Less Developed, More Divided

The LDCs lower their expectations for a new economic order

United by poverty, Third World nations have long called for a "new international economic order"--a grand transfer of wealth, resources and economic decision-making power from the industrial countries to the poorer lands. But lately, changes among Third World members have divided the once harmonious group into a company of often competing soloists. The divisions were apparent in Manila at the fifth meeting of the United Nations Conference on Trade and Development (UNCTAD v), the forum where the developing countries present their complaints to the wealthier nations. After a month of sometimes heated dialogue, the conference ended last week in division, indecision and frustration. TIME'S Hong Kong Correspondent Ross H. Munro reports:

The past quarter-century of uneven growth and the recent meteoric rise in oil prices have made the Third World a more disparate group of nations than ever. For many of them, the catchall appellation of less-developed countries (LDCs) has become outdated or at least incomplete. New subclassifications have become necessary: advanced-developing countries and least-developed countries; socialist LDCs and neocapitalist LDCs; non-oil LDCs and OPEC LDCs.

Such rapidly industrializing, fairly affluent and capitalistic countries as Singapore, Taiwan, South Korea and Malaysia have totally different problems and priorities from many dirt poor and authoritarian African nations. Although the LDCs presented a fac,ade of commonality on the floor of the conference, their changing interests were obvious. Calls for a new economic order were often ignored by the advanced-developing countries.

Also the growing rift between oil haves and have-nots widened further at the conference. Recent oil price increases will swell the collective current-accounts deficit of the non-OPEC LDCs this year by $5 billion, to a total $57 billion, and additional raises will grossly enlarge the gap. The Costa Rican delegation mustered some support from other oil-deficient Latin American countries for its proposal that OPEC consult with the importing LDCS before it raises prices again. But African and Asian delegations squelched the resolution partly out of fear that the OPEC nations might reduce their aid to any country daring to challenge them.

Since UNCTAD last met in Kenya three years ago, several Latin American governments as well as Sri Lanka, India and others have moved toward more reliance on free market economics. A resolution calling for the industrialized nations to cancel or suspend debts of the LDCs was quietly suppressed by some of the capitalistic advanced-developing countries. Although the U.S. had already written off $500 million in debts owed by 15 of the poorest nations, ADCs like South Korea, Singapore and Brazil have feared that any further write-off would make them appear to be poor credit risks and that international lenders might push up interest rates or hold back on future loans.

There have also been second thoughts about a world commodity fund to stabilize prices by buying when prices fell and selling when they rose. Delegates of many commodity-producing LDCs argued that such a resolution would help the developed countries more than the undeveloped because some 60% of all commodities and raw materials originate in five developed countries: the U.S., Canada, the Soviet Union, Australia and South Africa.

Many Third World nations discovered common ground on the subject of protectionism. One speaker after another attacked the West's "new protectionism" of quotas, marketing agreements and restrictions against the developing countries' textiles, television sets and other products. An additional resolution called for the Soviet bloc to lower its more rigid protectionist barriers. Delegates from many of the LDCs said they were tiring of the Eastern Europeans' illogical claims that they cannot be accused of protectionism because their centrally directed socialist governments simply ban unwanted goods.

The poorest nations, including Chad and Afghanistan, called for more help from the richest countries. But delegates for those industrial nations felt the advanced-developing countries must also be willing to help. Their argument was that as the ADCs prospered they should not only lower their own tariffs against the least-developing nations but should also give up some of the special tariff preferences they receive from industrial countries. Said one U.S. delegate about the conference: "The advanced-developing nations sooner or later must recognize that less preferential treatment for them would mean more benefits could be passed on to the least-developed countries."

The overall mood of the conference was disappointment. Fortunately, most nations backed a resolution calling for substantially increased aid to the 30 poorest countries; two-thirds of them are in Africa and others include Haiti, Bangladesh, Laos and Yemen. Sometimes described as Fourth World or "basket cases," they constitute still a further division among the developing nations--and a growing problem that the rest of the world will have to address. -

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