World Bank Document

t' 8 ~~~~ottoWorld Development Report, 1980/'Part I Adjustment and growth in the 1980sPart II Poverty and human developmentAnnex World Development IndicatorsF:L . CLOPYPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedThe World Bank August 1980

WorldDevelopmentReport1980The World BankWashington, D.C.August 1980

Oc 1980 by the International Bankfor Reconstruction and Development / The World Bank1818 H Street, N.W., Washington, D.C. 20433 U.S.A.All rights reserved.ISBN 0-19-502833-3 clothISBN 0-19-502834-1 paperbackISSN 0163-8058The Library of Congress has cataloged this serial publication as follows:HC59 World development report. 19 78-W659[New York] Oxford University Press.v. 27 cm. annual.Published for the World Bank.1. Underdeveloped areas-Periodicals. 2. Economic development-Periodicals. 1. International Bank for Reconstruction and Development.HC59.7.W659 330.9'1 72'4 78-67086ii

FoirewordThis third World Development Report reduce poverty, focusing on hu- the converse is true as well-directis published at a time of difficulty man development, an important steps to reduce poverty do notand Lmcertainty for the world eco- complement to the approaches to obviate the need for growth. Thisnomy-particularly for the devel- poverty alleviation emphasized in Report emphasizes that the directoping countries. They must adjust the two previous World Develop- attack on poverty, if it is ultimatelyto external payments imbalances, ment Reports. to be successful, must be comhigherenergy prices and slower Human development-educa- bined with measures to ensuregrowth in world trade. That ad- tion and training, better health that the economies of the develjustmentwill slow their growth and nutrition, and fertility reduc- oping countries continue to exforat least the next few years. tion-is shown to be important not pand. The active support of theThere is much that they them- only in alleviating poverty directly, richer nations is required to assistselves can do to ease the slow- but also in increasing the incomes this process through the provisiondown and to speed the expected of the poor, and GNP growth as of capital and technical knowledgesubsequent recovery. But the bur- well. The vital message is that some and through the opening of theirden of adjustment must be shared: steps we all have long known to markets to developing-countrythe industrialized and centrally be morally right-primary educa- exports. There is a real risk thatplanned countries and the princi- tion, for example-make good the domestic economic problemspal oil exporters also have a major economic sense as well. of these richer countries will causerole to play. The laudable objectives of hu- them to give inadequate attentionThe first part of this Report is man development, though, are far to the immense problems of theprimarily about the economic pol- from easy to achieve. Nor are they developing world, and to the hardicychoices facing both developing without cost. The Report draws on ships that narrow or short-sightedand richer countries and about the years of World Bank experience- policies-in energy, trade and fiimplicationsof these choices for in the analysis of projects, sectors nancial assistance-can inflict.growth. The outlook for growth and national economies, and in This Report reflects the work ofthat it discusses is a cause for deep research-to examine the causes many of my colleagues in the Worldconcern-particularly for low-in- and effects of progress in human Bank. The judgments expressedcome countries and, among them, development and what it takes to do not necessarily reflect the viewsfor the countries of Sub-Saharan implement successful programs in of our Board of Directors or theAfrica. More generosity and ini- this area. governments they represent. Astiative in the provision of conces- While there is now increasing in previous years, the Report insionalaid by richer countries is recognition that growth does not cludes the World Developmenturgently needed. obviate the need for human devel- Indicators, which provides tablesIt is vital, moreover, that suc- opment and other steps to reduce of social and economic data forcessfril adjustment should not un- poverty, it must be stressed that more than 100 countries.duly sacrifice either the currentliving standards of the poor or themeasures needed now to reducepoverty in the future. Growth isvital for poverty reduction, but itis not enough. The second partof the Report reviews other ways toRobert S. McNamara

ivThis report was prepared by a team led by PaulIsenman and comprising Nicholas Hope, Timothy King,Peter Knight, Akbar Noman, Rupert Pennant-Rea andAdrian Wood. The Economic Analysis and ProjectionsDepartment prepared the data and projections used inChapter 2 and in the World Development Indicators.The authors would like to acknowledge the substantialhelp received from many contributors, reviewers andsupport staff. The work was carried out under the generaldirection of Bevan Waide and Hollis Chenery.

Contents1 Introduction IPart I Adjustment and growth in the 1980s 32 The outlook for developing countries 3Adjustment and recovery 3Factors affecting growth 6Regional growth in the 1980s 113 International problems and policies 14Energy 14Trade 18Capital flows 25Part II Poverty and human development 324 Poverty, growth and human development 33Dimensions of poverty 33Three decades of poverty reduction 35Poverty and growth 35Sources of growth 36Raising the incomes of the poor 405 Human development issues and policies 46Education 46Health 53Nutrition 59Fertility 64The seamless web 686 Irnplementing human development programs: some practical lessons 71Political support 71Easing the financial constraint 72Developing administrative strengths 75Ensuring that services are used 78International assistance 80The importance of persistence 817 Pr-iorities and progress in regional perspective 83Issues for planners 83Sub-Saharan Africa 85South Asia 88Middle-income regions 90Lessons for planning 948 Summary and conclusions 95Statistical appendix to Part I 99Bibliographical note 102Annex World Development Indicators 105V

Text tables2.1 Summary of prospects for growth 62.2 Growth of exports and imports, 1970-90 72.3 Percentage shares in world exports of goods and nonfactor services 72.4 Net imports of oil by oil-importing developing countries, 1975-90 82.5 Developing countries' savings and investment rates, 1980-90 92.6 Current account deficits of oil-importing developing countries, 1970-90 102.7 Debt-service ratios of developing countries, 1977-90 102.8 Growth of GNP per person by region, 1960-90 112.9 Developing countries' GNP per person, 1980-2000 133.1 Shares of net world trade in commercial energy, 1977-90 163.2 World merchandise trade, by country group, 1970 and 1977 213.3 Product composition of developing countries' merchandise exports to industrialized countriesand other developing countries, 1977 243.4 Commercial bank claims on developing countries, 1976-79 273.5 Average spreads over LIBOR for external borrowing, 1974-79 273.6 Aid flows to developing countries and multilateral institutions, 1975-90 293.7 Distribution of DAC donors' bilateral official development assistance, 1970-78 304.1 Agricultural population in relation to crop area 394.2 Irrigation and income, selected projects 434.3 Dependency ratios, by income group 435.1 Public expenditures on elementary and higher education per student, 1976 465.2 Primary school enrollment, by income group 475.3 Farmer education and farmer productivity 485.4 Rates of return to education 495.5 Public education spending per household, by income group 505.6 Differences in life expectancy within countries 556.1 Taxes as a percentage of GNP 737.1 Sub-Saharan Africa: GNP per person 85Statistical appendix tablesSA.1 Growth of population, GNP and GNP per person, 1960-90 99SA.2 Commercial primary energy production and consumption, by country group, 1977-90 99SA.3 Composition of world commercial primary energy supply, 1970-2020 99SA.4 Growth of merchandise exports, by product category and country group, 1960-77 and 1977-90 100SA.5 Direction of merchandise trade, 1970 and 1977 100SA.6 Capital flows and debt of the developing countries: oil importers and oil exporters, 1975-90 101SA.7 Capital flows and debt of the oil-importing developing countries:low-income and middle-income, 1975-90 101Figures2.1 Growth of GNP per person: industrialized and oil-importing developing countries, 1965-80 52.2 Developing countries' growth of GNP per person, 1970-90 62.3 Energy production and consumption growth, by country group, 1980-90 82.4 Developing countries' savings and investment rates, 1960, 1980 and 1990 82.5 Net flows of medium- and long-term capital to developing countries, 1980 and 1990 93.1 Petroleum prices, annual averages, 1972-80 143.2 Actual and projected shares in world primary energy supply, 1970-2020 163.3 Growth of developing countries' merchandise exports, 1963-73 and 1973-77 193.4 Growth of developing countries' merchandise exports, by destination, 1973-77 243.5 Developing countries' use of borrowed funds, 1970-90 253.6 International bond issues, 1972-79 284.1 Three decades against poverty 344.2 National income and national poverty 364.3 Population distribution by age, 1980 40vi

4.4 Income of poorest groups 405.1 E.nrollment ratios, by region, 1960-75 475.2 [eath by age groups, developing and industrialized countries, 1980 545.3 T'rends in birth and death rates, 1775-2050 645.4 Income and fertility, 1978 665.5 Influences on fertility 665.6 Policy and poverty 696.1 Literacy rates, selected developing countries, 1950 and 1970 817.1 GNP per person, 1960, 1970 and 1980 857.2 Literacy, by region, 1945-75 857.3 Life expectancy, 1960 and 1978 857.4 Sub-Saharan Africa: life expectancy in relation to income per person, 1978 877.5 South Asia: life expectancy in relation to income per person, 1978 897.6 Middle East and North Africa: life expectancy in relation to income per person, 1978 927.7 Latin America and the Caribbean: life expectancy in relation to income per person, 1978 927.8 East Asia and Pacific: life expectancy in relation to income per person, 1978 - 93BoxesGNP and trade prices 4Taxes and energy 15Fuel from food 17Stabilizing export earnings 20Multilateral trade negotiations: the Tokyo round 21Migration and money 22Food, f'arming and foreign exchange 23Military spending 29Human resources and growth: macroeconomic evidence 38Small is productive 42A strategy that backfired 44Schooling, screening and productivity 49The benefits of women's education 50Unemployment among the educated 51Big is not necessarily bad 52Oral rehydration 56Lessons of experience 58Food and the poor 61Alternative population projections 65Contraceptive technology 69How m.uch would it cost? 72China's barefoot doctors 74Self-help in Sri Lanka 75Rural poverty unperceived 77Private costs of using public services 79The banjars of Bali 80Tradeoffs in Sri Lanka 90Sex, length of life and development 91vii

DefinitionsCountry groups in the analytical members of the Organisation for Zealand, Norway, Sweden, Switzerframeworkof this Report are as Economic Cooperation and De- land, the United Kingdom, thefollows: velopment, apart from Greece, United States and the Commission0 Developing countries are di- Portugal, SpainandTurkey, which of the European Community.vided, on the basis of 1978 gross are included among the middlenationalproduct (GNP) per person, income developing countries. The Organization of Petroleum Exinto:low-income countries, with a GNP * Centrally planned economies porting Countries (OPEC) comprisesper person of US$360 and below; comprise Albania, Bulgaria, China, Algeria, Ecuador, Gabon, Indonesia,and middle-income countries, with a Cuba, Czechoslovakia, the German Iran, Iraq, Kuwait, Libya, Nigeria,GNP per person above US$360. Democratic Republic, Hungary, Qatar, Saudi Arabia, the UnitedThe countries in each group are the Democratic Republic of Korea, Arab Emirates and Venezuela.shown in the tables of the World Mongolia, Poland, Romania andDevelopment Indicators beginning the USSR. Economic and demographic terms areon page 105.defined in the technical notes to* Oil-exporting developing coun- Organisation for Economic Coopera- the World Development Indicatorstries comprise Algeria, Angola, tion and Development (OECD) mem- on pages 158 through 165.Bahrain, Bolivia, Brunei, Congo, bers are Australia, Austria, Belgium,Ecuador, Egypt, Gabon, Indo- Canada, Denmark, Finland, France, Billion is 1,000 million.nesia, Malaysia, Mexico, Nigeria, the Federal Republic of Germany,Oman, Syria, Trinidad and Tobago, Greece, Iceland, Ireland, Italy, Tonnes are metric tons (1,000Tunisia, Venezuela and Zaire. Japan, Luxembourg, the Nether- kilograms).* Capital-surplus oil exporters lands, New Zealand, Norway,comprise Iran, Iraq, Kuwait, Libya, Portugal, Spain, Sweden, Switzer- Growth rates are in real terms un-Qatar, Saudi Arabia and United land, Turkey, the United King- less otherwise stated.Arab Emirates.dom and the United States.* Oil-importing developing coun- The OECD Development As- Symbols used in the text tables aretries comprise developing countries sistance Committee (DAC) com- as follows:not classified as oil-exporting de- prises Australia, Austria, Belgium, . . Not available.veloping countries or capital- Canada, Denmark, Finland, France, (.) Lessthanhalftheunitshown.surplus oil exporters. the Federal Republic of Germany, n.a. Not applicable.* Industrialized countries are the Italy, Japan, the Netherlands, Newviii

1 IntroductionDeveloping countries start the intended to illustrate the likely from the importance of the roledecade facing two major challenges. outcome of different policies, rather of industrialized countries. Chap-First, they must strive to continue than to provide precise forecasts. ter 3 examines three of the ecotheirsocial and economic devel- Two sets of projections are pre- nomic links that bind the worldopment in an intemational climate sented in Chapter 2, based on together-trade, energy and capithatLooks less helpful than it differing growth rates in the indus- tal flows-and analyzes the fundida decade-or even a year-ago. trial world and policy responses damental issues in these areas, is-Second, they must tackle the in developing countries. This year sues that must be resolved chieflyplighl of the 800 million people the analysis has been extended to by the industrialized countries.living in absolute poverty, who provide separate estimates for oil- Because they take about 65 perhavebenefited much too little from importing and oil-exporting devel- cent of developing country exports,past progress. This Report examines oping countries, as well as by their growth rates and trade polisomeof the difficulties and pros- region and income level. cies largely determine how muchpects in both areas, looking as far The analysis indicates that world the developing countries can exaheadas 2000, but paying particular economic growth will be sluggish port. Because they account forattent.on to the next 5 to 10 years. during the next few years, as oil- more than half of world energyOne of its central themes is the importing countries reduce their consumption, it is their conservaimportanceof people in develop- current account deficits and adapt tion (or lack of it) that has thement. Adam Smith's observation to higher energy costs. But the biggest impact. And most of thethat the prosperity of a nation is policies adopted during the adjust- foreign capital that the developingdeternined mainly "by the skill, ment period will have some effect countries need must come throughdexterity, and judgment with on growth then-and even more the industrial world's banks orwhich its labor is generally applied" on the recovery expected after 1985. directly from its aid programs.has lost none of its truth. In the International finance will play adifficuLt economic conditions of the crucial role in the 1980s: unless The role of human developmentpast six years, as in earlier years, the developing (and other oilmostof the fastest-growing devel- importing) countries can fund their The past three decades have seenoping countries without oil have large projected balance-of-payments some impressive changes in thehad well-educated populations. deficits, output and growth will be lives of people in the developingBetter health and more education seriously affected. The domestic world. Average incomes havecan also help the poorest people policies of developing countries doubled. Average life expectancyclimb out of their poverty. will also be crucial: the more has increased from 42 to 54 years.efficiently they use their imports, The proportion of adults who areThe economic outlook their investments, and their energy literate has risen from about 30suppLies, and the more they increase percent to more than 50 percent.As in the two previous World their saving and investment, the There has been a significant closingDevelopment Reports, economic projec- faster will be their growth. The of the gap between industrializedtions for the developing countries fate of poor people in developing and developing countries in lifehave been carried out, drawing on countries will likewise be decided expectancy, literacy and primarythe World Bank's analysis of what largely by domestic opportunities school enrollment.determines country and regional and policies. But there is still a long way togrowth. These projections are None of this, though, detracts go. More than three-quarters of a1

illion people have barely enough familiar idea that poor people be of central importance.income to keep themselves alive should be helped to help them- Chapters 6 and 7 draw conclufromweek to week. In the low- selves. Better education, health and sions from experience with humanincome countries people on average nutrition have long been considered development programs. Chapter 6live 24 years less than they do in important ends of development. shows how common financial,the industrialized countries. Some They can also raise incomes and administrative and political con-600 million adults in developing reduce fertility. Human devel- straints have been eased, andcountries are illiterate; a third of opment alone cannot overcome considers the role of foreign assisttheprimary school-age children absolute poverty; but it is an ance. It also looks at ways of(and nearly half of the girls) are essential complement to other steps overcoming the cultural and econotgoing to school. to raise the productivity and nomic barriers that stop poor peopleThis state of affairs is the starting incomes of the poor. and their children-especially theirpointforPartIIoftheReporf. Chapter Chapter 5 provides a detailed daughters-from using human4 provides an overview of the look at education, health, nutrition development services.various ways of attacking absolute and fertility. In each of these areas, Chapter 7 focuses on broaderpoverty. The sources of growth, it explains why the poor are de- planning issues-including theand policies to accelerate it, are prived, and discusses the policies tradeoffs between growth andexamined, as are a wide range of needed to overcome their depriva- poverty reduction, and the allocameasures-employmentcreation, tion. Special attention is given to tion of resources between humanland reform, schooling and so on the practical consensus that has development and other activities.-to raise the incomes specifically recently emerged in several areas It examines these and more specificof poorer groups. -including nutrition policy, primary human development issues asThe rest of the Report,beginning health care and the role of family they apply to the different regionswith Chapter 5, singles out for planning programs in reducing of the developing world. Chaptercloser examination one particular fertility. These different areas of 8 contains a summary of the mainapproach to poverty-human de- human development influence arguments and conclusions ofvelopmeKit-which epitomizes the each other; education is seen to Parts I and II.2

Part IAdjustment and growth in the 1980s2 The outlook for developing countriesWorld economic prospects have parable to 1974-75. But the adjust- tral challenge over the next fewdeteriorated since last year's World ment must take place at a time years-to adjust to higher oil pricesDevelopmnent Report was published. when the outlook for capital flows and sluggish world trade while* The real price of oil is likely -especially aid for the poorest minimizing their loss of growth.to be at least 80 percent higher in nations-is worse than before. This They are subject to a formidable1980 than in 1978. As a result, adjustment will be spread over constraint: their ability to importcapital-surplus oil-exporting na- several years; while it lasts, the more has declined, both becausetions will run current account world economy and most devel- imports (particularly of energy)surpluses of around $110 billion oping countries are likely to grow are more expensive and becausethis year and oil-importing de- more slowly than in the 1970s. the export outlook has deteriorated.veloping countries deficits of more Provided the adjustment is suc- These countries went through athan $60 billion., This prospect cessful, a significant recovery should similar adjustment in 1974-78, andrevives questions about the inter- be possible from the mid-1980s there is much that can be learnednational financial system's ability onward. from this earlier experience.to recycle enough funds-to indus- Higher oil prices have clearly The adjustment process has twotrialized and developing countries- improved the prospects of those stages. First, when there is a sudtomaintain import levels and developing countries with oil to den increase in the cost of importseconomic growth rates. Further- export, where a fifth of the de- relative to export earnings, countriesmore, the real price of energy can veloping world's population lives. squeeze imports-and so growthbe expected to rise during the Their GNP per person grew 2.8 slows sharply. Because too sharp1980s. percent a year in the 1960s, com- a fall is disruptive, both economeFor reasons only partly con- pared with 3.1 percent for the ically and politically, countriesnected with higher oil prices, the oil-importing developing countries; accept large current account defioutlook;for growth in the indus- but in the 1970s the oil exporters cits and finance them from bortrializedcountries and in world accelerated to an annual 3.5 per- rowing or aid. During the earliertrade has worsened. The widespread cent growth, while the oil importers adjustment period the currentresurgence of inflation in 1979 and slowed to 2.7 percent. (The dis- account deficit of oil-importing1980 has prompted governments parity was even larger when GNP developing countries rose sharplyto take strong deflationary meas- is adjusted for changes in the -from 2.3 percent of their GNPures; the industrial economies are purchasing power of their exports in 1970 to 5.1 percent in 1975;expected to show only sluggish -see box overleaf). With much from 1978 to 1980 it went fromgrowth in 1980 and 1981. This increased oil revenues, at least for 2.3 percent to 3.9 percent. Growthinevitably slows their demand for the first half of the 1980s, the oil is falling off in these countries indeveloping countries' exports. The exporters' growth will be con- 1980, but less sharply than in 19751980s are thus off to a slower start strained more by the productivity (see Figure 2.1).than anticipated a year ago. of domestic investment than by The second stage is to reduceGiven these two developments, their ability to borrow abroad. these current account deficits tothe world faces the need to ad-levels that can be financed overjust-to payments imbalances and Adjustment for oil-importing the medium term. At the sameexpensive energy-on a scale com- countries time output and trade must berestructured to meet the new cir-1. See pzLge viii for definitions of country All oil importers, developing and cumstances. This structural changecategories. industrialized alike, face a cen- requires heavy investment. New3

in official aid and other capital andGNP and trade pricesby borrowing a significant part ofWhen a country's terms of trade shift rose. The reason was that commodity the oil producers' recycled sursubstantially,changes in national prod- prices were depressed; two years later pluses. Nonetheless, the result ofuct in constant prices do not accurately they were booming, and the correction these efforts was slower growth:reflect changes in its purchasing power. augmented the growth rate. in 1975-78, GNP per person in theThe volume of imports that can bebought with a given volume of exports Terms-of-trade effects on oil-importing developing countrieswill rise if the terms of trade improve, fall growth of GNP per person, grew 2.3 percent a year-aboveif they deteriorate. There is no generally 1970-80 the 0.8 percent in the 1975 trough,accepted way of measuring these changes (1977 prices) but still well below the 3.7 perinpurchasing power; but a rough mea- Pe'ce,- cent average for 1965-73. Andsure is obtained if export earnings are 20 Oil-exporting developing countriesexpressed in terms of the imports that some countries experienced seritheywill buy-and any gain or loss is ous fiscal and external debt probaddedto GNP.Among the developing countries, the15 lems. The poorest African countrieswere the biggest cause for conoilexporters and oil importers provide avivid example of the difference such an g ,-GNP(corrected) cern; their GNP per person grewadjustment can make to the apparent 10 _ 1.6 percent a year in the 1960s,benefits of GNP growth. In 1974, the year but only 0.2 percent in the 1970s.oil prices rose most sharply, the oilOn average their people are asexporters' output (as measured by their GNP On baverag their pedope decadGNP per person in constant prices) rose e badly off at the end of the decade4.4 percent; but their "corrected" GNP N/a hywr ttebgnigrose 18 percent (see figure). That was . The oil-importing developingexceptional: gains and losses from terms- 0 'ri' countries that coped best duringof-trade changes are typically muchthe earlier adjustment period were:smaller. But for the 1970s, the adjusted* Those that reacted to the deannualaverage GNP growth of 11 majoroil-exporting developing countries was2.4 percentage points higher than for 25major oil importers, compared with 0.2 10 Oil-importing developing countriesa temporaryaccompaniedslowdown in growthby a drive to expercentagepoints if the adjustment is GNP (corrected) pand exports. Import capacity (andnot made. ct / hence output growth) was restoredTerms-of-trade effects are caused by a 5 , GNP quickly. Most of these countriesvariety of factors: with the correction,

Table 2.1 Summary of prospects for growth(average annual percentage growth, 1977 prices)Population GNP Growth of GNP Growth of-GNP per personPouain GNP per (High case) Low case High case1980 person, 1980 _Country group (millions) (1977 dollars) 1980-85 1985-90 1970-80 1980-85 1985-90 1980-85 1985-90Low-income oil importers 1,133 168 4.1 4.6 0.9 1.0 1.3 1.7 2.4Sub-Saharan Africa 141 186 3.1 3.8 0.2 -0.3 0.1 0.1 1.1Middle-income oil importers 701 1,275 4.9 5.7 3.1 2.0 2.4 2.6 3.5Oil exporters 456 753 6.3 5.9 3.5 3.0 3.0 3.5 3.4Industrialized countries 671 7,599 3.3 4.0 2.4 2.5 2.5 2.8 3.5Note: For more detail, see Table 2.8 and Table SA.1 in the statistical appendix to Part I.growth in the oil-importing devel- after 1985. The High case repre- porters; and in the Low case avopingcountries is likely to be sents a much more successful erage incomes would actually besignificantly slower in 1980-85 adjustment, with growth slowing lower in 1990 than they were inthan in the 1970s-and still further less in 1980-85 and accelerating 1980.below the average in the 1960s. more thereafter (see Figure 2.2). Whether the outcome will beBecause of the differences in closer to the High or the Low caseKey factors affecting growth: growth rates between oil-importing will depend on the policies pursued1980-85 and 1985-90 and oil-exporting developing coun- by industrialized countries, thetries, estimates for them are shown capital-surplus oil exporters andTo help analyze the outlook, two separately (see Table 2.1). The the developing countries themsetsofillustrative projections have projections of this Report are not selves. At this early stage in thebeen prepared. Designated Low directlycomparabletothoseof last adjustment process, it is unclearand High, they are based on alter- year's, but they represent a sub- how successful their policies willnative policy responses to current stantial fall in growth expectations be in restoring growth, for theeconomic difficulties. Each scenario for the oil importers over the next world as a whole or for developingis internally consistent with respect five years. 2 countries. The estimates this yearto policies and outcomes. The Low The oil exporters have buoyant should therefore be treated withcaseshowsanunsuccessfuladjust- prospects throughout the decade morethanusual caution. Buttherement in 1980-85; though payments (see Table 2.1). But the oil im- are some disturbing signs that theimbalances are reduced, growth porters will grow more slowly in seeds of the Low case are alreadyremains depressed, and inadequate 1980-85 than in the 1970s, even being sown: on current prospects,foundations are laid for recovery in the High case; with a successful aid for low-income countries isadjustment and a strong revival in far from certain to meet the modworldtrade after 1985, their growth est requirements of the High case,Figure 2.2 Developing countries' should accelerate in 1985-90. By and some middle-income coungrowthof GNP per person, contrast, their recovery would be tries are experiencing both debt1970-90 (High case) weak in the Low case. Sub-Saharan and political difficulties.saverage annual percentage growth, 1977 prices) Africa has the most disturbing out- Thus, without a strong policylook. Even in the High case, its response during the adjustmentAll oil importers All oilexprters0 growth in 1985-90 would be a period, the Low case is the likelier1970 = 0 meager 1 percent per person-far outcome. And a number of factors,so0 _ 0 tj below the average for the oil im- including serious political instability,300000;0KStS-SV p =;90 fii: \f0004St;;000\S;f i

production and consumption; in- Table 2.2 Growth of exports and imports, 1970-90 (High case)vestment and productivity in the (average annual percentage growth rates, 1977 prices)developing countries; and the inflow Exports, Imrports'of capital. (A broader view of the Country group 1970-80 1980-85 1985-90 1970-80 1980-85 1985-90deterrminants of economic growth Oil-importing-including the effects of human developing countries 5.6 5.7 6.8 4.6 4.7 6.3resources-is discussed in Chapter Low-income 2.6 0.9 3.7 0.1 2.1 2.84.) In each area, the emphasis is Middle-income 5.9 6.1 7.0 5.2 4.9 6.5on what is required to increase Oil-exportinggrowth; policy prescriptions are All developing countries 3.5 4.6 4.5 8.6 7.6 6.3growtla; policy prescriptions are All developing countries 5.1 5.5 6.4 5.4 5.4 6.3discussed in Chapter 3. Industrialized countries 6.0 5.4 5.8 4.8 4.3 5.3Capital-surplusInternational trade oil exporters 2.7 1.8 2.0 21.1 10.9 7.3With slow growth expected in theCentrally planned economies 6.6 5.1 5.2 8.1 5.8 5.2World 5.6 5.2 5.7 5.8 5.2 5.7industrialized countries in 1980-81 andi with much larger currenta. Goods and nonfactor services except for centrally planned economies, for which netnonfactor services are included as net exports.account deficits for all the oilimportingcountries, world tradegrowth will slow from the 5.5 per- teriorate markedly in the 1980s, of manufactures growing aboutcent a year it averaged in the 1970s. exports will still have to grow two and a half times faster thanBut if, as the High case assumes, faster than imports in 1980-85 to nonfuel primary exports. As a result,the industrialized economies are reduce current account deficits. developing countries' exports ofable to average GNP growth of 3.3 But for low-income oil importers, manufactured goods would risepercent a year in 1980-85-see and especially Sub-Saharan Africa, from 24 percent of their total ex-Table 2.1-and if further protec- exports could grow more slowly ports in 1978 to 39 percent intionisrn is avoided, world trade in 1980-85 than in the 1970s- 1990 and from 10 percent to 14could rise by an averge of 5.2 per- underlining their need for foreign percent of world manufacturingcent a year in 1980-85 (see Table assistance to maintain their im- trade.2.2). Thereafter, with the indus- port capacity. With a strong The biggest gains are likely totrialized countries' GNP projected recovery of world trade in 1985- be in machinery and transportto grow 4.0 percent a year in 90, their export prospects would equipment (from 6 to 16 percent1985-90, it should accelerate. improve and export growth could of developing country exports), inExports of developing countries exceed that of imports. which Brazil, India and South Korea,could expand at 6.4 percent a year If the High case is achieved, the for example, have become increasin1985-90, compared with 5.5 share of developing countries in ingly competitive in internationalpercent in 1980-85. world trade would increase from markets. The developing countries'As with growth, the trade out- 20.1 percent in 1977 to 21.3 per- importance as markets for the inlookd'iffers sharply between oil cent in 1990 (see Table 2.3). The dustrial world would also increase:exporters and oil importers- structure of their trade could change in 1978 they and the capital-surplusunderlining the important effects more dramatically, with exports oil exporters already accounted forof terrms-of-trade changes. In the1970s export volume for oil-exportingdeveloping countries grew Table 2.3 Percentage shares in world exports of goodsat about two-thirds the rate of that and nonfactor services (High case)(1-977 prices)of the oil importers; but because 1the price of their exports rose so Primary Nonfactorcommodities Fuels Manufactures services Tetalmuch faster, their import volumewasabletogrowtwiceasfast.For Country groups 1977 1990 1977 1990 1977 1990 1977 1990 1977 1990the cap ital-surplusthe canpitl-surlusoiloiexporters,expoters,Developingcountriesthe terms-of-trade benefits were Industrialized35.0 34.0 24.2 28.2 10.1 14.3 28.8 30.6 20.1 21.3even greater. countries 55.6 56.5 16.0 19.3 79.6 76.3 67.7 65.6 62.9 65.6Although the terms of trade of Other countries 9.4 9.5 59.8 52.5 10.3 9.4 3.5 3.8 17.0 13.1the oil-importing developingcountries are not projected to de- Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.07

of the developing and centrallyFigure 2.3 Energy production and planned economies. As a result, Figure 2.4 Developing countries'consumption growth, by countrysavings and investment rates,group, 1980-90 (High case) real energy prices can be expected 1960, 1980 and 1990',.'rrcannva!rr--g,lo pd pacarres y) to rise further-though the rise is rper- s.tag. GPcD .dpr:rres)likely to be moderated and the P--Loss L-inc-mIndustrialized Pwoducndio energy constraint on growth eased if owntioe -Cunftieico-untries Conm-ption the industrialized countries achieve 25 -Centrallypan-nedprogress in both energy conservaeconomies20-capital- tion and production (Figure 2.3s-rplu.st and Table SA.2 in the statistical 15 _Deceloping appendix to Part I). The working _asrgcountries: Xt;Eda;\$ibassumption is that real oil prices 10ol ohichie3erNet.oil wil on average rise 3 percent a year. 5exporters i0;0000 00 i00000000000 ;0 For the industrialized countries,Middle-incoeNetoil I net energy imports (mainly oil, 0 80 90 1960 S0 90importers plus gas and coal) are projected to 1960Totalremain at some 20 million barrels-,, it 1,11 ,111:, 4,S, a day of oil equivalent (mbdoe)0 2 4 6 8 10 throughout the 1980s. Among the imported oil for energy use (thatPercentage increasedeveloping countries, the oil ex- is, excluding oil for such things asporters are expected to increase fertilizer production) would risetheir energy exports by a third; in nominal terms from $29 billionalmost a third of North America's some of today's oil importers either in 1978 to some $107 billion inexports of manufactures, almost will be net energy exporters at 1985 and about $200 billion ina half of Japan's and a fifth of some stage during the decade, or 1990 (Table 2.4). Without a rapidEurope's. will have greatly reduced their expansionofexportsandsubstantialenergy imports by 1990.financialsupportfromabroad,theyEnergy But most developing countries could find their growth severelyAlthough uncertainty inevitably will continue to import much of constrained by the cost of energysurrounds the prospects for new their energy needs. For all oil- imports. Individual country analysisenergy discoveries, the supply of importing developing countries, suggests that oil imports as a perenergyis likely to remain tight the "energy gap" under the High centage of export earnings will riseduring the 1980s. World produc- case is likely to widen from 5.6 substantially for many countriestion of primary energy from all mbdoe in 1980 to 6.3 mbdoe in 1985 from 1980-85, particularly among(commercial) sources is projected (see Table SA.2). By 1990 the gap the low-income countries.to increase 3.8 percent a year over would have increased to 7.5 mbdoe,the decade (see Figure 2.3)-about even if the countries succeed (as Investment and efficiencythe same as the industrialized projected) in more than doubling Developing countries have raisedcountries' GNP growth in the High production and restraining con- their savings and investment ratescase, but considerably below that sumption growth. Their bill for considerably in the past 20 years(see Figure 2.4). Further increasesand,still more important, improvementsin the productivity ofTable 2.4 Net imports of oil by oil-importing developing countries, existing and new investment-can1975-90 make a major contribution toOil imports for energy use only 1975 1978 1980 1985 1990 adjustment and growth, as theVolume (millions of barrels of oil per day) 4.9 5.8 5.3 5.8 6.9 experience of the 1970s has shown.Low-income countries 0.4 0.4 0.3 0.3 0.4 Previous World Development ReportsMiddle-income countries 4.5 5.4 5.0 5.5 6.5 have discussed the importance ofCost (billions of dollars) 22.1 29.2 57.8 107.2 198.0 efficiency and policies for promot-Low-income countries 1.8 2.1 3.3 6.0 11.1Middle-income countries 20.3 27.1 54.5 101.2 186.9 ing it; Part II of this Report con-Price per barrel c.i.f. siders another important elementCurrent dollars 12.33 13.70 29.80 50.30 78.30 in efficiency-the human factor.Constant 1980 dollars 19.60 17.13 29.80 35.10 40.85 The 1970s have shown whichJ18

measures can raise efficiency fairly Table 2.5 Developing countries' savingsrapidly. In agriculture, examples and investment rates, 1980-90 (High case)include balanced packages of irri- (percentage of GDP, current prices)gation, inputs of fertilizer and Gross domestic Gross domesticselected seeds, extension services investment saving Resource gapand credit, and ensuring adequate Country group 1980 1985 1990 1980 1985 1990 1980 1985 1990producer prices. Efficient indus- Low-income countries 21.2 23.0 25.0 18.7 19.8 21.2 2.5 3.2 3.8trialization can be helped by policies Africa 16.3 16.0 18.3 9.1 8.6 11.3 7.2 7.4 7.0that discourage undue capital Asia 22.0 24.0 25.9 20.2 21.4 22.6 1.8 2.6 3.3intensity and do not protect domes- Middle-incometic nilutryexcesivly. countries 25.3 25.4 25.7 23.2 23.8 24.5 2.1 1.6 1.2tic industry excessively. Many All developing countries 24.6 25.0 25.6 22.4 23.1 24.0 2.2 1.9 1.6countries have learned from painfulexperience how to improve theefficiency of publidy owned enter- The projected pattern of net By the mid-1980s, however, theprises and how to apply more financing for all developing coun- real value of oil export earningsrigorous economic criteria to tries is shown in Figure 2.5. But is likely to be falling for someproject selection, the needs of developing countries countries. If their imports are toBut even with greater efficiency, for finance differ widely. Oil- rise to the level required for themore investment would be needed exporting developing countries now High case, the oil exporters wouldto achieve the High case-especially look to be less dependent on foreign have a current account deficit byin the Low-income countries. They capital in the 1980s than was an- 1985 of around $16 billion. Towould have to raise their invest- ticipated a year ago. Over the next maintain their growth in the secmentto more than 23 percent of five years, they can achieve High- ond half of the 1980s, they wouldoutput by 1985, and to 25 percent case growth financed largely from need to borrow more heavily; theirby 1990, matching the already their oil revenues. After running net private borrowing could risehigh level of the middle-income a current account deficit (before from only $7 billion in 1985 tocountries. Some increases in sav- official transfers) of more than $10 around $25 billion in 1990. Privateings rates are possible (see Table billion a year in 1975-77, they capital would meet about two-2.5), although there are real limits could have a surplus of about $2 thirds of their financing requiretohovv far consumption in low- billion in 1980. ments in 1990 (see Table SA.6).income countries can be restrained.But substantial increases in investmentcan be achieved only with Figure 2.5 Net flows of medium- and long-term capital to developingmore capital from abroad. For low- countries, 1980 and 1990 (High case)income Africa foreign resources P-r ) 1990will be required to finance about 1980 Total net inflow:Total net inflow:$177.9 billion40 percent of investment, and for $74.6 billion Official $billion Privateforeignlow-income Asia 13 percent. ByPr-vate foreiBn development _ \drect ivestmentcontrast, higher savings rates in rate drecnvestment assistance $524.6 billonsavings rates in boys ~~~~~$10Obill1o- $billionsthe middle-income countries could $3.5 _reduce their dependence on for--omrants-lCommivateeign resources by 1990.tcom erilral_loans t cermsInternational capital flows Multilateral-loansThe analysis of trade, energy and Nuffioai a s TO, / idomestic investment highlights $5.0 billion o3ficll Iaans off-icialansthe role that foreign capital must ss.sb111on $12.4 billionplay in a successful adjustment N,ai: Uses of medium- and long-term capital (billions of dollars) are:by the developing countries. ButOil imparters Oil tvponl-rs rounir;rsthe actual capital inflow will depend Use 1980 1990 1980 1990 1980 1990on both the needs of countries Current accotnt deficit before interest paymentst 42.7 42.2 -11.1 30.2 31.6 72.4lntere.st paymet 18.3 62.0 5.5 17 5 27.2 79.4and on. the likely availability and Changes in reserves (net of changes in short-term debt) -4.4 23.5 20.2 2.6 15.8 26.1cost of capital from all sources (see Total finance required 6.6 127.7 18.0 50.2 74.6 177.9a. Defined as net imports of goods and services (except interest) munus private (but not official) transfers. See tables SA.6discussion in Chapter 3). and SA.7 in the statistical appendix to Part 1.9

Table 2.6 Current account deficits of oil-importing institutions at market or neardevelopingcountries, 1970-90 (High case) market terms will depend onCurrent account deficit" increases in the capital that backsCountry group 1970 1973 1975 1978 1980 1985 1990 their bond issues.Billions of dollars, current pricesAs for private finance, someLow-income 1.2 2.3 5.4 5.7 10.0 18.6 32.0Middle-income 7.1 4.4 34.2 21.4 51.0 59.7 72.2countries that have borrowedheavily in the past and alreadyTotal 8.3 6.7 39.6 27.1 61.0 78.4 104.2 have high debt-service obligationswill need to be cautious aboutBillions 977 pricesfurther o dollars,borrowing. Given the High-Low-income 2.2 3.2 6.1 5.0 7.1 9.2 11.8Middle-income 13.2 6.0 38.3 18.5 36.1 29.5 26.7 case outlook for their currentTotal 15.4 9.2 44.4 23.5 43.2 38.7 38.5 accounts, the debt-service paymentsAs percentage ofGNP of middle-income oil im-porters will peak at around 29Low-incomeMiddle-income1.62.52.20.93.85.32.72.23.64.03.82.63.91.8 percent of their exports of goodsTotal 2.3 1.1 5.1 2.3 3.9 2.8 2.1 and services in 1985 (see Table 2.7).In the High case, private financea. Excludes official transfers. (including direct investment)provides a slightly larger propor-For oil-importing developing 0.34 percent of their GNP in 1979 tion of the middle-income oilcountries the outlook is very differ- to 0.35-0.36 percent of GNP in importers' net financing requireent.Although their current account 1985, then staying at this level. ment in 1985 than in 1990, thoughdeficit in 1980 is smaller as a per- Unfortunately, aid prospects are smaller than in 1980 (see Tablecentage of GNP than it was in not encouraging (see Chapter 3)- SA.7). If the Low case comes about,1975, in constant prices it is roughly and this has serious implications developing countries' exportthe same (see Table 2.6).The low- for low-income countries. For ex- growth would fall more than theirincome countries in particular ample, the Low-case assumption import growth-and hence theyface serious financing problems. for DAC donors-lower GNP would remain about as dependentTo achieve High-case growth of growth, aid falling to 0.30 percent on nonconcessional finance as in1.7 percent per person a year in of GNP by 1982, with 40 percent the High case. If the necessary1980-85, their current account def- of bilateral aid to low-income finance could not be obtainedicitswould have to rise to 3.8 countries-would account for 0.3 because of concern about creditpercentof GNP by 1985 (the same percentage points of the difference worthiness, for example-growthas in 1975) and would rise further in average annual growth for low- could slip even lower than the Lowby 1990. Since the low-income oil income countries between the case, and the number of countriesimporters have only limited access Low and High cases. in serious debt difficulties wouldto commercial funds (other than For the middle-income oil im- increase.some short-term borrowing and porters, bilateral official finance is The extraordinary expansion ofsuppliers' credits), deficits of this not likely to be as freely available private commercial lending tosize can be financed only if: for funding current account deficits developing countries that took* Aid from DAC and OPEC in 1980-81 as it was in 1974-75. place in the 1970s is unlikely tomembers trebles in current prices And lending by the multilateral be repeated during the currentover the decade.* Support from the multilateralinstitutions lateal nsttutons is s increased icresed Table (High 2.7 case) Debt-service ratios of developing countries, 1977-90ucorrespondingly.(percent)* The share of the low-income Countrygroup 1977 1980 1985 1990countries in bilateral aid from theindustrialized countries increases Oil-importing developing countriesLow-income 10.1 9.2 11.3 11.5to around 50 percent from about Middle-income 19.8 25.7 28.6 22.140 percent at present. Oil-exporting developing countries 16.0 15.4 13.5 12.9This requires only a marginala. Interest and amortization payments on debt divided by exports of goods and services.increase in the aid performance of Figures are from individual country analysis of 25 major oil-importing developing countheindustrialized countries-from tries and 11 major oil-exporting developing countries.10

adjustment; but the increases pro- plight of these poor Asian and countries too would not repeatjected for the High case are not African countries-particularly the their extraordinary growth of theimplausibly high. In nominal latter-deserves special attention 1970s. But they have made continterms,net private lending to all from the intemational community. uing progress in raising savingsdeveloping countries would rise As they adjust to less buoyant and investment rates, in expandingonly 3.2 percent a year in 1980- export prospects and higher exports and in reducing popula-85. This would lower debt-service energy costs, middle-income oil tion growth. As a result, they areratios for oil exporters and slow importers can also expect slower likely to continue to achieve fastertheir increase for oil importers. growth-from 3.1 percent per per- growth per person than any otherThe 11 percent (nominal) annual son a year in the 1970s to a range region.rise projected for net private lend- of 2.0-2.5 percent during the first Growth in the comparativelying in 1985-90 would stem largely half of the 1980s. It would take high-income countries of Southernfrom increased borrowing by the the favorable international envi- Europe has been slowing, and theoil exporters. Indeed, if major ronment and successful adjustment trend could continue in the 1980s,borrowers do adjust successfully of the High case for growth in the since these countries are veryin 1980-85, by building up their second half of the 1980s to exceed dependent on oil imports and onexport base and earning good re- the average of the 1970s (and trade with Western Europe. Someturns on capital invested, private match that of the 1960s). will join the European Communitylending may well rise more than The slowdown in 1980-85 would during the 1980s; the terms ofis projected. be most marked in Latin America their entry and how rapidly theyRegional growth in the 1980s and the Caribbean-from 3.5 adapt to membership will have apercent in the 1970s to 2.2-2.6 marked effect on their growth.Whether the Low or the High case percent in 1980-85. Even with a Finally, for the middle-incomeis achieved, most of the past dec- strong recovery after 1985, growth oil importers of Sub-Saharan Africaade's disparities in growth rates for the 1980s could still fall below and the Middle East and Northbetween different groups of develop- that of the 1970s. In East Asia Africa, the slow growth of theing countries can be expected to and the Pacific there would also be past two decades seems likely tocontinue in both halves of the a slowdown in 1980-85, and these continue into the 1980s.1980s (see Table 2.8). There aretoo few oil exporters to identifystemateic diffexortens by rdegtionsystematic differences by regionTable 2.8 Growth of GNP per person by region, 1960-90and income group in their pros- GNP Average annual percentagegrowth'pects; but the aggregate figures perfor the oil importers hide wide Population, 198 0 Lea' case Hlgh casedifferen-ces.190(current 1980 7970 1980 1985 1980 1985Countrygroiep (milluouxs) dollars) -170 -80 -85 -90 -85 -90With strong economic manage- Low-income oil importers 1,133 216 1.6 0.9 1.0 1.3 1.7 2.4ment, continuing agricultural Africa (Sub-Saharan) 141 239 1.6 0.2 -0.3 0.1 0.1 1.1progress and more aid, growth per Asia 992 212 1.6 1.1 1.1 1.5 2.0 2.6person in low-income Asian coun- Middle-income oil importers 701 1,638 3.6 3.1 2.0 2.4 2.6 3.5tries could be substantially higher East Asia and Pacific 162 1,175 4.9 5.6 4.1 4.1 4.7 5.2in the 1.980s than in the 1970s. But Latin America and Caribbean 256 1,775 2.7 3.5 2.2 2.4 2.6 3.8North Africa and Middle East 30 667 -0.2 0.4 0.0 o.o 0.6 0.8it would still be well below that of Africa (Sub-Saharan) 125 867 2.4 0.9 1.3 1.3 1.6 1.4middle-income oil importers, and Southern Europe 128 2,950 5.4 3.2 2.2 2.2 2.5 3.4in the Low case it would not be Oil importers 1,834 751 3.1 2.7 1.8 2.2 2.4 3.2much rnore than 1 percent a year Oil exporters 456 968 2.8 3.5 3.0 3.0 3.5 3.4for the decade. The situation for All developing countries 2,290 791 3.1 2.9 2.0 2.3 2.6 3.3low-income Africa is worse. These All low-income 1,310 245 1.7 1.7 1.2 1.8 2.1 2.5countries face a desperately hard All middle-income 980 1,521 3.4 3.1 2.1 2.4 2.7 3.4adjustment period-coming on top Capital-surplus oil exporters 69 4,614 7.3 5.0 2.3 2.3 2.8 2.8of the economic stagnation of the Industrialized countries 671 9,684 3.9 2.4 2.5 2.5 2.8 3.51970s. Even under the compara- Centrally planned economies 1,386 1,720 n.a. 3.8 3.3 3.3 3.3 3.3tively optimistic assumptions ofNote: More detailed information, including GNPthe High case, their growth would Table SA. 1 of the statistical appendix to Part 1.and population growth rates, is inbe negligible in 1980-85. The a. Calculated in 1977 dollars.111

Compared with the industrialized maintain strong growth after 1985. developing countries, the potencountries,growth per person in * The capital-surplus oil ex- tial exists for substantially fasterdeveloping countries will be slightly porters can contribute to efficient growth. While the chances of exlower.The resultant widening in recycling by expanding their ceeding the High case seem slim,income disparities occurs primarily holdings of real and financial it is important that all countriesbecause of slow growth in the foreign assets, by avoiding disrup- recognize the advantages-and thelow-income countries and in the tions in oil supplies or sharp price feasibility-of higher growth.two slowest-growing middle-in- fluctuations, and by extending more What would it require? Onecome groups. Research for this Report direct financial support-conces- important element is more effecsuggeststhat average growth per sional and nonconcessional-to tive adjustment by the industrialpersonof about 1.5 percent a year developingcountries.Andtheycan ized countries, particularly to higherin low-income countries and about help the developing countries to energy costs. Another is a liberal2 percent in middle-income coun- expand foreign earnings by buy- trade environment, with lesstries is needed to prevent the ing more from them and by con- protection for products in whichnumber of people in absolute pov- tinuing to provide employment developing countries have anerty from rising. Thus, for these for their migrant workers. actual or potential cost advantageslow-growing groups (except South * The industrialized countries (this would help to reduce infla-Asia in the High case) the extent can help by avoiding excessive tionary pressures). A third is moreof absolute poverty is likely to in- deflation and by promoting tech- progress by all countries in procreaseduring the decade. nical and policy innovations to ducing and conserving energy, andovercome structural constraints, some reasonable assurance thatPolicy implications by country thus encouraging a rapid resump- supplies would not be suddenlycategories tion of sustained growth. They willassist developing countries (anddisrupted. Improvements in effi-ciency and some further increasesGiven current policies, growth in themselves) by importing more in domestic savings in developingoil-importing developing countries, from them; this requires trade countries would also be valuable.with their total population of 1.8 liberalization as well as economic Finally, capital flows to developingbillion, is likely to be unacceptably growth. The industrialized coun- countries would need to increaselow. The steps needed to move tries should reverse the tendency substantially. Given increases intoward, or beyond, the High case for their aid to fall as a share developing-country exports (andcan be summarized by country of GNP and should encourage thus in debt-servicing capacity)group. prudent expansion in lending and in the efficiency with which* For the oil-importing devel- from their commercial capital capital is used, developing counopingcountries, faster growth markets to developing countries. tries would become increasinglydepends heavily on economic The low-income countries in par- attractive customers to commercialmanagement. This requires efforts ticular need more external finan- lenders. If the industrialized countoincrease exports and invest- cial support than is currently tries grew more rapidly, they wouldment, and to improve the efficiency in prospect. The richer centrally find it easier to provide more aid.with which existing and new in- planned economies also have the With good progress in all thesevestment is used. But increasing capacity to extend considerably areas, GNP per person in thetheir import capacity and their more aid to developing countries developing countries perhapsability to service debt will require and to expand trade with them. could grow 4.3 percent a year inbuoyant export markets, and morethe second half of the 1980s (comcapitalfrom abroad. What would be required for even pared with 3.3 percent in the High* The oil-exporting developing faster growth? case). This would mean growthcountries can grow rapidly; butof 3.9 percent a year in the oiltheymust invest their oil revenues It will take the kind of strong efforts exporting developing countries,productively in the early part of discussed above to reach the High 3.6 percent in the low-income oilthe decade, and ensure that effi- case. But that growth is itself low importers and 4.6 percent in thecient production is encouraged in -measured against that of the 1960s middle-income oil importers.the nonoil as well as oil sectors of and the first part of the 1970s, and Achieving these results wouldthe economy. This will enhance by any reasonable expectations for require much more internationaltheir creditworthiness for the development. Both for the world cooperation than now seems likely.expanded borrowing needed to economy and especially for the Aid of at least 0.5 percent of in-12

dustrialized countries' GNP would Table 2.9 Developing countries' GNP per person, 1980-2000be essential; still higher aid flows- (1977 dollars)approaching the 0.7 percent UN 1985 8990 2000target--would raise growth further Low High Low High Faster Low High Fasterand help to reduce disparities be- Country group 1980 case case case case growth case case growthtween low- and middle-income Low-incomecountries. In addition, economic oil importers 168 177 183 188 206 218 215 261 311Middle-incomemanagement would have to improve oil importers 1,275 1,408 1,448 1,585 1,719 1,813 2,009 2,423 2,843considerably. International efforts Oil exporters 753 873 896 1,012 1,058 1,085 1,360 1,475 1,591to encourage the steps required to All developingcountriesincrease growth-including those615 679 702 761 825 866 955 1,139 1,320now being considered as part ofthe International Development 2.9 shows what would happen to million. The difference-reducingStrategy of the United Nations- GNP per person if the faster (than the number of people in povertyare therefore very much to be High-case) growth mentioned above by between 60 million and 190welcomed. could be achieved. Developing- million during the next 10 yearscountrygrowth of about 1.9 per- is a powerful reminder of the ben-Broader implications of the cent above the Low case (and efits of higher growth. And as disprojections0.9 percent above the High case)would start in 1985 and be maincussedin Chapters 4 and 5, growthin incomes is also vital for betterSince World Development Report, tained until the end of the century. nutrition, health and education, as1979 was published, there have The difference in growth may not well as for lower fertility.been major attempts to advance seem large, but by 1990 for allthinkinig and policies on develop- developing countries it makes a The challenge of the decadement. The OECD study Facing the difference of more than a seventh.Future (Interfutures) was a result By the end of the century, average The world will reap great benefitsof three years' research on pros- real incomes with the faster growth from rapid growth. Without it,pects f'or the global economy. The would be almost two-fifths above hundreds of millions of very poorIndependent Commission on Inter- those in the Low case and one- people will live and die with littlenational Development Issues (the sixth above those in the High. or no improvement in their lot.Brandt Commission) published its And it is only with this sharp Many developing countries willfindings in North-South: A Program acceleration that growth of in- find it hard to maintain politicalfor Survival, which called for bold come per person in developing stability.reforms to avoid an otherwise countries would match that of the The developing countries facegrave future for international eco- industrial countries. formidable obstacles on the waynomic and political relations. The What does this growth mean to rapid growth-many of whichanalysis of the present Report for people's lives? The same they will have to overcome themstronglyendorses the Commis- method for estimating the link selves. But through their policiession's emphasis on the interdepen- between income growth and poverty on trade, aid and other capital flows,dence-through trade, energy and reduction used in the previous two the industrialized countries andcapital flows-of all countries, as World Development Reports suggests the capital-surplus oil exporterswell as its emphasis on the impor- the following effects. In 1980 the have a striking impact on howtance cf renewed efforts to reduce number of people with incomes much the developing countries canworldwide poverty. below the absolute poverty line is accomplish. Much will depend onThere has been continuing, in- approximately 780 million. With the degree of international cooperatenseclebate over an appropriate the Low case this number would tion-which at present threatensstrategy for the Third Develop- actually increase over the next to fall short of what is needed.ment Decade. But all agree on the decade to 800 million; in the High For poverty, growth and politicalneed to raise the growth of the case it would fall slightly, to 720 stability, the implications of thedeveloping countries. million. If it were possible to achieve Low case-itself not the worst pos-The advantages of higher growth the faster growth mentioned, the sible outcome -show that theare striking. To illustrate, Table number could fall sharply-to 590 world can ill afford such failures.13

3 International problems and policiesThe analysis in Chapter 2 has rise for the foreseeable future. Tem- This represents considerableemphasized that the international porary fluctuations aside, what progress, but it is still inadequate.economic outlook poses particularly happens to prices will be determined The evidence of the past six yearsdifficult choices for policymakers by trends in energy conservation shows that pricing policies (includinthe 1980s. A sustained recovery and production: this section con- ing taxes) have a major role to playof the world economy from the siders each in turn, paying particular in curbing energy demand (and,slowdown expected in the next few attention to the position of devel- no less important, in encouragingyears will depend largely on the oping countries. domesticproduction). But politicalpolicies pursued in the three areasdifficulties have often inhibitedof international concern discussed Conservation governments from passing higherin this chapter-energy, trade and * Industrialized countries. The energy prices through to finalcapital flows. Particular attention greatest scope for conservation lies consumers. These difficulties haveis paid to policies aimed at ensuring with the industrialized countries; been most acute in the Unitedthat current account deficits are theyaccountformorethanhalf of States and Canada, less so infinanced-and over time reduced- world energy consumption (and Europe and Japan.with minimal loss in the growth more than a third of production).' Solutions need to be found thatof developing countries. Where On average the industrialized convey the right price signals toprojections are given, they are countries use about eight times users-and here taxation can helpconsistent with the High case as much commercial energy (see box)-and provide incentivesdescribed in Chapter 2, but the per person as the middle-income to producers. If higher prices meanspecific policy issues discussed developing countries and more that existing producers reap largehere are not related to anyparticular than 40 times as much as theset of projections. low-income countries. This ispartly because they are moreEnergy industrialized; but their agricul- Figure 3.1 Petroleum prices,ture and households are also moreRecent increases in petroleum prices energy-intensive. They have been tdollars per barrel,(Figure 3.1) have ensured that the reducing the ratio of energy use 3economic impact of energy will to GNP: between 1973 and 1977 25remain a central concern of policy- this ratio fell 16 percent in Japan, -makers everywhere. Their past 13 percent in France, 12 percent in 20concern, however, has achieved the Federal Republic of Germany,only limited success in producing 10 percent in both the United 15 Current'coordinated energy policies-in States and Italy, 9 percent in -part because of the emphasis given Canada and 7 percent in the United 10to managing immediate balance- Kingdom. Moreover, Japan andof-payments difficulties. While Western Europe have held their 5this issue is again important, all absolute volume of petroleum use Constant 1972 prices'economies will also have to adapt constant since 1973, and the United °l I I I I I Ito higher energy prices. The long- States has done so since 1978. 1972 73 74 75 76 77 78 79 80term outlook is uncertain, buta. Prices weighted by production shares.prudent energy policy should 1. The word "energy" means commercial b. Deflated by manufactured export prices.assume that real energy prices will energy unless otherwise specified.14

windfalls, some of their extra contrast, energy consumption in to grow much faster since 1973 inprofits can be appropriated directly the industrialized countries is energy exporters than in energy-for example, by a "windfall profits projected to rise by just over 30 importers like Brazil and Southtax" (the US solution) or by a percent and GNP by about 40 Korea. Some countries (Brazil, India"petroleum revenue tax" (as in the percent.) By 1990 the developing and Pakistan, for example) haveUnited Kingdom). countries' commercial energy tended to pass on higher prices to* Developing countries. Ex- requirements are likely to rise to domestic users relatively quickly;cluding the capital-surplus oil around 17 percent of world use and others are now moving in theexporters, they account for only (See Table SA.2 in the statistical same direction. The alternativeabout 13 percent of the world's appendix to Part I). subsidizes energy use-thus drainuseof commercial energy (and In curbing demand growth, ing budgets and discouragingabout 15 percent of production). developing countries have experi- conservation.About half of all the energy pro- enced many of the same diffi- While there is a natural relucducedby low-income oil-importing culties as industrialized countries tance to inflict hardship on lowercountriesis noncommercial-from -and usually more acutely. and middle-income groups bywood and dung, for example. As Domestic prices-particularly of raising energy prices, energytheir economies develop, much of domestically produced energy - subsidies (if essential) should bethis will have to be replaced by often have not been raised in line reserved for products consumedcommnercial energy. Even with with world prices. Until recently, primarily by poorer people. Evenappropriate pricing and other domestic petroleum prices in then, care is neededtopreventthoseconservation measures, the con- Indonesia, for example, were less products from being diverted tosumption of commercial energy than 40 percent of the world price; other uses. On grounds of equityin developing countries is pro- Egypt, Ecuador and Venezuela or efficiency, there is little justifijectedto rise more than 80 percent have also underpriced their oil. cation for subsidizing gasolinein the 1980s, compared with GNP This is a major reason why energy and domestic electricity (which ingrowth of about 70 percent. (By use in relation to GNP has tended most developing countries areconsumed primarily by richergroups), industrial fuels andTaxes and energythe energy used by public sectoragencies.Taxation policy has played only a small tages. First, the revenues can be used topart in conserving energy in the past six mitigate the overall effects on the cost of Productionyears. Although higher base prices for living (through subsidies, for example, orenergy have encouraged more econom- increased transfer payments). Second, * The oil exporters. For most majorical use, their effects have been muted taxes can be varied so as to cushion the oil exporters, oil is the one reliablebecause energy taxes have not risen shock of sudden increases in oil prices. source of finance for their develasmuch. Gasoline provides a good Higher prices can be passed on in fullexample: while crude oil prices rose three over a period-but smoothly, with taxesopment over the medium term (atleast 10-20 years). Accordingly,and a half times in real terms between sometimes rising more than oil prices,the beginning of 1970 and mid-1979, real sometimes less. This could reduce un- howmuchoiltheyproducedependsgasoline prices in the seven largest certainty and assist energy planning by on a variety of factors-such asindustrialized countries rose between households and firms. how much investment their econ-3 percent (Canada) and 37 percent (Italy). omies can absorb productively andAs a proportion of the final price, taxes Effective rates of gasoline without social disruption; the actualfell in all seven countries (see table).The sharp rise in oil prices in 1973-74 taxation, 1970 and 1979 and prospective price of oil; andreduced the relative importance of taxa-Gasoline tax the (expected) yields on the foreigntion in every kind of petroleum product; as percentagelittle has been done since to restore it. In of pretax priceassets that can be bought withoil revenues.the early and mid-1970s, the reluctance Country 1970 1979 For the capital-surplus oil exofgovernments to add to inflation often Canada 82 48 porters, current revenues far exceedtook precedence over conserving energy France 290 180by raising its price. There is now greater Germany, Federal immediate mvestment needs; theiremphasis on conservation (an emphasis Republic of 264 126 oil exports are not expected tostrongly endorsed by the major oil pro- Italy 364 209 expand rapidly. The other oilducers),with higher prices having a key Japan 142 72 exporting developing countries arerole to play. United Kingdom 257 47Energy taxation has two other advan- United States 44 18 therefore projected to increase theirshare of energy trade (see Table15

Table 3.1 Shares of net world trade in commercial energy, 1977-90 others-notably nuclear power-(High case)face opposition on environmental(percent) grounds. This is an importantEstimated Projected source of uncertainty about pro-Countrygroup 1977 7980 1985 7990 duction prospects, particularlyShare of exportsover the long-term; but in the nextCapital-surplus oil exporters 70 64 63 65 5-10 years production will be de-Oil-exporting developing countries 23 28 31 33Centrally planned economies 7 8 6 2 termied maily by projects nowTotal 100 100 100 100 in the pipeline. For technologicaland financial reasons, the devel-Shore of importsIndustrialized countries 79 78 77 73 opment of supplies of new energyOil-importing developing countries 21 22 23 27 to the stage of commercial pro-Total 100 100 100 100 duction is mainly a task for theMemo item industrialized countries. How itVolume of total net trade(millions of barrels per day)33.9 30.2 32.8 34.0 is achieved will also influence theprospects for energy productionOf which bunkers and othera 4.6 4.6 5.8 6.5a. These imports are not allocated to country groups. in the rest of this section.* Developing countries' energyproduction. Since 1973 several3.1). This will require increased of what can be achieved. With countries (including Cameroon,investment in exploration and strong efforts to develop these Ghana, Guatemala, Ivory Coastexploitation; yet spending on altematives, the share of petroleum and the Philippines) have startedexplorationandtheratioof proven in the world supply of primary producing petroleum; existingreserves to production are declin- commercial energy could fall from producers (such as India, Malaysiaing in some countries, while the 46 percent in 1980 to 38 percent and-strikingly so-Mexico) havedomestic consumption of oil is in 1990; by contrast, its share fell expanded capacity. Althoughrising in all. by only two percentage points exploration generally has beenBoth oil exporters and importers between 1970 and 1980. inadequate, discoveries of exploitsharea common interest in ensuring In addition to raising the profita- able oil and gas deposits have beenthat oil price rises and supplies do bility of developing domestic made (for example, in Chad,Pakistan,not change sharply or unpredict- petroleum and other conventional Tanzania and Thailand). Severalably. Steady changes would help sources of energy, higher oil prices developing countries (includinginvestment planning and financial stimulate research into new ways India, Turkey, South Korea andmanagement in the importing coun- of producing, converting and using the Philippines) have expandedtries; and all countries stand to energy of all kinds. Many alterna- coal and lignite production; othersgain from a stronger, more stable tive sources are still in their tech- (among them Argentina, Brazil,world economy. nical and economic infancy, while Cameroon, Ivory Coast, Uruguay* New supplies of energy. In and Sri Lanka) have taken meas-1974 producers and governments ures to increase hydroelectricitymay have doubted that real oilFigure 3.2 Actual & projected sharesoutput; a few (most notably Indopriceswould be maintained, so inworldprimaryenergysupply, nesia and the Philippines) arethere was less pressure to commit 1970-2020 tapping significant geothermalthe funds needed to develop alter- 100% sources; and Brazil leads the worldnative energy supplies. Today such 901 Ga in producing alcohol fuel fordoubts have disappeared. But 80 ilhe, automobiles.considerable uncertainty remains 70 EUEU aHydro In the 1980s progress shouldabout the returns from developing 60 Ih E - N-clear accelerate-but will require largesome potential alternatives to oil;increases in investment. The mainand energy projects take many 30 gains are likely to be in petroleumyears to come on stream, and re- 20- - and natural gas, coal, and primaryquire large capital outlays. The 0 -.____ (other than thermal) electricityprojections in Figure 3.2 (and 0 generation-mainly hydro andTable SA.3) take a positive view 1970 1980 1990 2000 2010 2020 nuclear. But much also needs to16

e done to increase the supplies Latin America. Despite consider- to make much of a contributionof the kinds of energy that are able geothermal potential in up to over the next 10 years; shale oilparticularly important for poor 30 developing countries-among and methanol have rather morepeople!. them Kenya, Mexico, El Salvador, potential. Alcohol produced from* Petroleum and natural gas. Nicaragua and the Philippines- biomass (cereals, sugarcane, beetsWhile the oil-importing developing geothermal capacity will produce and so on) is now used as a partialcountries have only about 2 percent relatively little electricity in the substitute for gasoline. The techofthe world's proven oil reserves, 1980s. But nuclear power could nology for producing it is welltheir share of ultimately recover- produce 11 percent of the total by established. A key question is theable oil reserves may be 15 percent. 1990 (2 percent in 1980)-mainly extent to which agricultural landOne study (undertaken for the in the major existing producers should be diverted from food toWorld Bank) estimated that 23 of (Argentina, Brazil, India, South fuel production (see box).70 countries surveyed each might Korea and Pakistan) but in other * Energy for the poor. The poor,have ultimately recoverable re- countries as well (for example, especially those in rural areas, relyserves of at least 750 million bar- Romania, Thailand, Yugoslavia and on noncommercial energy forrels. (For comparison, net imports the Philippines). cooking and heating; these formsof oil for energy use by develop- * Other sources. Any significant of energy provide more than 85ing couintries will amount to about increase in the production of oil percent of rural requirements in110 m:llion barrels in 1980.) To from tar sands in developing coun- many countries. Yet their suppliesrealize their full potential, most tries depends on a major tech- are dwindling, thus inflicting sevcountriesmust step up exploration nological breakthrough. Solar and eral sorts of hardship. Much timeactivities; the same study judged windpower are also unlikely is spent just in gathering fuel (forthat exploration was inadequatein 51 of 58 countries that werenot producers.Gas is widely spread; many Fuel from foodcountries can significantly expand Alcohol produced from sugarcane or or have the potential for large "gasohol"production-both for domestic grains is becoming competitive with programs.energy use and for petrochemicals gasoline as real petroleum prices rise. This development could indirectly-during the decade. A lot of gas Conventional automobiles and trucks affect the availability and price of foodassociated with oil production is can run on "gasohol," a mixture of alco- for developing countries that either imholand (at least 80 percent) gasoline. port grain on commercial terms or dependnow wasted by venting or flaring; With engine modifications, they could on international food aid to meet theirmuch of it could be recovered. run on pure alcohol; such engines are deficits. Current plans in Brazil and the* CoDal. For most developing already being produced in Brazil. By United States envisage that the area ofcountries, coal is still a minor fuel 1977 the estimated national ratio of alco- cultivated land would be expanded toused mainly in electricity genera- hol to gasoline use in Brazil was 4.3 per- grow fuel crops, so that food productioncent; in 1979 it had risen to 19 percent, (and therefore price) is not significantlytion and-in larger coal producers and will rise further as more cars run on affected. In practice these goals may not(such as India, Turkey, South Korea pure alcohol. be fully achievable.and Yugoslavia)-in industrial ap- Brazil's alcohol is still derived almost Whether ethanol proves economic inplications. Coal can substitute for exclusively from sugarcane, but alcohol other countries will depend on landoil in electricity generation, but can be produced from a variety of crops. availability, markets and prices for foodus s Ethanol, the cheapest alternative to gaso- exports, and the development of suchthe potential for increased use is line in the 1980s, comes from fermenting alternative sources as wood, sorghumlimited largely to new capacity- sugar crops, principally sugarcane; root and agricultural waste. In the next fivesince converting existing plants is crops, mainly cassava; and cereals, years or so, the quantity of agriculturaloften uneconomic. especially corn and potentially sorghum. production diverted into alcohol is likely* PrJ1arv electricity. Two-thirds The United States also has ambitious to be small (with the exception of BrazilP .imary e.ectncity. plans for producing alcohol fuel, pri- and the United States). But as moreof the electricity generated in devel- marily from corn. The US target of 2 countries consider ways of reducingoping countries is used in industry billion gallons of ethanol by 1985 would petroleum import costs, the "food or(compared with 40 percent in the require 20 million tons of corm or its fuel" issue may become more serious.industrialized countries). Hydro- equivalent, one fifth of the current US A satisfactory solution will require apower, currently accounting for exportable grain surplus. And other food major effort to develop alternative bioofelectricity output, can exporters (including Argentina, Austra- mass sources of energy, including crops44 percent of electricity output, ca lia, New Zealand, the Philippines and that can be grown economically onbe greatly expanded in many devel- South Africa) either have already launched marginal land.oping countries-particularly in17

example, 5 to 19 work days a formal energy strategies and ade- are discussed first. The secondmonth for each family in upland quate sector plans. Planning con- question is largely a matter forNepal); often the gatherers are tinues to be hampered by lack of developing countries: their polichildrenwho might otherwise be essential data on fuel deposits, on cies are considered in the secondin school. In many countries (in- consumption patterns and on how part of this section.cluding the entire Sahelian belt energy demand and supply arefrom Senegal to Somalia) forest likely to respond to income and Trade policy for industrializedland is being turned into desert. price changes. Geological and countriesThis pernicious process would geophysical surveys and detailed Most industrialized countries willbe (at least partially) arrested if market studies are still required run current account deficits inaffordable energy were made before effective planning can take 1980. How they respond to theseavailable. As well as this, burning place. Many countries also lack deficits will largely determine thedung and vegetation carries health some of the technical and mana- climate for world trade. If they allrisks, and every year deprives the gerial skills required to undertake simultaneously attempt to restrainsoil of enough fertilizer to produce the preliminary studies, draw up imports while boosting exports,20 million tons of grain-enough an energy plan and oversee the shrinking markets for each others'to feed 100 million people. exploitation of domestic energy exports will defeat their purpose,Although there are no easy so- resources. and world trade and output willlutions to these energy problems, Countries facing these constraints suffer-as happened in acute formthe essential policy initiatives can benefit from external capital in the 1930s.remain as described in last year's and technical assistance. Although After the 1973-74 oil price rises,World Development Report. Existing some assistance has been provided some of the major trading nationsforests must be husbanded, new already (for example, by the UNDP (especially Japan and the Federalones planted. Roughly 50 million and the World Bank), there is Republic of Germany) acted quicklyhectares (125 million acres) of scope for considerable expansion to reverse the deterioration in theirfuelwood planting may be required of these activities. trade accounts. They were able toby the year 2000 to meet domesticdo so because some industrializedneeds for cooking and heating in International trade countries (notably the Uniteddeveloping countries. Their pres-States) and most developing counentrate of afforestation is less International trade has been tries financed much larger currentthan a tenth of what is needed to emphasized in previous World account deficits, and because surensureself-sufficiency in fuel- Development Reports for two rea- pluses of the major oil-exportingwoodby then. More efficient ways sons: first, trade is a principal countries were quickly reduced.of burningwood (for example, im- means of promoting economic Avoiding an excessive slowdownproved stoves) can help; but news efficiency and growth; second, a in world trade and output in thetechnologies need to be devised to strong trade base tends to be a early 1980s requires that industriusethe sun, the wind and other prerequisite for attracting foreign alized countries, as a group, runrenewable energy sources. And capital. Given the world economic larger deficits-and for longer.better use should be made of outlook, these benefits acquire The countries bestplaced to runother traditional fuels (for ex- added significance; but two policy large deficits and thereby supportample, through biogas generation, questions stand out. growth are those with the capacitywhich does not destroy the fertilizer * What developments in world to borrow heavily (or run downvalue of animal wastes). trade (and the resulting effects on reserves)-and those with the lowthedistribution of payments defi- est inflation, since deflationaryThe need for energy strategies cits) will contribute most to rapid policies aimed at curbing inflationIn the developing countries, national growth? will tend to moderate demand forand regional planning is urgently * With a less buoyant outlook imports. Industrialized countriesneeded to evaluate fuel minerals for world trade, do developing that restrain domestic growth toand other energy sources, to examine countries face a changed tradeoff control inflation should minimizeconventional and new technologies, between producing for the foreign the effect on world trade by mainandto assess the likely trends in or for the domestic market? taining their demand for importsdemand for commercial and non- The first question turns mainly and avoiding beggar-thy-neighborcommercial energy. on the policies of the industrial support for exports. They can doBut many countries do not have and oil-exporting countries: they this by refraining from deliberatei8

exchange-rate depreciation, by percent of the merchandise exports have the manufacturing and marketavoidingsubsidies to exporters of developing countries and they ing skills required either to export aand by opening their markets to have grown roughly in line with wide range of manufactures or toimports. the industrialized countries' GNP. adapt quickly to changes in marketEach of these policies will also There is no reason to expect conditions.serve to dampen inflation. With- this relation to change, especially Whilenonewmajorrestrictionsout them, the industrialized coun- as exports of some agricultural prod- were imposed in the past year,tries will find that the developing ucts remain constrained by heavy some measures were consolidated.world cannot maintain its growth protection in Japan and Western In some sectors (particularly-or its demand for their exports. Europe. Even if demand were to textiles and clothing) elaborate* The outlook for exports. The grow rapidly, the developing coun- mechanisms to control importssluggish demand from the indus- tries may not be able to expand the have become more entrenched,trialized countries expected in the volume of their agricultural exports reducing the chances of their earlyearly 1980s will harm developing very much (because of supply removal. In some industrializedcountries' exports-particularly of constraints), though they would countries, imports of footwear andprimary commodities-as it did dur- benefit considerably from higher some consumer electronic goodsing 1973-77. The growth of develop- prices. In the short-term, most are still subject to fairly stringenting colntries' exports decelerated primary producers would be quotas. In shipbuilding, althoughsharply in that period; their exports assisted by improved schemes to substantial subsidies remain,of prirnary commodities fell after stabilize revenues or prices (see there has been progress recentlygrowing at around 4 percent a year box overleaf). If the industrialized in cutting capacity in uncompetiin196.3-73 (see Figure 3.3). Even economies begin to pick up, there tive countries. France and theexcluciing fuels, primary com- would be a recovery in demand United Kingdom, in particular,modit:ies account for about 55 for primarv products. have taken steps to reduce generalThe outlook for manufactured subsidies to industry.exports is much brighter; as in * The Tokyo round. The latest1973-77, their growth is likelv to (Tokyo) round of multilateral tradecountries' merchandise exports, be comparatively robust. At pres- negotiations (MTN) was largely1963-73 and 1973-77' ent, they account for only about completed in April 1979; it madelauerage .nnual percentage ihange, 1970 price ) 10 percent of the imports (and less valuable progress in some areasthan 2 percent of the consumption) (see box on page 21); in some others,Nonfuel ManufacT of manufactured goods in the the results were a disappointmentdroduct Fue e industrialized countries. But they for the developing countries. Noneareconcentrated heavily in some theless, the MTN agreements12 - -________ products, and therefore have at-__________________ tracted protectionist attention. Thehave considerableliberalize trade.potential to10 - developing countries most directly The extent to which this potential_______ _______ affected by protection have been the is realized, especially by develops_ __ more successful exporters (particu-____-__- - - larly the major East Asian exportersing countries, will depend on howthe agreements are implemented6 - -- - ___ of manufactures and Brazil); but they and on the outcome of continuing_______ have continued to expand their ex- negotiations-the most important196373 -_ _ - ports rapidly by diversifying into of which pertain to the safeguard4- new product lines. Current restric- clause. This attempts to limit the2 - * =_ = tions *_ on items other than textiles and emergency protection that can be2_ clothing are not (with some minor adopted on the grounds of serious+ exceptions) an insuperable barrier to injury to domestic industry. Safe-- _ rapid export growth. guard measures have been invoked2 1973-77 Harder to assess (but clearly im- frequently against imports fromportant) is the longer-term disincen- developing countries (often outa.Exczludes exports to centrally planned economies(about 7 percent of developing-contt-y tive-from both current restrictions side the legal framework of theexports in 1977). Country groups correspond toUN classification. Developing countries include and risks of their expansion-to GeneralAgreementon Tariffs andcapital-surplus oi exporters and exclude SouthAfrica rnd most of southern Europe. countries at earlier stages of export Trade-GATT). The main disdevelopment.Generally, they do not pute holding up agreement is19

conduct. But most developingStabilizing export earningscountries so far have refused tocompared with $575 for Lome 1.Two international facilities already exist There are some minor reforms in thesign-partly because of dissatisfactionwith the progress madeto help stabilize the export earnings of new agreement but the principles re- and partly because they maintaindeveloping countries,main the same. To qualify for support,* The IMF's compensatory financing a commodity must have accounted for that they should benefit from thefacility. A country in balance-of-pay- at least 6.5 percent (7.5 percent under codes without being bound byments difficulty is eligible to draw up to the old agreement) of a country's total100 percent of its quota, if exports fall exports to all destinations in the pretheirprovisions.The reciprocal obligations ofbelow a defined trend for reasons gen- ceding year, or 2.0 percent (2.5 percenterally beyond its control. After the facil- previously) for the 44 ACP members developing countries are a sensiitywas liberalized in December 1975, that are least developed, landlocked or tive issue that will be increasinglydrawings by members rose sharply. islands. A Stabex transfer can be made important in future negotiations.Compared with 57 drawings totaling if export earnings of a qualifying prod-SDR 1.2 billion (about $1.3 billion) in uct fall below its average earnings overIn particular, the status of thosedeveloping countries that are major1963-75,107 drawings totaling SDR 4 bil- the four preceding years by 6.5 percentlion ($4.9 billion) were made from Janu- or more (2.0 percent for the 44 special exporters of manufactures and areary 1976 to March 1980-accounting for cases)-down from 7.5 and 2.5 percent reaching a more advanced stage ofnearly a third of the total credit ex- under the old agreement. development ("the graduates") istended by the IMF to all its members. Stabex transfers to the 35 least-devel- unresolved. If their eligibility forThe scheme has several advantages: oped countries are grants; to other special treatment were reduced,(a) it applies to exports in general-even countries they are interest-free loans,receipts from tourism and workers' re- to be repaid over seven years with two there would be more scope for themittances qualify for support if data are years' grace. Under Lome 2 a related lower-income countries to benefit.available; (b) drawings are not at the but different facility for minerals will The extent of the gains from theexpense of other rights to draw on IMF also be introduced. A major advantageresources; and (c) potential access is for ACP countries receiving paymentsMTN nevertheless depends mainlyon the industrialized countries.now large-about $16 billion for oil- is that Stabex offers "untied" foreignimporting developing countries once the exchange on concessionary terms. Butseventh general review of quotas takes it is small, does not fully cover earnings economies reduces alternativeeffect. But there are disadvantages too: losses resulting from inflation, and is not employment opportunities forbecause the amount a country can bor- as automatic as its (complex) rules displaced workers, and aggravatesrow is determined by its quota, it may suggest. protectionist sentiment. (There isbe relatively little for countries (such In addition, there is the UNCTADas Zambia) that are heavily dependent Common Fund-agreed upon in princi- in fact no evidence that compeona single commodity export with ple, but with legal and technical ques- tition from developing countriessharply fluctuating prices. And it pro- tions still to be resolved. The original is a major cause of unemployment.vides no compensation for a sharp in- proposal was for a fund of $6 billioncreasein import requirements (for ex- $4.5 billion to stabilize 10 "core" com-Several studies have shown thata balanced increase in trade withample, if a harvest fails)-which can modities, with a "second window" ofbe equally unpredictable and outside a $1.5 billion for other measures (product developing countries has insigmember'scontrol. (The IMF is studying diversification, research and process- nificant effects on employment inthe possibility of giving assistance to ing). The idea is that a central fund industrialized countries, especially asmembers adversely affected by higher would finance buffer stocks under sep- compared with the job losses duecosts for food imports.) arate international commodity agree- to technological change; other* The European Community's Stabex ments (ICAs), and would thereby stabi- sscheme. It covers the 58 African, Carib- lize commodities prices. The current studies show employment gainsbean and Pacific (ACP) countries that proposal is for $400 million for buffer- for some countries.)In turn, protection impedesare members of the Lome agreement; stock financing (from member govern-12 primary products were covered at the ments and deposits by ICAs) and aoutset, 44 are eligible for support under second window of $350 million fromeconomic recovery by slowing themovement of resources fromLome 2. Proposed funding for Stabex in voluntary contributions (by April 1980, low- to high-productivity sectors,Lom6 2 is $775 million for 1980-85, $170 million had been pledged). thus to inflati And____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ thus exacerbating inflation. Andimports can reduce inflation directly,whether safeguard measures can actively participate in) the Tokyo restraining the price rises thatbe invoked selectively against agreements, they are likely to add domestic producers seek andspecific countries-an approach significantly to the benefits they increasing the pressure on themfavored by some industrialized obtain from it. Under its terms, to improve efficiency. A 1978 surveycountries but opposed by devel- only signatories can participate in in the United States of all consumeroping countries. the implementation and surveil- goods (except food and automo-If developing countries sign (and lance of the governing codes of biles) found that imports from20

Table 3.2 World merchandise trade, by country group, 1970 and 1977 rights. These measures complement(percent)efforts to raise employment andDestinationgrowth and to reduce inflation.Oil-importing Oil-exporting But if adjustment policies are notdevelopinig developing Capital-surplus Indusfrialized properly designed and implementedcountries countries oil exporters countries World' p they can delay rather than assistOrigin 1970 1977 1970 1977 1970 1977 1970 1977 1970 and 1977 restructuring.Oil-importingdevelopingcountries 17.4 20.5 3.5 8.4 1.5 3.1 69.0 61.8 100.0Trade issues for capital-surplusoil exportersdevelopingOil-exportingAfter the 1973-74 oil price increasescountries 21.8 21.5 3.9 2.2 0.5 0.8 66.6 72.6 100.0Capital-surplusthe oil-exporting countries rapidly* oil exporters 20.2 20.6 1.7 4.3 0.8 1.2 74.4 69.6 100.0 expanded their imports-therebyIndustrialized moderating the world economiccountries 18.2 16.4 4.7 6.7 1.5 5.6 71.0 65.7 100.0 modeang The world onomicslowdown. The imports of theWorlda 18.0 16.9 4.1 6.1 1.3 4.3 65.4 62.2 100.0 capital-surplus countries are una.Includes centrally planned economies and unallocated trade (usually about 1 percent). likely to grow in the 1980s at theextraordinary rate (more than 20percent a year) of the 1970s; butAsia and Latin America were on tries. Policies to improve mobility they are expected to grow almostaverage 16 percent cheaper than were discussed at length in last twice as fast as the imports of thedomestic products of similar year's World Development Report. industrialized countries (9 percentquality. These include quick and adequate a year compared with 5 percent).Pressures for protection can be compensation for affected individ- This will offer buoyant opportunioffsetby policies to improve uals, retraining schemes and the ties for exporters in developingproductivity within particular creation of new industries, and countries-but within limits, sinceindustries and to ease the move- removing obstacles to labor mobility, the oil-exporters' market is stillment of resources between indus- such as nontransferable pension relatively small (see Table 3.2).Multilateral trade negotiations: the Tokyo roundbut also for modifying their productionSeveral novel features are contained in * To reduce discrimination against structure; revising GATT procedures forthe MTN agreements, including the in- foreign suppliers for government con- supervising adherence to internationalcorporation of preferential treatment for tracts valued at SDR150,000 (about rules.developing countries into the legal $200,000) or more. Others. Antidumping measures andframework governing trade and codes on * To regulate export subsidies and, restrictions on trade in dairy and certainnontariff barriers. But they largely ex- for countervailing duties, to require meat products were amended.clude existing quantitative restrictions on proof that subsidized imports caused Provisions for developing countries. Asidetextiles, clothing and agriculture. material injury to the domestic industry from the framework agreement, specialTariffs. Industrialized countries are to in question. provisions include:reduce tariffs 38 percent (simple average) * To ensure that technical regulations * A five-year delay in implementingover eight years, affecting trade worth adopted for such reasons as health or the customs code, and longer exempabout$125 billion (1976 values). The environmental protection do not create tions for certain goods.simple--average tariff cut on developing unnecessary obstacles to trade. * Fewer entities to be covered by thecountries' traditional exports would * To prevent procedures for import government procurement code; andamount to 25 percent for industrial and licensing from constituting barriers to technical assistance for tendering bids.7 percent for agricultural products. The trade. * Delays of up to two years in applytariffreductions are less than average on Framework for conduct of trade. This ing the import-licensing code.products eligible for the generalized sys- reforms several aspects of the GATT * Export subsidies to nonagriculturaltem of preferences; they are larger on system. Its main features are: providing a products are not flatly prohibited; butfinished manufactures than on semi- legal basis within GATT for preferential developing countries should avoid usingmanufactures. treatment of developing countries, and subsidies to harm the interest of tradingNontariff barriers. The aims are as special treatment of the least-developed partners, and phase them out gradually.follows: countries; increasing the regulation of Aside from the safeguards clause, the* To prevent increases in protection trade measures adopted for balance-of- areas of continuing negotiations are comarisingfrom use of arbitrarily deter- payments purposes; recognizing the mercialcounterfeiting,adequateaccessmined customs values as a base for developing countries' need to take safe- to vital imports and restrictions ontariffs. guard action not only for new industries agricultural trade.21

slowdown in trade poses markedlyMigration and money other countries of the region, most of the different policy problems for oil-Emigration once played a crucial role in other 1 million from South Asia. exporting and oil-importing develreducingpoverty in Western Europe: Remittances to developing countries oping countries. As discussed inabout 50 million people are estimated to have grown rapidly, from about $3 bil- World Development Report, 1979, thehave left for the "new world" in the lion in 1970 to an estimated $17.5 billion main trade issue for oil exporterssecond half of the 19th century. Whole in 1980, with more than $3 billion goingfamilies moved then, for good. Today to South Asia, about $5 billion to the is to prevent their sharply increasedmany of the migrants are male workers Middle East and North Africa and close foreign earnings from discouragingwho go abroad for a period and send to $7 billion to Southern Europe. Remit- growth of other exports and immuchof their earnings home. Many tances are about a fifth as large as mer- port substitutes.of them are illegal; some of their remit- chandise exports in South Asia, and in For oil-importing developingtances go unrecorded or enter official the Middle East and North Africa (ex- countries, the likelihood of a diffibalance-of-paymentsaccounts in ways cluding the capital-surplus countries).that make it hard to disentangle them The proportion is especially high in cult external environment-risingfrom other flows. Pakistan, Bangladesh, Jordan, Egypt, oil prices and slower growth inWhile estimates are imprecise, the Morocco and the two Yemens. Other world trade and capital flows-inbroadpicture is clear. There were roughly countries where remittances are particu- creases the urgency of taking steps20 million migrant workers in the world larly important include India, Turkey, to earn and save foreign exchangein the late 1970s, of whom 12 million Greece and Yugoslavia.were from developing countries. Some There has been controversy over the through export promotion and6 million were in the United States net benefits to developing countries when import substitution. The unfavor-(mostly Mexicans); 5 million in Western skilled people emigrate. The "brainEurope; and 3 million in the Middle East drain" represents a serious loss of manableenvironment makes it harderfor the developing countries to(other main destinations include the power for some countries, and there are achieve rapid export growth butWest African coast and the mines of social costs as well. But governments canSouth Africa). The number in Western often take steps to encourage vocational makes it more important to do so.Europe increased from 2 million in the education andtrainingto meeta demand Also of great importance areearly 1960s to 6 million in the early 1970s for skills-in order to increase remit- efforts to reduce the import requireandthen declined, but this was more tances while retaining enough trained ments of their overall growththan offset by an upsurge in migration people within their countries. In anvto the oil-rich countries of the Middle event most of the objections apply lessEast. More than 2 million of the migrant strongly to the unskilled or semiskilled, of curbing nonessential imports,workers in Europe are from developing the majority of migrant workers; for shifting production toward lesscountries (mainly Algeria, Morocco, them, migration offers a chance of import-intensive items and re-Tunisia, Turkey and Yugoslavia); in the dramatic improvement in their often placing more imports by domesticMiddle East about 2 million come from meager incomes. production.BALANCE BETWEEN EXPORT PROMO-TION AND IMPORT SUBSTITUTION. Sev-The share of the oil-importing a significant constraint on growth eral factors indicate caution in emdevelopingcountries' exports go- for several oil-exporting countries. phasizing import substitution.ing to both the capital-surplus and But migration raises sensitive * Most developing countriesother oil-exporting developing social and political issues for now have trade policies that arecountries increased sharply be- countries of origin and destination; heavily biased toward import subtween1970 and 1977 (Table 3.2)- if investment programs in the stitution at the expense of exports.exports to each group grew at capital-surplus oil exporters are These biases commonly result fromannual rates exceeding 20 per- more conservative and slow growth excessive reliance on quotas andcent. Some developing countries persists in the industrialized coun- administrative controls, and indis-(including South Korea and India) tries, migration is likely to grow criminate use of tariffs. Frequentlyhave won major contracts for "tum- less rapidly in the 1980s. such policies have been introkey"plants and for constructionduced in response to temporaryand consultancy services; these areas Trade policy for developing countries balance-of-payments crises butoffer many export opportunities. Slower growth in world trade does then maintained for long periods.Remittances from migrant notchangetheprinciplesthatshould They result in misallocated reworkersin the oil-rich states have govern the trade policies of devel- sources and create a constituencyboosted the foreign exchange oping countries. Generally, the for retaining protection. Reducingearnings of some developing policies that maximize benefits from the general bias toward importcountries considerably (see box trade in good times will also maxi- substitution should therefore conabove).Labor shortages remain mize them in bad. But the likely tinue to be of high priority.22

* Inward-looking policies may experience (particularly in the substitution can, however, helpprevent: developing countries from 1950s) illustrates the costs of ex- growth. Many countries have untakingadvantage of the consider- cessive export pessimism, both in exploited opportunities for importable export opportunities that will terms of lower import capacity and substitution through the producexistin the industrialized countries inefficiency in highly protected tion of energy (see pages 16-17)even i.f their growth slows, and industries. and food (see box). And inmay also retard the growth of * Pricing and other policies most countries-including Southdeveloping countries' trade with that encourage efficient export Korea, for example-it played aneach other. growth encourage efficient import important role in initiating in-* World trade could recover substitution as well. dustrialization. But South Korea,strongly by the mid-1980s-and Emphasis on selective import unlike many countries, eliminatedFood, farming and foreign exchangebrought into production in developing 80, when the country experienced one of- countries (more than the acreage devoted its worst droughts, output fell 8 to 9Before 1939 only Western Europe among to cereals in the United States, Canada, percent-but the crop was still the thirdthe world's regions was a net importer of the EEC and Japan combined). But this largest ever (some 20 percent biggergrains. Today only North America and expansion has slowed since the mid- than in 1973-74, when there was a com-Oceania are not. Trade in grains has 1960s, and it can be expected to account parable drought).risen from 25 million tons in the late for no more thana quarter of incremental Water may become a critical con-1930s to 181 million tons in 1979-from food production in the 1980s. straint in agriculture in the next 25 years.4 percent of global production to 14 per- Hence the importance of increasing Over the past 50 years the area undercent. North America now accounts for yields. Typical constraints include: un- irrigation has trebled. Costs of irrigation20 percent of world grain production and due emphasis on large-scale irrigation at have risen far more rapidly than water80 percent of world grain trade. the expense of smaller projects; wasteful charges generally; the result is inefficientThe largest rise in net imports since use of water; inadequate support for re- use and a lack of funds for maintainingthe early 1960s has been in the middle- search and extension; and pricing policies and operating irrigation systems. Waterincome developing countries-from 13 that discriminate against agriculture, wastage is immense: in many parts of thepercent to 23 percent of their consump- Several countries went a long way to world only 25 percent of water releasedtion (see table). Of the low-income removing these constraints during the from dams is used to grow crops. Imcountries,there has also been a sharp 1970s. India is a good example. In the proved management of water systemsrise in Sub-Saharan Africa. In 1980 food early 1970s prices to farmers were raised, would result in major increases in grainand beverage imports are estimated to be and there was increased emphasis on production. But for large parts of the$7.7 billion in low-income countries (17 small-scale irrigation and agricultural ex- world and many of the world's poorestpercent of their merchandise imports) tension. Helped by good weather, these people, the key to greater food producandmore than $36 billion in middle- policies contributed to record grain tion lies in a breakthrough in drylandincome countries (9 percent). Historically, crops in 1977-78 and 1978-79; in 1979- farming (see Chapter 4, page 37).a 10 percent increase in average incomeshas led to a 7 percent increase in grain Grain consumption and tradeimports in developing countries.(millions of tonnes)The growth of imports has placed severepressure on the grain handling and dis- Average annual Average annualtribution systems of developing coun- Country consumption' net trade balance'. tries (when domestic production is orcountrygroup 1960-63 1977-79 1960-63 1977-79includecd, their marketing and distribu- United States 139.8 173.5 32.7 94.9tion capacity is today handling roughly Canada 15.1 22.5 10.2 17.7four times the tonnage of only 20 years EEC 92.0 118.3 -21.5 -8.0. ago). In times of food shortfalls, dis- Other 50.3 83.6 -3.0 -18.5tributiorial bottlenecks are often a more Eastern Europe 64.3 106.5 -6.4 -12.4important constraint than the ability to USSR 119.0 217.6 7.3 -17.9procure inhports. Both these constraints China 112.3 225.2 -4.0 -8.7argue for a measure of self-sufficiency in Developing countriesb 254.1 427.3 -11.1 -36.0food but within limits: the earmings for- Low-income 139.3 214.0 -5.6 -8.7gone as a result of diversion of resources India 73.1 109.4 -4.1 -1.3from other agricultural (or nonagricul- Middle-income 101.3 191.8 -12.7 -44.7tural) investment can be substantial. In- Major exporters 0 13.5 21.5 7.2 17.4creased food production should be part a. Excludes Albania, Cuba, Mongolia and Southern Africa (South Africa,of a broad-based effort to stimulate agri- Lesotho and Zimbabwe).culture.b. Includes capital-surplus oil exporters and excludes Southern Europe (Greece,From 1955 to 1975 more than 150 mil- Portugal, Yugoslavia, Romania and Israel).lion hectares of new farmland were c. Thailand and Argentina.23

earnings. For some primary prod- counted for barely more than aFigure 3.4 Growth of developing ucts, the potential gains from quarter of the increase in theircountries' merchandise exports, increased processing can be ex- manufactured exports during 1963-by detiation, 17 7 re aggerated: some stages of processing 73, but almost half in 1973-77.certain commodities (for example, Most of such trade in manufac-Nonfuel Manufac- Ti nickel and bauxite) are highly tures is from more- to less-indusprimaryFuel tre Tol capital- or energy-intensive; others trialized developing countries, or_______ ;i V (for 00; example, some edible oils) between adjacent countries that; X 0°0:2:00B00 can cost less to transport in their are not otherwise major exportersTodevelopingcountriet ________ unprocessed form. This does not of manufactures. In the compo-12 ________810 t000 05¢¢X :0 necessarily mean that such pro- sition and characteristics of the______ f00 t0 j0cessing activities are unsuitable for products, south-south trade differss______ . 0 a developing country, but in these significantly from developing councasesa more careful evaluation of tries' manufactured exports to________________ X 00 t0 the costs and benefits is required. industrialized countries; in par-6 To industrialized- The decision to do more pro- ticular, it is more skill- and capitalcountriescessing, however, is seldom in the intensive, with a higher proportion4 _ hands of developing countries alone. made up of engineering and chem-2 The tariff structures of industrial- ical items (see Table 3.3). Trade injjjjj0

inward-looking policies, with high of about 0.5 percent of GNP-theprotection and low overall trade counterpart of their current account Figure 3.5 Developing countries'growth. But they could play a big- deficit. Moreover, by 1990 much (High case)ger role if properly designed and of the projected net capital inflow p Grossimplemented. One promising to developing countries would be Avail.bl f-o nrd lo.gavenuefor improving the bene- needed to meet interest payments Amorti-aton Int-rest reserves ($ billion)fits from regional cooperation is on loans. The share of gross lending 1970 1 1 | ito coordinate large-scale invest- that is available for buying importsments to avoid excess capacity (as and adding to reserves would fall 1975 la Lmembers of ASEAN-the Asso- sharply during the 1980s (see 1980ciation of South-East Asian Nations Figure 3.5).-have begun to do). But the main Clearly, the uncertainties in 1 1T|(H)vehicle for expanding south-south these projections are high. Considtradeis more likely to be those erably more resources could be 1990 [ - 3general policies that liberalize de- available to developing countries l l l lveloping countries' import regimes over the decade, and the result 5 50 75 10and strengthen their export capa- could be more growth. But it looksbilities (for example, by expanding as though their capital inflow willexport credit and insurance facilities). be relatively modest in the 1980s, billion; in 1980 the same amountbecause of constraints both on of imports would cost them aboutCapital flows their capacity to borrow and on thesupply of funds.$65 billion. Their potential financinggap is widened further by slowThe links between the growth growth in the industrializedprojected for developing countries Factors affecting borrowing decisions countries, as a result of which theirand the capital flows required to In general, the oil exporters face exports in 1980 could be about $6sustain it received close attention few financial constraints on their billion lower than they mightin Chapter 2. The projected capital growth. Their major challenge otherwise have been. In the shortinflowto developing countries (especially if the real price of oil term this means they will runreflects judgments both about the continues to rise throughout the higher current account deficits thanavailability of finance and the 1980s) is to use their oil revenues in earlier years for any given rateamounts the countries will want efficiently and not to exceed their of growth.to borrow. But the flows that in capacity for absorbing investment. In these circumstances thefact materialize will be deternined If they succeed, they will not need policy options of the low-incomeby savings and investment behavior much foreign capital over the oil importers are limited. They caninthe industrialized countries and next five years or so. For major not borrow much capital on comthecapital-surplus oil exporters- borrowers (such as Algeria or mercial terms, nor would it beand specifically on how much of Mexico) this means that debt- prudent to do so. Their growththeir saving they choose to invest service ratios will tend to decline rates depend essentially on threein the developing world. despite strong economic growth. factors: their own efforts to raiseThis choice cannot be forecast Later in the decade, however, investment and saving; the availwithprecision. The High case their position will change. The abilityof concessional finance; anddescribed in Chapter 2 requires initial surge of revenues from the how efficiently they use domesticaid and commercial capital from oil price rises of 1979-80 will have and foreign resources. Withoutindustrialized countries totaling been digested; their ability to absorb much more aid (beyond theabout 0.5 percent of their GNP in more foreign investment produc- increases currently projected),1990. By historical standards, this tively will have risen. With oil GNP per person in these countriesis not a large amount: it was 0.8 providing them with a strong credit is unlikely to grow faster thanpercent of their GNP in 1970 and standing, the oil exporters could 1.7 percent a year in the first halfstill about 0.5 percent in 1975. choose to finance further rapid of the 1980s.lt implies, however, a substantial growth by more foreign borrowing. The hardest decisions lie withturnaround from 1980, when the The position of the oil-importing the middle-income oil importers,industrialized countries themselves developing countries is altogether for whom prudence will have toare likely to have a net inflow of different. In 1978 net oil imports remain the watchword. In thecapital (before official transfers) (for energy uses) cost them $30 short-term (perhaps until the end25

of 1981), they can resort to the from the 1970s is that foreign the capital surplus oil exporterstemporary expedients of com- capital-especially on commercial than in previous years. In addition,pressing imports and running terms-cannot substitute for struc- the European centrally planneddown inventories-and in some tural adjustment but can ease it. economies are likely to increasecases using foreign exchange their demands on the capital marreserves(which were boosted by Theoutlookforcapitalavailability ket. They have been substantialheavy borrowing in 1977-78). To meet their needs in the 1980s, borrowers in the past and (apartThese measures will not prevent developing countries will seek from the USSR) are net importersexternal deficits from rising, so finance from private sources of energywithlargedebtstoservice.more finance will be needed to (mainly commercial banks, but also Finally, China seems poised to entermaintain growth, even at the bonds and direct investment) and the market to finance ambitiouscomparatively low rates of 1977-80. from official sources, both on modernization; over the decadeBut these countries may find concessional and on market terms. China could become a sizabletheir options increasingly restrictedborrower.by a key constraint-their credit- OUTLOOK FOR CAPITAL FROM COM- While developing countries willworthiness for larger and larger MERCIAL BANKs. Despite the in- therefore face more competitionamounts of borrowing on com- creased liquidity of the intemational for loans in the 1980s, this doesmercial terms. This means not only banking system, arising from the not mean that net lending to themcreditworthiness as perceived by surpluses of the capital-surplus oil will not increase. But the pace willlenders, who may be willing to exporters, developing countries will beslowerthaninthepast,andtheycontinue to lend to countries that find it harder to maintain rapid will probably pay higher spreadshave demonstrated an ability to growth in borrowing in the 1980s (the margin over interbank depositmanage their debt. Developing than they did in the 1970s. Apart rates) than they have done in recentcountries themselves must deter- from the considerations of credit- years. Interest rates themselves aremine how much they will benefit worthiness already discussed, they likely to be higher as well-becausefrom continued heavy commercial can expect greater competition for of competing demands for funds,borrowing-allowing for their funds and direct constraints on and because of restrictive monetaryexisting levels of debt and debt- bank lending. These factors are policies (in the next few years, atservicing obligations, their uncer- likely to affect borrowing more in least) in industrialized countries.tainexportprospects andthe likely the next few years than over the From 1976 to 1978 the relativereturn on additional investment. whole of the decade. ease of monetary policy (especiallySome countries have already run * Increased competition. in the United States) helped tointo debt-servicing difficulties. Developments in the 1970s have boost international liquidity andIn the absence of more official highlighted the need for heavy thus facilitate the rapid expansion offinance, the wise policy for some investment in the industrial econ- commercial lending. The currentoil importers may be to borrow omies, to overcome structural stance of monetary authoritiesless and accept slower growth weaknesses. The increased cost of suggests that the 1980s will seein the near term, while current energy provides a strong incentive tighter monetary policy to combataccount deficits are reduced and for governments to stimulate both domestic inflation. But the dramaticdebt-servicing capacity and credit- public and private investment in fluctuations in interest rates overworthiness are strengthened. energy programs. Investment is the past year underline the potentialCountries that can finance higher thus unlikely to be compressed much for error in this kind of prediction.deficits and more rapid growth will further, even in the short-term * Constraints on banks. Thealso have to take steps to restruc- when demand will be depressed. two previous World Developmentture their domestic economies and Unless savings rates rise sharply, Reports have noted the potentialtheir extemal payments. They, too, the industrialized countries are not constraints on commercial bankwill be faced with the need to raise likely to eliminate their current lending to developing countriesexports rapidly, to use imports account deficits as rapidly as they that arise from portfolio concenefficiently,to control domestic did in 1974-78-especially as the tration, higher debt-equity ratiosexpenditure and inflation and to real price of oil is expected to rise and the associated concem of bankinvest productively so that their further in the 1980s. regulators. The danger to develdebt-servicingability and credit- Borrowing by industrialized oping countries is not that banksworthiness will not be impaired. nations is therefore likely to take will stop lending to them; ratherA lesson that has been learned a larger share of the surpluses of that lending growth will slow be-26

cause individual banks or bank- Table 3.4 Commercial bank claims on developing countries, 1976-79ing groups may have to restrainPercentage compositiontheir lending-and it will take time Country' of amounts outstandingtfor new lenders to expand their or group 1976 1977 1978 June1979activities. Brazil 16.7 16.6 16.2 16.1The main factors behind these Mexico 16.2 13.4 11.4 11.7Venezuela 6.2 6.0 6.9 7.5constraints still exist and may have Spain 6.6 7.6 6.5 6.5becorme more acute. The rapid Argentina 3.0 3.2 3.4 4.8growth in lending by the main Subtotal, 5 largest borrowers 48.7 46.8 44.4 46.6* money center banks in the United Next 5 borrowers 17.4 18.7 18.8 18.0States, the Federal Republic of Next 10 borrowers 20.4 19.6 19.9 19.2Germany and Japan has meant that All others 13.5 14.9 16.9 16.2* their capital base (shareholders'equity plus retained earnings) hasAll developing countries 100.0 100.0 100.0 100.0failed to keep pace with lending. Amount (billions of dollars) 110.5 151.1 203.9 221.5For the major US banks at least, Source: Bank for International Settlements and US Federal Reserve Board.how rnuch they can lend in the a. Rankings according to outstanding claims on June 30, 1979.b. Excludes offshore banking centers-Bahamas, Barbados, Bahrain, Bermuda, Caymanfuture will be affected by how fast Islands, Hong Kong, Lebanon, Liberia, Netherlands Overseas Territories, New Hebrides,they can expand their capital. But Panama, Singapore and West Indies.this is difficult in a world of lowspreads, high inflation (which increasesloans and deposits relativecreases d loas s ras adties of many countries as wellthe Bank for Internationalof borrowing; at current levels ofboth spreads and interest rates,to capital) and low prices for bank Settlements are concerned to avoid the latter should have more effectstocks. Second-tier banks that are undue constraints. on the developing countries' willcomparativelyunderlent relativeto their capital will probably ex-While these factors may causeodvlpn yedningness to borrow.gonrepsand their international lending. lending to developing countriesBut because these banks are smaller to grow more slowly, banks could OUTLOOK FORles bexpseriened bands probablyore be encouraged to lend more if PRIVATE FINANCE.OTHER FORMS OFBoth bondsrisk-averse than the large inter- spreads (between deposit and lend- and private direct investmentnational lenders, developingconatriesnar lendelysto developiring rates) widen. These spreadshave a major influence on theoffer some alternative to banklending, though their main impactfountriheiarservices to pay more profitability of lending; they have will be felt in the longer term.In addition, some banks maynarrowed considerably since 1976(see Table 3.5), but this trend* The bond market. Developingcountries made few interwishto limit their exposure in someseems to have been arrested in national bond issues before thecountries, since lending has beenvery concentrated (see Table 3.4).1980. Since 1977 spreads have notbeen a major element in the costend of 1975, when outstandingexternal bonds of 96 developingRegulatory agencies reinforce thiscaution: they have become increasinglyconcemed that foreign lending Table 3.5 Average spreads over LIBOR for externalshould not pose a threat to domes- borrowing, 1974-79'tic banking systems. The effect of (percentage points)regulatory constraints on lending Item 1974 1975 1976 1977 1978 1979is not certain; it depends on the All developing countries 1.13 1.68 1.72 1.55 1.20 0.87attitudes of regulators. In the past, Typical industrializedbanks have been free to interpret country (France)' 0.58 1.42 1.09 0.92 0.63 0.36quite liberally the guidelines Difference 0.55 0.26 0.63 0.63 0.57 0.51within which they operate. There Memo itemhave been moves to tighten con- LIBOR rate, 11.32 7.74 6.26 6.54 9.48 12.12trol of international lending (for a. LIBOR is the London interbank offered rate, the rate charged by banks in London forexample, banks are increasingly dealings with each other.having to report foreign and do- b. Spreads reflect the credit standing of the borrower as well as market costs. This explainsthe very low difference in 1975.mestic operations on a consolidated c. Calculated as an annual average from monthly averages for the Eurodollar bid (deposit)basis); but the monetary author- rate plus one-eighth of a percent.27

countries totaled an estimated OUTLOOK FOR OFFICIAL CAPITAL.$5.5 billion. (By comparison, the Figure 3.6 International Given this relatively uncertain out-World Bank alone then had out- bond issues, 1972-79 look for private capital flows, officialstanding bond issues of $12 bil- Biihons,f agencies will have to help securelion.) And only a handful of d'N"' the financing needs of the develop-40-(mainly higher-income) develop- _ Othe, ing countries (especially the lowingcountries had tapped the bond 30_Intmrationa1intitutton- income oil importers), as they didmarket: Israel accounted for 40 _ in 1974. Finance from the cenpercentof outstanding bonds, 20 - trally planned economies is modwhileArgentina, Mexico and /u0s-tiaed est and probably will remain so.Spain together contributed a fur- 10 Official capital from the industher35 percent.trialized countries and the capital-Issues by developing countries o _ a E countriesg surplus oil exporters-together withincreased rapidly after 1975 (see 1972 74 76 78 79 the international financial institu-Figure 3.6). They totaled $6.0 bil- tions they support-will effectivelylion in 1978, of which $5.9 billiondetermine the capital inflow to lowwasthe debt of middle-incomeincome countries and will supplecountries.But their share of a most European countries restrict ment the middle-income countries'slow-growing (if turbulent) market the foreign bond portfolios of some private borrowing.for international issues tumed down types of institutional investor. * Prospects for concessionalsharply in 1979, to $3.9 billion Andinpracticeaforeignborrower assistance. The aid projections(compared with issues by the in- must make a successful public that underlie the High case areternational organizations of $8.3 offering in another foreign bond shown in Table 3.6. They showbillion). market before it can enter the aid from DAC donors reaching noOver time, bond issues should Japanese market. Governments and more than 0.36 percent of projectedbecome more important as a source regulatory agencies could help de- GNP in 1985 and 1990. Measuredof funds for developing countries. veloping countries by improving against the target (0.7 percent ofBut the bond market is a con- their access to bond markets, but GNP) established by the Unitedservative one in which investor quick results cannot be expected. Nations for the Second Developacceptanceis acquired only slowly; * Direct foreign investment. ment Decade, the performance ofborrowers must approach the Direct investment could provide DAC donors has been most dismarketcautiously until they es- more capital to developing coun- appointing. Real growth from 1965tablish sound reputations. This tries, with the capital-surplus oil to 1979 averaged only 1.5 percent asuggests that in the foreseeable exporters playing an increasingly year. Excluding countries that havefuture bonds will not substitute important role. But in the short- already reached the UN targetto any great extent for commercial term its potential is limited- (Denmark, Netherlands, Norwaybank lending. partly because many projects take and Sweden), the aid performanceThis conclusion is reinforced by so long to come on stream, but of most of the remaining 13 DACthe regulations imposed on bond also because developing countries members deteriorated from 1975transactions in many countries. are often concerned about foreign to 1979. There is little assuranceThese regulations do not dis- ownership and influence in their of significant progress in responsecriminate among borrowers; they economies. Because the risks are to the Brandt Commission's call forare intended to protect national high, the foreign investor typical- rapid growth in aid, and the evidentinvestors and currencies. But their ly requires high returns on capital needs of developing countries.effect is to favor established (and in some cases substantial Recent actions give cause forborrowers and to make markets control of the enterprise). Any concern. The aid cuts announcedinaccessible for inexperienced major increase in direct invest- by the British Government couldborrowers. For example, the Se- ment is likely to need greater cause their aid to fall to 0.38 percuritiesand Exchange Commis- agreement between governments cent of GNP by 1985, from thesion imposes strict disclosure abouttheroleoftransnationalcor- 0.48 percent average for 1977-79.requirements on public offerings porations. Barring that, direct Aid bills continue to face difficultiesin the US bond market that new investment over the next 5 to 10 in the US Congress, suggesting thatborrowers often find difficult to years would probably grow at only support from the biggest donor issatisfy. The United States and about 3 percent a year in real terms. likely to remain the lowest, relative28

to GNP, of all large industrial na- higher-income aid recipients. Nonetions.Some countries, such as theless, there is an extremely strong Military spendingJapan and the Federal Republic of case for donors to provide at least Although data are imprecise and esti-Germany, have indicated their 50 percent of their aid to low- mates vary widely, one estimate putsintent to continue their recent im- income countries; this redistribu- global military expenditure at moreprovements in aid flows. Never- tion is built into the capital-flow than $400 billion in 1977. The proportheless,achievement of the projectedtheless, achievementprojectionsofunderlyingthe projectedtheprojectionsHighunderlyingtions of GNPthethatHighindustrialized anddeveloping countries devoted to it wereoverall increase (a tripling of aid case in Chapter 2. If it fails to rather similar (see table). For indusinnorninal terms, or 4 percent real take place, total aid flows from trialized countries, the outlay on armsgrowth throughout the decade) is DAC members will have to be was 17 times higher than that on aid.far from certain; it depends on very much higher ($85-90 billion And for developing countries, it wasstrong growth in industrialized in 1990 rather than the projected one-and a-half thmes core than oncountries as well as on main- $69 billion) to achieve the protenanceof their aid shares.jected bilateral flow to the low-Economic difficulties in the income nations. Public expenditures on defense,industrialized countries are an * Official capital on market aid, health and education, 1977important-but not a sufficient- terms. The other major source of (percentage of GNP)reason toEduexplain theirca-lack of sup- funds for developing countries is Countrygroup Defense Aid Health tionport for aid. Most governments official capital on nonconcessimplyhave not found it expedient sional terms (that is, with a grant countries' 5.6 0.33 3.0 5.9to expand foreign assistance while element of less than 25 percent); Developingrestricting domestic spending. The this is provided principally through countries' 5.9 n.a. 1.0 2.7failure even to maintain the share official export credits, govemment- a. Include centrally planned economies.of aid in GNP will have serious to-govemment lending, the World b. Include centrally planned economiesand capital-surplus oil-exporters.long-term economic and political Bank and the regional banks and Source: World Military Expenditures andconseqluences for the developing the International Monetary Fund. Arms Transfers 1968-77 (US ACDA)countries-particularly for the poor- While it offers limited support for Iest anmong them. The inadequate the low-income countries, forprovision for development aid middle-income countries it has 1975, the oil producers togethercontrasts starkly with the sums been and could remain a very gave 2.7 percent of their GNP asdevoted by all countries to mili- important supplement to private aid, while the major Arab donorstary expenditures (see box). capital. -Saudi Arabia, Kuwait, QatarClose examination suggests, Prospective aid from OPEC and the United Arab Emirateshowever,that political factors will members is also uncertain. The gave proportionately much moreinhibit- a rapid redistribution of Arab countries that are the major (a range of 5 to 15 percent of theirconcessional aid. France and the donors have been generous in GNP). By 1978, however, aid inUnited States, in particular, main- their support of developing coun- real terms was only about 60 pertainstrong political ties with some tries in the past. In the peak year, cent of what it had been in 1975;estimates for 1979 indicate a furtherreal decline.Table 3.6 Aid flows to developing countries and The increase in oil revenuesmultilateral institutions, 1975-90 (High case)(billions )f dollars)should permit a substantial increasein the oil producers' aid inCountry group 1975 7978 1979a 1980 1985 1990 1980 and beyond. OPEC donorsDACb 13.8 20.0 22.3 25 44 69 have not yet agreed to boost sub-(As percentage of GNP) (.36) (.35) (.34) (.36) (.36) (.35) stantially their aid through multi-OPEC 5.5 4.3 4.7 5 10 15 ltrlcanl;mc hrfr(As percentage of GNP) (2.71) (1.35) (1.23) (n.a.) (n.a.) (n.a.) lateral channels; much thereforeCentrally planned economiesdepends on the expansion of theand other' 0.6 1.1 1.0 1 2 2 national programs of the majorTotal 19.9 25.4 28.0 31 56 86 bilateral donors-the four mena.Preliminary figures. tioned above, plus Iraq and Libya.b. Reporting by DAC members has changed to a uniform system (see the technical notes Iraq has become the third largestfor Table 16 of the World Development Indicators). Under the old system of reporting, the OPEC donor in absolute terms,1975 figuire was $13.6 billion, the 1978 figure $18.3 billion.c. Includes OECD countries that are not members of DAC. partly because of its interest-free29

loans to poorer countries to com- Table 3.7 Distribution of DAC donors' bilateral official developmentpensate them for higher oil prices. assistance, 1970-78* Improving aid to benefit the Percentage sharespoorest. To maintain energy im- Country group 1970 1975 1976 1977 1978ports at their 1978 levels, the Low-income countries 47 44 38 35 38poorest oil-importing countries Middle-income countries 44 46 51 56 52need extra aid of about $2.2 bil- Unallocated by country 9 10 11 9 10lion in 1980 (for 36 low-income Total 100 100 100 100 100countries). This could be providedby increasing aid from DAC andOPEC donors by only 8 percent. siderably above private direct expected to grow 12 percent a year.Yet even this additional aid will investment of $11 billion). Con- The African Development Bank,not be made available without tinuing growth is likely, but the despite the expansion of resourcesstrong efforts; and it would not limitations on what is financed by resulting from the admission ofcompensate for the losses in trade official export credits (usually, nonregional members in 1980, willand aid from the slowdown in only specified capital goods) re- be similarly constrained. The aidworld growth. strict their ability to compensate program of the European Com-Besides expanding aid, donors for slow growth of other capital. munity under the Second Lom6should redistribute it toward the Government-to-government Convention, and the Unitedpoorest nations. Some donors lending affords a more direct means Nations Development Programsend a comparatively high pro- of assisting developing countries. will increase at a somewhat slowerportion of their aid to the middle- The greatest potential seems to lie rate.income countries. In 1978 DAC with OPEC governments, which Higher inflation will erode thedonors distributed 38 percent of provided $2.5 billion a year in real value of capital increasestheir bilateral aid to low-income 1975-76 (mainly on market terms and replenishments. The capitalcountries (see Table 3.7) and 52 to low-income countries) compared increase for the World Bank waspercent to middle-income coun- with their aid of $5.5 billion a year. intended to support 5-6 years oftries (data on the country distri- Current and projected surpluses lending growing at a nominalbution of the remaininglO percent of the capital-surplus oil exporters rate of 12 percent a year with anare unavailable). Although only could support a much larger volume implied inflation of 7 percent aseven DAC donors currently give of such lending. year (at present, that inflation rateless than 55 percent of their bi- * The role of multilateral insti- looks a distinct underestimate).lateral aid to low-income countries, tutions. While the machinery The sixth replenishment of IDA (athis group includes the four largest exists to assist developing proposed $12 billion) was planneddonors-France, the Federal Re- countries in the difficult times' to provide for an annual realpublic of Germany, Japan and the ahead, the international agencies increase in loan commitments ofUnited States. Bilateral aid to the are hampered by a shortage of 5 percent for fiscal years 1981-83low-income countries from OPEC resources, especially to finance (July-June). Again, however, thedonors has fallen since 1976 and longer-term adjustment. Most of real resource flow will be erodedthere is scope for redistribution. their proposed major capital byinflation.Flows from multilateral institu- increases and replenishments Against this backdrop, the Boardtions, by contrast, are concentrated have run into authorization or of the World Bank has accepted amore on the poorest countries. appropriation delays. proposal that will provide loans toOfficial export credits are diffi- The Inter-American Develop- support developing countries'cult to separate statistically from ment Bank's capital increase structural adjustment programs.associated officially supported (agreed to in 1979) was to sustain But agreement has not yet beenprivate flows. Together, however, nominal lending growth of about reached that these loans willthey have grown rapidly over the 14 percent a year, but legislative be in addition to the previouslypast two decades; in 1978 net ratification has been delayed. The planned lending programs. Overdisbursements from DAC members Asian Development Bank's cur- the decade, unless the intemationalto developing countries were more rent replenishment period extends agencies get more funds, they willthan $13 billion (exceeding net to 1982, during which time both only be able to reallocate fundsbilateral aid from the DAC coun- concessional and nonconcessional already earmarked (and allowedtries for the first time, and con- lending in nominal terms are for in the High-case projections30

in Chapter 2). Ways of increasing and to emphasize its role as a percent). On present plans, theytheir lending capacity should be supplier of finance. The maturity are likely to grow at less thanconsidered, within the constraints of loans under an extended arrange- half these rates between now andof the capital available to them ment has already been lengthened 1990. But there remains a clear needfrom the industrialized countries. from 8 to 10 years to encourage a for additional resources to allow* The IMF. The seventh quota smoothtransitionto lower deficits. the developing countries to adjustincrease is expected to become For countries that have severe to changed external conditions andeffective in 1980, raising the quotas deficits the IMF has been willing, at the same time maintain acceptableof the oil-importing developing in some instances, to provide growth. Without such resources,countries to around $16 billion. financial support amounting to six the chances of successful adjustmentAnd in response to members' times their quotas. in 1980-85 will be much reduced;needs for financial assistance toconsequently, the recovery proeasetheir current adjustment More multilateral finance is needed jected for 1985-90 would be weakproblems,the Fund is studying From 1970 to 1978 multilateral ened and longer-term developinitiativesdesigned to raise the flows on nonconcessional terms ment goals jeopardized.amount of finance it offers; to grew 11 percent a year in realextend credit for longer periods; terms (concessional flows grew 1231

Part II Poverty and human developmentAn unfavorable world economic ing, better health and nutrition, eliminate, absolute poverty.environment casts shadows over and fertility reduction. The role of human developmentthe lives of people in developing The focus is on absolute poverty in alleviating poverty has beencountries; the poorest in particular -a condition of life so character- debated for several hundred years.face acute hardships. Part I of this ized by malnutrition, illiteracy In Europe in the 16th to 18thReport has stressed the steps that and disease as to be beneath any centuries, there was a vigorousdeveloped and oil-producing reasonable definition of human dispute between those who believedcountries in particular must take decency. Yet within a particular that education would make the poorto improve the international en- society at a particular time, poverty more productive and better citizens,vironment for growth-without is often (and for many purposes and those who believed that itwhich, efforts to help the poor will should be) defined relative to would make them challenge thebe of limited avail. Part II concen- average living standards. It would established order. (With hindsight,trates on certain other measures be wrong, for example, to use the both were clearly right.) Politicalto reduce absolute poverty. same poverty line in appraising as much as economic considera-In the 1970s it was increasingly policy, say, in Argentina and tions impelled the United Statesrecognized that economic growth Bangladesh. Relative poverty is and Japan toward universal primaryalone would not reduce absolute also important because the dis- education in the 19th century.poverty at an acceptable speed. tribution of assets, incomes and Economists, meanwhile, haveSo those involved with develop- power has a profound impact on seldom given prominence to thement-including the ILO and the prospects for reducing absolute quality of the labor force, especiallyWorld Bank-gave attention to poverty. And reducing relative in their formal models. In the 1950sfour different, though largely poverty is regarded as important and early 1960s, there was a wavecomplementary, strategies: increas- in itself in most countries. of optimism about the contributioning employment, meeting basic Despite these links between of education to economic develneeds,reducing inequalities in absolute and relative poverty, there opment. Partly for want of quickincome and wealth, and raising are fundamental differences. Equal and obvious results, enthusiasmthe productivity of the poor. sharing of poverty or of low life then waned. But research continuedThis part of the Report draws expectancy is not the purpose of -and the chapters that follow drawon all these approaches to over- development. Conversely, some together its results.coming poverty. But it combines policies that benefit large num- The case for human developmentthem with a strong concern for bers of poor people have an am- is not only, or even primarily, angrowth. And it integrates them biguous effect on the overall economic one. Less hunger, fewerwith a related strand of thinking distribution of income and may child deaths and a better chance of-human resource development, even make it more unequal. primary education are almosthere called human development And while countries differ consid- universally accepted as importantto emphasize that it is an end as erably in the priority they attach ends in themselves. But in a worldwell as a means of economic pro- to distributional objectives, there of tight budgetary and manpowergress.' Human development appears to be unanimity on the constraints, the governments ofencompasses education and train- need to reduce, and at some point developing countries must askwhat these gains would cost-and1. Earlier World Development Reports have what the best balance is betweencovered other aspects of development Asia and Sub-Saharan Africa. In 1979policy. In 1978 the central topic was the industrialization, employment and urbani- direct and indirect ways of achievingproblems and prospects of low-income zation were the main issues addressed. them.32

4 Poverty, growth and human developmentThe poor are a mixed group. Some of them are malnourished to the where to draw the line betweencope reasonably well; others are point where their ability to work the poor and the rest, and abouton the margin of survival. Their hard is reduced, the physical and the correct way to calculate andwell-beingcanfluctuatewidely:the mental development of their chil- compare incomes and livingmarriag,esandceremoniesafterthe dren is impaired, and their resis- standards at different times andharvest- are in stark contrast to the tance to infections is low. They in different places.hunger and illness that often pre- are often sick-with tropical To compound these difficulties,cede it. A good crop with a new diseases, measles and diarrhea, the data are inadequate. Houseseed,cr the chance to work on a and cuts and scratches that will hold surveys, if they exist, somenearbyroad project, may push a not heal. Complications of child- times underrepresent the poor. Verypoor farm family's income to the birth are a common cause of death. few follow the fortunes of indipointwhere they can buy a plow Of every 10 children born to poor viduals and families through time,witha ametal blade or some clothing parents, two die within a year; or disaggregate the household tofor their children. But two years another dies before the age of five; examine the well-being of women,of inadequate rain, or a bout of only five survive to the age of 40. children and the elderly. Nor isillness, may cost them their land The great majority of poor adults direct observation necessarilyor their livestock-a degree of vul- are illiterate; their children, though a reliable basis for generalization,nerability that understandably having a much better chance of especially in the countryside,makes for caution and aversion attending school than in the past, where many of the poor areto risk. usually do not complete more than beyond the gaze of the casualThe poor have other things in a year or two. Unable to read a visitor to villages and rural develcommon,apart from their extremely road sign, let alone a newspaper, opment projects-away from thelow incomes. A disproportionate their knowledge and understand- roads, away from the markets andnumber of them-perhaps two in ing remain severely circumscribed. project sites, or on the outskirtsfive-are children under 10, mainly Yet they learn about the possibility of the villages.in large families. More than three- of a better life from direct observa- Despite all this, no one seriouslyquarters of them live in (often very tion, from friends and relatives, doubts that a very large numberremote) rural areas, the rest in ur- and perhaps from small improve- of people are extremely poor.ban slums-but almost all in very ments in their own circumstances; Taking as the cutoff a level of incrowdedconditions. Many poor and they hope that their children come based on detailed studies offamilies own a small piece of land, will somehow be able to climb poverty in India, the number ofsome inimals or some tools. But out of poverty. people in absolute poverty inboth thney and other poor peopledeveloping countries (excludinglive mainly by working long hours Dimensions of poverty China and other centrally planned-men, women and children alikeeconomies) is estimated at around-as farmers, vendors and artisans, It is difficult to measure the extent 780 million. In 1975 about 600or hired workers. of poverty. To begin with, abso- million adults in developing coun-As much as four-fifths of their lute poverty means more than low tries were illiterate; and only twoincomeis consumed as food. The income. It also means malnutrition, fifths of the children in theseresult is a monotonous, limited poor health and lack of education countries currently complete morediet of cereals, yams or cassava- -and not all of the poor are equally than three years of primary school.with a few vegetables and in some badly off in all respects. There is In 1978, 550 million people livedplaces a little fish or meat. Many also room for disagreement about in countries where the average life33

Figure 4.1Three decades against povertyIncomeGNP per person (1980 dollars)GNP per person'(7l980dollars, 1950 1960 1980 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000Industrialized countries 3,841 5,197 9,684 1950 IndustrializedcountriesMiddle-income countries 625 802 1,521 1980Low-income countries 164 174 2451950 Middl-i.corne Average annual growth, 1950-80 (percent)Average annual groth (percent) 1950-60 1960-80 T950 Ind-&i.1i.ed Middi-o- 419801980 sountr~~~~~~-mies -- utriesIndustrialized countries 3.1 3.2 3.1Middle-income countries 2.5 3.3 o Low-ioco,e 21950 owmoe,onriesc..Low-income countries 0.6 1.7 1 countriesa. Excludes all centrally planned economiesHealth1980Life expectancy at birth (years)Life expectanrat birth (years) Developed I lIncrease, cou.trieVs ii ii ii1950 1960 1978 1950- 78 15Industrializedcountries 66.0 69.4 73.5 7.5 1978Middle-incomeMiddle-incomecountries'countries 51.9 54.0 61.0 9.1 1950 TYTY ITYTTULow-incomecountries 35.2 41.9 49.9 14.7 1978 _Low-incomeCentrally plannedcountrieseconomies' 62.3 67.1 69.9 7.6 1950 11 11 JIl1j =so million peoplea. Includes Bulgaria, Czechoslovakia, German DR, Hungary,Poland, Romania, USSR 1978b. Includes Albania, Cuba, North Korea, Mongoliac. Excludes China 0 10 20 30 40 50 60 70 80EducationAdults in all developing countries (percent)'Adult literacy rate IperceniO1950 1960 1975 1950IndustrializedLiterate fll9countries 95 97 99 Illiterate9 =so million peopleMiddle-incomecountries 48 54 71 1975Low-income Literate 9ff99$9:9f Icountries 22 29 38IlliterateCentrally plannedeconomies 97 98 99a. Excludes centrally planned economies 0 20 40 60 80 100Population Total population (billions) = 100 million peopleAverage annual percentage growth 198 . . . .. Developed countries1950-60 1960-70 1970-80 1980Industrialized countries 1.2 1.0 0.7 2000 vMiddle-income countries 2.4 2.5 2.5 1980 . .jj; .... Middle-income countries'Low-income countries 1.9 2.5 2.3 01. ., . . . . .Centrally planned 2000 ll'' I Ieconomies 1.9 1.7 1.3 1980 *. . .. . i.. iiii i Low-income countries'o11198 f999999999 9991a. Includes Bulgaria, Czechoslovakia, German DR, Hungary, 2000 ENU EK MN#EE EK E ...Poland, Romania, USSR 2000 | j 1 111ii ifii ii TIb. Includes Albania, Cuba, North Korea, Mongoliac. Includes China 0 1 2 3 434

expectancy was less than 50 years, income countries the incomes of them has widened, even in pro-400 million in countries where the the poor have grown more slowly portional terms (though in the caseaverage annual death rate of chil- than the average. The proportion of the middle-income countriesdren aged one to four was more of people in absolute poverty in only slightly). But the gaps in eduthan20 per 1,000-20 times that developing countries as a group cation and health have narrowedin the industrialized countries. is estimated to have fallen during -by 15 percentage points in adultNor is there any serious dis- the past two decades (though literacy and five years in lifeagreementaboutwhothepoorare. probably not in Sub-Saharan expectancy.Half of the people in absolute Africa in the 1970s-see Chapterpoverty live in South Asia, mainly 2). But because population has Poverty and growthin India and Bangladesh. A sixth grown, the number of people inlive in East and Southeast Asia, absolute poverty has increased. Most poor people live in poormainly in Indonesia. Another sixth There has also been progress countries. Whether absolute povarein Sub-Saharan Africa. The in education. The proportion of erty is measured by low income,rest-about 100 million people- adults in developing countries who low life expectancy or illiteracy,are divided among Latin America, are literate is estimated to have there is a strong correlation betweenNorth Africa and the Middle East. increased over the past three the extent of poverty in a countryWith thie partial exception of Latin decades from about 30 percent to and its GNP per person (see Fig-America (where about 40 percent more than 50 percent; the propor- ure 4.2 overleaf). This suggestsare in the towns) the poor are tion of children of primary-school that the solution to poverty is ecoprimaiilyrural dwellers, over- age enrolled in school rose from 47 nomic growth. There is a great dealwhelm:ingly dependent on agri- percent in 1960 to 64 percent in of truth in this proposition, butculture-the majority of them 1977. These advances have been it needs to be carefully qualified.landless (or nearly landless) labor- shared by most countries and re- First, comparing countries, theers. Some minority groups-for gions, including those that initially relation beween the extent of theirexample, the Indians in Latin were furthest behind, such as absolute poverty and the level ofAmerica and the scheduled castes Sub-Saharan Africa. But the qual- GNP per person is (as the disperinIndia-are also overrepresented ity of schooling remains low in sion of points in Figure 4.2 shows)among the poor. And there is a many countries; and because of far from perfect. Because oftendency for absolute poverty in population growth, there has been differences in income distribution,particular places, families and an increase of about 100 million the proportion of the populationsocial groups to persist from gen- in the absolute number of illiterate below the poverty line in 1975 waseration to generation. adults since 1950. more than twice as high in Colom-The most striking advances bia as in South Korea, even thoughThree decades of poverty against poverty have been in the average incomes of the tworeduction health. Average life expectancy inmiddle-income developing councountrieswere close. Sri Lanka isa low-income country, yet the lifeIn aggregate, however, consider- tries has risen nine years over the expectancy of its people approachesable progress has been made in past three decades. In low-income that of the industrialized countries.reducing the incidence of poverty countries, the increase has been Some middle-income countries,over the past 30 years (see Figure even greater-15 years. But even such as Morocco and the Ivory4.1). Progress would have been though infant mortality rates Coast, have literacy rates belowgreater still but for the dramatic (which are a major determinant of those of the average low-incomegrowth of population, which has life expectancy) have fallen sub- country.doubled the number of people in stantially in developing countries Second, looking at changes overthe developing world since 1950 since 1950, there now are so many time within particular countries,and has begun to slow down- more children born that the abso- the connection between growththough as yet slightly-only since lute number of infant deaths and poverty reduction over periodsthe mid-1960s. probably has not declined. of a decade or two appears inexact.Since 1950 income per person Another way of viewing the There is general agreement thatin the developing world has doubled. progress of the past three decades growth, in the very long term,But in low-income countries, the is to compare the developing with eliminates most absolute poverty;average increase has been half the industrialized countries. The but also that some people maythat, and in both low- and middle- gap in income per person between (at least temporarily) be impover-35

Figure 4.2 National income and the absolute poverty line apparently their tremendous importance asnational poverty has not fallen in some slow-grow- ends in themselves.national povertying countries (including rural India100 . e_ between 1956 and 1974) or in Sources of growth. \ v ~~~Venezuela*a*so- *riMexco some periods in faster-growingPeouth Argrentna countries. But it appears to have Economic growth comes about inSouth Korea80- Colombia fallen markedly over the past 25 two ways, both of which can be-o .Senegal years in several fast-growing coun- powerfully influenced by govern-60 - tries (including Thailand and ment policy. One is building up- Kenya Proportion of Yugoslavia) and in some slower- a larger stock of productive assets5O_t-Kenya population above growing ones (including Costa and human skills. The other isabsolute income40 poverty line, 1975' Rica and Sri Lanka). The associ- increasing the productivity ofI I I I I ation between economic growth these assets, skills, and the coun-Years and improvements in education try's natural resources. This in-80 and health has also been imperfect. volves moving capital and labor75- CXhrna vcuba Third, the connection between between sectors, developing new7 Sri Lanka* economic growth and poverty re- institutions, inventing and intro-65 - Viet Nam venezuela / duction goes both ways. Few would ducing new techniques of produc-: Singapore dispute that the health, education tion and new products, making5 *Algeria and well-being of the mass of better choices among existingIvory Coast people in industrialized countries techniques, and taking steps to- . Ivory Coast .tot Lif are a cause, as well as a result, of cut costs and eliminate waste.* en AR expectancy, 1978 national prosperity. Similarly, Growth thus involves continuous01 P,-wI I I E I people who are unskilled and sick change-it has aptly been de-BSurma make little contribution to a coun- scribed as a process of perpetualri alnka Chile Trinidad & Tobago try's economic growth. Develop- disequilibrium.100 - Thaiand Uruguay/90 -ll *e ment ./ strategies ** *.that bypass largeso -1l . \ = numbers of people may not be the Natural resources70 - Singapore most effective way for developing The natural resources of countries50_'

population density (see page 39). efficiency with which productive What governs the quality ofIt also dlepends on the availability investment has been allocated and human resources, and how can itof capital and skills and on the used. This efficiency has in turn be improved? There is no simpledevelopment strategy adopted. depended on the availability of answer, no simple best policy. OneAnd it is very much a function of natural resources and skiLLed labor important ingredient is practicalworld demand and the state of and on government policies toward experience. Another consists of thetechnology. Malaysia's early prog- agriculture, industry and foreign knowledge and attitudes thatress was founded on tin for plat- trade (discussed at length in the children acquire from their parentsing and rubber for automobile past two World Development Reports). and from society at large. Thentires. Bangladesh's jute industry It has sometimes been suggested there are the many different kindssuffered fromtheinventionofsyn- that income inequality is conducive of formal education and training:thetic fibres (especially because, to higher investment (since the general primary and secondaryin contrast to Malaysia, little rele- rich save a larger proportion of schooling, technical and vocationalvant research was undertaken). A their incomes than the poor). But schooling, general and specializedtechnical breakthrough in "dry" in practice this relation is muffled higher education-all of whichfarning would-perhaps more than by government and corporate saving impart specific skills, enhance theany other feasible technical ad- and by variation across countries ability to learn further and moldvance--transform the prospects of in incentives and attitudes to saving. attitudes toward work and change.a large proportion of the world's High investment rates are observed Partly because measurement ispoor. both in countries with relatively difficult, the evidence is not comunequalInvestment in physical capital income distributions, suchas Brazil and Kenya, and in countriesplete-either on the contribution ofhuman resources to production andThe accumulation of physical capital with relatively equal distributions, growth, or on what determines theiris a necessary and very important such as China and South Korea. quality. But a lot of research haspart of economic growth. The Low investment rates also appear been done on the economic contriproductivityof workers in compatible with income distribu- bution of formal education. In allindustrialized countries is greater tions that are both more unequal, countries more educated peoplethan in developing countries partly as in Senegal, and less unequal, tend to earn more-to a degreebecause they have more capital to as in Burma. that makes educational spendingassist thnem. Similarly, most of the(especially for primary educationinnovations and structural changes Human resources and especially in developingthat generate growth clearly require It has long been recognized that countries) often appear an attracsubstantialphysical investment- the qualities of a nation's people tive investment (see pages 48-49).in roacds, machines, inventories, have an important influence on its Studies have also shown thatirrigation systems and so on. prosperity and growth. This is not primary schooling can contributeDeveloping countries that have simply because better labor adds to the productivity of farmers (seeinvested a higher proportion of to output in the passive way that, page 48) and to industrial protheiroutput have on average grown say, more fertilizer or better ductivity. In addition, there is evifaster,but the contribution of machinery does. It is also because dence that basic education caninvestmient to growth has varied human beings are the source of contribute to national growth (seewidely. Some, including the fast- ideas, decisions and actions on box overleaf). Developing coungrowingEast Asian countries, have investment, innovation and other tries with higher literacy rates havemanaged to squeeze as much as opportunities. tended to grow faster, even afterhalf an extra unit of annual output Technical, scientific and profes- allowances are made for differfromeach extra unit of capital. sional skills are clearly essential ences in incomes and physicalOthers, such as Ghana and until to producing many modern goods investment, and they have hadrecently Uruguay, have invested and services. Entrepreneurial and higher physical investment rates.to much less effect. administrative abilities are vital The results of this research re-Part of the discrepancy is attrib- in both public and private sectors. inforce a body of less systematicutable to differences in the share Less immediately obvious, but observations, and some historicalof investment devoted to activities equally fundamental, are the skills, evidence, that formal education(such as housing) that do not knowledge and attitudes of the can aid economic development.contribute directly to production, great mass of ordinary workers, The outstanding growth recordsbut more to variations in the incLuding smalL farmers and traders. of Japan and South Korea prob-37

Human resources and growth: macroeconomic evidenceHow can the effect of human resources tion. Even if it were possible to control with growth over the period 1960-77.on growth be assessed? The microeco- for all other influences, the existence of a ItshowsthatthelOfastest-growingdevelnomicstudies of the effects of education, correlation between human resources and oping countries started the period withnutrition and health on the incomes and economic performance does not answer literacy rates that were on average, despiteproductivity of particular people and the question of which is causing which- substantial variation, 16 percentage pointsenterprises provide important evidence. especially pertinent, since there are reasons higher than would have been expectedSo do the "growth accounting" exercises, for believing that the causation flows in at their income levels. It also shows thatwhich have in effect added up the results both directions. the 10 developing countries with theof microeconomic studies to measure One way of addressing this question highest life expectancy in relation tothe contribution of human resources to is to look at the sequence of events. The their income levels in 1960 subsequentlyaggregate growth. table in this box, for example, compares attained growth rates that on average wereBut microeconomic evidence is not literacy rates and life expectancy in 1960 1.6 percentage points above those of allenough. For example, it has sometimesthe developing countries for which databeen suggested that the higher earningsare available.of more educated people are partly offsetAnother (complementary) approach isby indirect reductions in the earnings Literacy, life expectancy and growth to use "simultaneous equations" techofless educated people-and thus that Top 10 niques to estimate the relations in boththe microeconomic evidence overstates countries Growth rate Literacy: directions at once, thus trying to identifythe effects of education on total (or ranked by of GNP deviation the strength and characteristics of eachaverage) income. Conversely, though, it growth per person, from norm, while allowing for the existence of theof GNP 1960-77 1960'has been suggested that the earnings of per person (percent) (percent) other.more educated people may understateAs part of the background work fortheir contribution to total production, Singapore 7.7 . this Report, the methods outlined aboveinnovation and growth. South Korea 7.6 43.6 have been applied to the recently enlargedIt is thus important to complement Hong Kong 6.3 6.4 and improved data base from which thethe microeconomic evidence with studies Greece 6.1 7.5 World Development Indicators arethat look directly at the relation between Portugal 5.7 1.7 drawn (see the studies by Hicks andhumandevelopmentandaggregategrowth. Spain 5.3 1.2 Wheeler mentioned in the bibliograph-One way of doing this is through historical Yugoslavia 5.2 16.7 ical note). The purpose of these studiescase studies. Another is by cross-country Brazil 4.9 8.6 is primarily to double-check at the macrocomparisons-lookingat a large sample Israel 4.6 . economic level the results derived fromof countries to see whether those with Thailand 4.5 43.5 the microeconomic and experimentalbetter, or more rapidly improving, human Averageb: work discussed in Chapter 5. Thus theyresources have grown faster. Cross-country top 10 attempt to measure not only the effectsstudies, however, must tackle two basic countries 5.8 16.2 of human development on growth, andproblems-in addition to shortages and Avera b of growth on human development, butinaccuracies of data, which are particularly A vegeo: . also the effects of the various humansevere for developing countries. 83 developg 24 00 development indicators-education,* Disentangling other influences. A countres . . health, nutrition and fertility-on eachcorrelation across countries between Top 10 Life Growth other.human resource indicators and growth countries expectancy: rate of The results, and especially the estimatedmay be generated-or obscured-by other ranked by life defriatom GNP magnitudes of the effects, are not beyondfactors (such as income) that influence in relation 1960' 1960-77 dispute. But in general they reinforce theone or more of the variables. Many of to income (years) (percent) other evidence. Among the most cleartheseother factors-such as income levels, SriLanka 22.5 1.9 cut results are these: (1) increases ininvestment rates and even some aspects South Korea 11.1 7.6 literacy contribute both to increasedof natural resources and climate-can be Thailand 9.5 4.5 investment and (given the level of investmeasured;their influence can be controlled Malaysia 7.3 4.0 ment) to increases in output per worker;for by multivariate statistical methods. Paraguay 6.9 2.4 (2) literacy, as well as nutrition and income,Other relevant factors-culture and eco- Philippines 6.8 2.1 affects life expectancy; and (3) variationsnomic policies, for instance-cannot be Hong Kong 6.5 6.3 in life expectancy, literacy, income andso readily measured, and hence are diffi- Panama 6.1 37 the strength of family planning programscult to control for. Burma 6.0 0.9 explain between them most of the varia-This problem, however, can be sub- Greece 5.7 6.1 tion in fertility rates across countries.stantially overcome by focusing on changesThe impact of health (measured byover time within countries, rather than Averageb: life expectancy) and nutrition on economicon levels at a particular time. That elimi- top 10 growth is less clear-cut. Although lifenates the influence of factors (politics and countries 8.8 4.0 expectancy on its own, controlling forinstitutions, say) that affect both the Averageb: income, appears to have a positive effectlevel of income and the level of human 83 developing on both investment and output per worker,development in particular countries. Even countries 0.0 2.4 these effects largely disappear when otherthen, though, the possibility remains thatvariables that influence life expectancysuch unmeasured such nmeasred factors fctor are influencing nfluecing a. equations Deviation relating from adult expected literacy value and derived life expectherates of change in all the variables tancy to GNP per person for all developing calorie supply appear to have a clear,from are introduced. Increases in averageof interest. To reduce this risk, additional countries. FoT example, in the top part of the positive effect on growth; but the possivariablescan be used to allow for, say, table, South Korea's literacy rate in 1960 was bility cannot yet be ruled out that thisregiol or c43.6 percentage points higher than expected forregional or cultural differences, a country at its income level. may refect the effect not of nutrition but* Establishing the direction of causa- b. Unweighted mean. of agricultural output.38

ably could not have been achieved cation and health-and are often efficient exploitation of naturalwithout their distinctively early measured inaccurately as well. resources. But in many countriesmass literacy and numeracy, which But the main reason is that growth high and growing densities are(together with land reform, more also depends on other factors- likely to be a continuing sourceadvanced education and good eco- the availability of natural resources of poverty. In 1975 the agriculturalnomic rnanagement) contributed and physical capital and the effi- population per hectare of croplandto increased agricultural produc- ciency with which all resources in Egypt, Bangladesh and probtivity,to the expansion of labor- are used. ably China was already more thanintensive manufacturing and Without modern inputs, the five times that in the Netherlandsexports, and to their remarkable right technology and ready access (see Table 4.1). The scope forability to adapt to changes in tech- to markets, even educated farmers compensating by higher yieldsnology and world demand. At the find it hard to innovate (see page per hectare is limited-in Egyptother end of the spectrum, the 48); and they can be discouraged because yields are already closepoor eccnomic performance of the from increasing production by low to those in developed countries,countries of Sub-Saharan Africa prices. Without rapid accumulation and in Bangladesh (where yieldsis at least partly attributable to of physical capital, and policies are much lower) by the high costextremely low literacy and the to ensure that this is associated of improving water management.scarcity of highly educated and with rapid growth of productive Population growth can affectexperienced people. employment opportunities, the economic growth in other ways,Knowledge, skills and attitudes earnings of even a healthy and too. In some circumstances, fasterare not the only aspects of human educated labor force will stagnate. labor force growth can permitresources that affect economic Without the right mixture of faster growth of income perperformance. A healthy and well- education and training, shortages person. That may have happenedfed labor force is more physi- of specific skills will hold back with the flow of foreign workerscally and mentally energetic than growth, while chronic surpluses into Switzerland and the Federalone that is sick and hungry, and of other sorts of manpower may Republic of Germany in the 1960stherefore gets more work done emerge. and early 1970s. But in the greatand is more innovative. This ismajority of developing countries,confirmed by a number of experi- Population induding most of those whose curmentsand project-level studies- Another important influence on rent population density is low, thesee pages 55 and 60. The aggre- the growth of income per person growth of income per person couldgate evidence is less clear-cut. is population growth. One way be accelerated by slower popula-At the same time, however, there it has an effect is by increasing tion growth-for three reasons.are examples that refute any population density. In some sparsely * Lower fertility would reducesuggestion that education, health populated countries, this in itself the proportion of people who areand nutrition are in themselves might (within limits) have a bene- young and not productive. Atsufficien,t to induce rapid growth. ficial effect on average incomes- present, two-fifths of the peopleBurma and Jamaica, for example, as it has done in Argentina-by in developing countries are underwithhigh levels of literacyand life permitting and stimulating more the age of 15; in developedexpectancy for their income levels,achieved annual growth rates ofonly 1.0 and 2.0 percent per person Table 4.1 Agricultural population in relation to crop areaover the period 1960-78. It is also Agricultural Projected agriculturalpossible (though possibtedifficult (thoughif ~~~~~~~CropP1975 area, per popualation 100 hectares population per 100 hectares in 1990 ofeconomies heavily dependent on Country (100,000 hectares) of crop area, 7975 crop area in 1975petroleum, other minerals or ex- Bangladesh 951 660 980patriate skilled labor are exduded) Burundi 126 256 380to find cases of fairly rapid growth Dominican Republic 100 302 430Egypt 286 687 890even with low levels of literacy India 16,720 244 310and life expectancy-Pakistan in Indonesia 1,860 458 540the 1960s is an example. Pakistan 1,945 204 280The linkage is imperfect partlybecause literacy and life expec- Japan 557 289 130tancy are crude indicators of edu- Netherlands 84 107 6039

number in this group in Colombia, and quality of attention receivedby age, 1980 for example, doubled between from parents and other adults in1950 and 1970; but because of a the first few years-and that isAge fertility decline that began in generally less in large families.[t 75-79 X the mid-1960s, it then increasedDeveloping 65-69 only slgtyin the 1970s-andthDevelopig_60-64 i_ Developed slightly ith19 s-andcountries countrieSl fell as a proportion of the totalf hRaising the incomes of the poor45-4940-44 < population. In South Korea, where Faster growth of average incomesl 3l02O-34 ii.., fertility has fallen steadily, the is essential to reducing absoluteI20-2415-19 number of school-age children has poverty, especially in low-income~~~~~~10-14-r-a ^5I9 stopped growing. countries, where half or more of141210 1 64 2 0 0 2 6 I 84101214 There are other effects apart from the people may be poor. But growthPersCet reducing pressure on the formal alone is not enough. This is partlya. Includeindustrialid countries, the USSR education system. Studies in because rising population isand Eastern Europe.developed countries (even those tending to swell the numbers incontrolling for socioeconomic absolute poverty even where theyclass) have shown that children are a diminishing share of thecountries the ratio is about a in smaller families tend to be population, and partly because inquarter (see Figure 4.3). In the larger, more intelligent, and to many developing countries thereFederal Republic of Germany and have a longer life expectancy. is a large gap between averagethe Soviet Union, for example, When high fertility is associated incomes and the incomes of poorerthere are two people of working with repeated and closely spaced groups. It is also because (exceptage for every one who is too young pregnancies, the mother's health at fairly high average incomes)or old to work; in Mexico and can suffer; the results-low birth growth tends to widen this gap.Nigeria, there is only one. weight and early weaning-then This pattern is described by the* Slower growth of the labor damage the child's health. In the Kuznets curve, which shows thatforce would mean that less invest- Colombian town of Candelaria, the incomes of the poorest 40ment, hence a smaller sacrifice of for example, the likelihood of percent of the population normallyconsumption, would be needed to malnutrition among preschool grow more slowly than the averagemaintain or increase the amount children in low-income families until income per person reachesof capital per worker. In most de- was directly related to how many a range of $700 to $900 (see Figureveloping countries the working- brothers and sisters they had. 4.4). Beyond this range, the incomesage population has roughly doubled Furthermore, a child's capacity to of poorer groups tend to grow fasterin the past 25 years. At its current learn is affected by the amount than the average. Thus the distrigrowthrate it will double again inthe next 25 years. In Japan andFrance, by contrast, the workingagepopulation would at its present Figure 4.4 Income of poorest groupsgrowth rate take about 90 years to Share of bott-o 40 per-en t is GNP Percenidouble. 24 2* Human resources could be 22developed more effectively. About 2025 percent of the population of a 18 ~ ~ ~ pitypical developing country is of laprimary-school age, compared with 1615 percent in developed countries. 14 Ttili p wAs a result, for any given amount 12 *.acsaRaaeaeicneof spending on education, a devel- 10 = int ise inoping country has to have either s n sa lower enrollment rate or lower 8 jS / caziIspending per child enrolled. One o 1000 2000 3000 100 500 1000 1500 2000 2500of the earliest economic effects of GNPper pers.. (978 dolars,) GNP per pe-ro (1978 doll-rs)declining fertility is a (relatively) a. Dates as-i Table 24, WorldDevelopent Indicators.smaller school-age group. The40

ution of income typically is less The rest of this section looks replace existing tenants, or ifunequal in developed countries more closely at the range of things landlords (in their alternate rolesthan in developing countries. that can be done-in the context as moneylenders and employers)The initial rise in inequality of strategies aimed at increasing have been able to compensate foroccurs chiefly because the impulses average incomes-to raise the loss of rent by extracting moreand opportunities for harnessing incomes of those in absolute poverty. favorable terms from their tenantsmoder:n technology in a backwardin other transactions.economy are unevenly spread. Land and land tenure Despite the difficulties, land andThose who perceive (and can take Land reform - the redistribution tenure reform (in urban as well asadvantage of) these opportunities of land ownership in favor of the rural areas) remains a vital eleforgeahead of those who stay in poor-has been tried in many ment of poverty reduction intraditional lines of activity-who countries, with mixed results. In many countries, and it meritsin sorme cases may be undercut some (South Korea, for example) it strong support.and irnpoverished. As develop- has raised the incomes of the ruralment proceeds, though, the modem poor considerably-though better Capital and creditsectors in industry, commerce and access to credit and extension The poor conspicuously lackagriculture become increasingly services for small farmers has every kind of physical capital, butdominant, drawing most of the proved an essential adjunct. In their poverty limits their demonlaborout of the traditional sectors most developing countries there strated ability to respond to goodand pulling up the earnings of those is scope for further land reform. investment opportunities (suchwho remain in them. Because small farms tend to as new seed varieties) by savingThe Kuznets curve is not an iron apply more labor per hectare and more. The alternative is to borrow,law. As Figure 4.4 shows, some to use land and capital at least as which can enable the poor not onlycountries lie well above it, others productively as large farms, land to buy pumps and fertilizers forbelow. (Information on changes reform will usually increase theirfarms, and tools and materialsin income inequality in particular agricultural output after a period for their workshops, but also todeveloping countries confirms that of adjustment (see box overleaf). get their children educated, to paythey do not all follow a path of the But it faces social and political for transport to better jobs in urbansame shape.) Much depends on opposition-from landlords and areas, and to tide themselves over pegovernmentpolicy, which can re- from urban groups that benefit riods of illness and unemployment.duce the unevenness of the mod- from the bigger marketed sur- But government efforts to helpernization process-and accelerate pluses of large farms. the poor by supplementing tradigrowtlh-bypromoting productiv- As an altemative to distributing tional informal sources of creditity gains in traditional small-scale individual parcels of land-which have had only limited success. Foragriculture, increasing the rate at is easier where resettlement on long-term credit especially, lenderswhich labor is absorbed into the uncultivated land is possible, as in want collateral-so those with fewmodern industrial sector, and not Brazil, Indonesia and Upper Volta assets, or who want to acquire inconcentratingpublic investment -some countries (Algeria, China tangible assets (such as education)and services on a few places and and Peru, for example) have estab- are at a substantial disadvantage.socialgroups. lished cooperatives and communes. In addition, governments andIn addition, governments can But these have tended to encounter, public agencies usually have nottake measures to reduce the in- in varying degree, serious prob- charged an interest rate high enoughequality of incomes by improving lems of incentives and management. to make credit programs self-supthedistribution of productive assets Other countries have revised land porting. And the limited amounts(land, capital, labor skills); avoiding tenure rules: greater security of of subsidized credit available haveprice and wage policies that bene- tenure gives tenant farmers more often been channeled away fromfit the urban middle classes at the incentive to invest. Schemes that the poor toward more influentialexpense of small farmers; discour- encourage landlords of share- groups.aging the exploitation of public croppers to share the cost of seeds For the poor to benefit fromposition for private gain; and mak- and fertilizers have also tended physical investment, however,ing taxes more progressive. They to increase efficiency. But rent con- they do not necessarily have tocan also take measures to improve trol has proved hard to enforce- own or control the assets themthelot of the dependent poor- especially if there have been plenty selves. Public investment (andchildren, the agedand manywomen. of landless laborers willing to private investment by people who41

Small is productiveNor, as Chinese experience shows,need schemes of this kind be onlyAlthough most farms in developing used declined sharply and consistently temporary. With good orgarnzation,countries are small, the small minority as farm size increased. Depending on the investment in rural infrastructureof large farms account for most of the subregion, small farms applied 5 to 22 can continue indefinitely. In thisarea. Yet there is wide-ranging evidence times as much labor per hectare as large as in all areas, governments shouldthat (comparing similar types of agricul- farms, although the proportion of high- not encourage excessive capitalture) smaller farms outperform larger or medium-yielding soils did not varyfarms in value added per acre. For significantly with the size of the farm. intensity and thus discourageexample: Small farms tended to employ more employment creation. The policies* India. The Farm Management Studies labor than profit maximization would required, which were discussed atof the 1950s, covering about 3,000 farms warrant, probably in part because family length in Chapter 4 of last year'sin six states, found that the larger the members have difficulty in obtainingfarm, the smallerits output per acre. Nor employment elsewhere, while large farms Report, are partly a matter ofhas the green revolution-high-yielding employed less. avoiding subsidies for capital andvarieties of seed-changed this conclusion. Such studies suggest that redistribution taxes on labor, but also involveTheNationalCouncilofAppliedEconomic of land in larger farms into smaller ones general development strategyResearch surveyed 4,000 households in many cases would increase output and (including that for foreign trade).throughout the country in 1968-69, 1969- employment (and of course equity)70 and 1970-71; more than 2,500 of them significantly. But there are important Education, health, nutrition andfertilitywvere farming throughout the period. qualifications.Forexample,whereliteracyAlthough the productivity gap between rates are low among small farmers, The employment opportunitieslarge and small farms tended to narrow middle-size farms tend to be quicker to and earning power of many of theas the green revolution spread, it remained adopt innovations. After a certain point poor are also limited (in ways tosignificant-even after controlling for fragmentation inhibits productivity be discussed further in Chapter 5)differences in land quality and irrigation. growth, and significant land is lostThe proportion of land under high- through field boundaries (for example, by sickness, insufficient food andyielding varieties did not vary by farm in parts of Asia a holding of one hectare lack of education. Their standardsize. Tests relating capital and labor use may comprise 15 or 20 tiny parcels). For of living is also depressed by theirto farm size showed that as farms became some combinations of crops and soils, high fertility and large family sizelarger, they used proportionately less mechanization-and thus large fields- ,capital and labor-and particularly the may increase output: research in South -each adult's earnigs have tolatter, which costs less on small farms Asia provides little support for the yield- support more dependents than inmaking use of family labor than on large increasing effect of tractor cultivation, richer families (see Table 4.3).farms relying mainly on hired labor. which may simply cause agricultural Better health and nutrition can* Brazil. The World Bank and SUDENE, laborers to get fewer days of work. But permit poor people to work morethe official regional development authority, where labor is in relatively short supply, days in each year (which amongcarried out a detailed study of 8,000 farms and timely cultivation and harvestingin the poor northeastern region in late are critical to increasing yields, large other things increases their eligibility1973 and early 1974. It revealed that the mechanized farms may be economi- for employment in modem industry)intensity with which land and labor were cally rational. and can increase their effectivenessat work. Studies of constructionprojects in India and Indonesiaare not poor) can have a powerful places where they can earn more. showed that poor health andeffect on their earnings. Irrigation The construction phase of infra- nutrition were among the factorsschemes, which can double the structural investments can also which tended to make the use ofamount of labor required per provide employment and higher capital-intensive techniques morehectare of land, raise the incomes wages for the poor. The record of economical, even where labor wasof landless laborers, even though employment through public works cheap and abundant.farmers (especially those who own is a checkered one-there have been Even a primary education cantheir land) derive even greater too many cases where for one reason raise the productivity of smallbenefits-see Table 4.2. Similarly, or another local labor has not farmers (see page 48) and, thoughroads that reach remote villages received much benefit or where this has been studied much less,and provinces where some of the the road or dam concerned has make the poor better entrepreneurspoorest people live have (in Liberia been of little economic value. in other lines of business. MoreandThailand, for example) increased But there are enough examples of over, basic education is usuallytheir incomes by giving them access successful schemes (as in Morocco a precondition of employmentto new seeds, insecticides and andtheIndianstateofMaharashtra) in modern manufacturing andmarkets, as well as by enabling to suggest that the approach is services. In Brazil, for example,them to move more readily to worth pursuing, albeit with care. the growth of modern industrial42

Table 4.2 Irrigation and income, selected projectsWhile others may benefit fromHouselhold income (current dollars) the poor being educated, theCountry Withlout With Absolute Percentage converse is also true. More andand beneaciary irrigation irrigation' increase increase better extension workers areCamerooni (northern: ricel needed to reach poor farmers.1978 Technicians and accountants areFarmers 178 1,013 835 469 needed to run factories. MoreSouth Korea (Pyongtaek- managerial and administrativekamgang: rice) l976bFugarmers i236)5007214training and experience couldFarmersMalaysia (Muda: rice)286 500 214 75 increase the rate of industrial and1974 190 361 171 90 agricultural expansion, createLarge-scale farmers 237 443 211 89 more jobs and raise the incomesSmall-scale farmers 131 247 116 89 of everyone.Landless laborers 73 166 93 127India (U'tar Pradesh: rice,Research and technologywheat, sugarcane) 1978 181 359 178 Nor should specialized scientificLarge-scale farmers 384 738 354 92Medium-scale farmers 218 464 246 113 and technological education beSmall-scale farmers 148 264 116 78 overlooked. Their role in reducinga. All studies control for changes in other influences on incomes. poverty is particularly apparent inb. Household income per person. agriculture. The introduction ofhigh-yielding rice and wheatvarieties-the green revolutionemploymentis slowest among but they do not detract from the has substantially improved the livesuneducated people. Literacy and fundamental point that poor health of poor consumers and (on balnumeracyare necessary not just and lack of education are likely ance, with many exceptions) smallin clerical work, but also in the to aggravate the exclusion of the farmers in the wetter parts of Asia.many manual jobs that involve poor from modern development. But more research is urgently neededfollowing written instructions or If the innovations of richer and on dry farming (the economic ratekeeping simple records. Schooling better educated farmers increase of return to this sort of researchhas also been shown to increase agricultural output and reduce has typically been as high as 20-30the capacity to learn from subse- its price, the.incomes of the poor percent) and on the cultivation ofquent formal training and practical farmers who do not innovate will poor soils and subsistence cropsexperience. fall. on which many low-income farmersIt should be emphasized that depend. And in countries wherebetter education, health and nutri- climate and soil conditions varytion-while they may be necessary Table 4.3 Dependency ratios, widely from place to place, muchto increase the earning power of by income group more research is needed to deterthepoor-are not sufficient. Com- Average mine the best farming methodsplementary measures are also household incomefoeahpaeiTaznats for each place-in Tanzania thisneeded to expand the demand for (percentage is being held back by a shortageof nacionial Dependencylabor and to furnish the incentives Income group, average) ratio' of scientists at local researchandc material resources required Peninsular Malausia, stations.for inrLovation. 1973 Industrial research also has aNor will all the gains in income Richest 10 percent 332 0.4 part to play in reducing povertythat can result from better educa- Sri Lana,a p969-70 (as does research in such fields astion, health and nutrition among Richest 10 percent 240 0.5 education and health). Many techthepoor necessarily accrue to the Poorest 10 percent 46 1.3 nical advances stem from workpoor. In some circumstances, the Nepal fseven done by large firms in industrializedincreased productivity of a farmer towns), 1974-75 countries. The resulting innova-Richest 10 percent 167 0.4will partly benefit his landlord- Poorest 10 percent 51 1.2 tions, which tend to be concentratedor consumers, for that matter, who a. Households ranked by income or expen- on capital-intensive methods ofmay be able to buy food more diture per person. large-scale production, often benecheaply.These distributive issues b. Children (0-14) and the aged (over 65 fit the poor-as in the case of fertilforPeninsular Malavsia; over 60 for theare difficult and poorly understood, others) as percentage of the rest. izer. But small enterprises are43

disadvantaged, job creation is also been important in reducing the detriment of the poor. And inlimited, and some of the goods poverty-particularly in Northern a few cases the exodus of brightbought by the poor are not im- Europe in the 19th century, but young people may have held backproved or made cheaper as rapidly also more recently in Mediterranean agricultural progress. The impactas those bought by the rich. More and other developing countries of rural development programs onresearch, especially if undertaken where a significant proportion of migration is not clear-cut, either;in developing countries, could the relatively unskilled labor force land redistribution, expansion ofreduce these biases. Progress has has migrated to the Middle East the cultivated area, and loweralready been made, for example, or elsewhere (see box on page 22). fertility reduce emigration; butin small-scale food processing and The relation between rural-urban improved communications and thelabor-intensive construction. migration and poverty remains commercialization of agriculturesomewhat controversial; but views appear to increase it.Migration on this subject have evolved over The extent to which the poorTechnology is one way of making the past decade (see Chapter 6 of benefit from migration dependsprogress in places where poverty the WorldDevelopmentReport, 1979). partly on the extent to which theystems from poor land or poor It now is increasingly recognized have had access to at least a priclimate.Another is for people to that those who move generally mary education (see box). Illiteratemove to places where opportuni- make themselves better off. Their people do migrate, and often gainties are better. Expansion of rural incomes go up, and they and their substantially by it (though someemployment,both on and off farms, dependents have better access to times they become destitutewill reduce the need for migration; health and education services. wanderers). But Indian evidencebut it is clear that the industrial- Studies in India show that the suggests that they move mainlyization of poor countries (like that chances of girls from poor fam- to other rural areas. If they try toof the now-developed countries) ilies going to school are more than move to urban areas, where earnwillin the long term require large- twice as high in large cities as in ings prospects are generally better,scale migration from rural to urban rural areas. the uneducated are much moreareas. International migration has On the other hand, there is still likely (as a studyof Bombay showed)widespread concern about the to fail to get jobs and to be forcedfiscal, social and political costs of to leave.A strategy that backfired rapid rural-urban migration, which, The same is true of internationalby holding down urban wages and migration. The poor and unedu-Theexperience oftwosubclansinwest- adding to pressure on government cated are less likely to find outern Kenya illustrates some of the interactionsbetween education, migrationand agricultural development.services, retards the rate of improvementin the living standardsabout opportunities for workingabroad. More important, theyIn the 1930s the head of the more of the urban poor. But these living have less chance of being acceptedpowerful subclan, anxious to conserve standards, low as they often are, by prospective employers. It hashis people's land, caused the colonialadministration's schools to be built ontend to be above those of the rural been estimated that more thanthe land of the other subclan. rhis had poor. Where they are not, as in three-quarters of the foreignersunexpected consequences. Calcutta, migration usually ceases now working in the Middle EastThe education received by members or goes into reverse. Indeed, re- are literate, and almost all of themof the less powerful subclan enabled verse and repeated migration in have some skills. Even if no formalsome ofmoney to get jobs in the local response to changing job opportuni- training is needed, good healthused to purchase improved livestock ties has been found to be common. is invariably a prerequisite of foreignto switch into cash crops (especially The effects on those who remain employment, and one which manycoffee) and to establish more schools. in the countryside-other than the poor people are unable to fulfill.In addition, the movement of people families of migrants that benefit Migration of all kinds can haveto the town slowed the rate at which from remittances-appear to vary harmful social and economic effects.land was subdivided, making the intro-.d of .u'impred livestoc (which from case to case. In some, non- But on balance the evidence suggestsduction of improved livestock (whichrequired a minimum grazing area) more migrants gain because the labor that, by enabling labor to be usedprofitable. market tightens when people leave, where it is most productive, migra-By 1974, although the division of and because there is less pressure tion aids both growth and povertypolitical power was still the same, the on agricultural land. In others, reduction-and would do so evenless powerful subclan had become thericher of the two remittances have been spent on more if the poor were betterconcentrating land ownership-to equipped to migrate. Develop-44

ment strategies that assume that income countries have fairly The next three chapters examinethe productivity of the poor must extensive social security programs. in more detail one aspect of antipovnecessarilybe raised in the places But the scope for such programs erty policy-human development.where they now live may be both in low-income countries is neces- Chapter 5 looks at the consequencesinefficient and inequitable. Not sarily limited. and determinants of education,least, the children of the landless An alternative approach, used health, nutrition and fertility; atin stagnant rural areas may be best in both industrialized and devel- policies that affect them; and atserved by a primary education that oping countries, is to subsidize the way in which they (and incomes)will increase their geographic, as (and sometimes also ration) items interact. Chapter 6 considers somewell as economic, mobility. that are particularly important for of the common practical problemspoor people. Such subsidies can -political, financial, administrativeraisethe real incomes of the poor of human development programs.In indlustrialized countries the considerably-witness the increase Chapter 7, in the context of amainstay of antipoverty policy is in Peru's infant mortality when discussion of the several regionsincome transfers aimed at offset- subsidieswerereducedandunem- of the developing world, addressesting life-cycle poverty among the ployment rose in 1976. Indeed, some practical questions of prioritiesold and the very young, and at the three low-income countries and tradeoffs: How do the benefitscompensating for loss of earnings with life expectancy above 60 years and costs of human developmentthrough sickness, unemployment all provide guaranteed or subsidized programs compare with those ofand so on. In developing countries, food. But programs of this sort the other approaches to povertytoo, these are important causes of (discussed further on page 62) reduction discussed in the presentextrerme poverty (though they tend have to steer a tricky course be- chapter? How does the best allocatobe mitigated more through the tween the financial rocks of general tion of resources vary accordingextencded family); and they are not subsidization and the administra- to the circumstances of particulartouched directly by measures to tive and political rocks of effectively countries and the specific objectivesraise earning power. Brazil, Turkey reaching the poor. being pursued?and a number of other middle- : E45

5 Human development issues and policiesThis chapter looks at the four main family size-that receives most views, and its implications forareas of human development- attention. development strategy.education, health, nutrition and A decade or two ago, there wasfertility-and at the links between a widespread view that trained Recent progressthem. In each, it considers the people were the key to develop- The major educational progresscauses and effects of poverty and ment. Universal literacy was a of the past two decades reflectsvarious ways of breaking its grip political objective in many coun- heavy investment by developingon the poor and their children. tries,butmoneyspentonprimary countries. Their total publicTen years ago this chapter would schooling was often regarded as expenditure on education rose inhave been written very different- diverted from activities that would real terms (in 1976 dollars) fromly. In certain areas thinking has have contributed more to economic about $9 billion in 1960 (2.4 perchangedsubstantially-for instance, growth. Planners favored the kinds cent of their collective GNP) toabout the nature of malnutrition of secondary and higher education $38 billion in 1976 (4.0 percent ofand its causes. Good progress has that directly met the "manpower GNP). Costs vary widely bybeen made in unraveling some requirements" of the modern region-and by type of educationcomplex and highly controversial sector. People who worked with (see Table 5.1). The potential forissues-for example, the respec- their hands were thought not continued enrollment growth attive roles of family planning and to have much need of formal different levels will, of course, besocial development in reducing education. strongly affected by these costs.fertility. And in all areas, research Over the past decade, views But school attendance in someand practical experience have im- have changed substantially. Ade- parts of the world remains low,proved understanding of the na- quate provision of secondary and especially among the poor, in ruralture of poverty and what can be higher education and training areas and by girls (see Figure 5.1done about it. remains an important priority. But and Table 5.2). This is not simplythe value of general education at because schools are unavailable-Education the primary level is now morewidely recognized. This sectionnot everyone who has an oppor-tunity for education accepts it.Every individual is born with a discusses more of the evidence Among those who do enroll, morecollectionof abilities and talents. that lies behind this change in over, in developing countries onEducation, in its many forms, hasthe potential to help fulfill andapply them.Table 5.1 Public expenditures on elementary and higher educationIn some societies the economic per student, 1976function of schooling is regardedHigher (postasminor-since the cultivation of secondary) Elementary Ratio of higher tothe mind and the spirit, curiosity, Region education education elementary educationcontemplation contemlatio andreasoningh and reasoning have Sub-Saharan South Asia Africa 3,819 171 38 100.5 .South Asia ~~~117 13 9.0more than economic purposes and East Asia 471 54 8.7justifications. But in the context Middle East and North Africa 3,106 181 17.2of this Report, it is the role of edu- Latin America and Caribbean 733 91 8.1Industrialized 2,278 1,157 2.0cation in overcoming poverty- USSR and Eastern Europe 957 539 1.8increasing incomes, improving Note: Figureshown are averages (weighted by enrollment) of costs (in 1976 dollars) in thehealth and nutrition, reducing countries in each region for which data were available.46

average 40 percent drop out before percent (less than half the national that at most 4 percent completedthe fourth year. In Brazil's poor urban average), nearly two-thirds four years. Even the completionrural Northeast region in 1974, of the students dropped out before statistics conceal the very lowdespite an enrollment rate of 46 the second year-and it is estimated quality of some of the schoolingprovided (see pages 52-53).Nonetheless, the very substantialFigure 5.1 Enrollment ratios, by region, 1960-75 growth in enrollment (Figure 5.1)perce,nis a sign of great educational advance.M ddle East Latin Sub-Saharanand North Africa South Asia East Asia America AfricaThere are several mechanismsthrough which this has contributed30 _, Female 11) to growth in incomes.70 - M.Ie I e- II) Mal 6-ll70 ]\4ale(O-11), Malelo-ll) _= MIles6-1ti _ M ..... le(U-l]) -Effects of education on earning power60 Female b-ti) Schooling imparts specific knowl-.- it Male -(1217) edge and develops general reasoning50 , 6])Ma( (1'-17) M -6} skills (its "cognitive" effects); itfereale 0-tin )also induces changes in beliefs and40 F IaI _-. values, and in attitudes towardMae 12 17) Male ( 12-17) cma Ie (12-l,7) .,..Fe-male (1-17) Fe-tle '-li) work and society ("noncognitive"30 -FeTstlleZ-17)e effects). The relative importance0 _ Male 1 5-23) Male(12-17) of these effects is much debated,20_ M,' 31 - Femaie (12-172 Fea1-12alal-i7) but poorly understood; both areM,], -18-23) extremely important.10 -Male (iS8 23) -Fe-eae (18-23) In the cognitive area, developingt'e-cle (13-23) - fml 1-- Fml 15 Malell3-123i10 I (15I -~ fF-al, (1S--3} 18e3a Flee (1823-S a generalized capacity for thinking1960 i5 70 75160 65 70 75 60 65 70 75 60 65 70 75 60 65 70 75 and learning has to be found to beL NESC 0 more important than the specificsubjects learned. On-the-jobtraining, informal education andTable 5.2 Primary school enrollment, by income group vocational training all build on(percent)learning abilities acquired earlier.Boys (aged 5-9) Girls (aged 5-9' And although literacy and numeracydeteriorate if left unused, thePoorest Richest Poorest Richest.Country households liouseholds households households educational experience still gen-Sri Lan;.a, 1969-70 70.3 89.8 65.8 81.9 erally provides an improved foun-Nepal, 1973-74 dation for subsequent learning.11 towns 29.5 77.8 15.3 71.2 Many of the noncognitive effectsof schooling-receptivity to newstate, 1r972-73 ideas, competitiveness, and will-Rural 22.7 53.9 8.6 50.9 ingness to accept discipline-areUrban 42.1 77.7 30.8 69.5 directly relevant to productiveIndia: Maharashtra economic activity. Others-tolerstate,1972-73ance, self-confidence, social andRural 24.6 54.6 16.6 52.9 * *Urban 40.4 86.3 42.1 87.0 CiViC responsiblity-are moreBoth sexes (aged 6-11) personal or political in nature,but may also affect economicPoorest Richestlhouseholds householdsperformance.Colombia, 1974 Some of the evidence on theLarge cities 69.6 94.6 effects of education rests on at-All urban 62.0 89.5 tempts to measure attitudes directly.Rural 51.2 60.0 Studies in several countries haveNote: Enrollments are expressed as a percentage of the number in the age group. Poorest shown that "modemity" of outlookand richest refer (in the case of India, Nepal and Sri Lanka) to the bottom and top 10 percent t a rof households ranked by expenditure per person, and (in the case of Colombia) to the top toward actvities rangmg from votandbottom 20 percent of households ranked by income per person. ing to family planning, saving and47

working, is more influenced by the Table 5.3 Farmer education it would be short-sighted to leavelevel of the individual's schooling and farmer productivity a large part of the next generationthan by any other factor. But there Estimated percentage of farmers illiterate.are also many studies of the directincreaseannual farm Gutput EMPLOYEES.effect of schooling on individualThe second type ofdue to four yearsEproductivity and earnings, which Study of primary education study relates the educational levelsproductivity anh earmngs, wohc Study Wrather than none of individuals to their wages andare examined are examined here under two heads W/\ith complementary inputs' salaries. aais If feucto education affects fet theh-those relating to the self-employed Brazil (Garibaldi), 1970 18.4and those relating to employees. Brazil (Resende), 1969 4.0 capacity to learn, innovate andBrazil (Taquari), 1970 22.1 adapt, its effects should be par-Brazil (Vicosa), 1969 9.3 ticularly important for employeesTHE 5ELF-EMPLOYED. 1The hy- Colombia (Chinchina),potheses are straightforward: that 1969 -0.8 doing nonroutine or changingColombia (Espinal), 1969 24.4 tasks. For employees in modernprimary education helps people to Kenya, 1971-72 6.9obtain and evaluate information Malaysia, 1973 20.4 enterprises, primary education alsoabout improved techniques and Nepal (wheat), 1968-69 20.4 promotes disciplined work habitsabout Improved techniques and South Korea, 1973 9.1 and responsiveness to furthernew opportunities, to keep records Average (unweighted) 13.2 training, as well as offering the adactivitiesand the risks of future Without complementary inputsvantages of literacy and numeracy.Brazil (Candelaria), 1970 10.8ones. More generally,Studies of the rateprimaryof return toBrazil (Conceicao deschooling is a training in how to Castelo), 1969 -3.6learn, an experience in self- Brazil (Guarani), 1970 6.0 mainly with relatively large urbanBrazil (Paracatu), 1969 -7.2 enterprises; but a few have indisciplineand in working for Colombia (Malaga), 1969 12.4 edrsmal busines and i-longer-term goals. Colombia (Moniquira), cluded small businesses and agri-1969 12.5 cultural workers. All find thatMost of the empirical evidence Greece, 1963 25.9comes from agriculture-studiescomparing the productivity, yieldsAverage (unweighted) 8.1 eamrings. And when the extra ear-erig.Adwe h xr anandandinnovativeunnshoovedactivityfarmers.of schooledNotllNo information on availabilityof complementary inputsingsresultingtion arefromweighed againstprimary educa-its costs,thes studischontdfaroleds a uatly t Average of eight high rates of return are consistentlythese studies controlled adequately stde studies ,uvegtd (unweighted) 2\ 6L 6.3 found. Similar studies for secondaryfor other influences, particularly a. Improved seeds, irrigation, transport and higher education find lower,wealth; but many did (for example, to markets and so on. though nonetheless substantial,by including farm size as a proxyreturns (see Table 5.4 and box).for wealth).The general weight of the evi- pends on the cost of achieving Investment priorities in educationdence (see Table 5.3) lends strong them. It is thus significant thatand consistent support to the studies that went on to compare Primary education is of particularhypotheses-and is particularly the increase in production result- importance in overcoming absolutecompelling because the studies ing from education with the costs poverty. But secondary, higher,measure productivity directly, not of that education (for example, in vocational and adult educationthrough wages. Where the com- Korea, Malaysia and Thailand) and training also have major rolesplementary inputs required for found rates of return comparing to play.improved farming techniques were very favorably with investment inavailable, the annual output of a other sectors. It is, of course, im- PRIMARY EDUCATION. In counfarmerwho had completed four possible to predict which places tries where it is far from universal,years of primary schooling was will offer scope for improved farm- the case for increasing the proporonaverage 13.2 percent more than ing techniques in 10 years' time, tion of children who complete prionewho had not been to school. when children leave school. In mary education is strong. WhileAs expected, where complementary some, effects on farm productivity there have been high economicinputs were not available, the in- may be low. But given past progress returns in the past, it has beencrease in output resulting from in agricultural research, it is prob- suggested that the rate of return toadditional schooling was on aver- able that some places with stagnant primary schooling (especially inage smaller-but still substantial. technology now will offer greatly certain jobs) may decline as theWhether these increases should improved possibilities. Thus, on proportion of the labor force withbe regarded as large or small de- growth as well as equity grounds, primary education increases. But48

this may be offset by shifts in the And in the few countries where rural areas, girls, and the poorestpattern of production toward more studies have been done at differ- urban boys. In general, primaryskill-intensive goods. In Table 5.4 ent periods, rates of return have education tends to be redistributherates of return to primary usually declined, but only mildly. tive toward the poor (see Tableeducation in countries with adult There are also favorable effects 5.5). In contrast, public expendiliteracyrates above 50 percent, on equity. As primary education ture on secondary and higherwhile somewhat below those in becomes more widespread, addi- education tends to redistributecountries with adult literacy below tional spending will be increas- income from poor to rich, since50 percent, are still strikingly high. ingly concentrated on backward children of poor parents havecomparatively little opportunityTable 5.4 Rates of return to education(percent)to benefit from it.Primary education, especially ofNumber ofCountry group Primary Secondary Higher countriesgirls, has favorable effects on thenext generation's health, fertilityAll developing countries 24.2 15.4 12.3 30 and education (see box overleaf).Low iacome/adult literacyFinally, it enriches peoples' lives.rate under 50 percent, 27.3 17.2 12.1 11Middle income/adult literacyMany would regard this as sufficirateover 50 percent 22.2 14.3 12.4 19 ent justification for universal pri-Industrialized countries .. 10.0 9.1 14 mary education, independent ofNote: In all cases, the figures are "social" rates of return: the costs include forgone earnings its other benefits.(what the students could have earned had they not been in school) as well as both publicand private outlays; the benefits are measured by income before tax. (The "private"returns to individuals exclude public costs and taxes, and are usually larger.) The studies SECONDARY AND HIGHER EDUCATION.refer to various years between 1957 and 1978, mainly in the latter half of the period. Renewed emphasis on the impora.In this sample of 30 developing countries, those countries with low incomes also had tance of primary education, andliteracy rates below 50 percent (at the time the studies were done). All the middle-income its high returns relative to seccountrieshad literacy rates above 50 percent.ondary and higher education,should not start the pendulumswinging too far in the other di-Schooling, screening and productivityrection. High levels of knowledgeare necessary for many people whoThe interpretation of rates of return thus that relative wages are not such serve the poor, both directly asto education-especially secondary and imperfect indicators of productivity, as teachers, health workers and agrihighereducation-is still controversial. It those who have concentrated on their cultural extension workers, andhas often been argued that educational institutional characteristics and determiqualif.cationsare simply a "screening" nants have supposed. In developed indirectly as researchers, technidevice,signaling an individual's produc- countries the relative wages of different cians, managers and administrators.tive qualities to an employer without occupations have gradually but steadily While their skills must be developedactually enhancing them. In some changed in response to increases in the to a considerable extent throughdeveloping countries, moreover, the supply of educated labor. That the samepublic sector-and some heavily protected process operates even in the public sector practhcal experience and i otherparts of the private sector-are the main in developing countries is suggested, for ways, there is for some purposesemployers of university and even second- example, by the fact that the relative no better or cheaper substitute forary-school graduates: it has been sug- salaries of teachers and civil servants the formal disciplines of convengestedthat the salaries they pay are often are much higher in Africa, where edu- tional schooling. Even allowing forartificially inflated and bear little relation cated manpower is much scarcer, thanto relative productivity; and that educa- in Asia, where it is more abundant. doubts about the estimated ratestional requirements serve merely to ration The conventional economic interpre- of return to secondary and higheraccess to these inflated salaries. In both tation of the association between school- education, and for the existencecases, earnings differences associated ing and wages is further strengthened by of some educated unemploymentwith different levels of education would a few studies showing that more educated (see box on next page), there areoverstate the effect of education on workers have increased output in spedficproductivity. manufacturing industries, by evidence unquestonably severe shortagesOn the other side, it is argued that of substantial returns to education even of skilled people in many developingschool "screening" is by no means all in agriculture and other traditional small- countries.wasteful and is preferable to such other scale activities, where one would expect More economical ways of proscreeningmethods as caste or family educational credentials to be much less ducing skilled people need to beconnections. -It is also argued that labor important, and by the macroeconomic found. First, greater use of in-careermarkets are not so monopolistic, and evidence discussed in the box on page 38. and on-th trater shof beon-the-job training should be9and49

Table 5.5 Public education spending per household, education at about a fifth the costby income groupof traditional schools, and allows(dollars)would-be students who have toMalaysia, 1974'Colombia, 1974' earn a living to continue their edu-Income group' Primary Postsecondary Primary University cation at the same time. RecentPoorest 20 percent 135 4 48 1 studies (in Brazil, Kenya and theRichest 20 percent 45 63 9 46 Dominican Republic) have alsoa. Households ranked by income per person. concluded that correspondenceb. Federal costs per household. courses have effectively taughtc. Subsidies per household. people in remote areas.* In most countries the familiesThe benefits of women's educationof postprimary students pay toolittle for education. They are gen-Educating girls may be one of the best of Sub-Saharan Africa; but it exists to erally much better off than theinvestments a country can make in future some extent in every region. national average: in Tunisia, foreconomic growth and welfare-even if Why? From the parents' point of view, example, the proportion of chilgirlsnever enter the labor force. Most education for their daughters may seem dren from higher income groupsgirls become mothers, and their influence less attractive than for their sons. They . .t.a.u.i-much more than the father's-on their may fear that education will harm their Is nne tmes larger i unversitieschildren is crucial:daughters' marriage prospects, subsequent than in elementary school. Since* In health. Studies in Bangladesh, domestic life and even spiritual qualities. the rewards from higher educa-Kenya and Colombia show that children A girl's education brings fewer economicare less likely to die, the more educated benefits if there is discrimination againsttion are large, it is highly desirable(though often politically difficult)their mothers, even allowing for differ- her in the labor market, if she marriesences in family income.early and stops working or if she ceases* In nutrition. Among households after marriage to have any economic cover costs. Scholarships can besurveyed in Sao Paulo, Brazil, for any obligations toward her parents. given to students whose familiesgiven income level, families were better But parents and their daughters do cannot afford to pay.The cost of secondary and higherfed the higher the mother's education. respond rapidly to changing opportunities.* In fertility. Education delays mar- When women took on key roles in theriage for women, partly by increasing Anand Dairy Cooperative in Gujarat, education makes it inevitable thattheir chances of employment and edu- India, education for girls became more in most countries demand for placescated women are more likely to know valued. When a nutrition project in will exceed supply for the foreabout,and use, contraceptives. Guatemala offered employment to edu- seeable future, although someYet in most parts of the developing cated girls, the test scores of younger countries, such as South Korea,world, there are many more boys than girls improved.girls enrolled at school (see Figure 5.1). More generally, education does increase already have very high enrollmentTrue, female enrollment grew faster than the chance of paid employment for girls. rates. But economic considerationsmale between 1960 and 1977; but when In Brazil married women with secondary are not the only relevant ones:boys' enrollments were where female education are three to four times more secondary education often helps inenrollments are today, they were grow- likely to be employed than those with lowering fertility and reducinging even faster. The educational bias is primary education only-who in turn aremost pronounced in South Asia, the twice as likely to work as women with child mortality (over and aboveMiddle East and North Africa, and parts no education at all. the effects of primary education).All developed countries havefound universal free secondaryeducation to be desirable in itsexplored. Second, steps should be costs per student. Care must be own right. The question for develtakento reduce the high unit costs taken to encourage repatriation oping countries is less "whether"of secondary and higher education and to prevent foreign training than "when." Higher education(shown in Table 5.1). from becoming exclusively the clearly also has scientific, cultural* For example, the number of privilege of the children of the and intellectual objectives, as welluniversity specializations can be rich and influential. as economic ones.reduced, relying on foreign uni- * Correspondence courses canversities (not necessarily in devel- dramatically reduce the cost of VOCATIONAL EDUCAnON AND TRAINopedcountries) for specialized secondary and higher education ING. Experience shows that it istraining in areas in which small and teacher training. The Korean often inefficient to rely heavily onnumbers of students lead to ex- Air-Correspondence High School, schools (as opposed to the workcessiveteaching and equipment for example, provides secondary place and short-term training50

UNESCO concluded that the poorUnemployment among the educated results of most adult literacyprograms were due to lack ofUnemployment statistics in developing paid job is sufficiently large, a period of demand. Where there is an explicitcountries are sparse and often hard to job-seeking or unemployment will yieldinterpret. Evidence on open unemploy- a higher expected "lifetime" income. need, results have been better. Forment (persons without a job and actively The educational pattern of unemployseekingemployment) indicates that it is ment is consistent with this explanation.example, a recent review foundthat agricultural extension-whichprimarily an urban phenomenon heavily It is not worthwhile for uneducatedconcentrated among workers in their workers to remain unemployed as theyis essentially an applied form ofadult education-generally helpedteens and early twenties. Since these are search for a well-paid job. At the otherthe ages at which individuals typically extreme, highly trained people are scarce to raise productivity; and theleave school or university, therehas been in many countries-so college graduates World Bank's experience withconcern that educational expansion in can get well-paid jobs immediately. But the "training and visit" (T & V)developing countries will produce a grow- those in between-the secondary-schooling problem of "educated unemploy- leavers-are neither assured of high-wageapproach to agricultural exten-sion, which puts great weight onment." But despite the increased outflowfor them, there may be high returns tojobs nor completely out of the running;of students over the past decade, partic- careful training and supervisionularly secondary-school graduates, there a full-time search for a job. Since theis no evidence of rising trends in open unemployed are young, with few depenoffield workers, is consistent withthis. In West Bengal, for example,unemployment rates. Unemployment dentsandoftensupportedbytheirfamilies, T & V was introduced in 1975 andstatistics from a number of countries do, and since most of them eventually find helped to raise the proportion ofhowever, suggest that secondary-school jobs, neither the social nor the privateleavers experience higher rates of unem- costs associated with this unemployment land area planted with highploymentthan the uneducated or those are as serious as might appear. yielding wheat and paddy varietieswith postsecondary education. Moreover, the fact that some primary- from less than 2 percent to 40By and large, educated unemployment and secondary-school leavers are unemappearsto be associated with the processes ployed does not imply that the economypercent, in a single year. WhileT & V is effective even with illitthroughwhich the labor market adjusts is unable to make productive use of moreto an increased supply of school leavers. of them. Various studies have shown erates, literate farmers tend to beFirst, the earnings expectations or job thatthe social rate of returnto investment more responsive to suggestedpreferences of school leavers may not in education may be high despite the changes.keep pace with changes in labor market number of educated unemployed. Butconditions brought about by increased in the eyes of governments, frustrated Implementing investment prioritiesnumbers of workers with educational school leavers or college graduates cancredentials. Second, the structure of wages form a politically volatile group. Some The education received by poormay be slow to adjust-especially if the governments have therefore virtually children depends on three things.public sector is a major employer of guaranteed public-sector jobs for posteducatedworkers. School leavers may secondary leavers whether or not thereThe first is accessibility-are thereschool places for them within athen be encouraged to wait for jobs in has been socially productive work for reasonable distance from home?well-paid occupations rather than imme- them to do. This can result in a majordiately acceptajobthatpays significantly drain on government revenues and impede The second is use-do their parless;if the wage difference is high enough the diffusion of educated manpower into ents send them to school, and areand the probability of obtaining a higher- more productive uses as well. they allowed or encouraged todrop out? The third concerns thequality of the education thatinstitutions) to develop vocational later on-the-job training or short- schools provide.skills. Vocational and technical term courses (which may be neededschools often find it difficult to more than once in a lifetime) are ACCESSIBILITY. Financing constrikethe right balance between more likely to be successful, espe- straints will often be compoundedgeneral preemployment training cially if, as in Brazil, Chile and by difficulties in reaching the poorand the provision of specialized Singapore, there is coordination -distance, low-density populaskills,and are often slow to adjust with potential employers. tions and poor communicationstothe economy's changing needs. so that building schools andIn many school systems where ADULT EDUCATION. Certain supplying books, equipment andcompetition for higher education types of adult education play a qualified teachers is a difficult andis strong, they also suffer from low useful role. To be effective, adult expensive task. For example, theprestige. education must be conducted by Nepalese government estimatesBy contrast, institutions that dedicated and responsible teachers, that it costs more than twice asprovide training in skills with wide and must address specific, felt much to build and equip a schoolapplicability as a foundation for needs; after a major review, in mountainous regions as it does51

in the plains; and attracting quali- less education than boys (see boxfied teachers to remote areas has Big is not necessarily bad on page 50). Since the mere exisprovedto be extremely difficult. Class sizes vary widely in the developing tence of a school does not auto-There is often much that can be world-at elementary schools, from matically mean it is used by allaccomplished by administrative more than 60 in four countries (Chad, those eligible to attend, specialaction with relatively little capital Malawi, Congo-Brazzaville and Central measures may be needed to eninvestment.Repetition of classes African Republic) to less than 25 inseven (Iraq, Barbados, Bolivia, Uruguay, sure that the education offered isand early dropout may be the Romania, Mauritania and Mauritius). attractive to the families for whomresult of excessively high promo- Yet once classes have more than 40 it is intended (see pages 78-79).tion standards. In these circum- students, varying their size has almoststances, the flow of students can no effect on student learning (though QUALITY OF EDUCATION. This isbe accelerated by more automatic larger classes may weaken discipline QUalIy oF developing counandteacher morale). Between 15 andpromotion-while maintaining 40, students learn more in smaller tries, and has been found (forquality by correcting some of the classes (and still more in even smaller example, in studies undertaken incauses of repetition or dropout. classes), but the benefits are slight. For Thailand, Malaysia and the Philip-In many situations, resources can example, reducing an elementary-school pines) to be lower still for poorbe freed for extending educationexpectedclass fromto improve40 pupilsaverageto 15achievebyraising student-teacher ratios, ment (in a standard test) by only about public schools may lead the well-can be and rural pupils. Poor qualitywhich are the main determinant 5 percentage points. By the same token, to-do to choose private schoolsof unit costs (given teacher salaries) amodestincrease-from35to40pupils, for their children, reinforcingand are largely determined by say-might reduce achievement by only social and economic inequality.a single percentage point. While thereclass size. Extensive research shows are obvious practical limits to increasing Casual observation and smallthatclass size has surprisingly little classes much above 50, the research scale studies have long suggestedeffect on learning (see box). It is does suggest that, for classes initially that poor training of teachers, lackimportant to maximize the use of below 50, little will be lost if they are of textbooks, and inadequate schoolavailable facilities-by rotating increased. facilities lead to poor educationalclasses, with staggered scheduling In sparsely populated areas, larger results and provide a weak basisclasses-if that means fewer schoolsanddouble shifts in areas of high may increase the time it takes children for subsequent training. But broadpopulationdensity. If there are to get to school. That could be a genuine based evidence to demonstratenot enough pupils within an discouragement, though in most places the extent of the resulting learningacceptable distance from school to population density is high enough not losses has only recently becomefill individual classes, student- to make it so. available-from a large researchteacher ratios and the use of spaceproject, the International Evaluationcan be significantly improved by of Educational Achievement. Buttaking new students only in alter- only four developing countriesnate years (as has been done suc- to their traditional way of life; or (Chile, India, Iran and Thailand)cessfully in a project financed by the they may simply believe that social were among the 19 countriesWorld Bank in Malaysia) and by or ethnic barriers are too great, or covered.teaching more than one grade in a the quality of the available school- While international comparclass,as in another World Bank- ing too low, to make education isons of student achievement mustfinanced project in El Salvador. worth its costs. For poor families, be approached gingerly, particuthehelp of children at home-in larly when different languages orUSE. Since most poor parents animal care, fetching fuel and testing styles can affect the results,believe that education would water, taking care of young chil- a clear pattern nonetheless emergesbenefit their children-in terms of dren while adults work, and in from the study. Differences instatus and the ability to stand up agricultural work during busy average performance of studentsto officials and merchants, as well seasons-may conflict with a fixed from the 15 developed countriesas in a more narrowly economic school schedule. For some families, varied somewhat from subject tosense-they must have strong rea- malnutrition and poor health of subject and country to country;sons for not sending their children children may lead to poor atten- but the differences by and largeto school if they have the chance. dance, inattention while in school, were small. The developing coun-They may question whether they repetition of grades and, even- tries, however, did far less wellwillbenefit themselves; they may tually, dropping out. And there are in all subjects tested, and at eacheven regard the school as a threat particular reasons that girls receive of the three age levels examined.52

A typical finding showed the mean or defer spending on learning resources to improve health. Byscore for students in a developing materials. But this is a costly the end of the 1960s it was increascountryto be in the bottom 5 to alternative if costs are considered ingly plain that health care systems10 percent of students from a in terms of the education provided modeled on those in the developeddeveloped country. Some of the rather than simply per student world were not the quickest,handicaps of children in develop- in school. cheapest or most effective way toing countries may be due to lower * Properly designed and sup- improve the health of the majoritylevels ol: parental education (which ported radio projects have poten- of people in developing countries.has a substantial impact, particu- tial for improving learning (and in The 1970s have thus witnessedlarly in the preschool years) or certain cases reducing costs). To the evolution of a much broaderin some cases to prolonged mal- take a well-documented example, approach to health policy, incLudingnutrition. But the evidence suggests in Nicaragua regular radio broad- an emphasis on universal low-costthat they are mainly a reflection of casts achieved dramatic improve- basic health care. But despite somelow-quality schooling. ments in mathematics for primary successful experiments, "primaryThere are a number of promising students. Although new tech- health care" is still more of aapproaches to improving education- nologies and growing experience slogan than a nationwide realityal quality in developing countries. are increasing the educational in most developing countries. To* The curriculum should take potential of television, lack of rural change this is the greatest healthinto account the linguistic and electricity and the high costs of challenge of the 1980s.home backgrounds of students. capital, maintenance and operationFrequently curricula are too de- put it out of reach for most countries. Life expectancy and mortalitymanding, which only exacerbates Research into these approaches There is considerable variationtendencies to repeat classes or has indicated important potential, among developing countries. Indrop out, particularly for those but it remains to be seen how 11 of the richer ones, life expectancyfrom poor homes. Whenever much they can improve quality is 70 years or more-close to thepossible, subjects should be within the constraints of politically average level (74 years) in indusillustratedwith examples that feasible budgets. This underlines trialized countries. But in lowdrawon the child's experience. the importance of finding cheap income countries, life expectancy* The selection and training of ways to improve quality if the averages only 50 years, and severalteachers should be improved educational gaps between devel- countries are under 45. Thusthrough more training facilities, oping and developed countries, and despite the health improvementsgreater use of in-service training, between rich and poor in develop- that have occurred throughout theand more resources-teachers' ing countries, are to be narrowed. developing world over the pastguides, advisory services, mass-three decades, the gap betweenmedia programs and bulletins. This Health developed and developing countakestime, however; for manytries remains wide.countries, better teaching will be In general terms, the determinants Babies born in a developingas much a consequence as a source of health have long been well known. country will on average live 20of improved quality in schools. One is people's purchasing power years less than those born in the* The design, production and (which depends on their incomes industrialized world. About halfdistribution of learning materials and on prices) over certain goods of this difference can be explainedshoulcd be upgraded. This applies and services, including food, by what happens in the first fiveparticularly to textbooks, because housing, fuel, soap, water and years of life. Some 17 percent ofresearch indicates that increasing medical services. Another is children in developing countriestheir availability is the most con- the health environment-climate, (and more than 30 percent insistently effective way of raising standards of public sanitation and several of the poorest) die beforeeducational standards. A nation- the prevalence of communicable their fifth birthday; in industrializedwide textbook project supported diseases. A third is people's countries, only about 2 percentby the World Bank in the Philip- understanding of nutrition, health do. Mortality rates among childrenpines significantly increased stu- and hygiene. aged one to four in low-incomedent learning while increasing Knowledge is still evolving, countries are frequently 20-30costs per student by only 1 per- however, on the relative importance times those in industrialized councent.When school budgets are of these different factors, and on tries, and sometimes even more.squeezed, it is all too easy to cut the best ways to deploy govemment Although the gap tends to narrow53

as average incomes rise, in a 1 percent. The main causes of child similarity to those in developednumber of countries with 1978 deaths in developing countries are countries. There is also less differincomesof more than $900 (in- diarrheal diseases and respiratory ence between urban areas including Jordan, Turkey, Algeria infections, especially influenza and developed and developing countriesand Guatemala) the chances of a pneumonia. (It has been estimated than between rural areas, sincechild dying between its first and that diarrheal diseases cause 5-10 people who live in urban areasfifth birthdays were still at least million deaths a year and respira- have higher incomes, are better10 times as great as in industrialized tory diseases 4-5 million, making educated and have better accesscountries. On average, for children them by far the biggest killers for to health care. About 60-70 percentin developing countries who reach the population as a whole.) of physicians in Africa work inthe age of five, further life expect- Other diseases that make adults urban areas, where about 20 perancyis still eight to nine years ill may be fatal in young children. cent of the population lives. LatinMalaria, for example, has been America is relatively well endowedestimated to kill 1 million African with physicians, but two-thirds ofchildren a year. Common childhood them serve the large cities whereFigure 5.2 Death by age groups: diseases, such as measles, diphtheria, only a third of the population lives.developing and industrialized whooping cough and polio, which This gap is much wider than cancountries, 1980" have either been virtually eliminated be justified on the grounds thatPercentage dead by the age of: from developed countries or else specialized referral services must5 15 50 65 over 65 reduced to minor nuisances, can be located in towns.be fatal or crippling in developing Some of the health problemsIones. A case of measles is often of developed countries, however,Developing more than 200 times more likely are magnified in developing ones.to kill a child in a developing country The need to achieve competitivethan in an industrialized one. All costs has led industries in someof these diseases can be prevented developing countries to adopt lowerDeaths by age group as Industrialized by vaccination, yet fewer than 10 standards of job safety than prevailpercentage of total deaths: percent of the children born each in advanced countries, and accidentunder 5 5-14 15-49 50-64 65 and over year in the developing countries rates are high. Similarly, the number1 are being protected. of deaths per automobile is muchJ-; { XA major reason that these greater than in advanced countries;Developing infections so often lead to death for example, it is more than 100in preschool children in developing times higher in Nigeria than in thecountries is their interaction with United States and 16 times higherIndustrialized malnutrition, especially among per vehicle-mile. The joint use ofchildren between six months and roads by pedestrians, animals,0 20 40 60 8 100 loo0r 2060 40p 80 100three years old. As a result, malnutritionappears to contribute tobicycles and motor vehicles is amajor reason for this.a. At current ,ortality rates. between one-third and two-thirds Even though many of the diseasesof all child deaths, and perhaps and much of the death in developevenmore in the poorest countries. ing countries reflects an unhealthyA comprehensive study of 35,000 environment, there are significantless than in developed countries- deaths in 14 communities in Latin differences between rich and poorand they are much more likely to America found that 34 percent of (see Table 5.6). The poor, whethersuffer from disease (see next page). deaths of children under five had urban or rural, are more likelyThe very high death rates among serious malnutrition as an under- than the rich to live where diseasesyoung children, combined with lying or associated cause. An areendemic,andlesslikelytotakehigh birth rates, mean that a additional 23 percent of deaths preventive measures or to seektragically large proportion of the were associated with premature prompt medical care even whendeaths in a developing country births, which themselves partially it is available. A poor family isoccur among children under five reflected maternal malnutrition. much less able to tide itself over(see Figure 5.2). For example, in Compared with children, adult while a breadwinner is ill; even aBrazil in 1975 they were 48 percent mortality patterns in developing relatively minor illness may plungeof all deaths. In Sweden they were countries show a much greater it from poverty into destitution.54

Table5.6 Differences in life tend to be geographically more Some studies have shown thatexpectan-cy within countries concentrated-although in 1976 malaria control sharply reducedIncome"'nainal Lifeit was estimated that 850 millionpeople lived in areas where malariaabsenteeism-from about 35 percentto about 3 percent in one programCountry average expectancyaitd region - 100) (vears) persisted despite efforts to control in the Philippines in 1947. Anthro-Brazil, 1950-70 it, and another 345 million in areas pological research suggests thatNortheast region 54 47.9Southeast region 122 62.8with little or no control. Schistosomiasis(bilharzia) is carried bysettlement on fertile lands hasoften been prevented by major,azania, 1973 snails, which flourish in slow- diseases. There have been surpris-Kigoma iegion 46 43.0 moving water. It is severe in East ingly few detailed studies of theKilimanjaro region 215 55.0 Asia, East Africa and in irrigated effects of illness on productivityareas of Latin America; an estimated of individual workers; moreThailand, 1969-70North region 78 55.6 180-250 million people are infected. research is needed in this area.Bangkok region 243 63.7 Trypanosomiasis (sleeping sick- It is also likely that disease disness)is found in a wide band in courages innovation, by makingthe middle of Africa. It is generally people more reluctant to take risksIllness fatal if untreated in the early stages. or to commit themselves to activ-Nonfatal diseases are more common Carried by the tsetse fly, it was ities where precise timing is crucial.and more serious in developing largely under control in the 1950s, A study of Paraguayan farmersthan developed countries. But the but has revived because control suffering in varying degrees fromrelatively small proportion of people measures have slackened. It malaria found that severely affectovertheage of 65 inmost developing constitutes a serious risk to the ed families obtained lower yields,countries considerably reduces the life and health of at least 35 million cleared less land and avoided culsignificanceof chronic, degenerative people and has imposed great losses tivating crops that required labordiseases-which affect about a third on animal herds. Chagas' disease, at specific times. In industry,of the elderly in the United States, the Latin American form of trypa- capital may be substituted for laborfor example. nosomiasis, remains endemic in where workers are frequentlyThe most widespread diseases many rural areas. absent because of endemic disease.in developing countries are those Onchocerciasis (river blindness),transmitted by human feces-the carried by the simulium fly that Difficulties of improving healthintestinal parasitic and infectious breeds in swift-running water, is In its early stages, slowly decliningdiseases, but also poliomyelitis, hyperendemic in parts of West mortality in Europe largely reflectedtyphoid and cholera. These spread Africa and Central America. In improved nutrition, housing andeasily in areas without safe com- some areas it has led to the de- hygiene brought about by risingmunity water supplies and good population of fertile river valleys. incomes. The spread of educationhygiene practices. While they are Attempts have been made to also helped. The initial stages ofleading causes of death in young control these diseases by eliminating declining mortality in developingchildren, they are frequently disease carriers through chemical countries have been based on anchronic and debilitating rather than and environmental mechanisms, additional factor-new technologiescauses of acute illness or death. but with only limited and in some that affect masses of people, suchTheir incidence is high. For example, instances temporary success. In as pesticides and vaccinations. Itthe WHO estimated that in 1971 some cases effective drugs exist. is estimated that life expectancy inabout 650 million people had Control requires a well-developed developing countries in 1970 wouldascaria sis (roundworms). A World health service to monitor outbreaks have been eight years less thanBank study of construction workers of the disease and take remedial what it was without the contribuatthree sites in West Java, Indonesia, measures. tion of these changes in publicfound 85 percent infected with For children, illness obviously health technologies.hookworm. disrupts their attendance at school But some diseases, includingOf the other diseases that usually and reduces their ability to con- most causes of diarrhea and manycause debilitation in adults rather centrate and learn. As for adults, respiratory infections, cannot bethan death, tuberculosis in particular research on the consequences of prevented by currently availableremains extremely widespread. their diseases has been very limited immunization or pesticides. TheirMost debilitating diseases trans- and has not produced consistent reductioncomesthroughimprovemitted,by insects or other carriers or generally applicable conclusions. ments in sanitary conditions and55

nutrition, and changes in individual example, rose nearly threefold sleeping sickness-now exist inhealth habits. These diseases have between 1972 and 1976; other most of the affected areas. Theydeclined least in developing coun- diseases have also spread, though can be operated effectively withouttries and contribute most to not so sharply. people changing their behaviormortality in those countries today. These reversals have happened (though this is less true of schisto-There has been considerable partly because authorities became somiasis, since people as well asconcern that developing countries, overconfident and allowed control snails play a role in its transmission).particularly in the high mortality programs to run down. In addition, Pesticides can often be used moreareas of Sub-Saharan Africa and control became much more expen- efficiently.South Asia, have not maintained sive in the early 1970s. Pesticide There is also room for betterthe momentum of the 1950s in prices escalated and disease carriers coverage by immunization proreducingdisease. This is largely developed a tolerance for common, grams, even in areas not otherwisebecause countries have moved inexpensive pesticides (especially provided with government healthbeyond the "technological" phase DDT). Economic development has services. Sierra Leone, for example,of improving health: the closer sometimes made matters worse: employs recruitment teams; theythey come to developed-country small-scale irrigated agriculture enlist the help of local leaders inlevels, the harder it is to progress has expanded agricultural produc- gathering together everyone whoat the same rate. It also reflects tion-but also the habitat of snails needs to be immunized immethefact that some communicable that carry schistosomiasis. diately before the vaccinatorsdiseases have increased. The Programs to control endemic arrive in the village.number of cases of malaria, forOral rehydrationdiseases-especially malaria and Apart from these efforts, majorprogress in family health behaviorand in the provision of healthservices is needed. Simple treatmentoral rehydration mixture consisting of: can frequently be effective: forA simple innovation has revolutionized table salt (sodium chloride), 3.5 grams; example, the lives of children withthe treatment of a major killer in devel- bicarbonate of soda, 2.5 grams; potassium acute diarrhea can often be savedoping countries. Diarrhea normally stops chloride, 1.5 grams; and glucose, 20 grams.on its own accord after three to five days, These ingredients are usually mixed and by feeding them a solution ofbut it occasionally causes a severe loss packaged beforehand; the health worker water, salt and sugar (see box).of body fluid; the resulting dehydration (or a child's mother) simply dissolves Education, especially of mothers,is often fatal, particularly to young chil- the mixture in one liter of water. Pre- is important. Studies in 29 develdren.Replacing that fluid can prevent packaged mixes range in cost from $0.07 oping countries have shown thatmost deaths. to $0.10, and one to three packets might infant and child mortality wereFor more than a century, fluid has been be needed while the diarrhea lasts.intravenously "dripped" into sufferers- There now is considerable interest in consistently lower the bettera method with obvious drawbacks in the possibility that mothers could mix a educated the mothers; each extracountries where there are few medical dose from the two ingredients that are year of schooling on average meantfacilities. In the past 12 years it has available in most homes-sugar and table nine per 1,000 fewer infant andgradually been established that an oral salt. But the recipe lacks potassium and child deaths. Cross-country studiesdose has just the same effect. Even dur- bicarbonate (both of which are losting diarrhea, the intestine continues to during diarrhea), and using too much salt (see box on page 38) confirm thatabsorb glucose-and glucose will carry could be dangerous for the child. literacy has a strong, favorablewater and essential salts with it. Home-mixing and the standard WHO effect on life expectancy. And asOral rehydration had its most impres- formula are not, of course, mutually discussed below (see pages 66 andsive initial success in 1971, in camps for exclusive. One report (based on a field 67) family planning services canrefugees from the Bangladesh war. More experiment in Narangwal, India) recomthan3,700 patients were treated in two mended home-mixing for relatively mild contribute directly to better healthmonths under extraordinarily difficult cases of diarrhea, with a variant of the of mothers and children.circumstances, with a case fatality rate WHO formula used only for more Improved water supplies andof 3.6 percent instead of the 30 percent severe ones. This experiment placed waste disposal are important inbefore the treatment began. Oral rehydra- principal responsibility for treatment in the long run in reducing disease.tion has since been used to prevent or the hands of auxiliary nurse-midwivestreat dehydration due both to cholera (who live in the villages) and the mothers But they must be accompanied byand to other diarrheas in many countries of affected children. While the incidence better hygienic practices if theyof Asia, Africa and Latin America. Prop- of diarrhea changed little after the new are to be fully effective. Whereerly delivered, it could save millions of treatment was introduced, the case funds are short, water supplylives a year. fatality rate declined by almost half- networks in urban areas usuallyThe WHO currently recommends an from 2.7 per 1,000 to 1.5 per 1,000. deserve priority over sewers, which56

are more expensive and less critical compared with 490 per physician, reliance and partnership betweento health. (Latrines, septic tanks 80 per hospital bed, and 260 per communities and government.and other lower-cost alternatives nurse in the Federal Republic of The concept has achieved widetoconventional sewerage are less Germany. (Some of the middle- spread intergovernmental support,likely to contaminate water sup- income countries, though, have especially from the 1978 Internapliesif the water is centrally treated almost as many physicians per tional Conference on Primary Healthand distributed under pressure in person as the developed countries Care.ThishasbeennomeanpoLiticalpipes.) But water supply systems do.) achievement; but in most countriesmust be maintained-something For many necessary but simple the rhetoric stiDl must be translatedthat is frequently neglected. A medical tasks, paramedical workers into more money and reorganizedWorld Bank review of village are likely to do a better job than health systems.water supplies found two coun- physicians, who may be dissatis- A key element of primary healthtries in which systems were fail- fied with their work in rural areas care, or of any health care systeming faster than they were being and so turn to private practice. that attempts wide coverage atconstructed. In many countries, however, there relatively low cost, is the use ofAlthough heavy investment in are even fewer nurses than there are community health workers (CHWs)water supplies is often warranted doctors. with limited training both to proasa means of raising living stan- In many developing countries, vide front-line services and to referdards, it is unlikely to produce people typically live in scattered, seriously ill patients or specialquick or dramatic improvements often small villages and cannot cases to larger dispensaries andin health-and is expensive for travel far. They are therefore hospitals (see box overleaf). Thelow-income countries. Even public unwilling or unable to seek out potential duties among whichstandpipes and yard taps, while modern health facilities in urban their time must be allocated aremuch cheaper than conventional areas, except in extraordinary maternal and child health care,house connections with internal emergencies. Moreover, where midwifery, family planning, treatplumbing,can cost more than $40 rural health facilities are available, ment of injuries and helping toper person (in 1978 prices). In they are usually far too small to move seriously injured people tocontrast, immunization against all employ a physician full time-and referral facilities. In addition, theycommon childhood diseases costs certainly too smaLL to make efficient may organize immunization andat most $5 per child. use of equipment and auxiliary mass treatment programs, providestaff. Although occasional visits guidance on nutrition, family plan-Aby traveling doctors and nurses ning and hygiene, and monitor epi-The amount spent on health care can help, they are obviously unable demics, water quality and sanitation.varies widely throughout the to provide services at short notice. Although several examples (indevelopingworld, though it is They may also not develop suffi- cLuding China-see box on pagetypica:lly very low. Government cient individual rapport with 74) have shown that effective prihealthbudgets in low-income Africa patients. mary health care is feasible evenand Asia are usually less than $5for low-income countries, it makesper person a year (and frequently Primary health care fairly heavy administrative demuchless). Private outlays are often The widespread provision of basic mands. An effective coordinatedlarger--in Bangladesh, for example, preventive and curative medical approach is needed-involvingindividuals spent an estimated $1.50 services is essential. But in an careful selection and training ofeach in 1976, or three times what attempt to tackle both the broader CHWs, thorough supervision,the government was spending. But causes of health problems and referral of serious cases to betterthe combined total of $2 compares administrative, political and other trained and equipped people, andwith about $700 in the Federal implementation problems (see adequate (but controlled) availa-Republic of Germany. This gap Chapter 6), the WHO and UNICEF bility of drugs and other supplies.would remain huge even if allow- have recently sponsored a concept Without this, CHWs are likely toance were made for differences called "primary health care" that become demoralized, discreditedin prices. It is thus not surprising goes far beyond these services. It and inefficient-and their recomthatin the mid-1970s in Bangla- is an integrated approach to health mendations for curative and predeshthere were 9,260 people per that also spans food production, ventive care disregarded.physician, 5,600 per hospital bed, education, water and sanitation; Moreover, the emphasis thatand 42,080 per nurse or midwife, in addition, it emphasizes self- this Report (and others) gives to57

Lessons of experiencedegree to which the local political system confident of his or her skills and oftenNational experience with primary health reflects these interests. China has suc- encounters difficulties that instructorscare systems is still very limited. The ceeded in making the community entirely did not anticipate. Experience in Tan-Chinese barefoot doctors date from the responsible for compensating the CHW. zania underlines the need for sound, conmid-1960s(see box on page 74). During But overreliance on local finance may tinuous supervision. Supervisors shouldthe 1970s countries as diverse as Iran, mean that the poorest communities get both provide in-service training and en-Brazil, Sudan, India, Jamaica, Botswana the worst attention. sure that performance meets minimumand Tanzania began large-scale systems. * Recruitmentandtraining.TheCHW standards. Iran, Sudan and BotswanaTheir experience has shown which are should be mature enough to enjoy the have found that it is better to overestithekey requirements of success. respect of the community. Early programs mate the amount of supervision needed* Political support and finance. It is stressed formal education as a qualification than to risk undermining the confidencevital to secure the support of a substantial for the CHW, and thus recruited young and credibility of the CHW. Workersshare of the country's "health establish- people. Reviews of experience in Sudan should be visited regularly by staff fromment"; without this, sound medical clearly indicate that such people are not neighboring dispensaries, health centerssupervision and adequate finance will not easily accepted by communities. Ideally and hospitals as well as from the office ofbe possible, and primary health care will the CHW should have children and the regional medical officer. This compenbelittle more than an empty gesture personal experience with health crises. sates for frequent transport difficultiestoward the poor. It is also important to Programs now recruit highly motivated, or competing demands on the superviensurethat this type of medicine is not older people even if younger applicants sor's time. In addition, it ensures thatmislabeled as "second rate." are better educated. The CHW also should a broad range of issues (from clinicalThe Community Health Worker live in the community; this has been care to drug management) are consid-(CHW) should work cooperatively with found to reduce turnover as well as ensure ered, and that visits from the outside arethe community, if possible through such familiarity with local culture. In some regarded as routine, not part of a crisis.recognized organizations as the local countries, such as Iran and Yemen, it has Providing facilities for telephone orcouncil or village development committee been necessary to train both a male and radio contact between CHWs and super-(as they do in Botswana and Sudan). This a female CHW because of objections to visors has provided backup and helpedbuilds community support and increases treatment by members of the opposite sex. avoid unnecessary referrals in Honduras,chances of improving family health Community health workers must be forexample.Physiciansorhighlytrainedpractices; hours of service, use of drugs given enough training, equipment and health personnel often give curative workand materials, and patient satisfaction supplies to ensure that only one patient priority over supervision of CHWs-socan also be monitored. The community in four or five is referred to higher levels. nontechnical personnel should also playorganization should have access to the High referral rates undermine the com- a part in the supervision and monitoringsupervisor of the CHW. munitv's confidence in the CHW and of CHWs.At least part of the CHW's salary should also increase the probability of patients A standard, simple set of drugs shouldbe paid by government so that health bypassing him or her. This conclusion be provided to CHWs; if budget cuts areofficials can retain some control. But some has been confirmed by studies in Mexico necessary, they should not fall on medilocalfinance or voluntary efforts also and Thailand. Moreover, several countries cines and supplies for the CHW (as hasmake the CHW responsive to local feel that CHWs should have the chance sometimes been the case). Standards areconcerns-and in turn can make the to develop their careers, by competing required for the use of drugs andcommunity more aware of the services for entry into higher grades. Sudan, for supplies; and the drugs provided tooffered. The government of India is example, is planning to confine its "medical individual CHWs should be monitoredproviding a stipend of 600 rupees a year assistant" training programs to CHWs. to identify misuse or misappropriation.($76) to "volunteer" health workers. * Supervision and supplies. Frequent Kenya has developed a model programWhether local pressures work in the supervision of the CHW is essential. The for managing drug use, based upon careinterestsof the poor depends on the isolated, modestly trained CHW is rarely fully devised treatment standards.primary health care should not time physician). These should come more clinics and about 50 CHWs.detract from the importance-or under the umbrella of a referral The balance struck between theunderstate the difficulty-of strik- hospital with laboratory, x-ray various levels of the health careing the right balance between facilities, an operating theatre and system will depend on many factors,community level activities and the beds. (China, interestingly, has including financial and politicalback-up system that provides given much more emphasis to the support for the objectives of prireferralservices and supervision. referral system than is generally mary health care, administrativeRural health centers, urban clinics recognized.) Depending on popu- capabilities, the receptivity of thoseor district hospitals should deal lation densities, transport, and to be served, the extent of urbaniwithvarious illnesses that are incomes, the hospital could serve zation, and national income. HigherbeyondthescopeofaCHW(though100,000 to 250,000 people and income countries can afford toeven they may not need a full- oversee the activities of three or reduce the ratio of persons covered58

per hos pital and clinic, and to staff often thought to reflect primarily vitamins to salt and other processedand equip them better. But even a shortage of protein (and in some foods, and increasing emphasis onin industrialized countries, there cases, vitamins or minerals). Most producing foods typically consumedis a strong trend toward more nutrition programs concentrated by the poor.emphasis on paramedical workers on providing high-protein food to These points will be amplifiedto improve the spread and effec- children, usually in schools. The in the following discussion.tiveness of basic health care and emphasis today is different. Thereto help keep costs down. is now a wide measure of agreement Prevalence of malnutritionIn many countries it is also on several broad propositions. Evidence of serious malnutritiondesirable to make use of, and * Serious and extensive nutri- in almost all developing countriesprovide some training for, tradi- tional deficiencies occur in virtually comes from three main sources:tional health practitioners, such as all developing countries, though estimates of food consumption,"ayurveds" in South Asia and the they are worst in low-income anthropometric and clinical studies,traditional birth attendants found countries. They are usually caused and data on child mortality.in almost every country. This is by undernourishment-a shortage The estimates of food consumppartlybecausetheyoftenhavetheof food-not by an imbalance tion by different income groupstrust of their patients and because between calories and protein. normally show that in all butpatients pay for their services There may often be shortages of the richest developing countries,(enabling government funds to be specific micronutrients and of consumption by large sections ofspread farther); but it is primarily protein, especially among young the population is well below whatbecauseinmanycountries,includ- children. But given the typical isneededforaminimallysatisfacingsome of those where the world's composition of the diets of the tory diet. Undernutrition is mostpoor are concentrated, these prac- poor, to the extent that calorie widespread in Africa (where intitioners provide near-universal requirements (as estimated by the many countries food supplies havecoverage of people who, realistically, FAO and the WHO) are met, it is not even kept up with populationwill not be reached by effective likely that other nutritional needs growth) and in South Asia. It isgovernment health programs for will also be satisfied. also common in Latin America andsome time to come. Training can * Malnutrition affects old and the Middle East. Estimates of thehelp them to improve their treat- young, male and female, urban totalnumber of malnourished peoplement, dispense some modern and rural dwellers; particularly are surrounded by controversy:medicines and participate in health prevalent among children under there is dispute about what calorieor family planning education. five, it reduces their resistance to and protein requirements are onIn addition, there is still an urgent diseases and is a major cause of average "adequate"; individualsneed for research to develop meas- their death. In many societies, girls may have requirements very difurestc, prevent or treat common suffer more than boys. ferent from the average; and withindisabling diseases-for example, * Malnutrition is largely a reflec- households food often is notmalaria, schistosomiasis and the tion of poverty: people do not have distributed in proportion to indimaincauses of diarrhea in children enough income for food. Given vidual needs. Nevertheless, allowing-that are simple and cheap enough the slow income growth that is a wide margin for uncertainties,to be applied within the frame- likely for the poorest people in the the evidence is strong enough towork of a primary health care foreseeable future, large numbers conclude that several hundredsystemr. will remain malnourished for million people are undemourished.decades to come. Anthropometric and clinicalNutrit:ion* Poornutritionalpracticesandthe inequitable distribution of foodstudies (based on measures ofheight, weight for height, armSystematic efforts at national within families also are causes of circumference, skin-fold thickness,nutrition planning in developing malnutrition. blood tests and so on) show, forcountries go back barely a decade. * The most effective long-term example, that children fromDuring that brief time there has policies are those that raise the wealthier families, or from familiesbeen considerable progress in incomes of the poor, and those that have migrated to developedestablishing the extent and causes that raise food production per countries, tend to grow substanofmalnutrition and what can be person. Other relevant policies tially taller than do children ofdone to reduce it. include food subsidies, nutrition the poor.Ten years ago, malnutrition was education, adding minerals or The data on child mortality59

eflect the combined effects of and mental development, and reduce countries have shown that bettersicknessand malnutrition. Infec- energy and motivation. In com- nourished children (as measuredtions can reduce appetite and food munities that have an exceptionally by height for age) do better inintake in several different ways, high incidence of goiter, 4 percent mental tests. It is not always posincludingthe action of intestinal or more of children may be sible to isolate nutrition fromparasites; and they can reduce the deaf-mutes or cretins. other factors affecting intelligence,proportion of nutrients that the Vitamin A deficiency is also but there is some evidence of itsbody absorbs. Undernutrition in extensive-affecting, it has been independent effects.turn weakens the body's immuniz- suggested, half the children in Malnutrition also affects earnings.ing mechanisms-and so lowers its many developing countries. In an In part, this reflects the consequencesdefenses against the initial infection, extreme form it can lead to blind- of childhood malnutrition onwhile making it more susceptible ness. But in less serious forms mental development and educationalto further infections. As previously it can still lead to poor eyesight, achievement; but there are alsonoted, malnutrition is estimated undermining educational per- links between nutrition and physicalto be a contributory cause of a formance and adult earning power. productivity. In the long run, adultsthird or more of infant and child It can also affect growth, skin can only be as energetic as theirdeaths in developing countries (see condition and the severity of other diets will allow-otherwise theypage 54). nutritionally related illnesses. would gradually become emaciatedKinds of malnutrition Victims of malnutritionand ill. For example, farmers whoare badly malnourished put in fewerMost malnutrition reflects a short- Young children suffer most from hours per hectare than those whoage of calories, protein, or both. undernourishment, followed by are better nourished. Research onBut some diets are inadequate pregnant and nursing mothers. In the relation between nutrition andbecause they lack specific nutrients. many countries, there is considerable productivity has not been extensive,Anemia, resulting primarily from evidence that girls are less well but a few studies have suggestedblood loss and too little iron, is nourished than boys. This is that greater height or weight leadsthe most prevalent example of this. especially true of South Asia, to greater physical productivity.A recent estimate is that at least where newborn girls have signifi- In contrast to most other indicators500 million people are anemic. The cantly smaller chances of surviving of well-being, malnutrition in manyconsequent fatigue, the apparent to age five; in a number of countries, countries appears to be at least aslethargy and apathy, and the adverse including some in the Midc3le East, serious in urban as in rural areas.effects on productivity and school girls are weaned substantially earlier Surveys in India, Brazil, Thailandperformance can be so common than boys (see box on page 91). and Indonesia have shown thatin poorer societies as to appear Most childhood malnutrition the proportion of the populationnormal. It is estimated that more does not result in early death. But with very low calorie consumptionthan half the victims of anemia it means severe hardship beginning is substantially greater in urbanare adult women in developing at birth, which may prevent children areas. This is partly because of thecountries. Anemia due to iron and from ever escaping the poverty higher cost of food in many urbanfolic acid deficiency is common into which they were born. Mal- areas (although not in those withamong pregnant women-and nutrition stunts growth; in severe food subsidies) and higher expenharmful,because it can lead to cases it may retard mental devel- ditures for such things as housepremature birth and a much lower opment even after its physical rents and public transport.chance of survival for the newborn effects have been shaken off. Several But to some extent it is a signchild. The more children a woman studies have shown that children that living and working in citieshas, the greater the probability of who have recovered from severe is less physically demanding thansevere anemia-so adding to the clinical malnutrition during their in rural areas, rather than an indicycleof poverty, high fertility and preschool years continue to do cator of greater malnutrition.low rates of child survival. significantly worse in intelligence In any event, because the poorGoiter is another common dis- and other tests than their unaffected are primarily rural, malnutritionorder (affecting perhaps 200 million classmates. remains primarily a rural problem.people) caused by a micronutrient There is also some evidence, Rural populations are also moredeficiency-in this case, iodine. less conclusive, of the harmful likely to suffer seasonal variationsAvailable evidence suggests that effects of mild long-term malnu- in food consumption; they are mostiodine deficiency can stunt physical trition; some studies in developing affected in the wet season, when twin60

peaks in farm work and widespreadinfection. often coincide with the pe- Food and the poorriod when fobd is in shortest supply. As people get higher incomes, they eat Composition of expenditure, byC.uses of malnutrition better-and spend proportionately lessCauses of malnutritionon food. The chart shows householdincome group, Indonesia, 1976To what degree is malnutrition, spending patterns in Indonesia, but its decile dicileessence applies to every developing 0- Medincountry. The richest households spenda aespecially among young childrenand pregnant and nursing mothers, higher proportion of their total budget _ - Z Othercaused by (a) inadequate family on housing, fuel, light and water than o Ducableincomes, (b) ignorance of good the poorest do on all nonfood items. goodsnutritional practices and (c) the The composition of diets varies, too 60inequitable distribution of food (a fact whose implications for policy are Housug,within families? There is someexplored on page 62). The poorest 30percent of people in Indonesia obtain 40fe,ecevidence that all three factors are about 40 percent of their calories from Other toodimportant, but that low incomes cassava and corn and 46 percent from Vefgetblesare the central cause. rice, while the richest 30 percent obtain Meat, fiSh,in only about 14 percent of their calorieseg&mlThe famines in Ethiopia n from cassava and corn and 59 percent l10 2000 10Ss0 20000 ooo1973-74 and Bangladesh in 1974 from rice. Monthly total ependit-ewere not caused by a fall in the Not only is food the main element in (lepiah per person)average amount of food available poor people's budgets; but preparing itper person. Rather, droughts caused takes up a lot of their time. Rice must be One study in a Java village found thatlocal declines in farm incomes, so threshed, winnowed and hand-milled to on average a woman works 11 hours aremove the husk and bran; wheat and day. Roughly six hours are spent onthat people in affected areas could maize must be threshed, winnowed and income-earning activities (wage work,not afford to buy food from the ground to produce flour; cassava must handicrafts, producing food for sale).unaffected areas. be skinned, boiled, pounded, strained The other five hours are spent around theAt the global level, if income and dried to get rid of its deadly prussic home (collecting firewood, looking afteracid, spices must be ground by hand; and children, sweeping and so on)-and preweredistributed differently, present so on-all before any actual cooking is paring food, which takes three hoursoutput of grain alone could supply done. a day.every rnan, woman and child withmore than 3,000 calories and 65grams of protein per day-far more not only of farmers, but also of period is particularly critical.than the highest estimates of agriculturallaborers,pettytraders While it is desirable to continuerequirements. Eliminating malnu- and workers in food-processing breastfeeding for the first year oftrition would require redirecting industries. life, milk should be supplementedonly about 2 percent of the world's Poor people spend the bulk of by solid food by six months ofgrain output to the mouths that their income on food. In India in age; this is often delayed. It is alsoneed it. 1973-74 the poorest 20 percent likely that the poor nutrition ofMajor crop failures, which simul- were devoting 83 percent of their pregnant and nursing motherstaneously reduce rural incomes and total spending to food-yet on may at least partly reflect a lacknational food supplies, can have average ate fewer than 1,500 cal- of knowledge. Several studies haveeven more catastrophic effects on ories a day each. At these very found that better-educated parentsnutrition. While improved trans- low levels, the consumption of have better-nourished children:port and international movement calories (usually derived from the that this reflects more than theof food will reduce the impact on cheapest kind of food) changes higher incomes of educated parentsprices, events such as the two almost proportionately with changes is suggested by the fact that themonsoon failures in India in 1965 in income. As incomes rise, a little mother's education is more imporand1966 can have a terrible impact margin enters the budget (see box). tant than the father's.on the poor: supplies of basic A lack of money is frequently Education-especially girls' edufoodgrains fell 12 percent and compounded by poor nutritional cation-may also help remedy oneprices rose sharply. Relative to the practices. Several common beliefs of the most serious and intractableprices of manufactured goods, about nutrition have harmful nutritionalproblems:thewayfoodthey were 37 percent higher in effects and must be attributed pri- is distributed within the family.1967 than in 1963-65. In addition, marily to ignorance rather than A variety of evidence indicates thatthe crop failures cut the incomes poverty. For children, the weaning in most developing countries adult61

women receive a lower proportion tion and drainage than other crops; to a remarkably low level for suchof their food requirements than and, in the case of root crops, many a poor country. Because of this,adult men; girls are likewise gen- can be grown throughout the year and Sri Lanka's health and educaerallyless well-fed than boys. As and some are drought-resistant. tion services, life expectancy hasbetween adults and children, the In addition, both root crops and reached 69 years. When subsidizedpicture is less clear: in many coun- coarse grains tend to be produced food rations were sharply reducedtries children under five (and partic- by small farmers, who would bene- in 1974, largely because of a steepularly up to age three, when they are fit if encouraged to produce more. increase in the price of importedless able to take food themselves) Coarse grains can often be food, Sri Lanka's death rate rosedo much worse than adults; in grown together with low-cost noticeably (even after allowancessome countries, though, this is not vegetable sources of protein. for other plausible influences); itthe case. Although cassava is very low in declined again in 1976 and 1977,These sorts of discrimination protein, studies show that its price when food became more plentiful.sometimes reflect difficult choices is so low that most of the people Large-scale food subsidies are alsomade under severe economic duress, who meet most of their caloric common in the Middle East andincluding a justifiable concern for needs by eating a lot of it are able North Africa; they have played athe breadwinner. But they also to buy enough protein-rich food significant part in improving thereflect ignorance of nutritional to balance their diets. But there nutrition of the poor.priorities and deep-rooted cultural has not been enough emphasis on But general food subsidies havebiases. (Concern for this problem the production of cheap sources of a major drawback-they are veryappears to have been one of the protein, such as the cheaper varieties expensive. They have cost as muchreasons for the Chinese experiment of beans and lentils. as 10-20 percent of governmentwith communal feeding during the Despite long-standing neglect spending in some countries, includ-Great Leap Forward in 1958-59. in research, extension services, ing Egypt, South Korea (tempo-It encountered massive social accessto credit and so on, inrecent rarily in 1974-75) and Sri Lanka.resistance and was abandoned.) years there has been greater aware- Much of the cost is for imports,ness of the importance of foods which use up scarce foreign ex-Nutrition policies anid programs eaten by the poor. The intemational change or aid. And some of thisThe causes and consequences of agricultural research centers (in goes to people who do not reallymalnutrition suggest various particular those in India, Colombia, need to be subsidized.cures. Boosting food production and Nigeria) have increasingly Countries with strong adminis-(especially of food that poor people extended their research to these tration can organize income testseat and grow) and raising the in- crops and have given more atten- -not perfectly, but well enoughcomes of the poor are the two tion to nutritional issues. to cut costs. Sri Lanka, for example,central requirements in most Food marketing and storage could have done more for thecountries. They can be reinforced programs can also have a major nutrition of the poor in 1974 if itby other efforts-food subsidies nutritional impact by reducing had concentrated the availableof various kinds, fortifying food, regional, seasonal and annualvari- rations on them. In 1978 it introandeducating people to know ations in food supplies and prices duced an income test to restrictwhat a good diet is. -which contribute significantly to subsidies to the poorer half of themalnutrition. Market stability can population. But for many countriesAGRICULTURAL PRODUCTION. In- also be helped by better transport this would not be administrativelycreased food consumption by the and roads, or politically feasible.poor is in most countries unlikelyAlternative ways of restrictingto be sustained unless production FOOD SUBSIDIES. Few low-income subsidies to poor people includeis raised as well. For nutritional countries have come near to nutri- subsidizing cheap foods that otherpurposes, much can be achieved tional adequacy without some groups tend to neglect. Sorghum,by producing more of what the form of food subsidies. Sri Lanka's a low-status food, was introducedpoor traditionally eat-such as ration-and-subsidy program in 1970 into ration shops in Bangladesh inmillet and other coarse grains and provided about 20 percent of the 1978-and in some rural areas wasroot crops. These are, in general, calories and 15 percent of the in- bought by nearly 70 percent ofthe cheapest source of calories. comes of the poorest quintile of low-income households, but onlyThey have other advantages, too. the population. Largely as a result, 2 percent of high-income house-Some of them require less irriga- severe malnutrition was reduced holds. Subsidized foods may be62

confined to particular places. In And only a small minority were anemia is not due solely to ironColombia the nutrition program in the most vulnerable group of deficiencies, nor is it easily cured;assisted by the World Bank pro- all-under two years old. Such effective programs that can bevides nutritionally enriched foods schemes tend to be relatively universally applied are still someto specific age groups living in the expensive: in a number of these way off.poorest geographical areas, with- projects, annual food costs aver- It may sometimes be moreout a specific family income test. aged $10-17 per child, with effective to administer extraThe high cost of subsidies raises administrative costs adding a nutrients directly (orally or byanother difficulty-keeping the price further $3-7. injections). India and Bangladeshreceived by farmers high enoughhave done this with Vitamin A (atto encourage food production. FOOD FORTIFICATION. Adding six-month intervals). But reachingGovernments may attempt to push specific micronutrients to food at those at major risk every six monthsdown domestic food prices to cut the processing stage is common is usually impracticable. Manythe cost of subsidy programs; and in both developed and develop- countries have provided iron plusfarm pirices may decline if too much ing countries. But there are two folic acid pills for pregnant women;food is imported for the subsidy general difficulties. First, those who others have reduced goiter byprogram-more, that is, than the do not need the supplement still injecting people with iodized oilnet inc:rease in food consumption. get it, so that the cost per person (a single injection provides protec-But coumtries (and food-aid donors) needing assistance may be high, tion for three to five years).can anticipate and avoid adverse even if the cost per person receivingeffects on incentives. Well-designed the supplement is low. Second, the NUTRITION EDUCATION. There havesubsidies should be able to reduce poor may buy little processed food, been few, if any, striking successes,food p-rices for consumers and also and even that may be from small, but the potential effect of nutrition(since this increases the effective scattered processors-so that for- education is so vast that thedemand for food) to maintain prices tification is hard or uneconomic attempt to increase knowledgefor farmers. And proceeds from to arrange. about nutrition requires continuingfood aid sold through subsidy The best results have come strong support. Clearly, educationprograms can, for example, be used from adding iodine to salt to pre- must be realistic: urging poordirectly or indirectly to support vent goiter; almost all high-income families to buy milk might beagriculturalprograms. Introducing countries and some developing harmful if they can afford it onlysubsidies requires care, however, countries have succeeded with by eating fewer calories.since the political cost of abandon- this. Annual costs are much less Recent research on breastfeedinging them is likely to be high. than one cent per person. Such has confirmed the value of breastprograms are not yet universal milk, not only for nutrition butSUTPPLEMENTARY FEEDING PROGRAMS. (but may not be effective if people also for transferring to babiesSome countries have gone further get much of their salt from non- some of their mothers' immunityand have tried to target assistance commercial sources or very small against infections. In contrast,on the nutritionally most vulner- producers). bottle feeding in unhygienic conable-youngchildren and pregnant Vitamin A has been added to a ditions tends to increase the riskand mnrsing mothers. In some cases variety of foods (including tea, of infection, and is expensive. Thefood supplements have been given sugar, margarine, monosodium role of advertising in promotingfor home consumption; in others glutamate and cereal products) infant milk formulas in developchildrenhave been fed directly. in several developing countries. ing countries at the expense ofIn both cases, however, benefits It is both effective and cheap- breastfeeding has been questioned.have been shared with the whole for example, three cents a person In 1979, at a meeting sponsoredfamily-since if children get food a year could provide 80 percent of by the WHO and UNICEF, severaloutside the home, parents tend to Guatemalans with 75 percent of major multinational food firmsgive them less from the family pot. their daily requirements. Much agreed to curtail direct advertisingStudies of some preschool feed- more could be done. of infant formulas in developinging programs in the mid-1970s Since anemia is so widespread, countries. An international codeshowed that schemes providing adding iron to food has been tried of marketing is now under considchildrendirectly with 300 calories several times. There have been eration by the WHO.a day gave them a net increase in technical difficulties, but these may Nutrition education will beconsumption of about 100 calories. now have been overcome. But cheaper the more it can be made63

Figure 5.3 Trends in birth and death rates, 1775-2050(birtlis and deaths per o,000 populaationi'50 Pe,r OOO popalationpart of education in general, com- ing to assess relative priorities with rates has been greatly narrowed ifbined with information on family the help of national food and nutri- not wholly settled. The evidenceplanning and health, or tied to tion plans. These should ideally overwhelmingly suggests that bothcommunity organizations or other be supported by successive sample social and economic conditions andcredible and influential communi- surveys of nutrition status, food family planning are important incations channels. In addition, several consumption and production pat- determining birth rates, and thatcountries have experimented with terns by income group and region they are mutually reinforcing.rehabilitation centers for the severely -which can show, for example, * Accumulating evidence dearlymalnourished, which not only save the likely nutritional impact of contradicts the fear that healththe child but show mothers how to alternative subsidy or production programs, by lowering death rates,feed their children at home. Others programs. Such plans, especially will boost population growth inhave experimented with mass if effectively followed up, also offer the long term. Although fertilitymedia; relatively simple messages a way to focus the attention of, seemed unresponsive to fallingthat do not risk being misinterpreted say, agricultural ministries on the death rates during the 1950s andseem to have made people more implications of nutritional priori- 1960s, it has since declined in manypoor countries-partly in responseto lower death rates-and populationgrowth is slowing down.Demographic trends and projectionsFigure 5.3 compares past and pro-Birthrate Death rate jected trends in birth rates and40 _ r Z _ Developing countries death rates in developed and desopuiationtncreaseveloping countries. Two points30 ~~~~~~~~~~~~~~~~~needto be emphasized. One is therapid population growth in the20 _ _.' Dea thrat developing world, after death ratesplummeted in the postwar years,lO _________ and the continued rapid growthDeveloped countries 5 bprojected for the rest of this cen-0 [ ltury. The second is the drop in1750 1800 1850 1900 1950 2000 2050 birth rates, which began in theRateofpopulationincrease=birthrate-deathrate1960s in the developing world,a. Crude birth and death rates. The projected increases in death rates after about 1980 reflect and the resulting gradual slowtherising proportion of older people in the population.growthh. tnclude industrialized countries, the LUSSR and Eastern Europe. down sinc then-population gowt k___________________________________________________ rate since then-from a peak ofabout 2.4 percent in 1965 to 2.2percent now.aware of good practices, though ties for agricultural research, pric- Since 1965, birth rate declinesthey have not always been put ing, extension and other policies, of at least 10 percent have occurredinto effect. The enormous amountin the world's two most populousof commercial advertising sug- Fertility countries, China and India, and ingests that the value of mass mediaa number of other major develinpromoting social programs has In the past 10 years striking progress oping countries-Indonesia, thenowhere been adequately exploited. has been made in understanding Philippines, Thailand, Turkey andthe causes and consequences of South Korea. Moreover, the recentPRIORITIES AND PLANNING. As in high birth rates, and in helping rate of decline has been faster inother areas, difficult choices must to resolve two controversial and today's developing world than itbe made in tackling malnutrition. important issues. was in the 19th century in EuropeThere are simply not enough fi- * The dispute between those and the United States. England andnancial, political or administrative alleging that family planning the Netherlands took about 50resources to implement all the programs had little effect on birth years to reduce their birth ratespolicies and programs outlined rates and those alleging that family from 35 to 20 per thousand-orabove. Some countries are attempt- planning alone could reduce birth about one point every three years;64

Indonesia, Colombia and Chilehave recently cut about one point Alternative population projectionsevery yelar from their crude birth How sensitive are population projections Alternative populationrates-though generally from higher to changes in fertility and mortality rates? projections, Brazilinitial starting points.To illustrate, compare two projections forThus the comparison of current Brazil. The current World Bank projection Population (rnl.1ionsjbirth rates between the rich and assumes that the total fertility rate (TFR) 300-a measure of births per woman, stan- . 2poor worlds should not obscure dardized for age distribution-will decline 250 - " I= 238.4the progress some developing from 4.9 today to replacement level (a 15-o4=countries are now making in lower- TFR of 2.2) by 2015. The Brazilian 200 - 0-14ing fertility. Higher incomes, more government has not officially recognized.idespi-ead education and the rapidpopulation growthto be a problem, 150widespread but it does permit family planning for 126.3growing acceptability of family health purposes-and the use of contra- 100planning programs have begun to ceptives (mainly privately bought) isreduce birth rates in most middle- increasing.income countries in L.atin America What would happen if fertility reached 50 _and Est nd Aia, insomecounriesreplacement level a decade earlier, inand eas Aand in some countries 2005? This is what the Bank projections 0 _ 2 X IIand regions of South and South- assume foi Colombia, a country with l980 20201 202011east Asia. With continued socio- lower average incomes and roughly similar of 32 million will increase by 10 millioneconomic progress the fertility levels of literacy and life expectancy, but under Case I, only 4 million under Case 11decline is projected to spread to which already has a government-supported -compared with an increase of 14 millionthe rest offamily planning program and significantly in the past 20 years, and 21 million int he rest of South Asia and, with lower fertility (TFR = 3.7). For Brazil to the past 40. In 2020 under Case II, childrensome delay, to Africa, during the match Colombia would require a sharp under 15 would constitute only 15 percent1980s an-id 1990s. but not unprecedented fertility decline. of the population, compared with 26 today.Even with these fertility dedines, Birth rates would need to fall from 36 * Even in Case II, the working-agehowever, world population will per 1,000 people in 1978 to just below population would more than double, fromcontinlu-e to grow. By 2000, World 20 in 2000-less than the fall of one point 70 million today to 163 million in 2020.a year achieved in the past two decades On the other hand, the number of newBank projections (which are by South Korea. entrants to the labor force would bebroadly) consistent with other pro- The figure illustrates the differences in considerably smaller. In 2020 Brazil willjections, such as those of the United the size and composition of the Brazilian need to find about 4.5 million new jobsNations) indicate it will have risen population in 2020, under the alternative under Case I, but only 3.3 million underfrom the current estimate of 4.4 assumptions of replacement fertility in Case 11.2015 (Case I) or in 2005 (Case II). Two Reaching replacement fertility in 2005,billion to about 6 billion; the pop- things to notice: not 2015, would make a big differenceulation of the developing coun- * Under either projection, the propor- in the eventual size of Brazil's stationarytries (including China) is projected tion of children in the population will population (reached about 70 years later):to increase from 3.3 to 4.9 billion. decline substantially between 1980 and it would be 287 million rather than 345India will grow from 672 to 974 2020. The current school-age (5-14) group million.million people; Brazil from 126 to201 million; Nigeria from 85 to stationary populations would be circumstances prevailing in most153 million. These projections are reduced by, for example, 200 mil- of the developing countries, rapidbased on the assumption that cur- lion in India, 50 million in Nigeria population growth impedes ecorentrates of social and economic and 36 million in Mexico. nomic growth by reducing investprogress,including the spread ofment per person in physical capitalfamily planning and health and Poverty and high fertility and human skills. For individualeducation services, will continue; Poverty and high fertility are families the number of childrenif they change, so will population mutually reinforcing (see Figures affects how much parents can ingrowth(see box). 5.4 and 5.5). As discussed in Chap- vest in each one's health and edu-It is instructive to consider the ter 4 (page 39), rapid population cation-and thus in their futureconsequences of an acceleration growth is not always harmful. Re- earning power.of fertility decline such as to cause duction of population growth is Quantitative analysis suggeststhe rate of population growth in not an end in itself; nor does it for that social and economic factorsparticular countries to fall to zero every country or for every point in (such as incomes, literacy and life10 years earlier than currently time increase the potential growth expectancy) accounted for as muchprojec-ted. The size of the resulting of income per person. But in the as 60 percent of the variation in65

Figure 5.4 Income and fertility,suggest, however, is that programstend to flourish where their services-become more attractive. This isparticularly true for women, whoare in demand. Nonetheless, gov- are primarily responsible forfeTotlflalS ernment efforts are vital. bringing up children; as theirrot,opportunities for education and7.0 Sub aharan Africaocioeconoic determinnts employment improve and their6.0 Mid East&N Africa of fertility horizons expand, they often want5.0 ASouthi Fertility is an area of human be- a smaller family. Second, withAsia Latin America & CaribbeanEast1Asia \havior where individual tastes, increasing income, parents appar-4.0 - > religion, culture and social norms ently prefer healthier and better-3.0 - Worldwide norm all play a major role. Yet evidence educated, but fewer children.2.0 - S.Ear~ from large groups of people sug- They are more likely to wantgests that differences in fertility more education for their children1.o - can be largely explained by differ- when they believe that future job00 X 1 1 1 1e500 1s0o 3,500 2,000 2,500 3,0001 ences in their social and economicenvironment. What are the mechopportunitieswill be governedless by class origin or familyGNP pe, person (cu,rewl doUoar5)ao "technical notes for Table 180 f the World anisms by which low education, background than by education andDevel,pmrnotIndcaor,tfeetilityrotetocGNprrperson.q-tielati,gt.t.1 poor living conditions, high deathrates and lack of health andassociated skills. Since this tendsto be a consequence of developfamilyplanning services lead to ment, it can help to explain fallinglarge families? fertility over time. Third, thefertility changes among develop- Consider the issue from the children of the poor work at homeing countries from 1960 to 1977. point of view of parents and poten- and outside the home at an earlyThe strength of family planning tial parents. They receive pleasure age: for richer parents, children'sprograms explained an additional from their children but have to work is not so vital to family15 percent. spend time and money bringing welfare.The strength of family planning them up. Children are also a form If children help to support theirprograms is influenced substan- of investment-short-term if they parents in old age, the (low) currenttially by socioeconomic factors work during childhood, and long- costs of raising children are a(which account for about three- term if they support parents in small price to pay. Where mothersquarters of its variation). This helps disability or old age. Since chil- command only low wages, theexplain why family planning pro- dren are a source of satisfaction, differences between children's andgrams in countries with high fer- one might expect richer parents mothers' earnings may be small;tility, such as Pakistan, often to want more of them. Yet the op- work lost by the mother duringappear weak even after years in posite is true, for several reasons. a child's infancy may be easilyoperation. This weakness is often The first is that the alternative recouped by the child later on.written off as simply lack of gov- uses of time-earning money, de- Finally, in poor countries muchernment effort. What the results veloping and using skills, leisure of women's traditional work-inagriculture, crafts and petty retailing-canbe combined with lookingafter children.Figure 5.5 Influences on fertilityThe link between householdpoverty and high fertility is furthermily planningreinforced by high rates of infantprograms~~~~~~~and child mortality; in poor familiesmany births and the high probamaIlerdesiredSmaller desired Lower fertilitybility of infant deaths go hand inhand. In the first place a motherReduction in poverty: A who stops breastfeeding because* Higher female literacy l her baby dies is biologically more* Longer lifctancy Higher age atOther cultural and social factors marriageI likely to conceive another. Parents66t , replace them; and where highmortality is common, social norms

(which respond only gradually to cultural or religious differences. program to reduce populationchanges in mortality) tend to en- But culture never seems to have growth.courage "insurance" against the been an impenetrable barrier to In Latin America, later marriageexpected loss of children. On the fertility change. Once a high enough has been a less important ingredientother hand, high fertility contrib- level of development has been of declining fertility.This has beenutes to high infant and child mor- reached, fertility has fallen without partly because average age at martality:rmany births, especially if exception. Where there was a strong riage was already high comparedthey are close together, can weaken religious or cultural resistance to with Asia, partly because muchboth mother and children. contraception, as in Ireland, fertility of the fertility decline in suchfell through delays in the age at countries as Chile, Colombia andFAMILY PLANNING. The link be- marriage and an increase in life- Costa Rica has been among oldertween household poverty and high long celibacy, rather than through women, and partly because childratesof childbearing is further family planning. bearing outside wedlock is morecemented by the fact that the poorcommon. Fertility is generallystill have very limited access to AGE AT MARRIAGE. Recent de- high and age at marriage lowmodern and simple means of clines in birth rates partly reflect throughout Africa and the Middlecontraception. The contraceptives rising age of marriage among East.available are often expensive, par- women. This has lowered the rateticularly in relation to the incomes of population growth by lengthening Population policy and familyof the poor-and especially if they the interval between generations, planning programsmust be bought from private by shortening the period during Lower fertility is not an end indoctors. For a poor family, limiting which women are likely to have itself, but one among several waysthe number of children may there- babies, and perhaps by giving of improving human welfare. Norfore mean sexual abstinence, women other interests beyond arethebenefitsoffamilyplanningillegal abortion, infanticide-or, family and childbearing to take simply economic. Relatively fewat best, ineffective and difficult with them into married life. couples, even among the poor, wanttraditional contraception. In some Like marital fertility, age at as many children as their naturalcircumstances, the psychological marriage is strongly affected by fertility would allow-witness theor financial costs of avoiding social and economic conditions, hospitalization rates due to selfpregnancymay exceed the costs including women's education and induced abortion in Latin America,of having another child. employment opportunities. The and scattered evidence that someFamily planning programs that average age at marriage (corrected parents do not always do all theyare well designed and implemented for the proportion of women who might to avoid infant deaths,may legitimize what relatives, never marry) is 22 in the middle- particularly of daughters. Poorfriends, the community, the clan income countries of Latin America women are particularly helped byor village might otherwise have and in Malaysia, Singapore and family planning services; so arefrowned upon. These social norms South Korea; but it is less than children, who can benefit from aare often influential. Recent evi- 20 (sometimes much less) in many smaller family.dence indicates that declining Sub-Saharan African countries The case for the public provisionfertility in 19th century Europe and in Nepal, India, Pakistan and of family planning services, andwas not associated with economic Bangladesh. ensuring that the poor have accessfactors in any consistent way. But Later marriage as a mechanism to them, is gradually becoming lessit did follow a similar pattem across of fertility reduction has been most controversial. Some 35 developingregions defined by a common important in Asia. In the 1960s countries, with 78 percent of thelanguage or culture-implying that in South Korea and Peninsular developing world's people, havethe idea of limiting family size Malaysia, changes in the proportion an official policy to reduce populacanaffect fertility independently of women married accounted for tion growth. An additional 14of specific economic change. about half as much of the decline percent of the developing world'sThe same tendency can be seen in the crude birth rate as did changes population lives in countries wheretoday: even taking income and in marital fertility-and were more family planning is supported foreducation differences into account, important than marital fertility reasons of health and welfarethereare national and regional declines in Sri Lanka and the including the health benefits thatdifferences in fertility (Figure 5.4) Philippines. China has placed great come from fewer children.that appear largely the product of stress on delaying marriage in its Some countries have had striking67

successes. In Thailand contraceptive and well-trained practitioners, be referred for further help.use increased from 11 to 35 percent making programs heavily depend- Several countries have greatlyof rural married women between ent on the health system. increased the number of places1968 and 1975, and from 33 to 49 This has caused difficulties for where pills and condoms can bepercent of urban married women. many countries where medical bought, often at subsidized rates.In Indonesia the government facilities and personnel are too But simple and safe barrier methodsexpanded its service in 1974 from limited to provide adequate family (condoms, diaphragms and spermiaclinic-based approach, to one planning coverage. But if they cides) are still neglected in manybased in villages. It currently has operate within the framework of developing countries despite their3,500 clinics, 25,000 village depots the health service, middle-level renewed popularity in developedand 40,000 village family planning health staff and people specially countries. Their use could sensiblygroups. The proportion of married trained in family planning have be encouraged; research into wayswomen using modem contraceptives proved effective substitutes for of making them more practical inincreased from 7.4 percent in 1974 medical specialists. In Thailand developing country settings isto 18 percent in 1977; it was 0.2 and South Korea the use of para- needed (see box).percent in 1970.medical personnel for screeningNor need a population policy patients and supplying contracep- FUTURE PRIORITIES. Progress inbe confined to the support of tive pills led to increased acceptance reducing fertility will partly dependfamily planning programs. A few of these pills. Family planning aides on increasing the demand for concountries-mostnotably Singapore- in Pakistan and Bangladesh have traception-primarily through socialhave used tax and housing policies leamed to insert IUDs, and in India and economic development thatto discourage large families. Direct to carry out menstrual regulation successfully reaches the poor, butpayments for sterilization have been (inducing abortion of possible but also through the growing underanimportant part of the Indian unconfirmed pregnancies at an standing that fertility is a matterprogram. China, which for several early stage). On a trial basis, they of individual choice. It will alsoyears has emphasized that later have been trained to perform depend on providing effectivemarriage and small families are sterilization. family planning services. Both willpatriotic, recently announced Separate family planning services be facilitated if contraceptives canbonuses and preferences for one- have not been so successful. The be made more convenient and lesschild families, and tax and housing ad hoc systems (in Pakistan, for prone to complications that needpenalties for families with more example) have at times involved medical attention. And the importhantwo children. Raising the ambitious programs of regular tance of political commitment tolegal minimum age at marriage home visits to persuade people a population policy should not be(the median among all countries to plan their families, and to supply underestimated. Countries with ais still only 15) might also help, contraceptives. But without a sat- dual concem for social and economicalthough efforts to date have not isfactory health network, it may advance and for family planningbeen particularly successful (with be difficult to supervise the staff will be able to cut fertility ratesthe possible exception of China). and provide more specialized substantially in the rest of thisadvice or assistance to the few century, and beyond.IMPROVING ACCESS TO CONTRACEP- people who develop complications.TION. Before 1960 family planning A promising altemative approach The seamless webservices were provided largely by is to use other administrative netvoluntaryassociations. Most works. From time to time, India Chapter 4 stressed that education,programs were small and offered has had government personnel, health, nutrition and fertility sigservicesthrough health centers such as teachers and tax collectors, nificantly affect the incomes of theand private clinics, promoting recruiting people for sterilization poor. This chapter has consideredsimple barrier methods (foam, -although this became unpopular separately each of these main areascondoms and diaphragms) and through abuse. The successful of human development, with sperhythm.In the 1960s oral contra- family planning program in Indo- cial emphasis on the causes ofceptives and the intrauterine nesia (see box on page 80) has change and the policies that candevice (IUD) became available- taken advantage of strong com- bring it about. But it is worth reitandsterilization and legal induced munity organizations and made erating that the different elementsabortions became more common. extensive use of village workers, of human development are keyThese required clinical support with clinics to which people can determinants of each other.68

Contraceptive technologyresearch in the mid-1970s. And public in both 1977 and 1978. In contrast, spendingspending on applied contraceptive on the simpler barrier methods was lessOf the people who use some form of research has fallen as much as 50 percent than $500,000-despite their potential forbirth control (about two-thirds of them since then. The (smaller) amount spent improvement (a biodegradable condomin developed and one-third in developing by pharmaceutical firms has probably or a standardized plastic-based diaphragm,nations), roughly one-third are sterilized, also fallen, apparently because new for example).about 20 percent use the pill, 15 percent methods are not expected to be profit- Present barrier methods are generallythe intrauterine device (IUD) and 13 able. Unless more is spent, new tech- viewed as too ineffective and inconvenientpercent the condom. Most of the remain- nologies-vaccines, menses- inducing for widespread use in developing countriesing 19 percent use rhythm, abstinence, drugs, pharmacologic methods for men, -where sanitary conditions are poor,the diaphragm, contraceptive injections and much improved barrier contraceptives privacy is less, husband-wife communi-(which last one to three months), various -though technically within reach, are cations are more formal and abortiontypes of spermicide and such traditional unlikely to be developed or tested for as a backup is more difficult to obtain.methods as withdrawal, postcoital douch- many years. In the United States, however, use of theing and deliberate reliance on the anti- Applied contraceptive research is still pill is falling, that of the diaphragmfertility action of breastfeeding. Though largely directed at female contraceptives increasing; consumer concern over thethere is evidence of widespread illegal (about nine times more was spent on side-effects of both the pill and IUD hasand self-induced abortion, safe and legal female than on male methods in 1978), increased. Whether such concerns areabortionisavailableinonlyafewcountries, partly because basic research on the well-founded-and on this there is noand publicly provided in even fewer. female reproductive system has been more consensus-they are bound to spread toThe amounts spent on research in successful. It is also geared almost exclu- developing countries. In the 198s thereproductive sciences and contraception sively to the search for new hormonal, efforts to extend services to more peoplehave been small-less than 2 percent of drug-based and surgical procedures: mayhavetobecomplementedbyawidertotal government spending on medical more than $10 million was spent on these choice of methods.The seamless web of interrela-Figure 5.6 Policy and poverty tions constitutes the core of Figure* Land ownership and tenure 5.6; feeding into this core are the* Technology and research various areas in which policy affects*Domestic saving* External capital poverty. The diagram is tiustrative,* Investment allocation and the shown are not the* Agriculture policies* External trade only of poverty or* Taxation and transfers determinantsof human development. As hasbeen stressed, climate, culture,religion and natural resources allshape the environment in whichdevelopment takes place andinfluence the choice of policies.So do political realities, administrativeconstraints and the worldu~~~~~~economy.Some of the links are simplycommon sense: it is not surprisingthat the incomes of the poor* Public health,care * Food production significantly affect their health,* Water supply, sanitation S* ubsidies/rationsand housing * Food fortification education, nutrition and fertility.Education * Fertility Poor people cannot afford decentncentyivpesl Igfood and health care; they are morelikely to need their children'smeager earnings (or help in thehousehold and fields) so that thechildren cannot go to school. Andthey feel more need to have largefamilies to support them during69

old age and disability. Average important than the father's. incidence of malnutrition-there isnational income is obviously also Health and nutrition both affect simply less food, money and timesignificant, especially since it af- whether children can attend school for each child.fects the tax base and hence the regularly enough to finish the pri- It is also important to take agovernment's ability to finance mary years, and whether they have long view. Although a certainhuman development programs. the mental and physical energy amount can be done with crashSome influences are less familiar. to learn. Malnutrition and disease programs such as vaccinationThe effects of primary education have been found to be closely campaigns and adult literacyhave been stressed above in numer- connected, each increasing the programs, sustained human develouscontexts. For example, parents likelihood and severity of the opment is usually a slow process.with a primary education are more other-with death often the end In general, a country's level oflikely to learn about (and be willing result. Better health plays a key health, education, nutrition orto try) improved health, hygiene role in the demographic transition fertility at any given time largelyand nutrition practices, thus to lower fertility: when the odds reflects its level 10, 20 or even 50reducing the chances that their are greater that children will survive years earlier. At any given level ofchildren will become ill or mal- to support their parents in old age family income, children are morenourished. Educated people are or disability, parents tend to have likely to go to primary school ifmore likely to have lower fertility: fewer children. Although it is their parents have also done so;they more readily see the dis- possible (though not firmly estab- and because the home environmentadvantages of having too many lished) that better nutrition may encourages learning, particularlychildren to feed and educate; they increase natural fecundity, its effects in the preschool years, they arehave more alternative sources of on the health, education and incomes likely to do better in school as well.interest and satisfaction that of the poor all contribute indirectly Human development is thuscompete with children for time to reduced fertility. transmitted from generation toand money; they are generally more Lower fertility itself affects the generation in a virtuous circle; butwilling to accept new ideas, such other aspects of poverty. The spread equally, there is a vicious circleas the use of modern contracep- and quality of education increases that sentences the children oftives, and to seek family planning -because both the state and parents deprived parents to deprivationadvice. Because of the mother's can afford to spend more on each themselves. Breaking out of the vipreeminentrole in bearing and child when there are fewer of them. cious circle into the virtuous one israising children, it is not surprising Large families have higher infant the essence of human development.that her level of education is more and child death rates and a higher70

6 Implementing human development programs:some practical lessonsThis chapter concentrates on four for them. The links, though, are available to the middle dass in richkey questions that invariably affect not all complementary: for example, countries. A major political chaltheway human development pro- paramedical workers have lower lenge of the 1980s will be to adaptgrams are organized, and how salaries than doctors, but they need and extend programs to the poor,effective they are. more supervision. particularly those in rural areas.* Political support. This has been Despite the difficulties, it hascritical to the considerable success Human development usually been easier to obtain politicalof human development programs needs political support support for health and educationin reaching the poor. Its absenceprograms that benefit the pooralsohelps to explain some of the Political support for human devel- witness the large increases in schoolfailures. opment cannot be taken for granted. enrollment and life expectancy-* Finance. Money alone will not The poor frequently are politically than for policies of, say, land orproduce human development. But weak. They are often too sick, tax reform. Why? Largely because,a shortage of funds is a com- uneducated, geographically dis- unlike land reform or increasedmon, often binding constraint. So persed and busy to be politically taxation, more knowledge, healthmethods that reduce unit costs active. Influential elites, particularly and vitality for the poor are notor raise new revenues have a large landowners, may oppose obtained by reducing them forconsiderable role to play in human development programs if someone else. Of course, suchexpanding services. they feel that their power and status programs must be financed. The* Administration. For many might be undermined. They might rich may have to pay more in taxesprograms, administrative and feel, for example, that educated than they get in direct benefits.institutional capacities may be children are less likely to settle for But they are often prepared toeven scarcer than finance. Yet working in serf-like conditions on support human development, inproject experience shows that their haciendas or plantations. part because it has a legitimacyimportance is frequently overlooked. Even if there is no direct oppo- that transcends culture, religion,* Demand. The way families sition, the extent and form of human ideology and class. This is particuandindividuals respond to services developmentprogramswvillgenerally larly true if poor children areis crucial to improving health, be influenced by keen political involved. The idea that all childrenhygiene and nutrition; to whether competition for limited tax revenues. should have a fair start-withoutchildren from poor families go to Because policymakers generally the handicaps of disease, illiteracyschool or have to work instead; live in urban areas, as do the most and malnutrition-is widespread.and to reducing fertility. politically active of the people who In some circumstances, more-These four factors-like education, benefit from public services, these over, everyone gains. Those whohealth, nutrition and fertility-are programs tend to suffer from urban are not poor will benefit if endemicclosely interlinked. For instance, bias (though reductions in urban diseases are eradicated-preventionfinancial and administrative con- social expenditures do not neces- usually being cheaper than cure.straints can be eased by political sarily lead to increases in rural Malaria control is an obvioussupport, which in turn will be expenditures). But the health and example: the main beneficiariesstronger if programs can be made education facilities available even are the rural poor, who are mostless costly or administered more to urban elites in poor countries likely to be infected. But mosquitoesreadily,orifthereisaheavydemand are generally inferior to those that bite the infected poor may71

fly on to bite the rich as well. InBrazil in 1974, an epidemic of spinal How much would it cost?meningitis aroused public concern- Take an illustrative list of human develop- cost 4 percent of GNP. Eliminating foodin response, 80 million people were ment needs: five years at school; adequate deficits in Brazil-with its much highervaccinated within 10 months, nutrition; primary health care no more income-could cost from I to 2 percentstopping the epidemic. than an hour away; family planningservices; at least 20 liters a day of pureof GNP in 1980, depending on the typeof food provided.are also seen almost everywherewater within 100 yards of home; and apit latrine. How much would it cost a* Health and family planning. Malay-sia's system of public health care coveredas contributing to national unity. government in a developing country to more than 75 percent of the populationUniversal primary education in provide this for everyone? in 1974. It relied heavily on low-costparticular can provide all citizens The answer varies from country to paramedical staff-and its operating costswith a common intellectual heritage country, depending first (and most were nearly 2percent of GNP. Sri Lanka'simportantly) on the standard of service; government spent about 1.7 percent inand help overcome the potentially second on such factors as climate, the mid-1970s. China's central governdivisiveeffects of regionalism, communications and population disper- ment spent less than 1 percent on healthtribalism, race and caste and class sion; and third on the balance between in 1978, but much of the primary caredistinctions. In addition, govern- capital and operating costs (most budgets system was financed locally; Brazil' spentments often see human development do not provide enough for the operating about 2.5 percent of GNP in 1975, butcosts that an effective service would public health insurance was biased towardas helping to build broad-based need). But there are also two general hospitals and urban areas-covering almostpolitical support among potentially rules that affect cost: one, for any given go percent of urIan dwellers but muchantagonistic groups. standard the proportion of GNP required less of the 40 percent of people in ruralThe appeal of and political com- falls as GNP rises, partly because higher- areas.income countries have more educated * Water. A recent World Bank estimatecut across ideological boundaries:people-whose wages are therefore relativelylower-to implement the programs,suggests that it would cost the Tanzaniangovernment about 1.8 percent of GNPChina, Cuba and North Korea have and partly because nonlabor costs rise a year over a 10-year period to supplyplaced great emphasis on such more slowly than GNP. And two, mar- every village with pure and reliable water,programs, but so have South Korea ginal unit costs usually fall as coverage plus 0.8 percent for operating costs onceand Costa Rica. Their appeal is rises, but only up to a point: the costs of the system is fully established. In Braziland Costa Rica. reaching the last 10-20 percent of the theinvestmentneededtocoverthewholereinforced by international and population may be several times the population by 2000 has been estimatedethical support. The Universal average costs for the first 80-90 percent at less than 0.1 percent a year of a muchDeclaration of Human Rights of because of physical inaccessibility or larger and faster-growing GNP in rural1948 included the rights to food, inadequate demand. areas (allowing for higher costs to reachhealth and education. The United Some examples from different countries: the last 10 percent of the rural population)h Education. The average gross enroll- and perhaps 0.1 to 0.2 percent a year inNations and its specialized agencies mentratiofor primary school in developing urban areas depending on GNP growth.have played an important role in countries in the early 1970s was about Coverage of the rural and urban populafocusinginternational attention 70 percent; central governments were tions was 62 and 14 percent, respectively,on human development and on then spending an average of 1.7 percent in 1976. Operating costs are borne bypopulation issues. All the major of GNP on primary education. Few the users.governments have provided universal * Sanitation. In Brazil, where 37 percentreligions also provide strong back- elementary education for less than 3 of urban houses had sewers or septicing for efforts to improve the health, percent of GNP. Peninsular Malaysia tanks in 1976, extending the sewer networknutrition and education of the poor. spent 2.7 percent in the mid-1970s and to cover them all by 2000 would requirehad a gross enrollment rate of 93 percent. annual investments of about 0.2 to 0.3Easing the financial constraint* Nutrition. In 1979, when subsidized percent of GNP. Providing latrines inrations were restricted to the poorer half rural areas would cost only between 0.01Finance ministers everywhere (withof the population in Sri Lanka, they still and 0.02 percent of GNP.the exception of some mineral-richcountries) find that available fundscannot meet the many competing ture, debt service, defense and so of GNP (and often a good dealdemands placed on them. In the on) commonly exceed 12 percent more) on doing so.poorer countries, public revenue of GNP. Yet governments that have The costs involved depend on(taxes, other domestic revenue and assuredvirtuallyeveryoneprimary many factors (see box), among theforeign assistance) usually is less education, health care, family most important of which are thethan 20 percent of GNP, while planning services, adequate food, range and standard of services.expenditures other than on social pure water and sanitation have Thus governments in some poorprograms (agriculture, infrastruc- generally spent more than 10 percent countries-notably Sri Lanka and72

probably China-have managed Table 6.1 Taxes as a percentage wasteful showcase projects, subtoprovide the essential services of GNP sidizing inefficient enterprises and,(primary education, food supple- Group of Percentage so far as security considerationsments and basic health and family countries 1953-551972-76 increase permit, military spending (whichplannirng facilities) to almost every- 7 low-income on average in East Asia, Southone for less than 10 percent of countries 11.2 16.0 43 Asia and the Middle East exceedsGNP. Typically, though, govern- 17 middle- public outlays on education andments are spending from 3 to 10 income health combined). And withinpercent of GNP for human devel- developing human development programspercent~~~~~~~~~countries12.1 16.4 36 thuman developenromto prelogramsopment programs that are far from Total (24 there is often room to reallocatecomprehensive-and whose effec- developing budget shares away from high-costtiveness is often reduced by lack countries) 11.8 16.3 38 and less-urgent projects (such asof money for operating costs (wages 15 developed urban hospitals and universitiesfor health workers and teachers, countries 26.2 36.2 38 largely serving the relatively wellmaintenanceof water supply Note: Taxes include social security taxes. off) and toward more basic prosysterms,gasoline for transporta- grams (such as primary health caretion of doctors in rural areas, and education).textbooks in schools). in the distribution of income). OnHow can financial constraints this basis, India's taxable surplus Keeping costs downon hurnan development programs in 1975 was 41 percent of aggregate By modesty in standards and effibeeased? There are four ways: income; the ratio of taxes to taxable cient choice of technology, govemincreasingtaxes, reallocating surplus therefore was 34 percent ments can provide services relativelyrevenues, reducing costs and using -comparable with the tax-to-GNP cheaply-and without precludingresources other than those obtained ratios of industrialized nations. future improvement. (For examfromnational taxes and duties. Earmarking taxes for programs ple, public standpipes can supplywith strong ethical or political safe water at some sacrifice in con-Increas.;ng tax revenues appeal can raise extra money when venience but at less than half theMany developing countries have further general taxation is not cost of individual house connecalreadymade impressive progress feasible. In Colombia a share of tions.) This general approach willin improving their tax-gathering the beer tax is reserved for public often be opposed by teachers,(see Table 6.1). Since 1975, how- hospitals. Many Latin American doctors, architects, engineers andever, tax ratios in developing countries finance their health and other professionals who insist oncountries have not increased; social security budgets by a pay- high standards-and correspondalthoughsome obvious steps can roll tax. (But payroll taxes cover ingly high costs. Not surprisingly,be taken (making taxes more only formal employment, and they the financial constraint is then saidprogressive and reducing evasion tend to reduce growth in jobs by to prevent the extension of serandarrears), the scope for raising raising the cost of labor relative vices to poor rural areas. Politicaltaxation is less now than it was to capital.) Motor fuel taxes are leaders have sometimes felt that20 years ago. good for earmarking, for several it was better to accept unaffordablyThis is especially true of the reasons. They are easy to collect, expensive standards than to riskpoorer countries-even where are progressive, help curb oil con- the charge that they were backingforeign trade is a substantial share sumption, and have high revenue "second rate" projects. But theof output. Their tax administration potential-in some cases exceeding World Bank's experience in health,is generally weaker, there is usually 1 percent of GNP. But like all education and urban developmentsubstantial unmarketed output, earmarked taxes, they should be projects suggests that many govemandtheir taxable surplus accounts used only sparingly, because they ments now see political as well asfor a smaller share of their GNP. increase the rigidity of the way economic benefits from being ableEven a tax-to-GNP ratio of 15 per- government revenues are spent. to reach the poor by acceptingcent in such countries implies a lower standards initially.heavy tax burden. Take India as Reallocating existing revenues Chapter 5 discussed a numberan example: its taxable surplus may Public spending on human de- of specific ways of economizingbe defined as all income beyond velopment can be increased by in health, education and nutritionthe poverty line (defined there as reallocating government revenue programs. China's barefoot doctheincome of the fortieth percentile from less productive uses, including tors (see box overleaf) are an excel-73

education and medical treatment.China's barefoot doctorsWhere the expansion of privateBest known for its use of "barefoot financed from four sources: an annual education and health care is notdoctors" at the grass roots, China's rural premium paid by members; charges for inconsistent with national policy,healthcaresystemhasseveralotherfaces the service; appropriations from the this would allow scarce govern--specialized urban hospitals serving the brigade's social welfare fund (collected ment funds to be concentrated onsurrounding areas, well-equipped county through a tax on each production team's the poor. But if the middle classeshospitals, and health clinics at commune income); and, sometimes, subsidies fromcenters. These facilities provide indis- the county government. invariably send their children topensablesupportfortheextensive coverage The annual premium, 1-2 yuan ($0.60- private schools, much of the necprovidedat the "brigade" level-catering 1.20) per person or 5-10 yuan ($3-6) per essary political support for hightoa large village or several small ones. family, depending on the locality, is a quality public education may beEach brigade sets up a program with considerable sum for peasants whose lost.financial support from the government; incomes average only about 100 yuanbut once established, it must be self- ($60) a year (only a small proportion One way of mobilizing privatefinancing (though the government may of which is cash income). The brigade's funds for education is by restrictinghelp in exceptional circumstances). A social welfare fund is a fixed percentage the number of places in publicmajority decision of the brigade members of its total income, so the contribution universities, maintaining highis enough to start or end a program; indi- from the fund to the health program standards there, and then allowingviduals can choose to join-and leave-it. depends on the brigade's income. Mem-China's 1.6 million barefoot doctors bers pay for each visit to the brigade the private sector to cater to those(roughly one per 600 people) operate at health station. In complicated cases, they who can afford it but do not succeedthe brigade level in rural areas. Many may have to go to the commune health in the stiff competition for theare women, selected by the brigade center or the county hospital. Charges places in public universities. Scholarmembersfor training, and supported by at the commune health center are nor- .. a. bthem during training (which usually takes mally paid out of the brigade's health ships to public universities can beplace in the slack agricultural season). fund; but patients attending the county provided for those who cannotAfter completing training, the barefoot or specialized hospitals must pay at least afford tuition fees. This has beendoctors return to their brigade, continuing part of the fees themselves. done in South Korea, where 72to devote part of their time to farm work. Like other primary health care systems percent of higher education enroll-Barefoot doctors are trained to use relying on community health workers, ments are in private institutions,both modern techniques and traditional China's has faced problems of credibilityChinese medicine-acupuncture and and training, and of uneven levels of while in primary education (whichherbal cures, for example. By combining service. Steps are now being taken to is virtually universal) 99 percentthe two, they increase acceptance of address these problems, including more of the enrollments are in publicmodem treatment and reduce costs-since emphasis on initial and in-service training schools.they prepare herbal medicines from locally of barefoot doctors. The intention is to . .grown ingredients. upgrade the services as funding and staff In some cases it is even possibleAs a rule, the brigade program is skills permit. to charge the better-off enoughI to subsidize services for the poor.In many countries, for example,lent example both of keeping costs of the educational system-were fees for private and semiprivatedown and of upgrading services also discussed earlier (see page hospital rooms are set well aboveas the economy grows-the Chinese 50). costs and the surplus used to subarenow providing their primarysidize poorer ward patients. Therehealth workers with additional Using resources other fhanare even better opportunities fortraining and better support. Restrict- national tax revenue this type of cross-subsidy in urbaning subsidies to those who cannot The state invariably plays a central water and sanitation systems,afford to pay for services can also role in education, health and nu- where the subsidy can be virtuallyhelp keep costs down (see pages trition programs. But it is by no automatic. The well-off are gen-62-63 for examples of how this means the only source of finance erally willing to pay more than thecan be done in nutrition pro- for human development. With the actual cost of the service becausegrams). But overly narrow targeting proper incentives, individuals, pri- the alternative to being connectedmay sacrifice some political support vate firms and other nongovern- to the public system is a privatefrom middle- and upper-income mental organizations can play an well or septic tank, at much highergroups-support that may be critical important role. cost.in establishing a program to reach Most food consumption, of Local resources can also reducethe poor, too. Various ways of cut- course, is privately financed. the financial burden on the center.ting unit costs in higher education Moreover, the relatively well-off In Tanzania in the mid-1970s, self--by far the most expensive part are often willing to pay for private help labor was equal to about 1074

percent of the development bud- developing world involve build- As people become more mobileget. The Tanzanian government ing such things as wells, schools and the cash economy more widetypicallyprovides construction and health clinics. But they do not spread, the strength of traditionalmaterials for projects, and the stop there: in many countries local self-help efforts may wane. Butlocal communities provide the people provide food and housing instead of providing resources inlabor. Self-help organizations exist for primary school teachers. It is kind, local communities can raisein many developing countries: one more difficult, however, to mobilize money (through local taxes orexample is Sri Lanka's Sarvodaya sustained support for recurrent charges) to support their efforts.Shramadana Movement (see box.) costs than for one-time efforts, such Like other forms of self-help, thisMost self-help projects in the as construction projects. can be stimulated by matchinggrants from the central govemmentin support of locally initiated andSelf-help in Sri Lankamanaged activities. In Kenya, forFrom small beginnings in 1958, the week leadership training course. On their example, the government assistsSarvodaya Shramadana Movement now return they beganforming what Sarvodaya harambee (self-help) projects thatemploys some 6,000 full-time workers calls the "social infrastructure"-groups meet official guidelines. But slugandreaches more than 10 percent of the for mothers, farmers and so on. Repre- gish administration in centralcountby's rural population. It has full- sentatives from each group made up thescale programs in some 300 villages, but Village Reawakening Council, which has agencies can suffocate local pariciisactive in another 2,500. It has organized initiated various productive activities, pation and self-help-enthusiasmeduca-ion, health, nutrition, sanitation such as growing bananas and passion and initiative may wane if deciandhousing; set up agricultural and fruit as cash and food crops, and set up sions take too long or promisedhandicraft programs; and is starting to a cooperative store, assistance does not arrive on time.promote other small-scale rural industries. In the community center built dur-The village of Panakura, in the poor ing the Shramadana camp, one of the Self-help is not always the righthilly district of Kegalle, provides a good Sarvodaya trainees has helped the mothers answer. In education, for example,example of the Movement's work. Simon organize a community kitchen and day- local financing can lead to such anJayawickrama had graduated from care center. Here young children are uneven distribution of qualifiedPanakura'sprimary school andwasdoing taught about health and hygiene, and teachers, books and equipmentwell in the secondary school two miles are vaccinated by a visiting governmentaway; then he had to drop out in the health worker (who received part of her as to intensify the inequities thetenth grade to help support his family. training from Sarvodaya). The school- country is trying to reduce. North-Through his former teacher and the local age children's group is responsible for a eastem Brazil and northem NigeriaBuddhist monk, he made contact with garden that helps to supply the community provide two cases in point. In boththe Movement; with the help of the local kitchen, and for keeping the community regions, low incomes partly explainSarvodayaworkersinnearbyAtulugama,center clean. The local Buddhist monkSimonbeganworkingamongstPanakura's took a four-month course on village why the wages and quality of81 families. After intermittent visits over development at the special Sarvodaya teachers fall below the nationala two-week period, a first Shramadana training school for monks. average; they also partly explainworkcamp was organized-to build a As well as extending its coverage, the the low enrollment rates in theseroad to the village. A second camp began Movement is improving the follow up to regions. If local economic andbuilding a community center-both proj- the initial Shramadana workcamp phase, social rogress lags well behindects chosen by the villagers themselves. to prevent backsliding. Although the s g gThe Sarvodaya Movement provided long-term effect of Sarvodaya's work the national average, financial andcement, reinforcing rods and skilled remains to be properly evaluated, most technical assistance from the cenlabor.For 15 weekends, 80 percent of the observers have been strongly impressed tral government will be crucial.villagers put in 6-8 hours of manual labor by the way it has involved people ina day. With the help of 100 young workers development. It has attracted widespreadfrom Sarvodaya groups in other villages, international support. Developing administrativethey established a community kitchen How much has all this cost? The strengthswhere everyone pooled and prepared Sarvodaya budget for 1979-80 was $2.3their food; took part in community medi- million, an average of less than $1,000 Institutional constraints are in manytation, singing, dancing and other cultural per village assisted. Voluntary labor and cases at least as serious a barrieractivities; and held two daily community otherpayments inkind contributed manymeetings (called "family gatherings") times that amount. Of the cash budget, to human development as shortwhereeveryone, young and old, had an some 80 percent came from international age of funds or lack of politicalopportunity to discuss their problems assistance (both private and official), 10 support. Effective administrationand ways of solving them. percent from Sri Lankan donations and usually requires more than theFollowing the workcamps, Simon and 10 percent from the sale of commodities efficient working of official bureau-10 others went to the Sarvodaya regional produced in Sarvodaya's training farmstrainir.g institute at Kegalle for a two- and schools. cracies; it depends on such factorsI as the availability of middle-level75

manpower, the complementary barriers that separate them from medicine, family planning andactivities of local governments and the poor. Supply lines for text- nutrition education.voluntary agencies, the receptivity books or medicine may be con- Most developing country govofintended beneficiaries to public tinually breaking down, and the ernments are well aware of theservices, and the persistence necessary technical support may need to improve administrativeof effort. be lacking. But these and similar performance, and have under-Unlike many aspects of agricul- difficulties must be overcome to taken some form of public sectortural, industrial and infrastructural reach the poor; that usually means reorganization. A common objecdevelopment,human develop- improving organization at the tive is to decentralize; planningment programs can rarely be put grass roots. units are being created at theout to contract. Improvements can-state or provincial level in thenot be effected by changes in Strengthenin government Philippines and Sudan, for example,policy or legislation alone. Funds, machinery as a first step toward greaterequipment and advanced technol- No matter how resourceful indi- devolution of power (thoughogies can seldom substitute for viduals or local communities premature decentralization, as intrained field personnel or admin- may be, sustained progress in Tanzania, can complicate programistrators. human development inevitably implementation).Administration is a vital ingre- requires national governments With the help of multilateraldient in primary health care: with- to mobilize and apply the much and bilateral agencies, manyout adequate training, supervision greater resources, both domestic countries are trying to improveand supplies, locally recruited and international, attheir disposal. the performance and skills of publicparamedical staff cannot be effec- Reviews of World Bank projects sector employees through training;tive. This is one of the important reveal a number of common insti- through better job classification,lessons of Brazil's early experience tutional problems-among them, which facilitates recruitment, trainwithrural primary health care in weak planning agencies and an ing and evaluation; and throughits poor northeast region, one con- inability (or failure) to relate changes in civil service regulationsfirmed in countries as diverse as annual budgets to long-term -for example, to specify promotionChina, Jamaica and Botswana. development priorities. Some of requirements more clearly and toIn education, too, there are the existing deficiencies are due to tighten discipline. Thailand isobvious administrative difficulties, inappropriate administrative struc- introducing special procurementbecause of the number and geo- tures and procedures, which still procedures to prevent slippage ingraphic spread of primary schools. tend to reflect the metropolitan project implementation. MalaysiaBut most countries have wide models on which they were isimplementingamoresystematicexperience of operating an educa- patterned. They plate undue approach to the preparation andtional system, although major emphasis on central control and appraisal of agricultural projects.changes in curricula or teaching take inadequate account of Several Asian and African counmethodsmay be administratively prevailing cultural or social tries have begun to streamlinedemanding. For nutrition, general attitudes. cumbersome budgetary practices.food subsidies are simpler to or- Other weaknesses arise be- These and other efforts to makeganize than targeted programs- cause the administration is not government machinery more effibutsubsidizing food consumed properly geared to identifying cient will take many years tomainly by poor people (see pages the people to be served, increasing produce discernible results. The62-63) is a form of targeting that their access to services, adapting continuous expansion of publiceases administrative problems. services until they are appro- sector activities in most developingImproving administration at the priate, delivering them efficiently countries has produced its ownperiphery is far more complex and and observing (and reacting set of constraints: many bureaudifficultthan administrative reform to) the public's response. This cracies have become large, powerfulat the center, a task that has itself sequence requires people who can and protective of their own interests.often proved intractable. Many of learn from the intended benefi- Frequent changes of politicalthe poor are hard to reach through ciaries and gain their confidence leadership have insulated someconventional public programs, and (see box). This is critically impor- bureaucracies from pressures forthe end-of-the-line workers may tant when the poor are cautious reform; in other countries radicalnot be motivated to break the (or even hostile)-as they often are attempts to restructure or purgesocial, linguistic and physical in their reactions to preventive public services have greatly76

members, too, as no bureaucraticRural poverty unperceivedagency can. When local healthPoor people are often the most difficult * Getting poor people to talk about centers in northern Senegal wereto reach. Many live on the edges of significant incidents in their life and work, unable to reach the people directlyvillages, far from main roads. They are particularly about those they see as being in a child-feeding program, theilliterate, have no radios and know little responsible for their poverty. religious leaders took over part ofabouteventsbeyondtheirneighborhood. * Exploring practices and attitudesThey rarely go to public meetings and that affect, for instance, diets and fertility. the food distribution: recent retravellittle except in search of work. * Seeking out those who do not use search indicates that this is anThose whose legal position is weak (such services or adopt new practices, and trying effective way of getting food toas refugees or squatters) may even try to understand the reasons for this. poor families. Local groups canto hide, to be invisible to the official Relatively simple but systematic surveys also provide reliable feedback oneye. Out of sight, they hope to be out can sometimes help those who carry them project experiments, and can inofmind.out. To take one example: in a densely fluece eaucries to in-As for the professionals who work in populated part of western Kenya, junior fluence bureaucracies to improverural development programs, many of agricultural extension staff and home services in ways that unorganized,them are caught in an urban trap. Young, economics workers were each given a poor individuals could not.unmarried officials are sent to remote random sample of 100 households to Research in both developed andrural areas; but age, marriage and their survey, in the area where they worked. developing countries shows thatcareers draw them back to the towns After the survey, many at first thoughtand cities. And those who do live in the that the sample had been biased heavily when the beneficiaries are involvedcountryside often direct their attention against the better educated households. through their own organizations,towardpeopletheyhavemostincommon One of the agricultural staff complained they respond more effectively towith-the not-so-poor. that only one of his 100 households had services. That has happened, forWhat can be done to correct this bias? an improved breed of cow: he wasChanging career patterns and incentives surprised to learn that he had, without example, i 4,500 village cooperatoreward rural work is fundamental; recognizing it, been concentrating on tives organized by the Indiantraining can also play a role. better-off households; in fact the area National Dairy Development Board;Without the need for complicated average was only one of these cows for in 200 local development associaresearch,in-service training can help more than 200 households. A home tions in the Yemen Arab Republic;people to understand more about poverty. economics worker was appalled at theFor example: poverty she had found. "These people n more than 9,000 Mothers' Clubs* Family case studies: a day in the life do not come to my meetings," she said. in South Korea, where familyof a landless household, or how a poor Perceiving reality is the first step to planning and other communityfamily survives the hungry season. changing it. functions have been assumed bytraditional credit associations(called kaes); and in special radioreduced the ability of govemments ment rather than supplant the listening and discussion groups into maintain essential human services available through health which about 2 million ruraldevelopment programs. ministries or other official family Tanzanians participated duringplanning agencies. The cost to users the "Man is Health" campaign inChoosing appropriate administrative has been kept low by providing Tanzania in 1973.strategies the private distributors with free There is of course a danger thatTo help make programs fully or highly subsidized contraceptives poor people's organizations mayeffective, administrators may need and controlling the retail price. And come to be dominated by localto use a variety of institutions- in Singapore, contraceptive infor- elites, with an associated risk ofnational bureaucracies, public mation was at one time distributed corruption. One of the main probenterprises,private businesses, with public utility bills. lems of agricultural cooperatives,voluntarv agencies, local govern- Organizations of intended for instance, has been to resistments and organizations of intended beneficiaries are not conven- this type of domination. Unlikebeneficiaries-and strike the right tionallyregardedasadministrative subsidized agricultural credit orbalance between them. agencies, but they can play a fertilizer, however, primary educa-In family planning, for example, valuable role. Farmers' organiza- tion cannot be stolen, hoarded ortraditional channels of private tions, rotating credit associations, resold. And though medicines canmarketing, which reach even remote women's clubs, religious groups be, even the richest person wouldvillages, have proved effective in and marketing cooperatives are in not want a hundred vaccinations.many countries (including India, principle accountable to, and can Another problem is infightingIndonesia, Jamaica and Sri Lanka). reflect the interests of, their mem- between rival local groups. ButThese private distributors supple- bers. They can involve their the suspicions that established77

ureaucracies may have about be simply a matter of providing have little idea what their useorganized beneficiaries or local information; but it commonly re- entails. They may assume that agovernments should not blind quires changes in long-standing newly established clinic will chargethem to their potential for effective attitudes and habits. fees or require membership.action. Education and organization ofWhen administrative abilities Changing the way services beneficiaries can help. So canare weak, it is sensible to concen- are delivered direct information campaigns,trate on projects that do not need A school calendar may compete making use not only of mass mediamuch organization. Food fortification unnecessarily with the crop cycle, like radio or billboards, but also(see page 63) involves minimal with important exams held at entertainers. Research on theadministrative effort. And in times when students are most diffusion of new ideas suggests thatCameroon a state corporation has needed by their parents in the direct contact between people iseffectively distributed low-cost fields. The staff of a health center the most effective form of compharmaceuticalsthrough commer- may not keep a regular schedule, munication. It has also been foundcial channels. But this approach forcing people who have traveled that mass media are more influentialdoes not work for every kind of for several hours to return home if they are heard (or read) in aservice, and it often fails to reach without treatment. The local clinic group. Radio forums, for example,themostdeprivedpeople. maybeshortofdrugsorsoincon- in which a radio program isWhere countries have a relatively veniently located that a patient followed by a discussion, are astrong administrative system but with a minor complaint may promising way of changing socialthe poor are badly organized (a prefer to go straight to an urban attitudes and behavior. Since it isfairly common combination), hospital-or to the traditional difficulttoformsuchgroupsonangovernments can provide services healer, who may live in the village. ad hoc basis, religious and otherthat do not require joint action- Often the changes required to social groups may be useful.such as primary education, basic make a service more attractive tohealth services, mass vaccination potential users are self-evident, Overcomingsociocultural obstaclescampaigns and subsidized food. such as providing them in a Deciding to use a service maySri Lanka and the Indian state of language that the beneficiaries require a more fundamental changeKerala, for example, have man- understand. This does not mean in attitudes and practices. The ideaaged to achieve striking progress that they are necessarily easy to may be controversial; for example,without relying much on local implement. women may have heard unfavorabledevelopment groups. But even rumors about modem medicine orthere, programs tend to be more Reducing costs to users family planning methods. Theactive and effective if the intended The benefits of services for health, poor may not appreciate thebeneficiaries are involved through education, nutrition and family benefits, say, of different hygienelocal organizations. planning often may be (or at least and sanitation arrangementsappear to people to be) less than because they do not understandDemand: ensuring that services their direct and indirect costs (see how diseases are caused. Or theare used box). The latter can sometimes bereduced. For example, providinglack of demand may have rootsdeep in traditional taboos, beliefsAs has been shown, the poor free textbooks (and uniforms, if or preferences. In many countries,sometimes fail to take advantage required) and locating schools men often refuse to allow womenof services even if they are avail- within walking distance will reduce and girls to go to male doctors orable (see page 52). The reasons the direct costs of school attendance. community health workers. Thefor this "reluctant demand" vary Providing free transport to health same beliefs mean that girls areacross countries and sectors; but clinics is another possibility. frequently not sent to school-andthe more accurately they can behence there are few female medicalidentified in particular cases, the Providing information workers. In Africa and Southeastbetter they can be tackled. Some- The reason people do not take up Asia certain types of food rich intimes this can be done by changing a service may simply be that they vitamin A (such as dark green, leafythe way a service is provided or lack information about it, or they vegetables) are cheap and abundant.reducing the costs of using it. Often may not know what to do: people Yet many cases of blindness amongit means changing the perceptions may claim to be "aware" that children are caused by vitamin Aof intended beneficiaries. This may family planning services exist, but deficiency-because eating these78

Private costs of using public servicesgone beyond information andpersuasion to use various formsdistribution bought piped and treated of coercion. Laws establishingData on the private costs of using public water (nearly all of which is supplied on compulsory primary education arehuman development services are scarce. a metered basis in Peninsular Malaysia).A recent study of Peninsular Malaysia, Of these, 14 percent spent more thanperhaps the most widespreadexample. Using laws is sometimeshowever, estimated them for education, 5 percent of their incomes on it. Thewater and health care.average burden for the poorest quintile* Education. Malaysian families had was 4.1 percent. There may again be than, say, manipulating costs, sinceto cover-in addition to examination fees some bending of the truth involved. But it allows no parental choice at all.and purchases of texts and supplies-the the burden of water charges was high But because childrenusually suffercosts of shoes, uniforms, snacks, trans- enough to deter at least a third of the more than their parents, suchport and special fees. In 1974 these aver- poorest 40 percent who had ready accessaged $47 a year for a student in primary to piped water from purchasing it. measures as compulsory schoolingschool, $123 for a student in secondary * Health care. The Malaysian study should be seen more as protectingschool. showed a strong relation betweenThe table shows that families in the household income and expenditure onthe rights of children than asrestricting those of parents.lowest income quintile spent about a private health care-but almost no relation Just how much coercion is confifthof their incomes on out-of-pocket between income and consumption of sidered to be acceptable will varyschool costs. Even allowing for some public health care. Most patients paidbending of the truth by respondents, this no fees for public inpatient or outpatient according to a country's cultureis impressive-and it understates the treatment. Nor were expenditures on and political values. In someburden. A fifth of the income of a poor transport to the place of treatment places, traditional social strucfamilyrepresents a far greater sacrifice related to income, although there was a tures have been enlisted to exertthan a fifth of the income of a wealthy weak inverse association between travelfamily. And the cost of forgone earnings time and frequency of treatment. Thus-what students could earn by working if the need for medical care of the poor has been a characteristic of thethey were not in school-is excluded. and most of the rest of the population Indonesian family planning pro-* Water. Fewerthanathirdofthefami- was met through the public system at gram. Among the Hausa in northliesin the lowest 40 percent of the income little private cost. em Nigeria, a program to eradicateOut-of-pocket costs, Peninsular Malaysia, 1974Percentage P,rcentagesleeping sickness has been successfullysustained through strongFamily Percentageof their incomespent onof householdswith pipedPercentageof their incomeleadership. Every year the villagersclear the undergrowth along theincome of households out-of-pocket and treated spent onquintile wifh students school costs water water banks of rivers and streams. TheyLowest 73 18 20 4.1 do not fully understand theSecond 67 10 37 2.6 reasons, but they are willing to doThird 676 1 632 2.5 what their traditional leaders ask.Highest 50 6 76 0.8 Nevertheless, programs of educa-Source: J.acob Meerman, Public Expenditure in Malaysia (Oxford, 1979).tion, health, nutrition and familyplanning have more chance ofsuccess if the beneficiaries comefoods is regarded as a sign of low (the pattern of distributing food to see the programs as servingsocial status. within families), threaten estab- their interests.Higher incomes and better lished norms (family planning),education will clearly help to challenge vested interests (profes- Affecting behavior within the familyovercome many of these obstacles. sional associations) or offer few Especially in poor households, theTraditional social and cultural immediately obvious benefits interests of parents, children andstructures can sometimes also be (sanitation), the more patiently old people can diverge, causingadapted to new uses rather than they must be introduced. Public maldistribution of food, educationignored or swept aside. The education and persuasion are and medical care within theIndonesian family planning needed, and it will take a long family (see pages 61-62). Raisingprogram has been notably suc- time to reap the economic and family incomes can reduce orcessful in this respect, as well as in political benefits. eliminate the economic reasonsdecentralizing responsibility for for unfair shares; more educationimplementation (see box overleaf). Coercion of parents, especially of mothers,The more that programs require In attempting to spread human can mitigate the cultural reasonspeople to change their behavior development, many countries have (see box on page 50). In addition,79

successes. It has played a majorThe banjars of Balirole, for instance, in helping tosubmit ideas for new campaigns, and spread education; in eradicatingIndonesia's family planning program funds are quickly provided for the ones smallpox and sharply reducingcombines central direction with decen- approved. The program has also made several major diseases (includingtralized implementation. The program use of the private sector-traditional yaws malaria, leprosy and Africanhas strong political support from the travelingherbvendors(calledtukanjamus) ,president, to whom its chairman reports have been enlisted to supply contraceptives sleeping sickness); and, perhapsdirectly. Family planning is an integral to remote villages as well as urban areas. most significantly, in increasiringpart of national and provincial develop- In the province of Bali, the traditional the production of basic foods.ment plans-ministers and provincial community council (called banjar) has On the other hand, some aidgovernors are responsible to the president been harnessed to promote family plan- programs have failed-or havefor their execution. And the program ning. For centuries banjars have beenmaintains a central data system to monitor the hub of village life. There are more succeeded while indirectly conperformanceand ensure that no region than 3,700 of them today; adult men in tributing to inappropriate policies.or even village runs short of contracep- Bali belong to their village banjar and Until the early 1970s, there wastives. But the task of implementing specific attend monthly meetings. In 1974 the an emphasis on showcase univergoalsrests largely with provincial and governmentinBalistartedtoworkthrough sities, large urban hospitals andlocal staff, and political and community banjar leaders to create an awarenessleaders in the villages. of family planning, to identify people large-scale agriculture-consistentThe program offers strong (but non- who might be keen on planning their with development thinking at thatmonetary) incentives for managers and families, and to help them do so. Typically, time. Not surprisingly, such interstaffat all levels, because it was designed the monthly banjar meeting now begins national assistance involved transtogivecreditforsuccesstolocalmanagers.with a roll call; each man responds by ferring some technologies orMost of the contact with families is by saying whether he and his wife are usingvillage volunteers. The program rewards contraceptives. Replies are plotted on a institutions from developed counthem,too-outer-island midwives can village map-prominently displayed. tries without adequate recognitionearn trips to Bali for training, while The results have been striking. An of how the circumstances of de-Balinese chiefs whose villages have estimated 49 percent of eligible couples veloping countries differed.made the most progress in family plan- have adopted family planning in Bali, Since the benefits of human deningare taken to see the successful East compared with 29 percent for the countryJava program. as a whole. The World Fertility Survey velopment are received partly byThe approach is tailored to specific showed that the average number of today's children but even more bylocal needs; it fosters local initiative and children a Balinese woman could expect their children and grandchildren,experiments with unconventional projects. to have had fallen from 5.8 in mid-1969 governments that are hard pressedPeople at provincial and village levels to 3.8 in 1976. financially may find it difficult tojustify spending as much on humanimproved earning opportunities and goats, selling the milk and development as is desirable forfor educated women, lower infant controlling the proceeds them- long-run economic growth, letmortality rates and a rising age selves. By selling cooperatively, the alone for alleviating poverty. Thisat marriage will help parents to members get higher profits than dilemma-which will be acuteprovide more for all their children they otherwise would. Families are during the next few years of finanandto have fewer of them. fed better. More of the children cial stringency-is one for whichWithout these sorts of change, are now attending school. And as external assistance can be particuitis difficult to affect the way food, the younger educated women are larly helpful. Many other measureseducation and medical care are seen to be taking a greater part in -from small-farmer programs toshared within families. But it is running the cooperative, education power generation and industrialnotimpossible. Door-to-door in- for girls is becoming more highly ization-are also needed to reduceoculation campaigns can reach all valued. In dairy development poverty and raise average incomes;children. This has been done projects in three other Indian these merit strong internationalrecently in Mozambique and states-all based on this model- support as well.Sierra Leone. And the way work similar results are being obtained. If donors providing assistanceis organized will also affect inequal-to a country are unwilling toities within families. For example, International assistance finance human development protheAnand Dairy Cooperative ingrams, these programs in mostIndia increased the income re- International aid for human de- cases will be smaller than theyceived directly by Indian women velopment programs has been otherwise would have been. Simi--since they have traditionally been provided for decades and has larly, if donors are willing toresponsible for looking after cows contributed to several notable finance only "bricks and mortar"80

ut not teachers or health workers, With increasing recognition of or program relies for long periodsthe net effect will be excessive cap- the importance of antipoverty on outside aid and that implemenitalintensity-showing up in overly programs, and of the investment tation difficulties in one projectexpensive and underused build- component of many of these pro- or region do not interfere withings and insufficient staff. Yet in grams, practices have begun to continued financing for others.developing countries a high pro- change. Several donors, includingportion of spending on primary the World Bank, have been financ- The importance of persistenceeducation and health care, for ex- ing the salaries of agriculturalample, is-and should be-for extension workers, and in some Programs that cost the least oftenoperating (recurrent) costs. In cases the operating costs required require the most organization.many countries, such as Tanzania to carry out education and training Moreover, whether in state bureauandUpper Volta, money for oper- projects-teachers' salaries and cracies at one extreme or amongating costs is already very short- teaching materials, for example. the intended poor beneficiaries atwith the result that schools In May 1979 the OECD's Devel- the other, an organization's strengthwithout books or even paper, opment Assistance Committee generally depends on the educationhealth posts without medicines or adopted new guidelines on the. and resourcefulness of its members.supervision (due to inadequate financing of local and recurrent That cannot be developed ovemight.travel budgets or gasoline short- costs, which recognized that basic One key lesson from 30 yearsages) are increasingly common. human development programs were of development experience is thatThese shortages will get worse as particularly suitable for these it takes a long time to build upgrowth slows and countries kinds of financing. effective institutions. Neitherstruggle to keep up their physical Donors should of course be governments nor donors shouldinvest:ment rates. concerned to avoid waste in oper- expect quick results, or give upMost aid agencies have preferred ating costs, just as in construction too easily. For example, evaluationto limit their funding to physical costs. And they need to ensure of family planning programs showsinvestment, being reluctant to that programs develop adequate a close relation between theirfinance operating costs partly financial support for operating costs effectiveness and the number ofbecause of concern that projects from national and local governments years they have been in existence.in which a developing country -lest they wither away when As Chapter 5 explained, and aslacked a substantial financial stake international aid is withdrawn. Figure 6.1 confirms with respectmight not develop enduring roots, Thus the share of operating costsbut also from fear of encouraging covered by external assistanceconsumption at the expense of in- should be reduced gradually, which Figure 6.1 Literacy rates, selectedvestment. As this Report stresses, will encourage steady increases developing countries, 1950 & 1970'however, human development rather than quantum jumps in the lp-0)increases productivity, reduces amounts to be financed from local 1950 1970fertility and thus promotes long- funds.G-ree 100Spain 90term growth in average incomes. Donors should also consider Chile.-9A significant part of spending- providing sectoral or subsectoral, P-erto Ric80operating as well as capital-on as well as project, financing. ThisCosta RicaTrinidad8human development therefore is enables governments to focus on & Tobago / 70investment. This is most evident the institutional, planning and Paraguayi 60in primary education, which in policy issues that have a strong Sri Lankamanycountries has economic re- influence on the success of individual Poaug,l 50Thailandturnswell above average: the projects; it also provides a useful Vene-nela 40salaries of teachers should no more framework for striking the appro- Brazil_be regarded asconsumptionthan priate balance between capital ElSalvador-30the wages of workers on irrigation and operating costs. In practice, Nicaragua 2projects. There is a large element subsectoral financing-limited by Haitiof investment in family planning activity or region-is often preferable 10prograLms as well (indeed the esti- to sectorwide financing. Through _ 0mated returns often are even higher) subsectoral financing, donors can a. The rates arr for the 20-24 age group aodand to a lesser extent in health and assist a continuing series of activities, deterrined by data availab,ity. Dats ,rr close to190ad1970.nutrition programs.while ensuring that no one project81

to education, the level of human programs are necessary (as will world economy or economic misdevelopmentat one time is strongly be the case for a number of coun- management cause cutbacks ininfluenced by its level decades tries over the next few years), human development programs,earlier. Thus, human development attention should be given to the children pay heavily-in loss ofis not something that can be need for investment in the human future income or health, and indeferred: what is done now-or not development of the next genera- some cases with their lives.done-will have an influence for a tion. When economic difficultieslong time to come. When austerity originating in the workings of the82

7 Priorities and progress in regional perspectiveThe past three chapters have from household surveys-though from some more than others; poliexaminedthe potential role of informal study and patching to- cies should correspondingly varyhuman development in attacking gether evidence from other sources in their focus.absolute poverty, and some of the can help. It is also a matter ofproblems and policies in the main analysis-experience has shown Tradeoffs between different objectiveshuman development areas. This how important it is to distinguish In the past the severity of thechapter addresses some broader household income from income tradeoff between poverty reductionhuman. development planning per household member, to find the and growth has sometimes beenissues--including the tradeoffs relevant price index to calculate exaggerated-especially from abetween growth and poverty changes in the real incomes of the narrowly economic point of view.reduction, and the allocation of poor and to take account of seasonal As the past two World Developmentresources between human develop- variations. For example, since the Reports have emphasized, morement and other activities. After a poor spend the bulk of their incomes support for agriculture, land reform,general review, these and other on the cheapest foods, a price index expansion of industrial employment,issues are examined in the context based on national average con- and a more even distribution ofof a regional typology of developing sumption patterns may seriously public services can all help to reducecountries. Since the needs and the distort what has been happening absolute poverty and acceleratedifficulties are greatest in the two to absolute poverty. growth. This Report similarlypoorest regions-Sub-Saharan To be effective, policies must stresses not only what greaterAfrica and South Asia-they receive also distinguish the causes of pov- national income can do for themost attention. The other three erty-which vary widely within as education, health and nutrition ofregions--the Middle East and North well as between countries. There the poor, but also how humanAfrica, Latin America, and East are common elements and impor- development policies for the poorAsia-are discussed collectively in tant linkages. But different measures can contribute to raising nationala single section. will be needed to benefit, say, income.subsistence farmers on poor soils, It would be wrong, however, toIssues for planners landless laborers in fertile butcrowded areas, and female-headedsuggest that there are no tradeoffs.Although it is highly desirable, forMuch absolute poverty, and some households in large cities. Poverty example, to help the aged and theof the ways to attack it, are obvious. programs have sometimes focused incurably sick-among the poorestYet lack of information about the almost exclusively on small farmers of the poor in most societies-thisnumbers and characteristics of the even when the majority in absolute will contribute little or nothing topoor, and the causes of their poverty, poverty were in fact landless growth. Similarly, in expandinghandicaps the design and imple- laborers. rural primary education, countriesmentation of effective antipoverty As important as differentiating will have to choose between thepolicies. Even in countries where the causes of poverty is differen- places that are poorest, and thosemuch work has been done-Brazil, tiating its characteristics. Absolute (the rapidly modernizing ones)India, Indonesia-controversy per- poverty is a bundle of things-low where more education would havesists about such basic facts as trends income, malnutrition, ill health, the largest effect on farm output.in the incomes of the poor. This lack of education. Different groups The severity of tradeoffs, moreispartly for lack of relevant data of poor people may initially suffer over, is (as Chapter 6 has shown)83

in most cases amplified by political, investment, agriculture, foreign Balance between different humanfiscal, administrative and even trade, land reform, credit and re- development policiescultural considerations. If, for search-must do most of the job, As the analysis in Chapter 5 bearspolitical reasons, more services for even though many of them com- out, there are also difficult choicesthe poor must be matched by more plement human development in to be made within the general areaservices for the rich, the cost of important ways. of human development. The diffiprovidingfor the poor is multiplied. Even at the margin, the key culty is partly a technical one-But economic factors underlie question is not whether the re- more research is needed to quanmanytradeoffs, especially since turns to human development are tify the returns to different sortsmoney can sometimes ease even high, but whether they are higher of programs in varying circumpoliticaland administrative prob- than returns to alternative uses of stances. But it is again partly alems. A country that is already the resources concemed. Much will matter of objectives-the relativecomparatively wealthy, or whose depend on the circumstances of weights attached to nutrition andgrowth prospects are excellent, the country concerned, including education, for example. And it isgenerally has more latitude than its past balance between human agravated by economic cononethat is poor, or whose growth development and other policies. straints: even with identical prefprospectsare grim. The severity Some countries have devoted too erences, a poor country mightof tradeoffs is thus also affected little of their development budgets make a different choice from aby the international environment. to human resources, and too much richer one when confronted withHigher oil prices absorb resources to physical investment; for them, the option of providing ruralthat could have been used either a switch at the margin toward primary health care or expandingfor growth or for reducing poverty. human development would be some form of urban secondarySo do cuts in aid, obstacles to com- the best use of scarce resources. education with a higher economicmercial borrowing, and sluggish Others, by contrast, may have rate of return. Choices are alsoexports (and hence imports and overinvested in some aspects of affected by the availability ofproduction) caused by slow world human development-as suggested, finance (foreign and local, as wellgrowth. Agricultural and industrial for example, by the low rates of as national) for different programs.protection in developed countries return to higher education in cer- The difficulty of the choice isundermine the efforts of developing tain countries. In other cases, eased somewhat by the fact thatcountries to foster agriculture and human development programs have the various aspects of human delabor-intensiveindustrialization. had low returns simply because velopment are causally interrelatedIn the next few years, especially, they were hard to implement (see (see Chapter 5): an attack on anythe harshness of the choices that Chapters 5 and 6). one front is likely to produce repoorcountries will have to make Overinvestment and underin- sults also on others. Thesecan hardly be exaggerated. Nor vestment, of course, cannot be de- spillovers appear greatest in basiccan the degree to which these could fined without reference to the ob- education-which usually alsobe eased by enlightened policies jectives of governments-how has the biggest payoff in termson the part of other countries. much weight they attach to growth, of increased income. There is thusBalance between hsman developmentredistribution and human development,or to short- versus longastrong case for considering increasing(or in times of stringency,and other policies term goals. Much of the payoff maintaining) expenditure on pri-The returns to human develop- from better education and lower mary schooling. This should notment programs can be high in fertility, for example, would accrue mean neglecting secondary andeconomic terms-both directly to this generation's children and higher education, nutrition, health(especially for education) and in- grandchildren. But people-espe- and family planning programsdirectly(especially through re- cially poor people-legitimately which in all circumstances are imducedpopulation growth). Their want improvements during their portant, and in many may have aimpact on the education, health, own lifetimes. This and other better claim on marginal fundsnutrition and fertility of the poor sources of economic or political than primary education. Noris also valuable in itself. But hu- pressure to concentrate on the should governments overlook theman development programs alone short or medium term are bound practical difficulties of translatingcannot reduce poverty and pro- to reduce the attractiveness of higher enrollment targets intomote growth. A whole range of some-though by no means all- adequate education and reducedother policies-for infrastructural human development programs. dropout rates, or the length of84

literacy and life expectancy); andFigure 7.1 GNP per person, regional analysis provides a more Figure 7.3 Life expectancy,1960, 1970 and 1980 i9601 and 1978ageneral, If less concrete, perspec- Yearsts7: ,L'7in'r! tive than would a set of country 70-case studies.1.847 Sub-Saharan Africa60-Most of the countries in the regionbecame independent in the 1960s. 55-_ They inherited acute deficiencies1,398 in skills, institutions and general 50-.-. ,,__ education; overcoming these has 1978been a major concern of most of 45-1140 si'

less than 1 percent a year in 11 of new farming methods (see page avoid such false economies (whilecountries during 1960-78; it rose 48) has obvious implications for maintaining the already very lowmore than 3 percent a year in four that improvement. But the prob- consumption levels of most ofcountries. (Some of these meager lemis clearly much wider. Modern their people).gains have been wiped out by agricultural "packages" (of seeds,deteriorating terms of trade.) fertilizers and cultivation tech- PovertyAgriculture has been almost uni- niques) have yet to be developed Giventhetrendinaverageincomesformly sluggish; food output per for many African localities and (particularly in agriculture), theperson appears to have declined subsistence crops. Agricultural proportion of the population livingin 25 countries (mainly in the programs generally have not re- in absolute poverty has probablySahel) between 1969-71 and flected the considerable role that increased in many countries since1976-78. African women play in agriculture. the early 1960s; in 1975 an esti-The constraints that hampered And there are basic deficiencies mated half of the people in thegrowth in the past have not eased in credit, infrastructure, agricultural region were absolutely poor. Mostmuch. The discouraging prospects incentives, extension services and are subsistence and small-scalefor growth in both low- and middle- market integration (the World farmers, but in some countriesincome African countries-and Development Report, 1978 consid- (such as Somalia) a sizable protheresulting likelihood of an in- ered in more detail the require- portion are nomads. As comparedcrease in the proportion of people ments for faster growth in Africa). with the low-income countries ofin absolute poverty-were de- In large measure these deficien- Asia, poor agricultural conditionsscribed in Chapter 2 (page 11). cies reflect institutional weak- and farming methods are a moreHow the international economy nesses and the related scarcity of important cause of low agriculaffectsAfrican countries will de- experienced, trained people. Nor tural incomes than unfavorablepend on aid levels and on primary are their effects confined to agri- land-man ratios.commodity prices, but importantly culture. In several countries a sigontheir own actions as well. The nificant industrial sector is already Human development issuespotential gains from processing emerging,butthescarcityandhigh Despite substantial gains sinceprimary products for export remain cost of suitably skilled labor and 1960, life expectancy remains belargelyuntapped. Primary products management remain major im- low 50 and adult literacy ratestypically account for 80-100 percent pediments to African industriali- below 25 percent in most counofmerchandise exports (though zation. tries. Both are generally belownot all are suitable for processing; While administrative weaknesses expected values for countries atsee page 23). In some countries will take time to overcome, the their income levels. For example,exports have stagnated because of effectiveness of many programs the norm for life expectancypoor domestic agricultural perform- is also hampered by difficulties in (Figure 7.4) is about 50 years forance; many more have had to financing operating costs, espe- countries with average incomes ofincrease their food imports. Grain cially for materials and supplies. about $350; but Senegal, with thatimports into Sub-Saharan Africa Progress could be more rapid if income level, has a life expectancyrose from about 1.6 to 2.6 million aid donors were to relax their of only 42 years. Africa is the onlytonnes between 1965 and 1975 (and traditional preference for funding region where fertility still showsthe US Department of Agriculture capital rather than operating costs. no sign of decline-women survivingprojects a rise to 4.5 million tonnes In addition, there is a serious to the end of their child-bearingby 1985). danger that economic stringency years average 6 to 8 children. AndThe importance of agriculture in the next few years will lead to it is the only region where nutritiongoes far beyond its effect on trade. cutbacks in human development has steadily worsened.As the region most dependent on programs, despite the importanceagriculture-the main activity of of their contribution-often ex- FERTILITY. The contributionmore than 70 percent of its 360 ceeding that of additional physical that slower population growth canmillion people-accelerating growth investment-to Africa's long-term make to raising incomes is parandreducing poverty and malnu- development potential. It is essential ticularly marked in Africa. Thetrition in Africa depend more than that aid donors, especially in the region's high infant mortality andanywhere else on improved agri- first half of the 1980s, should low adult literacy are majorcultural performance. Evidence that substantially increase their efforts reasons that population growthfarmerliteracyaffectsthe adoption to help African governments remains high.86

to establish the necessary admin-Figure 7.4 Sub-Saharan Africa: life expectancy in relation to income istrative structure. Vilary alper person, 1978 per person, 1978workersistrative structure.can be trained ~~~~Village cheaply,healthLife espectancy (years, as has been demonstrated in60- Niger; but a study of Mali's healthsystem noted that "at the villagelevel, the most serious manpower55- constraint is the near total lack9 wide Kenya norm' of literate people who can beTanzania Worldwide non,j trained as village health workers."50-* LesothoSierra Leone * Liberia EDUCATION. Typically, educa-Moambique Ghanaiaire gei tion accounts for 15-25 percent ofI R~~~~~~~~ZambiaIvrCos! *tz%/ CAR Sudan X * Congo Ivory Coast the budget and 3-6 percent of45\ > Togo Cameroon GNP; less than half the total is forBurundi1 Madagascar primary education. Recent growthChad Malawi Mauritaniad * oSenegal in school enrollment has beenMali\Niger * Angola40 - Somalia ineaimpressive, particularly in Benin,Congo, Ivory Coast, Kenya, Lesotho,Ethiopia Upper Volta Somalia and Zambia. These countriesspend more than 5 percento Lof their GNP on education and0 200 300 400 500 600 700 Soo 900 are in the top 25 percent of allGNP per person (current dollars)developing countries on this count.a. Derived from cross-country equation relating life expectancy to GNP per person. For them, the key issue is notincreasing education's share of thebudget but (as in other AfricanStudies in Nigeria and Tanzania in many parts of Africa, so that (in countries) using funds more effoundthat education among wives contrast to other regions) desired fectively, improving educationalreduced fertility and infant mortality family size often exceeds its actual quality and tackling serious prob--though some studies in Africa size. lems of dropout and wastage.have suggested that the initial im- Partly for this reason, and partly Costs are a major obstacle topact of schooling (by increasing because of the virtual absence in raising enrollment and schoolhealth and fecundity sooner than most countries of a primary health quality in Africa: costs per pupilit reduces desired family size) may care network onto which family as a percentage of GNP per personbe to increase fertility. The con- planning programs could be grafted, are the highest of all regions. Comtrastbetween Kenya and Lesotho such programs in Africa have been pared with Asia, this ratio in Westis also suggestive: among African few and feeble. Extending and Africa is more than twice as highcountries, they both have better- strengthening family planning for primary, five times for secondthan-averagerecords of literacy, efforts, however, would cause an ary and seven times for tertiarylife expectancy and child death earlier and faster decline in fertility. education. The high cost largelyrates-yet Kenya has the highest reflectsthefactthatteachersalariesfertility rate in Africa and Lesotho HEALTH. Primary health care (which typically account for 75the lowest. Data from the early can be provided inexpensively percent of educational costs) are1960s show that in Kenya many (about $2-3 a person) in some of high in relation to average incomes.more men than women were lit- the low-income countries (and In Upper Volta (which has theerate, wvhile in Lesotho it was the could be financed to some degree lowest literacy rate in Africa-5other way round. by a reallocation of government percent) teachers' salaries are 24That is unlikely to be the whole expenditure away from urban hos- times larger than GNP per person,explanation, of course; other pos- pitals); but since it is administra- compared with less than foursible rea,sons include the migration tively demanding, progress is likely times in Liberia. High salaries forof men from Lesotho to South to be slow. all educated people are partly aAfrica, and differences in cultural A few countries such as Mali, colonial legacy; but the main causevalues-which are strongly pronatal Kenya and Tanzania have begun has been a shortage of qualified87

teachers, which is now starting to education is thus a doubly serious 1974. South Asia has substantiallyease. Salaries have fallen in real drain on budgets; and its social better growth prospects than Subtermsin several countries, includ- returns have been pushed well Saharan Africa; but it too will faceing Benin, Tanzania and Sierra below the private returns to indi- difficult choices in the adjustmentLeone. viduals-and below what they might period. Growth will depend heavilyThere are various other ways of be with better economic policies, on domestic economic managemakingeducation less expensive since Sub-Saharan Africa badly ment, particularly in agriculture;without making it worse, as dis- needs more people with professional, but exports, migrants' remittancescussed in Chapters 5 and 6. In scientific and administrative skills. and aid are important intemationalsome countries, such as Nigeria Their shortage has been one of influences (no country borrowsand Sierra Leone, average class the biggest brakes on development much commercial capital). Remitsizesare small enough (about 30 projects-as reviews of World tances, mainly from the Middlepupils) to be raised without much Bank project experience amply East, have grown dramatically inadverse effect on quality (see box testify. But African countries also recent years; in 1979 they amountedon page 52). In Togo local com- need to train them more econom- to about $1.4 billion in Pakistanmunities pay part of teachers' ically (see page 50) in order both (almost three-quarters the valuesalaries; in Somalia and Tanzania to increase their supply and to of its merchandise exports) andthey contribute to construction release resources for primary school- roughly $1 billion in India. Theycosts. ing and other human development are also substantial in Bangladesh.While school enrollments have programs. The region has also had somerisen markedly, few countries have Despite the conspicuous scarcities, success in increasing exports totried to deal with the large backlog there is concern about incipient the Middle East-particularly India,of illiterate adults. Literacy cam- unemployment among secondary- which has won major contracts forpaigns that relied on students, school graduates in some countries. turnkey plants, construction andvolunteers and government ser- This reflects the fad that job require- consultancy services. Nonetheless,vants were mounted in Somalia ments and expectations tend to no country has fully exploited itsand Tanzania, with spectacular change more slowly than the supply potential for manufactured exports.success: literacy rates are estimated of qualified people (see box on The large industrial sectors of Indiato have risen from 2 percent and page 51). But as graduates find and Pakistan can respond strongly10 percent to 60 percent and 66 it harder to get jobs, they will be to incentives for exports, as Pakistan'spercent, respectively, between likelier to respond to the needs of did in the 1960s and India's has1960 and 1975. Such programs, the economy for more people to done more recently. Sri Lanka ishowever, lack the socializing work in rural areas as extension launching a major drive for exporteffectsof school attendance. There agents, teachers and administrators. led industrialization, which shouldis also a risk that literacy skillsbe helped by its highly educatedmay decay if they are acquired in South Asia labor force.circumstances that do not requireRecent agricultural performancetheir frequent use. This argues for South Asia has much in common in India augurs well for the 1980sprograms that are not too brief with Sub-Saharan Africa-in (and is the main reason faster GNPand have an emphasis on such particular, pervasive poverty and growth is projected). When anpractical subjects as numeracy, low average incomes. But it has identifiable package involvinghygiene, nutrition, family planning relatively many more highly trained water, fertilizer, high-yieldingand agriculture. people (there are almost as many varieties and credit is readilyThere are politically difficult university students in India as in available, as it is in much of Southchoices to be made in higher edu- the European Community) and Asia, the economic returns tocation. Governments often give greater administrative capacity. more rapid and successful adopstipendsas well as free education tion-facilitated by the spread ofto university (and sometimes even Growth education-can be high. Given thesecondary) students. Many govem- Economic growth has been generally pressure of population on land,ments have also felt obliged to slow: South Asia's GNP per person future agricultural expansion willguarantee jobs to all university grew at an annual rate of 1.6 percent have to rely almost exclusively ongraduates-in activities whose in 1960-70 and 1.1 percent in increasing cropping-intensity andproductivity does not always match 1970-80-stagnating in the early the spread of high-yielding varietiestheir salaries. Secondary and higher 1970s and then accelerating after of crops.88

Poverty Figure 7.5 South Asia: life is lower than in Africa, the densityAbout half of the region's people expectancy in relation to income of population makes it at leastlive in absolute poverty, accounting per person, 1978 as urgent an issue. The three mostfor half of the world's poor. Land- 75-L!f-P`l" Y"r populous countries of the regionlessness is a much more important 70- Sri lanka all share the nexus of low femalecause of poverty than in Africa. 65- literacy and high child mortalityThe landless and those with less 60- and fertility (female literacy ratesthan 0..5 hectares make up about 5 - Burma Pakistan are a third to a half of male rates),53 percent of the rural households5 0B ngladesh India with Pakistan and Bangladesh thein Bangladesh, 40 percent in India 45 . the worst affected. In India higherand 37 percent in Pakistan. And 40 W -r1widr n literacy, lower sex differences inthose with 0.5 to 1 hectare are Lstill very poor, and must earn much 0 100 125 150 175 200 225 250education and a stronger familyplanning program have beenof their income as wage-laborers. aD,r,v,dfrom cross cou.ntry equat-on relatmg associated with a decline in fertility.Although only about 20 percent eea As a result, by 2000, the primaryofthe population lives in cities,school age group is projected toSouth Asia contains much of the estate laborers remain an under- have increased by about 40 perworld'sworst urban poverty. privileged group), and extraordi- cent in Bangladesh, 60 percent inLife expectancy in South Asia narily low population growth. It Pakistan and a more manageableis above the norm for countries achieved this primarily through 20 percent in India.with simnilar average incomes (Fig- subsidies to food and education, Outside Sri Lanka and Burma,ure 7.5); but for literacy the picture which accounted respectively for the status of women is a major baris more mixed, with Nepal and 4.5 percent and 3 percent of GNP to human development. Malnutri-Pakistan below the norm. More in the early 1970s (17 percent and tion is considerably higher amonggenerally, progress in human 12 percent of the central budget). females, and newborn girls havedevelopment varies widely, both These were combined with fairly a significantly smaller chance ofbetween and within countries. Sri broad-based access to health care surviving to the age of five (seeLanka and the Indian state of Kerala and a moderately effective family box on page 91). The school enrollhaveachieved literacy and life planning program. Relatively low ment rate among boys is nearlyexpectancy that are usually reached defense spending-in 1977 Sri Lanka twice as high as among girls; theat incomes per person near the devoted just 0.7 percent of its GNP gap has closed signicantly, howtopof the middle-income range. to defense, compared with the South ever, even in the Muslim countries(In 1971 the literacy rate in Kerala Asian average of 3.4 percent-made where the cultural reasons for lowwas 69 percent; Tamil Nadu and it easier to finance these programs. female enrollment are strongest.Maharashtra were next in India Good literacy and nutrition con- The eventual impact this couldwith 45 percent and Rajasthan was tributed to high life expectancy have on population growth is conlastwith 21 percent.) At the other and low infant mortality, fertility siderable. A study in Bangladeshextreme, Nepal's human develop- and population growth. (The found that, as in other countries,ment indicators are more like those essential ingredients and results schooling reduced fertility even inof the typical African country. were similar in Kerala.) But Sri the absence of a strong familyHuman development issuesLanka's experience also highlightsthe importance of concentratingplanning program. But without astrong program, a large and earlyThe successes of Sri Lanka and spending on those who need it decline in fertility is unlikely.Kerala demonstrate the potential most. The provision of coverageas well as the difficulties of human to all income groups and educational NUTRITION. Food productiondevelopment and poverty reduction levels resulted in a fiscal burden has roughly kept pace with popuinSouth Asia. They also confirm which could not be sustained (page lation growth, but malnutritionthe potency of an early start: Sri 62). More generally, Sri Lanka's remains widespread. It is due moreLanka's literacy rate in 1900 exceed- economic performance has not yet to people not being able to affordedthat of Pakistan and Bangladesh matched its progress on human food than to any overall shortage:in 1975. development (see box overleaf). bumper harvests in India in 1976-78In relation to its income, Sri Lankaresulted in a large increase in foodhas extraordinarily high life FERTILITY AND WOMEN. While stocks, but malnutrition (whileexpectancy and literacy (although population growth in South Asia reduced) remained widespread.89

tion than on individual diseaseTradeoffs in Sri Lanka control programs. While theBut pricing policies discouraged new region's ratio of physicians toSri Lanka's record on life expectancy, investment in tea and other export crops. population is high by the standardsliteracy and fertility (in relation to its low And there was too much emphasis on of low-income countries, they tendincome level) is one of the best in the industrial import substitution and tooworld. But to achieve this the govern- little on export promotion-in part because to be clustered i urban areas.ment has spent on average over the past of an increasingly overvalued exchange The relative abundance of highlytwo decades nearly 10 percent of GNP on rate. After 1970 the economy was hit by educated people in South Asiaeducation, health and nutrition pro- bad weather, which affected agricultural (especially India), and the improvedgrams. To what extent, then, were these production, and by a steeper fall in theachievements in human development at world price of its exports relative to itsooutlook for economic growth,the expense of economic growth? imports. These problems were aggravated should allow the larger countriesGrowth of GDP in the 1960s was 0.7 until 1977 by poor economic management in the region to tackle the challengpercentagepoints above the low-income -including an unresolved conflict with ing tasks of (a) increasing the shareaverage, inpartreflecting one of the highest the private sector (which depressed its of spending on primary educationgrowth rates of rice production in the investment and expansion), excessive useworld. In the 1970s, though, slower growth of public investment for highly inefficientin agriculture and especially manufac- industrial projects, and expansion of theand expanding enrollment, espe-cially among girls and the poor;turing caused Sri Lanka's GDP growth public payroll in an expensive and unsuc- (b) improving the efficiency of therate to be somevvhat below the low-income cessful attempt to curb unemployment. educational system-better quality,average. But because Sri Lanka's pop- The tradeoff between expenditures on fewer dropouts and repeaters; andulation growth rate was well below the human development and growth in Sri ) expanding the network oflow-income average (it fell to 1.7 percent Lanka has thus not been so sharp as isa year in the 1970s), the growth of GNP sometimes suggested. In the 1960s fairly primary health centers (India isper person over the period 1960-77, at rapid growth permitted expansion of social already devoting renewed attention2.0 percent, was above the low-income expenditures. In the 1970s growth deteri- to this).average of 1.4 percent.orated for reasons generally independentSri Lanka has thus done no worse in of the human development spendingtermsof growth than other countries at and indeed caused a decline in real Primarily middle-income regionsits income level, while greatly out-perform- expenditures per person on health anding them in human development. But it education, as well as in food distribution With some injustice to theircould have done even better-realizing per person. The election of 1977 led to considerable diversity, the threemore of the economic potential of its a change of government and to sub- primarily middle-income regionshuman resources-had better economic stantial alterations in policies. From 1977policies been pursued. to 1980 annual GDP growth is estimated can be characterized as follows.In the 1960s Sri Lanka's economic to have spurted to 6.5 percent, or aboutmanagement was better than in the 1970s. 5 percent per person.* Middle East and North Africa:income growth has been extremelyrapid in recent years, reflectingthe direct and indirect effects ofoil revenues; but human develop-Calorie consumption per person in ultimately on raising the incomes ment still lags behind.Sri Lanka has not been higher than of the poor. * Latin America and the Caribinthe rest of South Asia, but there bean: the most urbanized andhas been much less malnutrition EDUCATIONANDHEALTH. Spend- industrialized region, with highsimply because food has been ing on education has been relatively average levels of human developrelativelyevenly distributed. low-about 1.5 percent of GNP in ment; economic and social progressIndia, Pakistan and Bangladesh Bangladesh, 2.5 to 3 percent in has been rapid, despite fast popularespectivelyspent 0.6 percent, 1.9 Burma, India and Sri Lanka-mainly tion growth; yet one in seven peoplepercent and 0.1 percent of their because educational costs are the still live in absolute poverty.GNPs on limited food subsidies in lowest in the world, which in turn 0 East Asia and Pacific: best pertheearly 1970s-but with relatively reflects the large supply of educated formance on growth of incomeslittle nutritional effect (outside people. Except in Burma and Sri and human development in relationKerala), since rural areas and urban Lanka, however, policies have to income; rapid growth has beensquatters were largely bypassed. tended to favor higher education: based on efficient use of labor,Greater attention to nutritional most poor children still fail to capital and technology rather thanconsiderations in food production complete primary school. on natural resources.and subsidy programs could have In health, future gains will deamajor impact; but sustained nu- pend more on improvements intritional improvement will depend nutrition, health care and educa- The countries of the Middle East90

and North Africa cover the spec- growth during the 1970s should regions account for the bulk oftrum of average incomes-from ensure fairly rapid expansion in commercial borrowing by devel-Kuwait, among the richest coun- the 1980s. oping countries, with Mexico,tries in the world, to Afghanistan, Growth in East Asia and Latin Argentina, Brazil, South Koreaone ol the poorest. Growth has America has in general been excel- and Venezuela alone accountingbeen rapid even in the non-oil lent. Strong economic management for 44 percent of the total in 1979.countries, which benefited from meant that these were the only Another crucial international intheoil boom through migrants' regions in which oil importers grew fluence on their growth prospects,remittances and inflows of official faster in the 1970s than in the both directly and through its efandprivate capital. (About 10 1960s. The adjustment period will fect on credit-worthiness, is worldpercent of the people in the region see a slowdown in their growth, demand for their manufacturedare directly dependent on remit- but by the mid-1980s their pros- exports.tances, which are often large-an pects look quite good-so long as The major East Asian exportersaverage of $4,000 a year per good management and political alone accounted for more than 40Moroccan migrant, for example.) stability are maintained, and so percent of developing-countryIn the 1970s GNP per person in long as growth in world trade and manufactured exports in 1977;the region rose 4.9 percent a year; capital flows to developing coun- despite some protectionism inhigher real oil prices meant that tries also pick up by then. industrial countries, they havegrowth in purchasing power was Growth in both Latin America sustained rapid export growth byhigher still (see box on page 4). and East Asia depends heavily on diversifying their product lines.The same factors that spurred commercial finance. The two This flexibility allowed them tomaintain growth in the 1970sdespite slower growth in the worldSex, length of life and developmentas a whole. It also means theyhave more freedom than otherIn developed countries, women live longer with the extent of education, especially non-oil developing countries tothan men-on average by more than six for women.years. This is not so in all developingcountries, especially the poorest onesoil prices by greater borrowing or(see table). In most of South Asia, women Excess of female over male life by increasing their exports (andon average die two to three years sooner expectancy, selected countries, 1970s intensifying import substitution).than men. In low-income Indonesia, Region Differencethough, women live longer than men. and country in years Human development: regional issuesIn most middle-income countries, South Asiaapart from those in the Middle East and Bangladesh -2.0 Some countries in East Asia andLatin America have achieved levelsconsiderably since the time of some of Sri Lanka 3.0 of literacy and life expectancythese estimates), women live substantially East Asia comparable to those in the indus-North Africa (where incomes have risen India -2.5longer than men. In East Asia and Latin Indonesia 2.0 trialized countries. In all the threeAmerica, moreover, this has been so for Peninsular Malaysia 4.5as long as statistics are available. But South Korea 6.0 regions absolute poverty has beenthe female advantage has increased-for Thailand 6.0 reduced significantly but remainsexample, in Argentina from around one Latin America substantial.year in 1900 to more than six years inthe 1970s. Argentina 6.0In 1som countries therehasbeena Brazil 3.0 MIDDLE EAST AND NORTH AFRICA.In some countries there has been a Costa Rica 4.0 Terpdeooi rwhoreversal. In Sri Lanka, for instance, women Mexico 4.0 The rapid economic growth ofon average in 1953 lived one year less recent years has probably cutthan men; by 1962 they had pulled level; Middle East and considerably the proportion ofby the early 1970s they were ahead by a North Africamargin of about three years. A similar Algeria" 1.0switch occurred in Turkey between the Iraq 0.5absolutely poor people in theregion. Nonetheless, there is still1930s and the 1970s. Iran -0.5 serious poverty in the countriesEconomic development thus tends to unisia . not rich in oil, and to a lesser deraisewomen's life expectancy more than Industrialized countriesgree also in Iran, Iraq and Algeria.men's. But regional differences in the size Italy 6.0 As in Sub-Saharan Africaand evolution of the gap, and the excep- Norway 6.0tional cases of Sri Lanka and Turkey United States 8.0 income differences between coun-(see next page), suggest an association a. Late 1960s. tries are related more to theirnatural resources than to institu-91

tions, human skills or economic Figure 7.7 Latin Americ and the relation with income. There is alsostructure. In most countries life Caribbean: life expectancy in scope for reallocation of humanexpectancy is well below what, relation to income per person, 1978 development expenditures. Forwould be expected at their income 75 y example, some of the heavy sublevels(see Figure 7.6); the sameCubaArgentina Trinidad- .- ba ruguay"and T;brI sidies on urban food and universityis true of literacy. Birth rates re- El pamnara Costa Rica education that are common in themain very high; of the ll countries 65 Saedo . Venezueia region could be diverted to ne-Praguay ~Baiwith the highest fertility rates in 60 Ecuador- colombia Wo-ldioide coin' glected rural areas and other uses.the world, eight are in the Middle rast -GuatemalaEast and North Africa. Death ratesPe \ Niaragua LATIN AMERICA AND THE CARIBhavecome down very sharply in5 0Bolivia BEAN. The countries of the "souththerecent past, but infant mor- ern cone"-Argentina, Chile andtality rates remain high-one in 0 1,000 1,500 2,000 ,2,500 3,000 Uruguay-as well as Cuba, Panama,GNP p,e perpr,sn, k daik,r,four in Afghanistan, for example. a. Derived fro cross-countrV equation relaieg life Jamaica, Costa Rica and TrinidadPart of the reason is that the epectacY to GNP pe person. and Tobago, have achieved lifegap between male and femaleexpectancy (see Figure 7.7) andeducation is larger in this region educational levels approachingthan in any of the others. But it overnight. Tremendous amounts those in the developed countries.is closing rapidly: the primary- of money are indeed being chan- The southern part of Brazil reschoolenrollment rate for girls neled into physical investments sembles these countries; but therose from 40 percent around 1960 and improving social conditions in northeastern part lags behind andto 60 percent in the mid-1970s; the oil-producing countries. In accounts for the largest concenprogresswas particularly impres- most cases, though, the manpower tration of absolute poverty in thesive in some countries-up from needed to complement this effort region. The other countries fall58 percent to 90 percent in Turkey, is not available domestically; and into two groups. The first consistsfor example, and from 43 percent it takes time and organization to of the smaller, poorer countriesto 81 percent in Tunisia. It is sig- make effective use even of trained of Central America and the Caribnificantthat these two countries people from abroad. bean plus Bolivia, Ecuador andhave the lowest fertility rates in Similarly, even when virtually Paraguay; more than half theirthe region. all school-age children are enrolled people live in rural areas whereThe challenge for many countries at school (as they are in some of health and education services areis to use the rapid increases in these countries), it will take more usually sparse. The second groupincome from nonrenewable re- than three decades-without adult -Peru, Mexico, Colombia andsources for productive investments literacy campaigns-to raise the Venezuela-are larger and moreand better health, education and overall literacy rate above 90 per- than 65 percent urbanized.nutrition. But this cannot happen cent. It may take even longer Throughout the region, there isbefore life expectancy approaches no significant difference in primarythelevels of the industrialized school attendance between boysFigure 7.6 Middle East and North countries. and girls, but there is betweenAfrica: life expectancy in relation For the richer countries in the urban and rural areas. Primary entoincome per person, 1978 region, then, money is not the rollment rates tend to be high; butintt." W-) main obstacle. But for the others, only a small proportion (often less70 Kuwait' the financial constraint on human than 10 percent) of children in65- W-1ldwide n-ri development programs is likely to rural areas complete primary60 - /SyriaTunisiaM5rocM o \Algeria *Iraq Libyaremain serious, especially in Morocco,Afghanistan, the twoschool. In many Latin Americancountries, higher education hasIran *Saudi Arabia Yemens and to a lesser extent in expanded very fast, accounting forEgypt, Syria, Turkey and Tunisia. the bulk of education budget in-4 5 .Yrmen PDR Fairly rapid growth in most of creases. Spending on primary40- YemenAR these countries, however, should education could be increasedVvfi, j E [ + T T [0500 1,000 1,500 2,000 6,000 10,000 14,000permit the increases in humandevelopment expenditures thatdramatically if higher educationwere financed to a much larger92GNP p,, pter .ers rddtlarnc -rr'a. Derived fro coss-ountr equation relating life are needed to bring social indica- extent from tuition fees, withexpect-y to GNP pee Pero. tors gradually into a more normal assistance for those not able to pay.

The high level of urbanization well-educated populations, rela- flecting substantial numbers ofin the region means that water tively equal income distributions underage and overage pupils, assupply and sanitation systems and rapid income growth, South well as near-universal enrollmentwould do more to improve health Korea and the city states of Hong of children in the primary schoolthanin other regions-water pollu- Kong and Singapore have made age group).tion and poor sanitation are more tremendous strides in human de- The most serious poverty is inserious in congested cities than in velopment and reducing poverty. Cambodia. Indonesia is a specialvillages. Experience in Brazil, They have combined extensive case; in many respects it is similarColombia and Mexico has shown human development programs to a South Asian country-Java isthat there is considerable potential with excellent economic policies. one of the most densely populatedfor rich users to subsidize the Rapid economic growth has in regions of the world, and haspoor in urban water and sewerage turn allowed further human de- serious malnutrition and poverty.systems. But there must be com- velopment. To a lesser extent this At the same time, oil and the (relplementaryefforts to provide pri- has also been the case in Malaysia, atively untapped) agriculturalmary health care in both rural Thailand and the Philippines; but resources of the outer islandsareas and urban slums. Some their records on income distribu- distinguish it from any of thecountries, including Mexico, tion and poverty are more mixed. South Asian economies. RecentJamaica and Panama, have begun Though lack of information economic growth has been rapid,to indcude family planning services lends a certain haziness to what but there has been controversyin primary health care systems; for is known about China and North over the extent to which it hasother countries to do so would be Korea, it seems that with a very led to less poverty.a major advance. different development strategy One notable feature of EastThough average food consump- they too have enjoyed consider- Asia's success has been the willtionis adequate in most countries, able success (though there is some ingness of most governments tomany poor people are malnour- controversy over what their growth set initially low standards in orderished. ]I the longer term, measures would be at international prices). to achieve comprehensive covertoincrease employment and the North Korea seems to have ex- age. Another has been the varietyincomes of the poor will help panded output rapidly, made of approaches adopted, despite theovercome this, as will measures to extensive improvements in health active involvement of all governstimulatefood production. But and education, and as a result ments in promoting economic andrecent direct nutrition programs, lowered fertility. China has prob- human development.including subsidies and nutrition ably done even better on human * Education. Fee-paying schoolseducation for the poorest groups, development in relation to its in- have traditionally played a majorappear to have been effective in come level-the gross primary- role in this region, and still do inChile and Colombia. school enrollment rate has risen higher education-for example, inReaching some of the more from about 25 percent in 1949 to the Philippines and South Koreaisolated and ethnically distinct well over 100 percent today (re- (page 74). At the primary level,rural poor is more expensive andthe emphasis has been on achievadministrativelymore demandinging universal enrollment. To dothan serving urban dwellers. More Figure 7.8 East Asia and so, South Korea has accepted classfundamentally, mustering the Pacific: life expectancy in re- sizesthatarelargebyinternationalfinancial and administrative re- lation to income per person, 197S standards (averaging about 60 butsources needed to reduce absolute 75 L.Z" P"n-a rising to more than 80 in manypoverty faster will require a public7 0 -Ch!ina Hong Kong metropolitan schools).commitment-thus far lacking in 65-VietNam S.Korea * Health. The world's bestmany countries-to the goal of 60- Korea examples of universal primarymaking basic human development Thailand Philippines health care at low cost are in Chinaservices available to all. so- NewGinea (see box on page 74) and the north-45 -/.d lnia ...em provinces of Viet Nam. OtherEAST ASIA AND PACIFIC. In most Laos countries have also emphasizedcountries of the region, literacy 40I primary health care-though thereand life expectancy (Figure 7.8) 0 500 1,000 1,500 2,000 2,500 3,000 3,500 are important exceptions to theare well above the norm for their d. Derived fro crw - rtIeq-nn-Wring rule. For example, medical care inincome level. With skilled andlifee-pec-tn .ytoGNper per-South Korea has depended mainly93

on doctors in private practice. exhaust the national income twice tions of interest to planners, andPartly as a result, matemal and over. There are always acute choices on the principles and informationchild health care is often inade- between the well-being of the needed to answer them.quate, and life expectancy is not current generation and of its heirs; * From the point of view ofas high, relative to income, as and between the well-being of the accelerating growth and reducingliteracy. poor and of the less poor. It is absolute poverty (in both its income* Nutrition. Substantial increases very hard to forecast the conse- and its nonincome aspects), is thein the incomes of the poor have quences of particular policies, or right balance being struck betweenallowed them to buy more food; to choose the best mix of policies physical investment and humangood agricultural performance to achieve particular objectives. development?has ensured that supplies are ade- The nature of the best strategy * In human development, is thequate. In the centrally planned also varies between (and within) right balance being struck betweeneconomies, there has been greater countries, not simply because of education, health, nutrition andresort to rationing and subsidies. broad differences in their economic family planning?While average nutrition levels in and social structures and prospects, * Within each of these areas, isthe region are satisfactory, serious but also because of differences in the right balance being struckmalnutrition still exists in lower- the feasibility and likely outcome between basic and more advancedincome groups in Indonesia, of specific policies and programs. programs? Would different pro-Malaysia and the Philippines as It would be a serious mistake, grams be more effective or morewell as in Cambodia. though, to suppose that there are economical?no lessons at all. Effective planning In addressing all these ques-Lessons for planning is largely a matter of identifyingthe important issues and linkages,tions, it is necessary to rememberthat there are no laws, only circum-One familiar conclusion from this and of bringing the light of evidence stances-but also that applyingreview of regional issues is that and experience to bear on them. general principles to specific cirthereare no simple lessons, no This regional review and the chap- cumstances is the springboard ofeasy prescriptions. There are always ters that preceded it have thus successful action.enough desirable uses of money to focused on a particular set of ques-94

Chaipter 8 Summary and conclusionsImpaled on the trident of inflation it need not. In the High case the cent) and faster than in the 1970s.and recession in the developed oil-importing developing coun- Without it, the growth of the oilcountries and much more expen- tries would grow at about 2.4 per- exporters would be almost half asive oil, world growth prospects cent per person a year in 1980-85, percentage point lower, and thathave deteriorated in the past year. and by 1990 there would be 80 of the oil-importing countries aHigher oil prices have improved million fewer people in absolute full percentage point lower. Muchthe outlook for the fifth of the poverty than in the Low case. This of the first part of this Report hasdeveloping world's population would require that developing been about the policy decisionsthat lives in oil-exporting coun- countries adjust successfully- that will determine the actual outtries;their average GNP per per- cutting their external deficits by comes, in both the near term andson could grow at around 3.0 to raising exports rather than lower- the longer term.3.5 percent a year in the first half ing imports, while increasing bothof the 1980s. But for the four- investment and efficiency in re- External factorsfifths that live in oil-importing source use. What the industrialcountries,the first half of the ized countries and capital-surplus * Trade. The ability of develdecadewill involve slower growth. oil exporters do is also vital-in oping countries to afford theFor developing countries as a whole, stimulating demand for develop- imports they need for growth degrowthwill be substantially below ing-country exports, in recycling pends crucially on their exports tothat forecast in last year's Report. oil surpluses and in providing aid. the industrialized countries, whichGovernments of oil-importing But even in the High case, the currently constitute two-thirds ofdeveloping countries must take growth of income per person in their market. The industrializedsteps to reduce current account the developing countries will not countries, even those determineddeficits and adapt to more expen- match that in the industrialized to combat inflation by restrainingsive energy-and at a time when countries. Taking the steps needed growth, must minimize the effectsdemancd for their exports from in- not just to attain, but to exceed, their deceleration will have on thedustrialized countries has slowed, the High case is thus the major developing world. This means exnotjust because of the rise in development challenge of the panding the volume of imports,energy prices, but because of next five years. maintaining the relatively freecyclical and structural problems The success of the adjustment trading opportunities that nowas well. The GNP growth of oil- by developing and other countries exist for most products, and startimportingdeveloping countries to the economic circumstances of ing to lower the barriers againstcould thus fall to about 1.8 per- the early 1980s will not only other goods of particular imporcentper person a year (the Low largely determine their growth tance to developing countries, suchcase). Prospects for the low-income during that period but will also as textiles, clothing, leather goods,oil importers would be particu- affect the chances of an accelera- electronics, steel and some agrilarlybleak in this scenario: income tion of growth in the second half cultural commodities. To do soper person in low-income Sub- of the decade. With recovery in would increase the localized painsSaharan Africa would decline; and the industrialized countries and in of structural change in the develthenumber of people in absolute world trade and with continued oped countries. But there arepoverty in the developing world sound domestic economic policies, internal remedies for these pains,as a whole would increase. the oil-importing countries could and liberalization of trade will payThis Low case (or an even worse grow almost as rapidly (3.2 per- off in faster productivity growthoutcome) could come about-but cent) as the oil exporters (3.4 per- and lower inflation. The oil-95

exporting nations can also help by donors should make every effort borrowing from commercial andrapidly expanding their imports to expand their aid relative to bilateral lenders and multilateralfrom developing countries. GNP, even in periods of domestic institutions.* Energy. The developing coun- stringency. And they should con- 0 Investment and productiontries that import oil have been centrate their aid even more on efficiency. In attracting (especiallyhard hit by the price explosion of low-income countries. commercial) finance, and in speedthepast 12 months and can expect Commercial capital, mainly from ing development more generally,their energy costs to rise further banks but also from the bond trade and energy strategies playin real terms. At the same time, market, private direct investment an important role. So do othermodernization of their economies and official sources, will be avail- policies that increase investment,will spur demand for energy; so able to help the middle-income improve administration, raise agritheyface a continuing need to countries. But not all countries cultural productivity and makeadapt to the rising cost of imported will be well placed to borrow better use of capital, labor, naturaloil. They will find this easier if oil- much more from private commer- resources and imports.exporting countries can avoid cial sources; without additional * Human development. Thesupply disruptions and sharp price financial assistance from other internal factor on which thischanges. More generally, the world sources, their growth will slow Report has focused is the humaneconomy will perform better if oil down. In particular, there is not one: the role not only of educationprices follow a smooth path; vio- enough long-term program (non- and training, but also of healthlent fluctuations play havoc with project) finance to support the and nutrition. In addition to theinternal resource allocation and structural changes required in important direct benefits that protheexternal payments system. many countries. Some will bene- grams in these areas confer, theReliable supplies and smooth price fit from the structural adjustment Report stresses another aspect,changes will be more likely if de- lending of the World Bank and long-standing but often neglectedveloped countries improve their assistance from the IMF; enlarged -the role of human developmentenergy conservation and develop official flows of this sort, particu- as investment, contributing toalternative sources. larly from multilateral agencies, growth. The importance of tech-* Capital flows. Current ac- could and should play a larger role. nical, professional and managerialcount imbalances will be large inskills is well known. Less wellthe next few years, again requir- Internal factors known but firmly established bying special efforts to recycle finance research is the importance ofto oil-importing countries, especi- While powerfully influenced primary education, which affectsally in the developing world. There by the international environment, the knowledge and attitudes ofis a serious risk that reluctance or the progress of developing coun- farmers and other workers.inability to finance large external tries depends even more on their Investment in human resources,deficits will lead to levels of trade, own policies and initiatives. like other kinds of investment,investment and economic effici- * Trade, energy and capital can be ineffectual unless compleency-hence,of growth-lower flows. In trade, the developing mented by other productive inputsthan anyone would wish. Even in countries can use pricing and and by policies to ensure thatthe later years of the 1980s, when other policies to stimulate pro- resources are efficiently used.the severity of payments imbal- duction of internationally traded Human development programsances is expected to diminish, the goods-both exports and import must also be carefully chosen andgrowth of developing countries substitutes; but they should avoid efficiently carried out. Despite thesewill continue to depend on inflows bias toward import substitution, qualifications, there is strong eviofforeign capital. since this reduces efficiency and dence to support the common-For the low-income countries, discourages exports. With regard sense proposition that human dewhichcan borrow little commer- to energy, they, like the industri- velopment can make a valuablecially, this means more aid. There alized countries, can minimize the contribution to growth.is a real danger that the modest loss of real income caused by Studies at the firm, farm andaid increases projected in this higher oil prices through conser- project level have shown that bet-Report will not be achieved. In vation and greater domestic energy ter education, health and nutritiontheir own long-term interests, as production. As to capital flows, can raise incomes and productivwellas those of the developing they can take full advantage of ity, and that the economic rate ofcountries, both OECD and OPEC their opportunities for prudent return to investment in schooling96

is high, frequently well above that tion. Growth is vital to reducing all according to circumstances andof physical investment. For pri- aspects of absolute poverty-mal- policies. And it has its own momaryschooling, the rates of return nutrition, ill health and illiteracy, mentum: what is done (or notin a large group of countries aver- as well as low income-especially done) today powerfully influencesage more than 20 percent. At the in the poorest countries. But growth what can be done a decade oraggregate level, cross-country unaccompanied by other mea- more ahead.comparisons show that develop- sures may neither boost the in- * Practical aspects of humaning nations with higher literacy comes of the poor much, nor lead development. Human developmentrates have grown faster, even to much progress on nonincome is easier said than done. But muchwhen allowances are made for aspects of poverty. On both counts, has been learned about the comotherinfluences on growth and human development programs have parative efficacy of different poliforreverse causation-the effect a part to play. cies and programs. In nutrition,of growth on literacy. This finding * Raising the incomes of the for example, there is growingis reinforced by case studies and poor. The Report has discussed a agreement that the central issue ishistorical evidence. wide range of policies, many of not improving the balance be-* Population. One important which positively reinforce growth, tween calories and protein butway in which human develop- that can help raise the incomes of increasing the amount of staplement contributes to raising aver- the poor. Support of agriculture, foods the poor can afford; this inageincomes, as well as to other land and tenure reform, policies to volves raising their incomes, stimsocialgoals, is by reducing popu- raise the demand for labor and ulating production of these foodslation growth. Reducing fertility various kinds of research are four and, in some cases, targeted subisnot an end in itself; but lower important areas considered. Human sidies. In health the vital role ofpopulation growth in most devel- development is an essential com- primary care, together with eduopingcountries tends to result in plement. It accelerates the spread cation and control of mass diseases,greater investment per person in of new techniques to small farms is now generally acknowledged. Inphysical capital and human skills and increases the opportunities of fertility there is better under--and thus in faster growth. Better the poor for employment in the standing both of how to implenutritionand health, by lowering modern sector. And because fertil- ment family planning programsinfant mortality, are essential in- ity and family size are reduced, and of how such programs intergredieritsof fertility decline. So is the earnings of adults do not have act with socioeconomic and culturaleducation, especially of women, to be spread so thinly among chil- conditions. In education moresince it delays marriage, alters atti- dren and other dependents. importance is now attached to itstudes about family size and makes * Nonincome aspects of pov- behavioral effects; and in raisingmodern contraception more ac- erty. The worst aspects of absolute educational standards, the signifceptable.Increases in income poverty include not only low in- icance of class size has been shownthemselves are a cause, as well as come, but also malnutrition, fre- to be much less, and that of teachaconsequence, of reduced fertil- quent child death, disease and ing materials much more, thanity: people who are less poor have ignorance. All can be helped by was formerly believed.good reasons for wanting fewer human development programs. Hard experience has also shownchildren (including less need for Less obviously, there is a complex the difficulties of implementingtheir labor and for support in old interdependence between the dif- human development and how toage). And research has confirmed ferent facets of human develop- tackle them. Political obstaclesthat farnily planning programs also ment-as there is between human such as urban bias, competitionare important in bringing about development and increases in for resources, and the weak posislowerpopulation growth. income. Health, nutrition, educa- tion of the poor often have to betion and fertility all affect each overcome; but efforts to improveHuman development and poverty other. Most striking, partly becauseleast expected, are thebasic education, nutrition and healthhave a universal political appeal.Hurman development can thus powerful effects that education, The financial constraint on proassistgrowth. But the Report has especially female education, has grams often appears binding; butstressed even more its potential on fertility, child health and nutri- frequently there are unexploitedcontribution to reducing absolute tion. As this suggests, human de- ways of cutting costs and harnesspoverty.velopment is a circular process, ing additional resources. Human* Growth and poverty reduc- one that can be vicious or virtuous, development programs can also97

encounter serious administrative The economic payoff to human ities are important. So are incomeconstraints; here it is important development eases the tradeoffs levels and growth prospects, andnot only to improve administra- between growth and poverty re- past progress in human developtionbut also to choose the most duction. But it does not eliminate ment. In considering human demanageablemix of programs and them, which means that policy velopment and other steps toto encourage local participation. decisions will be affected by the reduce poverty, the low-incomeMore paradoxical, but equally relative emphasis attached to countries of Africa and Asia, forvexing, is the gap between need increasing growth, raising the in- example, must perforce put strongand demand that can sometimes comes of the poor and attacking emphasis on economic returns.lead to underused schools and the nonincome aspects of poverty. Nothing can make widespreadclinics or the underrepresentation And whatever the balance of absolute poverty melt away overofgirls and women in human de- objectives, the difficulty of quan- night. And human developmentvelopment programs. Experience tifying costs and benefits often at best can do only part of the job.suggests ways in which this gap compounds the problems of de- Without effective policies on othercan be narrowed, and in some ciding how large the human fronts, and without active and encasesbridged, development budget should be, lightened support from the rest of* Tradeoffs and choices. Plan- and how it should be divided the world, progress will be agonnershave to choose at the margin among education, health, nutri- izingly slow. But these other polbetweenhuman development and tion and family planning, as well icies will not be sufficient. Theother activities, and between dif- as within each of these areas. most valuable resource any counferenthuman development activi- The way in which these dilem- try has is its people, the meansties. The choices are not easy, nor mas are resolved must vary accord- and the end of economic advance.should they be the same in all ing to the circumstances of eachcountries.country. Political and social prior-98

Stat.istical appendix to Part ITable SA.1 Growth of population, GNP and GNP per person, 1960-90(average annaual percentage growth rates)Population GNP, GNP per person'Country group 1960-70 1970-80 1980-85 1985-90 1960-70 1970-80 1980-85 1985-90 19b0-70 1970-80 1980-85 1985-90Low-income countries 2.4 2.3 2.3 2.2 4.2 4.0 4.5 4.7 1.8 1.7 2.1 2.5Sub-Saharan Africa 2.5 2.8 3.0 2.7 4.2 3.0 3.1 3.8 1.7 0.2 0.1 1.1Asia 2.4 2.2 2.2 2.1 4.2 4.2 4.7 4.9 1.8 2.0 2.4 2.7Middle-income countries 2.5 2.5 2.5 2.3 6.0 5.6 5.2 5.8 3.5 3.1 2.7 3.4East Asia and Pacific 2.8 2.3 2.1 2.0 7.7 8.0 7.0 7.3 4.9 5.7 4.8 5.2Latin America and Caribbean 2.8 2.6 2.6 2.4 5.7 5.8 5.5 6.3 2.9 3.2 2.9 3.8Middle East and North Africa 2.5 2.6 2.7 2.5 3.6 6.4 5.1 5.3 1.1 3.8 2.4 2.7Sub-Saharan Africa 2.5 2.9 3.2 2.8 4.8 4.5 4.9 4.3 2.3 1.6 1.7 1.4Southern Europe 1.4 1.4 1.3 1.2 7.0 4.6 3.8 3.7 5.6 3.2 2.5 3.4Oil-importing developing countries 2.4 2.3 2.3 2.2 5.6 5.1 4.7 5.5 3.1 2.7 2.4 3.2Low-income countries 2.5 2.4 2.4 2.2 4.1 3.3 4.1 4.6 1.6 0.9 1.7 2.4Sub-Saharan Africa 2.5 2.8 3.0 2.7 4.2 3.0 3.1 3.8 1.6 0.2 0.1 1.1Asia 2.4 2.3 2.3 2.1 4.1 3.4 4.3 4.8 1.6 1.1 2.0 2.6Middle-income countries 2.4 2.3 2.3 2.1 6.1 5.5 4.9 5.7 3.6 3.1 2.6 3.5East Asia and Pacific 2.8 2.3 2.1 2.0 7.8 8.0 6.9 7.3 4.9 5.6 4.7 5.2Latin America and Caribbean 2.6 2.5 2.4 2.3 5.4 6.0 5.0 6.2 2.7 3.5 2.6 3.8Middle East and North Africa 2.4 2.6 3.1 3.1 2.3 3.0 3.7 3.9 -0.2 0.4 0.6 0.8Sub-Saharan Africa 2.5 2.9 3.0 2.7 4.9 3.9 4.6 4.2 2.4 0.9 1.6 1.4Southern Europe 1.5 1.3 1.3 1.2 7.0 4.6 3.8 4.7 5.4 3.2 2.5 3.4Oil-exporting developing countries' 2.6 2.5 2.7 2.5 5.5 6.1 6.3 5.9 2.8 3.5 3.5 3.4All developing countries 2.5 2.4 2.4 2.2 5.6 5.3 5.1 5.6 3.1 2.8 2.6 3.3Industrialized countries 1.0 0.7 0.5 0.4 5.0 3.1 3.3 4.0 3.9 2.4 2.9 3.5Capital-sulrplus oil exporters 3.0 3.1 2.8 3.0 10.5 8.4 5.3 5.8 7.3 5.0 2.8 2.8Centrally planned economies 1.7 1.3 1.2 1.1 .. 5.2 4.6 4.5 .. 3.8 3.4 3.3Sources: World Bank estimates; High-case projections of World Development Report, 1980.a. 1977 prices.b. Estimates for oil-exporting developing countries are based on analysis of 11 major oil exporters.Table SA.2 Commercial primary energy production and consumption, Table SA.3 Composition of world commercialby country group, 1977-90 primary energy supply, 1970-2020(million barrels of oil equivalent per day)(percent)1977 1980 1985 1990 Eergv source 1970 1980 1990 2000 2020Produc- Consump- Produc- Consump- Produc- Consump- Produc- Consump- Petroleum 47.6 45.8 38 30 17Country group hon tion tion lion tion lion liO tion (OPEC) (23.0) (20.4) (16) ( 12) (6)Industriatized Coal 32.3 30.0 31 31 32countries 47.5 70.6 50.1 70.1 60.0 80.7 72.5 92.5Centrally Nuclear 0.1 1.0 2 7 16planned Hydro 2.0 2.7 4 5 5econoraies 42.6 40.3 44.8 42.5 54.0 51.8 65.0 64.3 Gas and other 18.0 20.5 25 27 30Capital-surplus Total 100.0 100.0 100 100 100oil exporters 25.2 1.6 21.4 1.9 23.2 2.7 26.1 3.9Developing Memo itemcountries 18.9 17.1 21.5 18.7 28.8 25.0 37.9 34.3 Total worldNet oilprimaryexpcrters 11.9 3.9 13.0 4.6 16.1 6.0 19.4 8.3 commercialNet oilenergyimporters 7.0 13.2 8.5 14.1 12.7 19.0 18.5 26.0 supply, 100.9 137.8 201.5 270 390Bunkersand ,973-78 Sources: UN, World Energy Supplies (Series J, no. 22);other n.a. 4.6 n.a. 4.6 n.a. 5.8 n.a. 6.5 World Bank projections.Total 134.2 134.2 137.8 137.8 166.0 166.0 201.5 201.5 a. Million barrels per day of oil equivalent.Sources: UNl, World Energy Supplies 0973-78 (Series J, no. 22): World Bank estimates;High-case projections of World Development Report, 1980.a. Includes nonenergy uses.99

Table SA. 4 Growth of merchandise exports, by product category and country group,1960-77 and 1977-90(average annual percentage growth rates, 1977 prices)1960-77 1977-90'Industrialized Developing Industrialized DevelopingProduct category World countries countries World countries countriesFuels and energy 6.4 4.4 6.6 1.8 3.3 3.0Other primary products 4.5 5.6 3.3 3.8 4.0 3.6Food and beverages 4.6 6.3 2.8 4.1 4.3 3.9Nonfood agriculturalproducts 4.7 6.0 3.2 2.8 2.9 2.2Minerals and nonferrousmetals 4.1 3.6 5.2 4.1 4.0 3.8Manufactures 8.9 8.8 12.3 6.8 6.5 9.7Machinery and transportequipment 9.6 9.6 16.8 7.2 6.8 14.2Other manufactures 8.3 8.0 11.3 6.5 6.2 7.7Total merchandiseb 7.2 7.7 6.0 5.4 5.9 6.0Sources: World Bank; UN, Yearbook of International Trade Statistics, various issues; UNCTAD, Handbook of International Tradeand Development Statistics, various issues.a. High-case projections.b. Excludes gold.Table SA.5 Direction of merchandise trade, 1970 and 1977DestinationOil-importingWorldOil-exporting developing countries All Indus- Capital- Centrally (millionsdeveloping Low- Middle- developing Irialized surplus oil planned Unallo- of currentOrigin countries Total income income countries countries exporters economies cated World dollars)Percentage composition, 1970'Oil-exportingdeveloping countries 3.9 21.8 1.0 20.8 25.7 66.6 0.5 6.1 1.1 100.0 12,961Oil-importingdeveloping countries 3.5 17.4 2.5 14.9 20.9 69.0 1.5 7.5 1.1 100.0 39,122Low-income 4.6 21.7 8.2 13.5 26.3 53.7 4.3 14.6 1.1 100.0 5,779Middle-income 3.4 16.6 1.5 15.1 20.0 71.7 1.0 6.2 1.1 100.0 33,343All developingcountries 3.6 18.5 2.1 16.3 22.1 68.4 1.2 7.1 1.1 100.0 52,083Industrializedcountries 4.7 18.2 2.1 16.1 22.9 71.0 1.5 3.5 1.1 100.0 215,896Capital-surplusoil exporters 1.7 20.2 2.9 17.4 21.9 74.4 0.8 1.5 1.5 100.0 11,151Centrallyplanned economies 1.7 14.5 1.7 12.9 16.2 21.3 1.0 60.4 1.1 100.0 32,940World 4.1 18.0 2.1 15.8 22.0 65.4 1.3 10.1 1.1 100.0 312,070World (millionsof current dollars) 12,710 56,019 6,604 49,415 68,729 204,160 4,211 31,400 3,570 312,070 312,070Percentage composition, 1977aOil-exportingdeveloping countries 2.2 21.5 1.1 20.4 23.7 72.6 0.8 2.8 0.1 100.0 58,391Oil-importingdeveloping countries 8.4 20.5 2.5 18.1 28.9 61.8 3.1 6.1 0.1 100.0 149,854Low-income 5.4 21.9 9.4 12.4 27.3 53.6 7.7 11.5 (.) 100.0 13,495Middle-income 8.7 20.4 1.8 18.6 29.1 62.6 2.7 5.6 0.1 100.0 136,359All developingcountries 6.6 20.8 2.1 18.7 27.4 64.8 2.5 5.2 0.1 100.0 208,245Industrializedcountries 6.7 16.4 1.4 15.0 23.1 65.7 5.6 5.2 0.5 100.0 697,568Capital-surplusoil exporters 4.3 20.6 1.5 19.1 24.9 69.6 1.2 2.9 1.5 100.0 110,289Centrallyplanned economies 2.9 8.8 1.0 7.8 11.7 27.2 3.2 54.5 3.4 100.0 107,523World 6.1 16.9 1.5 15.4 23.0 62.2 4.3 9.7 0.8 100.0 1,123,625World (millionsof current dollars) 68,149 189,918 16,578 173,340 258,067 699,036 48,665 108,930 8,927 1,123,625 1,123,625Sources: UN, International Statistical Yearbook, various issues; UNCTAD, Handbook of International Trade and Development Statistics, 1979; GATT, trade system datafile; World Bank.a. Totals may not reconcile because of rounding.100

Table SA.6 Capital flows and debt of the developing countries: oil importers and oil exporters, 1975-90(billions of csfrrent dollars)Oil importersOil exportersItem 1975 1977 1980 1985 1990 1975 1977 1980 1985 1990Current account deficit before interest payments' 32.9 16.8 42.7 43.4 42.2 6.8 7.8 -11.1 4.0 30.2Interest payments 6.7 8.1 18.3 35.0 62.0 2.0 4.1 8.8 11.8 17.5Changes in reserves and short-term debt -9.1 9.9 -4.4 6.8 23.5 6.2 5.8 20.2 8.4 2.6Total to be financed 30.6 34.8 56.6 85.2 127.7 15.0 17.7 18.0 24.2 50.2Financed by medium- and long-term capitalFrom public sources 12.5 13.2 21.7 41.1 66.6 5.4 6.0 7.3 11.2 16.6From private sources 18.1 21.7 34.9 44.0 61.2 9.6 11.7 10.7 13.0 33.6* Private direct investment 4.2 3.9 6.5 9.6 16.4 2.7 2.1 3.5 5.8 8.2Private -oans 13.9 17.7 28.4 34.4 44.7 6.9 9.6 7.2 7.2 25.4Total net capital flowsCurrent dollars 30.6 34.8 56.6 85.2 127.7 15.0 17.7 18.0 24.2 50.2Constant 1977 dollars 34.2 34.8 40.0 42.1 47.2 16.8 17.7 12.7 12.0 18.5Outstanding medium- and long-term debtPublic sources 57.7 77.5 100.4 212.9 397.1 16.2 24.3 48.8 79.6 130.0Private souirces 72.6 108.9 187.1 343.4 558.5 24.7 43.9 66.5 97.5 175.4Total debtCurrent dollars 130.3 186.4 287.5 556.3 955.6 40.9 68.2 115.3 177.1 305.4Constant 1977 dollars 146.4 186.4 203.5 275.0 352.9 46.0 68.2 81.6 87.5 112.8Debt serviceInterest payments 6.7 8.1 18.3 35.0 62.0 2.0 4.1 8.8 11.8 17.5Debt amortization 12.7 18.9 28.6 65.0 114.2 3.6 6.5 12.2 23.6 40.1Interest payments as percentage of GNP 0.9 0.8 1.2 1.2 1.3 1.0 1.6 2.7 1.3 1.1Price deflator 89.3 100.0 141.3 202.3 270.8 89.3 100.0 141.3 202.3 270.8Source: Higlh-case projections of World Development Report.a. Excludes official transfers.Table SA.7 Capital flows and debt of the oil-importing developing countries:low-income and middle-income, 1975-90(billions of current dollars)Low-incomeMiddle-incomeItem 1975 1977 1980 1985 1990 1975 1977 1980 1985 1990Current account deficit before interest payments' 4.8 1.4 8.8 16.0 26.8 28.1 15.3 33.9 27.4 25.5Interest payments 0.6 0.7 1.2 2.6 5.3 6.1 7.4 17.1 32.3 56.7Changes in reserves and short-term debt 0.4 3.0 -0.9 0.7 1.0 -9.5 7.0 -3.5 6.1 22.5Total to be financed 5.9 5.1 9.1 19.4 33.0 24.7 29.7 47.4 65.8 94.7Financed by medium- and long-term capitalFrom public sources 5.4 4.7 8.3 18.5 31.4 7.1 8.5 13.4 22.6 35.2From private sources 0.5 0.4 0.8 0.9 1.7 17.6 21.2 34.0 43.2 59.5Private dlirect investment 0.2 0.2 0.3 0.6 1.0 4.0 3.7 6.2 9.0 15.4Private loans 0.3 0.3 0.5 0.2 0.7 13.6 17.5 27.9 34.2 44.1Total net capital flows* Current dollars 5.9 5.1 9.1 19.4 33.0 24.7 29.7 47.4 65.8 94.7Constant 1977 dollars 6.6 5.1 6.5 9.6 12.2 27.7 29.7 33.6 32.5 35.0Outstanding medium- and long-term debtPublic sources 24.4 32.0 44.8 89.4 172.2 33.3 45.5 55.6 123.5 224.9Private souirces 3.1 3.3 0.8 3.6 9.3 69.5 105.6 186.3 339.8 549.2Total debtCurrent dollars 27.5 35.3 45.6 93.0 181.5 102.8 151.1 241.9 463.3 774.1Constant 1977 dollars 30.9 35.3 32.3 46.0 67.0 115.5 151.1 171.2 229.0 285.9Debt serviceInterest payments 0.6 0.7 1.2 2.6 5.3 6.1 7.4 17.1 32.3 56.7Debt amortization 1.2 1.3 2.2 3.7 6.0 11.5 17.6 26.4 61.3 108.3Interest payments as percentage of GNP 0.4 0.4 0.4 0.5 0.6 1.0 0.9 1.3 1.3 1.4Price deflator 89.3 100.0 141.3 202.3 270.8 89.3 100.0 141.3 202.3 270.8Source: High-case projections of World Development Report, 1980.a. Excludes official transfers.101

Bibliographical noteThis Report has drawn on a wide and their energy policy issues are Chapter 5. The evidence on edurangeof World Bank work, as well reviewed in Fallen-Bailey and cation and farmer productivity isas on external research. Selected Byer. In the area of international surveyed in Lockheed, Jamison andsources used in each chapter are trade, Keesing considers a wide Lau; that on the rates of return tobriefly annotated below, and then range of trade issues for develop- schooling in Psacharopoulos.listed alphabetically. The World ing countries; Balassa analyzes (Psacharopoulos, along with BerryBank sources include sector policy trends in trade in manufactured and with Bowman, also discussespapers, ongoing economic analysis goods; Morawetz provides a the debate on methodologicaland research, and project, sector country case study of the effects issues in applying rate-of-returnand economic work on individual of developing-country policies on analysis.) The connections betweencountries. In addition, a set of growth in manufactured exports; education, poverty and income disbackgroundpapers is commis- Wolf analyzes the adjustment by tribution are further analyzed insioned for each Report; their pri- industrialized countries to imports Berry and in Fields. On practicalmary purpose is to synthesize the from developing countries; Sapir issues of educational reform, seerelevant literature and Bank work. and Lutz survey trends and issues Haddad and others; on cross-(Thus the sources cited in these relating to trade in nonfactor ser- country comparisons of educationalpapers are not listed separately.) vices; Kemper assesses the likely quality, see Inkeles. The evidenceMany of the background papers impact of the "Tokyo Round"; and on the effects of education onare issued as World Bank Staff Frank analyzes the "graduation" health and nutrition is surveyedWorking Papers, which are avail- issues in trade policy. On export in Cochrane, O'Hara and Leslie.able at no charge from the Bank's credit finance, see Cizauskas. The Health problems and policies inPublications Unit. The views they method for deriving estimates of developing countries are reviewedexpress are not, however, neces- the number of people in absolute in Golladay and Liese and in Golsarilythose of the World Bank or poverty is presented in Ahluwalia, laday; nutrition issues in Berg andof this Report. Carter and Chenery. in Reutlinger; fertility and otherChapter 4. On absolute poverty population issues in Birdsall. ForSelected sources, by chapter and policies to overcome it, see a quantitative analysis of the de-Chenery and others, Sen, and terminants of fertility and its effectsChapters 2 and 3. The global model Ahluwalia, Carter and Chenery. on income growth, see Wheeler.used in the projections is described On urban poverty and rural-urban The connection between educationin Cheetham, Gupta and Schwartz. migration, see Nelson. The litera- and fertility is discussed in Cochrane,The data base for the global model ture on the contribution of human O'Hara and Leslie. Kanagaratnamand for country projections is con- resources to growth is surveyed in and Pierce examine trends intinually updated, by drawing on Bowman, and its main conclusions population policy and in the impublishedsources and other data are summarized in Schultz. The plementation of family planningcollected by the World Bank; some recent cross-country analyses re- programs.of these data are presented in the ferred to in the box on human Chapter 6. Factors affecting politicalWorld Development Indicators resources and growth (page 38) are support for and obstades to human(and in the World Bank Atlas, pub- presented in Wheeler and in Hicks. development programs are dislishedannually, as well as the World Parts of this chapter (and Chapter cussed in Uphoff. Sources ofTables, published occasionally). 5) also draw on the World Bank's financing and means of reducingEnergy prospects of developing work on basic needs, which is costs for these programs are discountriesare reviewed in Hughart, summarized in Haq and Burki. cussed in Meerman. Esman and102

Montgomery survey administra- publication, Recognizing the "Invisible" Africa) and Pfeffermann (Latintive aspects of implementing the Woman in Development. America). For a wide-ranging disprograrrms.A range of factors that Chapter 7. This chapter draws cussion of development issues inresult in misperception of the heavily onthe World Bank's country Sub-Saharan Africa, see Acharyaproblemrrs of poverty is considered economic work, as well as on many and Johnston. See Selowsky onin Chambers. Social and cultural of the sources listed for preceding antipoverty policies in Latinaspects of human development are chapters. In addition, various America, and Singh on assistingsurveyed in Rogers, Coletta and aspects of human development small farmers and the landless inMbindyo. And the role of the family, and its role in poverty reduction South Asia. Detailed country caseincluding the particular problems for different regions are discussed studies of human developmentfaced by women and young in Bussink (East Asia), Davies (Sub- issues include Knight (Brazil) andchildren, is considered in Safilios- Saharan Africa), Grawe (South Asia), Isenman (Sri Lanka).Rothschild and in the World Bank's Kavalsky (Middle East and NorthSelected sources, by authorAcharya, Shankar, and Bruce Johnston. "Two Studies of Development in Sub-Saharan Africa." World Bank StaffWorking Paper, no. 300. October 1978.Ahluwalia, Montek, Nicholas Carter and Hollis Chenery. "Growth and Poverty in Developing Countries." Journal ofDevelopment Economics, 6:3 (September 1979), 299-341.Balassa, Bela. "The Changing International Division of Labor in Manufactured Goods." World Bank Staff WorkingPaper, no. 329. May 1979.Berg, Alan D. Nutrition. Poverty and Basic Needs Series. Washington, D.C.: World Bank, forthcoming.Berry, S. Albert. "Education, Income, Productivity and Urban Poverty." In King, ed.*Birdsall, Nancy. "Population and Poverty in the Developing World." World Bank Staff Working Paper, no. 404.July 1980.*Bowman., Mary Jean. "Education and Economic Growth: An Overview." In King, ed.*Bussink, Willem, and others. "Poverty and the Development of Human Resources: Regional Perspectives." WorldBank Staff Working Paper, no. 406. July 1980.*Bussink, Willem. "Reflections on Socioeconomic Development and Poverty in Southeast Asia." In Bussink and others.*Chambers, Robert. "Rural Poverty Unperceived: Problems and Remedies." World Bank Staff Working Paper, no. 400.July 1980.*Cheetham, R. J., S. Gupta and A. Schwartz. "The Global Framework." World Bank Staff Working Paper, no. 355.September 1979.Chenery, Hollis, Montek S. Ahluwalia, C. L. G. Bell, John H. Duloy and Richard Jolly. Redistribution with Growth. NewYork: Oxford University Press, 1974.Cizauskas, Albert C. "The Changing Nature of Export Credit Finance and Its Implications for Developing Countries."World Bank Staff Working Paper, no. 409. July 1980.*Cochrane, Susan H., Donald O'Hara and Joanne Leslie, "The Effects of Education on Health." World Bank StaffWorking Paper, no. 405. July 1980.*Davies, David. "Human Development in South Asia." In Bussink and others.*Esman, Milton, and John Montgomery. "The Administration of Human Development." In Knight, ed.*Fallen-Bailey, Darrel, and T. Byer. "Energy Options and Policy Issues in Developing Countries." World Bank StaffWorking Paper, no. 350. August 1979.Fields, Gary S. "Education and Income Distribution in Developing Countries: A Review of the Literature." In King, ed.*Frank, Isaiah. "The 'Graduation' Issue in Trade Policy toward LDCs." World Bank Staff Working Paper, no. 334.June 1979.Golladay, Fredrick. Health Sector Policy Paper. Washington, D.C.: World Bank, 1980.Golladay, Fredrick, and Bernhard Liese. "Health Problems and Conditions in the Developing Countries." World BankStaff Working Paper, no. 412. August 1980.*Grawe, Roger. "Human Development in South Asia." In Bussink and others.*103

Haddad, Wadi D., and others. Education Sector Policy Paper. Washington, D.C.: World Bank, 1980.Haq, Mahbub ul, and Shahid Javed Burki. Meeting Basic Needs: An Overview. Poverty and Basic Needs Series.Washington, D.C.: World Bank, forthcoming.Hicks, Norman. "Economic Growth and Human Resources." World Bank Staff Working Paper, no. 408. July 1980.*Hughart, David. "Prospects for Traditional and Non-Conventional Energy Sources in Developing Countries." WorldBank Staff Working Paper, no. 346. July 1979.Independent Commission on International Development Issues (Under the Chairmanship of Willy Brandt). North-South:A Program for Survival. Cambridge, Mass.: MIT Press, 1980.Inkeles, Alex. Review of the International Evaluation of Educational Achievement, Proceedings of the National Academy ofEducation, 4 (1977), 139-200.Isenman, Paul. "Basic Needs: The Case of Sri Lanka," World Development, 8:3 (March 1980) 237-58.Kanagaratnam, Kandiah, and Catherine S. Pierce. "Population Policy and Family Planning Programs: Trends in Policyand Administration." World Bank Staff Working Paper, no. 411. August 1980.*Kavalsky, Basil G. "Poverty and Human Development in the Middle East and North Africa." In Bussink and others.*Keesing, Donald B. "Trade Policy for Developing Countries." World Bank Staff Working Paper, no. 353. August 1979.Kemper, R. "The Tokyo Round: Results and Implications for Developing Countries." World Bank Staff Working Paper,no. 372. February 1980.King, Timothy, ed. "Education and Income." World Bank Staff Working Paper, no. 402. July 1980.*Knight, Peter T., and others. "Brazil: Human Resources Special Report." A World Bank Country Study. 1979.Knight, Peter T., ed. "Implementing Programs of Human Development." World Bank Staff Working Paper, no. 403.July 1980.*Lockheed, Marlaine E., Dean T. Jamison and Laurence J. Lau. "Farmer Education and Farm Efficiency: A Survey." InKing, ed.Meerman, Jacob. "Paying for Human Development." In Knight, ed.*Morawetz, David. "Why the Emperor's New Clothes are not Made in Colombia: A Case Study in Latin American andEast Asian Manufactured Exports." World Bank Staff Working Paper, no. 368. January 1980.Nelson, Joan. Access to Power. Princeton: at the University Press, 1980.OECD, Interfutures. Facing the Future: Mastering the probable and managing the unpredictable. Paris: OECD, 1979.Pfeffermann, Guy P. "Some Economic Aspects of Human Development in Latin America (with Special Emphasis onEducation)." In Bussink and others.*Psacharopoulos, George. "Returns to Education: An Updated International Comparison." In King, ed.*Reutlinger, Shlomo, and Harold Alderman. "The Prevalence of Calorie Deficient Diets in Developing Countries." WorldBank Staff Working Paper, no. 374. March 1980.*Rogers, Everett M., Nat J. Colletta and Joseph Mbindyo. "Social and Cultural Influences on Human DevelopmentPolicies and Programs." In Knight, ed.*Safilios-Rothschild, Constantina. "The Role of the Family: A Neglected Aspect of Poverty." In Knight, ed.*Sapir, Andre, and Ernst Lutz. "Trade in Non-Factor Services: Past Trends and Current Issues." World Bank StaffWorking Paper, no. 410. August 1980.*Schultz, Theodore W. "Nobel Lecture: The Economics of Being Poor," Journal of Political Economy, 88:4 (August 1980)639-52.Selowsky, Marcelo. "Balancing Trickle Down and Basic Needs Strategies: Income Distribution Issues in Large Middle-Income Countries with Special Reference to Latin America." World Bank Staff Working Paper, no. 335. June 1979.Sen, Amartya. "Levels of Poverty: Policy and Change." World Bank Staff Working Paper, no. 401. July 1979.*Singh, Inderjit. "Small Farmers and the Landless in South Asia." World Bank Staff Working Paper, no. 320.February 1979.Uphoff, Norman. "Political Considerations in Human Development." In Knight, ed.*Wheeler, David. "Human Resource Development and Economic Growth in Developing Countries: A SimultaneousModel." World Bank Staff Working Paper, no. 407. July 1980.*Wolf, Martin. "Adjustment Policies and Problems in Developed Countries." World Bank Staff Working Paper, no. 349.August L979.World Bank. Recognizing the "Invisible"' Woman in Development: The World Bank's Experience. Washington, D.C., 1979.An asterisk (*) after a citation indicates papers prepared as part of the background work for this report.104

AnnexWorldDevelopmentIndicators

ContentsKey 108Introduction 109Table 1. Basic Indicators 110Population El Area El GNP per capita El Inflation El Adult literacyr- Life expectancy E Food production per capitaTable 2. Growth of Production 112GDP El Agriculture El Industry rl Manufacturing E ServicesTable 3. Structure of Production 114Agriculture r1 Industry El Manufacturing rl ServicesTable 4. Growth of Consumption and Investment 116Public consumption El Private consumption rl Gross domestic investmentTable 5. Structure of DemandPublic consumption n1 Private consumption El Gross domestic investmentE1 Gross domestic saving E1 Exports of goods and nonfactor services[I Resource balanceTable 6. Industrialization 120Share of value added in food and agriculture El in textiles and clothingC in machinery and transport equipment El in chemicals El in othermanufacturing E1 Value added in manufacturingr- Gross manufacturing output per capitaTable 7. Energy 122Growth of energy production n1 Growth of energy consumptionEl Energy consumption per capita El Energy consumption per dollar of GDPEl Energy imports as percentage of merchandise exportsTable 8. Growth of Merchandise Trade 124Export values El Import values E Growth of exportsEl Growth of imports n, Terms of tradeTable 9. Structure of Merchandise Exports 126Fuels, minerals and metals El Other primary commoditiesEl Textiles and clothing Fl Machinery and transport equipmentn Other manufacturesTable 10. Structure of Merchandise Imports 128Food r1 Fuels El Other primary commodities L Machinery andtransport equipment El Other manufacturesTable 11. Destination of Merchandise Exports 130Industrialized countries El Developing countries El Centrally plannedeconomies El Capital-surplus oil exportersTable 12. Trade in Manufactured Goods 132106To industrialized countries 1E To developing countries E To centrallyplanned economies El To capital-surplus oil exportersEl Value of manufactured exports11S

Table 13. Balance of Payments and Debt Service Ratios 134Current account balance before interest payments on external public debtn Interest payments on external public debt E Debt service as percentageof GNP r- as percentage of exports of goods and servicesTable 14. Flow of External Capital 136Gross inflow of public and publicly guaranteed medium- and long-term loansR Repayment of principal E Net inflow of public and publicly guaranteedmedium- and long-term loans E7 Net direct private investmentTable 15. External Public Debt and International Reserves 138External public debt outstanding and disbursed [1 as percentage of GNPn Gross international reserves El in months of import coverageTable 16. Official Development Assistancefrom OECD and OPEC Members 140Amount in dollars E as percentage of donor GNP El in national currenciesEl Net bilateral flow to low-income countriesTable 17. Population Growth, Past and Projected,and Hypothetical Stationary Population 142Past growth of population Fl Projected population E1 Hypothetical size ofstationary population El Assumed year of reaching net reproduction rate of IE Year of reaching stationary populationTable 18. Demographic and Fertility-related Indicators 144Crude birth rate fl Crude death rate E Total fertility rate fl Percentageof women in reproductive age group R Percentage of marriedwomen using contraceptivesTable 19. Labor Force 146Population of working age n Labor force in agriculture E2 in industryE in services n Growth of labor force, past and projectedTable 20. Urbanization 148Urban population as percentage of total population - Growth ofurban population n Percentage in largest city El in cities of over500,000 persons S Number of cities of over 500,000 personsTable 21. Indicators Related to Life Expectancy 150Life expectancy r- Infant mortality rate El Child death rateTable :22. Health-related Indicators 152Population per physician S per nursing person c- Percentage ofpopulation with access to safe water S Daily calorie supply per capitaTable.23. Education 154Number enrolled in primary school as percentage of age groupS in secondary school S7 in higher education S Adult literacyTable 24. Income Distribution 156Percentage share of household income, by percentilegroups of householdsTechnical Notes 158Bibliography of Data Sources 166107

KeyFigures in the colored bands are summary Not available.In each table, countries are listed in their measures for groups of countries. The L Lgroup in ascending order of income per letter w after a summary measure indicates (.) Less than half the unt shown.capita. The reference numbers indicating that it is a weighted average; the letter m, All growth rates are in real terms.that order are shown in the alphabetical that it is a median value; the letter t, that Figures in italics are for years or periodslist of countries below. it is a total. other than those specified.Afghanistan 26 Hong Kong 86 Peru 56Albania 116 Hungary 121 Philippines 49Algeria 72 India 15 Poland 122Angola 33 Indonesia 38 Portugal 82Argentina 81 Iran 110 Romania 119Australia 98 Iraq 109 Rwanda 17Austria 96 Ireland 91 Saudi Arabia 112Bangladesh 2 Israel 90 Senegal 37Belgium 101 Italy 92 Sierra Leone 20Benin 23 Ivory Coast 57 Singapore 88Bhutan 4 Jamaica 68 Somalia 8Bolivia 48 Japan 97 South Africa 77Brazil 79 Jordan 66 Spain 89Bulgaria 120 Kampuchea, Democratic 1 Sri Lanka 18Burma 12 Kenya 36 Sudan 34Burundi 9 Korea, Republic of 70 Sweden 107Cameroon 42 Korea, Democratic Republic of 115 Switzerland 108Canada 102 Kuwait 113 Syrian Arab Republic 64Central African Republic 27 Lao People's Democratic Republic 3 Taiwan' 75Chad 10 Lebanon 69 Tanzania 25Chile 76 Lesotho 31 Thailand 47China 114 Liberia 43 Togo 35Colombia 59 Libya 111 Trinidad and Tobago 84Congo, People's Republic of 51 Madagascar 28 Tunisia 65Costa Rica 78 Malawi 16 Turkey 71Cuba 117 Malaysia 67 Uganda 32Czechoslovakia 124 Mali 6 United Kingdom 94Denmark 106 Mauritania 30 United States 105Dominican Republic 62 Mexico 73 Upper Volta 13Ecuador 61 Mongolia 118 Uruguay 80Egypt, Arab Republic of 39 Morocco 55 Union of Soviet SocialistEl Salvador 54 Mozambique 11 Republics 123Ethiopia 5 Nepal 7 Venezuela 85Finland 95 Netherlands 100 Viet Nam, SocialistFrance 99 New Zealand 93 Republic of 14German Democratic Republic 125 Nicaragua 58 Yemen Arab Republic 50Germany, Federal Republic of 104 Niger 22 Yemen, People's DemocraticGhana 40 Nigeria 52 Republic of 41Greece 87 Norway 103 Yugoslavia 83Guatemala 63 Pakistan 24 Zaire 21Guinea 19 Panama 74 Zambia 45Haiti 29 Papua New Guinea 53 Zimbabwe 46Honduras 44 Paraguay 601. The references to Taiwan in these tables should not be interpreted as having any significance as to its legal status.108

IntroductionThe World Development Indicators They also reflect revisions to the an indicator. The letter w afterare designed to provide information estimates of population on the a summary measure indicates thatabout the main features of social basis of new information from it is a weighted average; the letterand economic development. The surveys and censuses. m, that it is a median value; theformat this year generally follows The country groups used in the letter t, that it is a total. The medianthat of previous years. The indica- tables are: 38 low-income develop- is the middle value of a set artorsin Table 1 give a summary ing countries with a per capita ranged in order of magnitude.profile of countries. The data in income of $360 or less in 1978; 52 Because the coverage of countriesother tables fall into the following middle-income developing coun- is not uniform for all indicatorsbroad areas: national accounts, tries with a per capita income of and because the variation aroundindustrialization, energy, external more than $360; 18 industrialized central tendencies can be large,accounts, aid flows, demography, countries; 5 capital-surplus oil- readers should exercise caution inlabor force, urbanization, social exporting countries; and 12 cen- comparing the summary measuresindicators and income distribu- trally planned economies. As in for different indicators, countrytion. Most of the information was previous years, Democratic Kam- groups and years or periods.drawn from the data files and publi- puchea, Lao People's Democratic Readers should also exercisecations of the World Bank, the Republic, Socialist Republic of caution in comparing indicatorsInternational Monetary Fund and Viet Nam, and Yugoslavia are across countries. Although thethe United Nations and the spe- grouped with developing countries. statistics presented are drawncialized agencies. Iran and Iraq are now grouped from sources generally consideredFor ease of reference, ratios and with capital-surplus oil-exporting the most authoritative and reliable,rates of growth are shown; abso- countries. some of them, particularly thoselute values are reported only in a Within each group, countries describing social features and infewinstances. Most growth rates are listed in ascending order of come distribution, are subject towere calculated for two periods: income per capita, and that order considerable margins of error. In1960-70 and 1970-78, or 1970-77 is used in all tables. The alpha- addition, variations in nationalif data for 1978 were not available. betical list on the opposite page practices mean that the data inAll growth rates are in real terms shows the reference number of certain instances are not strictlyand were computed, unless noted each country. Countries with comparable. The data should thusotherwise, by using the least- populations of less than a million be construed only as indicatingsquares method. Because this are not reported in the tables, trends and characterizing majormethod takes all observations largely for lack of comprehensive differences between countries.within a period into account, the data. The technical notes for Table The technical notes should beresulting growth rates reflect 1 show some basic indicators for referred to in any use of the data.'general trends that are not unduly 29 small countries that are mem- These notes outline the concepts,influenced by exceptional values bers of the United Nations, the definitions, methods and datafor a particular year. Table entries World Bank, or both. sources. The bibliography givesin italics indicate that they are for Summary measures -weighted details of the data sources, whichyears or periods other than those averages, median values, or totals contain comprehensive definitionsspecified. All dollar figures are US -were calculated for the country and descriptions of concepts used.dollars. groups only if data were adequate The World Development In-Some of the differences between and meaningful statistics could be dicators are prepared under thefigures shown this year and last obtained. The weights used in com- direction of Ramesh Chander.year reflect revisions to historical puting the measures are describedseries by the reporting countries. in the technical notes relating to109

Table 1. Basic IndicatorsGNP per capitaAverage indexAverageof foodA rea annual Aveaeana dl iee-poutoPopula- (thousandstion square ofgrowth~~~~ratevergetnnulaAulof inflation ltrcLiectexetnyperodctionation of square ~~~~(per- (percent) rate at birthprcpt(1969-71(millions) kilo- Dollars cent) (percent) (years) =1 00)Mid-1978a meters) 1978a 1960-78b 1960-70c 1970-78d 1975e 1978 1976-78Low-income countries 1,293.9 t26,31 3 t200 w l .6 wt 3.0 m 10.6 m38 w5 O w9 7 w1 Kampuchea, Dem. 8.4 181 . .. 3.8 ... .572 Bangladesh 84.7 144 90 -0.4 3.7 17.9 26 47 903Lao PDR 3.3 237 90 .. .4 Bhutan 1.2 47 100 -0.3 ....4241961005 Ethiopia 31.0 1,222 120 1.5 2.1 4.0 10 39 846 Mali 6.3 1,240 120 1.0 5.0 7.8 10 42 907 Nepal 13.6 141 120 0.8 7.7 9.1 19 43 928 Somalia 3.7 638 130 -0.5 4.5 10.7 60 43 879 Burunoi 4.5 28 140 2.2 2.8 10.1 25 45 10710 Chad 4.3 1,284 140 -1.0 4.6 7.4 15 43 8911 Mozambique 9.9 783 140 0.4 2.8 10.9 .. 46 8112 Burma 32.2 677 150 1.0 2.7 13.7 67 53 9613 Upper Volta 5.6 274 160 1.3 1.3 9.6 5 42 9514 Viet Nam 51.7 330 170 .. . .87 62 10215 India 643.9 3,288 180 1.4 7.1 8.2 36 51 10016 Malawi 5.7 118 180 2.9 2.4 9.1 25 46 9917 Rwanda 4.5 26 180 1.4 13.1 14.7 23 46 10318 Sri Lanka 14.3 66 190 2.0 1.8 11.8 78 69 11419 Guinea 5.1 246 210 0.6 1.7 6.4 .. 43 8620 Sierra Leone 3.3 72 210 0.5 2.9 10.8 15 46 9321 Zaire 26.8 2,345 210 1.1 29.9 26.2 15 46 9422 Niger 5.0 1,267 220 -1.4 2.1 10.7 8 42 8723 Benin 3.3 113 230 0.4 1.9 7.4 11 46 9224 Pakistan 77.3 804 230 2.8 3.3 14.6 21 62 10125 Tanzania 16.9 945 230 2.7 1.8 12.3 66 51 9326 Atghanistan 14.6 647 240 0.4 11.9 4.4 12 42 10027 Central African Rep. 1.9 623 250 0.7 4.1 9.0 .. 46 10228 Madagascar 8.3 587 250 -0.3 3.2 9.6 50 46 9529 Haiti 4.8 28 260 0.2 4.1 12.2 23 51 9130 Mauritania 1.5 1,031 270 3.6 1.6 10.4 17 42 7131 Lesotho 1.3 30 280 5.9 2.5 11.2 55 50 9032 Uganda 12.4 236 280 0.7 3.0 27.3 .. 53 9033 Angola34 Sudan6.717.41,2472,5063003201.20.13.33.722.07.4..2041468810835 Togo 2.4 56 320 5.0 1.7 7.4 18 46 8036 Kenya 14.7 583 330 2.2 1.5 12.0 40 53 9137 Senegal 5.4 196 340 -0.4 1.7 8.0 10 42 9638 Indonesia 136.0 2,027 360 4.1 .. 20.0 62 47 100Middle-income~countries~2872.8lf_ t 32,99 O I, "I7 3.I1 m 13.1 m7 71 w 61 w 106 w39 Egypt 39.9 1,001 390 3.3 2.7 7.0 44 54 9340 Ghana 11.0 239 390 -0.5 7.6 35.9 30 48 7941 Yemen, PDR 1.5 333 420 .. . .2742 Cameroon 8.1 475 460 2.9 3.7 9.8 ..444610811243 Liberia 1.7 ill 460 2.0 1.9 9.7 30 48 9644 Honduras 3.4 112 480 1.1 3.0 8.0 57 57 8445 Zamnbia 5.3 753 480 1.2 7.6 5.7 39 48 10946 Zimbabwe 6.9 391 480 1.2 1.3 7.6 .. 54 10247 Thailand 44.5 514 490 4.6 1.9 9.1 84 61 12248 Bolivia 5.3 1,099 510 2.2 3.5 22.7 63 52 ill49 Philippines 45.6 300 510 2.6 5.8 13.450 Yemen Arab Rep. 5.6 195 520 .. . .1387 60391159851 Congo, People's Rep. 1.5 342 540 1.0 5.4 10.6 50 46 8252 Nigeria 80.6 924 560 3.5 2.6 18.2 .. 48 8953 Papua New Guinea 2.9 462 560 3.6 3.6 8.8 32 50 10654 El Salvador 4.3 21 660 1.8 0.5 10.3 62 63 ill55 Morocco 18.9 447 670 2.5 2.0 7.1 28 55 8056 Peru 16.8 1,285 740 2.0 9.9 22.2 72 56 9057 Ivory Coast 7.8 322 840 2.5 2.8 13.9 20 46 10458 Nicaragua 2.5 130 840 2.3 1.9 11.0 57 55 10259 Colomnbia 25.6 1,139 850 3.0 11.9 21.7 81 62 11460 Paraguay 2.9 407 850 2.6 3.061 Ecuador 7.8 284 880 4.3 ..12.314.88174636010310362 Dominican Rep. 5.1 49 910 3.5 2.1 8.6 67 60 9363 Guatemala 6.6 109 910 2.9 0.1 10.8 47 57 10864 Syrian Arab Rep. 8.1 185 930 3.8 1.9 12.7 53 57 15065 Tunisia 6.0 164 950 4.8 3.7 7.1 55 57 12866 Jordan 3.0 98 1,050 ... 70 56 77110

GNP per capitaAverage indexAverageof foodArea annual Adult Life ex- productionPopula- (thousands growth Average annualtion of square (per- X atliteracy pectancy per capitarate at birth (1969-71(millions) kilo- Dollars cent) (percent) (percent) (years) = 100)Mid-1978a meters) 1978a 1960-78b 1960-70c 1970_78d 1975e 1978 1976-7867 Malaysia 13.3 330 1,090 3.9 -0.3 7.2 60 67 11068 JamaicEL 2.1 11 1,110 2.0 3.8 16.9 86 70 9869 Lebanon 3.0 10 . .. 1.4 .. . 65 8570 Korea, Rep. of 36.6 99 1,160 6.9 17.5 19.3 93 63 11671 Turkey 43.1 781 1,200 4.0 5.6 21.5 60 61 110'72 Algeria 17.6 2,382 1,260 2.3 2.3 13.4 37 56 8273 Mexico 65.4 1,973 1,290 2.7 3.5 17.5 76 65 9974 Paname 1.8 76 1,290 2.9 1.6 7.5 78 70 10375 Taiwan 17.1 36 1,400 6.6 4.1 10.3 82 72 105-76 Chile 10.7 757 1,410 1.0 32.9 242.6 88 67 9477 South Africa78 Costa Rica27.72.11,221511,4801,5402.53.33.01.911.715.7..90607010011479 Brazil 119.5 8,512 1,570 4.9 46.1 30.3 76 62 11780 Uruguay 2.9 176 1,610 0.7 51.1 65.6 94 71 10581 Argentiua 26.4 2,767 1,910 2.6 21.8 120.4 94 71 11482 Portugal 9.8 92 1,990 5.9 3.0 15.2 70 69 8283 Yugoslavia 22.0 256 2,380 5.4 12.6 17.3 85 69 11784 Trinidad and Tobago 1.1 5 2,910 2.2 3.2 21.3 95 70 9485 Venezuela 14.0 912 2,910 2.7 1.3 11.1 82 66 9786 Hong Kong 4.6 1 3,040 6.5 2.3 7.7 90 72 3087 Greece 9.4 132 3,250 6.0 3.2 13.8 .. 73 12088 Singapore 2.3 1 3,290 7.4 1.1 6.1 75 70 11289 Spain 37.1 505 3,470 5.0 6.3 15.0 .. 73 12290 Israel 3.7 21 3,500 4.2 6.2 31.0 88 72 113Industrialized countries 667.8 t 30,429 t 8,070 w 3.7 w 4.2 m 9A m 99 w 74 w 108 w91 Ireland 3.2 70 3,470 3.3 5.2 14.7 98 73 12892 Italy 56.7 301 3,850 3.6 4.4 14.0 98 73 10093 New Zealand 3.2 269 4,790 1.7 3.3 11.0 99 73 10794 United Kingdom 55.8 244 5,030 2.1 4.1 14.1 99 73 11195 Finland 4.8 337 6,820 4.1 5.6 13.2 100 72 10796 Austria 7.5 84 7,030 4.2 3.6 7.6 99 72 10997 Japan 114.9 372 7,280 7.6 4.8 9.6 99 76 9798 Australia 14.2 7,687 7,990 2.9 3.1 12.8 100 73 12199 France 53.3 547 8,260 4.0 4.1 9.3 99 73 106100 Netherlands 13.9 41 8,410 3.4 5.3 8.8 99 74 118101 Belgiuml 9.8 31 9,090 4.1 3.6 8.6 99 72 105102 Canada 23.5 9,976 9,180 3.5 3.1 9.4 98 74 112103 Norway 4.1 324 9,510 4.0 4.2 8.6 99 75 108104 Germany, Fed. Rep. 61.3 249 9,580 3.3 3.2 5.9 99 72 104105 United States 221.9 9,363 9,590 2.4 2.8 6.8 99 73 114106 Denmark 5.1 43 9,920 3.2 6.0 9.8 99 74 102107 Sweden 8.3 450 10,210 2.5 4.3 9.3 99 75 113108 Switzerland 6.3 41 12,100 2.2 4.6 6.6 99 74 113Capital-surplusoil exporters 60.1 t 6,011 t3 ,3 4 0w7 .1 w 1.2m 22.2m 50w53 w 111 w109 Iraq 12.2 435 1,860 4.1 1.7 .. .. 55 84110 Iran 35.8 1,648 2,160 7.9 -0.5 23.7 50 52 113111 Libya 2.7 1,760 6,910 6.2 5.2 20.7 50 55 123112 Saudi Arabia 8.2 2,150 7,690 9.7 .. 28.4 .. 53 1351f3 Kuwait 1.2 18 14,890 -2.3 0.6 19.8 60 69Centrally plannedeconomies 1,352.4 t 34,826 t 1,190 w 4.0 w .. .. .. 70 w 112 w114 China 952.2 9,597 230' 3.7 .. .. .. 70 111115 Korea, Dem. Rep. 17.1 121 730 4.5 .. .. .. 63 130116 Albania 2.6 29 740 4.1 .. .. .. 69 107117 Cuba 9.7 115 810 -1.2 .. .. 96118 Mongolia 1.6 1,565 940 1.5 .. .. ..72639694119 Romania 21.9 238 1,750 8.6 .. .. 98 70 148.. 72 113120 Bulgaria 8.8 111 3,230 5.7 .. ..121 Hungary, 10.7 93 3,450 5.0 .. .. 98 70 122122 Poland 35.0 313 3,670 5.9 .. ..123 USSR 261.0 22,402 3,700 4.3 .. ..98997170104111124 Czechoslovakia 15.1 128 4,720 4.3 .. .. .. 70 118125 German Dem. Rep. 16.7 108 5,710 4.8 .. .. .. 72 127a. Figures in i:alics are for 1977, not 1978. d. Figures in italics are for 1970-77, not 1970-78.b. Figures in italics are for 1960-77, not 1960-78. e. Figures in italics are for years other than 1975. See the technical notes.c. Figures in italics are for 1961-70, not 1960-70. f. Preliminary estimate based on partial official information. See the technical notes.111

Table 2. Growth of Production1 9 6 0 - 7 0Average annual growth rate (percent)GDP Agriculture Industry Manufacturing Servicesa 1970-78b 1960-70a 1970-78b 1960-7Oa 1970-78b 196O-7Oa 1970-78b 1960-70a 1970-78bLow-income countries 3.9 w 3.6 w 2.5 ml 2.0 m 6.1 mn 4.5 m 6.6 m 4.2 m 4.4 m 4.3 m1 Kampuchea, Derr., 3.1 . . . . .2 Bangladesh 3.6 2.9 2.1 1.6 7.9 5.9 6.6 5.3 3.8 4.73 Lao PDR.. ... ... ... .4 Bhutan.. ... ... ... .5 Ethiopia 4.4 1.8 2.2 0.5 7.4 0.4 8.0 1.3 7.8 4.56 Mali 3.3 4.6 .. 2.0 .. 9.2 ... 5.27 Nepal 2.5 2.7 . ..8 Somalia 1.0 3.1 -1.5 2.7 3.3 -2.6 14.3 .. 2.5 6.89 Burundi 4.4 2.9 .. 1.7 . 7.6 . 5.3 .. 4.010 Chad 0.5 1.7 .. -0.1 . 8.5 .. 5.7 .. 2.611 Mozambique 4.5 -3.2 2.1 -1.8 9.5 -5.1 6.6 -6.1 6.4 -3.712 Burma 2.6 4.0 4.1 3.6 2.8 4.5 3.3 4.2 1.5 4.213 Upper Volta 3.0 -0.2 .. -3.6 . 1.4 . 1.6 .. 2.714 Viet Nam . .. .. ..15 India 3.6 3.7 1.9 2.6 5.5 4.5 4.8 4.6 5.2 4.616 Malawi 4.9 6.5 .. 4.2 .. 6.8 .. 6.7 .. 9.617 Rwanda 2.7 4.8.. ... . . .18 Sri Lanka 4.6 3.4 3.0 2.3 6.6 3.0 6.3 1.2 4.6 4.319 Guinea 3.2 5.4 2.1 3.0 2.3 14.1 .. 9.4 7.2 0.720 Sierra Leone 4.2 1.3 .. 2.8 .. -3.5 .. 4.6 .. 3.621 Zaire 3.6 1.3 . 1.9 .. 0.7 .. -0.6 .. 1.622 Niger 2.9 2.4 3.3 -0.2 13.9 8.6 . .. () 4.223 Benin 2.6 3.8.. .. ... .24 Pakistan 6.7 4.4 4.9 1.9 10.0 4.8 9.4 3.5 7.025 Tanzania 6.0 5.0 .. 4.5 . 2.3 . 4.5 ..6.26.426 Afghanistan 2.0 4.6 ----. 3.5 .. 5.3 .. 4.0 .. 6.127 Central African Rep. 1.9 3.2 0.8 2.3 5.4 5.2 . .1.8 3.128 Madagascar29 Haiti2.90.1-0.73.9..-0.6-0.32.6.0.4()..8.0 -0.1-0.46.6..0.9-1.43.330 Mauritania 8.1 2.3 2.4 -2.3 12.8 2.1 18.0 2.9 17.0 7.631 Lesotho 4.6 6.5 .. 0.3 . 3.8 .. 8.7 . 15.732 Uganda 5.9 -0.2 .. 1.1 .. -7.8 .. -5.0 .. 0.233 Angola 4.8 -10.0 4.0 -11.0 11.0 -4.1 7.2 -12.8 4.2 -11.834 Sudan 1.3 2.7 . .. ..35 Togo 8.5 4.2 .. 1.7 .. 7.4 . . .. 4.636 Kenya 6.0 6.7 .. 5.5 .. 10.4 .. 11.7 .. 6.037 Senegal 2.5 2.2 2.9 3.3 4.4 3.9 6.2 4.1 1.7 1.038 Indonesia 3.5 7.8 2.5 4.0 5.0 11.2 3.3 12.4 8.0 8.7Middle-icm cutie . 57w 3.4 m 3.1 mn 7.8 r 7.1 mi 7.6 m 6.8 m 5.7 m 5.8 m39 Egypt 4.5 7.8 2.9 3.1 5. 4 7.2 4.7 7.6 5.1 12.040 Ghana 2.1 0.4 .. -1.2 .. -2.3 .. -6.0 .. 3.541 Yemen, PDR . . . ... ... .42 Cameroon 4.7 5.1 .. 3.3 . 6.2 .. 5.2 .. 6.043 Liberia 5.1 1.5 .. 5.3 .. -1.2 .. 8.7 .. 1.544 Honduras 5.1 3.3 5.7 0.8 5.2 5.9 4.0 5.8 4.5 3.9'45 Zambia 5.0 2.3 .. 3.1 .. 4.3 . 0.6 .. 1.446 Zimbabwe 4.2 3.4.. ... ... .47 Thailand 8.2 7.6 5.5 5.6 11.6 10.2 11.0 11.5 9.0 7.448 Bolivia 5.2 5.6 3.0 3.6 6.2 5.1 5.4 6.8 5.5 6.5-49 Philippines 5.1 6.3 4.3 4.9 6.0 8.6 6.7 6.8 5.2 5.450 Yemen Arab Rep. .. 7.9 .. 5.1 .. 11.7 . 12.2 .. 9.851 Congo, People's Rep. 2.7 3.5 1.0 ()7.0 11.4 6.8 2.3 2.1 0.752 Nigeria 3.1 6.2 -0.4 -1.5 16.0 10.3 9.3 13.4 0.2 8.653 Papua New Guinea 6.5 2.6.. ... ... .54 El Salvador 5.9 5.2 3.0 2.7 8.5 7.0 8.8 6.1 6.5 5.555 Morocco 4.2 6.4 4.7 0.1 4.0 7.9 3.8 6.6 4.0 7.656 Peru 5.4 3.1 1.9 0.7 5.5 4.3 7.2 4.3 6.8 3.257 Ivory Coast 8.0 6.8 4.2 3.9 11.5 10.0 11.6 7.5 9.7 7.258 Nicaragua 7.2 5.8 6.7 5.4 11.0 7.3 11.1 6.3 5.7 5.059 Colomoia 5.1 6.0 3.5 4.9 6.0 5.1 5.7 6.7 5.7 7.060 Paraguay 4.3 7.5 .. 6.2 .. 9.5 . 6.8 .. 7.461 Ecuador .. 9.1 .. 4.6 . 14.4 .. 10.0 .. 7.862 Dominican Rep. 4.5 7.4 2.1 3.3 6.0 10.1 5.0 7.4 5.0 7.563 Guatemala 5.6 6.0 4.3 5.3 7.8 7.6 8.2 6.1 5.5 5.864 Syrian Arab Rep. 5.7 9.6 4.4 7.2 6.3 11.6 5.6 13.6 6.2 9.565 Tunisia 4.6 7.9 2.0 5.6 8.7 8.1 7.6 11.0 4.2 8.766 Jordan .. 7.0........ ..112

Average annual growth rate (percent)GDP Agriculture Industry Manufacturing Services1960- 7 Oa 1970-78b 1960 -. 70a 1970-78b 1960-.7Oa 1970-78b 1960-70a 1970-78b 1960-70a 1970-78b67 Malaysiza 6.5 7.8 . 5.0 .. 9.6 .. 12.3 .. 8.468 Jamaica 4.6 -0.8 1.5 1.4 5.6 -2.7 5.6 -0.9 4.3 0.369 Lebanor: 4.9 .. 6.3 .. 4.5 .. 5.0 .. 4.870 Korea, Rep. of 8.5 9.7 4.5 4.0 17.2 16.5 17.2 18.3 8.4 8.771 Turkey 6.0 7.1 2.5 3.9 9.6 8.8 10.9 8.7 6.9 7.9'72 Algeria 4.6 5.3 0.4 0.2 12.9 5.9 7.7 6.9 -3.0 5.573 Mexico 7.2 5.0 3.8 2.1 9.1 5.2 9.4 6.2 7.0 4.874 Panama 7.8 3.4 5.7 2.4 10.1 0.7 10.5 -0.5 7.6 4.875 Taiwan 9.2 8.0 3.4 1.6 16.4 12.9 17.3 13.2 7.8 4.1-76 Chile 4.5 0.8 2.6 2.7 5.0 -0.8 5.5 -2.4 4.5 1.777 South A4frica 6.4 3.6 . ... .78 Costa Rica 6.5 6.0 5.7 2.5 9.4 9.1 10.6 8.8 5.7 5.779 Brazil 5.3 9.2 .. 5.3 .. 10.1 . 9.5 .. 9.280 Uruguayi 1.2 1.9 1.9 0.1 1.1 3.5 1.5 3.2 1.0 1.581 Argentinia 4.2 2.3 2.3 2.3 6.0 2.2 5.7 2.0 3.3 2.582Portugal 6.2 4.8 1.3 -1.9 8.8 4.6 8.9 4.6 5.9 7.183 Yugoslavia 5.8 5.6 3.3 3.3 6.3 8.0 5.7 9.3 6.9 4.084 Trinidaci and Tobago 3.9 3.4 . . -0. I. 2.8 . . -1.1 . 4.085 Venezuela 5.9 5.6 5.7 3.5 4.5 2.7 6.2 6.4 7.2 7.986 Hong Kong 10.0 8,2 . . -0.2 .. 6.2 .. 5.6 .. 10.18K7 Greece 6.9 5.0 3.5 1.9 94 5.3 10.2 6.6 7.1 5.788 Singapore 8.8 8.5 5.0 1.5 12.5 8.5 13.0 9.2 7.7 8.689 Spain 7.3 4.4 2.5 1.9 9.4 4.9 9.7 7.8 7.2 4.690 Israel 8.1 4.5 .. 6.6 .. 5.3 . 6.1 .. 5.4Industrialized countries 5.1 w 3.2 w 1.2 rn 1.0 m 6.1 m 3.4 m 6.2 m 3.3 rn 4.8 m 3.7 m9§1 I-relIa nd 4.2 3.4 0.9 .. 6.1 ... .4.392 Italy 5.3 2.8 2.8 0.5 6.2 2.7 7.2 3.3 5.1 3.393 New Zealand 3.9 2.2 . .. ..94 United Kingdom 2.9 2.1 2.3 0.8 3.1 1.3 3.4 0.5 2.7 2.495 Finland 4.6 2.8 0.6 -1.9 6.3 3.2 6.2 2.8 5.3 3.996 Austria 4.5 3.8 1.2 2.1 4.9 3.4 4.8 3.6 4.5 4.397 Japan 10.5 5.0 4.0 1.1 10.9 6.0 11.0 6.2 11.7 5.198 Australia 4.1 3.8 2.7 1.7 4.6 3.9 5.6 3.9 4.0 3.999 France 5.7 3.7 1.8 -0.4 6.4 3.5 5.6 3.9 5.7 4.3100 Netherlands 5.5 3.2 2.9 3.6 6.8 3.3 6.5 3.6 5.1 3.31-01 -Belgium 4.8 3.3 -0.5 -1.1 6.0 3.4 6.2 3.3 4.6 3.3102 Canada 5.6 4.4 2.5 2.7 6.8 3.7 6.7 3.8 5.5 4.8103 Norway 4.9 4.7 0.1 2.3 5.5 5.2 5.3 1.9 5.0 4.7104 Germaniy, Fed. Rep, 4.4 2.4 1.5 1.6 5.2 2.1 5.4 2.0 4.2 1.7105 United States 4.3 3.0 0.3 0.9 5.2 2.7 5.3 2.9 4.3 3.4106 -Den mark 4.7 2.7 0.2 .. 5.5 .. 5.4 .. 4.9107 Swederl 4.4 1.6 0.6 -1.6 6.2 11.0 6.2 0.8 3.9 2.3108 Switzerland 4.3 0.1 . .. ..Capital-surplusoil exporters 13.0 w 6.0 w .. 5.2 m .. 4.0 m .. 16.1 Ini . 16.1 mn109 Iraq 6.2 .. 5.7 .. 4.7 .5.9 .. 8.3110 Iran 11.3 7.4 4.4 5.2 13.4 4.0 12.0 16.1 10.0 16.1111 Libya 24.4 0.9 .. 12.7 .. -2.7 .. 18.4 .. 16.71.12Saudi Arabia .. 11.5 .. 4.0 .. 12.0 .. 5.4 .. 11.6113 Kuwait 5.7 0.7 . ... . . .Centrally plannedeconomies 4.9 w 5.6 w . .. ..114 China 5.0 6.0 . .. ..115 Korea, Dem. Rep. 7.8 7.2 . ... .. .116 Albani-a 7.3 6.7.. . . .. .117 Cuba 1.1 0.4 ... ... .118 Mongolia 2.8 4.5.. . . ... .119 Romaria 9.0 10.6 . .. ..120 Bulgaria 5.9 6.3 . ... ... .121 H ungary 3.8 5.4.. ... ... .122 Poianc 4.3 7.0.. ... ... .123 USSR 5.2 5.3124 ~Czech-oslovakia 3.1 4.9.. ... . ..125 German Dem. Rep. 3.1 4.7.. ... . ..a. Figures in italics are for 1961-70, not 1960-70. b. Figures in italics are for 1970-77, not 1970-78.113

Table 3. Structure of ProductionDistribution of gross domestic product (percent)Agriculture Industry (Manufacturinga) Services1960b 1978c 196gb 1978c (196gb I1978c) 1 96gb 1978cLow-income countries 50W 38t 17 t41t 3t 3t 8tDem. .1 Kampuchea,2 Bangladesh 61 57 8 13 6 8 31 303Lao PDR .. 60 14 4 264 Bhutan5 Ethiopia 65 54 12 13 6 9 23 336Mali 55 37 10 18 6 12 35 457Nepal 62 12 10 268Somalia 67 60 13 11 3 7 20 299Burundi 56 15 9 2910 Chad 55 52 12 13 5 8 33 3511 Mozambique 55 45 9 16 8 9 36 3912 Burma 33 46 12 13 8 10 55 4113 Upper Volta 62 38 14 20 8 13 24 4214 Viet Nam15 India 50 40 20 26 14 17 30 316 Malawi17 Rwanda5881434611719226112153112383218 Sri Lanka 34 35 22 31 17 23 44 3419 Guinea 56 32 36 41 4 8 2720 Sierra Leone - . 39 .. 22 6 3921 Zaire 30 27 27 20 13 7 43 5322 Niger 69 43 9 27 4 10 22 3023 Benin 55 31 8 13 3 9 37 5624 Pakistan 46 32 16 24 12 16 38 4425 Tanzania 57 51 11 13 5 9 32 3626 Afghanistan27 Central African Rep. 51 36 10 18 4 9 39 4628 Madagascar 37 38 10 19 4 14 53 4329 Haiti30 Mauritania 59 26 24 37 3 11 17 3731lLesotho 36 15 2 4932 Uganda 52 57 13 7 9 6 35 3633 Angola 50 50 8 21 4 3 42 2934 Sudan 58 43 16 12 5 6 27 4535 Togo 55 26 16 20 8 9 29 5436 Kenya 38 41 18 19 9 12 44 4037 Senegal 24 26 17 25 12 19 59 4938 Indonesia 54 31 14 33 8 9 32 36Middle-income countries 22 to 16 to 3 %6 34 to 22 t 25 wo 47 wo 50 wo39 Egypt 30 29 24 30 20 25 46 4140 Ghana 41 38 19 18 10 9 40 4441 Yemen, PDR--42 Cameroon 40 3523 28 9 232343 Liberia40 337 2623 744 Honduras 37 32 19 26 13 17 44 4245 Zambia 11 17 63 39 4 17 26 4446 Zimbabwe47 Thailand1840202735193527171320184741454648 Bolivia 26 17 25 28 15 13 49 5549 Philippines 26 27 28 35 20 25 46 3850 Yemen Arab Rep. 35 .. 14 . 6 .. 5151 Congo, People's Rep. 23 13 17 33 10 16 60 5452 Nigeria 63 34 11 43 5 9 26 2353 Papua New Guinea 49 33 13 26 3 8 38 4154 El Salvador 32 29 19 21 15 15 49 5055 Morocco 23 18 27 32 16 17 50 5056 Peru 26 14 29 36 17 .. 45 5057 Ivory Coast58 Nicaragua432421231421232671613204355565159 Colombia 34 31 26 27 17 20 40 4260 Paraguay 36 32 20 24 17 17 44 4461 Ecuador 33 21 19 35 14 17 48 4462 Dominican Rep. 27 21 23 29 17 19 50 5063 Guatemala . ..64 Syrian Arab Rep. .. 20 .. 28 .. 21 . 5265 Tunisia 24 18 18 30 8 12 58 5266 Jordan . 11 .. 29 .. 16 .. 601L14

Distribution of gross domestic product (percent)Agriculture Industry (Manufacturinga) Services1960b 1978c 1960b 1978c (1960b 1978c) 1960b 1978c67 Malaysia 37 25 18 32 9 17 45 4368 Jamaica 10 9 36 39 15 17 54 5269 Lebanon 12 20 13 6870 Korea, Rep. of 40 24 19 36 12 24 41 4071 Turkey 41 27 21 28 13 18 38 4572 Algeria 21 8 33 56 10 12 46 3673 Mexico 16 11 29 37 23 28 55 5274 Paname. 23 21 .. 13 5675 Taiwan 28 10 29 48 22 38 43 42-76 Chile 11 10 38 29 23 20 51 6177 South Africa 12 8 40 45 21 22 48 4778 Costa Rica 26 22 20 27 14 20 54 5179 Brazil 16 11 35 37 26 28 49 5280 Uruguay 19 14 28 32 21 26 53 5481 Argentina 17 13 38 45 31 37 45 4282 Portugeal 25 13 36 46 29 36 39 4183 Yugosletvia 24 16 45 45 36 31 3984 Trinidad and Tobago 8 3 46 62 24 14 46 3585 Venezuela 6 6 22 46 16 72 4886 Hong Kong 4 2 34 31 25 25 62 6787 Greece88 Singapore23417226183135161219265178526389 Spain 21 9 39 38 27 30 40 5390 Israel 11 7 32 37 23 26 57 56Industrialized countries 6 w 4 w 40w 37 w 30 w 27 w 54 w 59 w91 Ireland 22 26 .. .. 5292 Italy 13 7 41 42 31 .. 46 5193 New Zealand .. 10 31 21 .. 5994 United Kingdom 4 2 43 36 32 25 53 6295 Finland 18 8 35 35 24 25 47 5796 Austria 11 5 49 42 38 29 40 5397 Japan 13 5 45 40 34 29 42 5598 Australia 12 5 37 32 26 19 51 6399 France 10 5 38 37 29 27 52 58100 Netherlands 9 4 46 34 34 45 62101 Belgiurn 6 2 41 37 30 26 53 61102 Canada 6 4 34 31 23 19 60 65103 Norway 9 5 33 36 21 17 58 59104 Germany, Fed. Rep. 6 3 53 48 40 38 41 49105 United States 4 3 38 34 29 24 58 63106 Denmark107 Sweden117 43240..332227 245753108 Switzerland ..63Capital-surplus-oil exporters .. 5w 65w ..8 w 330 w109 Iraq 17 .. 52 .. 10 .. 31110 Iran 29 9 33 54 11 12 38 37111 Libya .. 2 .. 71 .. 3 .. 271-12 Saudi Arabia . 1 . 76 .. 5 .. 23113 Kuwail. . (.) .. 72 .. 7 .. 28Centrally plannedeconomies114 China .. .. .. .. ..115 Korea, Dem. Rep. .. .. .. .116 Albania .. .. .. .. .. .117 Cuba .. .. .. .. ..118 Mongclia .. .. .. . ..119 Romariia .. .. .. .. ..120 Bulgaria 32 18 53 64 46 .. 15 18121 Hungary 24 15 69 59 59 .. 7 26122 Polancl 26 16 57 64 47 .. 17 20123 USSR 21 17 62 62 52 .. 17 21124 Czechoslovakia 16 9 73 72 63 .. 11 19125 German Dem. Rep. . 10 . 69 .. .. .. 21a. Manufacturing is a part of the industnal sector, but its share in GDP is shown separate ybecause it typically is the most dynamic part of the industrial sector.b. Figures in italics are for 1961, not 1960.c. FigLIres in italics are for 1977, not 1978,115

Table 4. Growth of Consumption and InvestmentAverage annual growth rate (percent)Public Private Grossconsumption consumption domestic investment1 960-70a 1 970-78b 1 960-70a 1 970-78b 1 960-70a 1 970-78bLoiw-income countries t i Xt 4. m i i 3.,7;m r- 3 -.-i9 m i 3.g m i 4.;6 ;1 m 0 0;0 m 0;X3.6 ;01 Kampuchea, Dem. 2.6 ..2 Bangladesh c c3.23.4 3.10.311.1 -1.43Lao PDR .. .. ..4 Bhutan .. .. ..5 Ethiopia 4.7 3.7 4.7 3.7 5.7 -1.66 Mali 6.2 3.6 2.8 6.0 3.5 1.87 Nepal .. .. ..8 Somalia 3.7 11.7 -0.5 2.7 4.3 8.59 Burundi 19.2 5.1 3.2 3.1 4.3 16.910 Chad 4.4 0.1 -0.7 1.8 2.3 3.111 Mozambique 6.8 -4.6 4.4 -2.7 8.3 -9.612 Burma c c 2.8 3.7 3.6 4.213 Upper Volta .. 3.8 .. 0.8 .. 1.814 Viet Nam .. .. ..15 India -1.7 4.2 4.2 3.0 5.6 6.116 Malawi 4.6 1.5 4.1 6.4 15.4 1.117 Rwanda 1.1 2.8 4.2 3.9 3.5 17.118 Sri Lanka c C 1.9 2.5 6.6 3.619 Guinea .. 1.7 .. 2.9 .. 2.020 Sierra Leone .. 13.4 .. 0.5 .. 5.621 Zaire 8.5 -0.2 3.9 -0.7 9.6 0.622 Niger 2.0 4.2 3.9 1.6 3.0 5.223 Benin 1.7 0.6 4.9 3.9 4.2 8.424 Pakistan 7.3 3.9 7.1 3.8 6.9 4.825 Tanzania c c 5.2 5.8 9.8 1.926 Afghanistan c 9.8 2.5 3.8 -1.0 12.427 Central African Rep. 2.2 0.7 3.0 4.3 1.3 0.728 Madagascar29 Haiti..c-1.4-0.1..1.0-2.24.5.1.7-2.511.930 Mauritania 1.0 17.7 17.2 4.4 -2.1 5.131 Lesotho 0.3 13.9 6.0 12.7 18.5 29.332 Uganda 5.9 1.6 5.6 1.6 9.8 -13.833 Angola 9.1 2.9 4.0 -8.8 9.7 -10.934 Sudan 12.1 c -1.2 4.3 -1.3 9.835 Togo 6.7 14.6 7.6 1.9 11.1 16.036 Kenya 10.0 8.7 4.6 6.2 7.0 2.337 Senegal -0.2 2.3 3.2 2.1 1.1 2.538 Indonesia 1.0 10.9 3.4 7.6 4.8 15.3iMddle-income countries 6.4 m 7.4 m 5.3 m 4.9m 7.6 m 7.2 m39 Egypt 10.3 5.0 5.4 6.1 3.1 23.340 Ghana 6.1 -0.3 2.0 1.7 -3.2 -8.341 Yemen, PDR .. .. ..42 Cameroon43 Liberia8.95.65.88.33.41.84.83.38.4-4.67.06.144 Honduras 4.6 8.1 4.6 4.2 11.0 4.945 Zambia 11.0 2.3 6.9 -2.7 10.6 -2.946 Zimbabwe .. 2.9 .. 3.5 .. -0.847 Thailand 9.6 8.3 7.0 6.7 15.4 7.848 Bolivia 8.9 8.5 4.1 7.4 9.6 6.449 Philippines 5.0 9.4 4.7 4.3 8.2 11.150 Yemen Arab Rep. .. .. .51 Congo, People's Rep. 5.4 7.0 -0.3 4.3 2.9 -0.152 Nigeria 10.0 26.9 (.) 4.0 7.4 23.353 Papua New Guinea 6.5 -1.1 6.9 2.0 21.2 -10.454 El Salvador 6.4 6.9 6.1 5.7 3.5 11.155 Morocco 4.5 13.8 4.0 4.4 8.0 17.456 Peru 8.8 5.8 6.7 4.1 2.4 4.257 Ivory Coast 11.8 7.5 8.0 8.2 12.7 14.058 Nicaragua 3.6 12.7 6.8 4.9 10.7 8.659 Colombia 5.5 4.8 5.5 5.9 4.5 6.360 Paraguay 6.9 3.8 4.5 6.9 5.8 20.661 Ecuador .. 12.4 .. 8.4 .. 10.262 Dominican Rep. 1.9 -0.9 6.3 7.6 11.4 13.263 Guatemala 4.7 5.2 4.7 5.4 7.9 11.364 Syrian Arab Rep. .. 13.0 .. 10.4 .. 18.265 Tunisia 5.5 8.8 3.0 8.8 4.5 11.966 Jordan .. .. .. .. ..116

Average annual growth rate (percent)Public Private Grossconsumption consumption domestic investment1960-70a 1970-78b 1960-70a 1 970-78b 1960-70a 1970-78b67 Malaysia 7.4 9.6 4.2 6.4 7.2 10.268 Jamaica 8.6 6.0 3.2 0.5 7.8 -10.469 Lebanon 5.9 .. 4.4 .. 6.270 Korea, Rep. of 5.5 8.7 7.0 7.5 23.6 13.771 Turkey 6.7 8.8 5.1 6.6 8.8 10.272 Algeria 1.7 8.2 4.6 11.3 1.9 11.773 Mexico 9.4 10.2 6.6 3.8 9.6 7.174 Panarra 7.8 6.9 6.7 1.4 12.4 0.975 Taiwan 4.5 5.4 8.3 6.8 16.2 8.276 Chile 4.7 2.9 4.8 -0.4 3.7 -2.777 South Africa 7.1 .. 6.2 .. 9.578 Costa Rica 8.0 7.4 6.0 4.9 7.1 9.379 Brazil 3.5 8.6 5.1 9.0 7.0 10.780 Uruguay 4.4 3.2 0.7 -1.2 -1.8 4.881 Argentina 1.0 -3.1 4.1 2.4 4.1 1.282 Portugal 7.7 9.0 5.5 4.8 7.7 0.783 Yugos avia 0.6 4.5 9.5 6.1 4.7 7.284 Trinidad and Tobago 6.2 10.4 4.3 -0.3 -2.8 5.385 Venezuela 6.3 9.1 4.9 7.1 7.3 11.886 Hong Kong 8.7 9.2 8.9 8.8 7.4 10.287 Greece 6.6 7.7 7.1 4.6 10.4 1.988 Singapore 12.6 6.4 5.4 7.1 20.5 5.589 Spain 5.5 6.2 7.0 4.2 10.5 3.090 Israel 13.8 5.3 7.4 5.7 5.7 0.7lindustrialized countries 4.8 m 3.8 m 4.3 m 3.5 mn 5.6 m 1.5 m191 Ireland 3.9 6.3 3.7 2.7 8.8 1.792 Italy 3.9 c 6.1 2.7 3.8 -0.493 New Zealand .. . ..94 Unitec Kingdom95 Finland2.25.72.95.92.34.31.32.95.04.31.5-1.596 Austria 2.9 4.0 4.4 4.2 5.6 4.197 Japan 6.4 5.0 9.0 5.3 14.0 2.598 Austrealia 6.8 5.8 2.7 3.8 6.2 0.799 France 3.4 3.4 5.5 4.5 7.3 1.7100 Nethedands 3.1 2.7 6.1 3.8 6.8 -0.1101 Belgiu m 5.7 4.7 3.8 4.0 6.0 1.9102 Canaca 6.2 3.3 4.9 5.6 5.8 4.7103 Norway 6.4 5.6 4.1 4.0 5.1 4.1104 Germany, Fed. Rep. 4.1 3.9 4.6 2.9 4.1 -0.2105 Unitedl States 4.1 1.7 4.4 3.5 4.8 1.6106 Denmark 6.0 3.6 4.3 3.0 6.7 0.2107 Sweden 5.4 3.1 3.8 2.0 5.0 -1.3108 Switzerland 4.8 2.0 4.3 1.4 4.1 -4.6Capital-surplusoil exporters .. .. ..109 Iraq 8.1 .. 4.9 .. 3.0110 Iran 16.0 20.4 10.0 10.0 12.2 22.0111 Libya .. 22.6 .. 21.2 .. 10.9112 Saudi Arabia c 16.5 .. 51.0'113 Kuwait .. .. .. ..Centrally plannedeconomies .. .. .. .. .. .114 China115 Korea, Dem. Rep.116 Albania .. .. .. ..117 Cuba .. .. .. .. .118 Mongolia .. .. .. ..119 Romania .. .. ..120 Bulgaria .. .. .. ..121 Hungary122 Poland123 USSR R..... ..124 Czechoslovakia .. .. .. ..125 German Dem. Rep. .. .. .. ..a. Figures in italics are for 1961-70, not 1960-70.b. Figures in ita ics are for 1970-77, not 1970-78.c. Separate figures are not avai able for public consLmntion,which is therefore ncluded in private consumption.117

Table 5. Structure of DemandLow-income;countriesDistribution of gross domestic product (percent)Exports ofGross Gross goods andPublic Private domestic domestic nonfactor Resourceconsumption consumption investment saving services balance1960a 1978b 1960a 1978b 1960a 1978b 1960a 1978b 1960a 1978b 1960a 1978b9 w i2 w 80wt7 3 w 14wU2 1w iw 1 Iw 5 lOw12 w -3w -6 w1 Kampuchea, Dem. 19 69 . 20 12 14 . -82 Bangladesh 6 c 86 100 7 12 8 ()10 8 1 -123 Lao PDR 21 68 .. 40 .. 21 .. 2 .. -194 Bhutan5Ethiopia 8 13 81 81 12 9 11 6 9 12 -1 -3-6M alIi 12 19 79 76 14 17 9 5 12 21 -5 -127Nepal c . 98 . 9 .. 2 .. 5 .. -78Somalia 8 19 89 79 10 16 3 2 11 12 -7 -149Burundi 3 14 92 81 6 14 5 5 13 11 -1 -9lO Chad 13 18 82 89 11 17 5 -7 23 27 -6 -2411 Mozamnbique 11 15 81 86 10 10 8 -1 14 13 -2 -1112 BurmaL C C 89 87 12 20 11 13 20 7 -1 -713 Upper Volta 10 13 94 90 10 25 -4 -3 9 15 -14 -2814 Viet Naml5lIndia 7 10 79 70 17 24 14 20 5 ..- 3 -416 Malawi 16 13 88 71 10 32 -4 16 21 21 -14 -1617 Rwanda 10 9 82 87 6 10 8 4 12 20 2 -618 SriLanka 13 10 76 73 15 22 11 17 46 38 -4 -519 Guinea 14 16 80 68 5 15 6 16 23 28 1 120 Sierra Leone . . 19 . . 72 .. 17 .. 9 . . 22 .. -821lZaire 18 21 61 67 12 19 21 12 55 26 9 -722 Niger 9 11 79 77 13 19 12 12 9 23 -1 -723 Benin 16 14 75 91 15 22 9 -5 12 22 -6 -2724 Pakistan 11 11 84 82 12 18 5 7 8 10 -7 -1125 Tanzania 9 14 72 79 14 20 19 7 31 15 5 -1326 Afghanistan c C 87 90 16 13 13 10 4 10 -3 -327 Central African Rep. 19 20 72 72 20 20 9 8 23 18 -11 -1228 Madagascar 20 16 75 63 11 16 5 21 12 . . -5 529 Haiti c 8 93 83 9 18 7 9 20 22 -2 -930 Mauritania 24 38 79 55 37 52 -3 7 18 41 -40 -4531 Lesotho 17 1732 Uganda 9 C1087515498211304-25 -7116 21226224-275-101-233 Angola 9 26 77 56 12 9 14 18 20 41 2 934 Sudan 6 14 85 84 9 16 9 2 12 15 (.) -1435 Togo 8 13 88 73 11 37 4 14 19 34 -7 -2336 Kenya 11 19 72 63 20 28 17 18 31 27 -3 -1037 Senegal 17 17 68 72 16 23 15 11 40 32 -1 -1238 Indonesia 12 11 80 67 8 20 8 22 13 21 () 2Middle-income coUntries 11 W 13 w669 wi;6 15 j 21 w2 5 w 20 w'22 w l5 w 21 w -1w w 339 Egypt 17 21 71 65 13 28 12 14 2 21-1 -1440 Ghana 10 13 73 81 24 5 17 6 28 10 -7 141 Yemen, PDR .. 29 .. 80 .. 47 .. -9 -. -5642 Cameroon 14 10 72 69 11 24 14 21 29 26 3 -343 Liberia 7 15 58 67 28 22 35 18 39 65 7 -444 Honduras 11 13 77 67 14 27 12 20 22 38 -2 -745 Zambia 11 25 48 44 25 31 41 31 56 32 16 (.)46 Zimbabwe47 Thailand11101311677663672316192722 2414 22 17 21-1-25-548 Bolivia 7 13 86 74 14 21 7 13 13 17 -7 -849 Philippines 8 10 76 65 16 30 16 24 11 19 () -650 Yemen Arab Rep. .. 12 .. 96 .. 35 .. -8 .. 3 .. -4351 Congo, People's Rep, 23 31 98 61 45 20 -21 8 21 ..- 66 -1252 Nigeria 6 15 87 57 13 30 7 28 15 31 -6 -253 Papua New Guinea 28 28 70 56 13 19 2 16 17 45 -11 -354 El Salvador 10 13 79 75 16 20 11 12 20 30 -5 -855 Morocco 12 21 77 68 10 24 11 11 24 18 1 -1356 Peru 8 13 68 70 22 15 24 17 24 22 2 257 Ivory Coast 10 14 73 56 15 31 17 30 37 38 2 -158 Nicaragua 9 8 79 73 15 25 12 19 24 33 -3 -659 Colombia 6 7 73 68 21 24 21 25 16 16 () 160 Paraguay 8 7 76 73 17 27 16 20 18 13 -1 -761 Ecuador 10 14 74 60 14 26 16 26 17 24 2 (.62 Domninican Rep. 13 5 68 77 12 23 19 18 24 21 7 -63 Guaternala 8 7 84 76 10 22 8 17 13 22 -2 -5Rep. 64 Syrian Arab .. 21 . . 65 . . 32 .. 14 . . 18 . . -1865 Tunisia 17 16 76 64 17 30 7 20 20 31 -10 -1066 Jordan .. 32 .. 87 . 40 -19 .. 47 .. -591118

Distribution of gross domestic product (percent)Exports ofGross Gross goods andPublic Private domestic domestic nonfactor Resourceconsumption consumption investment saving services balance1960a 1978b 1960a 1978b 1960a 1978b 1960a 1978b 1960a 1978b 1960a 1978b67 Malaysia 11 16 62 53 14 25 27 31 54 51 13 668 Jamaica 7 20 67 64 30 15 26 16 34 40 -4 169 Lebanon 10 .. 85 .. 16 .. 5 .. 27 .. -1170 Korea, Rep. of 15 12 84 60 11 32 1 28 3 34 -10 -471 Turkey 11 13 76 70 16 21 13 17 3 6 -3 -472 Algeria 16 15 50 48 42 51 34 37 28 27 -8 -1473 Mexico 6 11 76 64 20 25 18 25 10 11 -2 (.)74 Panarna 11 18 78 60 16 28 11 22 31 40 -5 -675 Taiwan 19 17 68 50 20 26 13 33 11 59 -7 776 Chile 11 12 75 81 17 11 14 7 14 21 -3 -477 South Africa 9 14 64 56 22 24 27 30 30 33 5 678 Costa Rica 10 C 77 85 18 25 13 15 21 29 -5 -1079 Brazil 12 10 67 69 22 23 21 21 5 7 -1 -280 Uruguay 9 3 79 73 18 14 12 14 14 20 -6 (.)81 Argenlina 9 29 71 41 22 25 20 30 10 14 -2 582 Portugal 11 14 77 74 19 23 12 12 17 20 -7 -1183 Yugoslavia 19 17 49 55 37 33 32 28 14 17 -5 -584 Trinidad and Tobago 9 14 61 53 28 26 30 33 37 47 2 785 Venezuela 14 15 53 51 21 40 33 34 32 29 12 -686 Hong Kong 7 7 92 78 19 26 1 15 79 98 -18 -1187 GreecE- 12 16 77 64 19 27 11 20 9 17 -8 -788 Singapore 8 11 89 62 11 36 3 27 163 164 -8 -989 Spain 7 11 70 68 21 20 23 21 10 16 2 190 Israel 18 36 68 58 27 24 14 6 14 44 -13 -18lndustrialized countries15 w 18 w63 w 60 wv2 1 w2 2 w2 2 w 22 w 12 w 18w w (.) w91 Irelanci 12 19 77 64 16 27 11 17 31 54 -5 -1092 Italy 12 16 64 63 24 20 24 21 15 25 (.) 193 New Zealand 13 16 65 61 24 22 22 23 23 27 -2 194 United Kingdom 17 20 66 59 19 19 17 21 21 30 -2 295 Finland 13 19 58 56 30 21 29 25 23 31 -1 496 Austria 13 18 59 55 28 28 28 27 24 35 (.) -197 Japan 9 10 57 58 34 31 34 32 11 11 (.) 198 Australia 10 16 65 60 29 23 25 24 15 16 1499 France 13 15 61 61 24 23 26 24 15 21 2 1100 Netherlands 14 18 57 59 27 22 29 23 50 47 2 1101 Belgium 13 18 69 62 19 21 18 20 33 51 -1 -1102 Canada 14 20 65 57 23 23 21 23 18 26 -2 (.)103 Norway 14 18 58 54 30 29 28 28 41 42 -2 -1104 Germany, Fed. Rep. 14 20 57 55 27 22 29 25 19 25 2 3105 United States 17 18 64 64 18 19 19 18 5 8 1 -1106 Denmark 12 24 66 55 23 23 22 21 34 28 -1 -2107 Sweden 16 29 60 53 25 18 24 18 23 29 -1 (.)108 Switzerland 9 13 62 63 29 22 29 24 29 35 (.) 2Capital-surplusoil exporters 21 w .. 32 w ..3 w ..47 w .. 48 w .. 16 w109 Iraq 18 .. 48 .. 20 .. 34 .. 42 .. 14110 Iran 10 20 69 41 17 33 21 39 19 34 4 6111 Libya .. 27 .. 28 .. 25 .. 45 .. 56 . 20112 Saudi Arabia .. 21 .. 23 .. 30 .. 56 .. 62 ..T13 Kuwai .. 21 .. 24 . 18 .. 55 .. 71 ..2637Centrally plannedeconomies ..114 China115 Korea, Dem. Rep.116 Albania117 Cuba118 Mongolia . .119 Romania .120 Bulgaria ..121 Hungary 7 8 72 64 24 37 21 28 -3 -9122 Polanci 8 12 68 59 24 32 24 29 (.) -3123 USSR 2 C 70 73 26 26 28 27 2 1124 Czechoslovakia 6 7 75 68 17 25 19 25 2 (.)125 German Dem. Rep ..a. Figures ir, talics are for '961, not 1960. c. Separate f gures are rot ava lab e for pub ic consumptionb. Figures iri ta ics are for 1977, not 1978. which is therefore included n pr vate consumrtion.119

Table 6. IndustrializationLow-income countriesDistribution of value added (percent)GrossMachinery~~~~Value added manufacturingMachies ner in manufacturing outputTextiles and~~~~~~~~~(mlios f pe aptFood and and transport Other (mi dllons) of per colapitaagriculture clothing equipment Chemicals manufacturing 17 olr) (90dlas1976a 1976a 1976a I 976a 1976a 1970 1976a 1970 1976a1IKampuchea, Dem.2 Bangladesh ... .324 320 11 133Lao PDR .4 Bhutan...5 Ethiopia .. 149 171 12 136Mali 267 Nepal ..8Somalia ... 11 17 6 129 Burundi 19 2410 Chad 18 2711 Mozambique 68 13 4 15 104 82 2812 Burma 40 20 40 225 27113 Upper Volta ... .* .31 3714 Viet Nam . ..15 India 15 29 13 12 31 7,093 8,973 51 6216 Malawi 77 7 .. 16 38 53 29 5017 Rwanda ... .. .6 3 418 Sri Lanka 17 23 .. 9 51 321 346 . -19 Guinea ... .. .12 1820 Sierra Leone ... .22 2721 Zaire 59 10 5 4 22 155 17022 Niger ... .. .4023 Benin 44 38 .. 18 19 4524 Pakistan 46 35 9 10 1,462 1,75725 Tanzania ... . .. 116 156 2726 Afghanistan......27 Central African Rep. 31 .. .6.9 14 9.. 128 Madagascar 95 ... . 118 112 40 4429 Haiti 65 15 .11930 Mauritania ... .. .18 22831 Lesotho ...... 2 232 Uganda 53 ... 47 109 8633 Angola 67 ... .33 80 3834 Sudan 41 36 3 11 9 252 368 5135 Togo ... .. .24 .. 2836 Kenya 18 13 19 8 42 174 357 55 11637 Senegal 58 15 .. 13 14 141 190 .. 9838 Indonesia 41 16 43 854 1,671 28 40Middle-fincom countries39 Egypt 17 3440 Ghana 75 ...11 13 25251,3262531,8821861465841 Yemen, PDR . .. ..42 Cameroon 65 *.. .35 119 17043 Liberia ... .... 15 2744 Honduras45 Zambia51551691635292591181126213.1071303046 Zimbabwe 26 14 11 11 38 297 .. 14247 Thailand 45 17 8 15 15 1,048 2,101 13448 Bolivia 35 22 5 4 34 151 222 94 134,49 Philippines 44 13 6 13 24 1,579 2,334 10850 Yemen Arab Rep. ... .. .12 2351 Congo, People's Rep. 68 ... .32 32 40 6052 Nigeria 92 .... 8 529 1,122 17 4253 Papua New Guinea . .. ..54 El Salvador 45 31 .. 10 14 194 280 .. 15555 Morocco56 Peru4131141061271632315999828791,446 177 19857 Ivory Coast ... .. .200 292 .. 14058 Nicaragua 61 29 .... 10 159 226.59 Colombia60 Paraguay3348181610412427281,143 1,74699 136127 17261 Ecuador 33 16 9 4 38 271 452 119 17662 Dominican Rep. 68 5 ()4 23 275 455 133 19263 Guatemala 50 37 .. 4 9 .64 Syrian Arab Rep. 50 33 ..65 Tunisia 65 10 ..322143238115458234117 10090 16366 Jordan . .. ..120

Distribution of value added (percent)GrossMachinery~~~~~Value added manufacturingMachies ner in manufacturing outputFood and and transport Other (millions of per capitaagriculture clothing equipment Chemicals manufacturing 1970 dollars) (1970 d olla rs)1976a 1976a 19768 19768 19768 1970 1976a 1970 1976a67 Malaysia 35 8 11 12 34 543 1,103 17868 Jamaica 87 13 221 239 34869 Lebanon .. 20270 Korea, Rep. of71 Turkey1555252324 8 28221,4311,9303,9343,29411110632021772 Algeriai 29 18 11 6 36 735 1,11773 Mexico) 21 13 19 14 33 8,636 12,17474 Panama 44 7 3 3 43 166 186 276 38675 Taiwani 1,873 4,278-76 Chile 18 8 7 4 63 2,175 1,828 388 29377 South Africa78 Costa Rica17421312166121042303,959180 29243279 Brazil 15 10 30 12 33 9,972 19,147 22980 Uruguay 42 19 4 9 26 515 578 48981 Argentina 17 13 24 13 33 6,777 8,24882 Portugal 17 19 23 9 32 1,847 2,481 72183 Yugoslavia 9 14 24 10 43 3,235 5,423 411 84684 Trinidad and Tobago 5485 Venezujela 29 12..113643421841,8271692,719218423.. 98 ... 2 899 1,314 .. 86 Hong Kong 84487 Greece 16 29 10 7 38 1,642 2,601 498 83288 Singapore 7 5 49 7 32 388 707 764 1,24789 Spain 27 10 20 11 32 9,339 15,739 868 1,52390 Israel 11 17 26 7 39 1,101 .. 833Industrialiized countries91 Irelanci 31 16 12 11 30 1,18692 Italy 13 14 27 11 35 29,059 35,586 1,251 1,57893 New Zealand94 United Kingdom261415912305124235..-34,317 35,381-1,493 1,64095 Finland 13 10 25 6 45 2,788 3,467 1,731 2,03996 Austria 15 12 22 8 43 4,873 6,188 1,706 2,33997 Japan 8 7 36 11 38 73,167 103,478 1,816 2,56198 Australia 17 8 24 9 42 8,498 .. 1,71299 France 13 6 35 8 38 40,510 53,113 .. 2,429100 Netheirlands 20 6 22 19 33 9,192 11,708 2,137 2,391101 Belgium 18 10 29 9 34 8,226 10,636102 Canada 14 8 26 8 44 16,802 21,341 1,947 2,496103 Norway 14 5 25 6 50 2,442 2,882 1,606 2,312104 Germany, Fed. Rep. 9 7 33 11 40 75,765 85,792 2,184 2,636105 Unitec States 12 8 31 12 37 252,100 292,900 2,586 3,126106 -Denmarlk 23 8 26 7 36 3,100 .. 1,485 2,149107 Sweden 9 5 33 6 47 8,516 9,530 2,319 2,538108 SWitZerland 11 8 38 15 28 .Capital-surplusoil exporters109 iraq 37 23 .. 2 38 325 652 77110 Iran 14 34 34 5 13 1,501 3,720 140144111 Libya ... .. .82 198 88 142;I12 Saudi Arabia ....... 372 485113 Kuwait ......... 106 .199Centrally plannedeconomies115 Korea, Dem. Rep. . .. .. . .117 Cuba 72 ... .28 . .118 M ongol ia........... . ..T119 Romania 15 18 32 9 26 . .120 Bulgaria 25 15 27 5 28 .121 H ungary 1 2 1 1 32 5 40 . ..122 PolanJ 17 1 5 27 10 31 .123 USSR 1 0 6 .. 7 77 .124 Czechoslovakia 7 1 1 37 7 38 . ..125 German Dem. Rep. 1 1 12 36 1 1 30. ... .a. Figures irn italics are for 1975, not 1976.:121

Table 7. EnergyEnergyEnergy consumptionAverage annual consumption per dollar Energy importsgrowth rate (percent) per capita of GDP as(kilograms (kilograms percentage ofEnergy Energy of coal of coal merchandiseproduction consumption equivalent) equivalent) exports1960-74a 1974-78 1960-74 1974-78 1960 1978 1960 1978b 1960c`1977d6Low4incomectountries .w8 28.w 6w6 wOB 1.Ow ow 16w1 Kamnpuchea, Dem. ..- 0.1 5.9 31 4 . .. 92 Bangladesh .. 12.8 .. 16.5 . 43 .3 Lao PDR .. -0.6 13.4 1.5 18 60 ..3 - 484 Bhutan . . ..5 Ethiopia 14.1 1.8 14.7 -7.8 8 20 0.1 0.2 11 276 Mali .. 10.8 5.5 5.9 15 30 0.2 0.37 Nepal 27.2 4.6 12.3 0.9 5 11 (.) 0.113 258 Somalia . .. 7.4 27.4 19 55 0.2 0.6 4 139 Burundi .. 23.4 .. 3.1 .. 12 0.1 .. 710 Chadc. . 7.2 5.0 10 22 0.1 0.2 23 2711 Mozambique 3.2 29.9 5.7 4.4 114 151 0.4 0.5 11 2812 Burma 4.8 11.2 3.6 4.9 55 64 0.5 0.5 4 1213 Upper Volta . 6.5 10.9 5 25 0.1 0.3 38 1914 Viet Nam .. 12.3 .. -9.0 .. 125 .15 India 4.4 5.5 4.9 5.1 108 176 1.0 1.2 11 2616 Malawi .. 9.4 .. 2.8 .. 52 . 0.3 - 1517 Rwanda .. 2.8 .. 11.2 .. 17 .. 0.1 1118 Sri Lanka 10.4 3.5 6.2 0.8 107 109 0.7 0.5 8 2219 Guinea 16.1 .) 3.2 1.8 65 91 0.3 0.4 720 Sierra Leone . .. 10.3 -0.6 31 100 0.3 0.5 11 1021 Zaire 3.0 53.5 4.3 2.0 87 69 0.9 1.0 3 1622 Niger . .. 14.3 7.5 5 38 (.) 0.2 623 Benin . .. 8.8 -4.5 39 56 0.2 0.3 16 4324 Pakistan 10.0 2.4 5.9 1.0 61 172 1.3 1.0 17 3325 Tanzania 10.6 13.4 10.4 0.5 41 65 0.3 0.4 .. 2226 Afghanistan 39.7 -4.2 9.4 1.3 15 47 0.2 0.4 12 1227 Central African Rep. 14.2 4.7 7.4 8.7 37 44 0.1 0.2 12 128 Madagascar 6.8 3.5 8.9 2.3 38 78 0.2 0.4 9 2229 Haiti .. 17.4 2.8 11.1 36 57 0.2 0.3 .. 1730 Mauritania . . 16.8 4.3 18 203 0.1 0.7 39 631 Lesotho.. ... ... ... .32 Uganda 6.2 -4.1 9.5 -0.3 30 48 0.1 0.2 5 433 Angola 35.8 0.2 8.8 1.9 86 192 0.2 0.5 6 234 Sudan .. 16.8 13.2 1.4 52 172 0.2 0.7 8 2635 Togao. . 12.5 12.3 23 96 0.1 0.3 10 136 Kenya 9.3 10.5 4.2 -0.6 143 139 0.8 0.5 18 2437 Senegal . .. 4.6 4.7 121 181 0.3 0.5 8 1538 Indonesia 8.5 11.3 4.2 21.4 129 278 0.8 1.1 3 7Mid,dle-income CoUntries' 6.0 w 17w 7.9 w 6. w395 wo 903 w 0.7 W 1.1 w 11 20 w39 Egypt 9.8 31.6 2.7 11.7 298 463 1.7 1.4 12 640 Ghana .. 2.7 6.6 0.6 106 165 0.2 0.4 7 1841 Yemen, PDR . .. -13.6 11.2 299 523 .. 2.642 Cameroon 1.1 3.1 4.0 10.2 55 119 0.2 0.3 7 1043 Liberia 31.8 -1.3 19.3 -0.6 86 395 0.2 0.9 3 1244 Honduras 29.5 5.6 8.9 8.9 155 284 0.5 0.7 10 1445 Zambia .. 4.4 .. 1.8 . 474 . 1.2 .. 546 Zimbabwe 1.9 -3.9 .. ( . 579 .. 1.247 Thailand 28.0 11.4 16.9 7.6 64 327 0.3 0.8 12 2948 Bolivia 17.2 -2.0 7.0 11.3 147 368 0.5 0.8 4 149 Philippines 5.6 12.4 9.6 6.3 147 339 0.6 0.8 9 5350 Yemen Arab Rep. . .. 12.7 20.1 7 53 .. 0.351 Congo, People's Rep. 15.7 -9.3 5.2 -0.7 119 175 0.3 0.3 25 252 Nigeria 37.4 -2.9 10.2 8.1 34 106 0.1 0.2 7 253 Papua New Guinea .. 16.2 .. 3.0 51 292 0.2 0.6 7 1354 El Salvador 5.1 20.9 7.7 6.3 127 265 0.4 0.6 6 1055 Morocco 1.9 4.4 7.7 6.6 148 285 0.4 0.5 9 2856 Peru 3.5 13.4 6.2 2.4 445 649 0.8 0.8 4 2357 Ivory Coast 9.7 -3.8 15.5 7.3 76 357 0.2 0.4 5 958 Nicaragua 26.6 -9.5 10.0 8.5 174 517 0.4 0.7 12 1759 Colombia 3.4 -1.8 6.3 4.3 491 700 1.3 1.2 3 660 Paraguay .. 7.0 8.5 8.8 87 200 0.2 0.3 .. 3061 Ecuador 19.0 3.1 8.3 10.2 201 505 . . 0.8 2 162 Dominican Rep. 4.4 8.4 14.6 -7.0 157 464 0.3 0.6 .. 2263 Guatemala 9.9 20.9 6.1 4.9 174 260 0.4 0.4 12 1564 Syrian Arab Rep. 86.2 11.8 9.0 18.3 321 968 0.7 1.2 16 4265 Tunisia 73.4 0.1 9.5 8.7 190 543 . . 0.6 15 2266 Jordan .. . 6.5 15.2 197 535 0.7 1.3 79 53122

EnergyEnergyconsumptionAverage annual consumption per dollar Energy importsgrowth rate (percent) prcpt fGPa(kilograms (kilograms percentage ofEnergy Energy of coal of coal merchandiseproduction consumption equivalent) equivalent) -exports1960-74a 1974-78 1960-74 1974-78 1960 1978 1960 1978b 1960c 1977d67 Malaysia 37.4 27.1 11.1 4.7 242 716 0.6 0.8 2 1068 Jamaica -0.7 -2.8 11.2 0.3 426 1,823 0.2 1.5 11 3269 Lebanon 12.7 -0.6 6.3 -3.4 548 936 .. .. 68 470 Korea, Rep, of 6.3 3.2 13.2 9.6 258 1,359 1.2 1.8 70 2271 Turkey 7.6 -0.8 9.9 9.4 245 793 0.5 0.8 16 7972 Algeric. 11.7 6.7 12.2 13.7 252 687 0.3 0.7 14 273 Mexico 6.0 12.6 7.7 6.7 770 1,384 0.9 1.0 3 474 Panama 14.8 4.4 10.5 7.1 -448 991 0.7 0.975 Taiwari 2.3 1.4 8.6 14.5 583 2,202 1.5 1.9 .. 1576 Chile 4.0 -1.5 6.1 -0.8 845 997 1.2 1.1 10 2577 South Africa 3.8 8.1 . .-. .9 178 Costa Rica 9.5 4.7 10.4 5.6 233 564 0.4 0.5 7 1379 Brazil 8.1 5.6 8.6 7.0 332 794 0.6 0.6 21 3780 Uruguay 3.7 7.3 3.1 1.9 825 1,054 0,7 0.8 35 2781 Argenfina 6.5 2.2 5.7 2.2 1,129 1,873 0.9 1.4 14 1282 Portugal 4.4 -5.9 8.3 2.3 382 1,030 0.5 0.6 17 3683 Yugoslavia 4.7 3.2 7.1 4.8 872 2,035 1.3 1.2 8 2384 Trinidatd and Tobago 2.8 5.9 4.8 5.5 1,775 4,965 1.0 1.9 35 3985 Venezujela 1.2 -6.3 6.6 5.3 1,694 2,989 1.1 1.2 1 -86 Hong Kong . 6.8 12.2 468 1,657 0.7 0.7 5 787 Greece 14.3 10.8 13.2 4.1 460 1,925 0,5 0.7 26 3888 Singapore - .. 16.8 9.3 372 2,461 0.4 0.8 17 3289 Spain 2.5 4.3 8.5 3.9 756 2,405 0.6 0.8 22 4990 Israel 41.9 -71.2 9.6 2.8 1,270 2,362 0.7 0.6 17 25Industrialized countries 3.2 ew 0.8 w4 .9 w l.5 w4 ,4 62 w7 ,0 60 w 1.2 w 1.1 wo 11 w 23 w961 l1relanc, 0.1 3.8 4.7 2.6 1,838 3,292 1.2 1.1 17 1592 Italy 2.2 -1.6 8.3 1.8 1,086 3,230 0.6 0.9 18 2793 New Zealand 5.2 11.4 5.7 3.8 2,277 3,790 0.7 0.9 7 1694 United Kingdom -1.2 13.5 1.7 0.3 4,861 5,212 1.6 1.2 14 1695 Finland 3.3 9.0 9.1 2.7 1,529 5,205 0.5 0.9 11 239T6 A ust r Ia. 1.5 -1.5 5.1 1.1 2,129 4,048 0.8 0.7 12 1597 Japan -1.7 -0.8 10.7 1.5 1,171 3,825 0.8 0.7 18 3998 Austral'a 11.1 5.3 5.6 3.6 3,857 6,622 0.8 -0.7 12 999 France -1.3 0.6 5.8 1.6 2,474 4,368 0.7 0.6 16 24100 Nethe-lands 16.2 -1.6 8.7 -1.5 2,504 5,327 0.7 0.8 15 19101 -Bel g iu m -7.2 () 4.9 0.2 3,851 6,078 1.1 0.9 1 15102 Canada 8.9 -1.3 6.0 1.7 5,750 9,930 1.3 1.3 9 9103 Norwvay 6.8 37.5 5.9 4.0 2,702 5,571 0.7 0.7 15 16104 Germany, Fed. Rep. -0.7 -0.7 4.5 1.5 3,695 6,015 0.9 0.8 7 15105 Unitedi States 3.5 -0.5 4.1 1.6 8,172 11,374 1.6 1.4 8 37106 Denmark -20.1 49.9 5.5 3.7 2,830 5,423 0.6 0.7 15 22107 Sweden 3.6 4.6 4.9 2.5 3,572 5,954 0.7 0.7 16 19108 SWitZerland 4.2 4.0 5.9 1.4 1,873 3,690 0.3 0.4 10 10Capital-surplusoil exporters 11.5 w 1.4 w 9.2 w 11.7 wo 404 w 1,620 wo 0.4 wo 0.5 wo. . w109 Ir,aq 4.9 6.9 5.9 1.0 487 633 0.7 0.5(. ()110 Iran 14.5 -1.5 15.6 11.9 270 1,808 0.4 0.9 1 (.)111 Libya 29.1 8.9 17.9 21.8 251 1,889 0.1 0.3 83 (.)112 Saudi Arabia 14.1 2.3 14.4 16.1 267 1,306 . . 0.2 - C)I 13 Kuwalt 4.6 -4.2 6.7 12.2 10,396 6,771 0.4 0.6 . ()Centrally plannedeconomies 4.8 wo 6.5 wo 4.8 w 5.4 wo 1,347 w 2,117w~ 1.9 wo 2.1 wo114 -Com na 4.5 9.1 3.6 9.0 637 805 .- 4.2115 Korea, Dem. Rep. 9.1 4.3 9.1 4.3 989 2,702 3.8 4.4116 Albania 10.1 6.3 12.5 12.8 302 998 1.1 1.7117 Cuba 20.6 -19.4 4.4 2.7 912 1,168 1.0 1.6 8 39118 Mongolia 10.4 9.3 7.3 8.1 540 1,240 0.8 1.6119 -Ro man ia 5.8 1.6 8.0 4.5 1,342 4,042 3.8 2.7120 Bulgaria 3.3 0.8 9.8 3.8 1,303 5,020 1.2 1.9 7121 Hungary 1.8 2.0 3.9 3.0 2,072 3,451 1.5 1.2 13 14122 Poland 3.9 4.2 4.1 5.8 3,107 5,596 2.1 1.8123 USSR 5.6 5.5 5.3 4.2 2,839 5,500 1.9 1.8 4 4124 Czechoslovakia 1.3 2.6 3.1 4.0 4,741 7,531 1.9 1.9 .. 15125 German Dem, Rep. 0.5 1.2 2.1 2.1 4,950 7,121 1.8 1.5 -a. Figures in italics are for 1961-74, not 1960-74. c. Figures in italics aer for 1961, not 1960.b. Figu.res in italics are for 1977, not 1978. d. Figures in italics are for 1976, not 1977.123

Table 8. Growth of Merchandise TradeMerchandise tradeAverage annual growth ratea(millions of dollars) (percent) Terms of tradeExports Imports Exports Imports (1970 100)1978b 1978b 1960-70 1970-78 1960-70 1970-78 1960 1978Lowin1come countries ~ 287149 "a2,7t 5.0 m 08m50 m .gm9um 91 Karnpuchea, Dem. -3.3 -3.0 102 1362 Bangladesh 576 1,294 6.6 -4.7 7.0 -2.9 155 743Lao PDR 9 64 . ..4 Bhutan .. . .S Ethiopia 310 -522 3.7 _-5.4 6.2 -0--.2 75 1266 Mali 107 219 3.1 7.7 -0.4 5.0 91 937 Nepal 87 227.. ...8 Somalia 107 241 2.3 7.8 2.6 13.7 107 729 Burundi 67 98 . ..10 Chad 102 192 5.9 -3.0G 5.0 1.7 106 1221 Mozambique 129 278 6.0 -15.9 7.8 -13.4 103 9612 Burma 243 309 -11.6 0.5 -5.7 -4.6 101 8313 Upper Volta 57 210 14.4 8.5 7.8 9.4 75 8914 Viet Nam . .. ..15 India 6,614 7,954 3.1 6.0 -0.9 3.2 104 8016 Malawi17 Rwanda1877033917911.615.72.43.67.78.04.211.71168911212318 Sri Lanka 846 939 4.6 -3.8 -0.3 -2.7 175 12419 Guinea 314 273 . ..20 Sierra Leone 161 278 0.3 -3.1 1.9 -4.0 89 7721 Zaire 925 589 -1.8 -4.1 5.5 -10.4 61 6122 Niger 158 346 6.0 13.2 11.9 5.5 90 7823 Benin 26 267 5.0 -13.6 7.5 6.8 89 7924 Pakistan 1,471 3,275 8.2 -1.3 4.2 5.9 93 8225 Tanzania 457 1,117 3.5 -5.0 6.0 -1.0 96 10426 Afghanistan 322 681 2.4 2.4 0.8 8.1 99 13327 Central African Rep. 72 57 8.1 1.8 4.5 -0.9 93 10328 Madagascar 387 443 5.4 -0.9 4.0 -4.0 118 8729 Haiti 152 140 . ..30 Mauritania 119 181 55.2 -0.8 4.6 6.3 112 6831 Lesotho..... .32 Uganda 350 255 5.0 -5.3 6.2 -7.6 95 10633 Angola 500 340 9.0 -8.9 11.6 -4.7 89 14534 Sudan 533 1,198 2.1 -3.2 1.1 6.4 100 9235 logo 235 381 10.5 0.3 8.4 12.4 95 10536 Kenya 1,022 1,709 7.2 0.8 6.3 ()112 10437 Senegal 391 788 1.2 4.4 2.7 4.7 91 10038 Indonesia 11,643 6,690 3.5 7.2 1.9 15.8 138 225~Middle income counrtres 17,35t t 23, ti 55m .2 m6.8 m 5.8 m 3 939 Egypt 1,901 6,480 3.2 -2.3 -0.9 16.6 104 9240 Ghana 1,304 1,266 0.1 -0. 1 -1.6 2.7 92 8041 Yemen, PDR42 Cameroon105803590..1,057 6.9...2.4 9.3.6.7 90 9743 Liberia 486 481 18.3 1.5 2.8 2.0 194 8544 Honduras 596 693 11.1 2.9 11.7 2.6 91 7745 Zambia 832 611 2.2 -4.7 9,8 -6.9 50 5646 Zimbabwe . .. ..47 Thailand 4,085 5,256 5.2 12.2 11.2 5.6 118 8248 Bolivia 627 768 9.7 1.7 8.1 12.2 69 13049 Philippines 3,425 5,143 2.2 5.4 7.2 4.7 73 6950 Yemen Arab Rep, 34 1,043 . ..51 Congo, People's Rep.52 Nigeria1389,48333412,8574.96.114.70.5-1.01.76.725.0989711429053 Papua New Guinea 780 676 . . .-.54 El Salvador 629 1,025 5.6 0.6 6.4 8.4 94 10655 Morocco 1,511 2,970 2.5 2.6 3.3 13.7 103 8656 Peru57 Ivory Coast1,9492,3221,9602,3251.98.8-3.88.53.69.73.110.66389779458 Nicaragua 594 646 9.7 5.6 10.3 4.2 88 9059 Colombia 3,018 3,060 2.2 1.2 2.4 -0.7 90 10760 Paraguay 257 319 5,4 7.6 7.5 8.0 92 10761 Ecuador 1,494 1,627 3.7 9.5 11.6 12.7 110 12962 Dominican Rep. 604 860 -2.3 6.7 10.0 4.5 77 6263 Guatemala 1,090 1,286 9.0 3.4 7.1 7.1 97 10064 Syrian Arab Rep.65 Tunisia1,0531,1262,4372,1623.24.17.121.14.22.215.530.39410413913366 Jordan 297 1,499 10.1 21.5 3.6 16.3 99 84124

Merchandise tradeAverage annual growth ratea(millions of dollars) (percent) Terms of tradeExports Imports Exports Imports (1970 100)1978b 1978b 1960-70 1970-78 1960-70 1970-78 1960 197867 Malaysia 7,413 5,929 6.1 5.2 2.7 6.8 139 11968 Jamaica 710 872 4.7 -2.7 8.2 -5.9 100 9069 Lebanon 625 1,696 14.1 5.7 5.1 (.) 78 8770 Korea, Rep. of 12,711 14,972 35.2 28.8 20.1 13.5 78 8171 Turkey 2,288 4,597 1.6 2.5 5.5 8.1 .. 7172 Algeria 5,866 8,531 4.1 -0.8 -1.0 16.6 115 28173 Mexico 5,739 7,744 3.3 5.2 6.4 4.0 87 10874 Panama 244 942 10.4 2.2 10.4 -3.4 89 6175 Taiwan 12,682 11,033 23.7 9.3 17.9 9.1 79 7576 Chile 2,481 2,595 0.6 6.5 4.7 -0.9 53 5077 South Africa 7,182 7,193 5.5 6.7 8.2 -1.8 100 7578 Costa Rica 816 1,184 9.4 5.9 10.0 4.7 103 8179 Brazil 12,527 14,538 5.0 6.0 4.9 6.6 88 9080 Uruguay 686 774 2.1 -5.0 -2.8 2.3 99 8281 Argentina 6,400 3,834 3.5 6.8 0.3 -0.1 101 9582 Portugal 2,393 4,791 9.6 -5.9 14.1 4.7 83 8683 Yugos avia 5,659 9,987 7.8 4.8 9.0 4.9 96 9884 Trinidad and Tobago 2,039 1,967 5.0 -1.3 3.2 -4.4 115 10985 Veneziela 9,126 10,614 2.0 -10.1 4.3 14.9 112 29286 Hong \ong 11,499 13,452 12.7 4.8 9.2 3.2 .. 9787 Greece 3,341 7,648 10.7 13.1 10.9 5.9 92 9388 Singapore 10,134 13,049 4.2 9.8 5.9 8.189 Spain 13,115 18,708 11.6 11.0 18.4 3.3 93 6890 Israel 3,716 5,582 10.9 10.6 8.7 4.5 91 83Industrialized countries 837,596 t 862,455 t 8.7 m 5.7 m 9.4 m 5.1 m 99 m 95 m91 Ireland 5,678 7,097 7.2 8.4 8.2 6.3 94 10892 Italy 56,047 56,446 13.5 7.2 9.7 2.7 104 8093 New Zealand 3,752 3,500 4.6 2.4 3.0 3.3 115 9494 Unitec Kingdom 71,691 78,557 4.8 5.5 5.0 4.6 95 9495 Finland 8,618 7,864 6.7 3.0 7.1 1.6 98 9796 Austria 12,205 16,013 9.6 6.8 9.7 7.2 100 9797 Japan 97,501 78,731 17.5 9.7 13.7 5.0 102 d898 Australia 14,127 13,885 6.5 4.0 7.2 5.1 116 9899 France 76,609 81,805 8.3 7.3 10.9 6.7 93 96100 Nethelands 50,188 53,082 9.9 5.7 9.4 4.4 100 92101 Belgium 44,853 48,376 10.8 5.7 10.3 6.0 110 92102 Canada 46,065 43,434 9,9 4.3 9.3 7.1 98 102103 Norway104 Germzny, Fed. Rep.10,011142,09011,473120,6689.110.26.36.99.510.05.16.39190102104105 Unitecd States 141,154 182,787 6.0 6.5 9.8 5.4 93 77106 Denmark 11,886 14,810 7.1 4.2 8.1 3.4 108 94107 Sweden 21,560 20,123 7.7 2.3 7.3 2.3 109 94108 Switzerland 23,561 23,804 9.0 5.1 8.5 2.3 91 112Capital-surpiusoil exporters 94,107 t 49,866 t 9.5 m -1.2 m 11.1 m 21.1 m 107im 393 m109 Iraq 11,008 4,213 7.3 0.6 1.3 21.1 112 403110 Iran 22,430 16,019 12.7 -1.2 11.3 22.9 108 373111 Libya 9,503 4,603 61.0 -7.0 15.4 18.7 98 280J12 Saudi Arabia 40,716 20,424 9.5 6.2 11.1 41.5 107 396113 Kuwait 10,450 4,607 6.9 -9.7 10.4 19.2 105 393Centrally plannedeconomies 128,821t 136,420 t .. .. ..114 China 10,680 11,950 .. .. .. .. .115 Korea, Dem. Rep. .. 950 .. .. ..116 Albania ..117 Cuba 4,456 4,687 3.9 13.5 5.5 4.5 112 66118 Mongolia 281 417 .. .. .. ..119 Romaila 8,237 9,087 9.9 .. 10.5120 Bulgaria 7,478 7,651 14.5 10.7 12.8 10.8 .121 Hungary 6,345 7,902 9.7 13.0 9.1 12.2 . . 83122 Poland 14,114 16,089 10.0 9.3 8.9 11.4 .. 103123 USSR 52,216 50,550 . 7.8 . 10.2 ..124 Czechoslovakia 11,747 12,565 6.6 6.0 6.9 6.5 .125 German Dem. Rep. 13,267 14,572 8.3 7.9 8.6 8.0 ..a. See the technical notes.b. Figures in italics are for 1977, not 1978.125

Table 9. Structure of Merchandise ExportsLow-income countries I3 w 37 w 70 wPercentage share of merchandise exportsMachineryFuels, Other andminerals primary Textiles transport Otherand metals commodities and clothing equipment manufactures1960a 1977 1960a 1977 1960a 1977 1960a 1977 1960a 197744 w 12 w7 w (.w 2 w 5w lOw1 Kampuchea,Dem. 0 0 100 80 0 6 0 ()0 142Bangladesh 2 42 45 1 103Lao PDR 20 65 1 0 144BRhutan. .S Ethiopia 0 0 i66 97 0 . 0 26Mali 0 ()96 98 1 ()1 12 17Nepal (. . 82 11168Somalia 0 0 88 97 0 0 8 3 4 09Burundi 8 91 0 0 1lO Chad 65 0 32 96 0 1 0 0 3 311 Mozambique 0 11 100 86 0 2 0 0 0 112 Burma 4 6 95 88 0 0 0 1 1 513 Upper Volta 0 C.) 100 95 0 (.) 0 1 () 414 Viet Nam .. 12 . 32 33 (*) 23l5lIndia 10 9 45 35 35 20 1 6 9 3016 Malawi .. .) 96 2 (.) 217 Rwanda 10 90 0 0 (.)l8 SriLanka .) 6 99 82 0 2 0 ()1 1019 Guinea 65 15 0 ()2020 Sierra Leone 15 8 20 48 0 0 0 0 65 4421 Zaire 42 71 57 21 0 0 0 1 1 722 Niger 31 100 35 0 1 0 0 0 3323 Benin 0 6 100 85 0 2 .) 0 0 724 Pakistan 0 5 73 36 23 44 1 2 3 1325 Tanzania () 4 87 90 0 1 0 (.) 13 526 Afghanistan () 13 82 74 14 12 3 0 1 127 Central African Rep.28 Madagascar124(.)1486907678C.)1(.)411(.)01424429 Haiti 0 12 100 53 0 7 0 3 0 2630 Mauritania 4 87 69 9 1 ()20 ()6 431 Lesotho32 Uganda 8 1 92 99 0 ()0 (.(. (.33 Angola .. 64 .. 28 0 1 734 Sudan 0 5 100 95 0 (.) C (.) 0 (.35 Togo 0 49 96 45 0 3 0 2 4 136 Kenya 1 18 87 72 0 (.) 0 1 12 937 Senegal 3 13 94 80 1 1 1 (.) 1 638 Indonesia 33 71 67 27 0 ().) 1 .) 1Middle-lincome countries 25 w 33 w 61 w 30 w4 w lo,w 2 w 9 w8 w l8 w39 Egypt 4 26 84 49 9 18 () .)3 740 Ghana 7 16 83 80 0 0 0 0 10 441 Yemen, PDR .. 82 .. 17 .. .) .. (.) 142 Cameroon 19 5 77 91 0 1 2 1 2 243 Liberia 45 64 55 34 0 C.) 0 (. 0 244 Honduras 5 6 93 84 0 2 0 0 2 845 Zambia .. 94 .. 2 .. 0 . ... 446 Zimbabwe 71 .. 25 .. 1 .() .. 347 Thailand 7 9 91 72 0 8 0 2 2 948 Bolivia .. 79 .. 17 . 1 .. (.) 349 Philippines 10 17 86 58 1 5 0 2 3 1850 Yemen Arab Rep. .. (.) .. 90 .. 3 .. 1 . 651 Congo, People's Rep. 7 60 84 24 () 0 5 2 4 1452 Nigeria 8 93 89 6 0 0 0 (.) 3 153 Papua New Guinea 0 35 92 63 0 0 0 0 8 254 El Salvador 0 2 94 78 3 7 H. 2 3 1155 Morocco 38 46 54 33 1 10 1 1 6 10SS Peru 49 47 50 45 0 2 0 1 1 557 Ivory Coast 1 4 98 89 0 2 () 2 1 3S8 Nicaragua 3 1 95 82 0 3 0 1 2 1369 Colombia 19 4 79 77 0 5 .) 3 2 1160oParaguay 0 0 100 91 0 0 0 0 0 961lEcuador 0 50 99 48 0 1 0 (.) 1 162 Dominican Rep. 6 3 92 79 0 C. 0 1 2 1763 Guatemala 2 1 95 82 1 4 0 1 2 1264 Syrian Arab Rep. 0 62 81 28 2 4 0 3 17 365 Tunisia 24 49 66 17 1 19 1 1 8 1466 Jordan 0 31 96 38 0 4 0 1 4 26126

Percentage share of merchandise exportsMachineryFuels, Other andminerals primary Textiles transport Otherand metals commodities and clothing equipment manufactures1960a 1977 1960a 1977 1960a 1977 1960a 1977 1960a 197767 Malaysia 20 27 74 56 (.) 2 (.) 7 6 868 Jamaica 50 24 45 21 2 1 0 0 3 5469 Lebanon 3 .. 27 .. 11 .. 26 .. 3370 Korea, Rep. of 30 2 56 13 8 32 (.) 17 6 3671 Turkey 8 8 89 67 0 18 0 1 3 672 Algeria 12 97 81 2 0 (.) 1 (.) 6 173 Mexicc, 24 32 64 39 4 4 1 6 7 1974 Panama .. 28 63 .. 3 .. 1 575 Taiwanr 14 .. 37 .. 23 .. 3 .. 2376 Chile 92 83 4 10 0 (.) 0 (.) 4 777 South Africa 29 29 42 29 2 1 4 6 23 3578 Costa Rica 0 (.) 95 76 0 3 0 3 5 1879 Brazil 8 10 89 64 0 4 (.) 11 3 1180 Uruguay . 1 .. 60 .. 18 .. 2 .. 1981 Argen--ina i 1 95 75 0 2 (.) 9 4 1382 Portugal 8 4 37 26 18 26 3 15 34 2983 Yugos avia 18 11 45 20 4 8 15 32 18 2984 Trinidad and Tobago 82 92 14 3 0 (.) 0 1 4 485 Venezuela 74 97 26 1 0 (.) 0 (.) (.) 286 HongKong 5 1 15 3 45 46 4 16 31 3487 Greece 9 14 81 36 1 18 1 5 8 2788 Singapore 1 32 73 24 5 5* 7 24 14 1589 Spain 21 6 57 23 7 6 2 26 13 3990 Israel 4 1 35 19 8 7 2 10 51 63Industrializedcountries11 w9 w23 w 15 w7 w 5 w3 0 w39 w2 9 w 32 w91 Irelancl 5 3 67 42 6 9 4 15 18 3192 Italy 8 7 19 10 17 11 29 34 27 3893 New Zealand (.) 6 97 77 0 3 (.) 3 3 1194 Unitec Kingdom 7 10 9 9 8 5 44 37 32 3995 Finland 3 6 50 20 1 6 13 26 33 4296 Austria 26 5 22 11 10 10 16 28 26 4697 Japan 11 1 10 2 28 5 23 56 28 3698 Australia 13 34 79 45 (.) (.) 3 4 5 1799 France 9 6 18 17 10 6 25 38 38 33100 Nethealands 15 22 34 25 8 5 18 19 25 29101 Belgium 15 11 9 12 12 8 13 24 51 45102 Canada 33 26 37 23 1 1 8 33 21 17103 Norway 22 32 34 15 2 1 10 29 32 23104 Germany, Fed. Rep. 9 5 4 6 4 5 44 48 39 36105 Unitecl States 10 6 27 24 3 2 35 43 25 25106 Denmark 2 5 63 39 3 5 19 27 13 24107 Sweden 10 6 29 14 1 2 31 44 29 34108 Switzerland 2 3 8 5 12 7 30 33 48 52Capital-surplus.oil exporters9 5 w99 w 4w (.)w 0 w (.)w 0 w ()w 1w 1w109 Iraq 97 99 3 1 0 (.) 0 (.) 0 (.)110 Iran 88 99 9 1 0 (.) 0 (.) 3 (.)111 Libya 100 100 0 (.) 0 (.) 0 (.) 0 (.)412 Saudi Arabia 6 100 84 0 0 0 0 0 10 0113 Kuwait .. 88 .. 1 .. 1 .. 3 .. 7Centrally plannedeconomies 24 w 16 w 4 w 31w 25 w114 China .. 14 .. 37 .. 23 .. 3 .. 23115 Korea, Dem. Rep. .. 51 .. 31 .. 6 .. 1 .. 11116 Albania .. 33 .. 26 ..117 Cuba .. 7 .. 80 ..68....4(.)....315118 Mongolia 2 7 93 93 1 0 (.) (.) 4 (.)119 Romania .. 12 .. 20 .. 9 .. 24 .. 35120 Bulgaria 3 2 75 34 12 5 6 39 4 20121 Hungary 6 7 28 25 7 8 38 33 21 27122 Poland 24 43 28 11 1 (.) 21 19 26 27123 USSR .. 21 .. 11 .. 7 .. 39 .. 22124 Czechoslovakia 20 7 11 6 (.) 6 45 51 24 30125 German Dem. Rep. .. 3 .. 3 .. 5 57 32a. Figures in italics are for 1961, not 1960.127

Table 10. Structure of Merchandise ImportsLow-income cIo"untriePercentage share of merchandise importsMachineryOtherprimaryandtransport OtherFood Fuels commodities equipment manufactures1960a 1977b 19605q 1977b 1960a 1977b 1960a 1977b 1960a 1977b2 2 & w96 w25w 2w SOw OwI Kampuchea, Dem.2 Bangladesh 18 24 *6 13 393 Lao PDR4 Bhutan5Ethiopia 6 15 3 34 426Mali 20 19 5 14 4 2 18 30 53 3517Nepal8Somalia 27 4 0 18 519 Burundi . 23 11 8 27 3110 Chad 19 12 4 19 4611 Mozambique12 Burmna 14 4 9 17 5613 Upper Volta 21 4 I 24 5014 Viet Narn15 India 21 16 6 26 28 15 30 19 15 2416 Malawi 8 13 217 Rwanda -30 47l8 SriLanka 39 40 7 24 5 3 15 12 34 2119 Guinea20 Sierra Leone 23 23 12 7 5 1 15 19 45 5021 Zaire22 Niger 24 5 4 18 4923 Benin 17 17 10 8 1 0 18 30 54 4524 Pakistan 22 17 10 16 2 7 27 28 39 3225lTanzania 10 18 5 35 3226 Afghanistan 14 14 7 8 4 0 14 7 61 7127 Central African Rep. 15 16 9 1 2 2 26 36 48 4528 Madagascar 17 6.3 323 5129 Haiti30 Mauritania 5283 34113920503731 Lesotho32 Uganda 6 Ii 8 1 8 3 25 44 53 4133 Angola .-34 Sudan 17 8 3 14 5835 Togo 16 19 6 7 3 1 32 31 43 4236sKenya 12 6 11 22 8 4 27 34 42 3437 Senegal 30 5 2 19 4438 Indonesia 23 16 5 12 10 5 17 37 45 30Middle4income countrie$52w 9w 17w 14w 8w 2 9 2wSw39 Egypt 23 23 11 2 15 10 25 35 25 3040 Ghana 19 1441 Yemen, PDR.. .5 15 4 4 26 27 46 4042 Cameroon 20 12 8 9 3 1 17 38 52 4043 Liberia 16 .. 4 7 34 3944 Honduras 13 9 9 12 3 2 24 31 51 4645 Zambia . ..46 Zimbabwe47 Thailand 10 5 11 22 11 10 25 30 43 3348 Bolivia49 Philippines 15 10 10 24 5 7 36 26 34 3350 Yemen Arab Rep. 41 3 1 26 2951 Congo, People's Rep. 18 21 6 5 1 1 31 35 44 38S2 Nigeria 14 13 5 2 6 2 24 47 51 3653 Papua New Guinea 30 23 5 14 4 1 23 32 38 3054 ElSalvador 17 6 6 26 4555 Morocco 27 17 8 12 7 7 19 38 39 2656 Peru 16 14 5 19 5 4 37 35 37 2857 Ivory Coast 18 14 6 11 2 2 27 38 47 3558 Nicaragua 9 8 10 14 5 2 22 31 54 4559 Colombia 8 12 3 7 15 7 43 38 31 3660OParaguay 15 . 25 1 34 2561lEcuador 13 7 3 1 9 3 33 50 42 3962 Dominican Rep. . . 17 21 4.. 4 25 3363 Guatemala 12 10 7 26 4564 Syrian Arab Rep. 24 12 8 17 5 5 15 34 48 3265 Tunisia 20 13 9 11 4 7 23 34 44 3566 Jordar 18 9 3 35 35128

Percentage share of merchandise importsMachineryOtherandprimary transport OtherFood Fuels commodities equipment manufactures1960a 1977b 1960a 1977b 1960a 1977b 1960a 1977b 1960a 1977b67 Malaysia 29 17 16 13 13 7 14 33 28 3068 Jamaica 22 20 8 29 9 6 24 12 37 3369 Lebanon70 Korea, Rep. of 10 8 7 20 25 19 12 27 46 2671 Turkey 7 1 11 26 16 6 42 34 24 3372 Algeria 26 17 4 1 2 4 14 46 54 3273 Mexico 4 13 2 3 10 8 52 45 32 3174 Panama 15 10 10 33 1 1 22 19 52 3775 Taiwan. 11 19 .. 14 27 2976 Chile .. ..77 South Africa 6 6 7 1 9 7 37 52 41 3478 Costa Rica 13 8 6 10 6 3 26 30 49 4979 Brazil 14 7 19 34 13 7 36 26 18 2680 Uruguay .. 7 .. 25 .. 11 .. 29 2881 Argentina 3 5 13 16 11 10 44 36 29 3382 Portugal 15 18 10 15 28 13 26 26 21 2883 Yugoslavia 11 9 5 13 25 12 37 35 22 3184 Trinidad and Tobago 16 10 34 48 7 2 18 18 25 2285 Venezuela 18 12 1 1 10 4 36 50 35 3386 Hong Kong 27 17 3 6 16 8 10 19 44 5087 Greece 11 8 8 15 16 8 44 46 21 2388 Singapore 21 12 15 26 38 9 7 26 19 2789 Spain 16 15 22 29 25 13 22 20 15 2390 Israel 20 13 7 15 18 6 28 21 27 45Industrialized countries 22 w 13w 11 .w2 2w 24 wv lOw 16w 24w 27w 31 w91 Ireland 18 13 12 13 11 5 21 27 38 4292 Italy 20 17 14 26 31 14 13 19 22 2493 New z'ealand 8 7 8 15 16 6 29 32 39 4094 United Kingdom 36 18 11 14 27 11 8 23 18 3495 Finland 13 9 10 24 20 7 33 30 24 3096 Austria 16 8 10 10 20 9 29 34 25 3997 Japan 17 17 17 44 49 20 9 6 8 1398 Australia 6 6 10 10 16 5 31 38 37 4199 France 25 14 17 21 25 10 14 23 19 32100 Netherlands 18 16 13 19 14 7 22 23 33 35101 Belgium 15 13 10 14 26 10 21 26 28 37102 Canada 12 8 9 10 12 5 36 50 31 27103 Norway 12 7 9 11 13 6 36 42 30 34104 Germany, Fed. Rep. 26 16 8 17 28 11 10 19 28 37105 United States 24 10 10 30 25 8 10 25 31 27106 Denmark 18 13 12 17 11 6 23 27 36 37107 Sweden 13 9 14 18 13 6 26 31 34 36108 Switzerland 18 11 8 10 13 7 21 24 40 48Capital-surplusoil exporters 13 w 1w 2 w43 w 41 w109 Iraq .. 15 .. (.) .. 3 .. 54 .. 28110 Iran 14 11 1 (.) 1 3 23 45 61 41111 Libya 13 19 5 1 10 3 40 37 32 40,112 Saudi Arabia 11 .. 1 .. 2 .. 41 .. 46113 Kuwait 12 .. 1 .. 2 .. 45 40Centrally plannedeconomies114 China .. . .. . .. .. .115 Korea, Dem. Rep. .. . . .. . .. .. . .116 Albaria . . . .. . .117 Cuba .. .. .. .. .. . .118 Mongolia .. .. .. .. .. .. ..119 Romania .. .. .120 Bulgaria ... . . . . .. .121 Hungary 8 11 12 13 28 12 28 31 24 33122 Poland .. . .. .. . .. .. ..123 USSFR 12 .. 4 .. 18 . 30 .. 36124 Czechoslovakia .. 12 . 14 . 15 .. 36 .. 23125 German Dem. Rep. . .. .. .. .. .. .. .a. Figures i italics are for1961, not 1960. b.FigLresinitalicsareforl976,notl977.129

Table 11. Destination of Merchandise ExportsDestination of merchandise exports (percentage of total)CentrallyCapital-Industrialized Developing planned surpluscountries countries economies oil exportersOrigin 1960 1978a 1960 1978a 1960 1978a 1960 1978aLow-income countries 6 5 w 66 w 27w 2 3 w7 w 5 w I w 6 w1 Kampuchea, Dem.2Bangladesh .. 47 34 .. 14 53Lao PDR 20 .. 77 . () 34 Bhutan5 Ethiopia 69 64 24 26 1 4 6 66Mali 93 50 7 20 0 30 (.) ()7 Nepal 34 66 08 Somalia 85 22 15 14 0 13 (.) 519 Burundi .. 84 .. 6 . 10 010 Chad 73 34 27 63 0 0 0 311 Mozambique 29 71 71 29 (.) (.) (.)12 Burma13 Upper Volta23437507196624860(.)12 0 014 Viet Nam .. .. ..15 India 66 55 23 20 8 13 3 1216 Malawi .. 75 .. 25 .. (.) 017 Rwanda18 Sri Lanka..759042..141030..11(.)10 0(.)1819 Guinea 63 .. 19 .. 18 .. (.)20 Sierra Leone 99 96 1 4 0 0 0 ()21 Zaire 89 65 11 34 (.) 1 ( ) )22 Niger 74 84 26 15 0 0 0 123 Benin .. 52 .. 17 31 . (.)24 Pakistan 56 41 33 30 8 5 3 2425 Tanzania 74 65 25 28 1 6 026 Atghanistan 48 34 24 23 28 43 0 (.)27 Central African Rep. 83 79 17 21 0 (.) 0 (.)28 Madagascar29 Haiti799875982022121(.)4(.)(.)0(.)(.)30 Mauritania 89 85 11 15 0 0 0 (.)31 Lesotho .. .. .. .. ..32 Uganda 62 70 34 26 4 2 0 233 Angola 64 38 34 62 2 0 0 034 Sudan 59 50 23 27 14 18 4 535 Togo 74 77 26 14 0 9 0 036 Kenya 77 62 22 35 1 2 (.) 137 Senegal 89 69 11 31 0 0 0 (.38 Indonesia 54 79 38 21 8 (.) (.) (.Middle-income countres 70 w 67 w 24 w 25 w 5w 5 w I w: 3 w39 Egypt 26 54 29 12 43 30 2 440 Ghana 88 69 5 11 7 20 (.) (.)41 Yemen, PDR 42 35 56 51 (.) 10 2 442 Cameroon 93 85 6 13 1 2 (.) 043 Liberia 100 89 (.) 10 0 1 0 044 Honduras 77 86 23 14 0 0 0 045 Zambia .. 82 .. 13 .. 5 .. 046 Zimbabwe .. .. . .. ..47 Thailand 47 61 48 32 2 2 3 548 Boiivia 88 54 12 37 0 9 0 049 Philippines 94 81 5 14 1 4 (. 150 Yemen Arab Rep. 46 65 36 13 18 18 (.) 451 Congo, People's Rep. 93 66 7 33 0 1 0 052 Nigeria 95 78 4 22 153 Papua New Guinea .. 87 .. 12 ..(.)10..0054 El Salvador 88 74 12 26 0 0 055 Morocco 74 61 22 27 4 11 (.(.)156 Peru 84 71 16 18 (. 11 0 (a58 Nicaragua 91 69 9 31 (.57 Ivory Coast 84 83 16 15 00200 (9059 Colombia 94 79 5 16 1 5 0 (.)60 Paraguay 61 66 39 34 0 0 0 061 Ecuador 91 69 8 28 1 3 0 (.)62 Dominican Rep. 92 84 7 14 0 2 1 063 Guatemala 94 71 6 27 0 1 0 164 Syrian Arab Rep. 34 57 28 18 24 19 14 665 Tunisia 76 68 19 23 3 3 2 666 Jordan 1 8 62 39 11 9 26 44130

Destination of merchandise exports (percentage of total)CentrallyCapital-Industrialized Developing planned surpluscountries countries economies oil exportersCrigin 1960 1978a 1960 1978a 1960 1978a 1960 1978a67 Malaysia 58 62 35 32 7 5 0 168 Jamaica 96 84 4 15 0 1 0 (.)69 Lebanon 24 8 28 26 6 10 42 5670 Korea, Rep. of 89 73 11 17 0 (.) 0 1071 Turkey 71 64 16 12 12 15 1 972 Algeria 93 94 6 4 1 2 (.) 073 Mexico 93 81 7 18 (.) 1 0 (.)74 Panar a 99 71 1 28 0 (.) 0 175 Taiwan 56 70 33 26 0 0 11 476 Chile 91 67 9 30 (.) 1 (.) 277 South Africa 71 82 27 18 2 078 Costa Rica 93 68 7 28 (.) 3 (.) 179 Brazil 81 64 13 26 6 7 (.) 380 Uruguay 82 54 8 38 10 7 0 181 Argenzina 75 52 19 38 6 9 (.) 182 Portugal 56 80 42 17 2 383 Yugos avia 48 35 18 16 33 43 1 684 Trinidad and Tobago 80 80 20 20 0 (.) (.) (.)85 Venezuela 62 58 38 42 0 (.) 0 (.)86 Hong

Table :12. Trade in Manufactured GoodsDestination of manufactured exports (percentage of total)Value ofmanufacturedCentrally Capital- exportsIndustrialized Developing planned surplus (millionscountries countries economies oil exporters of dollars)Origin 1963 1977a 1963 1977a 1963 1 977a 1963 1977a 1963 1977a1 Kampuchea. Dem. 58 15 42 85 0 0 0 0 1 22 Bangladesh .. 47 . 41 .. 6 .. 6 . 2513 Lao PDR .. 83 .. 17 .. 0 .. 0 .) 24 Bhutan5 Ethlopi'a .. 28 .. 68 .. 2 .. 2 .) 126 Mali 14 29 66 71 20 0 0 0 () 27 Nepal .. 60 .. 40 .. 0 .. 0 148 Somalia .. 20 .. 67 .. 13 .. 0 2 29 Burundi .. 10 . 0 .. 0 . 0 .. 110 Chad 12 31 77 69 11 0 () 0 1 311 Mozambique .. 67 . 27 .. 0 . 6 .. 312 Burma .. 79 .. 21 .. 0 .. 0 1 1513 Upper Volta 12 50 88 50 0 0 0 0 1 314 Viet Nam . . 2 . . 2 .. 95 .. 1 .. 21615 India 56 52 35 24 7 12 2 12 677 3,35616 Malawi .. 34 .. 66 .. 0 . 0 *717 Rwanda .. 0 IOD0 . 0 .. 0 (. H.18 SriLanka 70 65 28 24 2 1 () 10 4 9619 Guinea . . 27 .. 73 .. 0 . 0 .. 5320 Sierra Leone 100 100 () 0 0 0 0 0 23 5921 Zaire . . 88 .. 11 .. 1 .. 0 1 7522 Niger 23 89 77 11 0 0 0 0 1 5624 Pakistan23 Benin491845284882 72260108020211109368125 Tanzania . . 85 .. 15 .. 0 .. 0 16 3526 Afghanistan 98 88 2 1 0 1 0 10 7 4227 Central African Rep. 50 83 50 17 0 0 0 0 11 1928 Madagascar 82 83 18 17 0 0 0 0 4 2629 Haiti . . 93 .. 7 .. 0 .. 0 .. 5130 Mauritania 95 84 5 16 0 0 0 0 3 631 Lesotho32 Uganda .. 100 .. 0 . 0 .. 0 () 233 Angola .. 80 .. 18 -. 0 -. 2 .. 5534 Sudan 35 90 54 10 0 0 11 0 () 535 Togo 45 42 55 58 0 (.) 0 0 1 936 Kenya .. 11 . 86 ..37 Senegal 74 50 26 50 ()10.0201291163638 Indonesia .. 44 .. 56 . . C)2 191~Middl-noeconre. 518 t 3 w. 6 t . 6t39 Egypt40 Ghana..821356..171144.0650..1110388 4294441 Yemen, PDR .. 48 .. 52 .. 0 . 0 .. 142 Cameroon 23 69 77 31 0 0 0 0 4 3043 Liberia 100 78 0 22 0 0 0 0 3 944 Honduras 3 22 97 78 0 0 0 0 2 4945 Zambia .. 66 .. 34 .. 0 .. 0 . 3746 Zimbabwe47 Thailand 41 65 5 320 316 54748 Bolivia 91 93 9 7 0 0 0 0 6 2249 Philippines 92 82 8 16 0 H. . 2 34 76450oYemen Arab Rep. .. 10 .. 25 .. 0 . 65 .. 151 Congo, People's Rep. 93 62 7 38 0 052 Nigeria 81 85 17 16 1 (.)01(.)02215297253 Papua New Guinea .. 100) . 0 .. 0 .. 0 2 1554 El Salvador 1 27 99 73 0 0 0 0 18 20955 Morocco .. 74 .. 19 .. 2 .. 5 27256 Peru 45 43 55 37 () 14 () 6 6 11557 Ivory Coast 40 35 60 65 0 0 0 0 7 161S8 Nicaragua .. 8 . 92 .. 0 . 0 3 10559 Colombia 4560 Paraguay 55425255155746001000(-)01744662561lEcuador 52 16 48 84 0 0 0 0 3 3062 Dominican Rep. .. 97 .. 3 . 0 .. 0 1 12863 Guatemala .. 9 . 91 .. 0 . 0 15 21864 Syrian Arab Rep. .. 11 . 16 .. 42 .. 31 21 10065 Tunisia 42 86 53 10 0 2 5 2 12 31166 Jordan . ().. 26 .. 0 .. 74 1 57132

Destination of manufactured exports (percentage of total)manuefacueCentrally Capital- exportsIndustrialized Developing planned surplus (millionscountries countries economies oil exporters of dollars)Origin 1963 19778 1963 19778 1963 19778 1963 19778 1963 1977867 Mialaysia 64 35 (.) 1 63 1,12168 Jamaica 83 68 17 ~29 0 3 0 0 13 34569 Lebaron . . 19 35 .. 3 43 8 45270 Korea, Rep. of 57 74 43 14 0 (.) 0 12 39 8,48071 Turkey 73 74 14 9 13 5 .) 12 6 431'72 Algeria 76 . . 19 .. 3 2 3873 Mexico 69 61 31 39 H. . . 0 147 1,18274 Panama 5 10 95 90 0 0 0 0 .) 2375 Taiwan 30 52 13 5 129 7,925,76 Chile 38 57 62 43 () 0 (. C) 22 14577 South Airica -. 67 29 .. 0 4 318 2,57678 Costa Ri:a .. 12 88 .. (.) .. 0 5 20379 Brazil 59 53 40 43 1 2 .) 2 45 3,1418o Uruguay .. 56 . . 41 .. 3 ()31 23681 Argentina 52 31 46 63 2 6 () .)79 1,34982 Portugal 53 79 46 16 (.) 4 1 1 246 1,42083 Yugoslavia 37 29 29 17 33 45 1 9 468 3,41584 Trinidad and Tobago 40 86 60 14 0 (.) 0 C.) 10 10585 Venezuela 79 52 21 48 (.) 0 (.) 0 43 15386 IHong Kong 71 83 28 14 0 (.) 1 3 617 7,26787 Greece 60 58 34 18 2 6 4 18 27 1,37388 Singapo'o 5 54 95 43 (.) (.) (.) 3 352 3,62689 Spain 62 60 35 32 2 3 1 5 227 7,21490 Israel 72 75 26 21 2 1 0 3 203 2,453Indtustrialized countries 65 w 65 w 31 w 25 w 3 w 4 w 1 w 6 w91 Ireland 94 92 6 6 C.) 1 (.) 1 133 2,42092 Italy 64 64 29 21 5 6 2 9 3,842 37,63093 New Zeatland . . 85 . . 14 (.) 1 40 52094 United Kingdom 57 65 39 25 3 3 1 7 9,412 46,88495 Finland 59 63 13 8 28 27 (.) 2 634 5,68696 Austria 66 66 17 15 17 16 0 3 985 8,24197 Japan98 Australia445947685040402851411(.)934,812 77,514332 2,80899 France 58 63 39 28 2 5 1 4 5,744 48,585100 Netherla.nds 79 79 18 15 2 3 1 3 2,693 23,123101 Belgium 85 83 13 12 1 2 1 3 3,572 28,991102 Canada 87 91 13 8 (.) (.) (.) 1 2,165 21,046103 Norway 78 69 19 26 3 4 (.) 1 529 4,654104 Germany, Fed. Rep. 75 69 22 19 2 6 1 6 12,812 104,361105 United States 56 58 42 33 .) 1 2 8 12,453 82,521106 Denmars 73 78 19 15 8 4 0 3 752 5,580107 Sweden 78 76 19 15 3 5 C.) 4 2,143 15,284108 Switzerland 72 66 25 23 2 6 1 5 2,163 15,821Capital-surpluscul exporters .. 31w . 24 w . 3 w 42 w109 Iraq () 9 21 79 () 0 79 12 5 18110 Iran 64 39 28 13 1 31 7 17 33 158111 Libya 33 22 .22 45 .. 0 .1112Saudi Arabia 22 .. 70 .. 1 .. 7 0 121113 Kuwait .. 31 . 19 .. (). 50 .. 1,059Centrally plannedeconomies . 14 w 1. Iw 64 w . 4 w114 China .. 31 .. 50 . 14 . 5 .. 3,684115 Korea, Dem. Rep, .. 5 13 .. 73 .. 9 . 197116 Albania .. 35 .. 37 . 28 .. 0 . 42117 Cuba .. 72 .. 4 . 24 .. 0 . 10118 Mongol ia .. 2 .. 0 . 98 . 0 .. 32119 Romania . 265. 17 .. 52 .. 5. 4,763120 Bulgaria . 6 . 11 81.. 2. 4,025121 Hungary 20 .. 14 .. 62 .. 4 .. 3,939122 Poland 19 .. 9 . 70 .. 2 . 8,351123 USSR .. 10 . 25 .. 59 .. 6 . 21,020124 Czechoslovakia .. 14 I 11 73 .. 2 .. 9,045125 German Dem. Rep. .. 10 . 10 .. 79 . 1 .. 10,242a. Figures in talics are for 1976, not 1977.'133

Table :13. Balance of Payments and Debt Service RatiosCurrent accountbalance beforeinterest paymnentsInterestpayments onDbDbevcevcspretgspretgffon external public external public Exports ofdebt debt goods and(millions of dollars) (millions of dollars) GNP services1970 1978a 1970 1978 1970 1978a 1970 1978aLow-income countries 1.2 w 1.7 w 1 2 . 3 w 11.7 w1 Krfapuchea, Dem.-..-2 Bangladesh .. -302 .42 . 1.3 .. 11.73 Lao PDR . .. ..4 Bhutan.. . .5Ethiopia -2 -9 6I3 . 0. 11.4 7.66 M`\ali -2 -72 ()3 0.2 1.11 1.2 7.17 Nepal -. -25 ()1 0.3 0.2 10.9 1.48 Somalia -5 -63 ()2 0.5 1.2 2.1 3.79 Burundi .. -22 ()1 0.3 0.4 2.5 3.210 Chad 2 -188 ()3 1.0 2.3 3.7 13.011 Mozambique ..-12 Burma -62 -137 3 17 1.0 1.2 16.1 18.013 Upper Volta 9 -79 ()3 0.6 0.9 4.0 3.814 Viet Nam . .--15 India -205 915 189 342 0.9 0.8 20.9 9.416 MaJawi -32 -116 3 9 1.8 2.0 7.0 8.717 Rwanda 6 -46 ()1 0.2 0.2 1.4 1.418 Sri Lanka -45 -33 12 25 2.1 3.6 10.3 9.219 Guinea .. -16 4 17 3.4 5.7 21.3 17.420 Sierra Leone -14 -96 2 7 2.9 4.5 9.8 16.021 Zaire -55 88 9 160 2.0 6.5 4.4 31.322 Niger 1 -81 1 4 0.6 0.8 3.8 2.923 Benin -1 -70 ()3 0.7 1.5 2.2 6.424 Pakistan -591 -560 76 179 1.9 2.1 21.6 12.225 Tanzania -29 -442 6 18 2.1 1.1 8.2 7.426 Afghanistan . 38 9 15 2.5 1.3 25.6 13.727 Central African Rep.28 Madagascar-1112-23-51()12 61.10.80.70.63.23.52.53.229 Haiti 2 -39 ()3 1.0 1.0 7.7 5.830 Mauritania -5 -65 ( 10 2.0 6.6 3.2 17.031 Lesotho . -10() .)0.5 0.3 8.8 1.932 Uganda 24 -129 4 1 0.8 0.1 3.4 2.233 Angola . .. ..34 Sudan -29 -54 13 36 1.3 1.4 10.7 9.435 logo 4 -234 1 13 0.9 6.9 2.9 15.236 Kenya -38 -474 11 45 2.6 2.4 7.9 8.337 Senegal -14 -114 2 31 0.8 5.4 2.8 14.938 Indonesia -286 -773 24 492 0.9 3.1 6.9 13.0Midd777e777ncome7- u7.3w 7o7tr777- 7175w779 1.839 Egypt -116 -540 38 386 4.1 8.7 28.7 22.240 Ghana -56 32 12 23 1.1 0.3 5.0 4.441 Yemen, PDR -9 -20 .. 1 . 0.2 -. 1.742 Cameroon -26 -112 4 46 0.9 2.0 3.1 7.743 Liberia . -122 6 13 5.5 3.5 .. 5.444 Honduras -61 -126 3 31 0.8 3.5 2.8 8.445 Zambia 131 -191 23 46 3.2 7.1 5.5 20.846 Zimbabwe . .. ..47 Thailand -234 -1,098 16 96 0.6 0.9 3.3 3.748 Bolivia -16 -301 6 83 2.2 8.5 10.9 48.749 Pnilippines -23 -991 25 167 1.4 2.8 7.5 13.450 Yemen Arab Rep.,. 80 ()3 0.2 0.5 .. 1.151 Congo, People's Rep.52 Nigeria..-348-156-3,69632011753.20.73.30.3.4.17.21.253 Papua New Guinea .. -12 1 23 0.1 1.8 . 4.054 El Sa`lvador 12 -230 4 13 0.9 0.8 3.6 2.655 Morocco -101 -1,040 23 252 1.5 4.3 7.7 18.756 Peru 245 119 43 317 2.4 7.4 11.6 31.157 Ivory Coast -26 -533 11 199 2.8 5.9 6.7 14.158 Nicaragua -32 23 7 48 3.2 4.6 11.0 12.559 Colomoia60 Paraguay-249-13305-109443172151.71.71.71.411.611.19.87.361 Ecuador -106 -54 7 96 1.5 2.8 9.1 11.762 Dominican Rep. -98 -334 4 39 0.8 1.7 4.5 9.463 Guatemala -2 -192 6 15 1.4 0.4 7.4 1.764 Syrian Arab Rep.65 Tunisia-64-35-406-41161858952.14.52.93.510.817.515.112.366 Jordan -15 -256 2 24 0.7 2.5 3.6 4.0134

Current accountbalance before Interest Debt service as percentage of:interest payments payments onon external public external public Exports ofdebt debt goods and(millions of dollars) (millions of dollars) GNP services1970 1978a 1970 1978 1970 1978a 1970 1978a67 Malaysia 29 284 21 146 1.7 4.6 3.6 8.868 Jamaica -145 -72 8 70 1.1 7.0 2.5 17.969 Lebanon . -494 1 4 0.2 . . 0.870 Korea, Rep. of -553 -455 70 653 3.1 3.9 19.4 10.571 Turkey -28 -1,121 42 182 1.3 0.9 16.3 11.0'-2 Algeria -116 -2.977 10 561 0.8 5.9 3.2 20.973 Mexico -850 -896 218 1,823 2.1 6.9 23.6 59.674 Panama -57 -91 7 130 3.0 25.2 7.7 39.275 Taiwan 27 1,979 23 239 1.4 2.6 4.5 4.476 Chile -13 -659 78 290 3.1 7.3 18.9 38.277 South Africa -1,156 2,010 59 366 1.2 4.2 5.1 11.778 Costa Rica -67 -309 7 63 2.9 7.2 9.7 23.079 Brazil -701 -5,310 136 1,725 0.9 2.2 13.5 28.480 Uruguay -29 -66 16 60 2.6 8.7 21.5 45.781 Argentina -36 2,512 121 513 1.9 3.5 21.5 26.882 Portugal .. -337 28 105 1.3 1.1 4.4 3.783 Yugoslavia -276 -834 72 183 1.7 0.7 8.2 3.284 Trinidad and Tobago -74 61 6 22 1.9 0.9 2.6 1.185 Venezuela -64 -4,973 40 394 0.8 1.9 2.9 6.986 Hong Kong . 317 .. 15 (.) 0.787 Greece -364 -1,056 41 206 1.0 1.7 7.2 8.588 Singapore -565 -669 6 78 0.6 4.0 0.6 2.389 Spain 151 321 72 600 0.5 1.8 3.6 11.090 Israel -572 -732 41 248 3.1 3.8 12.3 8.1Industrialized countriesb91 Ireland -189 -17892 Italy 902 6,35593 New Zealand -29 -38794 United Kingdom 1,865 1,93295 Finland -239 60696 Austria -23 -1,41097 Japan 1,980 17,52898 Australia -832 -3,84599 France 67 3,766100 Netherlands -487 -1,449101 Belgium 537 -556102 Canada 1,078 -4,617103 Norway -242 -2,145104 Germany, Fed. Rep. 850 8,852105 United States 6,200 -4,432106 Denmark -544 -1,469107 Sweden -266 -954108 Switzerland 70 4,403Capital-surplusoil exporters109 Iraq 110 1,209 9 37 0.9 1.1 2.2 1.1110 Iran -422 5,370 85 391 3.0 1.2 12.2111 Libya 645 1,024 .. .. .. .. .3.2112 Saudi Arabia 71 12,793 .. .. ..113 Kuwait .. 6,166 .. .. ..Centrally plannedeconomiesb114 China115 Korea, Dem. Rep,116 Albania117 Cuba .118 Mongolia ..119 Roman ia120 Bulgaria ..121 Hungary122 Poland .. .123 USSR ..124 Czechoslovakia .. ..125 German Dem. Rep. .. .a. Fig L ras in ilalics are for 1977, rot 1978.b. See the technical rotes.135

Table 114. Flow of External CapitalLow-income countiriesPublic and publicly guaranteed medium- and long-term loansNet direct(millions of dollars)~~~~private(millions of dollars) ~~investmentRepayment(millionsGross inflow of principal Net inflow of dollars)1970 1978 1970 1978 1970 1978 1970 1978a1 Kampuchea, Dem.2 Bangladesh 488 51 4373 Lao PDR4BEhutan5 Ethiopia 27 97 15 17 12 80 4 66Mali 21 68 ()6 21 627Nepal 1 27 2 2 -1 25-58 Somalia 4 114 (. 3 4 ill 5(.9Burundi 1 23 (. 2 1 21lO Chad 6 43 2 12 4 31 1 2111 Mozambique .12 Burma 16 315 18 38 -2 27713 Upper Volta 2 44 2 5 () 39(.14 Viet Nam .15 India 890 1,150 307 595 583 555 616 Malawi 38 90 3 12 35 78 9 1017 Rwanda () 19 I.) 1 (. 18 ()518 Sri Lanka 61 239 27 64 34 175 ()219 Guinea 90) 112 10 47 80 65 1020 Sierra Leone 8 83 10 28 -2 55 8 1921 Zaire 31 348 28 342 3 6 42 1522 Niger 12 69 1 6 11 63 123 Benin 2 38 1 9 1 29 724 Pakistan 484 748 114 204 370 544 23 3625 Tanzania 50 171 10 20 40 15126 Afghanistan 34 171 15 37 19 13427 Central African Rep. 2 22 2 3 () 19 1 828 Madagascar 11 50 5 9 6 41 10 129 Haiti 4 43 4 8 () 35 3 1030 Mauritania 4 ill 3 18 1 93 1 -1731 Lesotho ()5 .)1 ()432 Uganda 26 25 4 3 22 22 4 133 Angola . .-34 Sudan 54 290 22 40 32 25'035 Togo 5 200 2 32 3 168 136 Kenya 30 234 15 69 16 165 14 6737 Senegal 18 196 5 75 13 121 538 Indonesia 441 1,616 59 977 382 639 83 272Middle-incomne countries39 Egypt 302 2,464 247 822 55 1,642 . 29740 Ghana 40 82 12 24 28 58 68 1241 Yemen, PDR42 Camneroon12889287 415812488229 16 -743 Liberia 7 74 12 14 -5 6044 Honduras 29 163 3 28 26 135 8 1345 Zambia 351 104 32 145 319 -41 -297 1946 Zimnbabwe...47 Thailand 55 740 23 91 32 649 43 5348 Bolivia 54 531 17 266 37 265 -76 1249 Philippines 132 1,416 73 484 59 932 -29 16350 Yemen Arab Rep. 2 101 () 12 2 8951 Congo, People's Rep. 35 222 6 17 29 205 752 Nigeria 62 1,305 36 53 26 1,252 205 18953 Papua New Guinea 25 29 (. 10 25 19 3454 ElSalvador 8 80 6 12 2 68 4 2355 Morocco 163 1,191 36 296 127 895 20 4656 Peru 148 842 100 431 48 411 -70 2557 Ivory Coast 77 948 27 223 50 725 31 1058 Nicaragua 44 142 17 49 27 93 15 759 Colombia 235 341 75 231 160 110 39 6060 Paraguay 15 139 7 20 8 119 4 2261 Ecuador 42 503 16 108 26 395 89 4062 Dominican Rep. 36 164 7 39 29 125 72 4063 Guatemala 37 107 20 9 17 98 29 11564 Syrian Arab Rap. 59 683 30 169 29 51465 Tunisia 89 576 45 106 44 470 16 8966 Jordan 14 221 3 34 11 187 22136

Public and publicly guaranteed medium- and long-term loansNet directprivate(millions of dollars)investmentRepayment(millionsGross inflow of principal Net inflow of dollars)1970 1978 1970 1978 1970 1978 1970 1978a67 Malaysia 43 1,044 45 558 -2 486 94 59668 Jamaica 15 221 6 114 9 107 161 -1169 Lebanon 12 91 2 6 10 857 1770 Korea, Rep. of 440 3,919 198 1,142 242 2,777 66 6171 Turkey 328 798 128 262 200 536 58 95.72 Algeria 292 5,103 33 927 259 4,176 45 13573 Mexico 797 8,606 476 4,416 321 4,190 323 53074 Panama 67 986 24 442 43 544 33 975 Taiwan 154 621 54 394 100 227 62 11076 Chile 397 1,491 163 926 234 565 -79 17877 South Africa 519 1,173 146 1,422 373 -249 318 -18978 Costa R ca 30 396 21 174 9 222 26 6679 Brazil 1,063 10,055 333 2,406 730 7,649 407 1,88680 Uruguay 37 416 47 366 -10 50 12981 Argentina 489 3,203 342 1,578 147 1,625 11 29882 Portugal 20 1,157 62 98 -42 1,059 .. 5083 Yugoslavia 180 445 168 196 12 24984 Trinidacl and Tobago 8 161 10 10 -2 151 83 14085 Venezuela 224 2,707 42 356 182 2,351 -23 6886 Hong Kong (.) 117 (.) 79 (.) 3887 Greece 164 754 61 354 103 400 50 1888 Singapore 58 266 6 226 52 40 93 42289 Spain 268 2,003 122 1,822 146 211 179 42890 Israel 663 1,365 131 290 532 1,075 40 129Industrialized countriesb91 Ireland 32 25092 Italy 496 34293 New Zealand 22 994 United Kingdom95 Finland-440-34-1,515-2996 Austria 85 7497 Japan -261 -2,34198 Australia 787 1,26699 France100 Netherlands248-14660-1,231101 Belgium102 Canada162566776-1,721103 Norway 32 407104 Germany, Fed. Rep.105 United States-280-6,120-1,953-10,404106 Denmark 75 101107 Sweden -105 -334108 SwitzerlandCapital-surplusoil exporters109 Iraq 63 308 18 195 45 113 24 .110 Iran 940 2,901 235 960 705 1,941 25 802111 Libya . .. .. .. .. .. 139 -950112 Saudi Arabia . .. .. .. .. .. 20 822lT3 K uwait .. . . . .. . -131Centrally plannedeconomiesb114 China115 Korea, Dem. Rep.116 Albania117 Cuba118 Mongolia119 Romania120 Bulgaria121 Hungary122 Poland123 USSR124 Czechoslovakia125 Germar Dem. Rep.a. Figures in talics are for 1977, not 1978. b. See the technical notes for Table 13.137

Table 15. External Public Debt and International ReservesExternal public debtoutstanding and disbursedGross international reservesMillions As percentage Millions In monthsof dollars of GNP of dollars of importcoverage1970 1978 1970 1978a 1970 1978a 1978aLow-Income" ountries 18.1 w 21.7 w 3.5 w1 Kampuchea, Dem. . .. . .2 Bangladesh .. 2,798 . 38.2 . 322 2.33Lao PDR .. .. .. .4 Bhutan5 Ethiopia 169 551 9.5 15.4 72 218 4.46 Mali 238 539 88.1 65.3 1 11 0.57 Nepal 3 88 0.3 5.4 95 181 7.88 Somalia 77 496 41.1 101.7 21 131 4.99 Burundi 7 64 3.1 10.6 15 83 12.810 Chad 32 156 11.8 23.4 2 14 0.911 Mozambique .. .. .. .12 Burma 102 818 4.7 18.1 98 151 3.713 Upper Volta 21 191 6.4 21.6 36 39 2.114 Viet Nam .. .. .. ..15 India 7,936 15,326 14.8 13.1 1,023 8,316 10.216 Malawi 121 390 38.7 36.8 29 77 2.217 Rwanda 2 95 0.9 11.1 8 87 3.718 Sri Lanka 317 1,013 17.1 41.0 43 406 4.419 Guinea 314 916 72.5 81.7 .. .20 Sierra Leone 59 275 14.3 36.1 39 35 1.321 Zaire 311 2,566 17.1 33.4 189 196 1.322 Niger 32 194 8.7 16.2 19 131 3.423 Benin 41 146 16.0 19.5 16 18 0.924 Pakistan 3,059 7,568 30.5 40.8 194 795 2.325 Tanzania 248 1,095 19.4 25.1 65 96 0.926 Afghanistan 547 1,216 58.1 30.8 50 606 10.427 Central African Rep. 19 138 11.2 26.5 1 27 1.528 Madagascar 94 259 10.9 11.7 37 59 1.229 Haiti 40 163 10.3 13.8 4 41 1.630 Mauritania 27 574 16.8 138.1 3 82 2.531 Lesotho 8 28 9.2 7.5 ..32 Uganda 128 252 9.8 3.0 5733 Angola .. .. .. ..34 Sudan 309 2,076 11.6 38.6 22 29 0.435 Togo 40 494 15.4 65.4 35 73 1.536 Kenya 313 953 20.3 17.9 220 369 2.137 Senegal 103 587 12.2 29.8 22 23 0.538 Indonesia 2,443 13,089 27.1 27.6 160 2,676 2.6Middle-income countries lO8w 17. 6 w 2.5 w39 Egypt 1,639 9,879 23.7 71.5 165 1,049 1.940 Ghana 489 843 22.6 5.3 58 330 3.641 Yemen, PDR 1 349 0.3 47.5 60 194 5.642 Cameroon 131 1,167 13.0 30.2 81 57 0.543 Liberia 158 334 49.6 42.3 .. 18 0.544 Honduras 90 591 12.9 34.9 20 187 2.645 Zambia 596 1,396 34.5 51.6 515 96 1.046 Zimbabwe .. .. .. .. ..47 Thailand 322 1,777 4.9 8.2 911 2,559 4.948 Bolivia 477 1,666 46.4 40.7 46 314 3.349 Philippines 633 4,188 9.2 18.0 255 2,104 4.050 Yemen Arab Rep. 147 464 49.9 14.3 .. 1,461 15.351 Congo, People's Rep. 129 726 49.4 85.5 9 11 0.252 Nigeria 478 2,180 6.4 4.5 223 2,037 1.753 Papua New Guinea 36 370 6.2 21.2 . . 431 5.154 El Salvador 88 333 8.6 11.0 63 381 3.555 Morocco 711 5,139 18.6 40.1 141 773 2.256 Peru57 Ivory Coast8482565,3672,81814.018.353.139.53381197384553.31.558 Nicaragua 155 964 20.6 45.8 50 58 0.959 Colombia60 Paraguay1,249982,83344718.116.712.217.4207182,8104678.39.261 Ecuador 213 1,563 13.3 21.5 85 762 4.762 Dominican Rep. 212 724 14.6 16.1 32 176 1.763 Guatemala 106 374 5.7 6.0 80 857 6.064 Syrian Arab Rep. 232 2,091 13.6 26.6 57 622 2.665 Tunisia 545 2,359 38.8 40.5 60 479 2.465 Jordan 118 840 19.0 36.1 258 1,069 6.2138

External public debtoutstanding and disbursedGross international reservesMillions As percentage Millions In monthsof dollars of GNP of dollars of importcoverage1970 1978 1970 1978a 1970 1978a 1978a67 Malaysia 390 2,671 10.0 17.6 667 3,670 5.568 Jamaica 154 1,036 11.5 39.4 139 53 0.569 Lebanon 64 125 4.2 .. 405 3,918 25.470 Korea, Rep. of 1,797 11,992 20.9 26.1 610 2,828 1.871 Turkey 1,854 6,188 14.4 12.2 440 1,662 3.672 Algeria 937 13,168 18.5 52.6 352 3,230 3.673 Mexico 3,238 25,775 9.8 28.7 756 2,269 2.074 Panama 194 1,910 19.0 84.1 16 151 1.175 Taiwan 601 2,903 10.6 12.1 627 1,950 1.876 Chile 2,066 4,359 26.2 26.2 392 1,405 4.077 South Africa 1,089 5,704 6.3 13.3 1,057 2,636 2.378 Costa R ca 134 963 13.8 29.3 16 212 1.879 Brazil 3,589 28,821 8.0 15.6 1,190 12,191 6.780 Uruguay 267 766 11.0 15.7 186 1,111 12.581 Argentina 1,880 6,801 7.6 11.4 682 5,934 12.282 Portugal 473 2,642 7.0 14.0 1,565 5,873 11.783 Yugoslavia 1,198 3,454 8.5 6.4 144 2,756 2.684 Trinidac and Tobago 101 417 12.5 12.2 43 1,813 8.085 Venezuela 728 6,921 6.7 17.1 1,047 8,571 6.686 Hong Kong 2 223 0.1 1.687 Greece 905 3,123 8.9 9.7 318 1,851 2.888 Singapore 152 1,134 7.9 14.8 1,012 5,302 4.689 Spain 1,209 7,631 3.3 5.5 1,851 13.394 7.290 Israel 2,274 9,209 41.3 65.7 451 2,890 3.5Industrialized countriesb91 Ireland 698 2,770 4.492 Italy 5,547 29,831 5.493 New Zealand 258 467 1.294 United Kingdom 2,918 21,184 2.795 Finland 458 1,438 1.896 Austria 1,806 9,804 5.697 Japan 4,876 37,824 4.798 Australia 1,709 3,823 2.299 France 5,199 32,328 3.8100 Netherlands 3,362 17,469 3.4101 Belgium 2,947 13,591 2.9102 Canada 4,732 8,562 1.7103 Norway 813 3,116 2.0104 Germanv, Fed. Rep. 13,879 75,287 5.8105 United States 15,237 69,448 3.8106 Denmark 488 3,577 2.3107 Sweden 775 5,479 2.5108 Switzerland 5,317 36,584 15.1Capital-surplusoil exporters109 Iraq 274 878 8.8 4.0 472 7,237 9.2110 Iran 2,193 8,251 20.8 8.2 217 12,840 6.4111 Libya .. . . .. 1,596 4,659 6.0112 Saudi Arabia .. .. .. .. 670 20,227 12.1113 Kuwait .. .. .. . 209 3,072 5.7Centrally plannedeconomiesb114 China115 Korea, Dem. Rep.116 Albania117 Cuba118 Mongolia119 Romania120 Bulgaria121 Hungary122 Poland123 USSR124 Czechoslovakia125 German Dem. Rep.a. Figures in itslics are for 1977, not 1978. b. See the technical notes for Table 13.4.2 w7.9 w139

Table 16. Official Development Assistancefrom OECD and OPEC MembersOECDAmount1960 1965 1970 1975 1976 1977 1978 1979 1980aMillionsof US dollars92 Italy 77 60 147 182 226 186 375 279 32093 New Zealand .. .. 14 66 53 52 55 62 6594 United Kingdom 407 472 500 910 885 1,120 1,456 2,067 2,45395 Finland 2 7 48 51 49 55 86 10496 Austria 10 11 79 48 108 166 127 174 -97 Japan 105 244 458 1,148 1,105 1,424 2,215 2,638 3,07198 Australia 59 119 212 552 377 400 588 620 69099 France 823 752 971 2,093 2,146 2,267 2,705 3,358 3,836100 Netherlands 35 70 196 608 728 908 1,074 1,404 1,547 -101 Belgium 101 102 120 378 340 371 536 631 714102 Canada 75 96 337 848 763 945 1,060 1,042 1,151103 Norway 5 11 37 184 218 295 355 428 491104 Germany, Fed. Rep. 223 456 599 1,689 1,592 1,717 2,347 3,350 3,581105 United States 2,702 4,023 3,153 4,161 4,360 4,682 5.664 4,567 4,567106 Denmark 5 13 59 205 214 258 388 448 488107 Sweden 7 38 117 566 608 779 783 956 1,124108 Switzerland 4 12 30 104 112 119 173 205 218Total 4,628 6,478 6,967 13,820 13,829 15,680 19,994 22,267 24,594OECD iAs percentaglle of donor GNP92 Italy .22 .10 .16 .11 .13 .10 .14 .09 .0993 New Zealand . .. .23 .52 .41 .39 .34 .30 .3094 United Kingdom .56 .47 .41 .39 .40 .46 .48 .52 .5295 Finland .02 .06 .18 .17 .16 .17 .21 .2296 Austria . . .11 .07 .21 .12 .22 .29 .19 .2397 Japan .24 .27 .23 .23 .20 .21 .23 .26 .2798 Australia .37 .53 .59 .59 .41 .42 .54 .52 .5199 France 1.35 .76 .66 .62 .62 .60 .57 .59 .59100 Netherlands .31 .36 .61 .75 .83 .86 .82 .93 .94101 Belgium .88 .60 .46 .59 .51 .46 .55 .56 .59102 Canada .19 .19 .41 .52 .39 .48 .52 .47 .46103 Norway .11 .16 .32 .66 .70 .83 .90 .93 .95104 Germany, Fed. Rep. .31 .40 .32 .40 .36 .33 .37 .44 .44105 United States .53 .58 .32 .27 .26 .25 .27 .19 .18106 Denmark .09 .13 .38 .58 .56 .60 .75 .75 .67107 Sweden .05 .19 .38 .82 .82 .99 .90 .94 .95108 Switzerland .04 .09 .15 .19 .19 .19 .20 .21 .22OECDNational currencies92 Italy (billions of lire) 48 38 92 119 188 148 318 233 26293 New Zealand (millions of dollars) 13 55 53 54 53 61 6494 United Kingdom (millions of pounds) 145 168 208 411 490 642 759 974 1,09695 Finland (millions of markkaa) .. 6 29 177 195 196 226 335 40096 Austria (millions of schillings) . 260 286 1,376 861 1,785 2,411 1,698 2,32797 Japan (billions of yen) 38 88 165 341 328 383 466 578 669,98 Australia (millions of dollars) 53 106 189 422 308 361 514 555 61199 France (millions of francs) 4,063 3,713 5,393 8,975 10,255 11,762 12,207 14,287 16,334100 Netherlands (millions of guilders) 133 253 710 1,538 1,925 2,229 2,323 2,817 3,106101 Belgium (millions of francs) 5,050 5,100 6,000 13,903 13,129 13,234 16,836 18,500 20,913102 Canada (millions of dollars) 73 104 353 863 752 1,005 1,209 1,221 1,347103 Norway (millions of kroner) 36 78 264 962 1,190 1,570 1,861 2,167 2,470104 Germany, Fed. Rep.(millions of deutsche marks) 937 1,824 2,192 4,156 4,009 3,987 4,715 6,140 6,550105 United States (millions of dollars) 2,702 4,023 3,153 4,161 4,360 4,682 5,664 4,567 4,567106 Denmark (millions of kroner) 35 90 443 1,178 1,294 1,549 2,140 2,357 2,573107 Sweden (millions of kroner) 36 196 605 2,350 2,647 3,504 3,538 4,098 4,743108 Switzerland (millions of francs) 17 52 131 260 281 284 309 341 361OECD140SummaryODA (billions of US dollars,nominal prices) 4.6 6.5 7.0 13.8 13.8 15.7 20.0 22.3 24.6ODA as percentage of GNP .51 .49 .34 .36 .33 .33 .35 .34 .34ODA (billions of US dollars,constant 1978 prices) 13.1 16.7 14.9 17.9 17.3 18.0 20.0 20.1 20.2GNP (trillions of US dollars,nominal prices) .9 1.3 2.0 3.8 4.2 4.7 5.6 6.5 7.2ODA deflatorc .35 .39 .47 .77 .80 .87 1.00 1.11 1.22

Amount1981a 1982a 1983a 1984a 1985a 1975 1976 1977 19 7 8 b 1 9 79 bOPECMillions of US dollars385 461 554 605 658 52 Nigeria 14 83 64 38 2873 81 90 99 108 72 Algeria 41 54 48 44 452,573 2,674 2,765 2,903 3,041 85 Venezuela 31 103 52 109 83121 141 164 191 223 109 Iraq 218 232 61 172 861212 256 294 336 384 110 Iran 593 753 224 278 213,532 4,061 4,671 5,371 6,177 111 Libya 261 94 115 169 146768 854 943 1,062 1,172 112 Saudi Arabia 1,997 2,407 2,410 1,470 1,9704,282 4,786 5,369 5,932 6,546 113 Kuwait 976 615 1,518 1,268 1,099'1,749 1,976 2,213 2,457 2,745 Qatar 339 195 197 106 251814 928 1,057 1,205 1,374 United Arab1,279 1,420 1,552 1,701 1,863 Emirates 1,046 1,060 1,177 690 207558 631 707 790 882 Total OAPECd 4,879 4,656 5,526 3,919 4,5794,029 4,533 5,100 5,737 6,336 Total OPEC 5,516 5,596 5,866 4,344 4,7116,250 6,966 7,662 8,416 9,421571 638 707 781 861 OPEC As percentage of donor GNP1,259 1,400 1,545 1,702 1,872276 318 350 400 455 52 Nigeria .05 .25 .16 .08 .0528,731 32,124 35,743 39,688 44,128 78 Ageria .11 33 .124 .28 .14109 Iraq 1.65 1.44 .32 .76 2.94110 Iran 1.13 1.13 .27 .33 .03.10.30.10.30.11.30.11.30.11.30111 Libya112 Saudi Arabia2.315.40.635.73.654.32.932.76.583.15.49 .45 .42 .40 .38 113 Kuwait 8.12 4.36 10.61 6.35 5.14.23 .24 .26 .27 .28 Oatar 15.62 7.95 7.93 3.65 5.60.25 .27 .28 .29 .30 United Arab27 .28 .28 .29 .30 Emirates 14.12 11.02 10.22 5.60 1.58.50 .50 .50 .51 .51 Total OAPECd 4.99 4.03 3.95 2.55 2.43.59 .59 .60 .60 .60 Total OPEC 2.71 2.27 1.96 1.35 1.28.94 .96 .97 .98 .99.60 .61 .63 .65 .67.45 .45 .45 .44 .44.96 .97 .98 .99 1.00.44 .44 .45 .46 .46.22 .22 .22 .22 .22.70 .70 .70 .70 .70.95 .95 .95 .95 .95.25 .26 .26 .27 .28 Net bilateral flow to low-income countries1960 1965 1970 1975 1976 1977 1978315 377 453 495 547 OECD As percentage of donor GNP72 80 89 98 1061,150 1,195 1,235 1,297 1,359 92 Italy .03 .04 .06 .01 .01 .02 .01465 542 631 734 857 93 New Zealand .. .. .. .14 .06 .04 .032,835 3,423 3,931 4.493 5,134 94 United Kingdom .22 .23 .15 .11 .14 .11 .15770 885 1,018 1,170 1,346 95 Finland .. .. .. .06 .07 .06 .04681 757 836 941 1,039 96 Austria .. .06 .05 .02 .02 .01 .0118,233 20,379 22,861 25,258 27,873 97 Japan .12 .13 .11 .08 .08 .06 .073,512 3,968 4,444 4,934 5,512 98 Australia .. .08 .09 .10 .07 .07 .082,3,842 27,181 30,960 35,294 40,244 99 France .01 .12 .10 .12 .12 .10 .101,4972,8071,662-3,1741,8163,5561,9913,9742,1804,437100 Netherlands101 Belgium.19.27.08.56.24.30.24.31.26.26.33.24.34.23102 Canada .11 .10 .22 .24 .14 .13 .177,369 8,291 9,328 10,494 11.589 103 Norway .02 .04 .12 .25 .22 .30 .396,250 6,966 7,662 8,416 9,241 104 Germany, Fed. Rep. .13 .14 .10 .12 .09 .07 .103,010 3,363 3,727 4,117 4,539 105 United States .22 .26 .14 .08 .05 .03 .045,313 5,908 6,520 7,182 7,899 106 Denmark .02 .10 .20 .21 .24 .21457 526 579 652 753 107 Sweden .01 .07 .12 .41 .40 .44 .37108 Switzerland .. .02 .05 .10 .07 .05 .08Total .18 .20 .13 .11 .09 .07 .0928.7 32.1 35.7 39.7 44.1.36 .36 .36 .36 .3621.6 22.3 23.2 24.1 25.2a. Estimated.b. Provisional.c. See the technical notes.8.0 g10 9.9 11.0 12.1 d. Organization of Arab Petroleu.m Exporting Countries.1.33 1.44 1.54 1.65 1.75141

Table 17. Population Growth, Past and Projected,and Hypothetical Stationary Population aAverage annualHpteiagrowth gropulathiof of propatin Projected Hypothetical size of Assumed year Year ofpopulation(percent)population(millions)stationarypopulationof reaching netreproductionreachingstationary1960-70 1970-78 1980 2000 (millions) rate of 1 populationLow-in comecountriesq 2.5 w 2.2 w 1,348 t 2,00 t 4,0741 Kampuchea, Dem. . .2 Bangladesh 2.5 2.7 89 143 314 2035 21603 Lao PDR 2.2 1.3 3 5 11 2035 21754 Bhutan 2.0 2.1 1 2 4 2035 21655 Ethiopia 2.4 2.5 33 52 139 2045 21756 Mali 2.4 2.5 7 11 28 2040 21707 Nepal 2.0 2.2 14 21 46 2035 21608 Somalia 2.4 2.3 4 6 17 2045 21709 Burundi 2.4 2.0 5 8 21 2045 216010 Chad 1.8 2.2 5 7 18 2045 216511 Mozambique 2.2 2.5 10 17 44 2040 213512 Burma 2.2 2.2 34 51 92 2020 214513 Upper Volta 1.6 1.6 6 9 24 2040 217014 Viet Nam 3.1 2.9 55 87 149 2015 210515 India 2.5 2.0 672 974 1,645 2020 215016 Malawi 2.8 2.9 6 11 32 2045 216517 Rwanda 2.6 2.9 5 8 24 2045 216018 Sri Lanka 2.4 1.7 15 21 31 2010 207019 Guinea 2.8 2.9 5 9 23 2045 217020 Sierra Leone 2.2 2.5 3 6 14 2035 216021 Zaire 2.0 2.7 28 47 125 2045 216022 Niger 3.3 2.8 5 9 24 2040 217023 Benin 2.6 2.8 4 6 15 2035 216024 Pakistan 2.8 3.1 82 139 332 2035 215025 Tanzania 2.7 3.0 18 32 92 2045 214526 Afghanistan 2.2 2.2 15 25 65 2045 217527 Central African Rep. 2.2 2.2 2 3 8 2045 216528 Madagascar 2.2 2.5 9 14 38 2045 216029 Haiti 1.5 1.7 5 8 17 2030 214530 Mauritania 2.5 2.7 2 3 7 2040 215031 Lesotho 2.0 2.3 1 2 5 2045 215532 Uganda 3.7 2.9 13 23 58 2035 213033 Angola 1.5 2.3 7 11 29 2040 215534 Sudan 2.2 2.6 18 31 88 2045 213535 Togo 2.7 2.7 3 4 12 2040 213536 Kenya 3.4 3.3 16 32 109 2045 214037 Senegal 2.4 2.6 6 9 24 2040 215038 Indonesia 2.2 1.8 142 204 350 2020 2155Middle-income countries 2.5 w 2.4 w 916 t 1409t 2,599v39 Egypt 2.5 2.2 42 62 101 2015 210540 Ghana 2.4 3.0 12 21 56 2040 213041 Yemen, PDR 1.9 1.9 2 3 6 2030 212542 Cameroon 1.8 2.2 8 13 31 2040 213543 Liberia 3.1 3.3 2 3 9 2040 213044 Honduras 3.1 3.3 4 7 15 2030 209045 Zambia 2.8 3.0 6 10 28 2040 213046 Zimbabwe 3.9 3.3 7 13 37 2040 210547 Thailand 3.0 2.7 46 68 103 2005 209548 Bolivia 2.5 2.6 6 9 20 2030 212049 Philippines 3.0 2.7 48 75 126 2015 207550 Yemen Arab Rep. 1.8 1.9 6 9 19 2030 217051 Congo, People's Rep. 2.1 2.5 2 3 7 2045 211552 Nigeria 2.5 2.5 85 153 425 2040 213553 Papua New Guinea 2.3 2.4 3 5 9 2025 212054 El Salvador 2.9 2.9 5 8 14 2015 207555 Morocco 2.5 2.9 20 34 70 2025 209056 Peru 2.8 2.7 18 29 57 2025 209057 Ivory Coast 3.7 5.6 8 14 37 2040 213058 Nicaragua 2.9 3.3 3 5 9 2020 209059 Colombia 3.0 2.3 27 39 57 2005 207060 Paraguay 2.6 2.8 3 5 9 2015 207561 Ecuador 3.1 3.3 8 14 26 2020 208062 Dominican Rep. 2.9 2.9 5 9 16 2015 207563 Guatemala 2.8 2.9 7 12 23 2025 208564 Syrian Arab Rep. 3.2 3.2 9 15 33 2025 208565 Tunisia 1.9 2.0 6 9 14 2010 207566 Jordan 3.0 3.3 3 5 12 2025 2090142

Average annualHypotheticalgrowth of Projected size of Assumed year Year ofpopulation population stationary of reaching net reaching(percent) (millions)- population reproduction stationary1960-70 1970-78 1980 2000 (millions) rate of 1 population67 Malaysia 2.9 2.7 14 20 30 2005 207068 Jamaica 1.4 1.7 2 3 5 2005 206569 Lebanon 2.8 2.5 3 5 8 2010 207070 Korea, Rep. of 2.4 1.9 38 50 66 2005 207071 Turkey 2.5 2.5 45 65 100 2010 207572 Algeria 2.4 3.2 19 34 94 2040 210073 Mexico 3.3 3.3 70 116 205 2015 207574 Panama 2.9 2.6 2 3 4 2005 206575 Taiwan 2.6 2.0 18 24 30 2005 2065-76 Chile 2.1 1.7 11 15 19 2005 207077 South Africa 2.6 2.7 29 49 107 2030 209078 Costa Fica 3.4 2.5 2 3 5 2005 206579 Brazil 2.9 2.8 126 201 345 2015 207580 Uruguay 1.1 0.3 3 4 4 2005 207081 Argentina 1.4 1.3 27 33 41 2005 206582 Portugetl 0.0 1.0 10 12 14 2005 210083 Yugoslavia 1.0 0.9 22 26 29 2005 209584 Trinidad and Tobago 2.0 1.2 1 2 2 2005 206585 Venezuela 3.4 3.3 15 24 40 2010 207086 Hong Kong 2.5 1.9 5 6 8 2005 206587 Greece 0.5 0.7 9 10 11 2005 206588 Singapore 2.4 1.5 2 3 4 2005 206589 Spain 1.1 1.2 38 44 51 2005 206590 Israel 3.4 2.7 4 5 8 2020 2080Industrialized countries 1.0 w 0.7 w 673 t 736 t 774 t91 Ireland 0.4 1.2 3 4 5 2005 206592 Italy 0.7 0.7 57 61 63 2005 203593 New Zealand 1.7 1.6 3 4 5 2005 207594 United Kingdom 0.5 0.1 56 58 59 2005 202595 Finland 0.4 0.4 5 5 5 2005 202096 Austria 0.5 0.2 7 8 8 2005 202597 Japan 1.0 1.2 117 131 134 2005 201598 Australia 2.0 1.6 14 17 19 2005 207599 France 1.0 0.6 54 58 61 2005 2030100 Netherlands 1.3 0.8 14 15 16 2005 2025101 Belgium 0.5 0.3 10 10 10 2005 2025102 Canada 1.8 1.2 24 28 30 2005 2030103 Norway 0.8 0.6 4 4 5 2005 2030104 Germany, Fed. Rep. 0.9 0.1 61 61 61 2005 2005105 United States 1.3 0.8 225 252 273 2005 2030106 Denmark 0.7 0.4 5 5 5 2005 2020107 Sweden 0.7 0.4 8 8 8 2005 2005108 Switzerland 1.6 0.1 6 7 7 2005 2005Capital-surplusoil exporters 2.9 w 3.2 w 64 t 104 t 203 t1O9 Iraq 3.1 3.3 13 23 48 2025 2085110 Iran 2.7 2.9 38 59 102 2015 2105111 Libya 3.8 4.1 3 5 12 2030 2090112 Saudi Arabia 2.6 3.5 9 15 35 2030 20901.13 Kuwait 9.8 6.1 1 2 6 2030 2085Centrally plannedeconomies 1.7 w 1.4 w 1,386 t 1,730 t 2,121 t114 China 2.1 1.6 977 1,251 1,555 2005 2065115 Korea, Dem. Rep. 2.8 2.6 18 27 43 2010 2070116 Albania 2.8 2.5 3 4 6 2005 2060117 Cuba 2.0 1.6 10 13 17 2005 2070118 Mongolia 2.9 2.9 2 3 4 2005 2090119 Romania 1.0 0.9 22 26 30 2005 2090120 Bulgara 0.8 0.5 9 10 10 2005 2080121 Hunga-y 0.4 0.4 11 11 12 2005 2085122 Poland 1.0 0.9 36 41 47 2005 2090123 USSR 1.2 0.9 266 310 360 2005 2095124 Czechoslovakia 0.5 0.7 15 17 19 2005 2090125 Germam Dem. Rep. -0.1 -0.2 17 17 18 2005 2015Totalb 4,387 6,029 9,771a. For the assumotions used in the projections, see the technical notes. b. Exciudes countries with populations of less than one milJion.143

Table 18. Demographic and Fertility-related IndicatorsLow-incomecojuntre 4t 8PercentageCrude Crude Percentage Pecnae of marriedbirth death change in: ofewoen ng womenraeper rate per ofsomengrhuate rhusn Crude Crude Total reproductivle usingrapopulation population birth death fertility age group ceptivesarate rate rate (aged 15-44)1960 1978 1960 1978 1960-78 1960-78 1978 1978 1970 197739W2 4 w 15 -l4 .4 w ll5w5 41 Kampuchea, Dem. . . . .. ..2 Bangladesh 51 46 25 18 -9.8 -28.0 6.1 45 .. 93 Lao PDR 44 45 23 22 2.3 -4.3 6.4 404 Bhutan 46 44 28 23 -4.3 -17.9 6.2 435 Ethiopia 51 49 28 25 -3.9 -10.7 6.7 426 Mali 50 49 27 22 -2.0 -18.5 6.7 417 Nepal 46 45 29 21 -2.2 -27.6 6.5 42 1 48 Somalia 57 48 29 20 -15.8 -31.0 6.1 449 Burundi 48 47 27 20 -2.1 -25.9 6.3 4210 Chad 46 44 29 21 4.3 -27.6 5.9 4211 Mozambique 46 46 26 19 0.0 -26.9 6.1 4112 Burma 43 39 22 14 -9.3 -36.4 5.5 4213 Upper Volta 49 48 27 22 -2.0 -18.5 6.5 4214 Viet Nam 47 37 21 9 -21.3 -57.1 5.5 4115 India 43 35 21 14 -18.6 -33.3 5.0 44 12 1716 Malawi 53 52 27 20 -1.9 -25.9 7.0 3917 Rwanda 51 51 27 19 0.0 -29.6 6.9 4018 Sri Lanka 36 26 9 6 -27.8 -33.3 3.6 46 8 4119 Guinea 47 46 30 21 -2.1 -30.0 6.2 4220 Sierra Leone 47 46 27 19 -2.1 -29.6 6.1 4121 Zaire 48 46 24 19 -4.2 -20.8 6.1 42 .. ()22 Niger23 Benin5251514927272219-1.9-3.9-18.5-29.67.16.7414124 Pakistan 48 45 23 15 -6.3 -34.8 6.7 40 4 625 Tanzania 47 48 22 16 2.1 -27.3 6.5 4026 Afghanistan 48 48 30 22 0.0 -26.7 6.9 41 .. 127 Central African Rep. 42 42 26 19 0.0 -26.9 5.6 4228 Madagascar 47 45 27 19 4.3 -29.6 6.1 4129 Haiti 45 43 23 17 4.4 -26.1 5.9 42 .. 530 Mauritania 51 50 27 22 -2.0 -18.5 6.9 4131 Lesotho 40 40 23 16 0.0 -30.4 5.4 4232 Uganda 45 45 21 14 0.0 -33.3 6.1 4133 Angola 50 48 31 23 -4.0 -25.8 6.4 4234 Sudan 47 45 25 18 4.3 -28.0 6.6 4235 Togo 51 60 27 19 -2.0 -29.6 6.7 4136 Kenya 51 51 19 14 0.0 -26.3 7.8 39 2 437 Senegal 48 49 27 22 2.1 -18.5 6.5 4138 Indonesia 47 37 23 17 -21.3 -26.1 4.9 44 () 19middle-income countries 40 o35w~ 14t 11 w -17A w 2. 49w4 w39 Egypt 45 37 19 13 -17.8 -31.6 5.0 44 9 2140 Ghana 49 48 24 17 -2.0 -29.2 6.7 41 2 441 Yemen, PDR 54 48 30 21 -11.1 -30.0 7.0 4142 Cameroon 43 42 27 19 -2.3 -29.6 5.7 4143 Liberia 51 51 25 18 0.0 -28.0 6.9 4044 Honduras 51 47 19 12 - 7.8 -3. 6939 .45 Zamhia 51 49 24 17 -3.9 -29.2 6.9 4046 Zimbabwe 47 48 19 14 2.1 -26.3 6.6 40 .. 547 Thailand 46 32 17 8 -30.4 -52.9 4.5 42 27 4048 Bolivia 48 44 23 15 -8.3 -34.8 6.5 4149 Philippines 45 35 15 9 -22.2 -40.0 5.0 42 2 2250 Yemen Arab Rep. 49 48 29 25 -2.0 -13.8 6.8 4151 Congo, People's Rep. 46 45 27 19 -2.2 -29.6 6.0 4252 Nigeria 52 50 25 15 -3.8 -28.0 6.9 41.53 Papua New Guinea 44 41 23 16 -6.8 -30.4 6.0 42 .. 354 El Salvador 48 39 17 9 -18.8 -47.1 5.5 41 . 2255 Morocco 52 45 23 13 -13.5 -43.5 6.5 41 1 556 Peru 47 39 19 12 -17.0 -36.8 5.6 43 157 Ivory Coast 50 50 27 19 0.0 -29.6 6.7 42 .58 Nicaragua 51 45 19 13 -11.8 -31.6 6.2 41 .. 1959 Colombia 46 31 14 8 -32.6 -42.9 4.0 45 .. 3660 Paraguay 43 39 13 9 -9.3 -30.8 5.8 41 .. 1661 Ecuador 47 44 14 10 -6.4 -28.6 6.5 41 .. 662 Dominican Rep. 50 37 16 9 -26.0 -43.8 5.3 42 . 3163 Guatemala 48 41 18 12 -14.6 -33.3 5.7 43 .. 364 Syrian Arab Rep.65 Tunisia4749453226211312-4.3-34.7-50.0-42.97.44.6C3842 8(.)1566 Jordan 48 46 20 13 -4.2 -35.0 7.0 41 .1444 4

PercentageCrude Crude Percentage Percentage of marriedbirth death change in: owmein womenrate per rate per Crude Crude Total reproductive usingthousand thousand brh dah frity geropcontrapopulatonpoplation rate rate rate (aged 15-44) cetvS1960 1978 1960 1978 1960-78 1960-78 1978 1978 1970 197767 Malaysiat 39 29 9 5 -25.6 -33.3 3.9 44 7 3668 Jamaica 39 29 9 6 -25.6 -33.3 4.2 39 .. 4069 Lebanorn 43 33 14 8 -23.3 -42.9 4.7 42 14 .70 Korea, Rep. of 41 21 13 8 --48.8 -38.5 2,8 47 32 4471 Turkey 44 32 17 10 -27.3 -41.2 4.4 43 8 3872 Algeria 50 48 23 14 -4.0 -39.1 7.3 3973 Mexico 45 38 12 8 -15.6 -33.3 5.7 41 .. 2174 Panama 41 31 10 6 -24.4 -40. 4.1 43 .. 4475 Taiwan 39 21 7 5 -46.2 -28.6 2.5 49 44 65*76 Chile 37 22 12 7 -40.5 -41.7 2.7 4677 South Africa 39 38 15 10 -2.6 -33.3 5.1 4278 Costa Rica 47 28 10 5 -40.4 -50.0 3.6 46 .. 6779 Brazil 40 36 11 9 -10.0 -18.2 4.9 43 280 Uruguay 22 20 9 9 -9.1 0.0 2.9 4181 Argenti-2a 24 21 9 8 -12.5 -11.1 2.9 4382 Portugal 24 18 8 10 -25.0 25.0 2.5 4283 Yugoslavia 23 18 10 8 -21.7 -20.0 2.2 45 5984 Trinidadi and Tobago 37 22 7 6 -40.5 -14.3 2.6 46 4485 Venezuela 45 36 10 7 -20.0 -30.0 4.9 4386 Hong Kong 35 19 7 6 -45.7 -14.3 2.6 45 51 7787 Greece 19 15 8 9 -21.1 12.5 2.3 4088 Singapore 38 17 8 6 -55.3 -25.0 2.1 5145 789 Spain 21 18 9 8 -14.3 -11.1 2.6 4190 Israel 26 26 8 7 0.0 -12.5 3.5 42Industrialized countries 2 0 w 1 4 w low 9 w -31.3 w - 6 .0Ow l. 8 w 491 Ireland 21 21 12 11 0.0 -8.3 3.5 3992 Italy93 New Zealand1826131710998-27.8-34.6-10.0-11.11.92.2414494 United Kingdom 17 12 12 12 -29.4 0.0 1.7 39 7295 Finland 19 14 9 9 -26.3 0.0 1.7 44 7796 Austria 18 11 13 12 -38.9 -7.7 1.7 3997 Japan 18 15 8 6 -16.7 -25.0 1.8 46 .. 6198 Australia 22 16 9 8 -27.3 -11.1 2.1 44 6699 Prance 18 14 12 110 -22.2 -16.7 1.9 41 64100 Netnerlands 21 13 8 8 -38.1 0.0 1.6 44 5,9 71101 Belgiurn 17 12 12 11 -29.4 -8.3 1.8 41 .. 87102 Canadat 27 16 8 8 -40.7 0.0 1.9 47103 Norway 18 13 9 10 -27.8 11.1 1.8 39104 Germany, Fed. Rep. 17 9 11 12 -47.1 9.1 1.4 40105 United States 24 15 9 9 -37.5 0.0 1.8 44 65106 Denmark 17 12 9 10 -29.4 11.1 1.7 41 67107 Sweden 15 12 10 11 -20.0 10.0 1.7 40108 Switzer-land 18 11 10 9 -38.9 -10.0 1.5 43Capital-surplusjoillexporters4 8 w 4f3w2 1 w 14 w -10.5 w -35 .0Ow6 .5 w4 1 w109 Irap 51 47 19 13 -7.8 -31.6 7.0 41 .. 23110 Iran 47 40 21 14 -14.9 -33.3 5.9 41 3 24111 Libya 49 47 19 13 -4.1 -31.6 7.4 40M~2 Saudi A,rabia 51 51 28 15 0.0 --46.4 8.0 39113 Kuwaii 44 47 10 5 6.8 -50.0 7.0 42Centrally plannedeconomies3 2 w 18 w 13 w 7 w -4 I.5 w -4 0 .1lw2 .4 w 4114 China 36 18 15 6 -50.0 -60.0 2.3 46115 Korea, Dem. Rep. 41 33 13 8 -19.5 -38.5 4.5 44116 Albania 41 30 11 6 -25.8 -45.5 4.2 44 .117 Cuba 32 19 9 6 -40.6 -33.3 2.5 44118 Mongolia 41 37 15 8 -9.8 -45.7 5.4 42119 Romaria 20 19 9 9 -5.0 0.0 2.6 42120 Bulgaria 18 16 9 11 -11.1 22.2 2.3 42 .121 Hungary 16 16 10 12 0.0 20.0 2.2 41122 Poianc 24 19 8 9 -20.8 12.5 2.3 45 57123 USSR 24 18 7 10 -25.0 42.9 2.4 43 .1-24 _Czechos-lovakia 17 18 10 11 5.9 10.0 2.4 41 66125 German Dam. Rep. 17 13 13 13 -23.5 0.0 1.8 40 .a. Figures r italics aea for years other than those specifaed. See the technica notes.145

Table 19. Labor ForcePercentage ofpopulation ofworking ageofAveragePercentage of labor force in:annual growthof labor force(15-64 years) Agriculture Industry Services (percent)1960 1978 1960 1978 1960 1978 1960 1978 1960-70 1970-80 1980-2000Low-income ountries5 6w 557 7 w72 w 9w 1w 14w 17w 1.7 w 1.9 w2 .2 w1 Kampuchea, Dem. .. ..2 Bangladesh 53 54 87 74 3 11 10 15 2.5 2.4 2.53Lao PDR 56 51 83 75 4 7 13 18 1.4 0.3 2.04Bhutan 56 55 95 93 2 2 3 5 1.7 2.0 1.95 Ethiopia 54 52 88 81 5 7 7 12 2.2 1.8 2.26Mali 54 52 94 88 3 6 3 6 2.0 2.2 2.57Nepal8 Somalia57545554958893822427385111.51.72.02.32.12.49 Burundi 55 53 90 85 3 5 7 10 1.9 1.6 2.310 Chad 57 54 95 86 2 6 3 8 1.5 2.0 2.311 Mozambique 56 53 81 67 8 18 11 15 1.9 1.7 2.212 Burma 59 55 68 53 11 20 21 27 1.1 1.5 2.013 Upper Volta 54 53 92 83 5 12 3 5 1.2 1.4 2.314 Viet Nam .. 52 81 73 5 8 14 19 1.0 1.9 2.615 India 57 56 74 74 11 11 15 15 1.5 1.7 2.016 Malawi 52 50 92 86 3 5 5 9 2.3 2.4 2.817 Rwanda 53 51 95 91 1 2 4 7 2.2 2.5 2.818 SriLanka 54 58 56 54 14 15 30 31 2.1 2.1 2.119 Guinea 55 54 88 82 6 11 6 7 2.4 2.2 2.120 Sierra Leone 55 53 78 67 12 18 10 15 1.5 1.8 2.321 Zaire 53 53 83 76 9 13 8 11 1.4 2.1 2.422 Niger 53 51 95 91 1 3 4 6 3.0 2.6 2.923 Benin 53 51 54 46 9 15 37 39 2.0 2.2 2.124 Pakistan 52 51 61 58 18 19 21 23 1.8 2.5 2.925 Tanzania 54 51 89 83 4 6 7 11 2.1 2.3 2.726 Afghanistan 55 53 85 79 6 9 9 12 1.9 1.8 2.527 Central African Rep. 58 56 94 89 2 3 4 8 1.7 1.6 2.328 Madagascar 55 53 93 86 2 4 5 10 1.8 2.0 2.329 Haiti 55 53 80 70 6 8 14 22 0.7 1.4 2.430 Mauritania 53 52 91 85 3 5 6 10 2.2 2.3 2.731 Lesotho 57 55 93 87 2 4 5 9 1.6 1.9 2.132 Uganda 54 52 89 83 4 6 7 11 3.2 2.5 2.533 Angola 55 53 69 60 12 16 19 24 1.0 1.9 2.434 Sudan 53 53 86 79 6 9 8 12 2.1 2.3 2.735 Togo 53 51 80 69 8 14 12 17 2.2 2.1 2.636 Kenya 50 48 86 79 5 8 9 13 2.9 2.8 3.337 Senegal 54 53 84 77 5 8 11 15 1.8 1.9 2.238 Indonesia 56 56 75 60 8 11 17 29 1.8 2.1 1.8Milddle-income countries 55w 55 w 58 w 45 w, 17 w 23 w 25 w 32 w 2.0 w 2.4 w 2.5 w39 Egypt 55 56 58 51 12 26 30 23 2.2 2.2 2.340 Ghana 53 51 64 54 14 19 22 27 1.6 2.4 2.941 Yemen, PDR 52 51 70 60 15 21 15 19 1.4 1.3 2.842 Cameroon 57 55 87 82 5 7 8 11 1.3 1.3 1.743 Liberia 52 50 80 71 10 13 10 16 2.3 2.6 2.944 Honduras 52 49 70 64 11 14 19 22 2.5 3.0 3.345 Zambia 53 51 79 68 7 11 14 21 2.4 2.4 2.846 Zimbabwe 52 50 69 60 11 15 20 25 3.1 2.6 3.047 Thailand 53 53 84 77 4 8 12 15 2.1 2.9 2.348 Bolivia 55 53 61 51 18 24 21 25 1.9 2.4 2.949 Philippines 52 52 61 48 15 16 24 36 2.1 2.4 2.750 Yemen Arab Rep. 54 51 83 76 7 11 10 13 1.5 1.4 2.351 Congo, Peop]e's Rep. 56 54 52 35 17 26 31 39 1.5 2.0 2.752 Nigeria 52 54 71 56 10 17 19 27 1.8 2.0 2.953 Papua New Guinea 57 55 89 82 4 7 7 11 1.8 1.9 2.054 El Salvador 52 51 62 52 17 22 21 26 2.5 2.8 3.355 Morocco 53 50 62 53 14 20 24 27 1.6 2.9 3.356 Peru 52 53 53 39 19 21 28 40 2.0 3.0 3157 Ivory Coast 54 54 89 81 2 3 9 16 3.6 4.5 2.458 Nicaragua 50 49 62 44 16 15 22 41 2.6 3.3 3.659 Colombia 50 56 52 30 19 23 29 47 3.0 3.2 2.660 Paraguay 51 52 56 50 19 19 25 31 2.3 3.1 3.461 Ecuador 52 52 58 46 19 25 23 29 2.9 3.2 3.262 Dominican Rep. 49 51 67 57 12 16 21 27 2.3 3.4 3.363 Guatemala 51 54 67 57 14 20 19 23 2.5 3.0 2.864 Syrian Arab Rep. 52 48 54 49 19 22 27 29 2.1 2.9 3.565 Tunisia 53 54 56 45 18 24 26 31 0.7 2.9 2.665 Jordan 52 51 44 27 26 39 30 34 2.8 2.9 3.2146

Percentage ofpopulation ofworking agePercentageof labor force in:Averageoannualcgrowtof abor frce(15-64 years) Agriculture Industry Services (percent)1960 1978 1960 1978 1960 1978 1960 1978 1960-70 1970-80 1980-200067 Malaysia 51 54 63 50 12 16 25 34 2.8 3.0 2.868 Jamaicet 54 51 39 28 25 17 36 55 0.4 2.4 3.369 Lebanon 53 55 38 12 23 27 39 61 2.1 3.0 2.870 Korea, Rep. of 54 60 66 41 9 37 25 22 2.9 2.8 2.071 Turkey 55 56 78 60 11 14 11 26 1.4 2.2 2.172 Algeria 52 49 67 30 12 25 21 45 0.2 3.5 3.573 Mexico 51 51 55 39 20 26 25 35 2.8 3.3 3.574 Panama 52 55 51 35 14 18 35 47 3.3 2.8 2.675 Taiwan 52 63 56 37 11 37 33 26 2.4 1.9 1.676 Chile 57 61 30 20 30 26 40 54 1.4 2.6 2.177 South Africa 55 54 32 30 30 29 38 41 3.2 2.6 3.078 Costa F'ica 50 57 51 29 19 23 30 48 3.4 3.6 2.779 Brazil 54 55 52 41 15 22 33 37 2.7 2.8 2.980 Uruguay 64 63 21 12 29 33 50 55 0.9 0.2 1.181 Argentina 64 63 20 14 36 29 44 57 1.3 1.2 1.282 Portugal 63 63 44 27 29 37 27 36 0.2 0.8 0.983 Yugoslavia 63 66 63 33 18 32 19 35 1.0 1.1 0.784 Trinidad and Tobago 53 60 22 16 34 36 44 48 2.4 2.6 2.285 Venezuela 51 54 35 20 22 27 43 53 2.7 3.9 3.286 Hong Kong 56 65 8 3 52 57 40 40 3.1 3.0 1.387 Greece 65 64 56 39 20 28 24 33 (.) 0.6 0.588 Singapore 55 65 8 2 23 38 69 60 2.7 2.7 1.489 Spain 64 63 42 18 31 43 27 39 0.2 1.2 0.990 Israel 59 59 14 7 35 36 51 57 3.5 2.4 2.1Industrialized countries6 3 w65 w 17 w6 w 38 w 39 w45 w 55 w 1.2 w 1.1 T - 0. 6 w91 Ireland 58 58 36 20 25 37 39 43 (.) 1.0 1.692 Italy 66 64 31 13 40 48 29 39 -0.1 0.7 0.493 New Zealand 59 63 15 10 37 35 48 55 2.2 2.1 1.294 United Kingdom 65 64 4 2 48 43 48 55 0.6 0.3 0.495 Finlancl 62 68 36 14 31 37 33 49 0.5 1.0 0.496 Austria 66 63 24 10 46 40 30 50 -0.7 0.8 0.497 Japan 64 68 33 13 30 39 37 48 1.8 1.3 0.798 Austra ia 61 64 11 6 40 34 49 60 2.6 1.8 0.999 France 62 63 22 9 39 40 39 51 0.6 1.1 0.6100 Netherlands 61 65 11 6 42 45 47 49 1.6 1.3 0.5101 Belgium 65 65 8 3 48 43 44 54 0.3 0.7 0.3102 Canada 59 66 13 6 35 30 52 64 2.5 2.0 0.9103 Norway 63 63 20 8 37 38 43 54 0.5 0.7 0.6104 Germany, Fed. Rep. 68 65 14 4 48 48 38 48 0.2 0.7 (.)105 United States 60 65 7 2 36 33 57 65 1.7 1.5 0.9106 Denmeark 64 64 18 8 37 37 45 55 1.1 0.6 0.4107 Sweden 66 64 14 5 45 37 41 58 1.0 0.3 0.2108 Switzerland 66 66 12 6 50 47 38 47 1.9 0.4 0.2iCapital-surplusoil exporters51 w5 1 w 57 w4 2 w 20 w2 9 w 23 w 29 w 2.6 w2 .8 w2 .9 w109 Iraq 51 51 53 42 18 25 29 33 2.8 2.9 3.2;10 Iran 51 51 54 40 23 33 23 27 2.5 2.6 2.9111 Libya 53 51 53 21 17 27 30 52 5.2 3.5 3.0112 Saudi Arabia 54 52 71 62 10 13 19 25 2.3 3.5 2.7113 Kuwai: 63 53 1 2 34 35 65 63 7.3 4.1 3.1Centrally plannedeconomies5 8 w62 w 64 w49 w 20 w31 w 16 w20 w 1.4 w 1.7 w 1.2 w114 China 56 61 75 62 15 25 10 13 1.7 1.9 1.4115 Korea, Dem. Rep. 53 56 62 49 23 32 15 19 2.3 2.9 2.7116 Albania 54 57 71 62 18 24 11 14 2.3 2.7 2.4117 Cuba 61 59 39 25 22 31 39 44 0.8 2.0 2.0118 Mongolia 54 53 70 56 13 21 17 23 2.1 2.4 2.7119 Romania 65 64 64 50 21 31 15 19 0.8 0.6 0.7120 Bulgaria 66 66 56 40 25 38 19 22 0.7 0.3 0.3121 Hungary122 Poland666166663848183335295539272327280.51.80.41.40.20.8123 USSR 63 65 42 17 29 47 29 36 0.7 1.2 0.7124 Czechoslovakia 64 64 26 12 46 50 28 38 0.9 0.8 0.7125 German Dem. Rep. 65 63 18 10 48 51 34 39 -0.2 0.5 0.3147

Table 20. UrbanizationPercentage of urban population Number ofUrban population In cities citiesAs percentageof totalAverage annualgrowth rateInlargestof over500,000of over500,000population (percent) city persons persons1960 1980 1960-701970-8 1960 1980 1960 1980 1960 1980Low-icome countries1 w 2w3 7 4 .Ow l~4 w lw24 w4 45 z 20t~ 76t1 Kampuchea, Dem. .. ... ....2 Bangladesh 5 11 6.5 6.6 20 30 -20 51 1 33 Lao PDR 8 13 4.1 4.8 69 48 0 0 0 04 Bhutan 3 4 4.2 4.65. 0 0 0 05 Ethiopia 6 15 6.1 6.9 30 31 0 37 0 16 Mali 11 20 6.4 6.5 32 34 0 0 a 07 Nepal 3 5 4.3 4.7 41 27 0 0 0 08 Somalia 17 30 5.3 5.1 .. 34 0 0 0 0)9 Burundi 2 2 2.4 2.6 . .. 0 0 0 010 Chad 7 18 6.8 6.7 39 0 0 0 011 Mozambique 4 9 6.6 6.8 75 83 0 83 0 112 Burma 19 27 3.9 4.0 23 23 23 29 1 113 Upper Volta 5 9 5.3 4.1 .. 41 0 0 0 014 Viet NarT 15 23 5.3 5.1 32 21 32 50 1 415 India 18 22 3.3 3.3 7 6 26 47 1 3616 Malawi 4 9 6.6 6.2 .. 19 0 0 0 017 Rwanda 2 4 5.3 5.9 0 0 0 0l8 SriLanka 18 27 4.3 3.7 28 16 0 16 0 119 Guinea 10 19 6.1 6.1 37 80 0 80 0 120 Sierra Leone 13 25 5.5 5.6 37 47 0 0 0 021 Zaire 16 34 5.2 7.2 14 28 14 38 1 222 Niger 6 13 7.0 6.8 .. 31 0 0 0 023 Benin 10 14 5.3 3.9 63 0 63 0 124 Pakistan 22 28 4.0 4.3 20 21 33 52 2 725 Tanzania 5 12 6.3 8.3 34 50 0 50 0 126 Afghanistan 8 15 5.4 5.6 33 17 0 17 0 127 Central African Rep. 23 41 5.3 4.9 40 36 0 0 0 028 Madagascar 11 18 5.1 5.2 44 36 0 36 0 129 Haiti 16 35 3.9 4.2 42 56 0 56 0 130 Mauritania 3 23 15.8 8.6 .. 39 0 0 0 031 Lesotho 2 5 7.5 7.8 .. 0 0 0 032 Uganda 5 12 6.3 7.0 38 52 0 52 0 133 Angola 10 21 5.1 5.8 44 64 0 64 0 134 Sudan 10 25 6.9 6.8 30 31 0 31 0 135 Togo 10 17 5.6 5.6 .. 60 0 0 0 036 Kenya 7 14 6.6 6.8 40 57 0 57 0 137 Senegal 23 25 2.9 3.3 53 65 0 65 0 138 Indonesia 15 20 3.8 3.6 20 23 34 49 3 9Middle-income countrieS 7W 5 w *4.2W 3 A 8 29 SOb36 w 49 w 52 t 115t39 Egypt 38 45 3.6 3.0 38 39 53 53 2 240 Ghana 23 36 4.6 5.2 25 35 0 48 0 241 Yemen, PDR 28 37 3.2 3.5 61 50 0 0 0 042 Cameroon 14 35 5.6 7.5 26 21 0 21 0 143 Liberia 21 33 5.6 5.6 . .. 0 0 0 0-44 Honduras 23 36 5.5 5.5 31 33 0 0 0 045 Zambia 23 38 5.4 5.4 .. 35 0 35 0 146 Zimbabwe 13 23 6.8 6.4 40 50 0 50 0 147 Thailand 13 14 3.7 3.5 65 69 65 68 1 148 Bolivia 24 33 4.1 4.3 47 44 0 44 0 149 Philippines 30 36 3.9 3.6 27 30 27 36 1 350 Yemen Arab Rep. 3 10 7,5 7.3 25 0 0 0 051 Congo, People's Rep. 33 37 2.6 3.2 77 56 0 0 0 052 Nigeria 13 20 4.7 4.9 13 17 22 57 2 953 Papua New Guinea 3 17 15.3 8.5 .. 25 0 0 0 054 El Salvadcr 38 41 3.2 3.4 26 22 0 0 0 055 Morocco 29 41 4.2 4.5 16 13 16 29 1 556 Peru 46 67 5.0 4.4 38 39 38 44 1 257 Ivory Coast58 Nicaragua194138537.34.28.24.527413347003347001159 Colombia 48 70 5.2 3.9 17 26 28 53 3 560 Paraguay61 Ecuador363439453.04.53.54.544314429004452001262 Domninican Rep. 30 51 5.8 5.3 50 54 0 70 0 263 Guatemala 33 39 3.6 3.7 41 36 41 36 1 164 Syrian Arab Rep. 37 50 4.8 4.7 35 33 35 55 1 265 Tunisia 36 52 3.8 3.8 40 31 40 31 1 166 Jordan 43 56 4.5 4.5 31 37 0 37 0 1148

Percentage of urban population Number ofUrban population In cities citiesAs percentage Average annual In of over of overof totalpopulationgrowth rate(percent)largestcity500,000persons500,000persons1960 1980 1960-70 1970-80 1960 1980 1960 1980 1960 198067 Malaysia 25 29 3.6 3.5 19 27 0 27 0 168 Jamaica 34 50 3.5 3.6 77 65 0 65 0 169 Lebanon 44 76 6.2 4.5 64 79 64 79 1 170 Korea, Rep. of 28 55 6.2 4.8 35 41 61 77 3 771 Turkey 30 47 5.1 4.6 18 24 32 42 3 472 Algeria 30 61 6.1 6.4 27 12 27 12 1 173 Mexico 51 67 4.8 4.5 28 32 36 48 3 774 Panama 41 54 4.4 3.9 30 33 0 33 0 1-75 Taiwan 58 77 3.3 4.1 . .. ..76 Chile 68 81 3.1 2.4 38 44 38 44 1 177 South Africa 47 50 2.8 3.1 16 13 44 53 4 778 Costa R:ca 37 43 4.2 3.4 67 64 0 64 0 179 Brazil 46 65 4.8 4.3 14 16 35 52 6 1480 Uruguay 80 84 1.3 0.7 56 52 56 52 1 181 Argentina 74 82 2.0 1.8 46 45 54 60 3 582 Portugal 23 31 1.5 2.5 47 42 47 42 1 183 Yugoslavia 28 42 3.2 2.9 11 10 11 23 1 384 Trinidacd and Tobago 22 22 1.7 1.4 .. .. 0 0 0 085 Venezuela 67 83 4.8 4.2 26 26 26 39 1 386 Hong Kang 89 90 2.6 1.9 100 100 100 100 1 187 Greece 43 62 2.6 2.4 51 57 51 70 1 288 Singapore 100 100 2.4 1.5 100 100 100 100 1 189 Spain 57 74 2.6 2.3 13 16 37 44 5 690 Israel 77 89 4.3 3.1 46 35 46 35 1 1Industrialized countries 67 w 77 w 1.8 w 1.2 w 19 w 18 w4 8 w55 w 99 t 152 t91 Ireland 46 58 1.6 2.2 51 48 51 48 1 192 Italy 59 69 1.5 1.3 13 17 46 55 7 993 New Zealand 76 85 2.4 1.9 25 30 0 30 0 194 United Kingdom 86 91 0.8 0.3 24 20 61 52 15 1895 Finland 38 62 3.2 2.5 28 27 0 27 0 196 Austria 50 54 0.9 0.5 51 39 51 39 1 197 Japan 62 78 2.4 2.0 18 22 35 41 5 998 Australia 81 89 2.5 1.8 26 24 62 68 4 599 France 62 78 2.4 1.4 25 23 34 35 4 7100 Netherlands 80 76 1.0 0.5 9 9 27 24 3 3101 Belgiurn 66 72 1.2 0.5 17 14 28 24 2 2102 Canadet 69 80 2.7 1.7 14 17 31 66 2 10103 Norway 32 53 3.5 2.7 50 32 50 32 1 1104 Germany, Fed. Rep. 77 85 1.4 0.5 20 18 48 45 11 12105 United States 67 73 1.7 1.2 13 12 61 77 40 67106 Denmark 74 84 1.5 0.9 40 32 40 32 1 1107 Sweden 73 87 1.8 1.0 15 15 15 15 1 3108 Switzer-land 51 58 2.2 0.7 19 22 19 22 1 1Capital-surplusoil exporters35 w 58 w 5.8 w 5.5 w2 8 w36 w2 3 w 51w 2t 13 t109 Iraq 43 72 6.2 5.4 35 55 35 70 1 37I0 Iran 34 50 4.7 4.9 26 28 26 47 1 6111 Libya 23 52 8.0 8.2 57 64 0 64 0 1112 Saudi Arabia 30 67 7.8 6.5 15 18 0 41 0 3113 Kuwail 72 88 10.4 7.2 75 32 0 0 0 0Centrally plannedeconomies 29w 3 6 w 3.0w2 .6 w 9 w7 w3 1 w37 w 76 t 133 t114 China 19 25 3.6 3.1 6 6 42 44 38 65115 Korea, Dem. Rep. 40 60 5.0 4.3 15 12 15 19 1 2116 Albania 31 37 3.8 3.4 27 25 0 0 0 0117 Cuba118 Mongolia553665502.95.22.44.1385331523803101010119 Romania 34 48 2.8 2.5 22 17 22 17 1 1120 Bulgaria 39 64 3.8 2.5 23 18 23 18 1 1121 Hunga ry 40 54 1.7 2.2 45 38 45 38 1 1122 Poland 48 57 1.8 1.7 17 15 41 43 5 8123 USSR 49 65 2.7 2.2 6 4 21 33 25 50124 Czechoslovakia 47 63 2.1 2.0 17 12 17 12 1 1125 German Dem. Rep. 72 77 0.1 0.2 9 9 14 17 2 3149

Table 21. Indicators Related to Life ExpectancyLow-income countriesLife Infant Childexpectancy mortality d eathat birth rate rate(years) (aged 0-1)a (aged 1-4)a1960 1978 1960 1978 1960 197842 w 50 w ~~~~~ w ~~~~~~~~~3020 wDem.1 Kampuchea,2 Bangladesh 40 47 139 29 233Lao PDR 40 42 .. 29 274Bhutan 36 41 . .. 41 285 Ethiolpia 36 39 126 43 376 Mali 37 42 210 41 327 Nepal 36 43 35 238 Somalia 36 43 . .. 43 319 Burundi 37 45 .. .. 41 2810 Chad 35 43 . .. 45 3011 Mozambique 37 46 . .. 41 2712 Burma 44 53 . .. 25 1513 Upper Volta 37 42 263 .41 3214 Viet Nam 41 62 . .. 28 615 India 43 51 . .. 28 1816 Malawi 37 46 . .. 41 2717 Rwanda 37 46 .. 127 41 27l8 SriLanka 62 69 63 .. 7 219 Guinea 35 43 .. .. 45 3020 Sierra Leone 37 46 . .. 41 2721 Zaire 40 46 . .. 37 2722 Niger 37 42 212 .. 41 3223 Benin 37 46 206 .. 41 2724 Pakistan 44 52 .. .27 1725 Tanzania 42 51 185 32 2026 Afghanistan 34 42 .. 237 42 2727 Central African Rep. 37 46 190 .. 40 2728 Madagascar 37 46 . .. 41 2729 Haiti 42 51 . .39 2330 Mauritania 37 42 .. 41 3231 Lesofho 42 50 . .. 34 2132 Uganda 44 53 160 .. 30 1733 Angola 33 41 . .. 49 3434 Sudan 39 46 . .. 46 3135 Togo 37 46 177 .. 41 2736 Kenya 47 53 126 .25 1437 Senegal 37 42 93 .. 41 3238 Indonesia 41 47 125 .31 20Miiddle-incomecoutrie 5~4 w 61 w 8w 10ow39 Egypt 46 54 108 31 1840 Ghana 40 48 141 .. 36 2341 Yemen, PDR42 Cameroon36 37 4446 167.5 440 362743 Liberia 40 48 .3 6 2344 Honduras45 Zamoia464057 48130.118..30365142346 Zimbabwe 45 54 . .. 28 1647 Thailand 51 61 .. 68 15 648 Bolivia 43 52 .. 158 36 2 49 Philppines 51 60 98 65 16 750 Yemen Arab. Rep. 36 39 . .55 3151 Congo, People's Rep. 37 46 180 .40 2752 Nigeria 39 48 38 2453 Papua New Guinea 41 50 159 32 1954 Pl Salvador 50 63 .. 60 24 855 Morocco 47 55 . .30 1756 Peru 48 56 - 28 1657 Ivory Coast 37 46 .41 2758 Nicaragua 47 55 37 30 1759 Colombia 53 62 9860 Paraguay 56 63 . ..17169861 Ecuador 51 60 140 66 23 1062 Dominican Rep. 51 60 37 23 1063 Guatemala 47 57 77 31 1564 Syrian Arab Rep. 48 57 . .29 1465 Tunisia 48 57 148 123 29 1566 Jordan 47 56 .. .30 16150

Life Infant Childexpectancy mortality deathat birth rate rate(years) (aged 0-1)a (aged 1-4)a1960 1978 1960 1978 1960 197867 Malaysia 57 67 .. 31 9 368 Jamaica 64 70 63 20 7 369 Lebanon 58 65 .. .. 14 670 Korea, Rep. of 54 63 62 37 13 571 Turkey 51 61 . 118 24 10'72 Algeria 47 56 . . . 30 1673 Mexico 58 65 78 60 14 674 Panama 62 70 90 47 10 375 Taiwan 64 72 56 25 8 176 Chile 57 67 108 55 14 577 South Africa 53 60 .. . 17 1078 Costa R ca 62 70 80 28 10 379 Brazil 57 62 128 92 13 980 Uruguay 68 71 .. 46 4 381 Argentina 65 71 55 .. 6 382 Portugal 63 69 78 39 7 283 Yugoslavia 62 69 88 34 4 284 Trinidacd and Tobago 63 70 45 29 8 385 Venezuela 59 66 72 40 12 586 Hong Kong 65 72 42 12 3 187 Greece 68 73 40 19 2 188 Singapore 64 70 31 12 4 189 Spain 68 73 44 16 2 190 Israel 69 72 31 15 2 1Industrialized countries 69 to 74 w29 w 13 w I w 1 w91 Ireland 69 73 29 16 1 192 Italy 69 73 44 18 2 193 New Zealand 71 73 21 14 1 194 United Kingdom 70 73 22 14 1 195 Finland 68 72 21 9 1 196 Austria 68 72 38 15 1 197 Japan 68 76 31 10 3 198 Australia 70 73 20 13 1 199 France 70 73 27 11 1 1100 Netherlands 73 74 18 10 1 1101 Belgium 70 72 31 12 1 1102 Canada 71 74 27 12 1 1103 Norway 73 75 19 9 1 1104 Germany, Fed. Rep. 69 72 34 15 1 1105 United States 70 73 26 14 1 1106 Denmark 72 74 22 9 1 1107 Sweden 72 75 17 8 1 1108 Switzerland 71 74 21 10 1 1Capital-surplus-oil exporters45 w53 w94 w2 9 w 16 w109 Iraq 46 55 .. 92 31 17110 Iran 46 52 .. .. 24 14111 Libya 47 55 . 53 30 171'12 Saudi Arabia 38 53 118 48 28113 Kuwait 60 69 39 12 2Centrally plannedeconomies58 w O0 .. .. 10 w I w114 China 53 70 .. .. 14 1115 Korea, Dem. Rep. 54 63 .. .. 13 5116 Albania 62 69 .. .. 6 2117 Cuba 64 72 35 25 8 1118 Mongolia 52 63 . . 14 5119 Romania 66 70 76 31 3 1120 Bulgaria 67 72 45 22 3 1121 Hungary 67 70 48 24 2 1122 Polanc 66 71 57 22 2 1123 USSR 68 70 41 1 1124 Czechoslovakia 69 70 24 19 1 1125 German Dem. Rep. 68 72 39 13 2 1a. Figures ir, italics are for years other than those specified. See the technica notes.151

Table 22. Health-related IndicatorsPercentageDaily calorie supplyPopulation per: of population per capitaPhysiciana Nursing persona with accessto safe water TotalAs percentageof requirement1960 1977 1960 1977 1975 1977 1977Low-icome countrie 18,020 w 9,90 w ,00O ,70 2 2,052 w 91 w1 Kampuchea, Dem. 1,926 782 Bangladesh 9,260 42,080 53 1,812 783 Lao PDR 38,000 21,600 2,440 .. 2,082 944 Bhutan ,.2,028 885 Ethiopia 89,360 76,320 20,310 6 1,754 756 Mali 38,640 24,100 4,980 3,080 9 2,117 907 Nepal 72,000 35,210 51,220 9 2,002 918 Somalia 36,570 6,220 33 2,033 889 Burundi 77,160 50,840 6,850 6,980 .. 2,254 9710 Chad 70,930 42,150 8,040 4,220 26 1,762 7411 Mozambique 20,000 4,660 1,906 8112 Burma 9,900 5,120 .. 5,190 17 2,286 10613 Upper Volta 59,850 55,770 .. 1,280 10 1,875 7914 Viet Nam 5,620 . .1,801 8315 India 5,800 3,620 9,630 5,680 33 2,021 9116 Malawi 42,400 48,200 12,920 3,890 33 2,066 9017 Rwanda 138,100 36,440 11,200 9,830 35 2,264 9818 Sri Lanka 4,500 6,270 4,150 2,260 20 2,126 9619 Guinea 48,000 16,630 3,890 2,450 10 1,943 8420 Sierra Leone 19,960 .. 5,900 ... 2,150 9321 Zaire 36,850 15,540 3,440 1,940 16 2,271 10422 Niger 74,050 42,610 8,450 5,160 27 2,139 9123 Benin 47,000 26,910 .. 3,010 20 2,249 9824 Pakistan 11,000 3,780 .. 10,040 29 2,281 9925 Tanzania 21,020 15,450 10,440 2,760 39 2,063 8926 Afghanistan 22,460 19,890 23,210 25,100 6 2,695 11027 Central African Rep. 35,600 17,610 2,760 1,560 16 2,242 9928 Madagascar 9,620 10,300 3,110 3,540 26 2,485 11529 Haiti 10,600 5,940 11,880 3,510 14 2,100 9330 Mauritania 39,150 15,160 7,320 3,430 .. 1,976 8631 Lesotho 22,530 18,640 .. 4,340 17 2,245 9932 Uganda 12,960 27,60033 Angola 14,000 ......9,420 4,300 35 2,1102,133919134 Sudan 27,880 8,700 3,040 1,340 46 2,184 9336 Togo 35,130 18,360 5,340 2,040 16 2,069 9036 Kenya 10,560 11,950 2,230 1,120 17 2,032 8837 Senegal 22,380 15,700 .. 1,610 37 2,261 9538 Indonesia 41,000 14,580 .. 2,820 12 2,272 105Middlle-ilncome~ countries 80 wi 4,310 Dw 1,860 w 60 w2,590 w 108 wo39 Egypt 2,600 1,070 2,730 1,150 66 2,760 10940 Ghana 12,160 9,930 5,430 840 35 1,983 8641 Yemen, PDR .. 7,510 .. 1,570 24 1,945 8142 Cameroon 40,190 16,510 6,150 2,230 26 2,069 8943 Liberia 12,270 9,260 5,810 2,900 20 2,404 10444 Honduras 12,610 3,420 .. 1,240 46 2,015 8945 Zambia 11,990o 10,190 .9,920 1,9P30 42 2,002 8746 Zimbabwe .. 7,110 .. 1,390 .. 2,576 10847 Thailand 7,800 8,170 4,900 3,540 22 1,929 10548 Bolivia 3,660 1,850 .. 3,070 34 1,974 8349 Philippines .. 2,760 .. 3,060 39 2,189 9750 Yemen Arab Rep. 13,830 4,930 4 2,192 9151 Congo, People's Rep. 16,260 6,350 1,510 660 38 2,284 10352 Nigeria 56,900 15,800 6,020 4,030 1,951 8353 Papua New Guinea . 11,800 . 1,930 20 2,268 8554 El Salvador 5,660 3,600 .. 900 53 2,051 9055 Morocco 9,400 10,140 .. 1,830 55 2,534 10556 Peru 2,250 1,560 2,210 750 47 2,274 9757 Ivory Coast 23,280 15,220 2,920 2,370 19 2,517 10558 Nicaragua 2,740 1,670 -.. 70 2,446 10959 Colomnbia 2,400 1,970 3,740 1,250 64 2,364 10260 Paraguay 2,300 2,160 .. 2,260 13 2,824 12261 Ecuador 2,600 1,570 2,280 .. 42 2,104 9262 Dominican Rep. ... .55 2,094 9363 Guatemala 4,410 2,490- 9,040 .40 2,156 9864 Syrian Arab Rep. 4,600 2,510 6,660 3,810 75 2,684 10865 Tunisia 10,000 4,800 .. 1,070 70 2,674 11266 Jordan 5,900 1,940 1,650 950 56 2,107 62152

PercentageDaily calorie supplyPopulation per: of population per capitaPhysiciana Nursing persona with access As percentageto safe water Total of requirement1960 1977 1960 1977 1975 1977 197767 Maiays;a 6,940 4,350 1,780 1,080 62 2,610 11768 Jamaicia 2,600 3,520 550 86 2,660 11969 Lebanon 2,495 10170 Korea, Rep. of 3,000 1,960 510 62 2,785 11971 Turkey 3,000 1,770 1,400 75 2,907 11572 Algeria .. 5,360 .. 1,490 77 2,372 9973 Mexico 1,700 1,820 1,400 62 2,654 11474 Panamia 2,700 1,260 .. 1,450 79 2,341 10175 Taiwan 2,330 1,570 7,550 1,760 2,805 12076 Chile 1,810 1,~620 650 450 84 2,656 10977 -SoLth Africa 2,090 540 .. 2,831 11678 Costa Rica 2,600 1,390 1,700 450 77 2,550 11479 Brazil 3,600 1,700 77 2,562 10780 Uruguaty 960 710 .. 98 3,036 11481 Argentina 660 530 . .66 3,347 12682 Portugial 1,200 710 1,430 500 65 3,076 12683 Yugoslavia 1,620 760 1,350 410 3,445 13684 Trinidad and Tobago) 2,570 1,970 580 2,694 ill85 Venezuela 1,430 930 1,890 380 2,435 9986 Hong Kong 2,990 1,280 2,950 970 2,883 12687 Greece 7,90 450 2,080 600 3,400 13688 Singapore 2,400 1,260 650 340 100 3,074 13489 Spain 820 550 .. 900 3,149 12890 Israel 410 .. 360 -. 3,141 122Industrialized countries 820 wo 630 wo 220 wo 3,377 w 131 w91 Ireland 950 830 180 200 .. 3,541 14192 Italy 640 490 920 330 .. 3,428 13693 New ZeDaland 690 740 .. 200 .. 3,345 12794 United Kingdomn 1,100 750 420 300 .. 3,336 13295 Finlandi 1,570 620 220 110 .3,100 11496 Austriai 550 430 400 260 .. 3,535 13497 Japan 920 850 460 290 .. 2,949 12698 Australia 860 650 120 .. 3,428 12999 France 930 610 530 170 *.3,434 136100 Netherlands 900 580 .. 270 .. 3,338 124101 Belgium 780 470 .. 250 .. 3,583 136102 Canada 910 560 300 130 .. 3,374 127103 Norway 850 540 330 100 .. 3,175 118104 Germany, Fed. Rep. 670 490 450 260 .. 3,381 127105 United States 760 580 340 150 .. 3,576 135106 Denmark 810 510 270 170 .. 3,418 127107 Sweden 1,150 560 .. 130 .. 3,221 120108 Switzerland 740 500 390 220 .. 3,485 130Capital-surplus-oil exporters5 ,4 70Ow l,830 w 1,7 7 0 w 8 2,963 w 115 w109 Iraq 5,600 2,230 6,680 2,860 62 2,134 89110 Iran 3,800 . .51 3,138 130111 Libya 5,800 900 2,390 290 100 2,985 126112 Saudi Arabia 13,000 1,690 .. 850 64 2,624 88113 Kuwait 760 790 190 270 89Centrally plannedeconomies 640 wo 390 wo 410 wo 240 u7 2,752 wo 114 so114 China ... .. .2,467 105115 Korea, IDem. Rep. . .... .2,837 121116 Albania 2,860 960 540 370 .. 2,730 113117 Cuba 1,200 1,100 910 ... 2,720 118118 Mongolia 1,010 480 290 250 . 2,523 104119 Roma~ia 780 730 620 640 .. 3,444 130120 Bulgaria 640 440 550 220 .. 3,611 144121 H ungary 640 430 440 200 .. 3,521 134122 Poland -940 610 490 260 .. 3,656 140123 USSR 520 300 340 210 .. 3,460 135124 -Czechoslovakia 590 390 230 160 .. 3,340 139125 German Dem. Rep. 950 520 .... 3,641 139a. Figures i i italics are for years other than those specified. See the technical notes.153

Table 23. EducationaNumber Numberenrolled in enrolled inNumbenroled n priary shoolsecondary higher educat!on AdultNumberenrolled in piarye shool school as as percentage literacyas percentage of grouppercentage of of population rateTotal Male Female age group aged 20-24 (percent)1960 1977 1960 1977 1960 1977 1960 1977 1960 1976 1960 1975Low-income countries54 w,17 7 w7 2 w Owj3 7 6 4 w1ww2 w4 w29 w 38 w1 Kampuchea,Dem. 64 .. 82 46 3 .)362 Bangladesh 47 81 66 103 26 68 8 23 1 2 22 263 Lao PDR 25 92 34 99 16 84 1 14 (. () 284 Bhutan 3 11 5 16 (.) 7 .. 15 Ethiopia 7 26 11 .. 3 () 8 () .)106MalII 10 28 14 36 6 20 1 7 13 107Nepal 10 71 19 108 1 32 6 14 1 2 9 198Somalia 9 44 13 57 5 32 1 4 .) 1 2 609 Burundi 18 23 27 28 9 18 1 3 ( (214 25lO Chad 16 41 29 61 4 21 (2 3 . (... 15il Mozambique 48 .. 60 .. 35 .2 ... (2 812 Burma 56 80 61 83 52 78 10 22 1 2 60 6713 Upper Volta 8 16 12 20 5 12 () 2 .. ()2 514 Viet Nam .. 141 .. 140 .. 142 .. 51 . 3 . 87l5 India 61 80 80 95 40 64 20 28 3 6 28 3616 Malawi 63 62 81 75 45 50 1 4 9*. 2517 Rwanda 49 61 68 66 30 57 2 2 .. ()16 23l8 SriLank•a .. 86 .. 89 . . 82 27 47 1 1 75 7819 Guinea 30 .. 44 . . 16 .. 2 .. 720 Sierra Leone 23 37 30 45 15 29 2 11 (. I1. 1521 Zaire 60 93 88 109 32 78 3 19 .) 1 31 15221'Niger 5 23 7 29 3 16 (.) 3 .. (.) 1 823 Benin 26 58 38 80 15 37 2 11 .. 1 8 1124 Pakistan 30 51 46 69 13 32 11 17 1 2 15 2125 Tanzania 25 70 33 79 18 60 2 3 .. (.) 10 6626 Afghanistan 9 20 15 33 2 6 1 7 (9 1 8 1227 Central African Rep. 32 81 53 106 12 57 1 9 1 728 Madagascar 52 92 58 98 45 86 4 12 () 2 5029 Haiti 46 71 50 .. 42 . . 4 .. () 1 15 2330 Mauritania 8 31 14 40 3 21 (.) 4 .. (.) 5 1731 Lesotho 83 119 63 98 102 139 3 15 ( I 5532 Uganda 49 53 65 63 32 44 3 7 () 1 3533 Argola 21 . . 28 .. 13 .. 2 .. (9534 Sudan 25 41 35 47 14 34 3 13 (9 1 13 2035 Togo 44 106 63 135 24 78 2 27 .. I 10 1836 Kenya 47 104 64 110 30 98 2 17 (9 1 20 4037 Senegal 27 47 36 57 17 37 3 11 1 2 6 1038lIndonesia 71 86 86 91 58 81 6 21 1 2 39 62Middle-income counitries 81 w~ 97 w 87 wb 100w 93w ll 4 0w 4 so 11 w 54 w 71ws39 Egypt 66 72 80 87 52 56 16 46 5 14 26 4440 Ghana 38 74 52 84 25 64 5 29 .) 1 27 3041lYemen, PDR 13 77 20 99 5 54 5 26 I. 1. 2742 Cameroon 65 119 87 1,32 43 106 2 17 ..43 Liberia 31 57 45 74 18 40 2 14 .)12199 3044 Honduras 67 89 68 90 67 88 8 13 1 6 45 5745 Zambia 42 195 51 104 34 87 2 16 246 Zimbabwe 96 98 107 106 86 90 6 9 ( . 393,947 Thailand 83 83 88 86 79 79 13 27 2 5 68 84 -48 Bolivia 64 80 78 88 50 72 12 26 4 10 39 6349 Philippines 95 105 98 103 93 108 26 56 13 24 72 8750OYemen Arab Rep. 8 25 14 43 (.) 6 (9) 3 .. 1 3 1351 Congo, People's Rep. 78 155 103 166 53 143 4 52 1 3 16 5052 Nigeria 36 .. 46 .. 27 . . 4 - . 1 15 -53 Papua NevwGuinea 32 60 59 70 7 49 1 12 . 3 29 3254 ElSalvador 80 77 82 79 77 75 13 22 1 8 49 62S55Morocco 47 68 67 86 27 50 5 17 1 4 14 2856 Peru 83 110 95 115 71 106 15 52 4 16 61 7257 Ivory Coast 46 92 68 115 24 69 2 17 .) 2 5 2058 Nicaragua 66 92 65 . . 66 7 29 1 10 5759 Colombia 77 103 77 100 77 105 12 39 2 9 63 8160 Paraguay 98 102 105 106 90 98 I11 25 2 6 75 8161 Ecuador 83 101 87 101 79 100 12 44 3 28 68 7462 Dominican Rep. 98 102 99 101 98 103 7 27 1 9 65 6763 Guatemala 45 65 50 71 39 60 7 16 2 5 32 4764 Syrian) Arab Rep. 65 103 89 120 39 85 16 51 4 12 30 5365 Tunisia 66 100 88 118 43 81 12 22 1 5 16 5556 Jordan 77 83 94 87 59 79 25 53 1 7 32 70154

Number Numberenrolled in enrolled inNumbr enolle in rimay scoolsecondary higher education AdultNumberenrolled in piarye shool school as as percentage literacyas percetage of grou percentage of of population rateTotal Male Female age group aged 20-24 -(Percent)1960 1977 1960 1977 1960 1977 1960 1977 1960 1976 1960 197567 Malaysia 96 93 108 94 83 91 19 43 1 3 53 6068 Jamaica. 92 97 92 96 93 98 45 58 2 7 82 8669 Lebanorn 102 105 99 19 670 Korea, Rep. of 94 III 99 I1I 89 III 27 88 5 11 71 9371 Turkey 75 98 90 106 58 90 14 43 3 8 38 6072 Algeria 46 90 55 105 37 75 8 25 () 4 10 3773 Mexico 80 116 62 120 77 114 11 39 3 10 65 7674 Panama 96 86 98 88 94 84 29 115 5 22 73 7875 Taiwan 95 100 33 76 4 12 54 8276 Chile 109 117 111 119 107 116 24 50 4 13 84 8677 South Atrica 89 94 85 15 3 5778 Costa Rica 96 ill 97 111 95 110 21 44 5 18 9079 Brazil 95 90 97 89 93 90 11 24 2 12 61 7680 Uruguay 111 95 11l 95 111 94 37 60 8 13 9481 Argentina 98 110 98 110 99 ill 23 41 11 29 91 9482 Portugal 130 134 127 59 4 14 62 7083 Yugoslavia 111 100 113 101 108 99 58 79 9 21 77 8584 Trinidad and Tobago 88 81 89 81 87 81 24 38 1 5 93 9585 Venezuela86 Hong Kong100871041191009310512110079103117212038594421106370829087 Greece 102 105 104 107 101 103 37 82 4 18 8188 Singapore 111 110 121 114 101 107 32 55 6 9 7589 Spain) 110 114 106 114 116 115 23 76 4 22 8790OIsrael 96 97 99 97 97 98 48 68 10 24 84 68Industrialized countries11 4 w9 8 w 109 w 102w u l08 w 1 0 2 76 8 w87 w 17 w3 6 wu 99 U'-91 I relIa nd 110 109 107 110 112 109 35 92 9 18 .. 9892 Italy93 New Zealand1111061051I111211010611210910610511034737385713272891 989994 United Kingdom-95 Finlanc929710568921001058992951058866748295971920..999910096 Austria 105 100 106 100 104 100 50 73 8 21 . . 9997 Japan 103 100 103 100 102 99 74 93 10 29 98 9998 Australia 103 92 103 92 103 92 51 73 13 24 .. 10099 France 144 108 144 106 143 110 46 83 10 24 99100 Netherlands 105 102 105 101 104 102 58 94 13 29 .. 99101 Belgi~um 109 105 111 105 108 104 69 88 9 23 99102 Canada 107 102 108 102 105 102 46 91 16 37 98103 Norwaw 100 101 100 101 101 101 57 91 7 24 99104 Germaniy, Fed. Rep. 133 90 84 6 25 99105 United States 118 94 66 93 32 56 98 991_06 -DenmarnErk 103 103 103 103 103 103 65 77 -1 0 30 ~ .~99~107 Sweden 95 96 95 96 96 97 55 69 9 30 . 9.9108 Swvitzerland 118 85 118 65 118 86 26 55 7 16 .. 99Capital-surplus-oil exporters43 w9 4 w 61 T 113 w26 w74 w 12 w45 w 1w 6 w 15 w 50w109 Iraq 65 100 94 123 36 76 19 44 2 '9 18110 Iran 41 98 56 119 27 77 12 48 1 5 16 50111 Libya 59 148 92 156 24 140 9 70 1 7 .. 501l2 Saudi Arabia 12 47 22 59 2 35 2 19 () 4 3113 Kuwait 117 93 131 99 102 87 37 68 .. 13 47 60Centrally plannedeconomies lO w 11 9 w 10lw ll 8 w lOi w 120 w4 5 w72 w li w 20 w114 Chins 127 125 129.. ... .115 Korea Dem. Rep. .. 113 .. 115 112 . ..116 Alban a 94 . . 102 . . 86 20 .5 .117 Cuba118 Mongolia1097912210810979125111109781191051451508136118.. 96119 Romania 98 102 101 102 95 101 24 77 5 10 .. 98120 Bulgada 93 96 94 97 92 96 55 88 -ii 21121 Hungary 101 98 103 98 100 98 46 68 7 12 97 98122 PolandJ 109 101 110 102 107 99 50 67 9 18 95 98123 USSR 100 97 100 '98 100 97 49 73 11 22 98 991~24 Czec~hoslovakia 93 96 93 96 93 97 25 38 11 15 ~ 95 .125 Germain Dam. Rep. 112 94 111 92 113 95 39 93 16 29s. r gures in its ics ame for yeats other than tqose specified. See the techrical notes.155

Table 24. Income DistributionLow-income countriesPercentage share of household income, by percentile groups of householdsaLowest Second Third Fourth Highest HighestYear 20 percent quintile quintile quintile 20 percent 10 percent1 Kampuchea, Dem. .2 Bangladesh3Lao PDR4 Bhutan5 Ethiopia .. ..6 Mali7 Nepal .. ..8 Somalia .. ..9 Burundi . .10 Chad .. .. .11 Mozambique ..12 Burma .. .. .13 Upper Volta .. .. .14 Viet Nam .. .. ..15 India 1964-65 6.7 10.5 14.3 19.6 48.9 35.216 Malawi .. .. .17 Rwanda .. .18 Sri Lanka 1969-70 7.5 11.7 15.7 21.7 43.4 28.219 Guinea .. .. . .20 Sierra Leone .. .. ..21 Zaire22 Niger .. .. ..23 Benin .. .. ..24 Pakistan .. .. .. ..25 Tanzania .. .. ..26 Afghanistan .. .. .. ..27 Central African Rep. . .. ..28 Madagascar .. .. ..29 Haiti30 Mauritania .. .. .. ..31 Lesotho .. .. .. .32 Uganda .. .. ..33 Angola .. .. ..34 Sudan .. .. ..35 Togo36 Kenya .. .. ..37 Senegal .. .. .38 Indonesia .. .. .. ..Middle-income coutres39 Egypt .. .. .. .40 Ghana41 Yemen, PDR .. .42 Cameroon .. . .. ..43 Liberia44 Honduras 1967 2.3 5.0 8.0 16.945 Zambia .. ..67.8 50.046 Zimbabwe47 Thailand .. .. .48 Bolivia . .. . ..49 Philippines 1970-71 3.7 8.250 Yemen Arab Rep. .. ..13.2 21.0 53.951 Congo, People's Rep. .. .. ..52 Nigeria . .. .. ..53 Papua New Guinea .. .. ..54 Ei Salvador . .. .. ..55 Morocco .. .. .. ..56 Peru 1972 1.9 5.1 11.0 21.0 61.0 42.957 Ivory Coast .. .. ..58 Nicaragua .. .. .. ..59 Colombia .. .. .. ..60 Paraguay .. .. .. ..61 Ecuador .. .. .. ..62 Dominican Rep. .. ..63 Guatemala .. .. .. ..64 Syrian Arab Rep. .. .. ..65 Tunisia .. .. .. ..66 Jordan .. .. .. ..156

Percentage share of household income, by percentile groups of householdsaLowest Second Third Fourth Highest HighestYear 20 percent quintile quintile quintile 20 percent 10 percent67 Malaysia 1970 3.3 7.3 12.2 20.7 56.6 39.668 Jamaica .69 Lebanon . .70 Korea, Rep. of 1976 5.7 11.2 15.4 22.4 45.3 27.571 Turkey 1973 3.4 8.0 12.5 19.5 66.5 40.7-72 Algeria .. .. ..73 Mexico 1977 2.9 7.0 12.0 20.4 57.7 40.674 Panama .. .. ..75 Taiwan 1971 8.7 13.2 16.6 22.3 39.2 24.7-76 Chile 1968 4.4 9.0 13.8 21.4 51.4 34.877 South Africa .. .. . ..78 Costa R ca 1971 3.3 8.7 13.3 19.9 54.8 39.579 Brazil 1972 2.0 5.0 9.4 17.0 66.6 50.680 Urugua\ .. .. ..81 Argentira 1970 4.4 9.7 14.1 21.5 50.3 35.282 Portugal .. ..83 Yugoslavia 1973 6.5 11.9 17.6 24.0 40.0 22.584 Trinidacl and Tobago .. .. ..85 Venezuela 1970 3.0 7.3 12.9 22.8 54.0 35.786 Hong Kong .. .. ..87 Greece .. .. .. .. .. .88 Singapore .. ..89 Spain 1974 6.0 11.8 16.9 23.1 42.2 26.790 Israel .. .. ..Industrialized countries91 Ireland .. .. ..92 Italy 1969 5.1 10.5 16.293 New Zealand .. .. ..21.7 46.5 30.994 United \ingdom 1973 6.3 12.6 18.4 23.9 38.8 23.595 Finland .. .. ..96 Austra .. .. ..97 Japan 1969 7.9 13.1 16.8 21.2 41.0 27.298 Australia 1966-67 6.6 13.5 17.8 23.4 38.8 23.799 France 1970 4.3 9.8 16.3 22.7 46.9 30.4100 Netherlands 1967 6.5 11.6 16.4 22.7 42.9 27.7101 Belgium .. .. ..102 Canada 1969 5.0 11.8 17.9 24.3 41.0 25.1103 Norway 1970 6.3 12.9 18.8 24.7 37.3 22.2104 Germany, Fed. Rep. 1973 6.5 10.3 15.0 22.0 46.2 30.3105 United States 1972 4.5 10.7 17.3 24.7 42.8 26.6106 Denmark . . .. .. .....107 Sweden 1972 6.6 13.1 18.5 24.8 37.0 21.3108 Switzerland .. .. ..Capital-surplusoil exporters109 Iraq110 Iran111 Libya .. .. .. ..1-12 Saudi Arabia .. .. ..113 KuwaitCentrally plannedeconomies114 China .. .. ..115 Korea, Dem. Rep. .. .. ..116 Albania117 Cuba .. ..118 Mongolia .. ..119 Romania120 Bulgaria .. .. ..121 Hungary .. .. ..122 Poland .. .. .. ..123 USSR .. .. .. ..124 Czechoslovakia .. .. ..125 German Dem. Rep. .. .. .. ..a. These estimates should be treated with caution. See the technical notes.157

Technical NotesTable 1. Basic Indicators particular currency and generally the number of years newbornassures greater comparability of children would live if subject toThe estimates of population for the estimates of GNP per capita the mortality risks prevailing formid-1978 are primarily from the among countries. the cross-section of population atUN Population Division. In some The GNP per capita figure of the time of their birth. Data arecases the UN population data were $230 reported for China is based from the UN Population Division,adjusted by using more recent data on the official estimate of "net supplemented by World Bankfrom the World Bank and the US material product" released by the estimates.Bureau of the Census. Govemment, plus an allowance for The index of food production perThe data on area are from the depreciation and for services not capita shows the average annualUN Demographic Yearbook, 1977. covered by that concept. These quantity of food produced perGross national product (GNP) data were received only recently, capita in 1976-78 in relation tomeasures the total domestic and and analysis to assure that the data that in 1969-71. The estimatesforeign output claimed by resi- are reasonably comparable to those were derived from those of thedents of a country., It comprises of other countries has not yet been Food and Agriculture Organizagrossdomestic product (see the possible. tion (FAO), which are calculatedtechnical notes for Table 2) and The average annual rate of inflation by dividing indices of the quantityfactor incomes (such as investment was calculated from the "implicit of food production by indices ofreceipts and workers' remittances) gross domestic product (GDP) total population. Food is consideredaccruing to residents from abroad, deflator," which is calculated by to comprise cereals, starchy roots,less the income earned in the dividing, for each year of the period, sugar cane, sugar beet, pulses,domestic economy accruing to the value of GDP in current market edible oils, nuts, fruits, vegetables,persons abroad. It is calculated prices by the value of GDP in livestock and livestock products.without making deductions for constant market prices, both in Quantities of food production aredepreciation. national currency. This measure measured net of animal feed,The GNP per capita figures were of inflation has limitations, seeds for use in agriculture, andcalculated according to the World especially for the oil-producing food lost in processing and dis-Bank Atlas method: GNP in national countries in the light of the sharp tribution.currency units was expressed first increase in oil prices in late 1973. The country-group averages inin weighted-average prices for the The adult literacy rate is the per- this table are weighted by countrybase period 1976-78, converted centage of persons aged 15 and population.into dollars at the GNP-weighted over who can read and write. These The accompanying table showsaverage exchange rate for this rates are based primarily on infor- basic indicators for 29 countriesperiod, and adjusted for US infla- mation from the UN Educational, that have a population of less thantion. The resulting estimate of GNP Scientific and Cultural Organiza- a million and are members of thewas then divided by the population tion (UNESCO), supplemented United Nations, the World Bank,in mid-1978. This method reduces by World Bank data. For some or both.the effect of temporary underval- countries the estimates are foruations or overvaluations of a years other than, but generally not Tables 2 and 3. Growth andmore than two years distant from, Structure of Production1. GNP figures generally are for 1978. those specified. Thus the series areExceptions are Iran, for which 1977 estimates not strictly comparable for all Most of the definitions used are thoseare the most recent, and Democratic Kam- countries. of the UN System of National Accounts.puchea and Lebanon, for which 1974 estimatesare the most recent. Life expectancy at birth indicates Gross domestic product (GDP)158

Average index Tables 4 and 5. Growth ofLife ex- of food Consumption and Investment;Area GNP per pectancy productionUN/World Bank neinbers Population (thousands capita at birth Per capita Structure of Demandwith a population ;millions, of square (dollars) tyears) 119b9-71 = 100)of less then : million Mid-1978 kilometers) 1978 1978 1976-78Maldives 0.1 (I) 150 47 GDP is defined in the technicalCape Verce 0.3 4 160 60 . notes for Table 2.Comoros 0.4 2 180 46 . Publi consumption (or general gov-Gambia, The 0.6 11 230 41 82 emient consumption) includes allGuinea-Bissau 0.6 36 290 41 105 current expenditure for purchasesEquatorial Guinea 0.3 28 .. 46 of goods and services by all levelsWestern Samoa 0.2 3 68 . .Solomon Islands 0.2 28 430 112 of government. In addition, capitalDjibouti 0.3 22 450 45 . . expenditure on national defenseSao Tome and Principe 0.1 1 490 and security is regarded as con-Grenada 0.1 (.) 530 69 .. sumption expenditure.Guyana 0.8 215 560 67 95 Private consumption is the marketSwaziland 0.5 17 590 46 109 value of all goods and servicesBotswana 0.8 600 620 48 100 purchased or received as incomeMauritius 0.9 2 830 67 103 in kind by households and non-Seychelles 0.1 ( ) 1,130Fiji 0.6 18 1,420 71 90 profit institutions. It includesBarbados 0.3 (-) 1,960 71 76 imputed rent for owner-occupiedSuriname 0.4 163 2,110 68 108 dwellings.Cyprus 0.7 9 2,120 72 98 Gross domestic investment consistsMalta 0.3 (.) 2,170 71 121 of the outlays for additions to theBahamas 0.2 14 2,520 69 .. fixed assets of the economy, plusOman 0.8 212 2,570 47 .. the net value of inventory changes.Gabon 0.5 268 3,580 44 88Bahrain 0.4 1 4,100 65 Gross domestic saving shows theIceland 0.2 103 8,390 75 114 amount of gross domestic invest-Luxembourg 0.4 3 10,540 72 105 ment financed from domestic out-Qatar 0.2 11 12,740 48 .. put. Comprising public and privateUnited Arab Emirates 0.8 84 14,230 48 . . saving, it is the difference betweenNote: Recent data on the adult literacy rate were available for only five of these countries: gross domestic investment and theThe Gambia, 10 percent in 1976; Botswana, 35 percent in 1978; Swaziland, 65 percent in deficit on the current account of1978; Mauritius, 80 percent in 1972; and Barbados, 99 percent in 197b. goods and nonfactor services,excluding net current transfers.Exports of goods and nonfactor sermeasuresthe total final output of fishing. The industrial sector com- vices represent the value of allgoods and services produced by prises mining, manufacturing, con- goods and nonfactor services soldan economy-that is, within a struction, and electricity, water to the rest of the world; theycountry's territory by residents' and gas. All other branches of include merchandise, freight, inandnon-residents, regardless of its economic activity are categorized surance, travel and other nonfactorallocation to domestic and foreign as services. services. The value of factor services,claims. It is calculated without National accounts series in such as investment receipts andmaking deductions for deprecia- national currency units were used workers' remittances from abroad,tion. For most countries, GDP by to compute the indicators in these is excluded.industrial origin is measured at tables. The growth rates in Table 2 The resource balance is the differfactorcost, but for some countries were calculated from constant price ence between exports and importswithout complete national accounts series, the shares of GDP in Table of goods and nonfactor services.series at factor cost, market price 3 from current price series. National accounts series inseries were used. GDP at factor The average growth rates for national currency units were usedcost is equal to GDP at market the country groups in Table 2 are to compute the indicators in theseprices, less indirect taxes net of weighted by country GDP in 1970 tables. The growth rates in Table 4subsidies. in dollars. The average sectoral were calculated from constantThe agricultural sector comprises shares in Table 3 are weighted price series, the shares of GDP inagriculture, forestry, hunting and by country GDP in current dollars. Table 5 from current price series.159

The country-group averages in not taken into account because countries. Exports are valued f.o.b.Table 5 are weighted by country reliable and comprehensive data (free on board), imports c.i.f. (cost,GDP in current dollars. are not available. insurance and freight). TheseThe country-group averages of values are in current dollars.Table 6. Industrialization growth rates of energy production The growth rates of merchandiseare weighted by volumes of coun- exports and imports are in real termsThe percentage distribution of value try production in 1974; those of and calculated from quantumadded among manufacturing in- growth rates of energy consumption, (volume) indices of exports anddustries was calculated from data by volumes of country consump- imports. For the majority of develobtainedfrom the UN Indus- tion in 1974; those of energy con- oping countries these indices aretrial Development Organization sumption per capita, by country from the UNCTAD Handbook of(UNIDO), with the base values population. International Trade and Developmentexpressed in 1970 dollars. Energy consumption per dollar of Statistics and supplementary dataThe classification of manufac- GDP refers to the ratio of total thatshow revisions. For industrialturingindustries is in accord with energy consumption to GDP in ized countries the indices are fromthe UN International Standard 1975 dollars. This indicator shows the UN Yearbook of InternationalIndustrial Classification of All the intensity of energy use in an Trade Statistics and UN MonthlyEconomic Activities (ISIC). Food economy. The country-group aver- Bulletin of Statistics.and agriculture comprise ISIC agesare weighted bycountryGDP The terms of trade, or the "netMajor Groups 311, 313 and 314; in 1975 dollars. barter terms of trade," are calcu-Textiles and clothing 321-24; Ma- Energy imports refer to the dollar lated as the ratio of a country'schinery and transport equipment 382-84; value of energy imports-Standard index of export unit values to thatand Chemicals 351 and 352. Other International Trade Classification of import unit values. The termsmanufacturingcomprises ISIC Major (SITC) Revised Section 3-and are of-trade index numbers shown forDivision 3, less all of the above. expressed as a percentage of earn- 1960 and 1978, with 1970 = 100,The figures for value added in ings from merchandise exports. thus indicate changes in exportmanufacturing are from the World The country-group averages are prices in relation to import prices.Bank's national accounts series in weighted by country merchandise The unit value indices are fromnational currencies, converted in- exports in current dollars. the same sources cited above forto 1970 dollars. Because data on energy imports the growth rates of exports andTo calculate gross manufacturing do not permit a distinction between imports.output per capita, ratios of gross petroleum imports for fuel and foroutput to value added in manu- use in the petrochemicals industry, Tables 9 and 10. Structure offacturing, derived from various these percentages may be over- Merchandise TradeissueS of the UN Yearbook of Indus- estimates of the dependence ontrial Statistics, were applied to the imported energy. The shares in these tables are derivedWorld Bank's data on value addedfrom trade values in current dollarsin manufacturing. Per capita Table 8. Growth of reported in UN trade tapes and thevalues were then calculated by us- Merchandise Trade UN Yearbookoflnternational Tradeing mid-year estimates of countryStatistics.population. The statistics on merchandise trade Merchandise exports and importsare from UN publications and the are defined in the technical notesTable 7. Energy UN trade data system, supplementedby statistics from the UN ConferforTable 8.In the categorization of exportsAll data on energy are from UN ence on Trade and Development in Table 9, fuels, minerals and metalssources. They refer to commercial (UNCTAD) and from Intemational are the commodities in SITCforms of primary energy: coal and Monetary Fund (IMF), Direction of Revised Section 3, Divisions 27lignite, petroleum, natural gas and Trade and International Financial and 28, and the nonferrous metalsnatural gas liquids, and hydro- Statistics. of Division 68. Other primaryelectricity and nuclear power-all Merchandise exports and imports commodities comprise SITC Secconvertedinto coal equivalents. cover, with some exceptions, all tions 0, 1, 2 and 4 (food and liveThe use of firewood and other intemational changes in ownership animals, beverages and tobacco,traditional fuels, though substantial of merchandise passing across the inedible crude materials, oils, fatsin some developing countries, is customs borders of the reporting and waxes) less Divisions 27 and160

28 (minerals, crude fertilizers and Gibraltar, Iceland and Luxembourg; Debt service is the sum of interestmetalliferous ores). Textiles and developing countries also include payments and repayments ofclothing represent SITC Divisions 65 Cuba, which in other tables is principal on external public andand 84 (textiles, yarns, fabrics and grouped with centrally planned publicly guaranteed debt. Debtclothing).Machinery and transport economies; capital-surplus oil exporters service data are from the Worldequipment are the commodities in also include Oman, Qatar and Bank Debt Reporting System. TheSITC Section 7. Other manufactares, United Arab Emirates. ratio of debt service to exportscalculated as the residual from the The country-group averages are of goods and services is one oftotal value of manufactured ex- weighted by country merchandise several rules of thumb commonlyports, represent SITC Sections 5 to exports in current dollars. used to assess the ability to ser-9 less Section 7 and Divisions 65, vice debt. The debt-service ratios68 and 84. Table 12. Trade in in the table do not cover unguar-In the categorization of imports Manufactured Goods anteed private debt, which for somein Table 10, food commodities arecountries is substantial; the debtthose in SITC Revised Sections 0, The data in this table are from contracted for purchases of military1 and 4 and in Division 22 (food the United Nations and are among equipment usually is not reported.and live animals, beverages and those used to compute Special The average ratios of debt servicetobacco, oils and fats). Fuels are the Table B in the UN Yearbook of to GNP for the country groups arecommociities in SITC Section 3. International Trade Statistics. Manu- weighted by country GNP in cur-Other primary commodities comprise factured goods are the commodities rent dollars. The average ratios ofSITC Section 2 (crude materials, in SITC Revised Sections 5 through debt service to exports of goodsless Division 22 (oilseeds and 9 (chemicals and related products, and services are weighted bynuts) plis Division 68 (nonferrous manufactured articles, machinery country exports of goods andmetals). Machinery and transport and transport equipment) exclud- services in current dollars.e,quipment are the commodities in ing Division 68 (nonferrous metals). The World Bank Debt Report-SITC Section 7. Other manufactures, The countrygroupsare the same ing System is concerned solelycalculated as the residual from the as those in Table 11. The country- with developing countries andtotal value of manufactured im- group averages are weighted by does not collect data on externalports, represent SITC Sections 5 country manufactured exports in debt for other groups of countries.to 9 less Section 7 and Division 68. current dollars. Nor are comparable data for thoseThe country-group averages in countries available from otherTable 9 are weighted by country Table 13. Balance of Payments sources.merchandise exports in current and Debt Service Ratiosdollars; those in Table 10, byTable 14. Flow of Externalcountry merchandise imports in The current account balance is the Capitalcurrent dollars.difference between (i) exports ofgoods and services plus inflows of Data on the gross inflozo and repay-Table 11. Destination of unrequited official and private ment of principal (amortization) ofMerchandise Exports transfers and (ii) imports of goodsand services plus unrequitedpublic and publicly guaranteedmedium- and long-term loans areMerchandise exports are defined transfers to the rest of the world. from the World Bank Debtin the technical notes for Table 8. Excluded from this figure are all Reporting System. The net inflowAll trade shares in this table are interest payments on external public is the gross inflow less the repaybasedon statistics on the value of and publicly guaranteed debt, which ment of principal.trade in current dollars in IMF, are shown separately. These in- Net direct private investment is theDirection of Trade. Unallocated terest payments represent those net amount invested or reinvestedexports are distributed among the on the disbursed portion of out- by nonresidents of the country incountry groups in proportion to standing public and publicly enterprises in which they or othertheir respective shares of allocable guaranteed debt plus commitment nonresidents exercise significanttrade. The country groups in this charges on undisbursed debt. The managerial control; these net figtablefollow those in the data current account estimates are ures also take into account thesource and differ somewhat from from IMF data files; estimates of value of direct investment abroadthose used elsewhere in the volume: interest payments are from the by residents. IMF data files wereindustrialized countries also include World Bank Debt Reporting System. used in compiling these estimates.161

Table 15. External Public at concessional financial terms by The table this year, in additionDebt and International Reserves official agencies of the members to showing totals for OPEC, showsof the Development Assistance totals for the Organization of ArabExternal public debt outstanding rep- Committee (DAC) of the Organ- Petroleum Exporting Countriesresents the amount of public and isation for Economic Co-operation (OAPEC). The donor members ofpublicly guaranteed loans that has and Development (OECD) and OAPEC are Algeria, Iraq, Kuwait,been disbursed, net of canceled members of the Organization of Libya, Qatar, Saudi Arabia andloan commitments and repay- Petroleum Exporting Countries United Arab Emirates.ments of principal. The data refer (OPEC) with the objective of protothe end of the year indicated moting economic development and Table 17. Population Growth,and are from the World Bank welfare. It includes the value of Past and Projected, andDebt Reporting System. In esti- technical cooperation and assistance. Hypothetical Stationarymating external public debt as a Amounts shown are net disburse- Populationpercentage of GNP, GNP was con- ments to developing countries andverted from national currencies to multilateral institutions. The dis- The growth rates of population aredollars at the average official ex- bursements to multilateral insti- period averages calculated fromchange rate for the year in question. tutions are now reported for all mid-year country populations.The country-group averages are DAC members on the basis of the The country-group averages areweighted by country GNP in cur- date of issue of notes; some DAC weighted by country populationrent dollars. members previously reported on in 1970.Gross international reserves the basis of the date of encash- The projections of population forcomprise the sum of a country's ment. Net bilateral flows to low-income 1980 and 2000, and to the year inholdings of gold, special drawing countries exclude unallocated bilateral which it will eventually becomerights (SDRs), the reserve position flows and all disbursements to stationary, were made for eachof IMF members in the Fund, and multilateral institutions. country separately. Starting withholdings of foreign exchange under Figures for 1978 and earlier years information on total population,the control of monetary authorities. are actual figures published by the fertility rates, and mortality ratesThe gold component of these re- OECD; those for 1979 are pre- in the base year 1978, these paramservesis valued throughout at liminary estimates. All others are eters were projected to 1980 andyear-end London prices: that is, projections by World Bank staff, thereafter for five-year intervals$37.37 an ounce in 1970 and $226.00 based on OECD and World Bank on the basis of generalized assumpanounce in 1978. The data for estimates of GNP growth, infor- tions until the population becameholdings of international reserves mation on budget appropriations stationary. The base-year estiarefrom IMF data files. The reserve for aid, and statements on aid policy mates are from UN, World Populalevelsfor 1970 and 1978 refer to by governments. They are projec- tion Trends and Prospects by Country.the end of the year indicated and tions based on present plans rather 1950-2000, and from the Worldare in current dollars. The reserve than predictions of what will occur. Bank, the Population Council andholdings at the end of 1978 are The nominal values shown in the US Bureau of the Census.also expressed in the number of the summary for ODA from OECD The net reproduction rate (NRR)months of imports of goods and countries were converted into indicates the number of daughtersservices they could pay for, with 1978 prices using the dollar GNP that a newborn girl will bear durimportsat the average level for deflator. This deflator is based on ing her lifetime, assuming fixed.1977 or 1978. The country-group price increases in OECD countries age-specific fertility rates and aaverages are weighted by couhtry (excluding Greece, Portugal, Spain fixed set of mortality rates.imports of goods and services in and Turkey) measured in dollars. The NRR thus measures thecurrent dollars. It takes into account the parity extent to which a cohort of newchangesbetween the dollar and bom girls will reproduce themselvesTable 16. Official Development national currencies. For example, undergiven schedules of fertility andAssistance from OECD and when the dollar depreciates, price mortality. An NRR of I indicatesOPEC Members increases measured in national that fertility is at replacement level:currencies have to be adjusted at this rate child-bearing women,Official development assistance upward by the amount of the on the average, bear only enough(ODA) consists of net disburse- depreciation to obtain price in- daughters to replace themselvesments of loans and grants made creases in dollars. in the population. A population162

continues to grow after replacement- be born per woman, if she were to ployed, but excluding housewives,level fertility has been reached live to the end of her child-bearing students and economically inactivebecause its past higher birth rates years and bear children at each groups. Agriculture, industry andwill have produced an age dis- age in accord with prevailing age- services are defined in the sametributior. with a relatively high specific fertility rates. The rates manner as in Table 2. The estimatesproportion of women in, or still to given are from the same sources of the sectoral distribution of theenter, the reproductive ages. The mentioned in the technical notes labor force in 1960 are fromtime taken for a country's popu- for Table 17. International Labour Office (ILO),lation to become stationary after The percentage of women in the re- Labour Force Estimates and Projections,reaching replacement-level fertility productive age group refers to women 1950-2000; most of those for 1978thus depends on its age structure of child-bearing age (15-44 years) are geometric extrapolations ofand previous fertility patterns. as a percentage of the total female ILO estimates for 1960 and 1970A stationary population is one in population. The estimates were in the same source. The countrywhichage- and sex-specific mor- derived from the population esti- group averages are weighted bytality rates have not changed over mates in Table 1. country labor force.a long period, while age-specific The percentage of married women The labor force growth rates werefertility rates have simultaneously using contraceptives refers only to derived from the Bank's popularemainedat replacement level married women of child-bearing tion projections and ILO data on(NRR = 1). In such a population, age (15-44 years). These data are activity rates, again from the sourcethe birth rate is constant and equal mainly derived from Dorothy cited above. The country-groupto the death rate, the age structure Nortman and Ellen Hofstatter, averages for 1960-70 and 1970-80also is constant, and the growth Population and Family Planning Pro- are weighted by country laborrate iszero. grams: A Factbook (New York: forceinl970;thoseforl980-2000,For all of the projections, it was Population Council, various issues); by projections of country laborassumed that international migra- Dorothy Nortman, "Changing force in 1980.tion would have no effect. Contraceptive Patterns: A Global The application of ILO activityThe estimates of the hypothetical Perspective," Population Bulletin, rates to the Bank's latest popsizeof the stationary population, vol. 32, no. 3 (Washington, D.C.: ulation estimates may be inapprotheassumed year of reaching re- Population Reference Bureau, priate for some countries in whichplacement-level fertility and the August 1977); and Office of Pop- there have been important changesyearofreachingastationarypopu- ulation, Family Planning Service in levels of unemployment andlation are speculative. They should Statistics, Annual Report, 1976 underemployment, in intemationalnot be regarded as predictions. They (Washington, D.C.: US Agency and internal migration, or in both.are included to provide a summary for International Development). The labor force projections forindication of the long-run implica- The data refer to a variety of years, 1980-2000 should thus be treatedtions of recent trends on the basis generally not more than two years with caution.of highly stylized assumptions. A distant from those specified.fuller description of the methods All country-group averages are Table 20. Urbanizationand assumptions used to calculate weighted by country population.the estirnates is available from theThe data on urban population as aEconom:ic Analysis and Projections Table 19. Labor Force percentage of total population are fromDepartrnent of the World Bank. unpublished estimates and pro-The population of working age refers jections by the UN PopulationTable 18. Demographic and to the population between 15 and Division, supplemented by dataFertility-related Indicators 64 years of age. The estimates for1978 are based on the populationfrom the World Bank and fromvarious issues of the UN Demo-The crude birth' and death rates indi- estimates in Table 1; those for graphic Yearbook.cate the number of live births and 1960 are from the UN Population The growth rates of urban popdeathsper thousand population Division. The country-group ulation were calculated from thein a year. They are from the same averages are weighted by country World Bank's population estisourcesmentioned inthe technical population. mates; the estimates of urbannotes for Table 17. The labor force comprises eco- population shares were calculatedThe total fertility rate represents nomically active persons, including from the sources cited above.the number of children that would the armed forces and the unem- Data on urban agglomeration163

are also from the United Nations. Table 22. Health-related Table 23. EducationBecause the estimates in this Indicatorstable are based on the national The data in this table refer to adefinitions of what is "urban," The estimates of population per variety of years, generally not morecross-country comparisons should physician and nursing person were than two years distant from thosebe interpreted with caution. derived from World Health specified, and are mostly fromThe country-group averages for Organization (WHO) data, some UNESCO.urban population as a percentage of which have been revised to reflect The data on number enrolled inof total population are weighted new information supplied by primary school refer to estimates ofby country population; the other reporting countries. They also take total, male, and female enrollmentcountry-group averages in this into account revised estimates of of students of all ages in primarytable are weighted by country ur- population, which are shown in school; they are expressed as perbanpopulation. Table 1. Nursing persons include centages of the total, male, or femalegraduate, practical and assistant populations of primary-school ageTable 21. Indicators Related to nurses. Because country definitions to give "gross primary enrollmentLife Expectancy of nursing personnel vary-and be- ratios." Although primary-schoolcause the data shown are for a age is generally considered to beLife expectancy at birth is defined in variety of years, generally not 6-11 years, the differences inthe technical notes for Table 1. more than two years distant from country practices in the ages andThe infant mortality rate is the those specified-the data for these duration of schooling are reflectednumber of infants who die before two indicators are not strictly in the ratios given. For countriesreaching 1 year of age, per thousand comparable between countries, with universal primary education,live births in a given year. The The percentage of total population the gross enrollment ratios maydata are from a variety of sources, with access to safe water, estimated exceed 100 percent because someincluding different issues of the by the WHO, is the proportion of pupils may be below or above theUN Demographic Yearbook and the persons with reasonable access to official primary-school age.US Bureau of the Census publica- safe water, which is defined as The data on number enrolled intion, World Population: 1977; they including treated surface water secondary school were calculated inrefer to a variety of years, gener- and such untreated but uncon- the same manner, with secondaryallynot more than two years dis- taminated water as that from school age generally consideredtant from those specified. boreholes, springs and sanitary to be 12-17 years.The child death rate is the number wells. The data on number enrolled inof deaths of children aged 1-4 per The daily calorie supply per capita higher education are from UNESCO.thousand children in the same age was calculated by dividing the The adult literacy rate is definedgroup in a given year. For countries calorie equivalent of the food in the technical notes for Table 1.with reliable death registration, supplies in a country by its popu- The country-group averages inthese rates are from different issues lation. Food supplies comprise this table are weighted by countryof the UN Demographic Yearbook; domestic production, imports less population.they refer to a variety of years, exports, and changes in stocks; theygenerally not more than two years exclude animal feed, seeds for use Table 24. Income Distributiondistant from those specified. For in agriculture, and food lost inother countries, the rates were processing and distribution. The The data in this table refer to thederived from the appropriate daily calorie requirement per capita distribution of total disposableCoale-Demeny Model life tables refers to the calories needed to household income accruing toto correspond to the expectation sustain a person at normal levels percentile groups of householdsof life at birth for 1960 and 1978.2 of activity and health, taking into ranked by total household income.The country-group averages in account age and sex distributions, The distributions cover rural andthis table are weighted by country average body weights, and environ- urban areas and refer to differentpopulation. mental temperatures. Both sets of years between 1965 and 1977.estimates are from the Food and The distributions for the indus-Agriculture Organization. trialized countries are from Malcolm2. Ansley J. Coale and Paul Demeny, Re- The country-group averages in Sawyer, Income Distribution in OECDgional Model Life Tables and Stable Populations(Princeton, N.J.: Princeton University this table are weighted by country Countries (OECD OccasionalPress, 1966). population. Studies, July 1976); they refer to164

posttax income and conceptually tical system in many countries, income, not according to their totalare roughly comparable with the estimates were typically derived household income, is superior fordistributions for developing coun- from surveys designed for other many purposes. The distinctiontries. Thae estimates for Latin purposes, most often consumer is important because householdsAmerican countries other than expenditure surveys, which also with low per capita incomesMexico come from the preliminary collect some information on income. frequently are large households,results of a joint project of the These surveys use a variety of whose total income may be rela-World Bank and the UN Economic income concepts and sample de- tively high. For this reason it isCommission for Latin America signs. With few exceptions the best to use the distribution of(ECLA). Those for Mexico are the analysis of data does not take into individuals ranked by per capitaresults from the 1977 Household account the differences in house- household income when comparingBudget Survey. The estimates for hold size. Furthermore, the cover- two distributions for welfaremost developing countries in Asia age of many of these surveys is purposes-say, those of two counarefrom the preliminary results too limited to provide reliable tries or those of rural and urbanof a joint project of the World nationwide estimates of income areas in a country. InformationBank and the Economic and Social distribution. Thus, although the on the distribution of per capitaCommission for Asia and the estimates are considered the best household income exists, however,Pacific (ESCAP). The distributions available, they do not avoid all for only a few countries. The Worldfor other developing countries are these problems and should be Bank recently launched the Livingfrom data gathered by the World interpreted with extreme caution. Standards Measurement Study toBank from national sources. The scope of the indicator is develop procedures and applica-Because the collection of data similarly limited. Because house- tions that can assist countries inon income distribution has not holds vary in size, a distribution improving their collection and analbeensystematically organized and in which households are ranked ysis of data on income distribution.integrated into the official statis- according to per capita household165

Bibliography of Data SourcesNational Production Yearbook. Rome: FAO, various issues.accounts A System of National Accounts. New York: UN Department of International Economic andand Social Affairs, 1968.economic Statistical Yearbook. New York: UN Department of International Economic andindicatorsSocial Affairs, various issues.World BankAtlas, 1979. Washington, D.C.: World Bank, 1979.World Bank data files.National sources.Energy World Energy Supplies, 1950-74, 1972-76 and 1973-78. UN Statistical Papers, Series J,nos. 19, 21 and 22. New York: UN Department of International Economic andSocial Affairs, 1974, 1978 and 1979.Trade Direction of Trade. Washington, D.C.: IMF, various issues.International Financial Statistics. Washington,D.C.: IMF, various issues.Handbook of International Trade and Development Statistics. New York: UN ConferenceTrade and Development, various issues.Monthly Bulletin of Sfatistics. New York: UN Department of International Economic andSocial Affairs, various issues.Yearbook of International Trade Statistics. New York: Department of International Economicand Social Affairs, various issues.United Nations trade tapes.Balance Balance of Payments Manual. 4th ed. Washington, D.C.: IMF, 1977.of payments, International Monetary Fund balance-of-payments data files.capital flows Development Co-operation. Paris: OECD, various annual issues.and debtPopulationWorld Bank Debt Reporting System.World Population Trends and Prospects by Country, 1950-2000: Summary Reportof the 1978 Assessment. New York: UN Department of International Economic andSocial Affairs, 1979.United Nations populationtapes.World Population: 1977. Washington, D.C.: US Bureau of the Census, InternationalStatistical Programs Center, 1978.World Bank Atlas, 1979. Washington, D.C.: World Bank, 1979.World Bank data files.Labor Labour Force Estimates and Projections, 1950-2000. 2nd ed. Geneva: ILO, 1977.force International Labour Office tapes.World Bank data files.Social Demographic Yearbook. New York: UN Department of International Economic andindicatorsSocial Affairs, varioys issues.166Statistical Yearbook. New York: UN Department of International Economic andSocial Affairs, various issues.Statistical Yearbook. Paris: UNESCO, various issues.World Bank data files.World Health Statistics Annual. Geneva: WHO, various issues.World Health Statistics Report. Special Issue on Water and Sanitation, vol. 29, no. 10.Geneva: WHO, 1976.Note: Because the United Nations no longer reports data on Taiwan, most of the indicators for Taiwan comefrom its statistical publications.on

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