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Little food is now given away
in government food-aid pro–
grams-from the United States
or any other nation. Only rela–
tively little can be. Food is no
longer cheap to produce. Pet ro–
Jeum prices have risen over 100
percent jus t in the past year
alone.
Surplus foods or cash crops
(even in many food-short devel–
oping nations) must be sold to
pay growing import costs- par–
ticularly high oil and industr ial
import costs. Food exporters sell
to those who can pay for it.
Mo rtgaged Future vs.
Mass Famine
You may wonder how so many
encrgy- and food-importing na–
tions, particularly the poorer na–
tions with limited foreign ex–
change, havc been able to meet
soaring energy, food, fertilizer
and development bilis but still
avert bankruptcy.
The answer is, many middle–
and low-income nations have been
heavily borrowing money wher–
ever they can. They have been
borrowing from international
banks, the lnternational Moneta–
ry Fund and United Nations
development agencies. OPEC
(Organization of Petroleum Ex–
porti ng Countries) has also es–
tablished a fund for grants and
loans to developing nations.
From Brazil to Záire, develop–
ing nations have mortgaged the
income of future generations to
pay for oil , food, fertilizers and
other imports that were con–
sumed years ago.
The Philippines is a case in
example. That nation relies on
imported fuel for 93 percent of its
energy needs. Spiraling world oil
prices have been Jittle short of a
national disaster.
Like many developing nations,
the Ph ilippines turned to foreign
borrowing to ease the 1974 oil
and balance-of-payment shock.
The country is now staggering
under a $9 billion foreign debt,
up 20 percent in 1979 over
1978.
Since 1974, the year of the
first oil shock, the debt of less–
developed nations has tripled to
October
1
November 1980
more than $370 billion.
1t
was
only around $60 billion 1
O
years
ago. The World Bank projects
that, at present trends, the debt
load of developing nations will
increase to $1.2 trillion in the
next 1
O
years!
By 1990, developing countries
are expected to be borrowing
close to $200 billion annually and
accepting another $70 billion in
direct aid to finance their grow–
ing demand for food, energy and
development.
The great worry among inter–
national bankers and lenders is
that the ability of many of these
nations to pay back such massive
loans is becoming increasingly
shaky .
lt
becomes shakier with
each leap in world oil prices or
with each faltering in world econ–
omy, with crop failure or natural
disasters, or with regional politi–
cal or trading conflicts.
Already, many of the heavily
indebted developing nations are
near or over prudent lending lim–
its- at least traditional prudent
lending limits. Fears of default on
loans have already panicked lend–
ers to renegotiate Iater repayment
dates, or even give new loans to
prevent default. The international
banking and lending system can–
not afford total loss of confidence
from severa! big loan defaults.
lt
is only because O PEC na–
tions have been recycling around
$120 billion a year in surplus oil
money in world banking invest–
ments that there has been enough
monetary liquidity in internation–
a l lending institutions to finance
the trading deficits of so many
nations.
"But," asks a West German
central bank official, "will the
oil-exporting countries take part
in bad risks? One must doubt
from past experience how far
they will go."
What shocking power and lev–
erage the major oil-exporting na–
tions, as a bloc, wield among
nations! Through their domina–
tion of oil exports and surplus oil
money they have power, direct ly
or indirectly, to determine what
vulnerable nations will prosper
and survive; in sorne cases even
who can be ruined or starved if
they don't act according to their
outlook, goals or values.
Deb t Risk s-or Sta rvatio n
and Revolution
Nations already on the debt-rid–
den worry list are most Central
American countries, the Sudan
and several other African nations.
lnternational lenders are afraid to
Jet critica! nations go under. Tur–
key, Brazil, India, Indonesia,
Peru, Pakistan, Za"ire and others
have been allowed to reorganize
repayments on existing loans for
much later dates.
As a group, developing coun–
tries spend about 30 percent of
their export earn ings on oil. Tur–
key will have to pay as much as
90 percent to satisfy fuel needs
and loan repayments.
l n recent months, jittery inter–
national bankers have tended to
shoo over-borrowed nations to the
l nternat ional Monetary Fund.
But before extending any credit,
the IMF frequently imposes a
series of tough restrictions over
domest ic fiscal and monetary pol–
icies. Many nations simply do not
want those strings attached .
1f nations cannot get new loans
to finance their trade deficits,
many will soon be forced to
sharply curtail economic growth
and imports. But for many food–
shor t nations, a reduction in bor–
rowing means a steep economic
setback with attendant mass s tar–
vation and revolution. What a
dilemma many nations are in!
Whatever weather conditions
in the years ahead, soari ng energy
prices and tightening fuel sup–
plies by themselves have guaran–
teed that poor and hungry nations
will become poorer and hungrier;
r ich nations will no longer be able
to produce cheap food. Never
have so many nations built such a
false and fragile foundation of
prosperi ty and "success"!
Never has the world more
needed a "strong hand" from
someplace to show nations the
way to true peace, abundant food
production and lasting prosperity!
That's precisely what the Bible
reveals the Creator will do. That 's
the good news- the only good
news- for the future!
o
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