27-JAN-1993
15:47
Economic Relations FCO
071 270 3443
P.05
C(93)2
HKD
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The Dynamic Asian Economies continue to demonstrate a remarkable capacity for rapid economic development based on the market economy and integration in the international system of trade in goods and services. to be hoped that the policies of other countries in the region and elsewhere will be influenced by these successes. China is achieving strong economic growth, making it an increasingly attractive economic partner.
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In Latin America, too, a profound change is under way in a number of countries, holding out the hope that the enormous potential of the region will be more effectively harnessed in the future. Mexico, in particular, is very dynamic witness its membership of the North American Free Trade Association and its active participation, as an observer, in various OECD committees.
3. It is of course in Central and Eastern Europe and in the territory of the former Soviet Union that the most spectacular changes are taking place. Even if it is still too soon to say with absolute certainty that all the countries in the region have opted irreversibly and completely for the market economy system, there is increasing evidence of their determination to move rapidly in that direction, which no doubt accounts for the substantial interest. they display in the OECD. It would be more than optimistic, however, to believe that this transition can take place very rapidly without being accompanied by very marked economic, social and perhaps political strains. collapse of the Soviet Union, in particular, has ushered in for its former constituent parts an exhilarating but dangerous period of fundamental change in all areas. It is to be hoped that the increasingly brutal events marking the break-up of the former Socialist Federal Republic of Yugoslavia will deter those who would like to restore or establish sovereignty of a "national" nature from taking any precipitate action.
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The
In other parts of the world (Africa and certain regions of Asia) economic development prospects are still not easy to detect. Recent progress in moving towards solutions to political and military conflicts (in the Near East, Cambodia, South Africa, Central America) have certainly improved the chances of economic and social development, but in many countries these chances are being seriously jeopardized, in particular by excessive population growth.
B. Problems on a world scale
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The first such problem is that of the rate of population growth in virtually all the non-OECD countries outside Europe, whose development. potential may well be jeopardised. The rapid increase in the world population poses an ecological threat that is now becoming dangerous. Lastly, the difference in demographic potential and economic standing between the poor countries and the OECD area, coupled with the fall in transport costs and the spread of information worldwide, provides the foundation for migratory pressures that are liable to become substantial. This is increasingly evident, for example, between the South and North of the Mediterranean.
It is very possible, though, that these South-North pressures will be compounded by East-West pressures generated not only in eastern Europe, but also in Asia. All this could add up to a major source of tension.
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A second universal problem is that of underdevelopment and poverty. Even if some of the formerly underdeveloped countries have "taken off" in some cases spectacularly many others continue to be faced with problems which
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