Global Economic Prospects and the Developing Countries 1997

This year’s Global Economic Prospects reviews the implications for developing countries of three important changes in the world economy that globalization is bringing about. First, five large developing and transition economies -- China, India, Indonesia, Brazil, and Russia -- are likely to emerge as key players in the world economy over the next quarter century. This will create broad new opportunities for trade and investment but will also require significant adjustments in international patterns of specialization for both industrial and developing countries. The second change is the expansion of global production networks by multinational enterprises, a trend that has been especially pronounced in developing countries in the 1990s and that opens new avenues for acquiring international know-how and participating in the gains from international trade. Finally, globalization is not only creating remarkable opportunities for countries to enhance their development, it is also posing broad and more complex policy challenges for governments, notable among them the proper handling of the costs of adjustment associated with trade liberalization. [author]