in the volume. export (or import) unit values developed from Developing countries include Kuwait, data in the UN Monthly Bulletin of Statistics. Libya, and Saudi Arabia, referred to as cap- The terms of trade (or the 'net barter terms of ital surplus oil exporting countries else- trade") are calculated as the ratio of a country's where in the volume, and Cuba, elsewhere export unit value index to the index of import treated with other centrally planned econ- unit values. The terms of trade index numbers omies. shown here for 1960 and 1976, where 1970 = 100, thus indicate changes over time in the level of Table 9: Balance of Payments and Debt export prices expressed as a percentage of im- Service Ratios port prices. The unit value indexes are from the The current account balance is the difference same UNCTAD and UN sources cited above, in between (i) exports of goods and services plus connection with the growth rates of exports and inflows of unrequited transfers, and (ii) imports imports. of goods and services plus unrequited transfers to the rest of the world. Excluded from this figure 116 Table 7: Structure of Merchandise Trade are all interest payments on external public and The trade shares in this table are derived from publicly guaranteed debt, which are shown sep- trade values given in UN trade tapes and in the arately. The latter represent interest payments UN Monthly Bulletin of Statistics, expressed in on the disbursed portion of outstanding public current US dollars. and publicly guaranteed debt plus commitment Merchandise exports and imports are defined charges on undisbursed debt. The current ac- in the Notes to Table 6 above. count estimates have been taken from the IMF's In the categorization of exports, primary com- data files; estimates of interest payments are modities comprise Standard International Trade from the World Bank's Debt Reporting System. Classification (Revised) Sections 0 to 4 (food Debt service is the sum of interest payments and live animals, beverages and tobacco, ined- and repayments of principal on external public ible crude materials, fuels, oils, fats, and waxes) and publicly guaranteed debt. Debt service data and the non-ferrous metals of SITC Division 68. are taken from the Bank's Debt Reporting Sys- Manufactures refers to commodities in the tem. The ratio of debt service to exports of goods Standard International Trade Classification (Re- and services is a commonly used rule of thumb vised) Sections 5 through 9 (chemicals and re- for assessing debt-servicing capacity. It is im- lated products, manufactured articles, machin- portant to note, however, that the debt service ery and transport eqdipment), excluding Divi- ratios shown here do not cover private debt, sion 68 (non-ferrous metals). which for some countries is substantial. The In the categorization of imports, food commod- table on the following page illustrates the differ- ities are those in the SITC (Rev.) Sections 0, 1, ences between interest payments as recorded 4 and Division 22 (food and live animals, bever- in the Debt Reporting System (and used to calcu- ages, tobacco, oils and fats). Fuels refers to com- late the debt service ratios in Table 9), and total modities in the SITC (Rev.) Section 3. Other im- interest payments as recorded in the IMF's Bal- ports are calculated as the residual from the ance of Payments data files. Also it should be total value of imports. noted that debt contracted for the purchase of military equipment is not usually reported. Since the World Bank's Debt Reporting Sys- Table 8: Destination of Merchandise Exports tem is concerned primarily with developing Merchandise exports are defined in the Notes countries, data on external debt are not given here for other groups of countries. Neither are Since the World Bank's Debt Reporting Sys- comparable data for those countries available tem is concerned primarily with developing from other sources. countries, data on external debt are not given here for other groups of countries. Neither are Comparison of Interest Payments, 1976 comparable data for those countries available Debt Reporting Balance of from other sources. Systema Payments' Gross international reserves comprise the sum (In millions of US dollars) of a country's holdings of gold, Special Draw- Pakistan 129 167 ing Rights (SDRs), the reserve position of IMF Korea, Rep. of 345 480 Philippines 87 246 members in the Fund, and holdings of foreign Egypt 77 257 exchange under the control of monetary author- Turkey 114 169 ities. The gold component of these reserves is Israel 196 632 valued throughout at SDR35 per ounce. This is Spain 267 816 equivalent to US$35 per ounce before December Brazil 734 2,040 Mexico 1,070 1,357 1971; US$38 per ounce from December 1971 Chile 209 326 through January 1973; US$42.22 per ounce from Colombia 125 262 February 1973 through June 1974; and to the US Greece 177 210 dollar price of gold as measured by the market China, Rep. of 145 261 valuation of the SDR beginning in July 1974. The Singapore 35 331 Panama 60 447 data for holdings of international reserves are from the IMF data files. The reserve levels shown alnterest payments due on external public and publicly guar- for 1970 and 1976 refer to the end of the year in- anteed medium- and long-term loans. blnterest payments due on external private, public and pub- dicated and are expressed in current US dollars. licly guaranteed short-, medium- and long-term loans. The reserve holdings at the end of 1976 are also expressed in terms of the number of months' im- Table 10: Flows of External Capital ports of goods and services they could pay for, with imports at the average level for 1976. The data on the gross inflow and repayment of principal (amortization) of public and publicly Table 12: Official Development Assistance 117 guaranteed medium- and long-term loans are From Members of the OECD from the World Bank's Debt Reporting System. The net inflows are gross inflows less the repay- Official development assistance (ODA) con- ment of principal. sists of disbursements of grants or loans made Net direct private investment is the net at concessional financial terms by official agen- amount invested by non-residents of the country cies of the members of the Development As- sistance Committee of the Organisation for Eco- in enterprises in which they (or other non-resi- dents) exercise a significant degree of mana- nomic Co-operation and Development (OECD), gerial control; these net figures also include the with the objective of promoting economic de- value of direct investment abroad by residents. velopment and welfare. It includes the value of The IMF's balance of payments data files have technical cooperation. been used in compiling these estimates. Figures for 1976 and earlier years are actual Since the World Bank's Debt Reporting Sys- figures published by the OECD; those for 1977 tem is concerned primarily with developing are preliminary estimates. All others are projec- countries, data on external debt are not given tions by World Bank staff, based on OECD and here for other groups of countries. Neither are World Bank estimates of GNP growth, on infor- comparable data for those countries available mation on budget appropriations for aid, and on aid policy statements by governments. They are from other sources. projections, not predictions, of what will occur, based on present plans. Commitments made in Table 11: External Public Debt and 1979 and 1980 will have a relatively small effect International Reserves on disbursements in those years. External public debt outstanding represents Finland became a member of the Develop- the amount of public and publicly guaranteed ment Assistance Committee (DAC) in January loans which has been disbursed, net of cancelled 1975. New Zealand became a member in 1973; loan commitments and repayments of principal. ODA figures for New Zealand are not available The data shown refer to the end of the year in- for 1960 and 1965. dicated, and are from the World Bank's Debt The nominal values of both GNP and ODA Reporting System. have been converted into constant 1977 prices using the US dollar GNP deflator. This meas- Table 15: Demographic Indicators ures inflation in the OECD countries (excluding The crude birth and death rates are based on Greece, Portugal, Spain, and Turkey) in terms of the computations of the UN Population Division. the US dollar. It takes account of parity changes The total fertility rates (TFR) have been com- between the US dollar and national currencies puted by the UN Population Division. The TFR for example, when the US dollar depreciates, represents the number of children that hypo- rates of inflation as calculated in national cur- thetically would be born per woman, if she were rencies have to be adjusted upwards by the to live to the end of her child-bearing years and amount of the depreciation in the dollar). bear children at each age in accordance with the Estimates prepared by the DAC indicate the prevailing age-specific fertility rates. following ODA flows from members of the Or- ganization of Petroleum Exporting Countries: Table 16: Population Projections, 1976-2000, 1973 1974 1975 1976 and Hypothetical Stationary Population Value (million US dollars) 1,308 3,446 5,512 5,182 The estimates of mid-1976 population are As Percentage of OPEC those of Table 1. Donors' GNP 1.4 2.0 2.7 2.1 To project population in the year 2000, data for each country on total population, fertility, OPEC donor countries are Algeria, Iran, Iraq, and mortality rates in 1975, the base year for the Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, projections, were obtained from the World United Arab Emirates, and Venezuela. Bank, the UN, and the US Bureau of the Census. Assumptions about future developments were Tables 13 and 14: Population and Labor Force based on analyses of recent fertility and mortal- Growth; Structure of Population ity trends in each country. The growth rates of total population have In projecting mortality rates, it was assumed been calculated by the least-squares method that female life expectancy at birth (see Notes to from UN and World Bank estimates of mid- Table 17 for a definition of this term) would con- year country populations. With minor revisions tinue to rise until it reached 77.5 years, after to reflect more recent information, they corres- which point it would remain constant. It was 118 pond to the data published in the World Bank also assumed that average life expectancy at Atlas, 1977. birth would increase according to the country's The estimates of urban population are those per capita income level. The projected death of the UN Population Division based on national rates that result for countries of over US$540 data. The urban population growth rates are per capita in 1976 are similar to those in the UN calculated from the UN estimates. Since these "medium" projections (1975); those for lower estimates reflect the different definitions of income countries are slightly higher than the "urban" used in different countries, cross-coun- "medium" UN projections. try comparisons should be interpreted cau- Fertility rates were assumed to decline ac- tiously. cording to the country's per capita income level The labor force describes economically active and its past family planning performance. These persons, including the armed forces and the un- assumptions result in birth rate projections that employed, but excluding housewives, students, are generally similar to the UN "low" projec- and economically inactive groups. The labor tions, for countries with family planning pro- force growth rates are projections derived by grams whose impact has been moderate to the International Labour Office (ILO) from 1960 strong. For other countries, the projected decline and 1970 census information, but adjusted to en- in birth rates is the same as in the UN "me- sure conceptual uniformity. The ILO projections dium" projections. do not take account of international migration. Throughout the projections, it was assumed The percentage of the total labor force depend- that international migration would have no ent on agriculture has been calculated by the appreciable impact. ILO, based on national data. The estimates of the years when replacement The estimates of population below the age of level fertility would be reached, and hence of 15 are from the UN Population Division, based eventual stationary population size, are specula- on national data. tive. They should not be regarded as predictions. The working age population refers to the total They are included to provide a summary indica- population between 15 and 64 years of age. tion of the long-run implications of recent These estimates have been compiled by the UN trends, on the basis of highly stylized assump- Population Division. tions. In particular, no account is taken of the effects that countries' future income growth were assumed to increase to replacement level might have on their fertility rates. Countries by the years 2000-05, and then remain constant. have been ascribed certain fertility and mortal- The hypothetical stationary population size ity characteristics on the basis of their present was projected starting from the year where NRR income levels, but if, for example, a country = 1. Using life expectancy at birth, the mean age with low per capita GNP at present achieved of child bearing, the sex ratio at birth, and Model rapid income growth over the projection period, Life Tables appropriate to the country in ques- its fertility rate would probably decline more tion, the total fertility rate was estimated for five- rapidly than projected here. year intervals up until the year in which female In a stationary population the birth rate is life expectancy at birth reached 77.5 years. For equal to the death rate. The population does not intermediate years, total fertility rates were ob- grow and its age structure remains constant. tained by interpolating between the value in year The net reproduction rate (NRR) indicates 2000 and that in the year in which NRR=1. the number of daughters that a newborn girl will According to the projections, the world popu- bear during her lifetime, assuming fixed age- lation would increase to an ultimate size of specific fertility rates and a fixed set of mortality about 10 billion within about 200 years, an in- rates. The NRR thus measures the extent to crease of about 250 percent over the present which a cohort of newborn girls will reproduce level of 4 billion. themselves under given schedules of fertility and mortality rates. Table 17: Health-Related Indicators A net reproduction rate of 1 indicates that Life expectancy at birth is an annual average fertility is at replacement level: at this rate child- figure for those born in the five-year period bearing women, on average, bear only enough ended in 1975. The measure indicates the num- daughters to replace themselves in the popula- ber of years newborn children would live if sub- tion. A population will continue to grow after ject to the mortality risks prevailing for the replacement level fertility has been reached, cross-section of population at the time of their because its past higher birth rates will have pro- birth. Data are from the UN Population Division. duced an age distribution with a relatively high The infant and child mortality rates are an- proportion of people currently in, or still to nual rates calculated by the UN Population Divi- 119 enter, the reproductive ages. This results in more sion. The infant mortality rate does not include births than deaths until the population changes stillbirths. The child mortality rate is generally to the older age distribution intrinsic in the low considered a reasonable indicator of the extent birth rate. The time taken for a country's popu- of malnutrition among children. The data refer lation to become stationary after reaching re- to a variety of years, generally not more than placement level fertility thus depends on its three years' distant from those quoted. particular age structure and previous fertility The estimates of population per physician and patterns. per nursing person are derived from World To estimate the stationary population size, the Health Organization (WHO) data. Nursing per- projected characteristics of the population in sons include graduate, practical, and assistant the year 2000 were taken as base. It was as- nurses. Both because country definitions of sumed that fertility rates would decline continu- nursing personnel vary, and because the data ously until replacement level (NRR=1) was shown are for years other than (though gener- reached, after which the total fertility rate would ally not more than three years' distant from) remain at that level. The year in which replace- those specified, the data are not strictly com- ment level fertility would be reached was first parable between countries. calculated from the fertility rate in the year 2000 The percentage of total population with ac- of the country in question, and its income level. cess to safe water, estimated by WHO, is the In several industrialized countries, fertility is proportion of people with reasonable access to at present below replacement level. Since a pop- safe water supplies, defined to include treated ulation will not become stationary if its net re- surface water or untreated but uncontaminated production rate is other than one, to make esti- water such as that obtained from boreholes, mates of the hypothetical stationary population springs, and sanitary wells. in these countries it was necessary to assume that their fertility rates would regain replace- Table 18: Education ment levels. For the sake of consistency with the The data in this table refer to a variety of estimates made for other countries, the total years, generally not more than three years' dis- fertility rates in these industrialized countries tant from those quoted. Estimates of total (and female) enrollment in calculated in the same manner. Both primary and primary school, of students of all ages, are ex- secondary enrollment ratios have been obtained pressed as percentages of the total (or total fe- from the UN Educational, Scientific and Cultural male) population of primary school age, to give Organization (Unesco) 1976 Yearbook. "gross primary enrollment ratios." Although The data on numbers enrolled in higher edu- primary school age is generally considered to be cation as a percentage of the population aged 6 to 11 years, countries' educational systems 20-24 are from Unesco. The minimum condi- vary. These differences between countries in the tion of entry to higher education is the success- ages and duration of schooling are reflected in ful completion of education at the second level, the ratios given. For countries with universal or proof of equivalent knowledge or experience. primary education, the gross enrollment ratios The adult literacy rate is the percentage of may exceed 100 percent since some pupils may population aged 15 and over able to read and be below or above the official primary school age. write. These rates are based on Unesco and The gross secondary enrollment ratios are World Bank estimates. 120 Bibliography of Data Sources National Accounts and Economic Indicators World Bank data files. World Bank Atlas, 1977 (Washington, D.C.: World Bank). United Nations Statistical Yearbook, various issues (New York: United Nations, Department of Economic and Social Affairs, UN Statistical Office). A System of National Accounts (New York: United Nations, Department of Economic and Social Affairs, UN Statistical Office, 1968). FAQ Production Yearbook, various issues (Rome: Food and Agriculture Organization of the United Nations). National sources. Energy World Energy Supply, 1971-75, UN Statistical Papers Series J, No. 20 (New York: United Nations, Department of Economic and Social Affairs, UN Statistical Office, 1977). Trade UN trade tapes. United Nations Monthly Bulletin of Statistics, various issues (New York: United Nations, Department of Economic and Social Affairs, UN Statistical Office). United Nations Yearbook of International Trade Statistics, various issues (New York: United Nations, UN Statistical Office). Handbook of International Trade and Development Statistics, various issues (Geneva: United Nations Conference on Trade and Development). International Financial Statistics, various issues (Washington, D.C.: International Monetary Fund, Bureau of Statistics). Direction of Trade, various issues (Washington, D.C.: International Monetary Fund, Bureau of Statistics). 121 Balance of Payments, Capital Flows and Debt International Monetary Fund balance of payments data files. Balance of Payments Manual, fourth edition (Washington, D.C.: International Monetary Fund, 1977). Development Cooperation: Efforts and Policies of the Members of the Development Assistance Committee, annual issues (Paris: Organisation for Economic Cooperation and Development). World Bank Debt Reporting System. Population World Bank data files. World Bank Atlas, 1977 (Washington, D.C.: World Bank). UN population tapes. Selected World Demographic Indicators by Countries, 1950-2000 (New York: United Nations, Department of Economic and Social Affairs, Population Division, 1975). Labor Force World Bank data files. International Labour Office tapes. Social Indicators World Bank data files. Demographic Yearbook, various issues (New York: United Nations, Department of Economic and Social Affairs, UN Statistical Office). United Nations Statistical Yearbook, various issues (New York: United Nations, Department of Economic and Social Affairs, UN Statistical Office). World Health Statistics Annual, various issues (Geneva: World Health Organization). World Health Statistics Report, Vol. 29, No. 10, Special Issue on Water and Sanitation (Geneva: World Health Organization, 1976). Unesco Statistical Yearbook, various issues (Paris: United Nations Educational, Scientific and Cultural Organization). World Development Report will be published in September 1978 by Oxford University Press. Addi- tional copies may be ordered through booksellers or from the Press offices or distributors in the following countries: AUSTRALIA. Oxford University Press, G.P.O. Box 2784Y, Melbourne 3001, Victoria, CANADA. Oxford University Press, 70 Wynford Drive, Don Mills, On- tario M3C 1J9. HONG KONG. Oxford University Press, 5th Floor, News Building, 633 Kings Road, North Point. JAPAN. Oxford University Press KK, Enshu Building, 3-3-3 Otsuka, Bunkyo-Ku, Tokyo. NEW ZEALAND. Oxford University Press, P.O. Box 11-344, Walton House, 66 Ghuznee Street, Wellington. SOUTH AFRICA. Oxford University Press, P.O. Box 1141, Cape Town 8000; P.O. Box 10413, Johannesburg; 36 Riley Road, Overport 4051. SINGAPORE. Oxford University Press, 41 Jalan Pemimpin, Singapore 20. UNITED KINGDOM. Oxford University Press, Walton Street, Oxford 0X2 6DP, England. UNITED STATES. Oxford University Press, Inc., 200 Madison Avenue, New York, New York 10016. Wor%d Bank Headquarters: 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. Telephone: (202) 477-1234 Cable address: INTBAFRAD WASHINGTON DC European Office: 66, avenue d'léna 75116 Paris, France Tokyo Office: Kokusai Building 1-1 Marunouchi 3-chome Chivoda-ku, Tokyo 100, Japan