Globalization has helped to integrate developing countries into the world economy, but now that very integration is becoming a threat in the wake of the financial crisis. With the increasing likelihood of protracted stagnation in most rich countries, the prospects for development look poor.
NEW YORK – Protracted economic stagnation in rich countries continues to threaten the development prospects of poorer countries. Globalization and economic liberalization over the last few decades have, of course, helped to integrate developing countries into the world economy, but now that very integration is becoming a threat as developing countries are hit by the knock-on effects of the rich world’s troubles.
As a consequence of increased global integration, growth in developing countries relies more than ever on access to international markets. That access is needed, not only to export products, but also to import food and other requirements. Interdependence nowadays truly is a two-way street.
Unfortunately, the trade effects of the crisis have been compounded by its impact on development cooperation efforts, which have been floundering lately. Four decades ago, OECD countries committed to devote 0.7% of their GDP to official development assistance (ODA) to developing countries. But the total in 2010 reached only $128.7 billion, or 0.32% of GDP – less than half of what was promised.
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NEW YORK – Protracted economic stagnation in rich countries continues to threaten the development prospects of poorer countries. Globalization and economic liberalization over the last few decades have, of course, helped to integrate developing countries into the world economy, but now that very integration is becoming a threat as developing countries are hit by the knock-on effects of the rich world’s troubles.
As a consequence of increased global integration, growth in developing countries relies more than ever on access to international markets. That access is needed, not only to export products, but also to import food and other requirements. Interdependence nowadays truly is a two-way street.
Unfortunately, the trade effects of the crisis have been compounded by its impact on development cooperation efforts, which have been floundering lately. Four decades ago, OECD countries committed to devote 0.7% of their GDP to official development assistance (ODA) to developing countries. But the total in 2010 reached only $128.7 billion, or 0.32% of GDP – less than half of what was promised.
We hope you're enjoying Project Syndicate.
To continue reading, subscribe now.
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