Vigorous LDCs

Cheer from the World Bank

While many industrialized nations have wobbly economies, the less developed countries (LDCs) are enjoying a period of good health that is likely to continue into the mid-1980s. That is the substance of an unexpectedly optimistic report last week by the World Bank. The economies of the non-oil producing developing countries expanded 4.9% last year, vs. 3.5% for developed nations. One reason is that bountiful harvests have substantially eased food shortages, especially in Southeast Asia. The effective use made of World Bank agricultural loans, which have increased 40% since 1973, was especially praised. The LDCs also benefited from the relatively strong demand for raw materials, which helped boost their exports last year 14%, or in dollar terms to $291.1 billion. Mexico and South Korea did well with manufactured exports, increasing their shipments 20% and 18% respectively. All told, the current account deficits of the LDCs fell from $37.2 billion in 1975 to $22 billion last year.

World Bank President Robert McNamara announced that starting in 1981, the bank will make loans totaling $500 million annually to enable Third World countries to begin oil exploration projects. That, too, should provide a continuing stimulus for growth. A major threat to further gains is the possibility that the developed countries will put up trade barriers against Third World exports. That would be self-defeating, warns the report, because only if the LDCs remain on the upswing can they continue to buy 28% of the manufactured goods exported by the industrial states.

This file is automatically generated by a robot program, so viewer discretion is required.