United Nations Trade and Development Report

2225-3262 (online)
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The Trade and Development Report (TDR), launched in 1981, is issued every year for the annual session of the Trade and Development Board. The Report analyses current economic trends and major policy issues of international concern, and makes suggestions for addressing these issues at various levels.
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Trade and Development Report 1987

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31 Dec 1987
9789210602907 (PDF)

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This publication identifies the key issues in the global economy and the design of development strategies addressed in the Trade and Development Report over the past three decades, tracing them through its various editions. It shows how ideas, opinions and proposals expressed in the Trade and Development Report, and the analytical approaches used, differed from those of “the mainstream” and their evolution in response to new challenges. This review revisits the concept of interdependence and explains the approach of the reports to macroeconomic and financial policies in both developed and developing countries. It also summarizes development policy failures and successes over the years.

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  • Explanatory notes
  • Abbreviations
  • Overview by the Secretary-General of UNCTAD

    The world economy is now even more burdened by deflationary pressures than it was a year ago, when we identified them as the prime threat. Again, growth has slowed; investment remains depressed, in both developed and developing countries; commodity prices have declined; new lending to developing countries has contracted and debt servicing has become more onerous. And again, trade conflicts have sharpened, and uncertainties regarding key prices and the "rules of the game" have mounted. All this is compounding the maladjustments and distortions in the world economy and making structural adaptation more difficult for all. What is more, because of slow growth, technological progress is causing acute distress among commodity producers and the unemployed and souring international economic relations - instead of raising living standards and promoting international harmony. In many countries there is a growing feeling that the costs of integration into the world economy are outweighing the benefits. The problem, however, arises not from international economic integration per se, but from the way in which the various components of the world economy are deflating and distorting each other, because of inadequate management of interdependence.

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  • Expand / Collapse Hide / Show all Abstracts Investment, growth and development in the world economy

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    • Recent developments in the world economy
    • Problems of capital market formation in market economies

      Both developing countries and developed market-economy countries have experienced a marked slow-down of investment and growth since the beginning of the 1980s. However, the constraints confronting them have been very different. The developing economies have been dominated by a sharp reduction in external resource availabilities, both earned and borrowed, which has imposed acute stagflationary and budgetary pressures, prompting a severe tightening of macroeconomic policy.

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  • Expand / Collapse Hide / Show all Abstracts Technology, growth and trade

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    • Introduction

      Technology, after having been considered by economists as late as in the 1950s to be a residual factor in explaining the growth of output, has come to be universally recognized as fundamental to economic growth and development. Since the pace of technological progress differs and its diffusion is unevenly distributed across countries, technology is also a determinant of the evolution of international economic relations.

    • International science and technology indicators

      The fact that technological innovations originate from a variety of sources and that innovative activity takes several different forms makes it difficult to find direct measures of this type of activity. In many innovation studies, therefore, the common practice has been to assess various indicators of one or more of the components of the innovative process. The convention has been to distinguish between input indicators of the resources and effort spent in producing innovations and output indicators of the ability to introduce new products and processes.

    • Trends in the international flow of technology

      International flows of technology are an essential element of the global network of international economic relations. Even in developed countries, the process of innovation - in addition to the search and learning efforts of individual firms - often involves inputs of knowledge, components, patents, know-how, etc., from other firms and other countries. Conversely, as was discussed in the introduction, technology is a decisive, intangible and often firm-specific asset whose benefits the firm seeks to appropriate for itself to the greatest extent possible. The commercial transfer of technology abroad is one of the means at the firm's disposal for exploiting this advantage. The ability of a country's enterprises to appropriate some rent from transferring technology abroad by whatever means can be interpreted as a measure of their past success in achieving international competitiveness.

    • Government policies on innovation and transfer of technology

      Most countries have implicit or explicit policies dealing with the development, diffusion and transfer of technology. Although these policies differ from country to country, they all affect - in varying degrees - the pace and direction of technological innovation as well as technology flows between firms and countries. This chapter contains a review of recent developments and trends in government policies dealing specifically with the encouragement of technological innovation and the promotion of transfer of technology.

    • Technology and international competitiveness

      This chapter provides some empirical support for the proposition suggested earlier in this Report that levels and changes in the technological capabilities of various countries based both on imported know-how and endogenous research and skill formation are major determinants in the explanation of the patterns of trade for a country as a whole and for each individual sector.

    • Implications for the future of international trade and development

      Three main conclusions emerge from the four preceding chapters. The first is that, among the many forces which seem to drive international trade, technology is very important. Because of the spread of industrialization, it is becoming increasingly difficult to view trade as the mere outcome of specialization by countries trying to exploit inherited natural advantages. Rather, trade is determined by competitive advantage, and competitive advantage is itself created by the knowledge accumulated or generated by individual enterprises through learning and experience, through acquisition from other enterprises or entities, and through R and D. Although all three of these sources of knowledge are associated with technological innovation, it is the first which is the most important, because it is a necessary element in determining the ability both to adopt and to generate new knowledge.

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  • Expand / Collapse Hide / Show all Abstracts Annexes

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    • Case studies on technology and competitiveness in selected industries

      The semiconductor industry is the foundation on which the entire electronics industry is built and lies at the centre of the microelectronics revolution that is transforming the nature of production and consumption throughout the world. Early research into semiconductor technology was undertaken principally with the sponsorship of the Government of the United States of America during the Second World War, in an attempt to find a replacement for the vacuum tube in radar applications, and by Bell Laboratories of AT & T. These efforts resulted in the unveiling in 1947 of the first transistor. The attempt to compact several transistors on the same component yielded the integrated circuit (IC) in 1961.

    • Recent developments in commodity markets

      With few exceptions, the overall situation of imbalance between supply and demand which has put downward pressure on prices of internationally-traded primary commodities since the beginning of the 1980s, continued to prevail in 1986. There was, however, a recovery in the markets of a very limited number of commodities, which brought about a modest improvement in the overall price index of nonoil primary commodities.

    • Recent developments in the oil market

      Oil prices plummeted from an average of around $28 per barrel at the end of 1985 to less than $10 per barrel in mid-1986. At the end of the summer they began to firm up, reaching on average $12-15 at the end of the year and $18 in the early part of 1987, and now stand at $18-19; in terms of the yen and the deutsche mark the current price is 60 per cent above the mid-1986 level.

    • Recent developments in international capital markets

      In 1986, as in 1985, there was a vigorous expansion of private international lending. The expansion of 1986 included not only bond issues and Furonote facilities but also syndicated bank loans (the only one of these three categories which failed to increase in 1985), As a result net lending (excluding the effects of exchange-rate movements) in the form of international security issues and changes in the external claims of banks in the reporting area of the Bank for International Settlements (BIS) increased from S175 billion in 1985 to $240 billion in 1986.

    • Recent developments in international trade policies

      For a number of years, international trading relations have been conducted against a background of discordant policies; protectionist measures have vied with actions to strengthen the open, multilateral trading system. But the trade conflicts which have dominated the international scene over the last year or two cannot be so simply characterized. This is because of the particular circumstances which have given rise to the conflicts.

    • Import compression, investment and growth in developing countries
    • Statistical annex
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