and brinq both new constraints and new opportunities, success in coping with the constralnts and exploiting the opportunities depends on the flexibiti.ty and adaptability of an economy, and on domestic policies. But while a few countries have great freedom of action, in most countries dooestic policies are substantially constrained by external factors. The capacicy for an adequate domestic policy response thus differs from country to country depending on economic size, resources, vulnerabi.licy co external shocks, the structure and diversification of foreign trade, hunan resources and institutional factors. In lhese maCters,generalizations conceal more than they reveal. 16. The evolving internaClonal economic environmenE to nhich every country must continuously adjust ies short- and long-term domestic policies is loday i.arqely dominated by two factors, The first is the major industrialized counEries' macro-econonic policies and their interactions, and the second is the functioning of the internatlonaL trade and financial systems as lrell as concessional aid progranmes. The prospects for economic and social progress in an indj.vidual country, nhile principaLly dependent on the effectiveness of the countryrs domestic policies, cannot be assessed in lsolation from the growth and stability of the world economy, which in turn depend on the policies of a lj.mited group of najor countries and are also affect.ed bv poLitical tensions and reqional conflicts,A/40 /708 Eng 1i sh Paqe 6 I7. Of partj.cular importance to the purposes and the issues addressed in thepresen! report is the structural change required to accom(rbda te shifts in thepatterns of comparative advantage among countries. Historical experience hastaught two lessons in this regard. First, trade competitiveness is not entirely determined by geography. natural resources and facCor endowments, but is partly a
**Analysis**
The text appears to be discussing the global economy, international trade, and the policies of countries in relation to economic development, competitiveness, and structural change. It highlights the importance of domestic policies, international factors, and the need for countries to adapt to changing global economic conditions. The text does not specifically mention natural resources, agriculture, or humanitarian aid, and the focus is on the macroeconomic and trade aspects of economic development.

**Category**
Economic development, International trade