2020 visions : creating tigers, cutting poverty, and increasing trade, 1995-2020

Based on research from the Harvard study, this paper presents contrasting economic growth forecasts for 12 developing countries over a period of 25 years, depending on whether they adopt closed or open economic policies. The study countries are Bangladesh, Brazil, India, Indonesia, Kenya, Madagascar, Nigeria, Pakistan, Peru, Philippines, Uganda, and Zambia. The study also briefly reviews the contrasting growth experience, from 1820 to 1992, of a number of countries to show that: (1) until several centuries ago, every nation in the world was mostly poor; (2) many nations have achieved sustained rapid growth; and (3) such growth is possible for nearly every nation -- if governments introduce and sustain suitable economic policies. Key projections for the 12 countries chosen for the present study are as follows. (1) Without sustained policy reform, the number of extremely poor in the 12 countries will rise from some 700 million in 1995 to 775 million in 2020, while, with sustained policy reform, the number of extremely poor will fall to 296 million in 2020. (2) Without sustained policy reform and rapid growth, U.S. merchandise exports to the 12 countries will rise from $27 billion in 1995 to $73 billion, a 170% increase, in 2020. With reform, U.S. merchandise exports will rise to $144 billion, a 435% increase. (3) For the 4 of the 12 countries for which baseline data are available, without sustained policy reform and rapid growth, the U.S. nonfactor services exports will grow from $8 billion in 1995 to only $29 billion, a 250% increase. With sustained reform, U.S. service exports will grow to $53 billion, a 530% increase, by 2020. An explanation of the choice of the 12 study countries and the assumptions behind study projections, are also discussed, along with implications for USAID activity. Appendices include country case studies.