HAND BOOK

The World In
Numbers
Comparing India with
14 nations on key parameters In Association With:

OLB+World Bank Report

CONTENTS

Agriculture 4
Banking And Markets 8
Business Environment 12
Economy 16
Human Development 28
Industry And R&D 46
Environment 50
Population And Employment 54
Power, Transport And Communication 60
Quality Of Life 66
Resources 72
Trade And Investment 76

Project Editor Thomas P Abraham

Design Manish Marwah
Graphics Pinaki Paul
Cover Design Arindam

Copyright © Outlook Publishing (India) Private Limited, New Delhi.

All Rights Reserved
No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or means
electronic, mechanical, photocopying, recording or otherwise, without prior permission of
Outlook Publishing (India) Private Limited and World Bank.
Printed and published by Maheshwer Peri on behalf of Outlook Publishing (India) Pvt. Ltd.
Editor: Sonal Sachdev. Published from AB-10 Safdarjung Enclave, New Delhi.

1
FOREWORD
T
HE GLOBAL economy is chang-
ing—as never before. And the
chief harbinger of this change
has been the advent of glo-
balisation. It has unleashed a wave of
prosperity in countries, which a decade
ago, stood at the pithead of economic
despondency and national despair.
And the greatest beneficiary of this
wave of prosperity has been the devel-
oping countries, including India, China
and Brazil.
Data from the study shows that the
2 3
march of developing countries to-
wards attaining the tag of ‘developed
countries’ is marked by certain defining
developments. These include a shift in
employment patterns in developing
economies—from the agricultural
sector to manufacturing and services;
and cost competitiveness (of develop-
ing countries vis-à-vis the developed
ones). However, compared to devel-
oped countries, developing countries
continue to suffer from low (abysmal,
in some instances) penetration of tele-
OUTLOOK BUSINESS & WORLD BANK REPORT
com, information technology, automo-
biles, banking credit and medical facili-
ties, despite great strides being made
in these fields by some. The study
shows that people living in developed
countries enjoy 100% or near-100% ac-
cess to amenities such as piped water
and toilet facilities, both in the rural as
well as urban areas—a far cry from the
prevailing conditions in a majority of
developing countries.
This handbook is a joint effort by
Outlook Business and the World Bank
to bring to our readers some interest-
ing and relevant facts and figures, in a
concise and reader-friendly format. Out
of the scores of countries featured in
the World Bank report, this book puts
the spotlight on key economic, trade
and quality of life numbers for 15 select
countries including, of course, India.
(Figures in italics indicate numbers that
pertain to the next nearest year.) The
product, we believe, does have some-
thing of interest to our readers from all
walks of life .
AGRICULTURE
The Changing Face Of Global Agriculture
W
ITH ECONOMIC growth,
the share of agriculture in
the global economy has
declined. Even so, agricul-
ture remains important in many de-
veloping economies and the source of
GREEN REVOLUTION: Output must rise to be
able to feed a growing urban population
4 5
income for many poor people around
the world. On average, agriculture con-
tributes more than 20% to value added
in the low-income economies.
Globally, about 40% of the active
labour force is employed in the agri-
OUTLOOK BUSINESS & WORLD BANK REPORT
cultural sector, but in the Sub-Saha-
ran Africa, Asia and the Pacific, about
60% of the population is dependent
on it. Compare that with 18% in Latin
America, and four percent in the high-
income economies.
AP
Agriculture is associated with natural
wealth, particularly in the developing
economies. A recent World Bank study
estimates that roughly two-thirds of
the natural wealth in low-income coun-
tries is embodied in the croplands and
pasturelands of these countries (World
Bank 2006).
Agriculture’s changing role is under-
scored by the rapid rural-urban migra-
tion. The United Nations estimates that
in 2007, for the first time, the majority
of the global population would be re-
siding in urban areas (United Nations
Population Division 2005, World Popula-
tion Prospects, 2004). And this trend is
expected to continue.
Urban population is expected to
grow at 1.8% a year through 2030, al-
most twice as fast as the global popula-
tion. Productivity must continue to rise,
so that the shrinking rural population
can provide more agricultural prod-
ucts for a rising urban population with
higher incomes.
In recent years, the increases in de-
mand for food have been met by high-
er productivity through agricultural in-
tensification, technological advances,
mechanisation and irrigation.
However, continuing depletion and
degradation of natural resources that
constitute the agricultural sector’s
main inputs—water and land—could
slow the growth of the sector .
AGRICULTURE OUTLOOK BUSINESS & WORLD BANK REPORT

Feeding The World Better Agriculture Comes Of Age

One of the biggest changes that have come about in the agricultural sector across the world is the rising
yield of cereals per hectare over the years. While in developing countries like India, this rise has been
steady, it has been nothing short of spectacular in the developed countries. This is the effect of wide-
spread use of fertilisers and high-yielding crop varieties developed through exhaustive R&D.
Over the last decade, agricultural land as a percentage of total land area has either fallen or remained
stagnant. Also, over this period, employment in agriculture as a percentage of total employment has fallen.
Yet, global agricultural productivity has risen by leaps and bounds. This is clearly the result of higher us-
age of fertilisers and the mechanisation of agriculture. The percentage of land being used for agriculture,
however, has remained largely unchanged.

6 7
BANKING & MARKETS OUTLOOK BUSINESS & WORLD BANK REPORT

F
INANCIAL SECTOR develop-
ments have a positive impact on
economic growth and poverty.
The size of the sector determines
the amount of resources mobilised for
investment. Access to finance can ex-
pand opportunities for all, with higher
levels of access and use of banking ser-
pose huge costs on the economy.
The stock market indicators include
measures of size (market capitalisa-
tion, number of listed domestic com-
panies) and liquidity (value traded as
a percentage of the gross domestic
product, value of shares traded as a
percentage of market capitalisation).
The comparability of such indicators
between countries may be limited by
conceptual and statistical weaknesses.
The percentage change in stock market
prices in US dollars, from the Standard
& Poor’s Emerging Markets Data Base
(S&P/EMDB) indices, is an important
measure of overall performance. Regu-
latory and institutional factors that can
affect investor confidence, such as en-
try and exit restrictions, the existence
of a securities and exchange commis-
sion, and the quality of laws to pro-
tect investors, may also influence the
functioning of stock markets. These are
however, not included in the tables .

Robust Financial Sector Drive Economic Activity

vices associated with lower financing
obstacles for people and businesses. A
stable financial system that promotes
efficient savings and investment is also
crucial for a thriving democracy and
market economy. The banking system
is the largest sector in the financial sys-
tem in most countries.
The development of credit markets
depend on access to timely, reliable
and accurate data on borrowers’ credit
histories. One way to improve access to
credit is to increase information about
potential borrowers’ credit-worthiness
and make it easy to create and enforce
collateral agreements.
The size and mobility of international
capital flows have made it important
to monitor the strength of financial
systems. Robust financial systems help
KEDAR BHAT

increase economic activity and welfare,

but instability in the financial system VITAL PARAMETER: Timely access to
can disrupt financial activity and im- credit histories is key to growth

8 9
BANKING & MARKETS OUTLOOK BUSINESS & WORLD BANK REPORT

Development Matters Private Affair

There is a direct correlation between economic development and banking credit coverage. The rate in During the period 2000-06, the market capitalisation of countries as a percentage of their gross domestic
developed economies is higher than that of the others. Also, banks in developed economies have lesser product (GDP) has shot up significantly. This is an indication of the increasing levels of privatisation and
non-performing loans than their counterparts in other economies. liberalisation sweeping across the globe. But interestingly, the number of listed companies has not grown
as significantly. This probably is the result of the high levels of mergers and acquisitions.

10 11
BUSINESS ENVIRONMENT OUTLOOK BUSINESS & WORLD BANK REPORT

well. Securing rights to land and build-

ings, a major source of wealth in most
countries, strengthens incentives to in-
vest and facilitates trade. More complex
procedures to register property are as-
sociated with less perceived security of
property rights, more informality, and
more corruption.
Lack of access to credit is one of the

Laying The biggest barriers entrepreneurs face in

starting and operating a business.
There are many types of business li-

Groundwork censes required, and striking the right

balance between the ease of doing
business and consumer safety requires

For Growth continuous reform.

Since construction is a large sector
in most economies, the procedures
required for a contract enforcement is
critical to enable businesses to engage
with new borrowers or customers.
Without good contract enforcement,
trade and credit will be restricted to a
small community of people who have
developed relationships through re-
peated dealings or the security of the
VIVAN MEHRA
assets they hold.

A
VIBRANT PRIVATE sector is
central to promoting growth
and expanding opportunities
for poor people. But encour-
aging firms to invest, improve produc-
tivity and create jobs requires a legal
and regulatory environment that fos-
ters access to credit, protects property
rights, and supports efficient judicial,
taxation, and customs systems.
When entrepreneurs start a business,
the first obstacles they face are the ad-
ministrative and legal procedures re-
quired to register the new firm. Coun-
tries differ widely in how they regulate
the entry of new businesses. In some
countries the process is straightfor-
ward and affordable. But in others the
procedures are so burdensome that
entrepreneurs may opt to run their
business informally.
Property registries were first devel-
oped to help raise tax revenue, but
they have benefited entrepreneurs as
The institution that enforces con-
tracts between debtors and creditors,
and suppliers and customers, is the
court. And the efficiency of contract
enforcement is reflected in two indica-
tors: the number of judicial procedures
to resolve a dispute and the time it
takes to enforce a contract .

12 13
DOING BUSINESS
BUSINESS ENVIRONMENT
INDICATORS OUTLOOK BUSINESS & WORLD BANK REPORT

Testing Patience
It could be a big challenge for businesses from the developed world to set up shop in the developing
countries. This is borne out by the numbers in this chart, which clearly indicate that right from starting a
business to closing it down, time taken and procedures involved are far greater in the developing econo-
mies. Clearly, this is another issue the economies need to address.

BRIGHT PROSPECT: Doing business in developed

countries is far easier than in developing ones
AP

15
ECONOMY
D
EVELOPING ECONOMIES
grew faster over the last de-
cade (1995–2005) than in the
two previous decades and
faster than high-income countries.
World output in 2005 amounted to
about $61 trillion, measured in pur-
chasing power parities. This was a 45%
Emergence Of
A New Order
16
increase over 1995, when the world
output was $42.3 trillion. The share of
developing economies in global out-
put rose from 39% to 46%. Developing
economies in the East Asia and the Pa-
cific regions grew the most, doubling
their output and increasing their share
of global output from 13% to 19%.
OUTLOOK BUSINESS & WORLD BANK REPORT
Further integration into world mar-
kets, better functioning internal mar-
kets, and rising demand for many
commodities all contributed to the
acceleration of growth in developing
countries. Past periods of growth were
often interrupted by financial or bal-
ance of payments crises. But recovery
BRISK PACE: Developing economies
are charting a fast growth path
AP
from such crises has been widespread
and durable. Developing economies
are running lower fiscal and external
deficits, accumulating larger reserves,
and adopting more cautious monetary
and financial policies. These policies
make economies less vulnerable to
shocks and less volatile, increasing the
confidence of investors. Developing
economies are expected to grow faster
than high-income economies. The sur-
prise is that they often don’t. The last
decade brought a change, however.
The average growth of low- and mid-
dle-income economies surpassed that
of high-income economies.
The high growth experienced in the
developing world was due in part to ex-
panding trade and a better investment
climate. The very rapid industrialisation
of large countries such as China and
India also benefited the exporters of
primary commodities—oil, metals and
minerals, and agricultural produce.
Macroeconomic stability also helped.
Since the high inflation and the debt
crises of the 1970s and 1980s, better
fiscal, monetary, and exchange rate
policies have brought inflation rates
down in most developing countries.
Trade surpluses and growing work-
ers’ remittances have allowed many
developing countries to accumulate
large holdings of reserve assets over
the past five years .
17
ECONOMY OUTLOOK BUSINESS & WORLD BANK REPORT

Growing Muscle That’s The Way To Live

During 1995-2005, despite expanding trade and commerce, revenue as a percentage of gross domestic Compared to developing countries, developed countries have, generally, succeeded in keeping the growth
product (GDP) has remained more or less constant in many developed economies. Interestingly, while it in their consumer price index low, allowing their populations to indulge in more personal consumption.
remained nearly constant in India, in China it nearly doubled. Expense as a percentage of GDP, however, has
risen in most cases. In the case of debt and interest payments, while the amounts have fallen significantly
in developed countries, it has fallen quite sharply in the case of some developing countries such as India.

18 19
ECONOMY OUTLOOK BUSINESS & WORLD BANK REPORT

Trade Patterns Services Take Centrestage

During 1990-2000 and 2000-2005, percentage growth of gross capital formation showed a mixed trend Rising economic prosperity in developing economies is marked by rising contribution of the services sector
for the developed and developing economies—rising and falling across countries with no tangible pat- to average annual growth. This corresponds with a drop in average annual growth of agriculture in these
tern. However, in the case of exports and imports, there is a clear pattern visible—that of falling exports economies. While average industrial growth picked up steam in India and Russia, it slowed down consid-
and rising imports in the developed economies. For the developing economies, it is again a mixed bag. erably in high-cost economies such as the US and UK.

20 21
ECONOMY OUTLOOK BUSINESS & WORLD BANK REPORT

Infrastructure All The Way Flavour Of The Season

Investment in infrastructure projects with private participation has risen by leaps and bounds in the de-
veloping countries over the period 1995-00 to 2000-05. This has fostered greater development in these
countries. While underlining the fact that infrastructure is key to economic development, it also shows that
ultimately private participation is important for the development of infrastructure. And of course, domestic
credit plays a major part in this fund-flow to the infrastructure sector.
Emerging markets (developing countries) were the toast of the world during 2005 and 2006. China’s aver-
age percentage growth in gross domestic product (GDP) zoomed to double-digit figures during the two
years. India and Russia follow closely.

REUTERS

22
ECONOMY OUTLOOK BUSINESS & WORLD BANK REPORT

Too Many Mouths To Feed Saving For A Rainy Day

Though India ranks No 10 on the gross national income parameter, it stands a poor 158 on the gross na- During the years 1990 to 2005, compared to developed countries, gross savings increased at a faster pace
tional income per capita, thanks to its huge population, which dilutes the benefits of economic growth. in the developing countries on the back of lower expenditure on household consumption. Since countries
such as India managed to keep government consumption in control, the rising reserves of savings were put
to productive use—directed towards gross capital formation.

24 25
ECONOMY OUTLOOK BUSINESS & WORLD BANK REPORT

Taxing Times
In the developing countries, tax revenue collections by the government, as a percentage of gross domestic
product, has generally risen. However, the time required to prepare, file and pay taxes in the developing
countries remain significantly higher than in the developed ones. Interestingly, some of the highest mar-
ginal tax rates are seen in the developed countries.

SHOME BASU

SMOOTH RIDE: Tax revenues must drive the

creation of modern infrastructure facilities

27
HUMAN DEVELOPMENT
Healthcare Woes
Remain A Concern
A
DVANCES IN technology and
knowledge of health and hy-
giene have transformed life
over the past 50 years. In 1960
more than 20% of children in devel-
oping countries died before reaching
their fifth birthday; by 2005 this had
fallen to just over 8%. The declines are
28
large, even for the poorest countries.
But this reassuring picture, painted by
rising global averages, obscures sub-
stantial disparities among the world’s
regions and among the poor within
countries. For millions of people health
services and modern medicines are still
out of reach, and many die prematurely
OUTLOOK BUSINESS & WORLD BANK REPORT
EXPENSIVE: Quality healthcare
remains out of reach for millions
in lower-income countries
PRIYAM DHAR
from diseases that are easily prevented
or cured. More than 25 years after the
Health for All declaration, improving
the health of the poorest in developing
countries remains a challenge.
What can improve all this? There is
no consensus on which determinants
are most important across countries.
But there is agreement on the need to
reduce extreme income poverty, the
major risk for poor health and prema-
ture death. The World Health Organi-
sation (WHO) concurs, noting that a
poverty-oriented health strategy re-
quires complementary policies in other
sectors (WHO 2003). These include im-
proving access to education, enhanc-
ing the position of women and other
marginalised groups, shaping develop-
ment policies in agriculture and rural
development, and promoting open
and participatory governance.
Priorities in healthcare are also clear:
focus on health problems and diseases
that affect the poor. Health gains re-
quire directing program benefits to-
ward the poor and raising the quality
and availability of health services, espe-
cially where they are least available.
Differences in the health of rich and
poor countries remain large and in
some case are increasing. Under-five
mortality fell by over 36% in high-in-
come countries from 1990 to 2005, but
only 20% in developing countries, as
preventable diseases continue to take
a toll on the world’s poorest people.
But more important than the changes
in proportion are the levels—under-
five mortality is five times higher in
middle-income countries than in high-
income countries and 15 times higher
in lower-income countries .
29
HUMAN DEVELOPMENT
Pension Woes
In the developed economies, the percentage of labour force contributing to pension fund, is very high—
running into the 90s in the US, UK and France. The system in these countries ensures that maximum num-
ber of employees are brought under the pension net, enabling them to enjoy pension benefits during their
retired life. Compared to this, in the developing economies, the percentage of labour force contributing to
the pension fund is low, indicating a system unable to bring most of the labour force under the pension
net. Also, public expenditure on pensions in developed economies is higher than in the developing ones.
30
OUTLOOK BUSINESS & WORLD BANK REPORT
Literally Growing
In the developed countries, from 1991 to 2005, the percentage of people completing their primary educa-
tion has risen to the highest levels. Within this segment, males and females constitute a similar percent-
age, indicating equal status to both the sexes. As for literacy rates for youth within the age group of 15
to 24, while the percentage in the developed countries hovers around 100%, the rate has risen in the
developing economies too. However, in the developing economies, youth (age group of 15 to 24) literacy
rates are higher among male youth than female youth. This is especially true in the case of India, where
despite a rise in female literacy ratios, the actual figure remains quite low. Also, adult literacy rates remain
very high in the developed economies compared to the developing countries.
31
HUMAN DEVELOPMENT OUTLOOK BUSINESS & WORLD BANK REPORT

Mass Education Hardly Healthy

In developing countries, public expenditure per student in the primary stage is far lesser than in developed Expenditure on health, as a percentage of gross domestic product, is significantly lesser in the developing
countries. Also, public expenditure on education, as a percentage of the gross domestic product, in devel- countries than in the developed ones. Even the per capita expenditure on healthcare is far lesser in devel-
oping countries is lesser than in the developed ones. The number of pupils per teacher, too, is far higher in oping countries than in the developed countries. Worse, the out-of-pocket component of this expenditure
the developing countries compared to the developed ones. is far higher in the case of developing countries than in the developed ones.

32 33
HUMAN DEVELOPMENT OUTLOOK BUSINESS & WORLD BANK REPORT

Rising Expectations
Developed economies boast of a higher life expectancy at birth compared to developing countries. This is a
vital indicator of good living conditions enjoyed by people living in developed economies. Life expectancy
of females is much higher across the board except in India where it is higher only marginally. Also, there are
more women representatives in the seats of power of developed economies compared to the developing
economies. However, it is worth noting that during the period 1990 to 2005, the percentage of women
representatives in developing countries rose, albeit at a lower rate than that in the developed economies.

LIFE’S A LAUGH: Better healthcare facility is

increasing the life expectancy of global populations
AP

35
INDUSTRY AND R&D OUTLOOK BUSINESS & WORLD BANK REPORT

T
HE UNITED NATIONS Industrial
Development Organisation
(UNIDO) provides data on the
distribution of manufactur-
ing value added by industry. UNIDO
obtains data on manufacturing value
added from a variety of national and
international sources, including the
United Nations Statistics Division, the
World Bank, the Organisation for Eco-
nomic Co-operation and Development
(OECD) and the International Monetary
Fund. To improve comparability over
time and across countries, UNIDO
supplements these data with informa-
tion from industrial censuses, statistics
supplied by national and international
organisations, unpublished data that it
SHOME BASU

collects in the field, and estimates by VITAL INPUT: Classification

the UNIDO Secretariat.
Nevertheless, coverage may be less
than complete, particularly in the case
of the informal sector. To the extent
that direct information on inputs and
outputs is not available, estimates may
be used, which may result in errors in
industry totals. Moreover, countries use
different reference periods (calendar
or fiscal year) and valuation methods
(basic or producer prices) to estimate
value added.
The data on manufacturing value
added in US dollars are from the World
Bank’s national accounts files. These
figures may differ from those used by
The Name Of The Game Is Adding Value
UNIDO to calculate the shares of value
added by industry, in part because of
differences in exchange rates. Thus,
estimates of value added in a par-
ticular industry calculated by apply-
ing the shares to total manufacturing
value added will not match those from
UNIDO sources. The classification of
manufacturing industries in the table
accords with the United Nations Inter-
national Standard Industrial Classifica-
tion (ISIC) revision 2. First published in
1948, the ISIC has its roots in the work
of the League of Nations Committee of
Statistical Experts. The committee’s ef-
forts, interrupted by the Second World
War, were taken up by the United Na-
tions Statistical Commission, which at
its first session appointed a committee
on industrial classification. The latest
affects the way data can
be interpreted
revision, ISIC revision 3, was completed
in 1989, and many countries have now
switched to it. But revision 2 is still used
to compile cross-country data.
In compiling a classification system,
compilers must define the type of ac-
tivities to be described and the organi-
sational units whose activities are to
be reported. The choices affect the way
the statistics can be interpreted .

46 47
INDUSTRY AND R&D OUTLOOK BUSINESS & WORLD BANK REPORT

Investing In Tomorrow Towards Higher Value Add

For India, which spends a paltry 0.85% of its gross domestic product on research and development, high
technology exports constitute a respectable five percent. The number of patent applications filed by India
too is a healthy 10,671 compared with 10,905 by Germany and 11,138 by the UK.
One of the hallmarks of economic growth is the higher levels of value addition made by the manufacturing
sector. Comparative figures for 1990 and 2003 indicate a significant rise in the levels of manufacturing
value added, both in the developed and the developing economies. Among the developing countries,
while India witnessed a strong 74% rise in manufacturing value addition, it jumped by a massive 362% in
China (though China’s figures during 1990 to 1993 are not strictly comparable with later revised figures).

48 49
ENVIRONMENT
E
MISSIONS OF organic pollutants
from industrial activities are a
major cause of degradation of
water quality. Water quality and
pollution levels are generally measured
in terms of concentration or load—the
rate of occurrence of a substance in an
No Solution
In Sight To
Pollution Woes
50
aqueous solution. Polluting substances
include organic matter, metals, miner-
als, sediment, bacteria, and toxic chem-
icals. We focus on organic water pollu-
tion resulting from industrial activities.
Because water pollution is sensitive to
local conditions, the national-level data
OUTLOOK BUSINESS & WORLD BANK REPORT
used for comparison purposes here
may not reflect the quality of water in
specific locations.
Unlike estimates from earlier stud-
ies based on engineering or economic
models, these estimates are based
on actual measurements of plant-
BREATHTAKING: Carbon emissions
threaten to kill the world’s tomorrow
AP
level water pollution. The focus is on
organic water pollution caused by
organic waste, measured in terms of
biochemical oxygen demand (BOD),
because the data for this indicator are
the most plentiful and the most reli-
able for cross-country comparisons of
emissions. BOD measures the strength
of an organic waste by the amount of
oxygen consumed in breaking it down.
A sewage overload in natural waters
exhausts the water’s dissolved oxygen
content. Wastewater treatment, by
contrast, reduces BOD.
Indoor and outdoor air pollution
place a major burden on world health.
More than half of the world’s popula-
tion rely on dung, wood, crop waste, or
coal to meet their basic energy needs.
Cooking and heating with such solid
fuels on open fires or stoves without
chimneys leads to indoor air pollution.
Every year indoor air pollution is re-
sponsible for the deaths of 1.6 million
people—one death every 20 seconds.
In many urban areas exposure to air
pollution is the main environmental
threat to human health. Long-term
exposure to soot and small particles
in the air contributes to a wide range
of health effects, including respiratory
diseases, lung cancer, and heart dis-
ease. Particulate pollution, on its own
or in combination with sulphur diox-
ide, leads to the burden of ill health .
51
ENVIRONMENT OUTLOOK BUSINESS & WORLD BANK REPORT

Gas For Your Lungs Water, Water Everywhere

The world is becoming a more polluted place to live in. In 2003, while the US, one of the most developed For rural and urban populations in developed economies such as the US, UK, Australia, France, Germany
countries, topped the charts of polluting countries—total carbon dioxide emission by the US was higher and Japan, access to improved water sources stands at an enviable 100%, far above the levels of Brazil,
than the combined lot of Brazil, France, Germany, India, Italy, Republic of Korea, Mexico, Thailand, South China, South Africa and the Republic of South Korea. This, despite no dearth of renewable internal fresh-
Africa and UK—China, a developing country, is fast catching up with the world’s top polluters. water resources for any of these countries.

52 53
POPULATION AND EMPLOYMENT
Dynamics
Of Rising
Numbers
P
OPULATION ESTIMATES are usu-
ally based on national popula-
tion censuses, but the frequency
and quality vary by country.
Most countries conduct a complete
enumeration no more than once a de-
cade. Estimates for the years before and
after the censuses are interpolations or
extrapolations based on demographic
models. Errors and undercounting oc-
cur even in high-income countries; in
developing countries such errors may
be substantial because of limits in the
transport, communications, and other
resources required to conduct and
analyse a full census.
The quality and reliability of official
demographic data are also affected by
the public trust in the government, the
government’s commitment to full and
accurate enumeration, the confiden-
tiality and protection against misuse
accorded to census data, and the in-
dependence of census agencies from
undue political influence. Moreover,
54
OUTLOOK BUSINESS & WORLD BANK REPORT
the international comparability of pop-
ulation indicators is limited by differ-
ences in the concepts, definitions, data
collection procedures, and estimation
methods used by national statistical
agencies and other organisations that
collect population data.
Unemployment and total employ-
ment in an economy are the broad-
est indicators of economic activity as
reflected by the labour market. Some
unemployment is unavoidable. At any
time some workers are temporarily
unemployed—between jobs as em-
ployers look for the right workers and
workers search for better jobs.
COUNTLESS: Too
many mouths to feed Changes in unemployment over
dilute the benefits of time may reflect changes in the
economic growth demand for and supply of labour,
but they may also reflect changes
in reporting practices. Ironically, low
unemployment rates can often dis-
guise substantial poverty in a country,
while high unemployment rates can
occur in countries with a high level of
economic development and low inci-
dence of poverty. In countries without
unemployment or welfare benefits,
people eke out a living in the informal
sector. In countries with well-devel-
oped safety nets, workers can afford
to wait for suitable or desirable jobs.
But high and sustained unemployment
FOTOCORP
indicates serious inefficiencies in the
allocation of resources .
55
POPULATION AND EMPLOYMENT OUTLOOK BUSINESS & WORLD BANK REPORT

Nothing Informal About It A Hard Day’s Work

Figures for the urban informal sector employment are interesting—clearly indicating the absence of this As economies move up the development ladder, the participation of labour forces in these countries also
category in the developed economies. However, India thrives on inputs by this category. Also, youth em- increase. This is clearly evident from the charts that show the rising percentage of people who have joined
ployment as a percentage of labour force is higher in developed economies than in the developing ones. the labour force over the years 1990 to 2005. However, the rise in percentage of female workers joining the
labour bandwagon in the developing economies is lesser than in the developed economies.

.. 2003 2002 52.4

38.7 1997 ..
17.2 1996 ..
62 2003 2002 65
64 2003 2002 71.8
5.7 ..
56 2003 2002 88.8
73 2003 2002 59.1
43 2003 2002 43.3
22.6 2003 2002 45.1
.. 2004 ..
.. ..
17 ..
73 2003 2002 47.6
71 2003 2002 51

56 57
POPULATION AND EMPLOYMENT OUTLOOK BUSINESS & WORLD BANK REPORT

Labour Pains Moving Home To Town

While in the US and UK, the percentage of unemployed males and female has fallen, in the other coun- From 1990 to 2005, populations in cities with over one million people have increased. More interestingly,
tries—developed and developing—the trend is pretty mixed. However, as a percentage of the total the rise in urban population has been higher in developing countries than in the developed ones. It is a sign
unemployed labour force, the segment least vulnerable to unemployment—in both the developed and of people moving away from jobs in the agriculture sector to those in manufacturing and services. How-
developing economies— is the one that has completed the tertiary level of education. ever, growth in access to sanitation facilities has not kept pace for those living in developing economies.

58 59
POWER, TRANSPORT AND COMMUNICATION
U
SE OF energy is important
in improving people’s stan-
dard of living. But electricity
generation also can damage
the environment. Whether such dam-
age occurs depends largely on how
electricity is generated. For example,
burning coal releases twice as much
carbon dioxide—a major contributor
Economic Growth AndThe Use Of Power
to global warming—as does burning
an equivalent amount of natural gas.
Nuclear energy does not generate car-
bon dioxide emissions, but it produces
other dangerous waste products.
The quality of an economy’s infra-
structure, including power and com-
munications, is an important element in
investment decisions for both domes-
OUTLOOK BUSINESS & WORLD BANK REPORT
tic and foreign investors. Government
effort alone is not enough to meet
the need for investments in modern
infrastructure; public-private partner-
ships, especially those involving local
providers and financiers, are critical for
lowering costs and delivering value for
money. In telecommunications, com-
petition in the marketplace, along with
SPEED OF LIGHT: Better access
to power and telecom are
crucial for economic growth
AP
sound regulation, is lowering costs and
improving the quality of and access to
services around the globe.
Over the past decade, new financing
and technology, along with privatisa-
tion and liberalisation of economies,
have spurred dramatic growth in the
telecommunications sector in many
countries. With the rapid development
of mobile telephony and the global ex-
pansion of the Internet, information
and communication technologies are
increasingly being recognised as essen-
tial tools of development, contributing
to global integration and enhancing
public sector effectiveness, efficiency
and transparency.
Globally, there have been huge im-
provements in access to telecommu-
nications, driven mainly by the growth
of mobile telephony. By 2002, access to
mobiles outpaced the access to fixed-
line telephones in developing coun-
tries, and rural areas are catching up
with urban areas.
Transport infrastructure—highways,
railways, ports and waterways, and air-
ports and air traffic control systems—
and the services that flow from it are
crucial to the activities of households,
producers and governments. Because
performance indicators vary signifi-
cantly by transport mode and focus,
highly specialised and carefully speci-
fied indicators are required .
61
POWER, TRANSPORT AND COMMUNICATION OUTLOOK BUSINESS & WORLD BANK REPORT

Empowering Populations Electric Rise

Transmission and distribution (T&D) losses are lesser in the developed countries than in the developing
ones. Also, the former boasts of a higher percentage of population covered by mobile phones.
The increase in production of electricity in China during 1990 to 2004 is indeed mind-boggling—from
621.2 billion kilowatt hours to 2,199.6 billion kilowatt hours. The call for cleaner sources of power has
resulted in increasing use of gas as a source of electric power. Nuclear power too is being harnessed to a
significant extent by the developed countries—chiefly France—which meets a whopping 79% of its
total electricity requirements from nuclear power.

62 63
POWER, TRANSPORT AND COMMUNICATION OUTLOOK BUSINESS & WORLD BANK REPORT

The Road To Prosperity

While many developed countries such as France, Germany and the UK have near-100% paved roads—interestingly US and Japan have only 64.5% and 77.7% of their roads paved—developing countries lag far behind in this regard.
However, at 6.43 million km, the US has the largest road network in the world. Significantly, it is followed closely by India with 3.38 million km. China, Brazil and Japan follow. As per figures available, the US leads the list of countries
passengers carried by roads followed by Germany and Japan. China, however, is far ahead of other countries in the qu antum of port container traffic logged. In railways, the US has the largest rail line network in the world. But India hauls
the largest number of people through rail lines. US is the leader in the air traffic segment too, with the largest number of carriers, passengers carried and air freight hauled.

64 65
QUALITY OF LIFE
Energy—The New Growth Paradigm
I
NEQUALITY IN the distribution of
income is reflected in the percent-
age shares of income or consumption
accruing to portions of the popula-
tion ranked by income or consump-
tion levels. The portions ranked low-
est by way of personal income receive
the smallest shares of total income. In
66
this regard, the Gini index provides a
convenient summary measure of the
degree of inequality.
Data on the distribution of income or
consumption come from nationally rep-
resentative household surveys. Where
the original data from the household
survey were available, these have been
OUTLOOK BUSINESS & WORLD BANK REPORT
SHOME BASU
CONSUMPTION: Economic growth
kindles the desire to live the good life
used to directly calculate the income or
consumption shares by quintile. Other-
wise, shares have been estimated from
the best available grouped data.
The ratio of gross domestic product
(GDP) to energy use provides a mea-
sure of energy efficiency. To produce
comparable and consistent estimates
of real GDP across countries relative to
physical inputs to GDP—that is, units
of energy use—GDP is converted to
2,000 constant international dollars us-
ing the purchasing power parity (PPP)
rates. Differences in this ratio over a
period of time and across countries
reflect in part the structural changes
in the economy, changes in the energy
efficiency of particular sectors and dif-
ferences in fuel mixes.
Because commercial energy is widely
traded, it is necessary to distinguish
between its production and its use.
Net energy imports show the extent
to which an economy’s use exceeds
its domestic production. High-income
countries are net energy importers
while middle-income countries have
been their main suppliers.
Among the change-factors of the
modern day are the digital and in-
formation revolutions, which have
changed the way the world learns,
communicates, conducts business
and treats illnesses. Modern informa-
tion and communications technolo-
gies offer vast opportunities to global
populations for progress in all walks
of life across various countries. These
provide opportunities for economic
growth, improved healthcare, better
service delivery, learning through dis-
tance education as well as social and
cultural advances .
67
QUALITY OF LIFE
Equal Status
The Gini Index, which measures economic equality, throws up some interesting facts. Among the countries
featured here, South Africa has the highest Gini Index, indicating high level of economic inequality, while
Japan, which has the lowest Gini Index, has the highest level of economic equality. Generally, the levels of
income inequality are highest among the developing countries, indicating low penetration of economic
growth to the general population of these countries.
68
OUTLOOK BUSINESS & WORLD BANK REPORT
High Octave
The ratio of GDP to energy use provides a measure of energy efficiency. To produce consistent estimates of
real GDP across countries relative to physical inputs to GDP, that is, units of energy use, GDP is converted
to 2000 constant dollars using purchasing power parity (PPP). It is good to see that energy efficiency has
risen in most countries during the period under consideration (1990 to 2004).
69
QUALITY OF LIFE OUTLOOK BUSINESS & WORLD BANK REPORT

Still A Far Cry Highway To Glory

Despite the economic development that is sweeping India, the percentage of households with TV sets is a Far fewer people living in developing economies are able to enjoy the comforts of riding motor vehicles
paltry 32%. This indicates that the country has miles to go before development reaches the hinterlands. than those in developed countries—more so, passenger cars. However, there has been a marked improve-
ment in the numbers over the years 1990 to 2004. Yet, the developed economies have taken care to reduce
the particulate matter concentrations over these years.

70 71
RESOURCES
T
HREE BILLION people, includ-
ing 70% of the world’s poor
people, live in rural areas.
Therefore, adequate indicators
to monitor progress in rural areas are
essential. However, indicators of rural
development are sparse, as few indica-
tors are disaggregated between rural
and urban areas. Rural population is
approximated as the mid-year non-
urban population. It is the difference
between total and urban population,
which is calculated on the basis of the
urban share reported by the United
Nations Population Division. However,
there is no universal standard for distin-
guishing urban from rural areas.
Great Urban-Rural
Divide Shows
Land use patterns are changing.
Countries use different definitions
of rural and urban population and
land use. The Food and Agriculture
Organisation, occasionally adjusts its
definitions of land use categories and
sometimes revises earlier data. Because
the data reflect changes in reporting
procedures as well as actual changes
in land use, apparent trends should be
interpreted with caution.
Satellite images show land use that
differ from that given by ground-based
measures in both area under cultiva-
tion and type of land use. Moreover,
land use data in countries such as India
are based on reporting systems that
OUTLOOK BUSINESS & WORLD BANK REPORT
were designed for the collection of tax
revenue. Because taxes on land are no
longer a major source of government
revenue, the quality and coverage of
land use data (except for cropland)
have declined. Data on forest area may
be unreliable because of differences in
definitions and irregular surveys.
Population estimates are usually
based on national population cen-
suses, but the frequency and quality
vary by country. Most countries con-
duct a complete enumeration no more
than once a decade. The quality and
reliability of official demographic data
BRIDGING GAPS: Data on land use and
population spread are essential
are also affected by the public trust
in the government, the government’s
commitment to full and accurate
enumeration, the confidentiality and
protection against misuse accorded to
census data, and the independence of
census agencies from undue political
influence. Moreover, the international
comparability of population indica-
tors is limited by differences in the
concepts, definitions, data collection
procedures, and estimation methods
used by national statistical agencies
and other organisations that collect
population data .
RESOURCES OUTLOOK BUSINESS & WORLD BANK REPORT

Galloping Numbers Home, Sweet Home

Developing countries account for a major share of the world’s rising population. By 2015, while developing India is one of the few countries where the rural population climbed during 1990-00. In most other coun-
countries will continue to add to population at a positive rate of growth, many developed countries will tries—both developed and developing—it fell. This is a sign of the population migration to urban areas.
see negative growth in population. And while many developing countries will benefit from the addition to Also, during the period 1990 to 2005, many developed and developing countries managed to increase
their 15 to 64 years population, many developed countries will see rise in the 65+ age group population. their forest cover—an important step in the fight to prevent rising global warming.

74 75
TRADE AND INVESTMENT OUTLOOK BUSINESS & WORLD BANK REPORT

T
HE GROWING integration of
societies and economies has
helped reduce poverty in many
countries. One indication of in-
Global Village—A
creasing global economic integration
is the growing importance of trade in
world economy. Another is the rising
Dream Not Too
size and importance of private capi-
tal flows to developing countries that
have liberalised their financial markets.
The numerators on trade and pri-
Distant
vate capital flows are based on gross
flows that capture the two-way flow of
goods, services and capital. In conven-
tional balance of payments account-
ing, exports are recorded as a credit
and imports as a debit. And in financial
accounts, inward investment is a credit
and outward investment a debit. Thus,
net flows, the sum of credits and deb-
its, represent a balance in which many
transactions are canceled out. Gross
flows are a better measure of integra-
tion as they show the total value of fi-
nancial transactions during a period.
Merchandise trade is an important
part of global trade. Trade in services STACKED UP: Rising global trade
has helped reduce poverty levels
is an important element of global in-
AP
tegration. The difference between
the growth of real trade in goods and to gain an advantage in labor-intensive of long-term loans differs among coun- Some countries do not identify FDI
services and the growth of GDP helps manufactures and services. tries. Under-reporting of FDI outflows outflows in their balance of payments
identify economies that have integrat- Foreign direct investment (FDI) may is more pervasive, particularly when statistics. However, the quality and cov-
ed with the global economy by liberal- be understated in many developing investors are attempting to avoid con- erage of the data are improving as a
ising trade, lowering barriers to foreign countries. Some countries fail to report trols on capital and foreign exchange result of efforts by international and
investment and harnessing their labor reinvested earnings and the definition or high taxes on investment income. national statistics agencies .

76 77
TRADE AND INVESTMENT OUTLOOK BUSINESS & WORLD BANK REPORT

Till Debt Do Us Apart Spend On A Good Life

Among the countries for which data is available—incidentally all developing countries—total external The average rise in household consumption in many developing countries underscores the economic gains
debt has tended to rise. (Comparative figures for Russia and South Africa are however, not readily avail- made during 1990-2005. But the phenomenon was absent in many developed countries. Interestingly, gov-
able.) Within this space, the rise in private non-guaranteed external debt, wherever available, has been the ernment consumption fell in many developing countries—nations not known for government frugality.
sharpest. This is followed by long-term debt. However, it is interesting to note that the rise in public and
publicly guaranteed debt, which generally comes with many strings attached, has been the least during
this period (1990-2005).

79
TRADE AND INVESTMENT
Exports Carry The Day
Within the scenario of rising global merchandise trade during 1990 to 2005, developing countries such as
India and China witnessed sharp rise in merchandise exports. Though merchandise exports from devel-
oped countries too moved northwards, the rate of growth was lesser than that in developing countries.
While export of agricultural raw materials from India fell, export of ores and metals registered a rise.

80