Europe's economies grew at roughly 2.5%, not enough to cut deeply
into the region's high unemployment; these economies produced 21% of
GWP. China, the second largest economy in the world, continued its
rapid growth and accounted for 11% of GWP. Japan posted a decline of
2.6% in 1998 and its share in GWP dropped to 7.4%. As usual, the 15
successor nations of the USSR and the other old Warsaw Pact nations
experienced widely different rates of growth. Russia's national
product dropped by 5% whereas the nations of central and eastern
Europe grew by 3.4% on average. The developing nations varied widely
in their growth results, with many countries facing population
increases that eat up gains in output. Externally, the nation-state,
as a bedrock economic-political institution, is steadily losing
control over international flows of people, goods, funds, and
technology. Internally, the central government finds its control
over resources slipping as separatist regional movements--typically
based on ethnicity--gain momentum, e.g., in the successor states of
the former Soviet Union, in the former Yugoslavia, in India, and in
Canada. In Western Europe, governments face the difficult political
problem of channeling resources away from welfare programs in order
to increase investment and strengthen incentives to seek employment.
The addition of more than 80 million people each year to an already
overcrowded globe is exacerbating the problems of pollution,
desertification, underemployment, epidemics, and famine. Because of
their own internal problems, the industrialized countries have
inadequate resources to deal effectively with the poorer areas of
the world, which, at least from the economic point of view, are
becoming further marginalized. In 1998, serious financial
difficulties in several high-growth East Asia countries cast a
shadow over short-term global economic prospects. The introduction
of the euro as the common currency of much of Western Europe in
January 1999 poses serious economic risks because of varying levels
of income and cultural and political differences among the
participating nations. (For specific economic developments in each
country of the world in 1998, see the individual country entries.)

GDP: GWP (gross world product)--purchasing power parity?$39
trillion (1998 est.)

GDP--real growth rate: 2% (1998 est.)

GDP--per capita: purchasing