relatively slowly, those problems will continue to pose major challenges to policy­ makers. without restoration of rapid growth to ease the painful process of adjustment and economic change, many international economic policy issues are likely to become highly politicized disputes over how the costs and benefits of change should be shared, domestically and internationally. Stability and prosperity in the world economy historically have depended on international consensus, co-operation and leadership, all of which have eroded in the last 10 years. This erosion raises pressing questions about the appropriate policies, rules and institutions needed to guide the international system through a difficult time. In the following section some of the major challenges to multilateral co-operation at the present time are examined. 3. Four major challenges 46. Effective multilateral economic co-operation will be particularly necessary to meet four immediate challenges to the world community: (a) The risk of disintegration of the trading system; (b) Instability and uncertainty in the international monetary and financial system; (c) Debt and development finance; (d) The crisis in sub-Saharan Africa. (a) The risk of disintegration of the trading system 47. The seriousness of the present slippage towards trade protectionism and discrimination cannot be over-emphasized. Foreign trade - and investment - are at the core of the international economy. All countries benefit from it and some are totally dependent thereon. 48. It is increasingly recognized that trade issues are closely linked to the financial and monetary issues that loom so large in the world's current economic disequilibria. Large swings in key currency exchange rates subject trading partners to great uncertainties about long-run comparative advantage and appropriate investment strategies. 49. When currencies are over-valued, protectionist pressures increase and trade barriers tend to take the form of quantitative restrictions. When they are undervalued, inflationary pressures build up and ultimately uncompetitive 
**Analysis**
The text discusses the challenges facing the world economy, including the risk of disintegration of the trading system, instability in the international monetary and financial system, debt and development finance, and the crisis in sub-Saharan Africa. The text highlights the importance of international cooperation to address these challenges and ensure stability and prosperity in the world economy. The focus is on economic issues, specifically trade, finance, and development, which suggests that the category should be related to economics.

**Category**
International trade, Economic development