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Trade and Development Report 1998

Financial Instability - Growth in Africa

image of Trade and Development Report 1998

A valuable resource for those involved in international business and economic development, the Trade and Development Report 1998 (TDR), issued by the United Nations Conference on Trade and Development (UNCTAD), examines current performance and prospects in the world economy. With the main theme of 'International Financial Instability and the World Economy', this illuminating publication offers a special focus on the East Asian crisis, addressing the global impact of the crisis, its causes and its consequences, especially on developing countries. It discusses how financial instability continues to prevail, underlining the 'systemic' nature of the repeated bouts of financial instability at roughly two-year intervals. The Report also focuses on African development. The analysis brings out the failures of the structural adjustment programs and advocates, among others drastic steps, lifting the external debt burden and giving African countries leeway in terms of the World Trade Organization (WTO) rules. TDR98 reveals that the prospects for the years ahead are extremely uncertain and puts forward recommendations on how future crises might be prevented.

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International financial instability and the East Asian Crisis

In less than a year from mid-1997 the East Asian economies have gone from being examples of the most successful development experience in modern history to economic stagnation and decline. Growth rates that had averaged 8-10 per cent per annum over many years have turned negative, economies that had enjoyed continuous high employment and experienced labour shortages now suffer from extensive and rapidly rising unemployment, and assets in stock markets that had led global diversification into emerging markets have lost half their value and more. In much less time than it took the 1929 stock market crash to turn into the Great Depression of the 1930s, the Asian economies that were once held up as examples of prudent and sustainable economic policies have been transformed in the minds of many from economic “miracles” into structurally unstable systems incapable of formulating their own economic policies and have been assigned to the tutelage of IMF. Never has the economic outlook for such a large group of economies changed so radically and so rapidly.

English

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