REPORT ON GLOBALIZATION FACTS AND FIGURES TO BE RELEASED AT PRESS CONFERENCE ON 22 APRIL

PRESS RELEASE

UNCTAD/PRESS/PR/Accra/2008/024*

REPORT ON GLOBALIZATION FACTS AND FIGURES

TO BE RELEASED AT PRESS CONFERENCE ON 22 APRIL

Compendium shows that while developing country growth has jumped,

gap with developed nations remains huge

Accra, 22 April 2008 - Rapid economic growth in developing and transition countries since 2002 has slightly closed the chasm in wealth between the developed and developing worlds, UNCTAD's Development and Globalization: Facts and Figures 2008 reports.  But the gap remains large.

The publication, the second in the Facts and Figures series, will be unveiled at a press conference on 22 April during the UNCTAD XII conference in Accra, Ghana.

This compendium of economic statistics and analysis of economic performance, trade, and investment states in its overview that the ratio of per capita gross domestic product (GDP) between developed and developing countries fell from 20 to 1 in 1990 to 16 to 1 in 2006.  Still, with only 16% of the world's population, developed nations generated 73% of world nominal GDP in 2006, although that proportion was down from 80% in 1992.

Developing-country progress has been rapid and all developing regions have benefited from recent growth trends, the compendium says, but there are significant differences: annual per capita GDP expansion between 2003 and 2007 was 6.2% in Asia, 3.7% in Latin American and the Caribbean, and 3.0% in Africa.

Major changes have occurred since the first edition of Facts and Figures in 2004.  UNCTAD Secretary-General Supachai Panitchpakdi notes in his foreword the "quick" and "fundamental" emergence of developing economies: "The biggest and fastest-growing developing countries nowadays are considered to stabilize the world economy due to their dynamism and their openness. Developing countries accounted for 37% of world merchandise exports in 2006 on a rising trend.  Moreover, as many developing countries have achieved current account surpluses, they have become important providers of capital for the rest of the world."

Large current account balances, or “global imbalances”, are a standing feature of international economic policy debates. Crucially, the report says, what is needed for a benign unwinding of global imbalances is a responsible multilateral effort rather than pressure on parts of the developing world. A well-coordinated international macroeconomic approach would considerably enhance the chances for poorer countries to consolidate recent improvements in economic growth.

Mr. Supachai adds that "with economic globalization challenging much of our traditional wisdom," the 2008 edition of the report "is meant to increase the analytical emphasis and to offer some explanation for new and emerging economic trends." The report has chapters on global growth and composition of demand; payments balances and determinants; external resources; international trade in merchandise and services; and population.

Among its statistics is that trade between developing countries, often referred to as South-South trade, tripled between 1995 and 2005. The report notes, however, that "Despite the impressive performance of developing countries as a whole in recent years, progress in LDCs (least developed countries) and other low-income economies has been slow and has continued to rely primarily on exports of low value added primary commodities. These countries have suffered from worsening terms of trade and highly volatile world prices."  Even though the nominal price indices for all non-fuel commodity groups have been above their declining long-term trend in real terms in recent years, most real commodity prices are still far below their levels of the 1970s and early 1980s. Only the real prices for minerals, ores, metals, and crude petroleum have exceeded those levels.

Another detail of interest is that worldwide, the number of people in developing countries living on less than $1 a day fell from 1.25 billion in 1990 to 980 million in 2004.  In sub-Saharan Africa, the proportion of those living in extreme poverty fell from 46.8% to 41.1% over that period, with most of the progress coming since the year 2000.  Still, the current rate of reduction in that region is too slow to meet the Millennium Development Goal of halving extreme poverty around the world by 2015.

From 2000, nominal official development assistance (ODA) started increasing rapidly, surpassing $100 billion in 2005. However, these are nominal trends that mask large increases in ODA associated with exceptional debt relief initiatives. In real terms, ODA delivered by the 23 member countries of the Development Assistance Committee (DAC), stands at about 0.25% of donors’ gross national income. This is similar to the level prevailing in 1990, and well below the target of 0.7%.

The report notes an often under-acknowledged source of income for developing countries: remittances from nationals working overseas.  By 1996, remittances had already exceeded ODA to such countries and had become the second greatest source of financing for developing countries ($177 billion in 2006).  Moreover, these inflows have a direct impact on reducing poverty, the report says, "since remittances frequently go directly to poor and often isolated populations to meet basic needs."

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