ECONOMIC INTELLIGENCE WEEKLY REVIEW 23 MARCH 1978

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01316A001000040010-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 51
• Document Creation Date: December 12, 2016
• Document Release Date: January 7, 2002
• Sequence Number: 10
• Publication Date: March 23, 1978
• Content Type: REPORT

Hpproye
Economic Intelligence
Weekly Review
Marrh X'97"',
copy N 562
Approved For Release 2002/01/30 CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
DISSEMINATION CONTROL ABBREVIATIONS
NOFORN- Not Releasable to Foreign Nationals
NOCONTRACT- Not Releasable to Contractors or
Contractor/ Consultants
PROPIN- Caution-Proprietary Information Involved
NFIBONLY- NFIB Departments Only
ORCON- Dissemination and Extraction of Information
Controlled by Originator
REL ... - This Information has been Authorized for
Release to ...
Classified by 015319
Exempt from General Declassification Schedule
of E.O. 11652, exemption category:
? 5B(l), (2), and (3)
Automatically declassified on:
date impossible to determine
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
SECRET
NOFORN
ECONOMIC INTELLIGENCE WEEKLY REVIEW
25X6
25X6
The recent confab culminated in a resolution on LDC debt and develop-
ment that drew plaudits from representatives of the developed and most
of the developing countries.
UNCTAD Meeting Glosses Over North-South Differences ................................ 4
Brazil: Future Superpower in Agriculture ..........................................................
Although short-run prospects for export earnings have been dampened
by severe drought and sagging world prices for coffee and cocoa, Brazil's
agricultural future looks especially bright because of tremendous natural
resources and vigorous government development efforts.
Copper: LDC Developments Threaten Established Producers ........................... 1
The movement of copper-mining LDCs into the smelting and refining
stages foreshadows substantial reductions in the copper industries of the
major developed countries.
Soviet Computers: A New Generation Emerges ............................................... 21
The USSR, while on the threshold of a major new advance in computer
technology, will find it extremely difficult to reap short-term economic
gains from the breakthrough.
i
SECRET
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
25X1A
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
25X6
k Next 2 Page(s) In Document Exempt
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
25X6
UNCTAD MEETING GLOSSES OVER NORTH-SOUTH DIFFERENCES
To the surprise of most observers, the meetings of the L'NCTAD Trade and
Development Board on 6-11 March culminated in a resolution on LDC debt and
development that drew plaudits from representatives of the developed and most of the
developing countries. The resolution:
? Sets out principles for treating individual debt problems and commits
donor countries to consider measures to adjust terms of past aid loans or take
other equivalent actions to improve assistance flows.
? Calls for the creation of an intergovernmental group of experts to
recommend features of future operations regarding LDC debt.
? Acknowledges that there will be further plenary review of the debt
question at UNCTAD sessions in early 1979.
This low-key formulation contrasts markedly with past strident demands of the LDC
leadership for universal debt relief.
We believe that the UNCTAD resolution papers over persistent differences
within and between the two groups and that these could easily reemerge in further
exchanges. The current constructive phase, which will probably last at least until the
UNCTAD preparatory meeting of January 1979, is based on an unusual convergence
of separate interests in the North-South dialogue.
?, As a group, the developed countries appreciate the willingness of the
Ll)Cs to avoid rhetoric and to stick to technical discussions on the debt issue.
? Developing country leadership was trying to appear as cooperative as
possible to encourage unilateral adjustments by donors of debt terms (or
Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
other debt-related actions), several of which have already taken place or
have been proposed.
Debt at the UNCTAD Meeting
No substantial agreement was reached on the proposals that previously had
constituted the basis of group positions. The developing countries had called for
generalized debt relief and for the establishment of guidelines that would link
eligibility with LDC development goals. The developed countries had tabled a
proposal at last spring's Conference on International Economic Cooperation (CIEC)
that laid out features to guide the treatment of individual debt problems and had
suggested procedures to provide additional external support for low-income LDCs
experiencing chronic balance-of-payments problems of which debt is an element. As
anticipated, the LDCs still were unable to accept the CIEC proposal. They could not,
however, agree among themselves on renewing earlier demands for generalized debt
relief and, spurred by opposing pressures within the group, approved a carefully
worded comprimise, acceptable to developed countries.
The resolution, adopted by consensus, reflects fairly broad acceptance by donor
countries of the principle of retroactive terms adjustment, acknowledges that some
individual LDCs suffer debts problems and provides for future review of actions taken
under the resolution. On the other hand, it lends some support to the developed
countries' commitment to case-by-case evaluation of debt situations, distinguishes
between debt crises and cases calling for longer term measures, and commits donors
only to seek an improvement in net flows of Official Development Assistance (ODA).
Most donor countries have stressed that terms adjustment is an aid enhancement, not a
debt rescheduling device, and that beneficiaries would be determined within the
context of donor country aid programs. The favorable donor country position on terms
adjustment was a factor in LDC acceptance of the basic concepts for dealing with
future debt problems of individual nations. While the concepts are modest, and in
some cases self-evident, they, represent a departure from what up to now had been a
sterile North-South debate. (t.
Factors Underlying the Joint Resolution
The groundwork for conciliation in both camps was laid by:
LDC differences. Since the original demands of the Manila Declara-
tion of January 1976, the G-77 has successively modified its debt package in
attempts to strengthen an elusive consensus. Support for the package varies
from moderate endorsement by interested African and South Asian countries
Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
to open hostility from the Latin American group and others who fear for
their credit standing in capital markets. Some of the poorer countries that
stand to gain from initial steps toward debt relief are no longer willing to
maintain unrealistic postures such as those of the G-77 in debt discussions at
the CIEC. In addition, many countries are directing their energies toward
other North-South issues, such as the suspended Common Fund talks,
recognizing that political and economic gains from the debt discussions may
not meet earlier expectations. Stepped-up pressures from such disaffected
participants at UNCTAD meetings in December and January shifted the
focus of G-77 lobbying toward generalized relief only of official ODA debt
for the poorest LDCs. This shift gained momentum because the chairman of
the meeting (Sri Lanka) and major spokesmen for the G-77 (Pakistan, Zaire,
and Egypt) privately opposed more sweeping demands..
Moves by developed countries. Recent action by individual donors on
debt relief measures and the favorable donor-country position on terms
adjustment have convinced many LDCs that they are riding a wave of
favorable changes in creditor policies that does not preclude future demands.
Even before the session, the Netherlands, Sweden, Canada, and Switzerland
had moved to cancel debts owed them by this group. The United Kingdom
and West Germany, which were already seriously considering some debt
measures, as well as Denmark and Belgium, pledged at the March meetings
to move forward on selective reajustment of terms.
UNCTAD ambitions. The UNCTAD Secretariat has campaigned
vigorously for a larger part in decisions on world economic issues. The
failure of last November's Common Fund talks and other North-South
discussions has led the Secretariat to seek to enhance its conciliatory role in
such exchanges. At a preparatory meeting last December, UNCTAD
officials worked hard to identify common points between the developed and
developing countries' positions on debt. UNCTAD Secretary General Corea's
attempts to persuade disaffected LDCs to send ministers to the March
meeting highlighted his desire for positive accomplishments at the debt
talks. These efforts at conciliation may have had a substantial influence on
some of the poorer African countries.
World economic conditions. Renewed economic growth, relatively
stable oil prices, and stronger markets for several important LDC exports
have at least temporarily eased balance-of-payments strains in many non-
OPEC LDCs since the debt relief demands of 1976. Nonetheless, in view of
the substantial debt service payments due this year and next and an expected
Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
deterioration of the non-OPEC current account, the G-77 will have consider-
able reason to renew broader demands for debt relief in the near term.
This month's meeting leaves uncertain the future role of the debt issue in the
North-South dialogue. While the resolution of the UNCTAD Board is the first
agreement of its kind in the short history of the North-South debt debate, it leaves
untouched a variety of G-77 demands that could be raised in the future: (a) relief of
official obligations for each interested LDC, (b) refinancing of commercial credits, (c)
readjustment of the terms of multilateral loans, and (d) creation of an international
institution specially charged with oversight of work on debt problems. Reemergence
of these demands will depend on progress on other issues in the North-South dialogue,
the initiatives of developed countries on debt relief outside the UNCTAD setting, and
world economic conditions affecting LDC current account positions. (Secret Noforn)
25X6
Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
Next 1 Page(s) In Document Exempt
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
25X6
BRAZIL: FUTURE SUPERPOWER IN AGRICULTURE
Tremendous natural resources and strong government support for agricultural
development should make Brazil the next superpower in world agriculture. Short-run
prospects for increased export earnings have been dampened by severe drought and
weakening world prices for cocoa and coffee.
Record earnings for coffee, cocoa, and soybeans made Brazil the world's third
largest exporter of agricultural commodities in 1977-behind the United States and
France. Agricultural sales totaled $6.7 billion. 55 percent of Brazil's export earnings.
Coffee sales reached a peak of $2.6 billion; soybean and soybean products posted a
$2.1 billion total. Cocoa accounted for another $530 million and sugar for $465
million.
Brazil was able to capitalize on strong world markets for coffee and cocoa, while
soybeans and soybean product earnings were up due to an ambitious agricultural
development program started in the early 1970s. Brazil's continued efforts to become
the world's largest cocoa producer sustained production in the face of adverse
weather. Expansion of soybean production resulted in a record crop of 12 million tons,
nearly eight times the level of 1970. Sugar production reached a new high of 7.5
million tons, while the massive coffee rejuvenation program-begun after the severe
Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
Brazil: Earnings from Principal Agricultural Exports
Commodity
1976
1977
Brazilian
CIA'
TOTAL ............................................
5250
6700
6624
5805
Coffee ..........................................
2398
2641
3100
2550
Soybeans ......................................
1738
2132
1580
1700
Sugar ............................................
306
463
450
450
Cocoa ............................................
289
531
396
320
Corn ..............................................
165
136
180
Negl.
Cotton ..........................................
7
41
100
100
Rice ..............................................
12
83
75
Negl.
Tobacco ........................................
161
186
220
220
Wool ..............................................
45
53
66
65
Beef ..............................................
16
40
57
50
Other ............................................
113
394
400
350
frost in 1975-enabled production to recover to almost double the 1976 output. Wheat
production reached a new high of 3 million tons as the government pushed ahead
toward its goal of self-sufficiency.
Prospects for 1978
The severe drought that has plagued southern Brazil since the beginning of 1978
threatens to reverse the trend in the 1970s of steadily rising agricultural exports.
Wheat production has already slipped because of unfavorable weather, forcing Brazil
to boost imports by almost 1 million tons. The corn and rice crops almost certainly are
being slashed by drought; export sales from these commodities will be negligible. The
reduction in the soybean crop and potential damage to coffee production could be
most damaging of all to short-term economic prospects.
The forecast of soybean production has been lowered from 12.5 million tons to
the current USDA estimate of 10.5 million to 11.0 million tons. Despite this marked
reduction, a jump in world prices is unlikely; the United States had a bumper 1977
soybean crop, Argentine output is up, and US planting intentions for 1978 are higher.
Brazil's export earnings from the sale of soybeans and soybean products could drop
more than $400 million compared with 1977.
A continuation of the drought would also hurt coffee earnings: Even though a
large reduction in the current crop-below recent estimates of 20 million to 21 million
bags-would itself help bolster world prices, the world outlook is dominated by
Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
decreased consumption and sagging prices. This, coupled with historically low
Brazilian stocks, implies that Brazil's coffee sales may be off by about $100 million in
1978. A prolongation of the drought would curtail Brazil's future production by
damaging the younger coffee trees.
Sugar production is likely to reach another new high of 8.9 million tons when the
current harvest is completed in April. Although Brazil has the potential to increase
exports to 3 million tons, it is limited by an export quota under the International Sugar
Agreement. Low sugar prices and the quota limitation will prevent Brazil from
increasing sales.
Cocoa production once more has been curbed by inclement weather and
probably will remain at last year's level. Lower prices and strong domestic consump-
tion suggest a reduction in export sales by about $200 million in 1978.
Government Programs to Date
Despite the anticipated cut in agricultural exports in 1978, Brazil's recent
agricultural record cannot be matched by any other country. From 1970 to 1977,
earnings from agricultural exports rose from $1.8 billion to $6.7 billion. Production of
soybeans increased nearly sevenfold; cocoa, by 17 percent; corn, by one third; wheat,
by nearly 120 percent; and rice by 45 percent. Rapid expansion of the citrus industry
enabled Brazil to become the world's largest exporter of frozen concentrated orange
juice. Brazil now places second only to the Soviet Union in total sugar output and has
maintained its position as the world's largest coffee producer and exporter.
1970 ..................................
1509
643
201
4593
14216
1374
1971_ ...............................
2077
1415
182
5117
141.30
1844
1972 ..................................
3666
1440
167
5648
14891
2132
1973......... ........................
5012
870
162
6163
14109
691
1974 ..................................
7876
1650
246
6959
16284
1928
1975 ..................................
9892
1380
273
7400
16354
2820
1976.. - .............. ......... .....
10810
557
258
6200
17885
1555
1977 ..................................
12000
1020
235
7500
18800
3000
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
Several factors account for Brazil's success. Abundant farm land, a favorable
climate for growing a wide variety of commodities, and massive domestic and foreign
investment in agriculture are important elements. But even more important are the
myriad government programs aimed at developing agriculture. The emphasis on
agriculture has been especially pronounced during the past two to three years under
President Geisel's administration.
Government programs now cover most facets of production and trade, including
(a) minimum prices for agricultural products; (b) credit arrangements for production
inputs such as seed, machinery, and fertilizer; (c) funding for agricultural research and
extension; (d) development of rural infrastructure; (e) tax incentives for production
and exports; and (f) export subsidies for certain commodities. The government is also
active in regulating exports and export prices for several commodities even though
most exports are made by private companies or cooperatives.
Government involvement in agricultural development is best illustrated by the
magnitude of the increase in agricultural credits. In 1974, credit for the agricultural
sector totaled $6.5 billion; by 1976, this amount had more than doubled, to $13.5
billion. During the same period, annual fertilizer usage increased from 1.4 million tons
to 2.3 million tons, largely because of increased availability of credit.
Although crop yields have risen slightly, production increases have occurred
largely through the rapid expansion of farmland. Area planted to grains and soybeans
increased from 29 million hectares in 1970 to 39 million hectares in 1977. Soybean
plantings alone increased by 5.6 million hectares. Most of this increase resulted from
the development of new lands in southern Brazil. Sugarcane planted area has doubled,
with expansion occurring largely in the northeast where a doubling of cocoa
plantations is also under way.
The availability of new land in southern Brazil is rapidly diminishing. Develop-
ment of the Cerrados, Brazil's central plateau region, is now progressing. Government
efforts in this area include an initial investment of $1.6 billion to develop 3.7 million
-hectares for production of wheat, corn, coffee, and soybeans. This project could add
an additional 40 percent to soybean planted area.
Government Targets Ahead
Current government policies will sustain the strong push for agricultural
development and diversification, with the major emphasis on soybeans. A large
portion of the Parana coffee area destroyed by frost has already been planted to
soybeans, and additional large tracts will be planted as part of the massive
23 March 1978 SECRET
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
development program for the central plateau. If the soybean component of the project
succeeds, Brazil will produce 20 million tons of soybeans by 1985. The loss of the
Parana coffee area is being offset by extensive plantings elsewhere of high-yielding
varieties; new plantings are mainly in frost-free areas.
Brasilia is also emphasizing the expansion of sugar and cocoa production. An
ambitious development program begun in the early 1970s should raise sugar
production to 10 million tons by 1980. This expansion will support a major program to
convert sugar to alcohol for use in automobile engines. This program, to cost $1.6
billion in its initial stages, is to result in the annual product of 4 billion liters of alcohol
(the equivalent of 43,000 b/d of oil) to help reduce Brazil's oil import bill. In addition,
Brazil hopes to expand its role as a major sugar exporter by exploiting its new export
quota of 2.35 million tons under the International Sugar Agreement. Brazil's exports of
sugar averaged only 1.7 million tons in 1974-76.
Another goal of the Brazilian government is to become the world's largest cocoa
exporter by 1990. Brazil now ranks as the world's number two producer along with the
Ivory Coast, behind Ghana. A total of $41 million was spent on cocoa research,
extension, and infrastructure development in 1975, and sizable sums probably were
spent in 1976 and 1977. Credit extensions to cocoa producers totaled almost $100
million in 1975. Successful development of the Amazon Valley and rejuvenation of
production in the traditional producing area of Bahia could result in a cocoa crop of
700,000 tons by 1990 compared with production of 235,000 tons in 1977.
Considerable attention has also been paid to expanding production of grain crops.
The government views increases in corn and rice output as necessary to meet
expanding domestic needs as well as to garner large foreign exchange earnings. As for
wheat, the goal is to attain self-sufficiency in the next five years. We doubt this can be
achieved, given the continued strong increase in domestic consumption.
Implication of Agricultural Development
Brazil will expand its position as a major competitor of the United States in
agricultural exports and as a key supplier of US agricultural import heeds. Barring
major crop failures, Brazil will cut into US export sales of soybeans and products;
increases in this world market share could be tempered by higher domestic demand.
Brazil probably must face up to greater import demand for wheat as the government's
drive for self-sufficiency in wheat production runs into domestic opposition because of
the lower cost of imported wheat. As for the traditional export crops, the coffee
industry will become even more influential in international markets since both world
and Brazilian stocks are at historic lows. Brazil also is in a strong position to achieve its
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
goal of becoming the number one cocoa exporter by 1990. Brazilian emergence as a
spokeman for LDC commodity producers foreshadows more frequent confrontations
with the United States over international commodity issues. (Confidential)
COPPER: LDC DEVELOPMENTS THREATEN ESTABLISHED PRODUCERS
The expansion of smelting and refining stages in the copper mining LDCs
foreshadows reductions in the copper industries of the major developed countries.
Producers in these countries are faced with sky-rocketing pollution abatement costs,
high wage bills, slow product demand growth, and rising imports of cheaper LDC
refined copper. Phaseout of capacity in some of the major industrial countries,
including the United States and Japan, could be moderated by protectionist measures
and/or relaxation of environmental constraints.
Market Depressed
Refiners in developed countries are whipsawed by weak demand, world overca-
pacity, record stocks, and low prices. Free World consumption of refined copper has
never returned to the record high of 6.9 million tons of 1973; meanwhile capacity has
increased by 1.3 million tons. The world market price in the London Metal Exchange
(LME) has fallen by more than 50 percent, from a record $1.38 per pound in April
1974 to less than 60 cents, while stocks of refined copper have risen to a record 2
million plus tons. The effects of the depressed market since 1973 on the US industry
have been particularly severe: (a) production is down 18 percent since 1974, (b)
consumption is down 20 percent, (c) exports are down 41 percent, and (d) imports are
up 91 percent.
Fifteen nations account for 90 percent of Free World copper mining and
refining:
? The United States is by far the largest producer, mining and refining
about one-quarter of total output. Although self-sufficient in terms of
capacity, the United States usually imports about 10 percent of its annual
consumption of refined copper.
Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
Copper Wire Bar
LME us
1S MAR 57.9 615
8 MAR 56.0 61.5
FES 78 55.3 633.6
MAR 77 $8.5 72.8
1-16 MAR11
1974 1975 1978 1977 1978
? Six LDCs-Chile, Peru, Zambia, Zaire. the Philippines, and Papua New
Guinea-account for nearly one-half of Free World mine output (copper
content) and one-quarter of refined output. The six export most of their
production to developed countries, shipping concentrates and blister copper
as well as refined copper.
? Canada, Australia, and South Africa together mine more than 20 percent
of Free World copper and refine about 12 percent. Approximately two-
thirds of their output is refined domestically and the rest is exported to other
developed nations for refining. The three consume about one-half of their
refined output and export the remainder.
? Four developed countries-Japan, Belgium, 4 lest Germany, and the
united Kingdom-mine almost no copper but refine 30 percent of Free
World output. Their inputs are obtained from the six copper exporting
LDCs, Canada, and South Africa. All except Belgium consume their entire
refined output.
The Appeal of Vertical Integration
LDCs view expansion of their smelting and refining stages as an attractive means
of increasing their export earnings and developing their industrial base. Vertical
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
integration is facilitated by low investment costs and high value added. Ore producing
LDCs find that a small additional investment of $2,500 per ton in smelting and
refining capacity can expand the value of product by about one-third. This gain,
coupled with the richer ore bodies, cheaper labor, and fewer environmental con-
straints, is attracting foreign capital to the LDCs.
Copper Processing Stages
Mine
Ore0.3 Percent to 6 Percent hopper
Concentrates 20 Percent to
35 Percent Copper
Smelted Metal (Blister)
98 Percent Copper
Refined Metal 99.9 Percent Copper
Status of the Major LDC Exporters
The degree of present LDC vertical integration varies: the Philippines and Papua
New Guinea process some of their mine output through the concentrate stage and
export both ores and concentrates. At the other extreme, Zambia exports nearly all of
its output as refined copper.
Peru possesses enormous copper reserves and has an ambitious expansion
program, which eventually will make it one of the world's largest copper producers. In
November 1976 the new Cuajone mine began producing at an annual rate of 150,000
Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
SECRET
Free World: Trade in Refined Copper
Total exports ..........................................................
2,543.0
2,788.8
2,496.7
2,620.4
LDCs ........................................................................
1,320.7
1,433.2
1,397.7
1,532.6
Chile ......................................................................
387.8
487.8
5041
594.7
Peru ......................................................................
270
38.5
36.9
122.1
Zambia ................................................................
672.1
649.8
616.1
712.4
Zaire ....................................................................
229.2
252.0
224.0
74.0'
Other ....................................................................
4.6
5.1
16.5
29.4
Developed countries ..............................................
1222.3
1,355.6
1,099.0
1,087.8
Australia ..............................................................
48.2
70.5
91.5
76.2
Belgium ..............................................................
319.4
288.9
248.6
307.5
Canada ................................................................
290.0
282.8
319.6
313.2
Japan ....................................................................
24.1
278.5
21.7
29.3
South Africa ........................................................
27.5
15.2
26.6
34.6
United Kingdom ................................................
66.1
35.0
15.7
12.3
United States ......................................................
173.3
113.3
156.2
102,3
West Germany ....................................................
119.5
116.0
97.3
66.3
Other ....................................................................
154.2
155.4
121.8
146.1
Total imports ........................................................
2,627.4
2,712.8
2,330.7
2,727.3
LDCs ........................................................................
209.0
230.1
190.4
236.2
Developed countries ..............................................
2.418.4
2,482.7
2,140.3
2,491.1
Belgium ..............................................................
214.1
187.8
187.9
302.21
Japan ....................................................................
314.0
230.2
168.0
200.5
United Kingdom ................................................
399.2
380.9
369.4
367.9
United States ......................................................
181.4
275.7
132.4
346.1
West Germany ....................................................
414.4
449.8
404.9
409.7
Other ....................................................................
895.3
958.3
877.7
864.7
' Because of fuel shortages in 1976. Zaire exported most of its blister copper to Belgium for refining.
' Japan's large exports in 1974-were made to reduce heavy inventories.
tons. Output from this mine added an estimated $175 million to foreign exchange
earnings in 1977. The Ilo refinery came onstream in mid-1976 with a capacity of
150,000 tons. Ilo's capacity will be doubled by early 1979. Approximately 16,000 tons
will be added to the capacity of the La Oroya refinery in 1978, raising Peru's refinery
capacity to 366,000 tons. When a new 170,000-ton-smelter now under construction at
Cuajone is completed, Peru will smelt and refine practically all its mine output.
Chile, possessor of the world's largest copper resources, can produce at the
present annual rate of 1 million tons for 150 years. At the present, Chile smelts about
85 percent of mine output and refines about 65 percent. A small expansion of existing
mines is planned, and a new 100,000-ton refinery is under consideration.
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
Zaire mines about 500,000 tons of copper annually, smelts 450,000 tons, and
refines 250,000 tons. Most of its smelted copper and leach cathodes are exported to
Belgium for further refining.
Zaire plans to construct a 100,000-ton refinery in Maluku at a cost of $460 million
and a smelter of equal size. The refinery could be completed by 1980 and the smelter
several years later. Eventually the size of the refinery is to be doubled. Even so, Zaire
will refine only 70 percent of the present level of mine output and considerably less if
plans to expand mine output to 800,000 tons are carried out.
Zambia refines its entire mine output of 700,000 tons per year. Plans to expand
are limited to a small electrowinning refinery of about 20,000 tons, which could be
onstream by mid-1980. The plant will cost $134 million.
The Philippines mine 230,000 tons of copper annually, exporting ores and
concentrates. Vertical integration plans have been cut back to one 84,000-ton smelter,
scheduled for completion in 1980 at an estimated cost of $220 million. This smelter
will be able to process only about 40 percent of concentrate output. Construction of a
refinery is still under consideration.
Papua New Guinea mines 180,000 tons of copper annually which it processes
through the concentrate stage. Concentrates are exported to Japan and West
Germany for smelting and refining. No smelters or refineries are planned at the
present time.
Competitive Advantage
Pollution abatement requirements and rising operating costs in the major
industrial countries have widened the LDC edge in the smelting and refining stages.
Pollution control programs have raised the costs of smelting and refining by as much
as 16 cents a pound-about 30 percent of the present LME price of refined copper.
The LDCs are exploiting their cost advantage by maintaining output at capacity
levels and underpricing old-line producers in certain markets. US producers have been
especially hard hit; US imports rose to record levels in 1976 and rose again in 1977,
keeping capacity utilization below 70 percent.
LDC copper producers will maintain their competitive edge into the 1980s,
However, their profits will be checked by continued low prices and slow growth in
product demand.
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
During 1978-80, completion of refineries now under construction will raise world
capacity by more than half a million tons, or by about 10 percent. Most of the new
capacity will be in the LDCs, with Peru adding 200,000 tons and Mexico and Iran
each adding 150,000 tons. By 1980, Mexico and Iran will join the ranks of copper
exporting nations.
Free World Copper Production Capacity
Thousand Tons (Contained Metal)
1980
1970 1975 (Projected)
United States
Mine ............................................................................................ 2.000 2.000 2,100
Smelter ......................................................................................... 1,950 2.065 2,065
Refinery ...................................................................................... 2.425 2.640 2,640
Developed countries exporters'
Mine ............................................................................................ 1,170 1,640 1,760
Smelter ........................................................................................ 945 1,170 1,170
Refinery ...................................................................................... 785 920 1,080
LDCs exporters'
Mine ............................................................................................ 2,720 3,565 4,075
Smelter ........................................................................................ 2.370 2,775 3,035
Refinery ......... .............................................................................. 1,630 1.860 2,645
Developed countries producers'
Mine ............................................................................................ 130 85 85
Smelter ........................................................................................ 1,000 1,650 1,660
Refinery ...................................................................................... 1,850 2,340 2,435
Canada, Australia, and South Africa.
Chile, Peru, Zambia. Zaire, Philippines, and Papua New Guinea. In 1980 the six major LDC exporters will
be joined by Mexico and Iran with a total refinery capacity of 390,000 tons.
' Japan, Belgium, West Germany and the United Kingdom.
As for 1981-85, announced plans call for about 650,000 tons of additional refining
capacity, all to be added to LDCs. Although these plans are tentative and may be
raised or lowered as market trends become clearer, they suggest that no sudden
tightening in the copper market is likely.
We expect exports of refined copper to the industrial countries to increase as
vertical integration continues. The developed countries thus face some hard choices:
? To allow market forces to phase out a substantial portion of the domestic
copper industry.
? To establish protectionist measures.
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
? To improve the competitive position of the domestic industry by relaxing
environmental constraints. (Unclassified)
The USSR, while on the threshold of a major new advance in computer
technology, will find it extremely difficult to reap short-term economic gains from the
breakthrough.
The RYAD-II, a new family of data processing computer systems patterned after
the IBM 370, is now going into production. RYAD-II computers will be faster and
much more versatile than the models being replaced and will be able to use IBM 370
software. The USSR, however, cannot achieve the full capabilities of the RYAD-II
without advanced integrated circuits from the West. These could become available.
later this year if current proposals for the relaxation of embargo restrictions are
adopted. The need for high-grade associated software and technical manpower, as
well as the ineffective employment of advanced computers at the enterprise level, will
limit the usefulness of the RYAD-II for a long time.
The Setting
The CEMA-wide program to build the RYAD series computers-the first modern
Soviet computers designed specifically for data processing-was beset throughout the
Ninth Five-Year Plan period (1971-75) with design and production difficulties.
Production grew from a few prototypes in 1971 to an estimated X00 units in 1975;
total output was only 10. to 15, percent of what had been anticipated, however, and
included only the smaller, less powerful ES-1020 and ES-1030 models-both markedly
inferior to their Western counterparts in reliability and performance.
By 1976, mainly-because of increased domestic production of improved semicon-
ductor components, these basic RYAD models had been modified, upgraded, and
redesignated as the ES-1022 and ES-1033. The new RYAD-Is are nonetheless still
limited in their performance characteristics and are soon to be superseded by RYAD-
IIs.
Technology Gap
25X1A
The RYAD-II program has moved along rapidly since it was first announced in
late 1974. Development cycle time-measured from the first announcement of
25X1A
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
planned development to the date of the first production prototype-took about three
years for Lite RYAD-II, compared with about five years for the RYAD-I. Nevertheless,
the technological gap with the United States, as represented by IBM, has stayed at
about seven years. In fact, the gap is much greater when Lite full range of equipment
being produced by both sides is considered. IBM in its 360- and 370-series machines
offers a complete line of computer sizes, including some very large, fast models.
RYAD-I production, in contrast, consisted of only the smaller sizes, with the larger
models only now entering series production.
The Soviets claim that two RYAD-II models are now going into production, the
small ES-1035 and the much more powerful ES-1060. The latter computer, however,
was under development for the original RYAD-I program and is not a complete new
design. The only other RYAD-II model that is likely to go into production during the
current Plan period (1976-80) is the ES-1055, being developed by East Germany.
The ES-1035 is in the very early stages of production in the USSR. A few
prototype machines have been made, tested, and accepted by the CEMA evaluation
committee. The Minsk Computer Plant, the largest producer of computers in the
USSR, is now making preparations for series production. During the transition phase
at Minsk, which could last until 1979, RYAD-Is (ES-1022s) will continue to be
produced along with the RYAD-Ils (ES-1035), thereby avoiding a sharp drop off in
total Soviet and East European production of RYADs. By 1980, RYAD-IIs should
constitute about one-half of total RYAD production.
RYAD-II production is going ahead even though the critical semiconductor
memory components are not yet available from the domestic electronics industry.
Semiconductor memory-a memory built out of high-density integrated circuits (IC)
with an information storage capacity of about one thousand bits of information on
each IC-is a key feature that distinguishes the technology of RYAD-1I from RYAD-I.
Although by current Western standards this level of density is low (off-the-shelf
memory components in the West have 16 times as much capacity), it nonetheless
represents a giant advance for the RYAD program. Semiconductor memory will
permit the USSR to double the memory size of the RYAD-I in one-fourth of the space,
while substantially increasing the speed of memory operations. Greatly increased
memory size makes it possible to (a) handle much larger programs and more than one
program at a time and (b) attach remote terminals for time sharing. These
characteristics would provide the USSR with its first true capability for computer-to-
computer communications.
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
Neither the USSR nor any of the other East European participants in the RYAD
program has yet demonstrated a_ capability to produce ICs of the required density.
The highest density IC in production in the USSR is a 64-bit device; even these- are_._
scarce and-shortages have caused delays in.the production of RYAD-Is. To compress
development time, the Soviets are attempting to copy several high-density devices
manufactured by US firms. _
Soviet designers, apparently uncertain about when the new component technol-
ogy will become available, have designed RYAD-II memories to employ the
traditional magnetic core technology. Use of this technology, however, will curtail the
number of new features of the RYAD-II and greatly reduce overall system perfor-
mance. In particular, it would be difficult to use the RYAD-IIs to establish large
computer networks.
... But Questionable Impact
RYAD-IIs will have little short-run economic impact. First, the increased speed
and capacity of RYAD-IIs raises the performance requirements of associated hard-
ware to levels that, in some cases, are beyond the reach of current Soviet technology. a
The smaller RYAD-IIs will require disc drives with a capacity (30 megabytes) four ';
times greater than those now being produced in the USSR. It is not clear if Bulgaria,,,-'
which has mastered production of such drives, will be able to supply large-scale Soviet ?,
needs. The larger RYAD-II models will require disc drives of a capacity (100
megabytes) far beyond the current manufacturing capability of any Communist
producer.
Second, RYAD-IIs will require higher professional skills from systems analysts,
programers, and service personnel. Programs to meet these manpower needs are
proceeding with far lesser priority than production.
Third, RYAD-IIs are likely to encounter the same problems in allocation and use
that have curtailed the effectiveness of RYAD-Is. Many enterprises have overordered
RYADs, failed to train personnel in their use, and have shown monumental
indifference to their care and maintenance. M. Ya. Rakovskiy, Deputy Chairman of
Gosplan, recently complained of "frequent cases where the machines are kept in a
storehouse, and sometimes under the open sky, still in a crate, for 4 to 6 months and
even longer."
Finally, RYAD-IIs offer the typical industrial facility few advantages over
RYAD-I and seem better suited for data processing at higher levels-the production
association, the Ministry, and regional and national planning bodies. Even in the latter
25X1A
25X1A
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
uses, potential effectiveness awaits the development of appropriate software and
complex data transmission systems.
Policy Implications
To realize the full capabilities of RYAD-II computers, especially the time-sharing
feature, the Communist countries will have to turn to the West for_ the required
integrated circuits. As precedent, the East Germans used Western ICs entirely in the
first few units of their RYAD-I model and continue to use some Western ICs.
The ICs-needed for the semiconductor memory in RYAD-IIs are controlled by
COMM. Even so, substantial quantities of these components have been acquired by
the USSR and East European countries. These acquisitions have allowed RYAD
producers to design exact physical and performance copies of the Western parts and,
probably, to use them in prototype RYAD-11s.
The supply of Western memory ICs through illegal channels is_neither adequate
nor sufficiently dependable for use in series-produced RYAD-11s. Later this year,
however, COCOM will consider relaxing controls on ICs to a level that would permit
free export of the needed Western memory components to Cornrnunist countries. The
USSR and East European countries would become large purchasers until high-volume
domestic production is achieved.
Soviet military authorities have been directly involved in the RYAD production
program and are important users. RYAD-Is are employed in military-space research
institutes and in plants producing military hardware. The more versatile and larger-
capacity RYAD-Ils would strengthen these military applications. Also, the networking
and time-sharing features of RYAD-II will permit more sophisticated military
command and control, automated air traffic control, and strategic planning and
targeting. (Confidential Noforn)
China: The Nonferrous Metals Industry in the 1970s
(ER 78-10104, March 1978, Secret Noforn-Nocontract)
This research paper analyzes China's nonferrous metals industry in terms of
production trends, technological development, and international trade.
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
Approved For Release 2002/01/30 CIA-RDP79TO1316AO01000040010-5
 roy Apr Release 2002/01/30: CIA-RDP79TO1316AO01000040010-5
Assessment
Center
Economic Indicators
Weekly Review
ER EI 78-012
23 March 1978
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
This publication is prepared for the use of U.S. Government
officials. The format, coverage and contents of the publication are
designed to meet the specific requirements of those users. U.S.
Government officials may obtain additional copies of this document
directly or through liaison channels from the Central Intelligence
Agency.
Non-U.S. Government users may obtain this along with similar
CIA publications on a subscription basis by addressing inquiries to:
Document Expediting (DOCEX) Project
Exchange and Gift Division
Library of Congress
Washington, D.C. 20540
Non-U.S. Government users not interested in the DOCEX
Project subscription service may purchase reproductions of specific
publications on an individual basis from:
Photoduplication Service
Library of Congress
Washington, D.C. 20540
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
1. The Economic Indicators Weekly Review provides up-to-date information
on changes in the domestic and external economic activities of the major non-
Communist developed countries. To the extent possible, the Economic Indicators
Weekly Review is updated from press ticker and Embassy reporting, so that the
results are made available to the reader weeks-or sometimes months-before receipt
of official statistical publications. US data are provided by US government agencies.
2. Source notes for the Economic Indicators Weekly Review are revised every
few months. The most recent date of publication of source notes is 16 February 1978.
Comments and queries regarding the Economic Indicators Weekly Review are
welcomed.
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 ? db&&bt 3f A JkS
BIG SIX F0R6 i ' 96bM 'f ' 17
Industrial Production
140
130
INDEX: 1970=100, seasonally adjusted
Semllogarithmic Scale
Unemployment Rate Percent
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 J1 p o , w e d For Rel s 52002/01/30 :1q,,JZDP79T013j01 000040012VJ78
tlncluding Japan, West Germany. France. the United Kingdom. Italy, and Canada. A-2
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
Consumer Price Inflation
Note: Three-month average compared with previous three months.
4.0
Percent, seasonally adjusted, annual rate
Percent Change
LATEST
from Previous
MONTH
Month
Industrial
Production
Big Six
DEC 77
0.3
United States
DEC 77
0.2
Consumer Prices
Big Six
DEC 77
0.5
United States
DEC 77
0.5
AVERAGE ANNUAL
GROWTH RATE SINCE
1 Year
1970 Earlier
9.4 7.8
6.5 6.8
Billion US $, f.o.b., seasonally adjusted
3 Months
LATEST MONTH 1 Year Earlier Earlier
3 Months
Earlier2
Unemployment Rate
Big Five
United States
DEC 77
nEC 77
4.3
6.4
3.9
7.8
4.4
6.8
LATEST
MILLION
CUMULATIVE (MILLION US $)
MONTH
US S
1977
1976
Change
5
5
Trade Balance
.
Big Six
DEC 77
4,824
37,242
16,562
20,680
4.4
United States
DEC 77
-2,116
-26,490
-5,635
-20,855
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
2Average for latest 3 months compared with average for previous 3 months, seasonally adjusted at annual rate.
A-3
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
INDUSTRIAL PRODUCTION INDEX: 1970=100, seasonally adjusted
United States
West Germany
130
120
-120'
JAN APR JUL OCT JAN APAp VQ F%ML RgFeagb 2M2/01/3t1 CIA-Rl9P79'f0t 16A0010000400h'0-5mm OCT
1973 1974 1975 1976 1977 1978
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
United Kingdom
100
Italy
Canada
20-
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
Percent
AVERAGE ANNUAL
Percent
AVERAGE ANNUAL
Change
GROWTH RATE SINCE
Change
GROWTH RATE SINCE
from
from
LATEST
Previous
1 Year
3 Months
LATEST
Previous
1 Year
3 Months
MONTH
Month
1970
Earlier
Earlieri
MONTH
Month
1970
Earlier
Earlieri
United States
FEB 78
0.4
3.4
4.5
0.7
United Kingdom
DEC 77
1.4
0.4
-1.2
-4.3
Japan
JAN 78
1.0
4.2
5.5
15.7
Italy
AN 78
4.5
3.3
-3.5
25.5
West Germany
DEC 77
1.7
2.4
2.6
4.7
Canada
DEC 77
0.2
3.9
3.6
2.9
France
DEC 77
-3.1
2.8
-1.6
-1.1
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
TAverage for latest 3 men his compared with average for previous 3 months.
 UNEMPLOYMEp~++1TeRATElease 2002/01/30 : CIA-RDP79T01316A001000040010- PERCENT
~
1973 1974 1975
1976 1977 1978
Approved For Release 2002,0 /30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
United Kingdom
A labor force survey based on now definitions of economic activity sharply raised the official estimate of Italian unemployment In first quarter 1977. Data for earlier periods thus are not comparable.
Italian data are not seasonally adjusted.
Italy (quarterly)
3
Canada
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
LATEST MONTH 1 Year
Earlier
3 Months
Earlier
1 Year
Earlier
3 Months
Earlier
United States
1-FR 78
6,090
7,183
6,818
United Kingdom
i EB 78
1,409
1,331
1,433
Japan
DEC 77
1,180
980
1,130
Italy
77 IV
1,598
777
1,692
West Germany
FEB 78
1,022
1,007
1,031
Canada
IAN 78
891
780
886
France
JAN 78
991
945
1,100
NOTE: Data are seasonally adjusted. Unemployment rates for France are estimated. The rates shown for Japan and Canada are
roughly comparable to US rates. For 1975-78, the rates for France and the United Kingdom should be Increased by 5 percent and
15 percent respectively, and those for West Germany decreased by 20 percent to be roughly comparable with US rates. Beginning in
1977, Italian rates should be decreased by 50 percent to be roughly comparable to US rates.
Approved For Release 2002/01/30 : Clfk. DP79T01316A001000040010-5
 A roved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
CONSUMER PRICE INFLATION Percent, seasonally adjusted,
Japan
45
40
35
30
West Germany
4.3
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
'Three-month average compared with prey Aopproved E For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
/~ A-8
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
United Kingdom
4.7
Italy
35
30
25
4.2
Canada
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
Percent
AVERAGE ANNUAL
Percent
AVERAGE ANNUAL
Change
GROWTH RATE SINCE
Change
GROWTH RATE SINCE
LATEST
from
Previous
1970
1 Year
3 Months
LATEST
from
Previous
1970
1 Year
3 Months
MONTH
Month
Earlier
Earlier2
MONTH
Month
Earlier
Earlier2
United States
JAN 78
1.0
6.6
7.0
6.1
United Kingdom
JAN 78
0.2
13.5
9.9
6.5
Japan
DEC 77
0
10.1
4.8
2.1
`Italy
JAN 78
1.0
13.2
14.5
12.3
West Germany
JAN 78
0.1
5.4
3.2
1.9
Canada
JAN 78
0.5
7.5
9.0
9.8
France
JAN 78
0.3
8.9
9.2
6.7
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
A-9
 Approved For Release 2002/0
/30 CIA-RDP ` 01 -
RETAIL SALES I
Commercial paper
Call money
Interbank loans (3 months)
Call money
Sterling interbank loans (3 months)
Finance paper
Three-month deposits
Pwceof
Avwop.
Ara o Growth Rat. Smc.
Choree
Average
Annnd Grawth R.I. Si..
Latasl Irom Pr
Qortw Qoor
., en t Year P,.riaw
tr 1970 Eafw Qsarlw
La
M
the
onth
Pwc
fro
.nt Change
m Pr.riow
Month
1970
1 Year
Earlier
3 Months
Earner'
United States
77 IV
1
.0
3.3
5.7
4.2
United States
Jo
n
78
Japan
77 111
0
.5
5.4
5.2
1.8
Japan
Se
p
77
West Germany
77 IV
1
.3
2.5
1.9
5.3
West Germany
Jo
n
78
F
77 111
0
2
7
3
2
3
9
0
France
N
ov
77
-12.0
rance
.
.
.
.
United
Kingdom
77 III
-0
.4
1.6
-0.6
-1.4
United Kingdom
Fe
b
78
9.7
Italy
77 III
-2
.7
2.3
-1.2
-10.3
Italy
O
ct
77
- 11.1
Canada
77 III
1
.3
4.6
2.5
5.3
Canada
N
ov
77
' Seosonoty od"rynted.
United States
Japan
West Germany
France
United Kingdom
Italy
Canada
' ScosonoCy odi ated.
A-9.
Anyd Growth R.I. Sne.
P.rmet Chong.
Latest from Pr.vioas 1 Year P`.ntoos
Quortx Quarles 1970 Errfwr Qaw1.
77 IV
77 111
77 IV
77 III
77 III
77 III
77 111
-0.7
2.8
-10.2
3.2
S.asondty adust.d.
' Avwage for Iol.sl 3 months carttpo.d with anwape lot previous 3 months.
United States
Japan
West Germany
France
United Kingdom
Italy
Canada
Average
Anmal Growth R.I. Sim.
Pectin Change
Latest from P,.wiavs 1 Y.v 3 Months
Pried Period 1970 Earlier Earle,'
Jan 78
Oct 77
77 IV
77 IV
Nov 77
Nay 77
Mourly .rhinos (NOfancly adpeted) far the IJr I.d States, Jaan, and Canada. hourly wage
rotas lox otI,n, Wal German and French data r.lw I. the beginning of the quortw.
'Average for latest 3 montfu comparesd with that for pr.vian 3 months.
United States
Japan
West Germany
France
United Kingdom
Canada
Eurodollars
mar 15
Mar 17
Mar 15
Mar 17
Mar 15
Mar 15
Mar 15
e2002/01/3 : CFA
pproved For Release A-l0
 EXPORT PRfC?froved For Release 2002/01/30 : C
A-I?ToofgA001000040010-5
US $
National Currency
Average
Average
Annual
Growth Rate Since
Annual Growth Rate Since
Percent Change
Percent Change
Latest from Previous
1 Year
3 Months
Latest fr
om Previous 1 Year
3 Months
Month
Month
1970
Earlier
Earlier
Month
Month 1970 Earlier
Earlier
United States
Dec 77
1.1
9.3
3.0
6.2
United States Dec 77
1.1 9.3 3.0
6.2
Japan
Jan 78
-0.7
11.0
11.9
20.0
Japan Jan 78
- 0.8 5.3 -7.3
-4.2
West Germany
Dec 77
6.3
12.1
11.9
49.6
West Germany Dec 77
2.1 4.4 1.0
10.2
France
Nov 77
-0.5
11.0
9.0
-3.8
France Nov 77
-0.7 9.0 6.1
-7.0
United Kingdom
Feb 78
-0.2
12.1
22.7
33.8
United Kingdom Feb 78
-0.4 15.3 8.2
3.6
Italy
Oct 77
-0.6
10.9
12.7
0.2
Italy Oct 77
-0.9 16.3 16.0
-0.7
Canada
Nov 77
-0.5
8.4
-3.5
-23.0
Canada Nov 77
0.5 9.3 8.6
-12.7
IMPORT PRICE
S
OFFICIAL RESERVES
National Currency
Average
Billion US
$
Annual
Growth Ra
te Since
Latest Month
Per
cent Change
1 Year
3 Months
Latest from Previous
1 Year
3 Months
End of
Billion US $ Jun 1970 Earlier
Earlier
Month
Month
1970
Earlier
Earlier
United States Jan 78
19.5 14.5 18.7
19.0
United States
Dec 77
-1.6
12.6
6.1
-3.3
Japan Jan 78
23.4 4.1 16.5
19.6
Japan
Jan 78
-3.0
7.6
-18.2
-33.4
West Germany Jan 78
40.7 8.8 34.4
35.7
West Germany
Dec 77
-1.2
3.8
-1.8
-4.1
France Oct 77
10.1 4.4 9.6
9.9
France
Nov 77
-0.3
9.8
4.7
-5.3
United Kingdom Nov 77
20.7 2.8 5.2
15.0
United Kingdom
Feb 78
0.3
17.7
1.6
-5.4
Italy Jan 78
11.4 4.7 6.7
11.1
Italy
Oct 77
-4.3
19.8
10.9
-3.0
Canada Feb 78
3.7 4.3 5.3
4.2
Canada
Nov 77
0.6
8.7
15.2
-7.3
BASIC BALANCE '
CURRENT ACCOUNT BALANCE
'
Current and Long-Term-Capital Transactions
Cumulat
ive (Million
US $)
Cumulative (Million
US $)
Latest
Latest
Period Mi
llion US $
1977
1976
Change
Period Million US $ 1977 1976
Change
United States 2
77 III -4,302 -
13,064
-48
-13,016
United States
No longer published'
Japan
Jan 78
-223 1
1,112
3,680
7,432
Japan Jan 78
-272 7,876 2,696
5,180
West Germany
Jan 78
-105
3,584
2,659
926
West Germany Jan 78
1,106 -1,648 2,472
-4,120
France
77 IV
136 -
3,179 -5,721
2,541
France 77 IV
149 -3,218 -6,842
3,624
United Kingdom
77 III
916
-691 -
1,539
848
United Kingdom 77 III
2,238 3,995 -1,585
5,581
Italy
77 III
2,390
1,629 -2,028
3,657
Italy 77 III
2,520 2,128 -2,083
4,211
Canada
77 III -1,150 -
4,106 -
3,215
-890
Canada 77 III
346 -446 3,239
- 3,684
'Converted to US dollars at the current market rates of exchange.
'Converted to US do
llars at the current market rates of exc
hange.
2 As recommended by the Advisory Committee on the Presentation of Balance
of Payments
' Seasonally adjusted.
Statistics, the Deportment of Commerce no longer publishes a basic balance
.
TRADE-WEIGHTED EXCHANGE RATES'
EXCHANGE RATES
Spot Rate
As of 10 Mar 78
Percent Change from
Percent Change from
As of 17 Mar 78
US $
1 Year
3 Months
1 Year 3 Months
Per Unit
19 Mar 73
Earlier
Earlier
10 Mar 78
19 Mar 73
Earlier Earlier 3 Mar 78
Japan (yen)
0.0043
14.33
22.69
4.77
2.07
United States 1.07
-5.33 -1.53 -
0.74
West Germany
0.4909
38.64
17.55
5.06
0.39
Japan 18.61
19.95 4.03
1.82
(Deutsche mark)
West Germany 32.84
7.98 1.09 -
1.06
France (franc)
0.2144
-2.74
7.04
2.85
4.61
France -11.64
-3.81 -1.40
3.90
United Kingdom
1.9070
-22.51
11.00
2.86
0.50
United Kingdom -27.50
4.12 -0.18 -
0.57
(pound sterling)
Italy -41.85
-6.45 -1.37 -
0.86
Italy (lira)
0.0012
-33.95
3.45
2.36
0.60
Canada -10.90
-8.96 -3.42 -
0.54
Canada (dollar)
0.8384
- 10.96
- 6.59
-2.64
-0.27
' Weighting is based on each listed coun
try's trade with 16 other industrialize
d countries to
Ap
proved For Rel
ease
2002/01/30: CI
-Frtbv`'GTuli31adb fth ofPIoblly ?"g the major currencies.
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
Work!
Big
Seven
Other
OECD
OPEC
Com-
munist
other
World
Big
Seven
Other
OECD
OPEC
Com-
munist
Other
UNITED STATES
1975 .............
107.65
46.94
16.25
10.77
3.37
29.82
103.42
49.81
8.83
18.70
0.98
25.08
1976 ........ . ....
115.01
51.30
17.68
12.57
3.64
29.44
129.57
60.39
9.75
27.17
1.16
31.09
1st Qtr
........
27.37
12-18
4.11
2.75
1.08
7.24
29.34
13.72
2.40
6.07
0.27
6.88
2d Qtr
..... . ..
29.69
13.38
4.51
3.11
1.01
7.51
31.65
15.36
2.41
6.07
0.28
7.54
3d Qtr
.. , ....
27.43
11.94
4.09
3.11
0.78
7.42
3174
15.24
2.40
7.55
0.31
8.24
4th Qtr
. . ......
30.52
13.79
4.97
3.60
0.76
7.26
34,84
16.07
2.55
7.48
0-30
8.44
1977 .............
120.17
53.92
18.53
14.03
2.72
30.97
156.70
70.48
11.08
35.44
1.22
38.48
1st Qtr
........
29.46
13.75
4.73
3-14
0.86
6.98
37,37
16.07
2.76
8.97
0.30
9.27
2d Qtr
.. , .....
31.67
14.39
4.81
3.69
0.71
8.07
40.45
18.14
2.77
9.31
0.35
9.88
3d Qtr
........
28.75
12.23
4.39
3.58
0.47
8.08
39.50
17.73
2.78
8.92
0.32
9.75
4th Ott
JAPAN
........
30.29
13.55
4.60
3.62
0.68
7.84
39.38
18.54
2.77
8.24
0.25
9.58
1975 .............
5533
16.56
6.07
8.42
5.16
15.87
57.85
16.93
6.08
19.40
3.36
12.05
1976 .............
67.32
22.61
8.59
9.27
4.93
17.84
64.89
17.58
7.78
21.88
2.91
14.72
l st Qtr ........
14.44
4.89
1.83
1.87
1.28
3.76
14-84
4.09
1.70
5.22
0.67
3.16
2d Qtr .......
16.42
5.46
2.09
2.27
1.32
4.39
15.89
4.35
1.95
5.40
0.66
3.54
3d Qtr ........
17.54
5.95
2.27
2.47
1.09
4,52
16.81
4.51
2.14
5.41
0.74
4.01
4th Qtr ........
18.92
6.30
2.40
2.66
1.24
5.17
17.34
4.62
2.00
5.86
0.84
4.01
1977
1st off ........
17.89
5.89
2.45
2.46
1.36
5.73
17.44
4.72
1.84
6.24
0.79
3.85
2d Qtr ........
19.73
6-73
2.41
2.91
1,19
6.49
17.88
4.88
2.10
5.74
0.86
4.30
3d Qtr ........
20.63
7.40
2.47
3.05
1.33
6.38
17.63
4.68
1.84
5.88
0.84
4.39
Oct & Nov ....
14.26
4.93
1.56
2.21
0.94
4.62
11.98
3.00
1.36
4.17
0.59
2.86
WEST GERMANY
1975
.............
91.70
28.33
36.44
6.78
8.81
11.05
76.28
27.09
27.78
8.24
4.87
8.21
1976
.............
103.63
3144
41.86
8.25
8.72
11.04
89.68
31.28
32.64
9.73
5.93
10.01
1st
Qtr ...... . .
23.79
7.92
9.54
1.71
2.09
2.47
20.49
7.13
7.59
2.19
1.33
2.23
2d
Ott ........
24.96
8.21
10.12
1.84
2.08
2.64
21.94
7.70
8.13
2.22
1.43
2.42
3d
Qtr ........
25.53
8.00
10.28
2.24
2.13
2.78
22.14
7.56
7.89
2.57
1.49
2.58
4th
Qtr ........
29.35
9.31
11,92
2.46
2.42
3.15
25.12
8.88
9.03
2.73
1.67
2.78
1977
1st
Ott ...... . .
28.19
9.28
11.62
2.31
2.11
2.87
24.45
8.46
8.85
2.58
1.42
3.14
2d
Qtr ........
29.20
9.59
11.79
2.69
2.07
3.06
25.21
9.09
9.04
2.43
1.54
3.11
3d
Qtr .......
28.75
9.20
11.45
2.71
2.26
3.13
25.27
8.99
8-97
2.54
1.65
3.12
Oct
FRANCE
& Nov ....
21.32
7.13
8.65
1.90
1.24
2.40
17.85
6.35
6.79
1.65
0.96
2.10
1975
.............
52.87
20.00
15.50
4.90
3.13
8.61
53.99
23.04
14.33
9.43
1.94
5.21
1976
.............
57.05
22.49
16.15
5.08
3.23
8.75
64.38
27.81
16.93
11.36
2.24
6.01
1st
Qtr , .. , ... ,
13.97
5.52
3.93
1.24
0.84
2.08
15.52
6.57
4.16
2.82
0.56
1.42
2d
Ott . , .....
15.02
5.91
4.41
1.22
0.98
2.23
16.19
7.15
4.33
2.61
0.55
1.53
3d
Qtr ........
12.81
4.97
3.49
1,29
0.67
2.09
14.97
6.49
3.77
2.75
0.55
1.41
4th
Ott ........
15.26
6.08
4.33
1.33
0.75
2.35
17.70
7.60
4.68
3.19
0.58
1.65
1977
1st
Qtr .......
15.68
6.25
4.55
1.39
0.75
2.74
17.89
7.50
4,84
3.06
0.52
1.97
2d
Ott .... , . , .
16.69
6.60
4.79
1.57
0.83
2.90
17.96
7.84
4.71
2.65
0.61
2.15
3d
Qtr .......
14.75
6.02
4.08
1.32
0.67
2.66
16.14
6.99
3.85
2.87
0.62
1.81
Oct
& Nov ....
11.45
4.60
3.13
0.99
0.41
2.32
12.11
5.25
3.12
2.10
0.46
1.18
UNITED
KINGDOM
1975
.............
44.03
12.55
16.59
4.55
1.56
8.64
53.35
18.47
18.52
6.91
1.68
7.67
1976
.............
46.12
14.03
17.53
5.13
1.39
7.92
55.56
19.66
18.81
7.29
208
7.65
1st
Ott ........
11.60
3.41
4.37
1.24
0.38
2.17
13.50
4.69
4.64
1.82
0.49
1.83
2d
Qtr ........
11.46
3.53
4.32
1.26
0.37
1.95
13.96
5.04
4.57
1.74
0.56
2.03
3d
Qtr ........
11.03
3.43
4.11
1.26
0.32
1.87
13.69
4.75
4.54
1.89
0.51
1.98
4th
Ott .. , , .. , .
12.03
3.64
4.74
1.38
0.31
1.93
14.41
5.17
5.06
1.84
0.51
1.81
Approved For Release 2002/014 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
Developed Countries: Direction of Trade
(Continued)
Big Other Com- Big Other Com-
World Seven OECD OPEC munist Other World Seven OECD OPEC munist Other
UNITED KINGDOM
(Continued)
1977 .............
57.44
16.99
22.56
6.79
1.63
9.47
63.29
24.02
21.34
6.31
2.40
9.22
1st Qtr ........
13.14
4.02
5.16
1.52
0.35
2.09
15.45
5.80
5.12
1.78
0.49
2.26
2d Qtr ........
14.35
4.20
5.72
1.69
0.44
2.30
16.52
6.02
5.73
1.70
0.58
2.49
3d Qtr ........
14.59
4.47
5.55
1.75
0.46
2.36
15.20
6,05
4.74
1.44
0.66
2.31
4th Qtr ........
15.36
4.30
6.13
1.83
0.38
2.72
16.12
6.15
5.75
1.39
0.67
2.16
ITALY
1975 .............
34.82
15.61
7.86
3.72
2.46
4.67
38.36
17.32
6.75
7.85
2.09
4.34
1976 .............
36.96
17.41
8.69
4.23
2.18
3.96
43.42
19.35
8.04
8.12
2.65
5.24
1st Qtr ........
8.01
3.80
1.86
0.83
0.53
0.87
9.77
4.37
1.83
1.82
0.54
1.21
2d Qtr ........
8.85
4.22
2.09
0.97
0.52
0.95
10.83
4.85
1.94
2.10
0.63
1.31
3d Qtr ........
9.45
4.51
2.22
1.07
0.53
0.99
10.33
4.51
1.85
2.03
0.67
1.26
4th Qtr ........
10.65
4.88
2.53
1.36
0.59
1.14
12.49
5.62
2.42
2.17
0.81
1.46
1977
1st Qtr ........
9.80
4.56
2.30
1.26
0.53
1.15
11.37
5.00
2.14
2.18
0.60
1.45
2d Qtr ........
11.47
5.33
2.61
1.51
0.60
1.42
12.49
5.51
2.24
2.50
0.64
1.60
3d Qtr ........
10.93
5.01
2.51
1.41
0.63
1.37
10.55
4.39
1.80
2.10
0.73
1.53
Oct ...........
3.72
1.76
0.81
0.48
0.20
0.47
4.25
1.92
0.78
0.66
0.28
0.61
CANADA
1975
........ . .... 33.84
26.30
1.73
0.71
1.20
2.00
38.59
29.78
1.70
3.43
0.32
2.02
1976
............. 40.18
32.01
2.03
0.81
1.25
2.09
43.05
33.55
1.82
3.48
0.38
2.56
1st
Qtr ........
9.18
7.39
0.43
0.47
0.33
0.42
10.40
8.05
0.42
0.95
0.09
0.59
2d
Qtr ........
10.75
8.61
0.50
0.18
0.34
0.56
11.61
9.02
0.45
1.02
0.10
0.70
3d
Qtr ........
9.94
7.74
0.56
0.20
0.35
0.53
10.12
7.75
0.47
0.80
0.10
0.69
4th
Qtr ........
10.31
8.27
0.55
0.26
0.23
0.58
10.91
8.73
0.48
0.71
0.09
0.58
1977
1st
Qtr ........
10.35
8.37
0.53
0.23
0.22
1.00
10.92
8.64
0.43
0.82
0.09
0.94
2d
Qtr ........
11.34
9.23
0.54
0.24
0.29
1.04
12.28
9.92
0.47
0.74
0.10
1.05
3d
Qtr ........
10.25
8.12
0.54
0.23
0.29
1.07
10.38
8.17
0.43
0.82
0.07
0.89
Oct
........... 3.80
3.10
0.19
0.09
0.06
0.36
3.82
3.11
0.14
0.21
0.02
0.34
A-13
Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
 Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
FOREIGN TRADE BILLION US $, f.o.b., seasonally adjusted
United States
14.0
12.0
10.0
2.0
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
Approved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
A-14
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
1.5
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
CUMULATIVE (MILLION US $)
CUMULATIVE (MILLION US $)
LATEST
MONTH
MILLION
US $ 1977
1976
CHANGE
LATEST
MONTH
MILLION
US $ 1977 1976
CHANGE
United States
JAN 78
10,014
121,206
114,860
5.5%
United Kingdom
FEB 78
5,819
56,132
44,643
25.7%
12,393
147,696
120,495
22.6%
5,656
59,024
51,108
15.5%
Balance
-2,379
-26,490
-5,635
-20,855
Balance
163
-2,892
-6,465
3,573
7
697
79
212
65
751
20
5%
4
555
45
007
37
957
18
6%
Japan
JAN 78
,
55.809
,
61,752
,
56,004
.
10.3%
Italy
DEC 77
,
4,173
,
44,132
,
40,025
.
10.3%
Balance
1,887
17,460
9,747
7,713
Balance
382
876
-2,068
2,944
West Germany
JAN 78
11,133
117,787
101,923
15.6%
Canada
JAN 78
3,202
42,035
38,355
9.6%
91818
96.533
83,574
15.5%
2,932
39,189
37,255
5.2%
Balance
1,315
21,254
18,349
2,905
Balance
271
2,846
1,100
1,746
France
JAN 78
5,690
65,087
56,967
14.3%
6.083
67,389
61,068
10.4%
Balance
-393
-2,302
-4,101
1,799
Approved For Release'2002/01/30: CIA-RDP79TO1316AO01000040010-5
A-15
 A proved For Release 2002/01/30 : CIA-RDP79T01316A001000040010-5
FOREIGN TRADE PRICES IN US $1
1974Approved FI&Tglease 20021 /73 : CIA-RDP bf316A00100 bti0-5
1Export and import plots are based on true-monltr weighted moving averages
A-16
 Approved For Release 2002/01/30 : CIA-RDP79TO1316AO01000040010-5
France
United Kingdom
1 34
APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1J p4ioved For R IRA9 2002/01/3(. 1J4-RDP79T01-~ A-6010000400+&-9$
575484 3-78
A-17
 ApgElVdf 2~Q~ Q t lA ~TQ. '1~6Q001000040010-5
MONEY SUPPLY'
INDUSTRIAL PRODUC
TION
Arrag.
Annod Growth R.I. Since
Awrape
Percent Chongs
Anonol Growth R
ate Since
LOPnl
hen Prevous
I Year
3 Months
Percent Chaps
Month
Month
1970
Earlier
E