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Stepping out of the shadows

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It is fair to say that the world economy in general has never done as well as it's doing now, even as oil prices continue to rise. As they chug upward, a lot of old shibboleths have to be thrown out the window.

Serious recessions that used to plague the industrialised economies with the regularity of the business cycle seem to be a thing of the past, as is the rapid inflation that accompanied them. America's 'Clinton boom' did run out of steam just as president Bill Clinton left office, but the Bush administration's tax cuts appear to have made the US slowdown extraordinarily short. That is still no excuse for weighing them so heavily towards the rich.

Countries as diverse as Sweden, Denmark, Britain, Spain and Ireland have backed up America's argument that freeing up markets and easing burdensome controls and regulations produces good rates of economic growth. Yet they have also countered America's more naked capitalism with successful programmes for social justice, universal health services and poverty eradication. Indeed, the most socialist of them all, Sweden, is currently the fastest-growing economy, on a per-capita basis, in the western world.

India is soaring towards Chinese rates of growth. It has a better chance of all-round success than China because its institutional, legal and political establishments are more developed and sophisticated. Japan is back in the growth game after a decade of post-economic-bubble repairs. Russia and Brazil - written off not that long ago after horrific setbacks - are probably set to become major economic powers within a couple of decades.

Many middle-income developing countries, from Peru to Indonesia to Nigeria, are purring along at a good speed thanks to a combination of fiscal reform, macroeconomic stability and a healthy export market. They have been able to leapfrog the development process through computer technology, mobile phones, airplanes and all the paraphernalia of modern industrial technology. As a result, they are growing at two to three times the rate that the present industrialised economies did when they were first developing in the 19th century.

In Africa, nearly 20 countries have achieved annual rates of growth of 5 per cent or more in recent years. The UN Conference on Trade and Development (Unctad) reported this month that a good number of the 50 least-developed countries are beginning to show reasonable rates of growth. Most of the 50 are in Africa, but 13 of them are in Asia - including Afghanistan, Nepal and Laos.

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