Reuters quoted Mr Supachai Panitchpakdi secretary general of United Nations Conference on Trade & Development as saying that the world economy will shrink by at least 1% in 2009 as hopes fade that some developing countries can withstand the crisis.

He said that "We might see more compression on developing country growth and that of course results in a deeper worldwide contraction, so minus 1% at the moment but it certainly could be deeper than minus 1%."

UNCTAD's working assumption of a 1% contraction is based on projections of 2.5% to 2.6% growth in developing countries, and is gloomier than the International Monetary Fund's 0.5 percent global growth forecast in January. That IMF projection assumed many developing countries, in Asia in particular, would get off lightly.

Mr Supachai said that it now appeared Asian countries could suffer the same 30% to 40% export declines that hit them in the Asian crisis a decade ago. This is because nations that adopted an export oriented policy to get out of that crisis now find themselves exposed to slumping demand elsewhere in the world, leading many countries to question the value of the current open trading system.

He added that "It is not the outright protections that you would see, it's not a blatant blockage of the market for me it's the economic nationalism, the way that quietly, tacitly, countries are urging people to become more self sufficient."

(Sourced from www.reuters.com)