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World Bank: Developed Economies Gain Strength in 2014


Welcome to As It Is from VOA Learning English. I’mMario Ritter.

The World Bank has released its report on the worldeconomy and the news is largely good.

“For the first time in five years, high income countriesare accelerating.”

The bank expects high-income countries to grow at afaster pace than they did in the years of recession thatfollowed the world financial crisis.

Also, Taiwan is trying to increase exports through tradeagreements in the extremely competitive East Asia-Pacific area.

Predictions for the World Economy in 2014 andTaiwan’s efforts to stay competitive are next on As It Is.

In 2014, Global Economic Growth Expected to Improve

The World Bank expects economic conditions around the world to improvethis year. The developing world has fueled much of the economic growth inrecent years. Now, the World Bank say growth in 2014 is likely to resultlargely because of economic expansion in high-income countries. JuneSimms has more in this report from Mil Arcega.

The World Bank says the world economy has reached a turning point. Afteryears of slow growth, the bank expects developed economies to show solidimprovement in 2014. Andrew Burns is an economist with the developmentagency. He says wealthy countries, once struggling with debt, are starting togrow.

“For the first time in five years, high income countries are accelerating.They’re going to be contributing to global growth in a way that they haven’t forsome time. That’s going to be good for developing countries.”

International Monetary Fund (IMF) ManagingDirector Christine Lagarde discussing the globaleconomy in Washington on January 15.

The World Bank says the world economy will grow at a rate of 3.2 percent thisyear, and it should continue rising over each of the next two years.

The World Bank predicts the American economy will grow at a yearly rate of 2.8 percent in 2014. That would be up from 1.8 percent last year.

Kaushik Basu is the Chief Economist of the bank. He believes the Europeaneconomy will also show improvement this year. It was not until last year that the recession in Eurozone countries ended.

North Africa and the Middle East remain areas of concern because of politicalunrest. Another question is how actions by the US central bank will affectother countries. The Federal Reserve has said it plans to begin reducing theamount of money it puts into the American economy. Kaushik Basu says theeffects are likely to be mild. That is because many countries started feelingthe effects of higher interest rates after the Federal Reserve announced itsplans in the middle of 2013.

“We saw that in South Africa, in Indonesia, in India, where the exchange ratewas crashing around. So I feel actually, at one level, a lot of the adjustmenthas already taken place.”

The World Bank predicts that during 2014, economic growth will be strongestin East Asia and the Pacific. The bank expects the Chinese economy, theworld’s second largest, to expand at a rate of 7.7 percent, about the same aslast year. Central Asia is expected to show stronger development, led byhigher income countries.

The managing director of the International MonetaryFund spoke about the world economy last week.Christine Lagarde told reporters in Washington thatgrowth remains, in her words, “too low, too fragile andtoo uneven.” She added that the gains in economicactivity would not be enough to create jobs for the 200million workers around the world who need them.

I’m June Simms.

Taiwan Seeks to Strengthen Trade Ties

Trade ties are important to increase demand for a nation’s exports. That is the subject of our next story.

​Taiwan is starting a campaign to join two important Asia-Pacific trade groups. The island wants a place in the U.S.- led Trans-Pacific Partnership and Asia’s 16-member Regional Comprehensive Economic Partnership. But China islikely to block membership in both. Steve Ember has Ralph Jennings reportfrom Taipei.

Taiwan’s President Ma Ying-jeou has said he will pushfor membership in the two regional trade groups toopen major markets for Taiwanese companies.

Taiwan wants to improve trade relations so itsexporters can enjoy lower import taxes, or tariffs, inother countries. Such has been the case for SouthKorea and Southeast Asian nations.

Design samples on display in a Taipei office.Taiwan is seeking to increase its trade ties in theAsia-Pacific area.

Raymond Wu is a political risk expert in Taipei. Hesays President Ma is building support to increaseeconomic links between the Island and nations in the area.

Taiwan has signed trade agreements with China, New Zealand, Singaporeand five small diplomatic allies. But that is far fewer than Taiwan’s exportcompetitors. Some countries have deals throughout Asia, in Europe and withthe United States. China usually uses its economic power to stop othercountries from signing agreements with Taiwan. It has also kept Taiwan fromjoining international bodies that require members to be states.

China also insists that other governments avoid formal relations with thegovernment in Taipei. Ties between China and Taiwan have improved since2008. But Taiwan has avoided the discussion of political issues that couldlead the two sides toward reunification, which has been an important goal forChina.

Jeffrey Wilson teaches politics at Murdoch University in Australia. He saysother countries may be willing to let Taiwan join a regional trade group. But, he says, they do not want to risk upsetting China.

This is especially true in the case of the Trans-Pacific Partnership, or TPP. The group has asked China to join, but the country has stayed out because itfears too much influence by the United States and its allies. China issupporting the Regional Comprehensive Economic Partnership instead.

Taiwan has taken its campaign to heads of state around the Pacific Rim. At aregional economic conference in October, Taiwan informed the other partiesof its hopes of joining the TPP. Foreign Ministry spokeswoman Anna Kaosays Taiwan has been heard.

She says Taiwan already has made contact with TPP members at manydifferent events. Taiwan is a member of the Asia Pacific EconomicCooperation group, as are many parties to the TPP.

I’m Steve Ember.

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