The Pacific Asian Countries: A Force for Growth in the Global Economy.

The market-oriented countries of Pacific Asia have been contributing to economic growth in the industrialized West. The market developing countries of East Asia have averaged economic growth of 7.5 percent a year over the last 20 years. The most prominent feature of their economic development has been rapid growth in manufactured exports, expanded agricultural production, and investment. Most of the countries rely heavily on market forces; their governments practice only selective economic intervention focusing on macroeconomic management and strong policy direction. With the global recession of the past few years, economic growth in these countries has slowed to 3 percent annually. In the People's Republic of China, reforms such as economic decentralization, private incentives, and increased foreign trade spurred China's economic growth to 6 percent a year for the period 1978-1983. Three issues are fundamental to continued development in Asia: free trade, the reduction of real interest rates by industrialized countries, and increased financial support for international development institutions such as the World Bank. Two lessons emerge from the development experience in Pacific Asia: the effectiveness of economic policy and the practical, human importance of the global economy. (LP)