The report comprises six chapters that provide an introduction, and statistical development information on: the WORLD VIEW through key economic indicators; on PEOPLE, reflecting the population dynamics, labor force structure, employment, poverty incidence, and social indicators among others; on the ENVIRONMENT as it is affected by the different sector inputs; on the ECONOMY at large, presenting growth patterns, the structure of trade, and financial and monetary indicators; on STATES AND MARKETS, outlining private sector development, investment climate, business environment, stock markets, and financial efficiency; and, on GLOBAL LINKS, analyzing the integrated global economy, trade, and development assistance. The report acknowledges the collective efforts of partners in development, among the various international and government agencies, and of private and nongovernmental organizations.

The world seems to be entering an economic crisis unlike any seen since the founding of the Bretton Woods institutions. Indeed, simultaneous crises. The bursting of a real estate bubble. The liquidity and solvency problems for major banks. The liquidity trap as consumers and businesses prefer holding cash to spending on consumption or investment. The disruptions in international capital flows. And for some countries a currency crisis.
Plummeting global output and trade in the last quarter of 2008 brought the global economy to a standstill after years of remarkable growth, throwing millions out of work. The United States, as the epicenter, has seen unemployment rising to more than 11 million, an unemployment rate of 7.2 percent. Most forecasts show world GDP growth slowing to near zero or negative values, after a 3.4 percent increase in 2008.
What brought about the crisis? Why is it so severe? How quickly has it spread? In this introduction, and in the introductions to sections four (Economy) and six (Global links), the data describe the events that have brought us to this point. Could the crisis have been anticipated by looking more closely at the same data? Perhaps. Perhaps not. But there is still much we can learn about how these events unfolded.

This year's World Development Indicators (WDI) introduces new estimates of purchasing power parity (PPP). PPPs are used to convert local currencies to a common currency - in this case the US dollar. By taking account of price differences between countries on a broad range of products and services, PPPs allow more accurate comparisons of market size, the structure of economies, and what money can buy. The new PPPs replace previous benchmark estimates, many of them from 1993 and some dating back to the 1980s. These new estimates are based on the recently released results of the International Comparison Program (ICP) - a cooperative program involving 146 economies.
"We live in a world of highly interdependent markets for goods, services, finance, labor, and ideas," said Alan Gelb, Acting World Bank Chief Economist and Senior Vice President for Development Economics. "When we measure economies on a comparable global scale, the growing clout of developing countries comes into sharp relief."

Global poverty rates continued to fall in the first four years of the XXI century according to new estimates published in the World Development Indicators 2007, released today. The proportion of people living on less than $1 a day fell to 18.4 percent in 2004, leaving an estimated 985 million people living in extreme poverty. By comparison, the total number of extreme poor was 1.25 billion in 1990. Two-dollar-a-day poverty rates are falling too, but an estimated 2.6 billion people, almost half the population of the developing world, were still living below that level in 2004.
Developing countries have averaged a solid 3.9 percent annual growth in GDP per capita a year since 2000, which contributed to rapidly falling poverty rates in all developing regions over the past few years. Another key reason dollar-a-day poverty fell by over 260 million between 1990 and 2004 was China's massive poverty reduction over that period. Indeed, East Asia's extreme poverty rate dropped to 9 percent in 2004.

Five years ago the Millennium Declaration recorded the commitment of the members of the United Nations to eliminate poverty and to build a secure and peaceful world conducive to human development. The Millennium Development Goals embody that commitment and set quantified targets for reducing poverty, educating all children, improving the status of women, combating disease and reducing premature deaths, ensuring environmental sustainability, and establishing an effective partnership between rich countries and developing countries. The Goals have become widely accepted as a framework for measuring development progress. Their benchmarks and targets, looking back to 1990 and forward to 2015, provide yardsticks for measuring results.
Taking the Goals seriously has helped to concentrate the attention of politicians, development professionals, and ordinary citizens on the need to work together and to use scarce resources more effectively. Since the articulation of the Millennium Development Goals, World Development Indicators has reported on progress toward each goal. This year’s edition provides a more comprehensive survey of the main targets and indicators. Although the presentation here is based largely on regional averages, it is important to remember that the goals are commitments by countries. We cannot claim complete success as long as some countries lag behind. Nor is progress within countries uniform. Some important disparities are illustrated by examples of the differences between poor and rich and between urban and rural populations.

The Millennium Development Goals put the world community on a time table. When 189 member states of the United Nations adopted the Millennium Declaration in September 2000, they looked backwards to 1990 and ahead to 2015 and gave themselves 25 years to produce substantial improvements in the lives of people. At the time, it was clear that in many places development progress had slowed and would have to be accelerated if the ambitious targets of the Millennium Development Goals were to be achieved.
As in the past four editions, this section of World Development Indicators reviews progress toward the major development goals. Until recently we have been gauging progress toward the Millennium Development Goals based on the record of the 1990s. Now, we are closer to 2015 than to 1990, and we are getting our first look at the record of the 21st century.
There are hopeful signs. Global poverty rates continue to fall. Fewer people are living in extreme poverty, after an increase in the late 1990s. In countries that have laid a good foundation for growth, indicators of social development are also improving. But progress is uneven. Slow growth, low educational achievement, poor health, and civil disturbances remain obstacles for many.

Since inception more than twenty five years ago, the World Development Indicators (WDI) presented statistical information of the world, as seen by development economists, and, through a growing understanding of the development process, the WDI now encompasses over 500 indicators, covering 152 countries. A larger picture of poverty trends and social welfare is now provided, as well as the use of environmental resources, the performance of the public sector, and the integration of the global economy.
This 2003 edition, focuses on measuring development outcomes, encouraged by the availability of internationally comparable statistics. Thus, the set of specific, quantified targets for reducing poverty, and achieving progress in health, education, and the use of environmental resources has been compiled within the framework of Millennium Development Goals, as adopted by the United Nations.
The report comprises six chapters that provide an introduction, and statistical development information on: the WORLD VIEW through key economic indicators; on PEOPLE, reflecting the population dynamics, labor force structure, employment, poverty incidence, and social indicators among others; on the ENVIRONMENT as it is affected by the different sector inputs; on the ECONOMY at large, presenting growth patterns, the structure of trade, and financial and monetary indicators; on STATES AND MARKETS, outlining private sector development, investment climate, business environment, stock markets, and financial efficiency; and, on GLOBAL LINKS, analyzing the integrated global economy, trade, and development assistance. The report acknowledges the collective efforts of partners in development, among the various international and government agencies, and of private and nongovernmental organizations.

At the Millennium Summit in September 2000 the states of the United Nations reaffirmed their commitment to working toward a world in which sustaining development and eliminating poverty would have the highest priority. The Millennium Development Goals grew out of the agreements and resolutions of world conferences organized by the United Nations in the past decade. The goals have been commonly accepted as a framework for measuring development progress.
The goals focus the efforts of the world community on achieving significant, measurable improvements in people’s lives. They establish yardsticks for measuring results, not just for developing countries but for rich countries that help to fund development programs and for the multilateral institutions that help countries implement them. The first seven goals are mutually reinforcing and are directed at reducing poverty in all its forms. The last goal—global partnership for development—is about the means to achieve the first seven.
Many of the poorest countries will need additional assistance and must look to the rich countries to provide it. Countries that are poor and heavily indebted will need further help in reducing their debt burdens. And all countries will benefit if trade barriers are lowered, allowing a freer exchange of goods and services. For the poorest countries many of the goals seem far out of reach.
Even in better-off countries there may be regions or groups that lag behind. So countries need to set their own goals and work to ensure that poor people are included in the benefits of development.

For four years the World Development Indicators has reported on progress toward the international development goals. While the challenge is immense, the prospects for success in some areas are improving. Between 1990 and 1998 the proportion of people living in extreme poverty fell from 29 to 23 percent and in China the number in extreme poverty fell by almost 150 million. In Liberia the rate of infant deaths dropped from 155 per 1,000 live births in 1990 to 113 in 1998, and at least 25 other developing coun- tries lowered infant mortality rates fast enough to reach the goal for 2015. This is some of the good news. But other data are more sobering. Despite remarkable success in some countries, none of the inter- national development goals for health and education is likely, on present trends, to be achieved at the global level. We are not likely to achieve a two-thirds decline in infant and under-five mortality or a three- fourths decline in maternal mortality. And we are not likely to have universal primary education by 2015. With less than 15 years to reach the goals, it is time for renewed and vigorous efforts to make good on our commitment to free our fellow men, women, and children from the cruel grip of poverty. That means action by rich and poor alike.

A sixth of the world’s people produce 78 percent goods and services and receive 78 percent of world income—an average of $70 a day. Three-fifths of the world’s people in the poorest 63 countries receive 6 percent of the world’s income—less than $2 a day. But their poverty goes beyond income. While 7 of every 1,000 children die before age five in high-income countries, more than 90 die in low-income countries. How do we bridge these huge and grow-ing income gaps, matched by similar gaps in social living standards? Can the nations of the world work together to reduce the numbers in extreme poverty? This is the fundamental challenge of the 21st century.
The World Development Indicators (WDI) is the World Bank's premier annual compilation of data about development. WDI 2000 includes 800 indicators in 85 tables, organized in six sections: world view, people, environment, economy, states and markets, and global links. The tables cover 148 economies and 14 country groups - with basic indicators for a further 58 economies.

This report is the Bank's most general statistical publication. It provides a continuing survey of the quality and availability of internationally comparable indicators. The organization of this report reflects a comprehensive development framework that integrates the measures of social progress and the quality of life of people with those of economic development, physical infrastructure, government policy and performance, and the condition of the environment. In this year's edition, new indicators have been added to the "People" section, providing data on wages and earnings, expanded coverage of education, and a full table on the global HIV/AIDS epidemic. The "Environment" section includes two new tables: one of city-level indicators and another that extends last year's measures of genuine savings to 121 economies. The opening "World View" section reports on the prospects for developing countries in the aftermath of the financial crisis that swept much of the world. The other sections have been revised as needed while preserving the now-familiar order and layout of the book.

This year's edition incorporates suggestions received from readers of the first edition. The introductions to each of the 6 sections focus on key development issues and trends.
"World View" reports on progress toward international development goals to be achieved early in the 21st century. New tables show long-term trends in development; rankings of country performance on total GNP, GNP growth, and GNP per capital as well as data for small economies and those with limited data availability.
"People" has new tables on employment, unemployment, and reproductive health. It features a special presentation on the worldwide HIV/AIDS epidemic.
"Environment" includes new tables on water pollution and sources of electricity generation; expands coverage of air pollution; provides indicators on agricultural inputs and production; and reports on three major issues combining development and environment.
"Economy" provides estimates of 1997 values for macroeconomic indicators for 37 developing countries; updates data on consumption growth; and adds a new table on relative prices.
"States and Markets" focuses on government credibility and corruption, defense spending and trade in arms, and updates indicators for public enterprises.
"Global Links" presents indicators on trade, exports by regional trading blocs, average tariff rates, global financial flows, as well as travel and tourism. The introduction examines the problems of measuring global economic integration.

We have redesigned the World Development Indicators to expand its coverage of development issues in a new, free-standing format, complemented by a comprehensive database on CD-ROM and a redesigned World Bank Atlas. This new family of products embodies many aspects of the change we are trying to bring about at the World Bank Group.
First, the selection of indicators reflects a broader, more integrated approach to development. The World Development Indicators starts from the premise that development is about the quality of life. It places people and poverty reduction first, at the center of the development agenda where they belong. In its five main sections it recognizes the interplay of a wide range of issues: human capital development, environmental sustainability, macroeconomic performance, private sector development, and the global links that influence the external environment for development.
Second, the new World Development Indicators is an excellent example of global partnership in creating and sharing knowledge and in making knowledge a major force for development—an area where I see the World Bank playing an increasingly important role. I would like to thank our partners in the United Nations family, the International Monetary Fund, the World Trade Organization, the OECD, the statistical offices of more than 200 economies, and countless others who have made this unique product possible. Throughout the volume we have acknowledged their contributions in order to guide researchers and others seeking information to the many sources on which it draws. And because the World Development Indicators draws on the Bank’s own cross-country experience and sectoral knowledge, I am particularly pleased to note the important role of the new sectoral networks of Bank staff in the redesign. Their support and that of staff of the International Finance Corporation and the Multilateral Investment Guarantee Agency truly make the World Development Indicators a Bank Group product.
Third, the new World Development Indicators reflects the Bank Group’s new emphasis on development impact and outcomes. I hope that the World Development Indicators will become the principal mechanism by which the world measures progress in reducing poverty and in enriching the lives of people everywhere. For this to happen, however, all of us—governments, international institutions, and the private sector—will have to pay far more attention to the coverage, timeliness, and quality of information about development policies and outcomes. The detailed technical notes that accompany each set of indicators show how much work still lies ahead.
Finally, the annual World Development Indicators is very much a work in progress. In the spirit of the new Bank, its redesign reflects extensive consultation with our clients. And knowing that it could be even richer and more comprehensive, we welcome your comments to assist us in making it even more powerful in serving our clients’ needs.

James D. Wolfensohn
President
The World Bank Group