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World Economic Survey, 1975

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World Economic Survey, 1975 E/5790/Rev.1 STIESA/49 WORLD ECONOMIC SURVEY, 1975 Fluctuations and Development in the World Economy UNITED NATIONS E/5790/Rev.1 ST/ESA/49 Department of Economic and Sodal Affairs WORLD EC Fluctuations and Development in the World Economy UNITED NATIONS New York, 1976 NOTE Symbols of United Nations documents are composed of capital letters combined with figures. Mention of such a symbol indicates a reference to a United Nations document. E/5790/Rev.l ST/ESA/49 UNITED NATIONS PUBLICATION Sales No. E. 76. II. C. 1 Price: $U.S.ll.00 (or equivalent in other currencies) FOREWORD The International Development Strategy for the Second United Nations Development Decade - adopted by the General Assembly in resolution 2626 (XXV) on 24 October 1970 - calls for a biennial review and appraisal of performance and progress. Two such cycles have been completed. In 1973 the Secretary-General presented an empirical analysis of Implementation of the International Development Strategy 1/ and a report on The International Development Strategy: First Over-all Review and Appraisal of Issues and Policies. 2/ In December 1973 the General Assembly completed its first review and appraisal with the adoption of resolution 3176 (XXVIII). In 1975 a second empirical analysis was presented as Part One of the World Economic Survey; it was entit1ed Mid-term Review and Appraisal of Progress in the Implementation of the International Deve10pment Strategy. 3/ The Genera1 Assembly undertook its own review and appraisal and in December 1975 adopted resolution 3517 (XXX) which, inter alia, decided to include on its provisional agenda for the thirty-first session an item entitled "Revision of the International Development Strategy for the Second United Nations Development Decade" in the light of the Programme of Action on the Establishment of a New International Economic Order and other recent declarations, requesting the Secretary-General to submit appropriate documentation for this purpose. The present report has been prepared in response to that request. It takes a closer look at the course of events in the first half of the Decade, bearing in mind the General Assembly's concern - expressed in resolution 3343 (XXIX) - in regard to the constraints that have inhibited the implementation of the International Development Strategy and the Programme of Action. The 1971-1975 period was one of great instability in which short-term problems and emergencies tended to pre-empt the attention of policy makers. The implications of this for the longer-term policies embodied in the International Development Strategy are examined. The report consists of two chapters. The first discusses the sources of instability in the first half of the Decade - the wide swings of the business cycle in the major industrial countries and the exogenous shocks to the system originating in the breakdown of the international gold-exchange monetary system and the extraordinary changes that occurred in the world food and energy situations. The second chapter looks ahead to the second half of the Decade, to the adjustments called for by the new price relationships, to the efforts needed to restore more stable growth and to improve the national and international division of labour and distribution along the lines implied in the International Development Strategy and y Produced in two volumes as United Nations pUblications, Sales Nos. E.73.II.A.2 and E.73.II.A.3. ?J United Nations publication, Sales No. E.73.II.A.6. ]j United Nations pUblication, Sales No. E.75.II.C.1. -iii- the Programme of Action. A supplement~ to be issued subsequently, will examine th< impact of these fluctuations and the efforts that were made to deal with them in the developed market economies, in the centrally planned economies and in the developing countries. The report, which was prepared in the Centre for Development Planning~ Projections and Policies of the Department of Economic and Social Affairs of the United Nations Secretariat has drawn on the information provided by Governments in their replies to the Secretary-General's questionnaire of December 1975 on economi trends and policies. The statistical contents reflect the data available to the Secretariat in February 1976. -iv- CONTENTS Foreward •• • • • • • •• • • •••• • • 00 III II • • • • II • II .. ••• II • iii Chapter 1. FLUCTUATIONS IN THE WORLD ECONOMY ••.•• ... 1 Economic growth and balance in the 1960s 1 Instability in the first half of the 1970s 2 Swings in demand in the developed market economies 4 Movements in commodity prices •. 11 Changes in the food situation . 16 Changes in the energy situation • 23 Changes in external balance .. 27 The impact of world economic fluctuations on the growth of developing countries .....• .. •••••••• 32 II. PROBLEMS AND PROSPECTS FOR THE SECOND HALF OF THE DECADE 88 The economic outlook in the developed market economies 90 Plans and prospects of the centrally planned economies 99 The outlook for international trade •• ..... 109 Prospects for the developing countries . 114 -v- List of tables Table L Flllctuations in growth rates, by group of countries. 1961-1975 • 42 2. Maj or developed market economies: gross national product growth rates, by quarter, 1970-1975 .. II .. .. .. .. .. .. II 44 3. Developed market economies: growth of gross domestic product, in constant market prices, 1970-1975 . 4. World industrial production: changes by branch and country group, 1971-1975 ....•. ........... o •• e.OlQO •• 46 5. Developed market economies: imports from deve1o~ing countries, 1970 ..... 1975 .. .. III • 1& oJ Q III • .. ., • .. " • • .. • .. .. CI .. .. .. '" • 6. Changing price relationships: energy, food and manufactures, 1950-1975 •••• .••••••.•.•.••....• 48 7. Primary commodities: changes in relative prices, 1970-1975 8. Beverage crops: world production, imports and prices, 1970-1975 50 9. Sugar: world prOduction, trade and prices, 1970-1975 51 10. Edible seeds and oils: world production, exports and prices, 1970-1975 . .. .. .. .. .. .. .. .. .. .. .. 52 11. Cereals: world production, trade and prices, 1970-1975 53 12. Trade in grains: Europe and USSR, 1950-1975 • .. .. • • 11II 55 13. Developing countries: net imports of cereals, 1960/61-1975/76 56 14. International trade in beef and veal, 1970-1974 .. 11/I • II 0 • • I!/I • .. .. 57 15. Developing countries: total imports and imports of food-stuffs, 1970-1974 •• . 58 16. Food aid, 1965 and 1970-1974 • . .. 58 17. Coal: output in major producers, 1950-1974 . 59 18. Changing structure of energy production and consumption, 1961-1973 •. 60 19. Petroleum in world energy supplies, 1950-1973 20. Selected countries: profiles of commercial energy consumption, 1973. 63 -vi- List of tables (continued) Table 21. Estimated petroleum reserves of members of OPEC • . • . " .. 66 22. Selected countries: production of petroleum, natural gas and coal, 1973-1975 .. " .. • e IIlI • • • • • • • • • •••• • 1& ,. III • 67 23. Crude petroleum: changing structure of production, 1955-1975 . .. 68 24. OPEC: crude petroleum exports, 1970-1975 ...... .. 70 25. Major developed market economies: balance of trade, 1970-1975 71 26. World trade, by country group, 1970-1975 • • • II)) • • III " • .. • 72 27. Market economies: changes in trade balance and international reserves, by region, 1970-1975 .••. .. .. .. ••.• • •••. .. .. •• 73 28. Developed market economies: distribution of trade balance~ 1970-1975. 74 29. Developing countries: changes in international reserves, 1970-1975 •. 75 30. Net flow of resources to the developing countries from the developed market economies and the international agencies~ 1970-1974 ..... 31. Organization of Petroleum Exporting Countries: financial flows to developing countries and multilateral lending organizations, 1973-1975 79 32. Developing countries: use of international bond and Euro-currency credit markets, 1970-1975 ••• • . .. •. .. .•.. .. .•. •. 80 33. Developing countries: international borrowing, external pUblic debt, 1971-1975 ...... ... 81 Developing countries: transactions with the International Monetary Fund, 1970-1975 . .. .. •••• e- ••• .. 84 35. Agricultural production, 1971-1975 . .. ... 85 36. World gross domestic product, by country group, 1971-1975 •• . 86 37. Developing countries: distribution according to rate of economic growth, 1970-1975 • II •••••••••••••••••••••• 87 -vii- List of tables (continued) Table 38. Developed market economies: growth of gross product, actual 1971-1975. forecast 1976 ....... 146 Major developed market economies: projected course of the recovery in industrial production ... 40. Developed market economies: forecasts of price movements, 1976-1978. 148 41. Developed market economies: forecasts of unemployment) 1976-1978 150 42. Developed market economies: forecasts of international trade, 1976-1978 151 Centrally planned economies of Eastern Europe and USSR: trends in national output. planned aDd actual) 1970-1980 152 44. Centrally planned economies of Eastern Europe and USSR: average annual change in expenditure components, planned and actual, 1970-1980 153 45. Centrally planned economies of Eastern Europe and USSR: growth of export and import quantum and income elasticity of foreign trade, planned and actual, 1971-1980 ...................... 154 46. Developed market economies: institutional arrangements affecting international trade, 1970-1975 155 Major developed market economies: measUres affecting international trade, 1970~1975 . 159 48. Members of OPEC: selected economic characteristics. 1974 168 49. Members of OPEC: planned
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