Third is growth led by economic restructuring and diversification into new products.

A vicious downward spiral followed, with mounting indebtedness further constraining investment, diversification and income growth.

Second is growth as a by product of commodity booms. Third is growth led by economic restructuring and diversification into new products.

Powerful economic forces drive the structural evolution and economic diversification that underpin growth, producing transitions that have common elements.

First, there is the need for diversification of African commodities, which is a prerequisite for economic recovery and growth.

Lack of private sector growth and diversification of the economy, as well as a weak financial sector, are additional challenges.

Diversification Though Current GDP per capita shrank by 2.4 in the 1980s, it bounced back to a growth of 36 in the 1990s as a result of successful diversification initiatives.

Many African countries, too, are showing a broad pattern of sound macroeconomic fundamentals, durable growth acceleration, economic diversification, and investor confidence.

(c) Client diversification and

Diversification

contribution to the diversification of the economic and technological base of developing countries, as well as improvement in their export value added and growth performance

51. It was essential to increase financial flows to developing countries to achieve economic recovery and growth through diversification and support of structural adjustment efforts.

But, too often, such revenues distort economic incentives, which come to favor rent seeking and interfere with the diversification that is essential for growth.

(vi) Diversification can involve horizontal diversification into new commodities, vertical diversification whereby value is added to existing commodities, and the development of new end uses.

strengthening and diversification of production capacity

B. Global diversification and commodity market

Energy saving and diversification measures

Economic and trade diversification could be crucial, and donor commitments to investment in economic diversification could be essential.

For nearly 30 years, market access preferences have been granted to alleviate the competitive handicaps of LDCs and facilitate their economic growth through export diversification.

6350 Import diversification

National diversification councils

National diversification councils

52. A major constraint to promoting diversification is a lack of technically and economically viable diversification projects.

But, in terms of growth and living standards, the cost of economic diversification, when implemented by protecting domestic industries from foreign competition, eventually outweighs the benefits.

In developing countries, import substitution as a way to jump start economic diversification can work for a while but, over time, as productivity growth lags and comparative advantage is over ridden, growth grinds to a halt.

This supports income generation and diversification activities.

1. Research aimed at diversification and creation

The main challenge for Brazil is to increase its investment rate from 18 of GDP currently to closer to 25 , thereby sustaining rapid growth and economic diversification.

In that report was recommended the establishment of a diversification facility, to finance the preparatory phase of diversification projects and programmes, and the establishment of diversification councils at the national level, to generate a stream of project proposals that would fit into national diversification programmes and priorities.

V. POTENTIAL FOR DIVERSIFICATION

II. DIVERSIFICATION WHICH WAY?

C. National diversification councils

1. Diversification of exports

The establishment of a diversification fund, however, would, along with the proposed national diversification councils, provide the focal point for enhancing diversification efforts in Africa.

Role and functioning of the national diversification councils

3. Reiterates the importance of maximizing the contribution of the commodity sector to sustained economic growth and sustainable development, while continuing diversification efforts in commodity dependent developing countries

It will also consider enhancing the contribution of these sectors to the diversification of the economic and technological base of developing countries, improvement in export value added and growth performance.

All students of Africa apos s development prospects agree that the diversification of production and exports must necessarily be an integral part of any strategy for economic recovery and growth.

5.2 Diversification of intervention options

IV. THE CASE FOR DIVERSIFICATION

30. Diversification has three dimensions.

Location of the diversification facility

Resources of the diversification facility

1. Reiterates the importance of maximizing the contribution of the commodity sector to sustained economic growth and sustainable development, while continuing with diversification efforts in commodity dependent developing countries

The Economic Commission for Latin America and the Caribbean promoted more market oriented regional integration in order to realize greater stability, reduce deficits, encourage export growth and diversification and increase foreign investment.