Uncertainties in the global financial markets may have slowed the momentum of the modest recovery that started in late 2001 according to a new report, Global Economic Prospects and the Developing Countries 2003: Investing to Unlock Global Opportunities. The report predicts that a sluggish global economic outlook, along with slower than anticipated growth in the next 12 to 18 months, will undermine progress in reducing poverty in developing countries. Global Economic Prospects 2003 details what actions need to be taken by rich countries and developing countries to increase growth rates and accelerate poverty reduction in developing countries.Productivity increases and effective investment are fundamental conditions for poverty reduction and for rapid growth. Establishment of these conditions requires improvement of the investment climate—that is, the policy and institutional environment that fosters entrepreneurship and productive investment. Global Economic Prospects 2003 analyzes both global and national dimensions of investment climate for developing countries. The report: • Explores the current state of the world economy and how it impacts the access to capital, exports, and growth prospects of developing countries; • Examines recent changes in the organization of global business, notably the proliferation of multinational companies and associated production networks; • Argues that sound national policies, particularly to encourage competition, are needed for countries to reap the benefits of globalization; • Discusses ways in which the international community can help developing countries establish competitive investment environments; and • Considers the potential for a new World Trade Organization agreement on investment and competition, and concludes that the probable development impacts of any new accords are clearly secondary in importance to progress in reducing trade barriers facing developing countries.