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UN survey upbeat over India's growth

Our Bureau

NEW DELHI, July 3

THE United Nations (UN) is optimistic that the post-Asian crisis world economic rebound has a good chance of persisting for some years to come, with the economies of India and China, which have been growing at six or seven per cent in recent years, conti nuing at a similar clip at least through 2001.

In its World Economic and Social Survey, 2000, released today in New York, the UN's annual report on the world economy cautioned that the recent experience of the US suggests that rapid advances in information technology (IT) open up the opportunity of s tepped-up economic growth in countries that are able to take advantage.

The Director of Policy Analysis at the UN Department of Economic and Social Affairs (DESA), Mr. Ian Kinniburg, said ``In the US alone, we estimate that the so-called new economy is adding $100 billions a year to total output''.

It said in several ways, the global economy is resuming its pre-crisis model. Private capital flows to emerging economies are on the upswing again, although not yet at pre-crisis rates. International prices of most commodities have bottomed out, and fuel prices have risen appreciably. The volume of world trade is growing by about eight per cent, up from less than five per cent in 1999 and about three per cent in 1998.

Although the crisis-induced rise in unemployment has peaked in developing and transition economies, unemployment rates remain above their pre-crisis levels. Inflation is under control globally, with even many emerging economies succeeding in reducing inf lation last year.

In China, where layoffs from State-owned enterprises (SOEs) have already swelled the ranks of the unemployed, accession to the WTO would add further pressure for reform so that ``further substantial shedding of labour by SOEs must therefore be expected'' .

The UN sees a new opportunity for robust growth of the global economy in the medium-term, especially if the revolution in IT is nurtured and diffused around the world. The diffusion of the IT revolution, including in some of the more advanced countries, particularly the poorest, are not yet benefiting from IT and they ``may find it difficult to catch up if they have to rely solely on their own resources''.

Stating that increased technological and resource transfers to the poorer countries are called for to address this difficulty, the UN said this issue is to be addressed at the upcoming IT Summit of ECOSOC (Economic and Social Council) from July 5 to 7, 2 000.