toexternal shocksandchanges inexternal demand, andpartly toimprovements in agricultural performance andsuccess withimportsubstitution (inenergyfor example) insomelargeandself-contained economies suchasIndia. Thebaseline scenario projections areforcontinued expansion atratesbetween 5and 5.5percentperyear. I...A/40/519 English page11 18.Underbaseline projections, development according tothestandards ofthe International Development Strategy isclearly notattainable. Theinvestment ratio toGDPforallpetroleum-importing countries collectively. forexample. is projected tobeonly24percentby1990andlessthan25percentbytheyear 2000,compared totheStrategy targetof28percent.Furthermore, GDP,exports andimports areprojected toincrease atratesof4.6,5.5and5.4percent, respectively, duringtheperiod1985-1990, whichareallmuchlowerthanthe corresponding targetratesof7.7and8percent,respectively. Inshort, although baseline projections represent aconsiderable improvement overthe performance duringthefirsthalfofthe1980s,thepicture forthedeveloping countries isoneofuncertainty anddisappointment. Still,analyses indicate that mechanisms promising considerable improvement areavailable, butsufficient international resolve willbeneededtoimplement them. 2.Appraisal ofopportunities forthesecondhalfofthe1980s 19.Theapproach usedtoappraise growthprospects to1990wastostartwiththe baseline projections mentioned abovethatassume"no-change" intheexisting and expected government policies (e.g.,monetary, fiscal, tradeandaid)andthento formulate policyscenarios indicating alternative development paths. Inthis exercise, globaleconometric modelsoftheDepartment ofInternational Economic and SOcialAffairs andthosemaintained byacademic andresearch institutions, notably theeconometric modelsoftheLINKProject andtheFugiGlobalMacroeconomic Model, havebeenused. 20.Several policyscenarios havebeensimulated inordertoassesstheimpactand efficiency'of thevarious policymeasures inraising thegrowthprospects ofboth thedeveloped anddeveloping economies. Thesimulated scenarios include: (a)co-ordinated OECDmonetary andfiscalpolicies toresultinareduction of interest rates(by3percentage pointsfortheUnitedStates, 2percentage points forWestern European countries and1percentage pointforJapan)compared with thoseassumed inthebaseline fortheyears1985-1990, (b)tradeliberalization policies (a5percentreduction innon-tariff barriers ofOEeDimports) starting in1985,(c)achievement oftheofficial development assistance (ODA)target (0.7percentofdonors' GNP)through reductions indefence expenditure by1990, (d)increased transfer oftechnology todeveloping countries, (e)increased direct private investment indeveloping countries, and(f)progress inglobaldisarmament, amongotherfactors. 21.Thesinglemosteffective scenario inraising theeconomic growthofthe industrialized countries wouldbethatinvolving thereduction ininterest rates. Thiswouldincrease theGDPgrowthrateofindustrial countries by0.3percentage pointsintheperiod1985-1990, ascompared withthebaseline projections (see table4).Thecorresponding increase forthedeveloping economies wouldbe0.1 percentage pointsonly. However, achievement oftheODAtargetof0.7percentof donors' GNPby1990wouldhavetheeffectofraising theGDPgrowthrateof developing countries by0.3percentage pointsintheperiod1985-1990, compared withthebaseline, whilethatoftheindustrial countries wouldremainunaffected. TheODAtargetscenario appears tobeparticularly effective inraising theGDP /...o .! (, I z o t8 6 €g q| OZ .a EJ O FI o.110 c Fa oqo o C!. O g{, 9.e c(t! o t>{,lo aotc ,9H.{ r'r Clll € or oo d rrl rtF o o oo -l ol o o oo .l 3 lY|F O .l OA .l at o o oo -l li) a{(r oo
**Analysis**
This text appears to be a discussion of economic growth and development, specifically in the context of developing countries. It mentions various policy scenarios and their potential impact on economic growth, investment, and trade. The text also touches on international cooperation and development assistance.

**Category**
Economic development, International trade