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World Economic and Social Survey 2000

Trends and Policies in the World Economy

image of World Economic and Social Survey 2000

Part one. State of the World Economy: chronicles a remarkable recovery in the world economy after the crisis years 1997-1999. Although the volume of international financial flows has not returned to its pre-crisis level, international financial markets are again displaying a sense of calm. International trade has also largely recovered from the setback it suffered following the financial crises. Part two. Escaping the Poverty Trap: identifies a number of critical steps for the poorer countries to break out of their “poverty trap” and find a path to sustained and sustainable development. The objective of part two is to identify some of the actions that countries can take to start a period of rapid and sustained growth that would allow living standards to increase appreciably over a relatively short period of time.

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Agriculture as an escape from the poverty trap

Development usually involves the transformation of an economy from one dominated by agriculture into one where other economic activities assume a greater role. Yet, whether agriculture plays a passive or an active role in the economy’s transformation from a low to a high living standard is less clear. Many development economists have paid relatively little attention to agriculture—with some notable exceptions—despite the fact that some economists have argued that there has not been any industrial revolution that was not preceded (by 50 to 60 years) by an agricultural revolution, in other words, by a substantial increase in agricultural productivity. In many development strategies, ranging from import-substituting industrialization to export-led growth, agriculture has played only a supportive role or no role at all. In particular, the interactions between agriculture and other sectors have often been ignored and frequently little emphasis has been put on enhancing technological progress, on investing in agriculture and on exploring the possibility that agriculture can trigger development elsewhere. Policies have frequently displayed, either explicitly or implicitly, an urban bias, reflected in heavy taxation of agriculture, price controls on food, a lack of rural infrastructure, too little agricultural research and neglect in the provision of social services in rural areas. On the other hand, agriculture has played a large role during the development process in a number of countries, for example, China and Japan.

English

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