production accurately. Employment in agriculture has also declined.
Growth in agricultural output slowed from an average annual increase of
3.4 per cent for the period 1980–90 to 2.2 per cent for 1990–98. The indus-
trial growth rate increased from 3.8 per cent in the 1980s to 4.0 per cent in
the 1990s and manufacturing from 4.7 per cent to 6.4 per cent. Average
annual growth in the service sector remained constant from 1980 to 1998.
However, although the proportion of GDP accounted for by the industrial
sector in Third World economies increased from 27 per cent in 1965 to 35 per
cent in 1999, manufacturing, generally the most dynamic part of the industrial
sector, actually declined in the 1990s from 23 to 22 per cent. The contribution
of the service sector to GDP rose from 46 to 54 per cent. The general trend in
the structure of Third World output has been from agriculture to manufactur-
ing and services.
Integration into the world economy
The processes of globalization are bringing about a closer integration of the
Third World into the world economy. Between 1965 and 1999 low- and
middle-income economies recorded an average annual growth in the export
of goods and services of 5.3 per cent, compared to 5.9 per cent for high-
income countries. In all regions of the Third World except the Middle East
and North Africa foreign trade as a percentage of GDP has increased – from
26 to 29 per cent during the 1990s.
4 Understanding Third World Politics
Table 1.2 Value added as a percentage of GDPEconomy Agriculture Industry Manufacturing Services
1990 1999 1990 1999 1990 1999 1990 1999Low income 29 27 31 30 18 18 41 43
Middle income 13 10 39 36 25 23 47 55
East Asia 20 13 40 46 29 28 40 41
Latin America 9 8 36 29 23 21 56 63
Mid. East & N. Africa 15 .. 38 .. 13 .. 47 ..
South Asia 30 28 26 26 17 16 44 47
Sub-Saharan Africa 18 18 34 32 17 17 48 50
High income 3 2 33 30 22 21 64 64
SOURCE: World Bank (2001b),Selected Development Indicators, table 12, p. 297.
NOTE: the symbol .. means not available.