Introduction

As the year 2000 approaches, interest in the economic prospects for the world economy, and Asia in particular, has quickened. A number of studies of developing Asia have been undertaken for the 1990s both by national governments (e.g., Korea and Philippines) and by multilateral agencies (e.g., Asian and Pacific Development Centre). This paper has been developed with the primary purpose of analyzing the structural changes that are likely to take place in the Asian developing countries over the next decade and the implications this will have for public investment needs (particularly development assistance), international trade, and the balance of payments.

The level of foreign assistance required by the developing countries of the region will depend critically upon both domestic and external balance, which in turn will depend upon a number of factors, including the effectiveness with which the developing countries can mobilize savings, improve efficiency, and promote exports. By exploring a scenario for growth and structural change, it is hoped that this paper will make a small contribution to the continuing discussion on the future of developing Asia.

In order to develop some perspectives for the future, it is important to review the past performance of these countries. Following this review a set of baseline projections for the 1990s is developed. These projections are point estimates representing my view of the most likely scenario. Due to time and space constraints, no attempt is made to derive a set of high and low scenarios for each country. The paper concludes with a discussion of some of the projected growth in terms of structural change, trade patterns and development strategy.

World Economic Developments, 1970—87

The sequence of international events of the past decade and a half and the uncertainties which they have created for economic planners and forecasters are familiar. However, a short summary of these events is nevertheless useful in framing a view as to the future prospects of the world economy and of Asian developing countries in particular.

From 1970 to 1987, the world economy recorded an annual average growth rate of 2.8 percent. Industrial countries expanded by 2.6 percent annually, while developing countries grew by 3.3 percent annually. Among the developing countries, Asia recorded the best performance, growing by more than 6 percent a year.