of their property, because it is so expensive and complicated to obtain in most developing countries. de soto showed that, for instance, in lima, peru, it took six years and eleven months going through 207 legal stages among 52 different public authority offices to obtain permission to build a house. obtaining legal permission to start a small company required six hours work a day for 289 days to follow the various bureaucratic steps, and it cost 31 times as much as the monthly minimum wage applying at the time. the fact that poor people therefore cannot formally own their houses or businesses means that they can have them stolen from them at any time, without the guilty parties being punished. it is also impossible for these people to use their assets as collateral to take out loans and perhaps even to sell them. it is therefore crucial, according to de soto, for developing countries to reduce bureaucracy and thereby release a mass of capital with the aid of the law. the world bank has extended the studies made by de soto to include more countries. the recentlypublished report doing business in 2005 : removing obstacles to growth shows, for instance, that it takes on average more than twice as long to register a new company in poor countries than in wealthy countries and that it is also much more expensive, in relation to income. most companies in developing countries therefore operate in the informal sector. despite this, wealthy countries implemented more than three times as many reforms to improve their investment climate last year than were made by poor countries. developing countries can thus, often using fairly simple means, ensure that more job opportunities are created by improving the opportunities for entrepreneurs in the formal sector and thereby promoting economic growth. the final basic explanatory factor behind increased wealth that i wish to highlight here is the pioneering technological advances made, particularly in the fields of information technology, international communications and global transports. these have led to large cost savings, which in turn have enabled the rapid spread of technology around the world. this has helped, for instance, give developing countries the opportunity to diversify their exports to a greater degree. one example worth mentioning is that it exports now account for almost 40 per cent of india ’ s total export income. all in all, the percentage of manufactured goods in developing countries ’ exports has increased from 20 per cent in 1980 to just over 70 per cent in 2001 ( however, in africa the figure is less than 30 per cent ). in addition, ict developments, which have enabled more efficient production in networks and at a distance,

figures and declining real wages, mass unemployment and political chaos in large parts of europe. the deliberate work on liberalising trade and capital flows, as well as payments for these transactions, within a strong multilateral framework began almost sixty years ago and is an important explanatory factor behind the increased economic growth we have experienced since then. the strategy was mainly based, within the framework of the gatt, on a gradual removal of trade barriers and the building up of a multilateral trade system via regular negotiating rounds and, within the framework of the imf, to jointly promote financial stability and free payments, initially for current account transactions and later for an increasing number of capital account transactions. moreover, the world bank was established, whose primary purpose is now to reduce poverty in the world. the endeavours towards liberalisation have been, and still are, very successful. with regard to trade, this can be illustrated by the fact that average tariffs on manufactured goods have fallen from over 40 per cent at the end of the second world war to under 5 per cent today. trade liberalisation has led, through increasing specialisation and competition, to a more efficient distribution of labour between countries, which has contributed to higher growth, and also to greater options and lower prices for consumers. however, the adjustments have not been easy, as we know from our experiences of the 1 branchforeningen for kontorsartiklar, emballage, papper och angransande produktomraden changes in the swedish shipyard and textile industries. it is necessary that the people affected by them receive support to enable them to make a living in other industries and in other regions. however, despite the difficulties experienced by some people, these changes have on the whole led to improvements. a lot of work remains to be done to liberalise world trade, which is indicated by the fact that the potential increases in wealth from continued liberalisation are substantial. calculations made by the world bank indicate that welfare gains of between usd 400 and 900 billion could be made if all of the current trade barriers were removed. more than half of these gains would fall to poor countries. the agricultural and pharmaceutical industries, where the poorest countries have their largest comparative advantages, would account for 70 per cent of the profits, that is to say, usd 230 billion. for comparison purposes, it can be mentioned that total foreign aid amounts to usd 60 billion a year, while the oecd countries ’ total agricultural subsidies are usd 330 billion