*Articles
WORLD DEVELOPMENT REPORT- 2009 Prosperity demands mobile people and products
Production concentrates in big cities, leading provinces, and wealthy nations. Half the world’s production fits onto 1.5 percent of its land.
More than two-thirds of the developing world’s poor live in villages.
Economic growth will be unbalanced, but development still can be inclusive. That is the main message of this year's World Development Report 2009. The report proposes that spatial transformations along the following three dimensions will be necessary: |
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Higher density as seen in the growth of cities. Tokyo, the world's largest city is home to 35 million--a quarter of Japan's population--but stands on just four percent of its land. |
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Shorter distances as firms and workers migrate closer to economic opportunities. Eight million Americans change states every year, migrating to reduce distance to economic opportunity. |
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Fewer divisions as countries thin their economic borders to enter world markets to take advantage of specialization and scale. Border restrictions to flows of goods, capital, ideas, and people continue to prevent progress in Africa, in contrast with Western Europe. |
KEY FACTS |
Economic activity concentrates as places prosper. Half the world’s production fits onto less than 5 percent of its land, an area smaller than Algeria. Tokyo, the world’s largest city, is home to 35 million—a quarter of Japan’s population—but stands on just 4 percent of its land. Cairo produces more than half of Egypt’s GDP, using just 0.5 percent of its area. Brazil’s three south-central states comprise 15 percent of its land, but more than half its production. North America, the EU and Japan—with less than a billion people—have about two-thirds of the world’s production. |
Living standards converge with development. Rural poverty rates are almost everywhere higher than in cities. In Brazil, China, and India, lagging states have poverty rates more than twice those in leading states. Countries home to the “bottom billion”—mostly in Sub-Saharan Africa and South and Central Asia—have 12 percent of the world’s population but less than 1 percent of its GDP. But location matters less and less for living standards as nations prosper. Estimates from over 100 living standards surveys show that households in the most prosperous areas of developing countries like Ghana and Indonesia have an average consumption nearly 75 percent higher than that in their lagging areas. In wealthy countries, this difference is less than 25 percent. |
Growth requires geographic transformations. Rising density as cities grow, shorter distances as people migrate and transport costs fall, and lower divisions as nations ‘thin’ their economic borders—these are all ingredients for rapid and shared growth. While cities are much larger today, the pace of urbanization seen in developing countries is not unprecedented. Meanwhile, coastal provinces have boomed relative to less accessible areas as the share of global exports to world GDP has risen from 6 to 26 percent during the 20th century. The number of international borders has increased from 100 to more than 600 since 1900. But what matters for economic growth is the ‘thickness’ of economic borders, which depends on the restrictions on the flow of goods, capital, people, and ideas. Borders between countries in Western Europe are now about one-fourth as thick as those in Western Africa. |
Prosperity demands mobile people and products. Korea went from more than 80 percent rural to more than 80 percent urban between 1950 and 1990, as its per capita income grew from present-day Benin’s to more than Portugal’s. The United States, the world’s largest economy, is also among the most mobile, with about 35 million people changing their place of residence every year. In China, more than 150 million people moved to coastal areas during the late 1990s. Falling transport costs encourage specialization and trade between economies at similar stages of development. Intra-industry trade—the exchange of broadly similar goods and services—is now half of global trade, up from about a quarter in the 1960s. Because this trade is especially sensitive to transport costs, East Asia, North America, and Western Europe account for much of it. |
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