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To: Alex who wrote (17040)	8/31/1998 7:26:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116815

NAM delegates ponder third world economic outlook 03:44 p.m Aug 31, 1998 Eastern By Luke Baker DURBAN, South Africa, Aug 31 (Reuters) - As a financial market crisis threatens to spread worldwide, delegates to the Non-Aligned Movement (NAM) on Monday pondered a report assessing the economic outlook for less-developed countries. The report, prepared by a panel of economists, looked at the demands being made on the developing world by globalisation and market liberalisation and how the impact of those changes is affecting the prospects for sustained development. ''On the economic side...spectacular changes have been taking place with capital flows, communications and the interaction of markets,'' said the report's author, Indian economist Gamini Corea. ''But at the same time, in the recent period, there have been signs of a weakening of this initial euphoria, signs that the benefits of globalization are not as great as thought.'' Referring to recent turmoil on world financial markets, Corea said developing countries were less able to deal with the shock waves created by shifts in capital and that those weaknesses were leading to vast disparities in wealth. ''Some of the enthusiasm has begun to wane. Some are beginning to say there has been little in it for us,'' he said. Disaffection with southeast Asian emerging markets last year led to a crisis of investor confidence that produced a rapid and enormous outflow of capital. That process sucked the life out of economies from Thailand to South Korea and saw currencies lose much of their value overnight. This month, Russia's economic woes forced a near 60 percent devaluation of the rouble, sending further reverberations around the world. Currencies and stock markets from Latin America to South Africa are now on the ropes, while Japan, the world's second largest economy, is in recession. U.S. economists are worrying about the threat of deflation. While some of the NAM's 113 member nations had not yet been affected by the global slump, it was inevitable that they all would feel some pain, Corea said. The report advocated the development of a clear-cut agenda for how southern hemisphere countries -- as a group -- should go about negotiating with the G7 and the World Trade Organisation. It pushed for more private sector involvement in expanding developing economies and raised the possibility of reviving a conference on monetary and financial issues to look into exchange rate policy and the impact of global capital movements. The proposals outlined in the 65-page economic report will now go before the heads of state, 60 of whom are due to attend the NAM summit that takes place on Wednesday and Thursday. While organisations such as the World Bank and International Monetary Fund might sometimes seem to have first- world interests higher on the agenda, that was no excuse for a resigned approach from the developing world, Corea said. ''It is only natural that the developed countries would pursue their own interests. I don't expect them to always take into account the developing world's interests at the same time,'' he said. ''The main challenge...is how precisely (we are) to benefit from the globalisation process while protecting (ourselves) from the negative aspects...How to safeguard against the drawbacks and disruptions...that is the primary challenge.'' In a speech earlier on Monday, South African Deputy President Thabo Mbeki touched on similar issues, saying that the potential markets of the developing world could fuel the next phase of global economic growth. ''The challenge to the Non-Aligned Movement...(is to) take upon ourselves the task of defining the new world order of prosperity and development for all and equality among the nations of the world,'' Mbeki said. Copyright 1998 Reuters Limited.