World Economic Report 1949-50

WORLD ECONOMIC REPORT 1949-50 ,�) U N I T E D N AT I O N S � ..ad7� WORLD ECO OMIC PORT 1949-50 UNITED NATIONS DEPARTMENT OF ECONOMIC AFFAIRS New York, March 1951 E/1910/Rev.l ST/ECA/9 16 March 1951 UNITED NATIONS PUBLICATIONS Sales No.: 1951.II.C.l FOREWORD World Economic Report, 1949-50 is the first economic trends from the beginning of 1949 to comprehensive review of world economic condi the middle of 1950. It is divided into six chapters tions to be published by the United Nations since dealing with several types of countries or groups June 1949, when World Economic Report, 1948 of countries. Part II of the report contains analyses appeared. These reports are issued in response to of changes in the volume and direction of inter General Assembly resolution 118 (II), in which national trade (chapter 7) and of recent trends in the Secretary-General was requested to prepare international financial settlements (chapter 8). annual factual surveys and analyses of world Part III is devoted to a discussion of two special economic conditions and trends. Like the earlier problems: the factors underlying the persistent publications, the present report is intended to dollar deficits in a large part of the world prior to meet the requirements of the Economic and Social 1949 (chapter 9) and the relationship between Council and other organs of the United Nations the currency devaluations of 1949 and subsequent for an appraisal of the world economic situation developments in international trade (chapter 10). as a prerequisite for recommendations in the eco The Statistical Appendix, which contains tables nomic field, as well as to serve the needs of the that supplement the text, begins on page 199 and general public. In its preliminary form, the report is followed by a chronology of the more important was made available in February 1951 to the international economic events of the period under twelfth session of the Economic and Social Coun review. cil and to Members of the United Nations. The report was prepared by the Division of The present report is devoted to an analysis of Economic Stability and Development in the De major developments in domestic economic condi partment of Economic Affairs of the United Na tions and international economic relations during tions, with substantial assistance by the Statistical 1949 and the first half of 1950, with some pre Office of the United Nations, which collected most liminary comments on tendencies since mid-1950. of the basic statistical data and prepared many of Detailed analyses of economic trends in 1950 in the tables. Some of the statistical material was Asia and the Far East, in Europe and in Latin obtained from the specialized agencies, notably America will become available during 1951 in the the International Monetary Fund, the International annual surveys prepared by the secretariats of the Bank for Reconstruction and Development and respective United Nations regional economic com the Food and Agriculture Organization of the missions. In addition, brief reviews of economic United Nations. The chronology was drawn up conditions in Africa and the Middle East are by the secretariat of the Economic and Social issued as supplements to this report. Council. The chart in the introduction was pre The report is divided into three parts. Part I is, pared for printing by the Presentation Unit of the in general, confined to the study of domestic United Nations Publishing Division. iii EXPLANATION OF SYMBOLS The following symbols have been used in the tables throughout the report: two dots (,',) indicate that data are not available; a dash (-) indicates that the amount is nil or negligible; a blank indicates that the item is not applicable; a full stop C.) is used to indicate decimals; a comma (,) is used to distinguish thousands and millions; a slash (j) indicates the crop year; the use of a hyphen (-) between dates representing years, e.g., 1934-38, normally signifies an annual average for the calendar years involved; "to" between the years indicates the full period, e.g., 1947 to 1949 means 1947 to 1949, inclusive. References to "dollars" indicate United States dollars unless otherwise . specified. Details and percentages in tables do not necessarily add to totals, because of rounding. iv TABLE OF CONTENTS Page INTRODUCTION 5 Part I Major National Economic Changes 1. ECONOMICALLY DEVELOPED PRIVATE ENTERPRISE ECONOMIES A. United States of America . 13 Changes in the' gross national product .. 13 Distribution of real income ........... 18 Employment and unemployment ....... 19 B. Continental western Europe, the United Kingdom, Canada and Australia 20 Production and employment situation. .. 20 Gross national product and inflationary pressures . 24 Changes from 1948 to 1949. ...... 24 Changes from first half of 1949 to first half of 1950 . 29 2. CENTRALLY' PLANNED ECONOMIES OF EASTERN EUROPE Changes in production, consumption and real earnings . 33 The economic plans . ' . 35 3. SELECTED COUNTRIES IN LATIN AMERICA AND THE FAR EAST . 38 Agricultural and industrial production. ................................. 38 Gross national product and inflationary pressures . 41 Changes from 1948 to 1949 . 41 Changes from first half of 1949 to first half of 1950 . 46 General observations ................ 47 4. GERMANY A. Western Germany . 49 B. EasrernGermany . 51 5. JAPAN . 54 6. CHINA . 58 Taiwan '" . 58 China proper and North-eastern Provinces (Manchuria) . 59 General economic trends in China proper . 59 Institutional changes in China proper . 61 Developments in North-eastern Provinces (Manchuria) . 63 Part II Changes in International Trade and Payments 7. DEVELOPMENTS IN INTERNATIONAL TRADE The changing pattern of trade. .............. .. ....................... 67 Decline in the world's import surplus with the United States. ............... 71 v Page Reduction in world's imports from the United States after 1948 .:...... 71 Fluctuations in United States imports between 1948 and 1950 ......... 76 The decline in the United States export surplus ...................... 80 Recovery of the trade of western Europe ................................ 81 Rise in intra-western European trade ........................... 82 Levelling off in volume of western European oversea exports after the middle of 1949 ................................ 85 Western European imports from overseas. ...................... 86 Reduction in western Europe's import surplus. ...................... 89 The trade of eastern Europe. ......................................... 90 Stagnation of east-west trade. .................................... 90 Expansion of trade among eastern European countries ................ 92 Re-emergence of export surpluses of countries exporting primary commodities. .. 95 Trade of the Latin American countries 96 Oversea sterling area ........................................... 99 Canada 102 Other areas ................ .. 102 8. RECENT TRENDS IN INTERNATIONAL SETTLEMENTS 104 The position of major trading areas and countries. ..................... .. 107 United States ............................................... .. 107 Canada 115 Latin American count:i;ies .............................. .. 116 United Kingdom and the sterling area 120 Continental western Europe. ............................... .. 128 Intra-European settlements .................................... .. 131 Other areas .............................. .. 135 Summary and conclusion .......................... .. 138 Part III Dollar Deficits and Currency Devaluations 9. POST-WAR DOLLAR DEFICITS IN INTERNATIONAL TRADE General aspects ... .............................................. .. 145 The dollar deficit of the sterling area ................................ .. 149 United Kingdom .. : ......................................... .. 152 The outer sterling area ....................................... .. 154 The dollar deficit of continental western Europe " 158 The dollar deficit of Latin America. ................................. .. 163 10. THE 1949 CURRENCY DEVALUATIONS AND INTERNATIONAL TRADE. ......... .. 167 The dollar crisis of 1949. .......................................... .. 168 Commodity prices after devaluation. ................................ .. 169 Primary commodities , .................................. .. 169 Manufactures 171 Import and export prices and terms of trade 173 Devaluation and international trade " 175 Exports to the dollar area. ..................................... .. 176 Non-dollar area imports from the dollar area ..................... .. 185 Summary and conclusion .............................. .. 196 STATISTICAL ApPENDIX " 201 CHRONOLOGY , .................................. .. 213 INDEX 237 VI List of Tables Page 1. Value and quantum of exports of world and of world excluding the United States, pre-war and 1946 to 1950 (three quarters) 7 2. Distribution of income among seventy countries, 1949 ................. 10 3. Gross national product, by major components, in the UnitedStates, 1948 to 1950 (first half) ................................ 14 4. Gross private domestic investment, export surplus, adjusted budget deficit and consumption in the United States, 1948 to 1950 (first half) ................ 15 5. Ratio of consumption to disposable income of individuals in the United States, 1948 to 1950 (first half) ............................................ 15 6. Indices of physical production of goods and transportation services in the United States, 1949 and 1950 (first half) ................................ 16 7. Gross

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