Asia Leads the World In Economic Growth
UNITED NATIONS, N.Y. — LOOKING for a fast growing market?
Forget about Europe, Japan and even the United States next year. Instead, consider such countries as China, India, South Korea and Thailand.
The developing nations of South and East Asia are likely to lead the world in real economic growth, according to a survey of the world's economies released last week by the United Nations Department of Economic and Social Information. The UN organization forecasts that growth in the region is expected to exceed 6 percent in 1994.
``This growth is the result of a domestic emphasis and an intensification of trade among themselves,'' says Christian Ossa, director of the UN's Macroeconomic and Social Policy Analysis Division.
India, Pakistan, and Bangladesh will all participate in this regional spurt. This year Indian exports will grow by 18 percent, helped by a devaluation of the rupee.
The real star will be China where growth should be 10 percent in 1994 compared to 13 percent in 1993. However, the UN report warns that China is expected to incur a trade deficit of $9 billion in 1993, a reversal of the $4 billion trade surplus in 1992. The UN forecasts that China may change its economic policies to slow down import growth in the coming year.
The not so good news is that the UN organization believes world economic growth will expand by only 2.5 percent, up modestly from an anemic 1 percent in 1993. World output on a per capita basis will be up by only 0.8 percent. However, the just-completed world trade negotiations, known as the General Agreement on Tariffs and Trade, could give the world a boost. ``The confidence that investors can put into more trade related investment is an important factor,'' Mr. Ossa says.
Africa, with a population of more than 600 million, will be the laggard for the ninth consecutive year. ``This is even more disturbing when account is taken of worsening terms of trade which indicate per capita incomes continue to decline faster than GDP,'' Ossa says. Many of the African economies have been adversely effected by drought and desert locusts. At least seven countries have seen their economies devastated by civil strife.
Latin America is doing slightly better with growth averaging 3 percent. The UN expects a recovery in Brazil to fade as political instability and the proximity of a national election prevents fiscal reforms. Inflation in Brazil is now running at about 2,500 percent a year. In worse shape are the economies of Haiti and Cuba.
One of the bright spots in Latin America will be Mexico, which the UN predicts will undergo a moderate expansion. Ossa expects the recently signed North American Free Trade Agreement will ultimately produce an acceleration in Mexico's economy. ``This will have a beneficial effect on Central America,'' he predicts.
The developed countries are not going to provide the world with much energy. The UN forecasts Western Europe will grow at a 1.6 percent rate in 1994, after falling 0.4 percent this year while Japan grows by only 1.5 percent after a year of stagnation. The most optimistic forecast is for the United States which the UN economists expect to grow by 3.1 percent in 1994.
Ossa says the slow growth in the industrialized countries means unemployment will reach 11 percent in some countries in 1994. The UN estimates that by the end of 1993, more than 30 million people, or 8 percent of the developed countries' work force will be out of work.
The UN is modestly optimistic about the ``transitional economies,'' or those from the former East Bloc. For the group as a whole, it predicts a decline of 0.8 percent in 1994. However, this isan improvement over 1993 when the economies plunged 10.4 percent and from 1992 when they fell 16.7 percent.
The UN economists expect the Polish economy will show modest growth in 1994. The Czech Republic seems to have reached the turning point, the report says. This may also be the case for Russia. After declining sharply for the past two years, the Russian economy should experience ``a further small decline'' in 1994. However, by the second half of 1994, the UN says there may be some signs of a gradual increase in output.