Oil, OECD, and the Third World: A vicious triangle

Book · Sun Jan 01 04:00:00 EST 1978

OSTI ID:6176412

Askari, H; Cummings, J T

The general economic impact of OPEC oil price increases is examined, in particular their economic impact on the non-OPEC less-developed countries. It is estimated that the negative effect on the terms of trade has been on the order of 10% or less for both industrialized countries and LDCs. The deterioration in the balance of trade of the LDCs during the adjustment period following the increase in the price of oil is analyzed in detail. The arguments are specifically concerned with the consequences of a single and singular event, the 1973-1974 oil price hike, and with the reaction of the LDCs to this event. As such, future developments do not affect the significance of these findings. The findings indicate that substantially less than 50% of the negative movement in LDC trade balances between 1972 and 1975 can be traced to higher oil prices. On the positive side, both the industrialized countries (generally, the members of OECD) and, to a somewhat greater extent, OPEC members have increased their economic support to LDCs in order to help them finance their current account deficits. This assistance, though indispensable, cannot by itself solve the long-range and fundamental economic problems of LDCs. It is concluded that the industrialized countries and OPEC, rather than placing the blame for the difficulties of LDCs on each other, should combine their economic strengths with non-OPEC LDCs in a trilateral, cooperative approach. It is only in this way that the long-range economic future of the world' disadvantaged can be ameliorated.

• OSTI ID: 6176412
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700 -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002* -- Energy Planning & Policy-- Petroleum
CHARGES
DATA
DATA COMPILATION
DATA FORMS
DEVELOPED COUNTRIES
DEVELOPING COUNTRIES
ECONOMIC IMPACT
ECONOMIC POLICY
ENERGY SOURCES
FOSSIL FUELS
FUELS
GLOBAL ASPECTS
GOVERNMENT POLICIES
INFORMATION
INTERNATIONAL COOPERATION
INTERNATIONAL ORGANIZATIONS
NUMERICAL DATA
OECD
OPEC
PETROLEUM
TABLES
TRADE