LDC BALANCE OF PAYMENTS 1973-1975

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000600050042-6
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 16, 2016
• Document Release Date: October 27, 2004
• Sequence Number: 42
• Publication Date: April 24, 1975
• Content Type: MEMO

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The quality and coral etnecs of t ho. c rai - report
should be corric?nded. We are well aware and appreciativc.
of the effort rccruired in compiling the data and analy::ing
the tiends. ,Jhilc we : ay differ on so;:ie epocific nu:;,bers
and definitions, we concur with the thrust of the drraf.t.
Our comments are attached. If you need any further i.nfor-
25X1 mation- please contact
Attachment:
As stated above
tl7:aiOI'.;: ~~I?II F011: Dr. 2;n.it?i Jay
Chief, Traclo Anc: 13avr;?ent.:3 L)i.vi~Rion
offi.ce of. Poli.cy 1)evelopmc:ut & Ana]y:;.i::
Purc.au for P'roclr3'..i and PoJ.i.rv Coorc'ir::t_.ion
?;c;c~r:c:- for Intorr:ationa1 llcvcloh:.ic3ri
SUBJECT LDC Balance of Payr.ients 1973-?1975
Distribution: (S-Project 08322)
Orig. & 1 - Addressee
1 - D/OER, DD/OER, SA/Ej
D review completed
(22 Apri
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Oil-Importin:: LDC Balance of Pay-men.ts, 1973-75
No support with miner reservations the basic conclusions
of the draft report including:
Current account deficit fcr 1974 on the
order of $18.4 billion for the oil-importing
LDCs under revie.wr,
Estimated average real growth rate of
3% last year, as we projected last January,
The need to redefine the "most seriously
affected" countries to reflect current
economic develcpmer.ts,
The "unfinanced" deficit of the MSAs
estimated at appro::imately $1.6 billion,
remarkably close to our intro-agency
projections reached last s= er.
Our own country-by-country review of the oil-importing
developing countries in tie study generated different
numbers for only some half-dozen countries. In the
aggregate, these changes are not significantly different
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from tho origJ.nal draft. For purposes-of comparison,
I have retabulated the data as shown in Table 1. The
main conclusion:: are:
We believe the trade deficit of the LDCs
increased to $19.3 billion in 1974, a
bit higher than the draft estimates.
This reflects in part a more pessimistic
reading of Brazil's trade balance.
The current account deficit remains at
$18.4 billion due to a larger services
and transfer inflow offsetting the larger
trade deficit. We believe LDC services
and transfers remained positive in 1974
but will slip a little this year. While
most poorer LDCs usually show a negative
services balance, strong services and
transfers inflows to Korea, Philippines,
Turkey, Morocco, and Thailand kept the
aggregate balance positive. Moreover,
we believe Brazil incurred an outflow
of only $800 million in 1974 rather than
the draft figure of $2.3 billion; this
difference accounts for much of the
disparity of the estimates.
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Long term capital flo;,.s? -- an elusive
element to define and estimate -- correspond
clcsely to our estimate. '#W,'e suspect,
ho;.,-ever, the flow may weaken this year
rather than hold steady as projected
in the draft study.
Overall LDC basic balance deteriorated
sharrly in 1974 to approximately $4.0
billion.
Our review of the "Most Seriously Affe - ted" developing
countries parallels the draft estimate and we propose
no changes. Table 2 retabulates the ::SA Balance of
Payments estimates. We agree with the need to redefine
these countries to bring therm more in line with current
developments and particularly appreciate the discussion
of this issue in the draft. We would suggest deleting,
however, Cambodia and Laos for reasons discussed by
phone. Table 2 presents the unified balance of payments
for the MSAs as adjusted. The basic balance of the
MSAs is little changed in 1974 (approximately $1.6 billion)
but worsens more severely in 1975.
CIA/OER
21 April 1975
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Less Developed Countries:
Bal
ance of Pa
yments
Billions US S
AID
CIA
1973
1974
1975
1973
1974
1975
Exports, f.o.b.
32.8
43.9
50.2
32.8
44.2
50.2
Imports, c.i.f.
-37.8
-62.1
-69.1
-38.6
-63.5
-69.1
Trade balance
-5.0
-18.2
-18.9
-5.8
-19.3
-18.9
Services and transfers
.6
-.2
-.6
.8
.8
.5
Current balance
-4.4
-18.4
-19.5
-5.0
-18.4
-18.4
Long term capital
9.0
14.3
14.4
9.2
14.4
13.8
Basic balance
4.6
-4.1
-5.0
.4.2
-4.0
-4.6
Note: May not add due to rounding.
CIA/OER
21 April 1975
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Less Developed Countries: Balance of Payments
Billions US $
Most
Seriously Affected
Adjusted MSA a/
1973
1974
1975
1973
1974
1975
Exports, f.o.b. 9.6
12.1
13.3
10.9
1
3.9 14.5
Imports, c.i.f. -11.4
-17.1
-18.8
-12.6
-1
8.9 -19.7
Trade balance -1.8
-5.0
-5.5
-1.8
-
5.0 -5.3
Services and transfers -.3
-.4
-.5
-.7
-.3 -1.1
Current balance -2.1
-5.4
-6.'0
-2.5
-
5.3 -6.4
Long term capital 2.3
3.8
4.3
2.3
3.8 4.3
Basic balance .2
-1.6
-1.7
-.2
-
1.5 -2.1
a.
Excludes: Cambodia, Ethiopia, Guyana,
Includes: Burundi, Chile, Costa Rica.
Laos,
Rwanda, Yemen
Arab Republic.
Note: May not add due to rounding.
CIA/OER
21 April 1975
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