May 5, 1984
INDUSTRY: NEW POLICIES IN TRADE, INVESTMENT AND TECHNOLOGY TRANSFER NEEDED.
GENEVA, MAY (IFDA/CHAKRAVARTHI RAGHAVAN) New international policies in trade, investment, and technology transfer would benefit both the developing countries and the industrialised countries, says the United Nations industrial development organisation. Analysing the relationship between trade and manufactures and the industrialisation process, UNIDO notes that in 1981, the value of world exports of manufactures declined for the first time since 1960, mainly due to a drop in exports of some European and Third World countries. This decline continued in 1982, aggravated by a fall in prices but not in volume. The share of exports of manufactures in total exports failed to increase significantly during the 70’s. For the OECD countries, it was the same in 1981 as in 1970, while it actually decreased for the socialist and Third World. The bulk of world trade in manufactures continues to be concentrated in a small number of countries. In 1980, five OECD countries accounted for more than two-thirds of that group's manufactured exports and five developing countries for almost half that group's exports. This concentration of manufactured exports in five developing countries contrasts sharply with the wide-spread international indebtedness of the developing countries with some ominous consequences, since exporting is essential if these countries are to earn foreign exchange needed to alleviate their debt problem. When the traded pattern of these manufactures are seen according to end-use, the export pattern of the OECD economies changed very little during the 70’s. The composition of the Third World trade shifted slightly, due to the increasingly important role of capital goods and consumer durables in their exports. In general, the demand for traded products remained relatively stable in terms of distribution among end-users. But in terms of input and technologies used, the distinction between the economic groupings has been more apparent. Slightly more than one-half of the OECD exports come from relatively labour-intensive industries, though most of these industries use new, rather than mature or standardised technologies. The major exporters in the Third World, depend primarily upon labour intensive industries but using more mature or standardised technologies. But almost 80 percent of the manufactured exports of the remaining developing countries are from resource-based industries. On the share of local processing of natural resources, UNIDO says that the share of manufactured exports of the Third World in the total non-oil exports rose from l2.9 percent in 1960 to 48.9 percent in 1980. There is a need to ensure that these processed manufactured exports are not merely lightly processed raw materials that are then exported and converted to finished products in the importing countries, UNIDO says. UNIDO studies show that the Third World is lagging far behind the OECD in the degree of finishing or semi-processing given to their exports, and this is more pronounced in the case of ores and ingots, sections, sheets and tubes, as well as in commodities like copper, cocoa, rubber, tea, and chemicals. Roughly, 70 percent of the OECD countries' manufactured exports are finished goods ready for final use. But for the Third World, the corresponding figure is only 39 percent in 1980, though this is an improvement on previous years. New international policies in trade, investment and technology transfer are needed. If industrialists in the Third World are to upgrade the value of their exports, UNIDO says. In view of the pressing need of developing countries to acquire foreign exchange, such policies would substantially benefit both industries in the developing countries and the lenders of capital in the developed countries, UNIDO adds.