DEVELOPING COUNTRIES IN THE INTERNATIONAL ECONOMIC SYSTEM:
THEIR PROBLEMS AND PROSPECTS IN THE MARKETS FOR FINANCE,
COMMODITIES, MANUFACTURES AND SERVICES

Dragoslaw Avramovic

Preface
I. International Financial Market, Poor Countries, and Poor People
II. Commodity Problem, Poor Countries, and Poor People
III. Developing Countries in the World Manufactures Market: Achievements and Problems
IV. Developing Countries in the World Services Market: Scope, Competitive Position and Reciprocity

    The four essays in this publication were prepared in response to the request by Dr. Mahbub ul Haq, Special Adviser to the Administrator of the United Nations Development Programme. He asked that I prepare an analysis of the operation of the international economic system as it affects the developing countries, as a background for UNDP's Human Development Report 1992. Dr. Haq's specific question was: how efficient and equitable are the functionings of the present markets in commodities, manufactures, services and finance?

    These are issues on which I have spent much of my working life, and I welcomed this opportunity to set out both the results of my earlier work and thinking, and the findings of the research specifically undertaken to throw light on the latest facts and ideas in these areas.

    Three major impressions have emerged. First, developing countries have suffered and are now suffering from an enormous deterioration of their terms of trade. Their export commodity prices in real terms are lower than at any time in the last 10, 40 and 120 years. Their export prices of manufactures also are falling in relation to the manufactures they import during the last decade. This deterioration is at least partly responsible for the great fall in real wages which developing countries have been experiencing. Secondly, despite these price and income developments, developing countries have managed to achieve an advance in industrialization which was not considered possible by almost all observers several decades ago. These countries have left a major mark on international trade in manufactures, and a number of them have established efficient industries in many fields. Thirdly, most international markets remain dominated by the financial power of developed countries. This power concentration results in a lack of bargaining strength of developing countries in commodity markets, services markets and partly manufactures.

    The work on these essays was completed at the end of November 1991. For purposes of the present publication, I have updated the material to April 1992, where relevant.

    I owe much gratitude to colleagues and friends in international institutions dealing with issues of commodities, trade and development, and finance. All errors are mine.
 

                                                                         Dragoslaw Avramovic