But, more than this well-documented revelation, the report brings out the increasing danger of the developing and poorer nations getting marginalised in the complex and competitive international trade. With strong output and trade growth in North America and Western Europe and also investments heading that way, developing countries may continue to remain in this swamp with only minimal growth expected this year.

For the Asian economies 1998 was perhaps one of the worst years in recent memory. This region saw import volume falling by 8.5 per cent. Imports, however, grew by aremarkable 7.5 per cent in Western Europe and by about 10 per cent in North America, Latin America and the transition economies. The economies in transition also recorded a drop of export growth rate from 12.5 per cent in 1997 to 10 per cent and import growth rate from 17 per cent to 10 per cent.

Exports increased marginally in Asia by one per cent in 1998 - but remained way below the growth of 13 per cent recorded the previous year. Asia's alienation from global trade can also be seen from the drop of 8.5 per cent recorded this year compared to a growth of six per cent last year.

Against this, the rich industrialised nations performed much better. The USA and the western Europe stood out with robust growth despite being affected by the global turmoil in many ways. The US economy grew by nearly four per cent - almost at the same rate as last year - recording continuous growth in seven years in a row. Canada and USA recorded an export growth of three per cent compared to 11 per cent in 1997. These twocountries also posted an increase of 10.5 per cent in imports compared to 13 per cent in 1997.

Exports from the USA has been falling month after month as the US industry finds its dollar too strong. Similarly, the western Europe has also recorded strong growth in output and trade.

The countries in western Europe experienced sharp increase in imports due to strong domestic demand. But, the weak global markets restrained exports. This has already started putting pressure on the euro and other European currencies as trade balance tilts adversely. Western Europe, nevertheless was the only region that recorded an increase in the dollar value of its exports as well as an unchanged growth rate of imports compared to the previous year. Imports in value terms increased by five per cent. Western Europe's export growth was slightly above the global average, at 4.5 per cent.

Reduced commodity prices have particularly affected the export earnings of African and Middle Eastern countries. Apart from the 11 membercountries of Opec, the report identifies eight other countries whose fuel exports account for more than 50 per cent of their total export earnings. These economies suffered heavily from drop in oil prices. However, the countries dependent on export of agricultural products have not been hit as badly as the oil exporting countries.

It is only a matter of common knowledge that the south-east Asian contagion has been primarily responsible for slowdown of global trade. This region that attracted so much of investment and provided such a huge market for capital goods, consumer items and services fell into a crisis that saw a reversal of capital flow, drastic drop in imports and widespread bankruptcy of business. Once found risky to invest, much of the private capital headed back to the USA and Western Europe.

This reversal had taken place from the transition economies as well. The consequent abundance of investment resources and associated drop in interest rates gave a boost to investment in USA and WesternEurope. With capital coming cheap, new investment gathered an added momentum. A large part of this had gone to renewal of infrastructure, new construction of industrial and residential buildings.

Interestingly, this period of boom had also seen the beginning of a decline in industrial production. While the industries gained from lower fuel prices, also had to face vigorous competition from imports from crisis ridden economies. Naturally, therefore, while on the one hand the users of imports gained from cheaper prices, the producers of the same suffered.

In an apparent contradiction, the EU and USA getting choked with new investment find the steel companies making huge losses and resorting to production cuts and layoffs. The overall implications of this development has not yet been felt. But in the days to come the USA as well as the western Europe will start feeling the pinch of it. The rich nations nevertheless got some good opportunities to rebuild their infrastructure cheap.

But, if, in the comingdays, the market opportunities are reduced due to increased foreign competition in the domestic as well as export market and earning from such businesses drops, it will have a serious implication on the economy as a whole. In all likelihood, a business contraction will lead to unemployment and reduction in standards of living. There are some early signs already visible in the European Union. The Economist has also forecast a slowdown in economic activities.

However, considering the prospects of sluggish growth in global output for another year and near stagnation in Asia, Latin America, the CIS and east Europe, the WTO forecasts the growth rate in trade to remain at about 3.5 per cent in 1999 too. Although the WTO asserts that `even this moderate expansion, however, is associated with major downside risks and would imply an acceleration of trade growth in the course of 1999', the problem is that the WTO totally undermines the possibility of a slowdown in the western developed economies which in the absenceof adequate revival in the developing countries may lead to a much deeper global recession.

The author is chief economist in the ministry of steel and the views expressed are his own