Last year, the unexpectedly slow growth of output in the world economy, and of trade relative to it, reinforced doubts as to whether developing countries would recover from their depression and financing crisis. Since then, the fall in oil prices has altered substantially the outlook for industrial countries. The process of re-examining the prospects for developing countries has scarcely begun.

This note describes developments in their trade and financing over the past five years, since the second oil price rise, as background to the judgement that the trends expected previously would have been economically and politically impossible to sustain. It then assesses the prospect now—after the fall in oil prices.