Page 432 - Arabia the Gulf and the West

The ‘Sting* 429

By the same calculation, the corresponding deficit incurred through the
purchase of oil by the twenty-four nations of the OECD would be about

$110,000 million, and that of the non-oil-producing countries of Asia and
Africa some $ 160,000 million. If oil prices increased before 1980 (as they have),
the surpluses and the deficits would grow proportionately; for at the average
annual rates of oil consumption in the world an increase of one per cent in the
price of oil operates to raise the OPEC surplus by $ 1,000 million. The essential

inference to be drawn from these figures is plain, viz. that the enrichment of the
Middle-Eastern oil states is being achieved by the gradual deterioration of the
trading position of all but the economically strongest nations of the world.
According to the testimony cited earlier, given before the foreign economic
policy sub-committee of the United States Senate in September 1977? the
aggregate deficit between 1971 and 1973 of all countries in the world on their

current trading accounts was, on average, $15,000 million per annum, making
a total deficit for these three years of $45,000 million. In the three years
1974-6, that is, after the fourfold increase in oil prices, the annual aggregate
deficit rose to an average of $75,000 million, which added up to a total of
$225,000 million for the three years. The significance of this rapidly growing

deficit might perhaps be made clearer by showing its impact upon individual
countries. Denmark’s foreign trade deficit, which was $715 million in 1972,
rose to $2,400 million in 1974 and exceeded $3,000 million in 1976. New
Zealand, which had a trade deficit of only $16.6 million in 1971, registered a
deficit of over $1,000 million in the year July 1974-June 1975 alone. Spain
recorded a deficit of $5,700 million in the first eight months of 1976, Britain

owed its creditors over $22,000 million in the spring of 1977, while Italy
admitted debts of $16,000 million and probably owed more.
The grievous effects of the oil-price rises upon the less fortunate countries of
Asia and Africa requires little emphasis. OPEC, as noted earlier, has consist­
ently refused to operate a two-tier system of prices for the benefit of the poorer

Afro-Asian nations, on the pretext that oil sold at the lower price would
eventually find its way into the hands of the Western industrial powers. OPEC
has also, in the main, fought shy of contributing to international or regional
funds established to provide financial aid to economically backward countries
hard hit by the surge in oil prices. The reluctance is due primarily to the
objections of the richer members of the organization to the lack of control they

would exercise over the selection of recipients and the way in which the funds
would be expended. They prefer, and this is particularly true of the Arab oil
states, to decide for themselves individually to whom to extend financial aid, if
any.
Obviously the motives behind this attitude are political, or religio-political,

and this is borne out by what is known of the grants, loans and investments
made by the Arab oil states to African and Asian countries in the past few years.
e principal recipients of these disbursements have been the so-called