International trade in 2009 is projected to contract for the first time since 1982. As a result, export diversifi cation has gained new urgency as one way of using exports to recover lost growth momentum. Moreover, diversifi cation is central to reducing income volatility and sustaining high growth rates, which are especially important for countries with large populations living in poverty. In the 1950s, countries became concerned that their dependence on primary products would lead to steady falls in the purchasing power of primary exports and thus slow growth. A major policy objective of...

The traditional policy reform agenda concentrated on reduction of tariff and non-tariff barriers between countries in the region and toward international markets is necessary, but not sufficient reason, for success. New opportunities, notably on trade and transport, and the services market deserve a higher profile on the policy agenda.