THIRD WORLD TRADE FALLS IN VALUE AND VOLUME IN 1985.

Apr 30, 1986

THIRD WORLD TRADE FALLS IN VALUE AND VOLUME IN 1985.

GENEVE, APRIL 28 (IFDA/CHAKRAVARTHI RAGHAVAN) – The merchandise trade of third world countries feel both in value and volume in 1985, according to latest estimates available with the U.N. Conference on Trade and Development.

Exports of the third world countries as a whole in 1985 is now estimated to have been 463.3 billion dollars, compared to 486.1 billion in 1984, or a drop of 4.6 percent.

Imports fell even by a larger proportion, from 458.6 billion in 1984 to 407 billion in 1985, or an 11.3 percent drop.

In terms of volume, the exports fell marginally by a 0.1 percent, but imports by 11.2 percent.

Direct data from individual third world countries to the UN Statistical Office, the common database for all estimations and projections by individual international organisations, is always several months behind (or even years in some cases).

Most estimation now available are those based on data for part of the year provided by countries themselves, and more complete data from their major trading partners particularly the OECD countries.

Trade data on commodity classification basis, are not also available in sufficient detail.

But available data suggest that the fall in third world trade values is due to fall in volumes of petroleum shipped, as also fall in unit values of exports from most regions and groups of third world countries.

The drop in trade in value terms affected all third world regions, and all groups of countries.

Only Sub-Sahara Africa registered in 1985 a 900 million dollar increase in imports or a 3.2 percent over 1984.

A major part of this is perhaps attributable to the massive emergency food aid shipped to Sub-Sahara Africa in 1985, which in merchandise trade data show up as imports.

Since 1981, third world countries as a group have been registering negative growth rates on their exports excepting in 1984, and on their imports continually.

In terms of geographical regions, the exports of western hemisphere third world countries dropped by 6.3 percent to 109 billion dollars, and their imports dropped even more by 8.2 percent to 82.7 billion dollars, leaving a trade balance in their favour of 26.3 billion dollars or 31.8 percent of their imports.

The countries of the region have heavy foreign debts, and since 1983 have had to pile up trade surpluses to service their debts.

In North Africa, exports fell to 28.6 billion dollars from the 30.8 billion in 1984, or a 7.4 percent drop, while imports fell from 36.1 billion to 30.9 billion or a 14.4 percent drop, giving a negative trade balance of 2.3 billion dollars.

In Sub-Sahara Africa, exports fell to 32 billion dollars from the previous 33.5 billion or a 4.4 percent fall, while imports increased from 28.6 billion to 29.5 billion or a 3.2 percent increase. This resulted in a trade balance of 2.5 billion dollars.

West Asia registered a decrease of 6.7 percent in exports, from 110.1 billion to 102.7 billion, while imports fell even more by 14.1 percent or from 107.4 billion to 92.3 billion, registering a 10.4 billion trade balance.

Exports of countries of South Asia fell from 14.9 billion dollars to 13.8 billion or seven percent, and imports from 24.9 billion to 23.8 billion or 4.4 percent, leaving a negative trade balance of 10 billion.

East Asia, a region with countries following so-called outward-looking strategies, saw exports dropping to 165.1 billion dollars from 168.5 billion or a two percent drop, and imports falling even more from 156.3 billion to 144.2 billion or a 7.7 percent drop, with a 20.9 billion trade balance.

In fact except for South Asia, where import fall was proportionately less, and Sub-Sahara Africa where imports grew, mainly perhaps due to the emergency food aid shipments in 1985, all other third world regions registered sharper cuts in imports than the fall in exports, indicating the pressures on them to "adjust" and mount trade surpluses to service foreign debts.

Among the various groups of third world countries, the major petroleum exporters, saw their exports drop to 193.5 billion dollars from 210.9 billion in the previous year or an 8.2 percent drop.

Their imports dropped by a shaper 11.8 percent, from 15.11 billion dollars in 1984 to 133.2 billion dollars in 1985.

The UNCTAD classification of major petroleum exporters comprises all members of OPEC, as well as Angola, Bahrain, Brunei, Mexico, Oman, Syria, and Trinidad and Tobago.

The other petroleum exporters (Bolivia, Egypt, Malaysia, Peru and Tunisia), also saw their total merchandise exports drop from 25.4 billion in 1984 to 24.4 billion in 1985 or a 3.8 percent drop, and their imports from 30.6 billion to 26.4 billion or a 13.8 percent drop over the same period.

Exports of the Net Oil Importing Countries (NOICS) dropped in 1985 to 245.7 billion from the previous year’s 249.9 billion or a 1.7 percent drop, while their imports dropped by 10.7 percent, from 276.9 billion in 1984 to 247.4 billion in 1985.

Among the NOICS, the exporters of manufacturers (Argentina, Brazil, Hong Kong, South Korea, Singapore, Taiwan, and Yugoslavia) saw their exports increase marginally, from 157.5 billion dollars to 157.7 billion, but had a sharp cutback of 12.7 percent in imports, from 141.4 billion to 123.5 billion.

The exports of the Least Developed Countries (LDCS) dropped by 9.7 percent from 7.7 billion dollars in 1984 to seven billion in 1985, and imports by 0.9 percent or from 14.5 billion to 14.3 billion.

The remaining NOICS saw exports drop from 84.6 billion in 1984 to 81.2 billion or a four- percent drop, and their imports from 121.9 to 109.6 billion or a 9.4 percent drop.

In volume terms, third world countries as a group saw a slight reduction in their export volumes in 1985, by a 0.1 percent, while their import volumes fell by a sharper 11.2 percent.

Within regions, the countries of East Asia registered a 3.8 percent increase in export volumes, while suffering a 6.7 percent drop in import volumes.

Among the groups of countries, the other petroleum exporters saw a 3.8 percent rise in their export volumes, and the NOICS a 5.8 percent increase (3.5 percent increase for exporters of manufactures and 6.4 percent by the "remaining" countries).

The terms of trade of third world countries as a group and of all regions and groups among them also saw deterioration in 1985.

For the third world as a whole, the terms of trade fell by 4.1 percent – by 5.7 percent for Western Hemisphere countries, by 1.2 percent for North Africa, 3.7 percent for other Africa, 2.5 percent for West and South Asia, and 4.5 percent for East Asia.

For the major petroleum exporters, it fell by 2.5 percent, by 6.5 percent for other petroleum exporters, by 1.8 percent for exporters of manufactures, by 4.7 percent for LDCS, and 8.6 percent for remaining countries (giving an overall average fall of 5.5 percent for the NOICS as a group).

The purchasing power of exports of third world countries as a whole, and of regions and groups of them, also fell excepting for the group of exporters of manufactures who made up by their fall in terms of trade by volume increase in their exports.

In the case of countries of East Asia, and the group of "remaining countries", who also had registered volume increases in their exports (but with greater weightage for commodities in exports), the increase in volumes was not sufficient to compensate fir their fall in terms of trade, and hence suffered a fall in the purchasing power of their exports.

For the third world as a whole, the purchasing power of exports in 1985 saw a 4.6 percent drop.

Within the third world, western Hemisphere countries saw a 6.3 percent drop, North Africans a 7.4 percent drop, other Africa a 4.5 percent drop, West Asia a 7.8 percent drop, South Asia a 6.0 percent drop, and East Asia a 0.9 percent drop.

The major petroleum exporters saw a 8.3 percent drop in the purchasing power of their exports, the other petroleum exporters a 2.7 percent drop, and the NOICS a 1.7 percent drop (a 1.1 percent rise for exporters of manufactures, a 9.7 percent drop for LDCS, and a 3.1 percent drop for the remaining countries).

The import volumes of the third world as a whole, fell by 11.2 percent – by 8.3 percent for Western Hemisphere, by 14.4 percent for North Africa, by 15.1 percent for West Asia, by 3.4 percent for South Asia, and 6.7 percent for East Asia, while it rose by 3.2 percent for other Africa.

Among the various groupings, import volumes fell by 11.9 percent for major petroleum exporters, by 12.8 percent for other petroleum exporters, by 10.7 percent for NOICS as a whole (11.7 percent for exporters of manufactures, one percent for LDCS, and 8.5 percent for remaining countries)