text: pros~ects fornon-fuel primary commodity exports, whichaccount formostoftheir for71gnexchange earnings, andforexternal capital flowswhich, although projected to~ncrease, arenotsufficient tofinance thehigher levelsofimports whichmore rap~dgrowth wouldrequire. Italsoreflects thedifficulties ofimplementing PO~1CY reforms andthelongtimelagsbetween theintroduction ofreforms andthesusequent supply response. 3;.Theco~itt~e wishe~ tomakethreesetsofcomments onthepolicy implications ~the~eproJect1ons. F~rst,thereisnothing intheprojections thatmakesit lmposs~ble forindividual countries tobreakoutofthevicious circle thatnow -8-keepstheminpersistent stagnation. Itmaybethecasethatinsomecountries the bindingconstraint ondevelopment islessamatterofinvestment resources thanof identifying economic development andmarketopportunities. Clearly, iffinanceis notforthcoming orifprofits aresiphoned offinexcessive publicorprivate consumption orincapital flight, development willnotbesustained; butthe initialshifttowards economic growthinpresent circumstances mustcomefrom activeentrepreneurship, withanenlarged supplyofinvestment fundsplaying onlya supporting role. 38.Secondly, whiletheprojections reviewed werecarried outwithin aconsistent worldeconomic model,itispossible thatinfactnational economic management ina sufficiently largenumberofcountries maybemoresuccessful thanisassumed. In thatcase,thestrains ontheworldeconomic system asdescribed inthemodelwould notarise. Thiswouldalterthebasisforthecentral assumptions onwhichthe projections arebasedandwouldrequire accommodating pOlicyadjustments. Itcould wellbe,forinstance, thattherewouldbereasontoalterassumptions about world-wide interest rates,levelsofconsumption orsavings levelsintheOECD countries, orthegeographical distribution ofcapital flowsetc.Thusthescope fordevelopment inindividual countries orregions shouldnotbeseenasbeing decisively constrained byworldconditions asdepicted inthemodel. 39.Thirdly, thedismalpicture drawnforAfricaforthe1990spresents a challenge notonlytonational Governments inAfricabuttotheentireworld community, including especially thegroupofcountries theperformance ofwhose economies shapetheinternational economic framework withinwhichthesmaller and poorercountries mustoperate. Economic stagnation, likedevelopment, isnot exogenously determined butislargely inthehandsofpeople. Thequestion mustbe askedwhetheritwouldbetolerable totheworldcommunity towitness passively an indefinite prolongation oftheeconomic devastation thathasafflicted Africafor somanyyears. 40.Thecontinued impoverishment ofAfrica, thoughlikely onpresent projections, isquiteunnecessary. Acombination ofimproved domestic policies, highernational savings andagreater availability ofexternal capital couldtransform the prospects ofmanycountries. Recentstudies oftheimpact ongrowthofincreasing capital flowstoAfrica andotherdeveloping countries haveconfirmed theresults ofprevious studies indicating thatfeasible injections ofexternal finance could increase therateofgrowthsignificantly. Onesuchstudy, ~Ibasedonthe baseline projection shownintable1,suggests thatgradually increasing net capitaltransfers to25billion dollars by1994couldraisetherateofgrowthof capital-constrained developing countries byabout1percentage pointayear. Anotherrecentstudy1/estimates thatincreasing netcapital transfers by 40billiondollars in1990andto60billion dollars by2000couldraisethe averagegrowthrateofdeveloping countries toatleast5.5percentforthedecade asawhole. 41.Increasing capital flowsfromdeveloped market economies todeveloping countries aswellastoEastern European countries insupport oftheirreform efforts wouldappeartobehighlyunlikely wereitnotforthepossibilities of reducing military expenditures arising fromrecent changes inEast/West political relations. Attheveryleastonewouldhopethatthemuchdiscussed peacedividend wouldbetranslated intoareduction inthenetoutflow offinancial resources from poorcountries torich. -9-42.Nonetheless,thereiseverylikelihood thatGDPgrowth, especially inthe poorest countries, willremain lowforthenextseveral yearsandthatpersistent
analysis: The text discusses economic development and growth, highlighting the challenges faced by African countries in achieving economic growth, and the potential for increased capital flows to stimulate development. It also touches on the international context, mentioning the impact of world economic conditions and the need for policy adjustments.