Global Economic
Prospects for Developing Countries 2008
Complete Report (5.4mb pdf)
Table of Contents, Foreword and Acknowledgements (62k pdf)
Overview in English
(459k pdf)
This edition of Global Economic Prospects is
being released during a period of increased uncertainty
following four years of record
growth in developing countries. In addition to
examining economic prospects over the near
and longer term, it takes an in-depth look at
the current level of and recent trends in technological
achievement and the main factors
that determine the extent to which developing
countries succeed in implementing foreign
technologies.
Notwithstanding the financial turmoil
provoked by a reassessment of risks in the
U.S. mortgage market, and despite large losses
in some financial markets, exposure to asset backed
securities appears to be broadly based.
Losses so far have been manageable, although
credit conditions have tightened. For developing
economies, sovereign risk premiums have
increased but remain low by historical standards.
Equity values, exchange rates, and
commodity prices have become more volatile,
and the vulnerability of countries with large
current account deficits or pegged exchange
rates has become more visible.
Chapter 1:
Prospects for Developing Countries
(1.2mb pdf)
Following the sudden and sharp drop in
market valuations of U.S. mortgage-backed
securities in mid-2007, global markets have
entered a phase of heightened uncertainty.
This has been reflected in increased volatility
in equity markets, commodity prices, and
exchange rates.
Notwithstanding the increased volatility,
the impact on developing countries has been
relatively minor to date. Risk premiums have
escalated, but remain relatively low in a historic
context, and capital inflows remain
plentiful, although bank lending has dropped
off. Aggregate growth in developing countries
continues to be strong, reflecting
improved fundamentals in many countries,
sizable revenues from commodity exports,
and continued access to international finance
at moderately higher cost. Their strong gross
domestic product (GDP) growth is partially
offsetting weaker U.S. domestic demand,
which is now expected to remain subdued
well into 2008.
Despite the resilience demonstrated by the
global economy, risks exist and increased
volatility has made several developing countries
more vulnerable to financial disturbance,
especially those with large current account
deficits, pegged exchange rates, or domestic
banking sectors that have borrowed heavily
in international markets.
Chapter 2:
Technology and Technological Diffusion in Developing Countries
(1.5mb pdf)
Technological progress—improvements in the
techniques (including firm organization) by
which goods and services are produced, marketed,
and brought to market—is at the heart
of human progress and development. At the
national level, technological progress can
occur through invention and innovation;
through the adoption and adaptation of preexisting
but new-to-the-market technologies;
and through the spread of technologies across
firms, individuals, and the public sector
within a country.
For developing countries, the bulk of technological
progress occurs through the latter
two channels. Much of this chapter is concerned
with measuring the extent to which
this process has occurred in countries in different
regions and at different income levels.
Chapter 3:
Determinants of Technological Progress: Recent Trends and Prospects
(960k
pdf)
As discussed in the previous chapter, the pace
at which technologies spread between and
within countries has picked up. As a result,
most developing countries are narrowing the
technological divide that separates them from
high-income countries. Nevertheless, the technology
gap remains large; for many, including
several low-income countries, it is widening
rather than closing, in part because of the
slowness with which technologies spread
within countries. For virtually all developing
countries, the domestic pace of technological
progress is determined mainly by the speed
with which already existing technologies are
adopted, adapted, and successfully applied
domestically, and done so throughout the
economy, not just in the main cities.
This chapter explores some of the major
determinants of this kind of within-country
diffusion of technology. It adopts an analytical
framework that distinguishes between the
Appendix: Regional
Economic Prospects
(750k pdf)
East Asia and the Pacific
Recent developments
Growth in the developing countries of East
Asia and the Pacific strengthened in 2007,
with gross domestic product (GDP) advancing
a full 10 percent in the year, up from 9.7 percent
in 2006. The expansion was powered by
China’s 11.3 percent gain, with other countries
in the region growing at a 5.9 percent
pace. Domestic demand was a key
driving force for many economies, as a downturn
in the global high-tech cycle for most of
2006–07 served to blunt the momentum of...
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About the Report
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| Global Economic Prospects 2008: Technology Diffusion
in the Developing World |
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“Rapid
technological progress in developing countries has been central to
the reduction of poverty in recent decades. While the integration
of global markets has played and will continue to play a key role
in this, future success will increasingly depend on strengthening
technical competencies and the business environment for innovative
firms in developing countries.”
—
Graeme Wheeler
Managing Director, The World Bank
Technology and technological progress are central to economic and
social well-being. The creation and diffusion of goods and
services are critical drivers of economic growth, rising incomes,
social progress, and medical progress. Global Economic Prospects
2008: Technology Diffusion in the Developing World examines the
state of technology in developing countries and the pace with
which it has advanced since the early 1990s.
It reveals both
encouraging and cautionary trends. On the one hand, the pace of
technological progress in developing countries has been much
faster than in high-income countries—reflecting increased
exposure to foreign technology as a result of linkages with
high-skilled diasporas and the opening of these countries to
international trade and foreign direct investment.
On the other hand,
the technology gap remains large, and the domestic factors that
determine how quickly technologies spread within developing
countries often stymie progress, especially among low-income
countries. Repeating the rapid progress of this past decade will
be difficult and may require that basic technology literacy is
improved further; that government efforts to adapt and disseminate
pre-existing technologies throughout the economy are strengthened;
and that regulatory regimes are modified to encourage business
innovation.
This year’s
Global Economic Prospects comes on the heels of an extended period
of strong growth and a 15-year period of strong performance in
much of the developing world that has contributed to substantial
declines in global poverty. While high oil prices and heightened
market volatility may signal a coming pause in this process, over
the longer term continued technological progress should continue
to push back poverty.
An online companion
to the prospects section of this report, including access to
additional data and analysis not reported here, is available at www.worldbank.org/globaloutlook.
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