World Development Report I995 RVO RKERS n an INTEGRATING WO RLD r~~~~~~~~~t E DI W RS ~~~~~~~~~~~~~~~I W OR LD DE VE L OP ME NT I NDI C AT OR S World DevelopmentReport I995 WORKERS n an INTEGRATING WORLD PU B LI OX S H ED FO R D FO R U N IVE TH E RS WO I TY R LD BAN P R ESS K Oxford University Press (XFORt) NEW Y(RK MAIIRAS KARACHI 15KO'o NAIROBI TORONTO D( IHIl KJAIA L-LNPLIR DLAREs AIAAN I BOMBAY INCAI'PORF UAIPF TOWN CMACLIUTIA HON(, KONG \I&.LBOURNE AI!C(KIAND) and associated companies in BERLIN IBAIDAN c 1995TheInteriiationial for Reconstriucrion Bank and [)evelopment WVorld / The Bank S NWV Washington 20433,U A D.C 1818H Srreer, Published Oxford bv Universirv Inc Press 200Madisoln Avenue York, 10016 New N.Y Oxfordis a registered trademark OxfordUniversiry of Press tAIrights reserved partofthispublicarioni be reproduced No may stored in a retrieval sysuem, transmitted, formor byanymeans, or inanv electronic,mechanical photocopying recordinig.otherwise, or without the priorperimiissioni of Oxford University Press Manufactured in the United States of America First printing Jtine 1995 The cover illustrationiis Eight Buiilders (1982) by Jacob Lawrence, reproduced courtesv of the artist and the Francine Seders Gallery Original artCollection adnminiswork is part of the Seattle City Light Porrable WVorks tered by the Seattle Arts Commission Photograph by SteveYoung Bank, and the judgThis vouime is a product of the staff of the WY/orld ments made hereinido not necessarilvreflect the views of its Board of Executive Directors or the counltries they representi.The World Bank does nor guaranrec the accuracy of the data incIlided in this publicatioln and accepts no responsibility wlhatsoeverfor any consequence of their use The boundaries, colors, denomiiinatiolIs,and other infornmationi shownion anv maip in this volume not imply on the part of the NWorld Bank any judgimenit the legal startis of any' erritory or the endorsement or accepo0n tanceof such boundaries '103-0 clothhound ISBN 0-19-51 ISBN 0-19-521 102-2 paperback ISSN 0163-5(85 00 Q Texr printed on recycled paper that confornmsto the American Standard for Permaneniceof Paper for Printed Library M-Zaterial Z39 48-1984 Foreword ORK-SAFE, PRODUCTIVE AND environmentally sound-is the key to economic and social progress everywhere In the advice it gives governments and in the policies it promotes, the World Bank has long recognized the critical value of work This is more than an economic issue; it is at the heart of human development As such, work is a more than worthy subject for this, the eighteenth annual WorldDevelopmentReport.It focuseson the incomes workers receive, the risks they face, and the conditions under which they work Inevitably, work has almost as significant implications for those who not work-children, the old, and those unable to work-as for those who What makes the Report even more timely is the growing impact of two distinct global trends: reduced government intervention in markets, and the increased integration of trade, capital flows, and the exchange of information and technology In such a climate of profound change, basic decisions about wages and working conditions are driven by global competitive pressures.The harsh reality of a global market is that policy failures are punished hard-through currency movements, shifts in market share, and, ultimately, through fluctuations in employment and wage levels Some see the new global marketplace as a source of opportunity, where industry and energy bring swift rewards; others regard the changes as a threat to security,and in parts of the industrial and the developingworld the cause of protectionism is far from defeated This Report makes four key points: First, building on earlier research-notably that of WorldDe7velopment Report 1990-it emphasizes the benefits to workers in all countries, and especiallypoor ones, of productivity-raising economic growth driven by sound investments in capital and in people'shealth and education Second, increased integration between countries, including through migration, can benefit workers in poor and rich countries at the same time But governments have an important role in helping workers who are adversely affected by changes in trade patterns and capital flows This can involve not just providing a social safety net, but also helping to equip workers for change Third, labor policies in many countries have been misguided in favoring those in good jobs at the expense of workers in the rural and informal sectors and the unemployed Governments have a distinct role in setting the legal and regulatory frameworks within which trade unions and firms can operate and in ensuring that those frameworks encourage their positive contributions to development Governments also need to define minimum standards and prevent exploitation and discrimination Successful labor policies are those that work in harmony with the market and avoid providing special protections and privileges to particular labor groups at the expense of the poorest Fourth, workers eventually benefit from economic reform as states move from central planning to market systems and from protectionism to openness The change, however,can be wrenching as employment and wagesoften decline temporarily and as workers have to move from old to new jobs There remains a need for governments to provide strong support to workers and their families in such times of transition One goal of this Report is to spark a broad and informed debate on these often contentious issues.Another, more important, goal is to inspire policy changes that allow more of the right sort of jobs to be created Work is, after all, the only foundation on which economies and people can build a successthat lasts James D Wolfensohn President The World Bank June 1, 1995 iii T:s Reort haben ppd b a ead Edwards, IshacDiwan,Hafz Ghane d a g assisted Vidn ua, DeonFilme,Pravee$ by i d Edwad Balls the was paio Therw iod u te;eaie o l Brwso Many othersin andoutside Bank the hell Note).Thefternatonal EconomisDeprment contribue to,diddta ppand ress fr he WorldDevelopment Indicators produciion of theAport ilded A B s Kath*yn Dahl, The staff Kine Geoffrey Eaton, Stephanie Gerard, Aidrey gman,Cthe K6cak, i N N,fe Nees, Kathy Rosen, BeatriceSito,TraceyA Sith, d Michael Aw e d nwas by BrianNoy f theMagaine Group The support washeaded Rebecca staff by Sgui andincludd danjel Atchison, EliabthVde Linma; Michal and Geller Trinidad Angeles laterMaina Ae serve asadministriati* S and D officer, Preparation Report greatly by ckound pIaessandbytontriwutions participants the ofthe was aide fromn in consultationmeetngs.The namesof he pacipants Note iv inthe consultation m gs are li in the BibliographicaI Contents Definitionsand Data Notes Overview viii Introduction:A World at Work Part One Which Development StrategiesAre Good for Workers? 15 EconomicGrowth and the Returns to Work 16 Households,Growth, and Employment 23 Policyand Patternsof Labor Demand 30 Skillsfor Development 36 Markets, Labor,and Inequality 41 Part Two Is International Integration an Opportunity or a Threat to Workers? 10 The Emerging Global LaborMarket 50 A Changing International Divisionof Labor Capital Mobility: Blessingor Curse? 61 International Migration 64 49 54 Part Three How Should Governments Intervene in Labor Markets? 11 12 13 14 69 Public Policyand Labor Standards 70 The Roleof Unions 79 Dealingwith Income Insecurity 86 The Governmentas an Employer 91 Part Four How Can PolicyChoices Help Workers in Periods of Major Change? 15 16 17 Patternsof Reform 98 Winners and Losers 103 EmploymentRestructuring 97 108 Part Five The Oudook for Workers in the Twenty-FirstCentury 18 PolicyChoicesand the Prospectsfor Workers Note Bibliographical 117 118 126 Appendix: International LaborStatistics 143 v World Development Indicators 153 Boxes A world at work 1.1 How can we compare real wages across countries? 3.1 What is unemployment? 12 4.1 Explaining weak labor demand in agriculture: the case of Colombia 5.1 By how much does education raise wages? 6.1 Do lower wages for women indicate discrimination? 7.1 Are poorer countries cacching up with richer ones? 8.1 How does crade with developing countries affect the unskilled in industrial countries? 8.2 Heckscher-Ohlin, skills, and comparative advantage 14.1 How does the principal-agent problem apply to public employment? 16.1 Do we know how much household welfare declines in periods of major change? 17.1 How effective is public retraining? 28 34 39 45 53 56 59 93 106 112 Text figures I Real wages in manufacturing Growth rates of GDP and capital per worker Real wage growth in manufacturing and export orientation Real wage income per capita in four countries undergoing comprehensive reforms 1.1 The world's working-age population by sector and country income group 1.2 Earnings in selected occupations in seven cities 1.3 Growth of GDP per worker by region 2.1 Real wage trends in Ghana, Malaysia, and Poland 2.2 Growth rates of GDP per capita and real wages in agriculture and manufacturing 2.3 GDP per worker and share of the work force in nonagricultural wage employment 2.4 Physical and human capital accumulation and growth of GDP per worker 2.5 Growth rates of GDP and the working-age population by region 3.1 Labor force participation rates by sex and age 3.2 Employment status of the working-age population by sex and age in Malaysia 3.3 GNP per capita and unemployment 10 11 13 17 19 20 21 22 24 25 29 4.1 Sectoral distribution of employment by country income level 4.2 Value added per worker and sectoral distribution of employment in Malaysia and the Republic of Korea 31 4.3 GDP per worker and the size of the urban informal sector 5.1 Educational attainment and growth of GNP per capita in Southeast Asia 6.1 Wage differentials between university and primary school graduates 7.1 International transport and communications costs 7.2 Trade, capital flows, and migration in industrial, developing, and transitional countries 35 43 51 8.1 Growth rates of real manufacturing wages and exports 11.1 The minimum wage and GNP per capita 11.2 Compliance by microenterprises with national labor standards 12.1 Union membership as a share of the labor force in selected countries 12.2 Real wages of coal miners in India 14.1 14.2 Employment in government and public administration 92 Differences in public and private sector earnings in Egvpt and Ghana vi 37 55 75 76 82 83 94 52 32 15.1 15.2 16.1 17.1 18.1 Increases trade and in privateemploymentin selectedreformingeconomies 101 in Sectoraldistribution of employmentin China and Russia 102 Income inequalityand economicgrowvth Latin Americaand former centrallyplanned economies in The minimum wageas a fractionof the average wage in selectedreformingeconomies 111 Actual and projectedwagesand employmentsharesby region and skill level 121 105 Text tables 1.1 2.1 2.2 4.1 6.1 8.1 9.1 10.1 11.1 11.2 11.3 11.4 11.5 12.1 12.2 12.3 13.1 15.1 15.2 15.3 16.1 17.1 18.1 18.2 18.3 The world'slabor force by country income group and region Working-agepopulationby employmentstatus in Ghana, Malaysia, Poland 16 and Earnings in selectedoccupationsin Malaysia 18 Changes in manufacturingearningsand employmentin highly protected and export-orienited economies 33 Averageyearsof schoolingby per capita income quintile in selecteddevelopingcountries 42 Estimatesof changesin wagesand pricesresultingfrom the UruguayRound agreement by 2005 57 Indebtedness,stock market performance,and wagesin the five largestLatin American debtor countries 63 The world'sforeign-bornpopulation by region 65 Typesof governmentintervention in labor markets 71 Wageemploymentas a shareof total employnment, sectorand country income group 72 by Sharesof men and women workersin nonwageemployment 73 Ratios of wagesin selectedurban industrialoccupationsto rural wages 76 Enforcementof health and safecy standardsin unionizedand nonunionized firms in the United States, by firm size 78 Effectof unionizationon productivity-enhancing initiativesby firms in Malaysia 80 Union wagepremiums in selectedcountries 81 Typesof labor organizationin the Republicof Korea 84 Prevalenceand amounts of privatetransfersin selectedcountries 88 Characteristics the four major patterns of reform 98 of Realwagesand unemploymentin four reformingcountries in Latin Americaand Sub-Saharan Africa 99 Realwagesand unemploymentin five former centrallyplanned economies 100 Impact of reform on workers in the four major reform patterns 107 Policiesthat easeemploymentrestructuring 109 Assumptionsunderlyiig the projections 119 Projectionsof GDP per capita and exports by region 120 Projectionsof wagesof skilled and unskilledworkersby region 120 Appendix tables A-I A-2 A-3 A-4 Labor supply 144 Distribution of the work force 147 Growth in output per capita and wages 149 Ratificationof basic ILO conventions 150 vii Definitions and Data Notes Selected terns usedin thisReport empted from payingduties on imported inputs and, The labor force and its components The laborforce of a country consists of all those in its working-agepopulation (those fifteen to sixty-four yearsof age) who are employed or seeking employment It includes the unemployed (those seeking work but unable to find it) but excludes discouragedzvorkers(those who have given up looking for work) as well as others who are neither working nor seeking work (familv members caring for children, as well as students, retirees, disabled persons, and others) Underemployment,although variously defined in the literature, is used in this Report to mean employment at fewer hours during a given period than the worker desires The laborfrrce participation rate is the percentage of the working-age population that is in the labor force The work force consists of all persons who are actually working, whether in the formal or the informal sector-that is, the labor force less the unemployed The formal sectorconsists of those enterprises, public or private, that hire workers under contract and are subject to labor laws and regulations For pLirposes of empirical analysis, the formlal sector is defined to include all nonagricultural enterprises that hire workers as wage-earning employees often, from certain domestic regulation Active labor market policies Policies aimed at helping the unemployed return to work or improving the opportunities of those now working; they include job search assistance, training, and job creation initiatives and are distinguished from passivepolicies, which seek to support the standard of living of those not working by providing cash or other benefits Affirmative action The granting of preferences in hiring to persons deemed to have suffered from job discrimination in the past Collective bargaining Negotiations betxveen a union (or other representatives of employees) and employers to establish wage levelsand other conditions of employment Export processing zone A defined geographic area in which mantifactLrers producing for export are exviii Freedom of association The freedom of workers to form and join unions or other organizations whose purpose is to increase their collective bargaining power Human capitaL The skills and capabilities embodied in an individual or a work force, in part acquired through improved health and ntitrition, education, and training Incomespolicy Any attempt by a government to restrain increases in wages and salaries, usuallv for the purpose of holding down inflation or maintaining employment levels Pension schemes are of two basic types Pay-as-you-go schemnes state-operated arrangements in which payare ments to retirees are made out of current revenues, thus constituting a transfer from those currently working In funded schemes, in contrast, benefits are paid out of funds accumulated from past contributions and are therefore an intertemporal "transfer" from one generation of workers to itself Purchasing power parity (PPP) adjustnent The adjustment for researchpurposesof data on the money incomes of workers to reflect the actual power of a unit of local currency to buy goods and servicesin its country of issue, which may be more or less than what a unit of the same currency will buy of equivalent goods and servicesin foreign countries at current market exchange rates PPPadjusted incomesare usefulfor comparing the livingstandards of workers in different countries In this Report, data stated "in international prices"are PPP-adjusted Country groups For operational and analytical purposes the World Bank's main criterion for classifying economies is gross national product (GNP) per capita Every economy is classified as either low-income, middle-income (subdivided into lowermiddle and upper-middle), or high-income Other analvtical groups, based on regions, exports, and levelsof external debt, arealso used cluded The coverage thereforenot alwayscomprehenis sive,and the figuresshouldbe treatedwith extreme caution Clearly,many maternaldeaths go unrecorded,particularly in countries with remote rural populations.This accounts for some of the very low numbers shown in the table,especially several for Africancountries Moreover, is it not clearwhetheran increasein the numberof mothersin hospitalreflects more extensive medicalcarefor women or more complications pregnancy childbirthbecause in and of poor nutrition, for instance.(Table27 showsdata on low birth weight.) Thesetimeseriesattempt to bringtogetherreadilyavailable information always not presented international in publications WHO warnsthat thereare inevitably gaps in the series,and it has invitedcountriesto providemore comprehensive figures The eduication indicators,basedon UNESCO sources, show the extent to which females have equal access to schooling Percentage cohort of persisting grade is the percentage to of childrenstarting primaryschoolin 1970and 1988 respecrively, continuedto the fourth gradeby 1973and who 1991 Figuresin italicsrepresentearlier or later cohorts The data are based on enrollment records.The slightly higher persistence ratiosfor females someAfrican in countries may indicate male participation in activities such as animalherding All things being equal, and opportunities being the same,the ratiosforfemales 100 males per shouldbe closeto 100 However, inequalicies causethe ratiosto movein may different directions.For example,the number of females per 100maleswill riseat secondary schoollevelif maleattendancedeclinesmore rapidlyin the final gradesbecause of males'greater job opportunities,conscriptioninto the army,or migrationin searchof work.In addition,sincethe numbers in these columns refer mainly to general secondarveducation,theydo not capturethose(mostlymales) enrolledin technical vocational and schoolsor in full-time apprenticeships, in EasternEurope as Females a percentage totallabor as of force,basedon ILO data, showsthe extent to which women are "gainfully employed"in the formalsector Thesenumbersexclude homemakersand other unpaidcaregivers in several and developing countriesreflecta significantunderestimate female of participationrates All summary measuresare country data weightedby eachcountry'ssharein the aggregate populationor population subgroup Table30 Income distribution PPPestimates and of GNP The firstset of columnsreportsdistributionof incomeor expenditureaccruing to percentilegroups of population 242 rankedbyper capitaincome.expenditure as in the case or, of the high-incomecountries,by total householdincome The last three columns contain estimates of per capita GNP based on purchasingpower parities (PPPs)rather than exchange rates(seethe definitionof PPP below) Colunmns through givethe sharesof populationor householdquintilesand the top decilein total incomeor consumptionexpenditure 51 low-and middle-income for countriesand 20 high-income countries The data sets for these countriesrefer to differentyearsbetween 1978and 1993 and are drawn mostlyfrom nationallyrepresentative householdsurveys The data setsfor the low-and middle-income countries have beencompiledfrom two main sources:government statisticalagencies (oftenusing publishedreports)and the WorldBank(mostlydata originatingfrom the LivingStandards MeasurementStudy and the SocialDimensionsof Adjustment Project for Sub-SaharanAfrica).Where the originalunit recorddata from the householdsurveywere available, these havebeenused to calculare directlythe income (or expenditure) sharesof differentquantiles;otherwise,the latter havebeen estimated from the bestavailable groupeddata For furtherdetailson both the data and the estimation methodology for low- and middle-income countries,seeChen, Datt, and Ravallion,"Is PovertyIncreasing the Developing in World?" PolicyResearch Working PapersWPS 1146, World Bank, 1993.The data for Australia,Canada, Israel,Italy,Norway,Sweden,Switzerland, and the United Statesare from the Luxembourg Income Studydatabase(1990); those for France,Germany, Netherlands, Spainand the UnitedKingdomfromthe Statistical Office of the European Union T he data for Belgium, Denmark,Finland,Japan, and New Zealandcome from the U.N National Accounts Statistics: Compendium of IncomeDistributionStatistics, 1985 Data for other highincomecouncries come from nationalsources There are significant comparabilityproblems across countries in the incomedistribution data presentedhere The underlying household surveys not fullycomparable are acrosscountries,eventhough theseprobLems diminishare ing overtime as surveymethodologies both improving are and becoming more standardized, parricularlyunder the initiativesof the United Nations (under the Household SurveyCapability Program)and the World Bank (under the Living StandardsMeasurementStudy and the Social Dimensions of Adjustment Project for Sub-Saharan Africa).In particular,the followingthreesourcesof noncomparability oughtto be noted.First,the surveys differin the useof incomeor consumptionexpenditure the living as standard indicator For 34 of the 51 low- and middleincomecountries,the data refer to consumptionexpenditure Tvpically, incomeis more unequallydistributedthan consumption.Second,the surveysdiffer in the use of the householdor the individualas their unit of observation Further,household units differin the numberof household membersand the extent of income sharingamong members Individualsdiffer in ageand need for consumption Where householdis used as the observation uni, the quinti]esreferto the percentage households, of rather than the percentage persons.Third, the surveysdiffer according of to whether the units of observationare ranked by householdor percapitaincome(or consumption) footnotes The to the table identifiy thesedifferences eachcountry.Alfor though the income distributionestimatesshownare conthey all sideredto be the bestavailable, stillreflect the problemsmentionedabove At the individualcountry level,ICP recaststraditional narionalaccountsthroughspecialpricecollections disand aggregation GDP by expenditure of components.ICP details are preparedby nationalstatistical offices,and the results are coordinated by the U.N Statistical Division (UNSTAT)with support from other internationalagencies, particularlythe Statistical Office of the European Communities(Eurostat) the OECD.The WorldBank and the EconomicCommissionfor Europe,and the Economic and SocialCommissionfor Asia and the Pacific(ESCAP) also contribute to this exercise Nepal,which particiFor total pated in the 1985 exercise, GDP data werenot available, and comparisonswere made for consumption only The international comparability of high-income country data is particularly limited, since the observation unit is a household unadjusted for size, and households are ranked according to total household income rather than income per household member These data are presented pending the publication of improved data from the LuxembourgIncome Study, where household members are ranked by the average disposableincome per adult-equivalent person The estimates in the table, therefore, should be treated with considerable caution The 1987 indexed figures on PPP-based GNP per capita (US=100) are presented in column PPP is the commonly used term to refer to the parities computed for a fixed basket of products, even though theoretically these are more appropriately labeled Purchasing Power of Currencies The data include (a) results of the Incernational Comparison Programme (ICP) for 1993 for OECD countries, extrapolated backward to 1987; (b) results for 1985 for nonOECD countries, extrapolated to 1987; (c) the latest available results for either 1980 or 1975, extrapolated to 1987 for countries that participated in the earlier phases only; (d) a World Bank estimate for China and the economies of the former Soviet Union; and (e) ICP estimates obtained by regression for the remaining countries Economies whose 1987 estimates are based on regressionsare footnoted The values are expressed in "international dollars" to distinguish them from those based on exchange rates The blend of extrapolated and regression-based 1987 figures underlying column is extrapolated to 1993, using Bank estimates of real per capita GNP growth rates and scaled tip by inflation rates measured by SDR deflators These estimates are expressedas an index (US=100) in column For countries that have participated in the ICP as well as for China and the economies of the FSU, the latest available PPP-based values are extrapolated to 1993 The blend of extrapolated and regression based 1993 estimates are presented in column 10 Economies whose 1987 figures are extrapolated from another year or imputed by regression are footnoted accordingly The adjustments not take account of changes in the terms of trade Luxembourg and Swaziland are the only two economies with populations under I million that have participated in the ICP; their 1987 results, as percentages of the U.S valLies,are 121.0 and 15.0, respectively The current round of ICP surveys, for 1993, is expected to cover more than 80 countries, including China and the FSU economies The "international dollar" (1$), used as the common currency, is the unit of account that equalizes price levelsin all participating countries It has the same purchasing power over total GNP as the U.S dollar in a given year but purchasing power over subaggregatesis determined by average internarional prices at that level rather than by U.S relative prices These dollar values, which are different from the dollar values of GNP or GDP shown in Tables I and (see the technical notes for these tables), are obtained by specialconversion factors designed to equalizethe purchasing powers of currencies in the respective countries This conversion factor, the purchasing power parities (PPP), is defined as the number of units of a country's currency required to buv the same amounts of goods and services in the domestic market as one dollar would buy in the United States.The computation involves deriving implicit quantities from national accounts expenditure data and specially collected price data, and then revaluing the implicit quantities in each country at uniform prices The average price index thus equalizes dollar prices in every country so that cross-country comparisons of GNP based on them reflect differencesin quantities of goods and servicesfree of priceleveldifferentials.This procedure is designed to bring crosscountry comparisons in line with cross-time real value comparisons that are based on constant price series The ICP figures presented here are the results of a twostep exercise Countries within a region or group such as their own group averthe OECD are first compared Lising age prices Next, since group average prices mav differ from each other-making the countries in different groups not comparable-the group prices are adjusted to make them comparable at the world level.The adjustments, done by UNSTAT and ELirostat,are based on price differentials observed in a network of "link" councries representing each 243 "I 3671ve-A-10s group However, linking is done in a manner that rethe tains in the world comparison the relativelevelsof GDP observed the group comparisons, in called"fixitv." The tvo-step processwas adopted becausethe relative GDP levelsand rankings of two countries may change when more countriesare brought into the comparison It was felt that this should not be allowedto happenwithin geographic regions;that is, that the relationshipof, say, Ghana and Senegalshould not be affectedby the prices prevailing in the United States Thus overallGDP per capita levelsare calculatedat "regional"prices and then linked together The linkingis done by revaluing GDPsof all the countries at average "world" prices and reallocating ATLAS ENROLare usedas rough proxies interand of country wagedifferentials unskilledand skilledhuman for capital,respecrively Following Isenman1980, the rationale adopted here is that ICP and conventionalestimates of GDP differmainlybecause wagedifferences persistamong nationsdue to constraints the international on mobilityof labor.A technical paper (Ahmad1992)providingfullerexplanationis available request.Forfurtherdetailson ICP on procedures, readersmay consultthe ICP PhaseIV report, WKorld ComparisonsPurchasing of Pouwer RealProductfor and 1980 (New York:United Nations, 1986) Readersinterested in detailedICP surveydata for 1975,80, 85, and 90 may refer to PurchasingPowerof Currencies: ComparingNationalIncomes Usin-g Data(WorldBank1993) ICP the new regionaltotals on the basisof each country's share in the original comparison Sucha methoddoesnor permit the comparison more Table Urbanization of 31 detailed quantities (such as food consumption) Hence Dataon urbanpopulationand agglomeration largecities in these subaggregates more detailed expenditurecate- are from the U.N.'s WVorld and UrbanizationProspects The goriesare calculatedusing world prices.These quantities growthratesof urbanpopulationarecalculated from popuare indeedcomparable internationally, they not add lationestimates(see but Table 1);the estimates urban popuof up to the indicatedGDPs becausethey are calculated a at lationsharesare calculated from both of the above differentset of prices Because estimates this tablearebasedon different the in Somecountriesbelongto several regionalgroups.A few nationaldefinitionsof what is urban, cross-country comof the group have priority;others are equal.Thus fixityis parisonsshouldbe made withcaution maintained between members of the European Union, The summarymeasures urban populationas a perfor evenwithin the OECD and world comparisons Aus- centageof totalpopulationare calculated For fromcountrypertria and Finland, however,the bilateral relationshipthat centages weightedby each countrys sharein the aggregate prevails within the OECD comparisonis alsothe one used population.The other summarymeasures this tableare in within the globalcomparison.But a significantly different weightedin the samefashion,usingurban population relationship (basedon CentralEuropeanprices)prevailsin the com-parison within that group,and this is the relation- Table Infrastructure 32 ship presentedin the separatepublicationof the European This tableprovides selected basicindicators the coverage of comparison and performance infrastructure of sectors To deriveICP-based1987figuresfor countriesthat are Indicatorsof coverage basedon the infrastructure are yet to participate any ICP survey, estimating in an equation data most widelyavailable acrosscountrieswhich measure is first obtainedby fitting the following regression 1987 the extent,type,and sometimes to conditionof physical facildata: ities in each infrastructure sector.Such data are dividedby national populationtotals to deriveindicatorsof coverage In (r) = 0.605 In (ATLAS) 0.239 In (ENROL)+ 0.717; + or availability in telephonemainlines thousandper(as per (0.276) (0.052) (0.160) sonsor road kilometers millionpersons).More direct per RMSE= 0.223;Adj.R-Sq 0.96; N=81 = where all variablesand estimated valuesare expressedas US=100and where r = ICPesnimates percapita of GDPconverted U.S to dollarsby PPP,the arrayof r consisting extrapolations of of the most recent actual ICP valuesavailablefor countries that everparticipated ICP in measures coverage basedon household of are surveys acof tual access, reportedas percentage households of with electricirvor accessto safewater Performance qualitycan be assessed from the perspectivesof both the infrastructureproviders of the users and Indictr fro th prvdes pesetv'esrprt in icators rom the providersperspectlve measure operatwater,and locomotive availability), capacityutilization, or financial efficiency (such as cost recovery) Indicators from ATLAS = per capita GNP estimated by the Atlas method ENROL = secondary schoolenrollmentrat'io RMSE= root meansquarederror 244 the users'perspectives measurethe effectiveness the serof viceultimately delivered Service qualityindicators (such as faults per 100 main lines per year) are the most difficult data to obtain on a comparableand recurrentbasisfor a largesample of countries.Some indicatorsrepresentboth systemefficiencyand servicequality such as the shareof pavedroadsin good condition Although the dara reported here are drawn from the most authoritative sourcesavailable, comparability may be limited by variationin data collection,statistical methods, and definitions Coverageof electric poweris measured by productioni This refersto grossproduction, (kilouwatt-hourper person) and which includesthe consumptionby station auxiliaries lossesin the transformers are considered that integralparts of the station Excluded is electricity produced from pumped storage.The data is from U.N EnergyStatistics Yearbook System losses, which are obtained from the "PowerData Sheets" compiledby the Industrvand Energy Departmentof the World Bankand IEA EnergyStatistics, combine technical and nontechnical losses Technical losses, to the physicalcharacteristics the powersysdue of tem, consistmainlyof resistance lossesin transmission and distribution Nontechnicallossesconsistmainlyof illegal connectionto electricity other sourcesof theft.System and losses expressed percentage totaloutput (net generare as of ation) Telecommunications coverage the numberof telephone is exchange mainlinzes thousanzd per persons.A telephone mainline connects the subscriber'sequipment to the port switchednetworkand has a dedicated in the telephone exchange This term is synonymouswith "main station," also commonly used in telecommunicationdocuments ulent or unregisteredconnections;and legal,but usually not metered,useslikefirefighting) The coverage indicaror railways the numberof rail for is traffictinitsper thousandU.S dollarsof GDP Rail traffic units are the sum of passenger-kilometers ton-kilomeand ters,and wereobtainedfromthe database maintained the by TransportDivisionof theTransportation, Waterand Urban Development Department,WorldBank.DieseLs Iuseis one in of the beLter measures technical managerial of and performancebecauselocomotives the most expensive are rolling stockthe railways own.Dataare from the sameWorldBank database GDP figures from R Summers A Heston, are and World Tables (AMark forthcoming 5.6), ThePeinn Faults (per 100 main linesper year) refer to the number of reported faults per 100 main telephone lines for the year indicated Some operators include malfunctioning customer premises equipment as faults while others include only technical faults Data on main lines and faults per 100 main lines are from the International Telecommunication Union database The indicators used to represent paved road coverage in this sector are road density (kilometers per million population) As the measure of performance, roads izn good condition is defined as roads substantially free of defects and requiring only' routine maintenance Data for paved roads are from C Queiroz and S Gautam, "Road Infrastructure and Economic Development," (Working Paper 921, World Bank, 1992) and are available for 1988 only The measure of coverage for water is the percentage the of population ivitl accessto safe water either by standpipe or house connection, and is drawn primarilv from the World Health Organization's, The International Drinking Water Supply and Sanitation Decadeseries for various years Data for losses are from H Garn, "Patterns in the Data Reported on Completed NVaterSupply Projects." NVorldBank, 1987 and are for metropolitan area systems.Where 1986 was not available,the closest available year was taken Losses include physical losses (pipe breaks and overflows)and commercial losses (meter under-registration; illegal use including fraud- methods, definitions, and government resources No conceptual framework that integrates natural resource and traditional economic data has yet been agreed on Nor are the measuresshown in ihis table intended to be final indicators of natural resource wealth, environmental health, or resource depletion They have been chosen because thev are available for most countries, are testable, and reflect some general conditions of the environment Forestarea refers to natural stands of woody vegetation in which trees predominate These estimates are derived from country statistics assembled by the Food and Agriculture Organization (FAO) and the United Nations Economic Commission for Europe (UNECE) New assessments were published in 1993 for tropical countries (FAO) and temperate zones (UNECE/FAO) The FAO and the UNECE/FAO use different definitions in their assessments FAO defines natural forest in tropical cotintries as either a closed forest where trees cover a high proportion of the ground and there is no continuous grass cover or an open forest, defined as mixed forest/grasslands with at least 10 percent tree coverand a continuous grass layer on the forest floor.A tropical forest encompassesall stands except plantations and includes stands that have been degraded to some degreeby agriculture, fire, logging, or acid precipitation UNECE/FAO defines a forest as land where tree crowns cover more than 20 percent of the area Also included are Table Natural 33 resources This table represents step towardincludingenvironmena taldata in the assessment development the planning of and of economicstrategies providesa partial picture of the It statusof forests,the extentof areasprotectedfor conservation or other environmentallyrelated purposes,and the availability use of freshwater.The data reportedhere and are drawn from the most authoritativesourcesavailable, which are cited in World ResourcesInstitute, WorldResources 1994-95.Perhapsevenmorethanother data in this Report,however,these data should be used with caution Althoughthey accurately characterize major differences in resourcesand uses among countries,true comparability is limited becauseof variation in data collection,statistical 245 open forest formations; forest roads and firebreaks; small, temporarily cleared areas; young stands expected to achieve at least 20 percent crown cover on maturitv; and windbreaks and shelterbelts Plantation area is included under temperate country estimates of natural forest area Some countries in this table also include other wooded land, defined as open woodland and scrub, shrub, and brushland Deforestationrefers to the permanent conversion of forest land to other uses,including shifting cultivation permanent agriculture, ranching, settlements, or infrastructure development Deforested areas not include areas logged but intended for regeneration or areas degraded by fuelwood gathering, acid precipitation, or forest fires The extent and percentage of total area shown refer to the average annual deforestation of natural forest area Some countries also conduct independent assessments using satellite data or extensiveground data A 1991 coLintry-wide assessment using Landsat iinagerv estimated India's forest cover at 639,000 square kilomerers.An inventory based on 1990 L-ANDSAT"' imagery estimated Mexico's forest cover at 496,000 square kilometers, with a deforestation rate of 4.06 square kilometers per year between 1980 and 1990 In Brazil two recent satellite-imagerybased assessmentsof deforestation in the BrazilianAmazon have resuilted in different deforestation rate estimates for this region A study by the U.S National Space and Aeronautics Administration (NASA) and the Universityof New Hampshire estimated forest loss at 15,000 square kilometers per year during 1978-88 Brazil'sNational Institute for Space Research (INPE) and National Institute for Research in the Amazon (INPA) estimated deforestation at 20,300 square kilometers per year for the same period Deforestation in secondary forest areas and dry scrub areas were not included in either studv The FAO dara presented in this table include forestation in all Brazil, including secondary forest areas and other forested areas Note also that according to the FAO Brazil has an estimated 70,000 square kilometers of plantation land, defined as forest stands established artificially by afforestation and reforestation for industrial and nonindustrial usage India has an estimated 189,000 square kilometers of plantation land and Indonesia an estimated 87,500 square kilometers Nationally protected areas are areas of at least 1,000 hectares that fall into one of five management categories: scientific reserves and strict nature reserves;national parks of national or international significance (not materially affected by human activity); natural monLImentsand natural landscapes with some unique aspects; managed nature reserves and wildlife sanctuaries; and prorected landscapes and seascapes (which may include cultural landscapes) This table does not include sites protected under local or provincial law or areas where consumptive uses of wildlife are allowed These data are subject to variations in defini246 tion and in reporting to the organizations, such as the World Conservation Monitoring Cencre, that compile and disseminate them Total surface area is used to calculate the percentage of total area protected annual withdrawaldata are subject Freshwaterresources: to variation in collection and estimation methods but accurately show the magnittide of water use in both total and per capita terms These data, however, also hide what can be significant variation in total renewable water resources from one year to another They also fail to distinguish the seasonal and geographic variations in water availability within a country Because freshwaterresourcesare based on long-term averages, their estimation explicirly excludes decade-long cycles of wet and dry The Departement Hydrogeologie in Orleans, France, compiles water resource and withdrawal data from published documents, including national, United Nations, and professional literature The Institute of Geography at the National Academy of Sciences in Moscow also compiles global water data on the basis of published work and, where necessarv, estimates water resources and constimption from models that use other data, such as area under irrigation, livestock populations, and precipitation These and other sources have been combined by the World Resources Institute to generate data for this table Withdrawal data are for single Yearsand vary from country to coLintry between 1970 and 1992 Data for small countries and countries in arid and semiarid zones are less reliable thani those for larger countries and countries with higher rainfall includes both internal renewable reTotaluater resources sources and, where noted, river flows from other countries Estimates are from 1992 Annual internal renewable water resources refer to the average annual flow of rivers and aquifers generated from rainfall within the country The total withdrawn and the percentage withdrawn of the total renewable resource are both reported in this table Withdrawals include those from nonrenewable aquifers and desalting plants but not incltide losses from evaporation Withdrawals can exceed 100 percent of renewable supplies when extractions from nonrenewable aquifers or desalting plants are considerable or if there is significant water reuse Total per capita water withdrawal is calculated by dividing a country's total withdrawal by its population in the year for which withdrawal estimates are available For most countries, sectoral per capita withdrawal data are calculated using sectoral withdrawal percentages estimated for 1987 Domestic uise includes drinking water, municipal use or supplv, and use for public services, commercial establishments, and homes Direct withdrawals for industrial use, including withdrawals for cooling thermoelectric plants are combined in the final coltimn of this table with withdrawals for agricultitre (irrigation and livestock production) Numbers may not sum to the total per capita figure because of roundinig Data sources Production and domestic absorption U.N Department of International Economic and SocialAffairs.Various years StatisticalYearbook New York Variousyears EnergyStatisticsYearbook Statistical Papers,seriesJ New York U.N Inrernational Comparison Program Phases IV (1980), V (1985), and Phase VI (1990) reports, and data from ECE ESCAP,Eurostat, OECI), and U.N FAO, IMF, UNIDO, and WVorld Bank data: national sources Fiscaland International Monetarv Ftiid Government FinanceStatisticsYearbook 11 Washington, D.C Vol monetaryaccounts Variousyears International Financial Statistics Washington, D.C IMF data, and World Bank data Core International Monetary Fund Variousyears InternationalFinancialStatistics Washington, D.C international U.N Conference on Trade and Development.Various years.Handbook of International Trade Develand transactions opnment Statistics Geneva U.N Departmenr of Inrernational Economic and SocialAffairs.Variousyears MonthlyBulletin ofStatistics.New York Various years Yearbook InternationalTradeStatistics.New York of FAO, IMF, U.N., and World Bank data External Organization for Economic Cooperation and Development Various vears Development Co-operation finance Paris 1988 Geographical Distributionof FinancialFlowsto DevelopingCountries.Paris IMF, OECD, and World Bank data; World Bank Debtor Reporting System Human Bos, Eduard, My T Vu, Ernest Massiah,and Rodolfo A Bulatao IWorld PopuLitionProjections, 1994-95 resourcesand Edition (1994) Baltimore, Md.: Johns Hopkins UniversitvPress environmentally Garn Harvey.April 198,7.Patternsin the Data Reported CompletedWater on Supply Projects Washington sustainable D.C.: World Bank development Heiderian, J and Wu Gary 1993 Statisticsof DevelopingCountries(1987-91) Washington D.C.: Industry and Energy Department, World Bank Institutefor Resource Development/W'estinghouse 198,7 Ch2ild Survival:Risks and the Road to hlealth.Colunmbia,Md International Energy Agency.1993 IFA Statistics: Energy pricesand taxes.Paris: OECD International Road Transport Union 1990 World Transport Data International Telecommunication Union 1994 WorldTelecommunications DevelopmentReport.Geneva Kurian, G.T 1991 The New Book of W'orld Rankinugs York:Facts on File New Queiroz, Cesar and Surhid Gautam June 1992 "Road Infrastructure and Economic Development." World Bank Working Paper No 921 Washington, D.C.: World Bank Ross,John and others 1993 Family Planningand Population: Compendiumof InternationalStatistics A New York:The Population Council Sivard, Ruth 1985 Women-A LWorld Survey Washington, D.C.: World Priorities U.N Department of Economic and Social Information and PolicyAnalysis.(formerly U.N Department of International Economic and Social AfTairs) Variousyears Demographic Yearbook New York Various years WorldEnergySupplies.StatisticalPapers, seriesJ New York Variousyears StatisticalYearbook New York 1989 Levelb and Trends Contraceptive asAssessed 1988 New York of Use in 1988 Mortalitry Ch7ildren of unider 5: Projections Age 1950-2025 New York 1986 World ormparisons Purchasing of Pouwer RealProductfor 1980 Neu, York and WorldPopulation Prospec-ts: 1994 Edition (forthcoming) The New York World UrbanizationProspects, 1994 Revision(forthcoming) New York U.N Educational Scientificand Cultural Organization Various years StatisticalYearbook Paris 1990 Compendiumof Statisticson llliteracy Paris UNICEF 1995 The State ofthe WV'orlds CGhildren 1995 Oxford: Oxford UniversityPress World Bank 1993 Purchasing Pow'er Curreneies: of Comnparing National IncomesUsingICP Data Washington, D.C World Health Organization Various vears W'orld Health Statistics Annual Geneva 1986 Maternal Aortality Rates: A Tabulation ofAvailable Information, 2nd edition Geneva 1991 AMaternal jM/ortaliy: GlobalFactbook A Geneva VariotIs years Wlorl-d Health) Statistics Report Geneva Various years The InternationalDrinking W'iterSupplyand Sanitation Decade.Geneva World ResourcesInstitute 1994 WorldResources 1994-95 New York FAO, ILO, U.N., and World Bank data; national sources 247 Table Classification of economies by income and region, 1995 Sub-S aharan Africa Income grouip East and Southern Africa Suibgroup Asia East Asia and Pacific West Africa Euirope and Central Asial Souith Asia Eastern Europe and Central Asia Burundi Comoros Eritrea Ethiopia Kenya Lesotho Madagascar Malawi Mozambique Rwanda Somalia Sudan Tanizania Uganida Zaire Zambia Zimbabwe Cambodia China Lao PDR Mongolia Myanmar Viet Nanm Afghanistan Bangladesh Bhutan India Nepal Pakistan Sri Lanka Albania Armenia Bosnia and Herzegovina Georgia Tajikistan Angola Botswana Djibouti Namibia Swaziland LouIncome Benin Burkina Faso Central African Republic Chad Cote d'lvoire Equatorial Guinea Gambia, The Ghana Guinea Gtihiea-Bissau Liberia Mali Mauritan-ia Niger Nigeria Sao Tom6 anid Principe Sierra Leone Togo Camerooni Cape Verde Congo Seniegal Fiji Indonesia Kiribati Korea, Dem Rep Marshall Islands Micronesia Fed Sts N Mariana Is Papua New Maldives Azerbaijan Builgaria Croatia Czech Republic Kazakhstan Kyrgyz Repuiblic Latvia Lithuania Macedonia Lower Guinea Philippines Solomon Islands Thailand Tonga Vanuatu Westem Samoa FYRa Moldova Poland Romania Rtissian Federation Slovak Republic Turkmenistan Ukraine Uzbekistan Yuigoslavia, Fed Rep American Samoa Guamn Korea, Rep Macao Malaysia New Caledonia Belarus Estonia Hungary Slovenia Middleincome Mauritius Mayntte Reunion Seychelles South Africa UppeT l Rest of Euirope l Gabon l l Middle East and Northi Africa Middle East Norti Africa ]Yemen, Rep Turkey Egj pt Arab Rep Iran, Islamic Algeria Rep Morocco Iraq Ttnisia Jordan Lebanion Svrian Arab Rep West Bank and L Gaza Americas Gttyaia Haiti Hondutras Nicaragua Belize Bolivia Colonibia Costa Rica Cuba Dominica Dominicai Republic Ecuador El Salvador Grenada Guiatemala Jamaica IPanama Paraguay Peru St Vincenit anid the Grenadines Suirniame | _ _ I _ Gibraltar Greece Isle of Man Malta Portigal Bahrain Oman Saudi Arabia l Libva | Anitigua and Barbuda Argentina Aruba Barbados Brazil Chile French Guiana GuadelouLpe |Martiniquie Netherlands Anitilles Puierto Rico St Kitts and Nevis St Lucia Trinidad and Tobago Urugujay Venezuela Slibtotal: 248 170 27 23 26 27 10 38 Table Sub-Saiaran Africa Ilcomi1e g'roup Subgroup East anid Souithiertn Africa WAlst Africa Asia East Asia and Pacific Europeand Central Asia SouithAsia Eastern Europeand CentralAsia Australia Japain New Zealand Middle EastanzdNorth Africa Rest of Europe Middle East Northi Africa Austria Belgium Denmark Finland France Americas Canada United States Germ any Iceland OECD Ireland Italy Countrtties LuxembotLirg High- Netherlands Nonvay ilcome Spain Swveden Switzerlaind Unuted X Kingdonm _ Brunei French NonzOECD Couintries Andorra Chaniel Polvnesia Islands Honig Kong Singapore OAE Israel Kuwait Bahamas, The Bermuda Qatar Cayman Cyprus United Arab Faeroe Islands Emirates Greenland Islands Virgui Islands (US) San Manno Total: 210 27 23 34 27 28 14 44 a Foriner Yugoslav Republic of Macedonia b Other Asian economies-Taiwan, Cliina For operational and analytical purposes the World Bank's main criterion for classifying economies is gross national product (GNP) per capita Every economy is classified as low-income, middle-income (subdivided into lower-middle and upper-middle), or high-income Other analytical groups, based on geographic regions exports and levels of external debt, are also used Definitions of groups These tables classify all World Bank member economies, and all other economies with populations ofBmoremthan 30,000 Income group: Economies are divided according to 1993 GNP per capita, calculated using the WVorld Bank Atlas method The groups are: Low-income middle-income ~ ~ and8-$.65 and Low-mcome~economies ~~~~~~~permddeinoe aresometimes referredto low-income, $695 or less: lower-middle-income $696-$2.785: ~ ~ andl-m high-income $are oreiesrfrrdt as developing economies The use of the term is convenient: it is not upper-middle-income $2.786-$8.625: and high-mcome, $8.626 or intended to imply that all economies in the group are experiencing more similar development or that other economies have reached a preferred The estimates for the republics of the former Soviet Union are or final stage of development Classification by income does not preliminary and their classification will be kept under review necessarily reflect development status 249 Table Classification of economies by major export category and indebtedness, 1995 Lo-'- anidmiddle-income Low-income Less Severely Moderately indebted indebted indebted Severely indebted Grouip Armenia China Georgia [Bulgaria Poland Moderately indebted Hungary Russian Federationi Exportersof manufactu(res Exporters of nonfuel pri mary products Albania Chad | Malawvi Togo Zimbabwe Argentina BoLivia Cuba Peril | Mongolia l Chile Paptia New Guinea _ _ Angola Congo Iraq _ Algeria Gabon Venezuela offuels (mnainlyoil) Benin, Egypt, Arab Rep Gambia, The Nepal Bbiitan Burkina Faso Cambodia Haiti Lesotho | Jamaica Jordan Panama A.ntigiia and | Barbuda Dominican Republic Greece Western Sanioa Exporters of servyices I _ _ _ _ _ _ _ _ _ _ 250 I _ _ _ _ _ _ _ _ _ _ Belarus Not classified lijlindebtedness Estonia Korea, Rep Korea, Dem Rep Kyrgyz Republic Latvia nonOECD OECD Caniada Finland Germaniy Ireland Italv Japai Sweden Switzerlanid Honig Konig Israel Singapore OAF.E Lithtaiia Macao Moldova Romania Ukraine Uzbekistan Botswan Guatemala Namibia Paraguay Solomon Islands St Vincent aind the Grenadines Suriname American Iceland Samoa New Zealand Frenich GtLiiana Guadeloupe Reunion Faeroe Islands Greenlaiid Swaziland Exporters Yemeni, Rep Less indebted ~~~~~~~~~~~~~~~~~~~~~~~Lebanoi Afghanistaul Burundi Cote d'lvoire Equatorial Guinea Ethiopia Ghania Guinea Guinea-Bissau Guyana Hondiuras Liberia Madagascar Mali Mauritania Myarunar Nicaragua Niger Rwanda SAo 1Tonm cald Principe Somalia Sudan Tanzania Uganida Viet Nam Zaire Zambia Nigeria High-income AMiddle-incomne I_ I _ _ _ _ _ _ _ _ _ _ I _ _ _ _ _ _ _ _ _ _ I _ _ _ _ _ _ _ _ I _ _ _ _ _ _ _ _ Bahrai| Iran Islamic Rep Libya Oman Sa|tdi Arabia Trinidad and Tobago Turkmenistan Barbados Belize Cape Verde Diibotiti El Salvador Fiji Grenada Kiribati Maldives Malta Seychelles St Kilts and Nevis St Luicia Toniga | an tiatu V _ _ Brunci |Qatar United Arab Emirates Ariuba Cayman Islanids Martinique I-_ _ _ _ _ _ _ _ _ Uniited Kingdom I aI_t Bahamas, The Bermuda Cy-prus French Polynesia Kuwait I Table Low- and middle-income Low-income ModeratnhI, Less Seuerely indebted izndebted indebted Severely, indebted Group Cenltral Africani Rcp Keniya Lao PDR MozanibiqLe Sierra I eonle Brazil Cameroon Ecuador Morocco Syriani Arab Rep Uruguiay High-incomne Not classified byiindebtedness OECD nzonOECD Colombia Costa Rica Iindonesia Mexico PhilippLnes Senegal Tunusia Azerbaijan) Donimica Kazakhstani Malaysta Mauritius Netherlands Antilles Auistralia Auistria Belgium Denmark France Luixenibourg Netherlands IPortigal Norway South t exporters Sri Lanka Talikistan Less indebted Tuirkey Diversified Bangladesh Comiloros India Pakistani Mizddle-incoine Moderately indebted Spaini Africa Thailanid United States Yugoslavia, Fed Rep TGibraltar Croatia Bosnia Czech Repubhc Virgin MNarshall Caledoniia Marino Islanis (US) Lslanids Slovak Mavotte ~~~~~~~~~~~~~~~~~~Repuiblic Microniesia C'ntegory l Islands San Isle of Man New category | Channel Guam FYRc 1b i'xp)ort Andorra Eritrea Macedonia Not classified and Herzegovina l l l | | Slovenia FeFd Sts Northem l Mariana Islandcs Puertt _ _ _ ecnombes of 13 11 ~ ~ 18 ~ 20 ~ ~ ~ 59 Rico West Bank Pand Gaza _ _ 21 18 a Other Asian economies-Taiwan, Chmna b Econom'ies Lin which no suigle export category accotints for miore than 50 percent of total exports c Foirmer Yugoslav Repuibhicof Macedoni-a Definitions of groups These tables classify all World Bank membereconomies, plus allother economies with populations of more than 30.000 Major export ccategorv:Major exports are those that account for 50 percent or more of total exports of goods and servicesfrom one category in the period 1988-92 The categories are: nonfuel primary (SITC 2, plus 68) fuels (SITC 3) ma-nufactures (SITC 5to9, less 68), and services (factor and nonfactor service receipts plus workers' remittances) If no single category accounts for 50 percent or more of total exports, the economv is classitfied as dii ersified.t oris assiedasd er h ied,interest y more totl of expots, econo itzdebtedniess: Standard World Bank definitions of severe and moderate indebtedness, averaged overthree years (I991-93) areused to classify economics in this table Severely indebtedmeans either ot' the two key ratios is above critical levels: present value of debt service to GNP (80 percent) and present value ofdebt service to exports (220 percent) Moderately indebted means either of the two key ratios exceeds 60 percent of, but does not reach, the critical levels For economies that not report detailed debt statistics to the World Bank Debtor ReportingSystem,present-value calculationis not possible Insteadthe following methodologyts usedto classify the non-DRS economics Severeiv indebtedmeans three offour key ratios (averaged over 1991-93)areabovecritical levels:debttoGNP(50percent);debt 10 exports (275 percent).debt service to exports (30percent):and xot 25pret,db evc oeprs(( ecn) n to exports (20 percent) Moderately indebted means three of four key ratios exceed 60 percent of, but not reach, the critical levels All other classified low- and middle-income economies are listed as less-i,idebted 251 T HE WOR L D BANK TRHROUGHOUT THE WORLD, most peoplespend most of their lives working Evenamong the world's poorest, only a relative few are idle; the great mass of the poor work hard for little pay Unemployment afflicts more than a hundred million people worldwide and is a matter of major concern in rich and poor countries alike But hundreds of millions more, living mainly in the world's low- and middle-income countries, remain in poverty not for lack of work but for lack of skills, or for lack of the kind of economic environment in which they can use their skills to work more productively, for higher pay It is mainly through their work that most households are swept up in the profound changes that are interweaving their national and regional economies into a single global economy These changes-the embrace of international markets, the abandonment of central planning-portend enormous opportunities for growth But how they affect people as workers-their wages, the risks they face, the conditions under which they work-especially during what for many countries, and many households, is a pinful transitional period? This eighteenth annual World DevelopmentReport assesseswhat a more market-driven and integrated world means for workers It asks which development strategies best address workers' needs, and what domestic labor market policies can to establish a more equitable distribution of income, greater job security, and higher workplace standards, while preserving and indeed enhancing the efficiency of labor markets The Report concludes that global integration holds out the prospect of tremendous future gains for the world's work force-but no guarantees Sound domestic and international policies are indispensable for realizing the promise of a prosperous, integrated global workplace Policies that rely on markets while avoiding or correcting market failures, that invest in people, that provide a supportive environment for family farms as well as emerging industrial and services sectors-all these are good for workers Governments continue to exercise important functions: building and maintaining the social framework within which workers, unions, and firms interact to set wages and working conditions; supporting workers who are hurt when industries or whole economies suffer major shocks; and defending the rights of the most vulnerable workers, whether they be child laborers victimized by exploitation, or women or ethnic minorities suffering from discrimination In those economies that are less prepared to face global competition-in particular, those emerging from central planning-public action has a particularly important role in promoting labor mobility, easing the cost of transition, and reaching those left out This Report includes the World Development Indicators, which offer comprehensive, current data on social and economic development in more than 200 countries and territories The Indicators are also available on diskette An Appendix to the Report provides additional statistics on labor 780191!15 21101!1419230 0 ISBN 0-19-521102-2 COVER DESIGN BY BRIAN NOYES / THE MAGAZINE GROUP ... World DevelopmentReport I995 WORKERS n an INTEGRATING WORLD PU B LI OX S H ED FO R D FO R U N IVE TH E RS WO I TY R LD BAN... and the developingworld the cause of protectionism is far from defeated This Report makes four key points: First, building on earlier research-notably that of WorldDe7velopment Report 1990-it emphasizes... or more in 1993 The cutoff date for all data in the World Development Indicators is April 30, 1995 not applicable.) Historical data in this Report may differ from those in Worktcomprises all economies,