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No Nation Has Escaped
S
piraling oil and food prices have
dealt a staggering blow lo !he strug–
gling economies of Central America. To
make matters worse, Guatemala, El Sal–
vador and Nicaragua are entangled in a
web of growing political strife and war–
fare.
In the Caribbean nations, princi–
pal cash crops such as sugar and
coconuts are subject lo !he vaga–
ríes of weather and world demand .
Higher oil prices and interest rates
have torced Caribbean govern–
ments to seek help from the lnter–
national Monetary Fund (IMF) to
survive.
Jamaica must seek international
loans lo meet its debts and devel–
opment needs. The nation ran out
of funds last year.
In Asia, the People's Republic of
China . beset with budget deficits
from its ambitious industrial devel–
opment plans, has approached
the IMF for loans lo help its econ–
omy.
Sri Lanka will have to spend on
oil imports about 43 percent of its
national budget o r the equivalen!
o f 58 percent of its export earn–
ings from tea, rubber a1_1d coco–
nuts.
One economist for Bankers
Trust Company estimates that for
every 1-point ri se in the prime
interest rate, less developed coun–
tries lace a $2 billion increase in
their annual debt service. Many
weaker nations are in a desperate
situation. There is little money al
affordable prices for interna!
expansion and development.
More Developed Nations Hit,
Too
No political or economic ideology
or system-whether capitalist or
socialist-has escaped serious
economic crises .
In the Soviet Union, there are
abi lity of these nat ions to repay
massive debts. And these nations
can' t afford new loans at today's
enormous interes t rates.
In Africa, almost every country
20
persisten! shortages o f many com–
modi ties - except vas! military
hardware . Weather calamities
again have w iped out huge
acreages of crops. Last year near–
ly 35 million tons of Soviet food
grai ns were destroyed by in–
c lement weather. The Soviets have
resorted lo paying premium prices
lo any nations who will sell lo
them. This competition ·for and
upbidding of tight supplies of world
grain lead lo costs poorer nations
cannot afford .
Poland's debts to the West now
are about $25 billion. And another
$15 billion are needed over the
next four years lo eliminate its bal–
ance of payments deficits by
1986. Almos! all of Poland's fo r–
eign exchange earnings this year
will go lo interest payments on
debts. Without fo reign assistance
there will be nothing for plan! and
equipment investments.
In Eastern Europe, the Soviet
Union has rai sed the price of its oi l
lo its socialist sa tellites by 27 per–
cen t and cut supplies . T hese
nations, already struggling wilh
declining production, are now
torced onto !he even more expen–
sive world oil market.
Yugoslavia's economic woes
are an example of a compound of
problems. The nation rec ently
received a $2 billion IMF loan to
help cope with its difficulties.
Heavy expenditures overwhelmed
the government. This was due to
costly imported oil , a severe jump
in inflation (37 percent last year) , a
poor harvest and a huge c leanup
bill alter a devastating earthquake
last year.
Elsewhere the consequences of
damaging economic policies are
coming lo a head. In Western
Europe, rapidly rising wage costs ,
fringe benefits and cradle-to-the-
watches helplessly. T hey see big–
ger energy bi lis and fall i ng
pr ices- because of lessening de–
mand for commod it ies like cocoa,
uranium, peanuts and cotton-
grave welfarism are justly starting
lo price European goods out o f
world markets.
' 'The total wage costs in West–
ern Europe ... continue to out–
pace wage costs in Japan and the
United States ," warns one Euro–
pean trade official.
In Britain, which is usually a year
or so ahead of other Western
nations on the inflationary path,
prívate firms are now borrowing to
finance their payrolls. lf this trend
continues, the collapse of prívate
business cannot be lar off.
Now the West German Wirt–
schaftswunder, or economic mira–
ele, is turning sour . West Germa–
ny's once-huge balance of pay–
ments surpluses have been trans–
formed into Western Europe's big–
gest deficit because of the cumu–
lat ive effects o f worldwide reces–
sien and imported oil.
Though the disciplined Germans
used 9 percent less o il in 1980 than in
1979, lheir oi l bill still rose 32 per–
cent. And their 1979 oil bill of $28
billion was doublethat of 1978.
West Germany, like all nations,
including the United States and
other highly developed nations, is
learning the ha rd way that they are
now vulnerable lo economically
destroying forces-especially high
energy prices, food shortages and
worldwide inflation-beyond their
national control.
In nation alter nation, too-rapid
consumption of limited resources,
massive government overspend–
ing, labor strikes, spiraling wage
and welfare demands, and the
pell-mell rush to spend lo gel
every materialistic want now–
even if one does no! possess !he
money-have produced soaring
inflalion. That's too many people,
demanding too many things for
limited money and goods.
Economic ills are often com–
pounded by political instability,
economic mismanagement and
natural disasters. o
erode trade and fi nancia! stabi li–
ty. Leaping oil pr ices and infla–
tion have been majar cont r ibu tors
to stagnating African economies.
I n Tanza n ia, fo r example ,
The PLAIN TRUTH