Marshall Plan Days (Routledge Revivals) by Kindleberger Charles P.;

Author:Kindleberger, Charles P.;
Language: eng
Format: epub
Tags: ebook, book
Publisher: Taylor & Francis Group
Published: 2011-09-26T00:00:00+00:00

The New International Economic Order

The demands of the Third World for stabilized commodity prices, trade preferences, foreign aid amounting to 0.7 percent of the gross national product of developed countries, the link to the SDR, new rules for the multinational corporation, free use of the North’s technology, without restrictive business practices, plus rescheduling of accumulated debts, more stable exchange rates among developed countries, and a share in any profits derived from exploitation of the ocean seabed pose many problems for the OECD countries at various levels. Among them are whether these problems should be treated in one great big package deal, as called for by the developing countries in the sixth and seventh special sessions of the General Assembly of the UN and sought in the Paris Conference on International Economic Cooperation with its four commissions on commodities, energy, finance, and development; or one at a time, commodity by commodity rather than eighteen commodities at once, and rescheduling the debts of countries as required, along previous lines of the so-called Paris Club, rather than in one grand bankruptcy proceeding; whether the OECD countries should enter negotiations with the developing world with agreed positions, vote as a bloc, caucus on new propositions, or by and large take independent national positions and run the risk of being overcome through divisions; whether to seek generally market solutions to economic problems, or to embark on a system of world planning; whether to accept the proposition implicit in the New International Economic Order demands of the Group of 77, the Non-Aligned Group, the UK majority, and others, that a change in institutional arrangements will make possible significant increases in the levels of living of the Third World, as they admittedly did for the OPEC countries and for the coffee-growers outside of frost-stricken Brazil, without increases in productivity and output; whether in fact the need of the moment is not for less negotiation, less integration, fewer North-South agreements, and more for what is coming to be known as “decoupling.”

In this writer’s judgement, to put the matter bluntly, the OECD and the developed world can make their greatest contribution to the development of currently LDCs by:

Maintaining their own stability and growth, including relati vely full employment, avoidance of inflation, and balance-of-payments equilibrium.

Maintaining free markets, with readiness to accept LDC imports and to adjust domestic resources to them. In the short run “market disruption” may require limited intervention. Over periods as long as five years the economic health of LDCs and DCs alike requires making room for emerging LDC exports of manufactures.

Maintaining and expanding foreign aid through multilateral agencies.

Abandoning governmental pressure to force LDCs to accept direct investment and encouragement to such investment through guarantees and insurance.

Tolerating LDC attempts to raise prices of commodities along lines of the success of OPEC in oil, but neither endorsing them nor retaliating. It should be enough to remind developing countries of the lesson of economics that in the long run, equilibrium market-clearing prices must prevail, and that attempts to raise them higher will sooner or later fail, as the example of sugar in 1974 and 1975 so conclusively shows.

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