Recent economic performance of developing countries

The GDP growth rate in the developing countries averaged 4.1 percent between 1980 and 1988. Many dynamic countries - chiefly in Asia - did exceedingly well during this period, but many others - typically in Sub-Saharan Africa - regressed. In general, the highly indebted countries have stagnated. If the prospects for the most deprived and highly indebted countries are to be improved, they will need to channel significant real flows into investments. This could be done through a combination of new external debt initiatives and growth inducing domestic policies. Appropriate domestic policies are essential so that external inflows are not negated by higher consumption levels. Perhaps it is time to reassess the Marshall Plan that reinvigorated the depleted post-war Europe. The Marshall Plan provided needed resources in a relatively short period, and since the aid did not carry an interest burden the authorities were not preoccupied with financial engineering.Financial Intermediation,Trade and Regional Integration,Environmental Economics&Policies,Economic Theory&Research,Achieving Shared Growth

Turkey : export miracle or accounting trick?

Turkey's recovery from its debt crisis ( 1978 - 80 ) has made it the paragon of export led growth. The driving force behind the Turkish export miracle has remained a matter of debate. If what happened in Turkey was a spillover of its proximity to the Middle East, there is little other countries can learn from the Turkish experience. If active export subsidies were the main determinants of Turkey's export growth, one wonders about the costs of joining GATT. The last possible explanation, real exchange rate depreciation, would put the focus much more on the macroeconomic policies and trade reforms that made such a depreciation sustainable in real terms. The authors provide an assessment of the relative contributions of all the factors mentioned above and their relationship to Turkey's export growth. They begin with an assessment of whether there was an export miracle once the Middle East is discounted, or was it all a product of accounting tricks in response to changing incentives? In Section II, Turkey's trade statistics are compared with those reported by its main trading partners to assess whether there was significant growth to countries outside the Middle East. Finally, the authors present a simple model which focuses on the role of export incentives, relative prices and foreign income growth in export determination. The authors conclude by confirming the existence of the Turkish export miracle.Economic Theory&Research,Environmental Economics&Policies,Economic Stabilization,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Tax Law

How can Indonesia maintain creditworthiness and noninflationary growth ?

Despite external shocks, Indonesia has maintained creditworthiness through swift adjustment. Indonesia's flexible economic management and clear policy signals have lent stability to the economy, in contrast to the stop and go reforms, uncertainty, and constant debt renegotiations in many high debt countries. The authors use an econometrically estimated macroeconomic model to analyze open economy adjustment in Indonesia - particularly the interaction between the exchange rate, the interest rate, growth, and debt - and to analyze future policy changes in light of Indonesia's objectives for growth, external debt, and inflation.Economic Theory&Research,Environmental Economics&Policies,Macroeconomic Management,Economic Stabilization,Banks&Banking Reform

Developing country experience in trade reform

During the 1980's, many developing countries received financial and policy support for trade policy reform. There has been major reform in exchange rate policy, in the reduction of export restrictions, and in removing impediments to the imports of inputs needed by exporters. Import regimes in many countries have been improved by substituting tariffs for quantitative restrictions. The lowering of import protection has been more modest in the face of foreign exchange constraints. Through adjustment lending, the World Bank has supported trade reform in more than 40 countries. Considering this emphasis, one might expect stronger reforms. Four factors that have constrained reform action are: (a) macroeconomic instability; (b) inadequate conviction about the benefits of reform; (c) weak implementation capacity; and (d) conflicts in design. When considering the impact of policy reform on growth performance, the evidence supports the need for continued stronger efforts to reform trade regimes and complementary policies as part of adjustment lending.TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies,Economic Theory&Research,Trade Policy,Economic Stabilization

Adjustment policies in East Asia

This paper examines the adjustment policies applied by two East Asian newly industrializing economies, Korea and Taiwan, in the period following the quadrupling of oil prices in 1973. As an introduction to the discussion, the policy performance of the two East Asian economies prior to 1973 is analyzed, comparing their performance to that of three Latin American newly industrializing economies, Argentina, Brazil, and Mexico. This is followed by an examination of adjustment policies in the periods of the first and the second oil shocks and a discussion of the policies applied in the subsequent period, when shifts from current account deficits to current account surpluses occurred in the two East Asian economies. Finally, desirable policies for the future are considered.Environmental Economics&Policies,Economic Theory&Research,Economic Stabilization,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Banks&Banking Reform

Population, health and nutrition : FY88 annual sector review

This paper review PHN lending for FY88. PHN lending rebounded in FY88 to $304.9 million for eight projects, a 50 percent increase in volumeover the previous five year average. Lending for health predominated, while population lending accounted for 27 percent of the total. Interest in nutrition increased, but nutrition lending received little emphasis (except in connection with structural adjustment). Important trends included increased attention to project software, continued support for decentralization of health systems, more efforts to involve the private sector in delivering PHN services, more emphasis on health costs and financing, development of new ways to reach clients at periphery, and more emphasis on focused projects. If lending to PHN sectors is to increase from its current low level of 2 to 3 percent of Bank lending to 5 percent or more, current staff resources are inadequate. There is a shortfall in PHN staff resources of about 20 staff years to meet the targeted level of 12 to 14 projects and$ 500 million a year in PHN lending.Health Monitoring&Evaluation,Banks&Banking Reform,Agricultural Knowledge&Information Systems,Health Economics&Finance,Housing&Human Habitats

Long term outlook for the world economy : issues and projections for the 1990s

The authors argue that, at the broad level of global analysis, there are good reasons to be optimistic about the 1990s. First, there are favorable supply side developments in many of the high income countries. Second, considerable scope exists for a recovery of private consumption and investment in the debt stricken developing countries, as well as in Eastern Europe and the USSR. The 1990s will see a continuation of the process of economic integration currently under way, emcompassing mainly the industrialized and the newly industrializing economies, propelled by rapid technological progress and increased competition in international markets, and taking place against a backdrop of policy reforms, economic restructuring, and political liberalization that has been gathering momentum since the early 1980s. According to the authors, the expected pattern of international trade and investment flows in the 1990s is likely to perpetuate two tracks of growth in the developing world. While it may be expected to be high in many Asian industrializing economies, relatively high population growth and low private investment will probably continue to depress living standards in many countries in Latin America and Sub-Saharan Africa. The differences in investment rates of the 1980s between the higher-income and other developing countries will, if not reversed, tend to widen the productivity and technology gap between them.Environmental Economics&Policies,Achieving Shared Growth,Economic Conditions and Volatility,Inequality,Economic Theory&Research

Central bank losses : origins, conceptual issues, and measurement problems

Central bank losses usually originate, the author explains, when a bank takes on other functions besides its normal role, such as subsidized loans to priority sectors, rescues of troubled financial institutions, or takeovers of private or public debt. This paper attempts to review the issues related to Central Banks'quasi fiscal deficits. In the first section, a taxonomic description of origins of quasi fiscal deficits is made. The second section explores the relation between economic and accounting losses. The third section analyzes inflation adjustment and net lending treatment which are relevant to the definition of non financial public sector deficits. Finally, alternative ways of calculating the central banks'quasi fiscal losses are reviewed.Economic Theory&Research,Banks&Banking Reform,Economic Stabilization,International Terrorism&Counterterrorism,Environmental Economics&Policies