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Trade and Development Report 1991

image of Trade and Development Report 1991

Overall, the trade volume performance of developing countries in 1990 was mixed. There was a considerable deceleration in the growth of exports from South and South-East Asia for the second consecutive year, mainly owing to a sharp slowdown in the exports of the four more in- dustrialized economies of the region. Also for the second consecutive year, Latin America re- corded negligible export growth, particularly for non-energy products. However, results were highly varied among countries: those suffering from continued macroeconomic instability fared far worse than the remainder. In Africa, the volume of exports registered an unusual spurt in 1990, but much of it was due to higher oil exports by the region's few energy-exporting countries. Moreover, in commodity markets increases in export volumes are often associated with softness of prices. In China, after a setback in 1989 exports recovered the momentum characteristic of the 1980s, while imports fell substantially in response to restrictive macroeconomic policies.

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The concept of savings shortage and the role of finance

Real interest rates on international capital markets have been exceptionally high for over a decade, giving rise to widespread concern regarding the implications for world investment and the developing countries. During the 1980s, the problem was largely viewed as resulting from the behaviour of government budgets, especially in the United States. Similarly, the large current account imbalances among industrialized countries were ascribed to disparities in their fiscal positions. More recently, as budget deficits have been brought under greater control and current account imbalances curtailed, concerns have been expressed that personal savings rates are declining, whereas the demand for funds is growing, especially in Central and Eastern Europe and the Middle East.

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