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December 9, 2016
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March 19, 1999
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July 16, 1975
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CLAOIS ,. Ec~no~rnri ~~ooiosria `: (V~ ~y ntelligence Weekly: ~ 16 JuI~ ~' ~, Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret No Foreign Dissem Economic Intelligence Weekly Secret ER EIW 7.5-28 16 July 1975 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-~?pY N ~ 4 5 9 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 NATIONAL SECURITY INFOR1~1iATION Unt~lthorized Disclosl~re ~ubiect to Criminal Sanctions Claulf?~d by d1S719 Er~mpt from general declassification schedule of E.O. 11632, exemption category: ? 38(1), (2), and (~) Automatico ly declassified on: Dote Impouibb to Determine Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret No Foreign Dissern 16 July 1975 Soviet Lrop Prospects Deteriorate Further . 3 Growing Pressure on Rice Prices . 4 Fertilizer Prices Skid . 7 Dev~:oped Countries: Improved Outlook for Housing Construction . 8 tcuador: Emerging Payments Problem 12 Saudi Arabia: Aid as a Foreign Policy Tool 14 Rising OPEC Economic Aid to LDCs 16 The Soviet Grain Crop Now Is Estimated at 200 Million Tons, down 15 million tons from our previous forecast. Drought conditions have worsened and spread in recent weeks. Although no grain contracts have been announced, rumors point to Soviet contracts or negotiations involving 10 to 11-1/2 million tons of wheat, corn, and barley. (Confidential) Housing Construction Shows Signs of Revival in the United States, Canada, the United Kingdom, and Japan. A turnaround in France and Italy is expected by yearend. because of an unusually large inventory of unsold dwellings. Lower prices for building ,naterials, some softening in mortgage rates, and government assistance are factors in the mild upturn. Job uncertainties, high mortgage rates, and high prices make a housing boom unlikely in the near future. Budget problems and concern about inflation will impede government efforts to spur the industry. Housing construction thus cannot be counted on to spark a recovery, as it has in previous business cycles. Food and Commodity Issues Continue To Dominate International Meetings. ? At this week's Trade Negotiations Committee meeting in Geneva, developing countries will intensify pressure for preferential treatment of tropical product exports. Developed countries are expected to introduce the issue of security of raw material supplies, over LDC objections. Note: Comments and queries regarding the F.conomlc /ntel/igence {Meekly ate welcomed. They may be duecled 25X1A to the Office of Economic Research, Code 143, Extension 5943. Approved For Release 2000/09/14 :CIA-RI~~T00608R000500140027-4 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret o The UN Conference on Trade and Development will consider a plan for financing commodity stockpiles in meetings starting on 28 July. The proposed fund, tutaling $6 billion, would be used to finance buffer stocks of such commodities as copper, coffee, and rubber. Exporting and importing countries as well as OPEC states will be asked to fund the progi am. a The World Food Council hopes to begin lining up financing for its International Fund for Agricultural Development at the September meeting. The Council is seeking an initial fund of $1 billion to aid the poorest food-deficit Gauntries. It is counting on substantial contributions from OPEC countries but has received no commitments. Approved For Release 2000/09/14 :CIA-F~p~86T00608R000500140027-4 cret Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret SOVIET CROP PROSPECTS DETERIORATE FURTHER The drought in the USSR worsened anti spread in late June and early July, leading us to lower our estimate of the 1975 grain crop from 215 million tons to 200 million. A crop of this size and the reduced outpttt now in prospect for forage crops could result in Soviet grain imports well in excess of 10 million tons in F'Y 1976. The USSR imported only 6-1 /2 million tons in FY 1975. Unseasonably hot weather and scant rainall in the last 10 days of June cut soil moisture to critical levels in the eastern and southern Ukraine and in the North Caucasus and the Central Black-Soil Region. Crop conditions remained critical in western Kazakhstan and the Volga Valley. Lower temperatures and moderate rain in the Ukraine during the first 10 days of July did not materally relieve drought conditions. The drought has not damaged winter grains appreciably because they were already mature when moisture levels fell. In western Irazakhstan and the Volga Valley, however, sown acreage that would normally produce 1 U million tons of Major train Growing Regions in the USSR ~- - L)ISf illnl: 20'~ (''?nhal r~ 141a~F E:u i6,. (i' r?, _ ~ ' Economic region .~~ Percentages show reglonp share of grain prodllctlon. Shares shown add to92ioof total production. ~~- ~ 1 ___ ___.__._~___._. ... ,. ~-- ~ ~ ._. _]____-_L--_.___..____.__....~__..._ ......__..______..____.._ i i ti~ ~ ~~ -~ ~ -- 5505G0 574 Approved For Release 2000/09/14 :CIA-RC~~,gtT00608R000500140027-4 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret spring grain already has been lost. In addition, acreage that should .have produced several milli~~ n tons of corn apparently has been lest ;n the Ukraine and North Caucasus. We will have to reduce our forecast for 1975 still further if growing conditions remain poor and harvesting weather is unfavorable. The spring grain crop is particularly vulnerable in the New Lands area of Siberia, where cool weather has slowed maturing. Early arrival of winter could catch the crop unharvested, causing heavy losses and lowering the quality of the grain saved. Production of forage crops - w::ich provide two-thirds of Soviet livestock feed - is as important as the grain harvest in determinir~~; the USSR's need. for grain imports. Forage crops have been severely hurt in major catty and sheep raising areas in the Volga Valley, the Ukraine, and the North Caucasus. Even with a normal output of forage crops, the current grain crop projecticn falls about 10 million tons short of estimated Soviet requirements. Meanwhile, the app~rent entrance of t}ie Soviets into the international grain market is clearly indica~ive of their concern. No Soviet contracts for grain imports have been announced formally, but reliable sources olaim that nurcirases of 2-3 million :ons of wheat, 41 /2 million tons of corn, and 1 million tons of barley have been or ~~P being negotiated. US grain companies have been told that sales of up to 7 million tons of corn and 7 million tons of wheat ~NOUId be acceptable to the US Government. bringing total rumored contracts to 10 to 11-1/2 million tons of grain. We believe that the grain that the Soviets are now d~rkering for is intended only to offset losses already sustained. If the. crop outlook deteriorates further, Moscow probably will come i:ito the market again to preserve its livestock program. (Confidential) ^ GROWING PRESSURE ON RICE PRICES Asian export prices for rice recently have fallen sharply because of good 1974/75 harvests in major exporting and importing countries and prospects for a bumper crop next year. The price of Thai rice, for example, dropped to $33'2 Approved For Release 2000/09/14 :CIA-RD~86T00608R000500140027-4 Secret Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret 0~ Jul 72 Jen 73 (Export Prices of Milled Rice (US $ Per ton) fob mills, koustonl /~~ Thai Pricei(Wtiito, 5% hrokens, / Q fob Bangkok) Jy Jul 73 Jen 74 Jen 75 1 Thailand suspended prico quotations from 5 Merch 1973 until January 197a and reduced exports because ut domostic rice ~ homages. 75 2nd Week par ton last week -down 17% from January 1975 and 48% from April 1974. US prices, stearied during the past seven months by i?L-480 sales and strong Middle East deman:i, probably will also come under pressure before long. In 1 y75 an estimated 9.1 million tons of milled rice will be available for export, up 1.4 million tons from actual exports in 1974. This increase reflects good harvests in three major exporting countries -the United States, Thailand, and Burma. At current F :es, imports are expected to reach about 8.0 million 6 Approved For Release 2000/09/14 :CIA-R~2FSfT00608R000500140027-4 Approved For Release 2000/09/14 :CIA-RI~86tT00608R000500140027-4 World Production of Paddy Rice Million Tons Crop Years Endinx 31 Julv 1975/76 1973/74 1974/75 Forecast Total 317.0 316.3 327.8 Asia 290.' 287.8 298.1 China :05.0 l OS.O 107.0 India 65.7 60.0 65.0 Indonesia 22.6 23.5 24.0 Thailand 14.4 14. s 14. S Burma 8.4 8.5 8.5 Other 74.6 76.3 78.8 Western Hemisphere 14.7 16.4 17.3 Of which: United States 4.2 5.2 5.3 Africa, Europe, and Oceania 11.6 12.1 12.4 tors, compared with 7.7 million in 1974. International demand for rice is sluggish because of good crops in several importing countries - particularly Indonesia, where stocks have increased substantially. Postponement of purchases by importers anticipating lower world prices or increased domestic output in 1975/76 also is a factor. If world rice output rises by 11.5 million tons in 1975/76 -our current forecast, assuming normal weather - some countries will have less need for imports and others should be able to buy at prices lower than at present. Thailand is feeling the brunt of t}te decline in import demand. By replanting after the floods in early 1975, the Thais managed to raise output by 100,000 tons in 1974/75, to a record 14.5 million tons. Meanwhile, production increased by 900,000 tons in Indonesia and reached new highs in otter importing nations such as the Philippines, Malaysia, North Korea, South Vietnam, and Taiwan. exports consequently have been running at an annual rate of only million tons, compared with the 1.6 million tons available. Purchases by Middle East states have done much to stabilize prices in the US market since November. MiCeast countries generally favor US rice because of its high quality; their purchases from the United States are expected to double in 1975, to nearly 800,000 tors. These leiiveric;. probably will make up a!~o~at a third of total US rce expa~ts this year and half of total Middle East ,rarcttases. US rice sales under PL-480 continue firm, with the ending of shipments of 300,000 s Approved For Release 2000/09/14 :CIA-R~,$~T00608R000500140027-4 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret tons annually to South Vietnam and Cambodia being largely offset by increases in shipments to Bangladesh and South Korea. US p~7ces nonetheless are likely to trend downward during the second half, since projected export sales in 1975 are 300,000 tons below the estimated amou~it available. (Confidential) ^ World :ertilizer prices continue to plummet as a result of sluggish demand. In the last three m:.nths: ? Japanese and Arab producers of urea have cut export prices by 35Io. ? West European anti US suppliers of concentrated phosphate fertilizer have reduced prices from $275 to $180 per ton. ? Tunisia, Togo, and Senegal have quietly absorbed freight and insurance charges and made other COIICCSS1011S redwing the actual price of phosphate rock by 15"I~25?o in individual new contracts; official prices - tied to the Moroccan price -are unchanged. ? Morocco indefinitely postponed the 8`7a increase in the official export price of phosphate rock that had been scheduled for 1 July. Many firms are cutting output ill an effort to stem the price slide. Major West European and Japanese producers of nitrogen fertilizer are operating their plants at only about 50`% of capacity, compared with full production in early 1975. Moroccan production of phosphate rock is down l Oh-I S% from a year ago, and the industry is prepared to make additional cuts rather than reduce its price. llespite cutbacks, producti~~n of chemical fertilizer probably will outpace consumption in 1975/76, putting more downward pressure on prices. Uncertainty regarding grain prices and continued higl-. domestic prices of chemical fertilizer probably will hold down the increase in fertilizer consumption in developed countries. Many importing countries, badly overstocked with fertilizer, have reduced :,reports dramatically or banned further purch~ises. India and Indonesia, for example, have already bought all the fertilizer they will require in 1975/76, and the Philippines has a large oversupply. (Confidcntial)^ Approved For Release 2000/09/14 :CIA-RD1Eb8~T00608R000500140027-4 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 DEVELOPED COUNTRIES: IMPROVED OUTLOOK FOR HOUSING CONSTRUCTION Housing starts have turned up in several major developed countries since the beginning of 1975 and should rise in others by yearend. A housing boom nonetheless appears to be a long way off. Tlie industry probably will not be a leader in the upcoming economic recovery, because the recession leas made consumers cautious and because high construction costs and interest rates have narrowed the market. In recent business cycles, housing construction generally has picked up much faster than other sectors, helping to spark the re~ovey. Housing Starts Turn Up All the major developed countries except West Germany either have reversed the slide in housing starts (seasonally adjusted) or are expected to do so in the second half. Ir. France and Italy, starts turned down later than in the other countries and proba~ly are continuing to slip; government measures should Help to bring a turnaround in the second half. L_~couraging Signs Government assistance programs and recession-induced progress in holding down the cost of home buyi?~ are impr~~ving the environment for a housing revival. s Approved For Release 2000/09/14 :CIA-RD ~86e 006088000500140027-4 25X6 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Next 1 Page(s) In Document Exempt Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Approved For Release 2000/09/14 :CIA-RS~k?186T00608R000500140027-4 Tok3?o and Rome have eased credit restrictions, while Paris, Ottawa, and Rome have budgeted increased funds to subsidize private housing. To step up public building material, Ottawa intends to boost its federal mortgage fund by $200 million, or 20%, and Rome plans to pump an unprecedented $1.5 billion into low-income housing in 1975. Italy's planned outlays, which equal 14%o of the total value of residential construction in 1974, will not be realized fully, because of the usual bureaucratic delays. Prices of key building materials such as cement and lumber generally have softened after two years of waning demand. After rising sharply in 1973, material costs began to fall in Canada and Japan in early 1974 and continued to drop through the first quarter of 1975. In Italy and West Germany, housing construction costs leveled off in lase 1974. Only in Britain, where inflation has been worsening, did the cost of building materials rise in the first quaver. Mortgage rates likewise have tended to level off in most countries, following steady increases in 1973-74. In Britain, Canada, and West Germany, mortgage rates fell by more than 1 percentage point from December to April, and vi the United States they dropped almost half a point. Mortgage money appears to be readily available in all of these countries, although its cost is still exceptionally high by historical standards. Prospects The revival in housing construction in the second half of 1975 is likely to be fairly weak. Because the economic growth rate is expected to average only 1.5%, unemployment in developed countries will remain at the highest levels seen in many years. The shortage of jobs will keep some potential buyers out of the market and, more irnportant, discourage purchases among the employed. Uncertainties about interest rates also will deter home-buying. Mortgage rates probably will soften little if at all in the months ahead, because heavy government borrowing requirements and reviving private demand will exert pressure on money markets. Many families will be kept out of the ,narket by high financing costs; others will delay purchases for a time, in the hope that mortgage rates will ease. Government financial a~3 would have to be stepped up substantially to have an appreciable effect on the housing market. Fiscal constraints and continuing concern about inflation ti?ill limit further financial incentives to private housing and Approved For Release 2000/09/14 :CIA-R[7R86T00608R000500140027-4 Secret Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Srcrot new appropriations for public housing projects. Some governments - will continue to resist even bailout assistance to the industry until the large overhang of unsold dwellings is worked off. (For Official Use Only)^ ECUADOR: EMERGING PAYMENTS PROBLEMS Quito's longstanding dispute with the Texaco-Gulf consortium -producer of practically all Ecuadorean oil -will cut export revenues this year. Although progress is now being made toward ending the dispute, a continuing boom in imports is expected to generate a large current account deficit. Million LJS $ Projected 1972 1973 1974 1975 Trade balance 57.6 119.0 300 -100 Exports 346.6 532.0 1,100 1,000 Imports 289.0 413.0 800 1,100 Net services -97.6 -115.2 -300 -300 Transfer payments 15.8 38.3 30 20 Current account balance -24.2 42.1 30 -380 Oil shipments began to decline in May 1974, when the government slapped on conservation ceilings that forced Texaco-Gulf to reduce output from 240,000 b/d to 210,000 b/d. Because further cuts resulted from technical difficulties with the Trans-Andean pipeline and co~isortium shutdowns aimed at forcing policy changes, oil shipments dipped 18% in 1974 and an additional 29% in the first half of 1975. Total export earnings, which ;;oared to $1.1 billion in 1974, will slip to $I billion this year even if oil shipments soon regain their earlier peak level. The dispute centers on Quito's oil tax policy. Company officials m~iintain that the tax-paid cost of $1 I a barrel for Ecuadorean crude - in e: fect until last week -made it noncompetitive with Saudi benchmark crude, which assts an average of $10.24. Declining tanker rates have reduced the short-haul advantage of Ecuadorean crude, much of which goes 'co Caribbean refineries via tlie Panama Canal. Approved For Release 2000/09/14 :CIA-RDQ~86T00608R000500140027-4 Secret Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret Texaco-Gulf also has become increasingly disturbed by the government's failure to pay the remaining $3 million due on a 25% equity purchased in the consortium and to pay a fair share of operating costs. This failure, along with the tax and production-ceiling disputes, caused the consortium to abandon exploration, postpone plans for opening new fields, and de-ay expansion of the 250,000-b/d pipeline to the Pac~fic. The government's oil policy also discouraged the Cayman Group from going ahead this year with plans to construct a pipeline spur to its concession. Ecuador: Trends in Trade and Foreign Reserves 1,200 million USj$ Forelpn floserw million US S i ~.. ~ . . To force Quito to come to terms, Texaco-Gulf shut down production for two weeks in May and suspended operations indefinitely in early June. At the same time, it offered to make new investments totaling $165 million in exchange for more conciliatory policie,. On 9 July, the government agreed to cut taxes by 43 cents per barrel, fallinb short of the consortium's demand for a cut of at least 60 cents. We believe that Quito will soon make additional concessions because it cannot afford a prolonged loss of oil revenues. Approved For Release 2000/09/14 :CIA-RDq$6T00608R000500140027-4 Secret Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret Accelerated expenditures on economic development and welfare will bring an estimated 38% jump in imports in 1975. Although Quito has temporarily banned automobile imports and has restricted credit financing of other purchases abroad, it has avoided severe curbs for fear of hurting development programs and aggravating inflation. Even if oil expc:ts are promptly resumed, a current accoant deficit of nearly $400 million is likely. Because foreign reserves totaled only $274 million at the end of May, Quito will seek foreign capital to cover the deficit. It probably will be forced to rely mainly on commercial sources. A request for $1 billion in credits from Middle Eastern governments thus far has been ignored. (Confidential) ^ SAUDI ARABIA: AID AS A FOREIGN POLICY TOOL though still small, part of its vast oil wealth to pursue longstanding foreign policy goals through aid programs. These policy goals are Arab unity, 25X6 regional stability reduction of Soviet influence, and the creation and strengthening of moderate governments throughout the Arab world. King Khalid and Crown Prince Fahd have increased both the volume of aid commitments and the sophistication with which aid is used as a foreign policy tool. In the first half of 1975, Riyadh pledged $2.9 billion in new aid, compared with $2.5 billion in all of 1974. About $1.8 billion of the new commitments is earmarked for the Middle East alone. Egypt continues to be the major beneficiary, receiving $760 million in Saudi commitments in the first half - nearly all untied aid for balance-of-payments relief. The granting of untied aid is a recent development in Saudi aid practices. Under Faysal, the Saudis followed a fairly conservative policy of funding development projects supported by In the months since King Faysal's death, the Saudi Arabian Aid Commitments Saudi government has been using a growing, 1st Half 1975 Million US $ Recipient Amount Total 2,936.4 Middle East 1,828.8 Egypt 760.0 Iraq 200.0 Jordan 257.0 Lebanon 23.5 North Yemen 18.3 Oman 2.00.0 Syria 370.0 Africa 915.6 Algeria 400.0 Gambia 4.5 Guinea 10.0 Mauritius 34.6 Morocco 100.0 Senegal 10.0 Somalia 11..5 Uganda St?.0 Sudan 260.0 Tunisia 35.0 Asia 192.0 Indonesia 100.0 Malaysia 70.0 r'akistan 22.0 Approved For Release 2000/09/14 :CIA-R~P86T00608R000500140027-4 Secret Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret international organizations such as the World Bank. The shift in emphasis is an outgrowth of Saudi Arabia's enormous financial resources and the desire to exert more influence in the Arab world. Aid to Egypt is designed to strengthen Sadat's moderate leaderships among other Arabs The recent pledge of $200 million in aid to Baghdad is intended to encourage Iraqi political moderation and perhaps helped in arranging a 50/50 division of the former Saudi/Iraqi neutral zone. A desire to resolve a border dispute probably also played a role in the Saudi decision in May to grant $200 million to Oman - so far, with inconclusive results. Regional political stability is a key consideration in Saudi aid to both the Yemens. The Saudis have been traditional sources of a:d for the Yemen Arab Republic and reportedly are considering giving $300 million in military assistance to the regime. Sandi delay in reaching a decision recently prompted San'a to threaten to turn agai,: to tl;e USSR for aid. Riyadh has given further assurances that aid will be forthcoming. At Cairo's urging, the Saudis have improved relations with the People's Democratic Republic of Yemen -. Substantial addi*ional aid to the PDRY is unlikely, since it will not adopt more moderate policies just to please the Saudis. The recent unpublicized transfer of $400 million to Algiers probably represented an effort to encourage Algerian moderation in OPEC councils and at the next Producer-Consumer Conference. An alternative, much less likely explanation is that the sum is earmarked for eventual relending to Egypt, to satisfy earlier Algerian aid promises to Cairo. Political considerations have been instrumental in Saudi denials of several loan requests. Riyadh turned down Morocco's request for $80 million in military aid for the liberation of Spanish Sahara because of indications that Spain plans to give up the Sahara shortly. A Libyan request for a reported $200 million was rejected out of hand owing to the strained relations and conflicting ideology of the regimes. Although the Saudis probably will approve project aid of up to $100 million for South Korea, no balance of payments relief will be forthcoming _ 25X6 Where political considerations are not dominant, the Saudis leave generally pursued their traditional, conservative lending policies. Riyadh shelved an Indian request for financing of a major power project, indicating that it might consider smaller protects already screened by the World Bank. The Saudis also leave rejected an Ecuadorean request for nearly $700 million unless guarantees from international financial institutions are obtained. (Secret No Foreign Dissem)^ Approved For Release 2000/09/14 :CIA-RDB$6T00608R000500140027-4 Secret Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secret Although OPEC economic aid to the LDCs continues to grow, a few donors and recipients account for most of the assistance, and credit terms are stiffening. OPEC countries disbursed $4.5 billion in bilateral aid to LDCs in the first half of 1975, compared with $3 billion in all of 1974. An addition:~l $1. l billion was funneled to multilateral aid institutions, mainly the IMF Oil Facility. Financial transfers to special ~~rab funds and regional development banks have been small. httra-Arab flows have accounted for about 701, of bilateral aid to LDCs so far this year. Saudi Arabia and Kuwait alone disbursed about $ ] .9 billion in newly committed funds, mainly to Egypt. Intra-Arab transfers under 1974 commitments reached more than $1 billion and consisted almost entirely of Rabat "war chest" grants for Egypt, Syria, and Jordan. Iranian disbursements have jumped mainly because of large prepayments to Communist countries. Romania, Bulgaria, and North Korea together have received some $680 million in payments against f~;cure delivery of goods needed to support Tehran's development goals. Egypt is the only other major recipient of bilateral aid from Iran. Bilateral aid to non-oil LDCs* totaled only $295 million in the first half. Tr..nstcrs from OPEC-funded multilateral institutions provided an additional $935 million. Nearly all of this sum was channeled through the IMF Oil Facility, which provided $590 million for Spain, Turkey, and Chile alone. Impact on Non-Oil i.. "~r OPEC bilateral and multilateral aid has been covering a little less than one-third of the 510 hil{ion increase in non-oil LDC import bills that has resulted from higher oil prices. Some of the poorer countries, particularly Moslem states such as Afghanistan, Bangladesh, North Yemen, and Pakistan, have fared well. OPEC aid to other hard-hit countries-India, for example-has barely made a dent in skyrocketing oil bills. Approved For Release 2000/09/14 :CIA-RDPI$6T00608R000500140027-4 Secret Approved For Release 2000/09/14 :CIA-R~~~T00608R000500140027-4 Non-oil LDCs designated by the United Nations as most seriously affected drew about $2 billion in aid from OPEC countries and OPEC-funded sources in 1974. So far this year, they have received only $415 million, and this downward trend is likely to continue until nev: sources of OPEC concessional aid are avail- able. Moss of the more advanced LDCs in Latin America and East Asia have had to draw Heavily on foreign reserves to meet their oil bills. OPEC pledges of bilateral economic aid to the LDCs and to multilateral agen- cies totaled $10.3 billion in the first half of 1975, compared with $9.2 billion in the second half of 1974. More than half of the new bilateral pledges involve cash or com- modity assistance that can be transferred rapidly; the remainder consists of project aid that will take considerably longer to implement. We expect OPEC bilateral dis- bursements and payments to multilateral agencies to rise to $8 billion in 1975, up from $5 billion last year. Non-0il LDCs Able to Cover a Substantial Share of Higher Oil Costs Through OPEC Aid Projected 1974 1975 Afghanistans 100+ 100+ Bangladeshi 100+ 100+ Jordan 100+ 100+ North Yemeni 100+ 100+ Pakistani 100+ 100i~ Somaliai 100+ 100+ Sudani 100+ 100+ Ugandan 100+ 100+ Costa Rica 79 100+ Zaire :' 100+ Lebanon 100+ 88 Malagasy Republica 41 82 Guyanas 33 78 Mauritanian 92 77 South Yemeni 100+ 71 Senegaln 59 69 El Salvadora 58 63 Nicaragua 9 57 Hondurans 54 54 Malii 92 50 Chada l00 36 Sri Lankaa 98 36 Ethiopian 52 33 Tanzanian 68 15 Togo 50 13 Guineas 100 5 Uruguay 91 .... Because several OPEC members have seen their current account surpluses decline or disappear in recent months, Saudi Arabia, Iran, and Kuwait account 1'or 80Io 1. Excluding any transfers through multilateral institutions in second half. 2. ]ncluded in UN List of countries most seriously affected by higher prices for essential imports. of new bilateral commitments. The range of recipients has remained narrow; two-thirds of the pledges so far in 1975 have gone to Middle Eastern and South Asian countries, especially Egypt, Syria, and Afghanistan. At the same time, outright ~?ants have dropped to one-fifth of bilateral aid flows, down from one-third last year. Approved For Release 2000/09/14 :CIA-R~~86T00608R000500140027-4 cret Approved For Release 2000/09/14 :CIA-RI~c~~T00608R000500140027-4 OPEC Countries: Estimated Economic Aid' to LDCs, by Donor Disbursements Pledge s Bilateral Multilateral Bilateral Multilateral 2d Half 1st Half 2d Half 1st Half Zd Half 1st Half 2d Half 1st Half 1974 1975 1974 1975 1974 1975 1974 1975 Total 1,839.5 4,514 ~ 1,809 1,121 4,911.4 7,098.1 4,332 3,163 Abu Dhabi (UAE) 292.9 316.6 147 51 902.2 625.5 280 6 Algeria 11.0 15.0 67 6 17.5 2.8 51 17 Indonesia .... .... .... 6 .... 1.0 31 .... Iran 330.5 805.0 258 129 605.1 1,455.5 720 500 Iraq 68.5 219.6 63 7 268.5 567.5 16 11 Kuwait 250.7 950.0 265 129 527.9 1,305.1 587 264 Libya 47.0 6.9 131 .... 177.1 152.9 229 .... Nigeria 0.6 1.4 .... 98 1.2 1.4 121 29 Qatar 57.5 106.8 15 .... 310.7 21.3 20 .... Saudi Arabia 765.8 2,040.2 602 427 1,917.5 2,936.4 1,651 1,584 Venezuela 15.0 52.2 260 268 183.7 28.6 626 752 1. Excluding credits carrying maturities of less than five years, bond purchases, and private assistance. 2. Including all money pledged to the IMF Oil Facility, part of which may be disbursed to developed countries. Pledges ~o multilateral institutions, which reached $3.2 billion in the first half, consist mostly of OPEC support for the IMF Oil Facility and Venezuela's contribution to a special Trust Fund managed by the Inter-American Development Bank. We estimate that at least $3 billion more will be pledged in the second half through capital subscriptions to the IMF, the new $1 billion International Ftln~ for Agricultural Development, and the Third Window of the Worid Bank. Approved For Release 2000/09/14 :CIA-RD~>~6T00608R000500140027-4 cret Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Secrat OPEC Countries: Estimated Bilateral Economic Aid to LDCs, by Recipient* 2d Half 1st Half rd Half 1st Half 1974 1975 1974 1975 Total 1,839.5 4,514.7 4,911.4 7,098.1 Africa 305.7 451.8 434.8 1,424.1 Algeria .... 400.0 13.5 454.1 Burunei .... .... .... 1.0 Chad 3.0 .... .... .... Ethiopia 1.0 .... .... .... Gabon 15.0 .... 15.0 .... Gambia 1.1 .... .... 4.5 Guinea 32.0 1.0 10.0 15.0 Guinea-Bissau .... N.A. 0.5 N.A. Lesotho .... .... .... 1.0 Malagasy Republic .... .... 3.0 .... Mali 1.0 1.2 2.1 35.3 Mauritania 2.5 5.5 12.5 15.2 Morocco 57.6 1.0 8.1 160.4 Niger 3.1 .... 3.1 .... Rwanda .... .... .... 5.5 Senegal 15.0 .... 33.0 10.0 Somalia 13.1 19.4 39.5 56.9 Sudan 12.5: 2.8 59.4 465.2 Tanzania 0.3 .... 112.0 14.4 Togo 2.0 .... .... .... Tunisia 6.0 .... 6.8 58.8 Uganda 27.6 4.9 15.1 125.8 Upper Volta .... .... .... I.0 Zaire .... 16.0 100.0 .... Zambia .... .... 1.2 .... East Asia ???? 200.0 3.0 671.0 Indonesia .... 100.0 .... 300.0 Laos .... .... .... 1.0 Malaysia .... .... .... 170.0 North Korea .... 100.0 .... 200.0 North Vietnam .... .... 3.0 .... Europe S.0 75~.^ 425.0 580.0 Bulgaria .... 160.0 .... 160.0 Malta 5.0 .... 5.0 .... Romania .... 420.0 420.0 .... Yugoslavia .... 175.0 .... 420.0 (Continued on next page) Approved For Release 2000/09/14 :CIA-RDP86T'00608R000500140027-4 Secref Approved For Release 2000/09/14 : CIA ~DP86T00608R000500140027-4 cret OPEC Countries: Estimated Bilateral Economic Aid to LDCs, by Recipient ~ (Continued) Million US $ Disburseme nts Pled ges 2d Half 1974 1st HaL~ 1975 2d Half 1974 1st Half 1975 Latin America 15.2 68.2 188.7 29.6 Costa Rica .... 4.6 18.6 .... El Salvador .... 6.0 29.1 .... Grenada 0.2 1.0 .... 1.0 Gcatemala .... 8.0 37.8 .... Guyana 15.0 18.8 5.0 .... Honduras .... 5.0 44.6 .... Jamaica .... .... .... 28.6 Nicaragua .... 5.5 20.4 .... Panama .... 19.3 33.2 .... Middle East 983.3 2,862.7 3,118.0 3,509.5 Bahrain 14.0 5.8 87.9 35.0 Cyprus 0.1 .... 0.1 .... Egypt 480.0 1,876.4 1,870.6 1,760.2 Iraq .... 100.0 .... 200.0 Jordan 114.5 198.4 181.2 309.5 Lebanon 3.0 1.8 27.9 38.5 North Yemen 67.7 10.3 51.1 77.7 Oman 29.9 102.0 .... 268.5 South Yemen 24.1 6.8 69.1 79.1 Syria 250.0 561.2 580.1 741.0 Turkey .... .... 250.0 .... South Asia 530.3 177.0 741.9 883.9 Afghanistan 17.8 15.0 88.3 719.0 Bangladesh 62.5 62.0 153.5 29.0 India .... N.A. 33.8 98.6 Nepal .... .... .... 0.3 Pakistan 405.0 100.0 354.0 37.0 Sri Lanka 44.0 .... 112.3 .... (Secret No Foreign Dissecn) Approved For Release 2000/09/14 :CIA-R~9P86T00608R000500140027-4 Secret Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 ECONOMIC INDICAT'OI~S Prepared by The Office of Economic Research July 16,1975 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 The Eco~:omit Indicators provide up-to-date information on changes in the domestic and external economic activities of the major non- communist developed countries. To the extent possible, the Economic Indicators are updated from press ticker and Embassy reporting, so that the results are made available to the reader weeks - or sometimes months - before receipt of official stiatistical publications. Commenis and queries regarding the Economic Indicators are welcomed. They may be directed to the Office of Economic Research, Code 143, Extension 7402 or 351-7402. Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 25X6 Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 Next 4 Page(s) In Document Exempt Approved For Release 2000/09/14 :CIA-RDP86T00608R000500140027-4 INDUSTRIAL MATERIALS PRICES MonthlyAuer,lg6 Cash PFICO 40 July 1972 1973 1974 1975 100 r LME US 14 Jul 5G.2 GU,G 7 Jul 53.8 6D.G Jun75 54,1 G2.3 Jul 1A 87.3 85.G ZINC 6 Per Pound Approved For Release 2000109114 :CIA-FT~~8R000500140027-4 ~ Monthly Au6rano Cash Price LME US 14 Jul 16.3 19.0 1Jul 15.5 190 Jun75 16.0 19.5 Ju174 24.8 24.5 16114 50.0 34,8 0 July 1912 1913 1974 150 r LME US 14 Jul 32.2 38,5 7 Jul 32.1 38.5 Jun75 33.8 38.5 Ju174 50.0 34.U STEEL SCRAP $ Per long Ton LME US 14Ju1 3D1.5 318.5 1 Jul 306.7 330.5 Jun75 314.0 342.4 Ju174 3868 426.II July 1972 1973 1974 500 r 10 15D LME US 14Ju1 16.3 19.0 1 Jul 15.6 19.11 Jun 75 1 D.0 I D.5 Ju174 24.8 24.5 LME US 14 Jul 307 5 328.5 1 Jul 306.7 330.5 Jun75 314.0 342A Ju174 386.8 42D15 SELECTED MATERIALS Aluminum Major US Prod., ulh Sleet Comporile,$AT ImnOre Non6essemer0ldAange,$!tT Chrome Gre Auuian, Brtd1 Chrome Ora S. Auice, ShT Ferrochmme US Chmge, tAh Nickel Mejer U9 Pmd. Celhade, SM Manganese Ore 49%Mn., $2T Tungsten Ore A5%W03, $4;T Mercury NY, $I761h Flask Silver LME rash, drroy Or Jen 14 2s.oD 212.13 12.16 36.00 33.50 22.50 1.62 52.eD 2,872.40 275.54 360.29 NR 14 Jul 32.0 1 Jul 31.5 Jun15 29.5 Jul 74 35.2 _ Jon 73 25.U0 209,86 I1,9fi 45,15 25.50 7DDo 1.53 a1.4D z241sD 282,50 200.15 SR NA NA NA 23.6 97D=100 0 us 14 Jul NA 7 Jul 59.67 Jun75 G8.94 Jul 74 12fi,3U July 1972 1973 1914 1975 t Appmsimales world marker price Irequently used by major world producers and traders, olthough only small quamitias al these metals are actually waded on the LME. i Producers' price, covers most primary metals sold in iha Unilad Slates. 3 Ouoted on New York markal. 4 Camposile price for Chicago, Philadelphia, and Pittsburgh, S S?type styrene, US Las. eapert price. A?6 MP USD 14 Jul 155.D 153,5 1 Jul 15S.D 163.5 Jun75 155.0 14L9 Ju174 195.0 19111 LME U5 1 Jul 53.8 GO,G uu75 54.1 12.3 d174 87.3 U5.6 LME US 4 Jul 32.2 38.5 ;7 Jul 32.1 38.5 Approved For Release 2006~~"I~~H~IA- 10D producers and traders, d an the LME. 0?'~O~f~(4mOd00140027-4 MP usD 14 Jul 155,0 153.5 1 Jul 155,0 153.5 Jun75 155.0 14L9 Ju174 195.0 190.1 Current Jan 75 39.00 39.00 289.23 289,59 18.14 17,00 135,00 107.35 57.50 51.50 53,50 52.50 2.81 2.01 s7,2D B7aD 4,093.98 ,308.02 145.00 227.73 459.80 422.2D~ Thia is a compiled indas by the Economist for 19 raw materiels which enter imemetional Credo. Commodities ere weighted by 3~year morlag averages of imports into induslrieli=ed ccunirios, 16 JULY 19]5 566693 ] 15 AGRICUITURAI PRICES Maothly AvaroOa each Price WHEAT Aonaoa Ciry No, 2 Nord Winter D I I I I t't41JUL I SOYBEANS Chicago No.l Yellow 0 July 1972 1973 1974 1.0 r D I I I I 1.141JUt I 14 Jul 3,04 1 Jul 3.15 Jun75 3.25 ul 14 4,34 Approved For Release 2000109114 :CIA-RDP SUGAR Warld Aaw New York No.11 14 Jul 5.80 25 7 Jul 5.18 Jun75 5.15 Ju114 8,80 14 Jul 0.4075 7 Jul 0.4775 Jun75 0.4521 Ju114 0.5000 0 July 1912 1913 1974 1915 15r 1974 ~N975 152.1 1? JUL 14 Jul 18.50 1 Jul 14,50 50 Jun15 13,83 Ju174 25.40 14 Jul 18,5D 14 Jul 75.00 1 Jul 14,59 5D 7 Jul 89.00 Jun75 13,83 Jun75 83.49 Ju174 25.4D Ju174 108.90 ;~ 14 Jul 0.4515 r 14 Jul 52,39 14 Jul 52.79 f I -' 7 Jul 0.4775 1 Jul 52.00 1 Jul 52.00 150 'Jun75 D.4521 55 Jun75 53.99 Jun75 53.99 z FJul74 0.5880 1 Ju174 11,75 52 Ju174 71.75 . I I I s. aw 9 25~ I I I 1.14 JUL I I July 1972 1973 1914 1975 $ Por cwt. f.o.6, mills, Houston, Tas, 7 Jul 19.50 30Jun 19.50 Jun15 19.50 Jul 14 26.50 COCOA a Par Pou:.d Ohenaian n~ New York price FOOD INDEX 1D0 SUGAR World Aew New Yark No.11 rI 0 1.14 JUL L_ This is r. compiled index by the Oconomisl far 16 loud commodities which solar international trade, Commodities ere weighted by 3?year moving auere0os of imports into industrielired countries.