World trade prospects over the next 10 years are the brightest since the 1960s, the World Bank said in a report released Tuesday.
Global merchandise trade, the bank said in its annual review of the developing nations' economic outlook, may average more than 6 percent annual growth over the next 10 years, compared with about 4 percent during the past 10 years. A number of developing countries, especially in East and South Asia, may post even bigger gains, it said.The projected trade expansion, it said, will help propel most developing nations - in Latin America, Africa, the Middle East and South Asia - to higher economic growth rates than during the past decade. Former Soviet bloc countries, it projected, will stop contracting and score moderate economic advances.
East Asia, where economic expansion is expected to average nearly 8 percent annually, will remain the world's fastest growth area, the report said. South Asia, it said, may post an average annual gain of as much as 7.5 percent - up significantly from the last 10 years. Growth averaging between 3 percent and 4 percent a year is projected for Latin America, Africa, the Middle East, and the former Soviet bloc region.
Overall, the developing countries' economic growth in the next 10 years may
average nearly 5 percent annually, nearly twice that of the industrial nations, and the report added, their share of world output by the year 2010 may rise to 27 percent, compared with 21 percent last year.
Contributing to the upbeat outlook, the report said, are the recently implemented Uruguay Round trade agreement, expanding economic reforms by less- developed countries, sharply expanding services trade, and "increasingly diverse" capital flows into the developing countries.
"Globalization," the report said, is the name of the game. "It is being driven by a near-universal push toward trade and capital market liberalization, increasing internationalization of corporate production and distribution strategies, and technological change" facilitating trade and capital movements.
Also helping, the report said, is that the industrial nations seem likely to sustain moderate, low-inflationary economic growth over the years ahead. Their average annual growth over the next 10 years may approach 3 percent, the bank estimated.
Commercial services, it said, offer an especially big export market for developing countries. Their services exports could more than double over the next 10 years, the report said. Among the promising export sectors are data processing, software programming, accounting and manufacturing design and development.
Capital inflows to the developing world over the next 10 years are likely to continue to be substantial, rising perhaps by 10 percent or more a year, but below the growth rate of the past four years, a World Bank economist said. The Mexican financial crisis has made investors more wary, he noted.
In general, the World Bank said, its upbeat projections are subject to important "ifs." Assumed, for example, is that developing nations will intensify their economic reforms and that industrial countries will hold down inflation and help their workers adapt successfully to increasing imports from the developing world.