ECONOMIC INTELLIGENCE WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80T00702A000800070005-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 55
• Document Creation Date: December 16, 2016
• Document Release Date: August 18, 2004
• Sequence Number: 5
• Publication Date: September 28, 1978
• Content Type: REPORT

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ECONOMIC INTELLIGENCE WEEKLY REVIEW
28 September 1978
China: Studying Yugoslav Economic System ............................................
Peking is pondering other methods of motivating workers, managing
factories, and handling foreign commercial and technical relations.
Vietnam: "Neva Economic Zones" Fail To Take Root ................................
Living conditions are notoriously harsh, and few of the areas have
generated an agricultural surplus.
Nigeria: Small Return on Oil Wealth ...................................................... 12
The country is far from establishing a diversified economy, needed before
oil output falls off (perhaps in the mid-1980s).
Zaire: Continuing Economic Malaise ....................................................... 15
Foreign exchange and budgetary troubles are hindering Mobutu's efforts
to refurbish his sagging political fortunes.
Denmark: Continued Focus on Payments Problem ................................... 18
For the second straight year the current account deficit is being reduced
at the cost of jobs and output.
Recent Patterns of International Trade Restrictions ..................................
Countries have expanded barriers within the GATT framework, which
permits nontariff restrictions in certain circumstances.
Notes ...................................................................................................
France Announces Takeover of Steel Industry
South Korea Further Liberalizes Imports
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ER EIWR 78-039
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CHINA: STUDYING YUGOSLAV ECONOMIC SYSTEM
Peking is showing considerable interest in the Yugoslav economic system, a
system that only two years auto incurred Chinese charges of "revisionism." This
surprising interest in Yugoslav economic management is part of a wide-ranging search
for ways to speed up mo-lernization, one that reaches to Japan and Western Europe as
well as to the socialist economies of Eastern Europe. The search involves radically new
departures in thinking about work incentives, factory management, and relations with
the international economy.
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Changes Since Mao's Death
In a series of policy reversals that began two years ago, China's post-Mao
leadership has begun to reform its system of economic management. Already a
reorganization of industry is under way. At the enterprise level the emphasis has
temporarily been placed on restoring control systems-over finances, product quality,
and worker discipline-which had fallen apart in the intensely political climate of the
past decade. In the future, probably before the end of the Fifth Five-Year Plan period
(1976-80), Peking apparently intends to overhaul plant management in ways that will
give workers a greater stake in enterprise success and to revamp the foreign trade
sector to facilitate large-scale acquisitions of imported plant and equipment-both
areas where Yugoslavia's experiences could be valuable.
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Work Incentives and Productivity
Work incentives and productivity are perhaps the main problems facing Peking.
"I'he Hua government in I Merited, in October 1976, an economic situation that featured
widespread dissatisfacti( m over wages and living conditions on the part of urban
workers. A decade of egalitarian wage policies and leftist denunciation of material
incentives had led to an erosion of real incomes and a growing schism between
government and workers. A measure of the dissatisfaction was the growing incidence
of work slowdowns, abs( nteeism, and strikes during the mid-1970s-phenomena that
did not entirely cease a`ter the new government took office.
A wage increase in late 1977--covering three-fifths of the urban work force and
averaging approximate],, 10 percent-a.nd promises of wage reform have improved
worker-management relations and induced some gains in productivity. The readop-
tion of production bonuses and piece rates, currently under way, can be expected to
have similarly beneficial effects. Nevertheless, a substantial improvement in work
incentives and productivity would require further concessions by the government.
Peking clearly plans to rely more heavily on material incentives. A comprehen-
sive wage reform will likely result in higher wages for all workers, not just the lowest-
paid; and closer adherence to p-rornotion policies will permit workers to anticipate
improvements in living standards. Higher rates of growth for light industrial
production during 1978-S5 (12 percent annually, some 2 percentage points higher than
for overall industry) and the larger imports of consumer goods imply that wage gains
are to be translated into real increases in consumption.
The Chinese leadership feels that-despite the past heavy investment in
industry-long-term productivity growth has been unsatisfactory. Now, with the
demands for modernization urgently felt and the belief that 10 years have been
wasted, the need to raise labor productivity is stronger than ever.
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China's system of enterprise management already contains elements of worker
participation. But the participation is largely political-ideological in nature rather than
an effective sharing of managerial decisionmaking Peking's interest in Yugoslav self-
management implies that the leadership may now give workers a greater say on
wages, bonuses, and investment. The ability of the Yugoslavs to maintain high rates of
investment while increasing real incomes and productivity growth doubtless appeals to
Peking. Yugoslavia's high rates of inflation and inefficient use of capital, both related
to the dynamics of self-management, probably reinforce a natural reluctance to
radically alter China's more centralized system.
Revamping the Foreign Trade Sector
We can only speculate about the aspects of Yugoslav foreign trade experience
that have attracted Peking's interest. China's modernization demands widespread use
of foreign technology. Foreign trade policy is one area where new initiatives are most
apparent; Peking has already made the policy decisions and laid the ideological
groundwork for large imports of plant and equipment under a greatly expanded
variety of payment and credit arrangements. Now the Chinese have begun to face up
to the new and difficult planning and management problems that will be created by
substantially higher levels of foreign trade.
Under previous circumstances Peking might have been content to continue its
highly centralized management of foreign trade, with most decisions taken at the
upper echelons of the Party and state bureaucracies. Within the past year, greater
responsibility for import planning and administration has been granted to provincial
and lower-level authorities. To encourage exports, localities are now allowed to retain
a larger share from foreign sales, and certain enterprises now may purchase foreign
equipment for export production if barter or product-payback deals can be arranged.
Local officials, pursuing these new opportunities, have been traveling abroad to
discuss projects and solicit bids from foreign firms.
We can anticipate further reforms in institutions and incentives to stimulate
exports. Peking's stress on efficiency and decentralized management may in time lead
it to make changes in, for example, its methods of allocating foreign exchange.
Yugoslavia's growing integration into the world economy and its experiments with
multiple exchange rates and other methods of foreign exchange allocation should
prove instructive to Peking as it contemplates a more restricted plunge into the
international economy. In particular, Belgrade's experiences in joint ventures with
Western firms should give the Chinese realistic ideas about the benefits and
difficulties of such arrangements.
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Comments by Chinese Economist
A recent interview, with the prominent economist Sun Yeh-fang-once de-
nounced as China's Liberman-provides an illuminating postscript to a discussion of
Peking's interest in the Yugoslav system. Sun, a former director of the State Statistical
Bureau and once head of the Economic Research Institute, was purged during the
Cultural Revolution of the late 1960s for advocating the study of profits as a
management tool. He spent more than seven years in prison, was released in 1975, and
is now an adviser to the Economic Research Institute. In the interview-with a
correspondent for the Yugoslav news agency Tanjug-Sun's discussion dealt largely
with the prerogatives of enterprise management. He advocates shortening the period
of amortization of capital from the current 25 years to something like 10 years and
handing the administration of amortization funds over to the enterprise. In response to
a question about worker management, Sun responded: "It is true to say that workers'
rights in enterprises should be extended. I have done only a little research into self-
management in Yugoslavia, but I think that workers' rights should be extended."
Sun doubtlessly has influence among the economic bureaucrats in Peking and
may have the ears of some members of the Politburo. He will soon head a team of top
economists visiting Yugoslavia to make a detailed appraisal of those aspects of the
system most relevant to the PRGC.
Borrowed Maybe, But Chinese
Peking learned from its early experience with the Soviets that foreign economic
systems, policies, and methods cannot be indiscriminately transplanted to China.
Anything borrowed from the Yugoslavs will acquire a definite Chinese stamp. And,
while Peking appears primarily interested in Yugoslav methods, it has also shown an
interest in the managerial techniques used in Japan and Western Europe. A delegation
from the State Economic Commission is scheduled to visit Japan in November for _a
month's study of various aspects of management, especially quality control.
Much of Hanoi's postwar effort at socioeconomic reform of Vietnamese society is
embodied in the "new economic zones"-outlying areas that the government has set
aside for agricultural developmer t. They are Hanoi's attempt to deal with (a) urban
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unemployment, running into the millions; (b) the highly uneven distribution of
population; (c) the lag in food production; and (d) the stubborn reluctance of many
southerners to accept the Communist ideology of the north.
After more than two years of the program, the government faces mounting
problems making these primitive new areas economically productive. Not the least of
the problems is to overcome the growing reluctance of Vietnamese to resettle after
hearing horror stories about the poor living conditions in the new areas. Hanoi,
although not yet at the point of physically forcing resettlement (as in neighboring
Cambodia), is tightening economic pressures to induce an urban exodus.
Population and Food Imbalances
Hanoi's victory in 1975 worsened economic problems in the south. South
Vietnam's sizable army and its top-heavy services sector, built up in urban areas to
serve wartime needs, suddenly became superfluous. Some 3 million people-located
mainly in Saigon-found themselves unemployed. Moreover, during the war substan-
tial numbers of peasants had abandoned farms and fled to Saigon and other cities. The
population movement resulted in labor shortages in rural areas and in the idleness of 1
million hectares of arable land. At the war's end, more than one-third of the southern
population lived in cities, compared with only 10 percent in the north.
Hanoi also acquired an annual foodgrain deficit in the south of 800,000 to 1
million tons on top of the chronic half-million- to 1-million-ton northern shortfall.
Although agricultural development in the south, beginning in the late 1960s, had
resulted in encouraging foodgrain increases and near self-sufficiency, the Communist
takeover in 1975 crippled the effort. In the postwar cra, farmers have had to make do
without technicians and critically needed production inputs previously provided
through US aid programs. Traditional supply and marketing arrangements were
broken, and farmers faced an inevitable takeover of their profitable private plots.
Little incentive has remained to boost output beyond the requirements of family
subsistence and state taxes. Thus, rice production in the south has remained far below
potential and still below the peak of 7.1 million tons reached in 1974.
Nationwide, total staple food production in 1977-13 million tons-barely
matched the combined 1974 level for North and South Vietnam. Production
disincentives and poor weather for the second year in a row combined to reduce
national rice output by 6 percent. Wood production in 1978 promises little improve-
ment. The northern crops are reportedly good, but flooding has seriously damaged
some Mekong Delta fields, and high-yielding seeds have proved particularly suscept-
ible to insect damage.
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The New Economic Zones
Hanoi sees the new economic zones as a way to restructure Vietnamese society
while boosting agricultural output, relieving population pressures in both the Red
River and Mekong River Delta,,., and providing employment for people displaced by
the war. Hanoi hopes to resettle 4 million people between 1975 and 1980, including
1.5 million people from Ho Chi Minh City (formerly Saigon). Long-range plans call
for the relocation of 10 million people by 1990, or roughly one-fifth of the current
population.
The settlements are locatec. on farmlands abandoned during the war or on large
tracts of previously uncultivated land. A zone typically contains 4,000 to 5,000
hectares, enough land for more than 1,000 families. The south has the greater number
of units in being, with some 80 to 90 established as of mid-1978.
The zones are organized differently depending on their location and the
objectives of Vietnamese officials. Some, for example, are little more than villages run
by Communist-trained. and appointed committees; others serve as reeducation camps
for former South Vietnamese army officers. Southern urbanites are sent to zones only
in the south while zones throughout the country serve as resettlement sites for the
surplus population from the central and northern provinces. Northern cadre are
inserted into many southern relocation sites to proselytize and shepherd the ideologi-
cally apathetic southern populace. Large zones in the south are operated either as
collective or state farm, from the start and form the nucleus for the full socialization
of the southern agricultural sector. In the north, many of the zones have been formed
by consolidating small collectives or expanding state farms. As in other Communist
countries, state farms are distinguised from collective farms by larger acreage, greater
mechanization, and payment through wages rather than shares.
Population Relocation
Reports of the number of people who have relocated to date vary from 1 million
to 1.5 million. A Hanoi news report earlier this year stated that 1.5 million South
Vietnamese, including 660,000 urban dwellers, had returned to their native villages or
had moved to the zone since 1975. The chairman of the State Planning Commission
has said that 1 million people were resettled in 1976-77. A,recent press report from Ho
Chi Minh City stated that 750,000 residents of the city had moved to the countryside
since the end of the war.
Living conditions in the never economic zones are notoriously harsh. A foreign
journalist who visited some zones called assignment to them "the Vietnamese
equivalent of being sent to Siberia." Refugee reports depict them as death camps
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Vietnam Provinces*
*Based on map Hanh C'hinh
Viet Nam, ? Hanoi, 1976
Provinces containing new
economic zones and other
population relocation sites
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guarded by armed ca Tres where the work is arduous, provisions few, housing
Irequently nonexistent and chalices of starvation high.
t;ifficials in Ho (hi Minh:ity acknowledge that sites are often improperly
prepared in rush to rei acate people. Army units, normally engaged in land clearing
,rnci irrigation improve nent in the zones, have been. diverted from these tasks by
hostilities along the Cask bodian border. The fighting has destroyed a number of zones
in Tay Ninh, Dong 'i'hap, An Giang, and Kien Giang Provinces, forcing the
g1(o4,(!rnm('nt to slow prr,grams for resettling the thinly populated border area.
The new economy, zones hive so far disappointed Hanoi; government officials
rate only a third of theiew area, as successful. Much to Hanoi's chagrin, very few of
the areas have gerrer-Led an agricultural surplus. thus failing to alleviate the
government's problem )f feeding the cities. Indeed, the too-rapid development of
litany zones has added a,) the prcdblem of erosion and the backlog of unmet irrigation
needs.
'I'lle. Next. Stage
Ih..noi is now tigliiening ifai' economic screws in an effort to make the new
t:,rograrn work. A Mara ka 1978 c'ecree nationalizing all private commerce deprived
merchants of their livelihood anc made them instant candidates for movement to the
zones. Moreover, even greater rressure is being put on the unemployed, former
soldiers and governmen' otficiah. and workers with designated skills to move to the
agricultural frontier. Tc h'orce resettlement, Hanoi is denying rations and identification
cards to those scheduler' to move to the zones, leaving them no alternative but to go.
Despite the tremens sous growth in oil revenues since 1973/74, Nigeria is far from
establishing a multipro luct economy before the rnid-1980s, when oil output is
expected to decline. Frwn the e,~enomic development angle, the past four years have
been marked by incredible waste of foreign exchange. Agriculture, the livelihood of
most of the population has been neglected, while small scale entrepreneurial skills
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have not been nurtured to satisfy a booming local market. At the same time,
performance in the oil sector has failed to meet expectations because of the
international economic slump and official pricing policies, which have made Nigerian
crude among the most expensive in OPEC. Lagos now faces a financial crunch that
limits its ability to channel investment into areas of greatest need.
The 1976-80 development plan aims to beef up the manufacturing sector and
diversify production. While more than $30 billion (including $6 billion in private
investment) has been spent, less than one-fourth of the plan has been carried out, and
many of the completed projects will only marginally help future development. Project
delays have been caused by political factors surrounding General Gowon's overthrow
in July 1975, inadequate skilled manpower, and inefficient bureaucracies. The time
lost has proven expensive given an average Nigerian inflation rate of 34 percent in
1975-77 and a 10-percent average annual rise in prices of Western machinery.
The greatest achievements so far have come in development of the public service
sector. Port facilities have been expanded, major road networks improved, and
domestic air service, telecommunications, and the electric power system upgraded.
Improvements in essential social services such as education, health care, housing, and
public sanitation have been less spectacular. A universal primary education scheme--
probably the most ambitious single project in the development drive-started on
schedule but quickly bogged down because of shortages of teachers and classroom
facilities.
Heavy industrial projects, which were supposed to absorb almost one-fifth of
planned investments in 1976-80, have encountered cost overruns, difficulty in
obtaining raw materials, and bureaucratic bickering. Cement plants, pulp and paper
projects, two oil refiners, an LNG plant, and an iron and steel complex are behind
schedule, some seriously. Two other petroleum refineries, a petrochemical complex, It
nitrogenous fertilizer plant, and three direct reduction steel plants have been canceled
or postponed indefinitely.
Light industry, financed mostly by private domestic investors or local subsidiaries
of multinational corporations, has fared better; production of beer, textiles, canned
food, and other light industrial goods rose 15 percent a year in 1976-77.
Reflecting governmental neglect, agriculture has performed poorly as (a) many
farmers have left the land in search of higher paying city jobs; and (b) clogged roads
have prevented the efficient delivery of foodstuffs to city markets and ports. Nigeria
has lost its self-sufficiency in food production, and exports of peanuts, cocoa, palm oil,
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and rubber have fallen off. Formerly the world's leading peanut exporter, Nigeria
now imports peanut oil.
The development drive has cut deeply into Nigeria's once healthy foreign
exchange reserves, which last month stood at $1.9 billion, the lowest level in four
years. As imports of roods and services have soared, oil revenues have lagged because
of stiff competition from North Sea and Alaskan oil as well as rigid government oil
pricing policies. The -urrent account balance slipped from a $5 billion surplus in 1974
to a near-$1 billion deficit in .977. This year Lagos faces a $3.5 billion to $4.0 billion
deficit. Capital inflows have fallen off in response to government steps to increase
Nigerian participati' En in the economy, forcing Lagos to borrow $1.75 billion in the
l' urodollar market s() far this year.
The governmen of Lt. Gen. Olusegun Obasanio has cut prices twice this year in
an effort to boost oil ';ales. While output has improved from a March low of 1.5 million
b/d, oil production for the year should average only 1.8 million b/d, down from last
year's 2.1 million b'd. Oil revenues for 1978 calendar year are estimated at $8.5
billion, a 13-percent drop from last year. Output by 1980 is not expected to be above
2.3 million to 2.4 million b/d, and crude exports almost certainly will slip back to the
1976 rate of 2.0 million b/d as production is diverted to meet the 25-percent annual
rise expected in don estic Nei demand. Finally, prospects for maintaining petroleum
output throughout the 1980s have been dimmed by the government's future to offer
sufficient investmen incentives to the operating companies.
Given these constraints, Lagos will be lucky if it can come up with $30 billion in
total budget revenue?s over the next two years, which would complete less than one-
Nigeria: Government Budget Revenues'
Billion US $
FY 1976
FY 1977
FY 1978
FY 1979
FY 1980
Revenue
9.6
11.5
12.5
13.5
15.4
Federal ..................... ..................
9.1
10.8
11.5
12.1
13.5
Oil Z ...................... ..... _......... ...
7.1
9.2
9.1
9.5
10.3
Government .....
4.0
5.2
5.2
5.5
5.8
Company
3.1
4.0
3.9
4.0
4.4
Nonoil
2.0
1.6
2.4
2.7
3.3
States
0.6
0.8
1.1
1.4
1.9
Fiscal year begins t April of st.dted year.
Z Excludes federal grants and loais.
At current oil price ;; assumes a 5-percent oil price rise in 1979 and a 6-percent rise in 1980.
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half of the investment program. Growing balance-of- payments problems will almost
certainly result in further project postponements and/or cancellations. GNP growth
probably will not exceed the 6-percent annual average of preoil boom years and will
be concentrated in services, light industry, and construction. Over the longer haul, the
government's ability to cover development costs will depend on trimming nonessential
foreign exchange expenditures and stimulating foreign investment.
Political Problems Ahead
Preoccupation with the transition to civilian rule (scheduled for October 1979)
will interfere with Lagos' ability to carry out critical economic policy decisions.
Political campaigning could exacerbate Nigeria's regional and ethnic tensions and lead
to sporadic civil disorders. Development priorities are likely to be reshuffled by the
new government, causing further setbacks to the plan Most observers believe that the
civilian regime will be dominated by northern Hausa-Fulani elements in coalition
with eastern Ibos. The new leadership may well decide to boost the share of
investment funds going to these regions; most contract awards thus far have involved
projects in southern urban areas.
ZAIRE: CONTINUING ECONOMIC MALAISE
Economic troubles in Zaire are hindering President Mobutu's efforts to boost his
sagging political fortunes, aggravated by the rebel incursion into Shaba Region in May.
Foreign exchange remains tight, foodstuffs and other essential imports are scarce, and
inflation remains unchecked. The President's economic reform program, accepted
only after considerable pressure from leading Western creditors, is not likely to
generate much popular sympathy.
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On the plus side is the near-normal operation of the Kolwezi mining complex
despite the absence of 450 foreign technicians since the Katangan incursion into
Shaba. Mining output will probably be difficult to sustain, however, unless some
expatriate technicians return soon.
The mining industry in Shaba has rebounded from the fighting more quickly
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hopper production during August totaled 34.000
tons, 85 percent of last year's monthly rate. Cobalt production for the month reached
1,300 tons, substantially above the monthly rate in 1977. Mining officials have
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improved the cobalt recovery rate from processed copper to take advantage of
favorable market conditions. Cchalt prices have jumped from $6.85 a pound to $12.50
a pound since the inv .tsion of Shaba.
The Zairians now estima.t_, maximum output for the year at 380,000 tons of
copper and 12,000 tong, of cobalt, compared with last year's totals of 480,000 tons and
10,000 tons.
Zairian personnel rre operating the Kolwezi facilities with no major difficulties. A
few senior expatriates :ly in from Lubumbashi for daily inspection visits. Some white
technicians are now ar;parently living in Kolwezi, and some others are reported ready
to return in the next few weeks.
Fhe upbeat reporrs from, the mines have no counterparts from elsewhere in the
economy. The Shaba disruptions have had negligible impact on the world price of
copper-Zaire's major export--and Kinshasa's foreign exchange position remains
precarious. Zaire need, some $,500 million this year just to keep the economy afloat
and to cover an estimated $500 million in debt-service payments. Western donors
pledged a substantial a -nount in emergency aid in June, and Kinshasa is also trying to
renegotiate terms of a proposed $250 million loan from a consortium of 60 Western
banks.
The payments squeeze ha$ prompted new government import restrictions that
would cut back sharpy. on purchases of a wide range of consumer goods. The moves
come at a time when s stocks of many staples are already low, and prices in Kinshasa
have risen more than 130 percent above those of a year ago.
The country's main flour mill will shut down soon unless the government settles
some overdue accounts for shipments of imported wheat. Construction timetables for
major development pr; sects may also be affected.
The government ~ cems unible to harness its proclivity for excessive spending.
I' xpenditures for the ft st half of this year outpaced revenues by almost $200 million,
with no letup in sight Even this deficit is understated because of some financial
juggling. Most of the overspending went for salaries--all civil servants were given a
25-percent wage increase-and the President's private slush fund. Mobutu uses the
food to pay off politisal and ,r_ilitary supporters as well as to advance his personal
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wealth through real estate and other dealings.
The overall picture of continuing economic decline and pressure from Western
creditors has pushed Mobutu to accept an economic reform program, the fourth since
1967. The reform measures include foreign management of the Central Bank, the
Finance Ministry, and the Department of Customs. The group of experts attached to
the Central Bank has already arrived in Kinshasa, and the budget team is slated to
come this month. The program also rectuires a shift in investment spending to
agriculture and basic infrastructure, both ignored in Mobutu's rush to industrialize.
Outlook: Rough Road Ahead
Zaire's economic outlook during the next year or so will depend in large part on
the situation at the Shaba mines. believe the August
production rates for copper and cobalt are not sustainable and that production during
the next several months will suffer because of inadequate preventive maintenance.
The government's inability to guarantee the timely delivery of spare parts will become
a growing problem with the exhaustion of existing stocks.
A rash of equipment failures in the mines will almost certainly put pressure on
Mobutu to bring in additional European technicians. even though he would prefer to
increase Zaire's self-sufficiency. Most of the 450 foreign technicians who fled Kolwezi
would like to resume their former positions. Few have been able to locate other jobs
because of the current economic slump in Belgium and other industrialized countries.
unimpressed with security in Shaba as provided
byte Inter-African Force, although they believe the force is superior to anything the
Zairians have to offer.
Mobutu will also have to toe the line on the reform program if he is to have
continued access to Western capital markets. The foreign exchange guidelines promise
long-term benefits by shifting funds to agricultural and transport projects, but their
immediate impact will he more cuts in consumer imports. Popular dissatisfaction with
the government is almost certain to rise as goods become increasingly scarce and prices
continue to soar.
Foreign supervision of the federal budget will probably limit Mobutu's ability to
draw on public funds for his personal use, including buying off potential opponents.
The President has backed off from similar reform programs in the past when the
political situation became tense, and he may well be tempted to do it again. Another
such move, however, would mean that Zaire would lose overseas credits and that the
President would jeopardize the future of Zaire's modern economy and greatly enhance
the possibility of his overthrow.
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For the second year in a row, Denmark is reducing its current account deficit, but
once again at a sobering cost in cutput and jobs. Real GNP growth this year will not
greatly exceed last year', sluggish 1 percent, while unemployment threatens to reach 8
percent of the labor for't, e, a postwar record. On the brighter side, inflation is abating,
and the increase in average wages is not expected to exceed last year's 10 percent.
Further progress on t6- balance of payments will depend on how much further
Denmark's newly forme+d coaliti:m government of Social Democrats and Liberals is
willing to tighten belts,
Denmark's normai, current account deficit got out of hand after the account
1973/74 hike in oil prig's and tbo onset of global recession. The 1976 deficit reached a
record $1.9 billion-equal to ahcut 5 percent of GNP--largely because of government
efforts to prop up demand. While a reduction in the value-added tax (VAT) on both
imports and domestic goods caused consumption to skyrocket in 1976, the rise in
Denmark: Selected Economic Indicators
1970-73
Average
Annual
1974
1975
1976
1977
19781
Real GNP growth (pero nt) ......... _...........
3.6
0.9
-1.8
5.0
1.0
1.2
Consumer price inflatioi (percent) ........
6.9
15.2
9.6
9.0
11.1
9.0
Current account deficit (million US $)
374
981
488
1,909
1,647
1,300
Projected.
export volume was on y 4 percent because of the reduced international competitive-
ness of Danish goods and economic stagnation in major foreign markets. Despite
substantial improvement in labor productivity from 1973 to 1977, Danish unit labor
costs increased more than 35 Percent, with average hourly earnings rising 16 percent
per year during the Period.
Denmark took steps in Aua;ust 1976 to boost exports by holding wage increases to
fi percent a year and to restrain imports by raising taxes on a number of consumer
goods. In August 197'- demand management was further tightened when parliament
raised the VAT rate to 18 percent.
In 1977 the cuu ent account deficit declined by $260 million, to $1.65 billion.
Import volume dropped 2.5 percent, while export volume rose 3.8 percent; price
movements held do v, n the inprovement in value terms. A small gain was made on
invisibles, particularly shipping. The trade account showed further improvement in
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first half 1978, with export volume up 6.8 percent from a year earlier and import
volume down 1.5 percent. The surplus on services and transfers continued to rise
slightly. Should first half trends continue, the 1978 current account deficit will not be
too far off Copenhagen's target of $1.3 billion-equal to 3 percent of GNP.
Stagflation
Real disposable income fell in 1977 under the impact of higher taxes and
inflation. While pay guidelines were breached by a 10-percent increase in wages,
consumer prices rose 11 percent over 1976. Real private consumption declined 2
percent. In 1978, household income and consumption should be flat, with both wages
and prices rising about 9 percent. Business investment has been declining; in contrast,
investment in agriculture has been picking up in response to favorable marketing and
price developments.
Expansion of the labor force, rising productivity, and weak demand have left
many people out of work. Unemployment shot up as high as 8.4 percent (not
seasonally adjusted) in the early months of 1978 and is likely to average around 8
percent for the year. Joblessness on this scale is staggering to a nation long accustomed
to less than 2-percent unemployment.
With unemployment benefits equal to 75 percent of wage rates, government
expenditures have swelled in recent years. Even though indirect taxes have been
boosted, revenues have barely kept pace with inflation because of slack economic
activity. The government defict for the fiscal year beginning 1 April 1978 is estimated
at $5.6 billion, equal to 32 percent of budgeted expenditures or 14 percent of GNP.
For the past several years the government has borrowed heavily ahroad.
simultaneously covering much of the budget deficit and offsetting the deficit on
current account. Although Denmark traditionally had financed current account
deficits through private capital inflows, these flows fell off during the global recession
and have not fully recovered. Despite the succession of large current account deficits,
borrowing has brought foreign exchange reserves to a record high of $3.3 billion as of
August 1978, enabling the krone to hold its position in the European joint float without
much intervention. Servicing the foreign public dept, which is expected to surge 1rom
$3.6 billion in 1977 to an estimated $5.3 billion this year, may soon become a serious
problem.
New Coalition at the Helm
In order to broaden parliamentary support for a new economic program, Prime
Minister Anker Jorgensen invited the Moderate Liheral Party to enter the government
28 September 1978 SECRET
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with his minority Social Democrats late last month. The coalition government has
come up with an economic program that focuses on further slowing inflation and
cutting the current account deficit. It calls for trimming spending, raising taxes, and
controlling prices and wages.
The new government intends to reduce the 1979 deficit budgeted by its
predecessor by $700 million; even so, the borrowing requirement still would come to
$6.6 billion. (Copenhagen is in the process of shifting the start of its fiscal year from 1
April to 1 January.) Spcrnding cuts reportedly will hit investment hardest, with such
costly projects as the Great Belt Bridge being curtailed or postponed. The VAT has
been raised, from 18 percent to 20.25 percent as of 1 October, and an easing of income
taxes previously set for 1979 has been modified.
Copenhagen has imposed a price-and-profits freeze to last from 28 August until 1
March, when the current two-year national wage agreement is due to expire. A ceiling
on the automatic wage escalator system is being continued.
The new program envisions a continuation of employment measures introduced
in 1977, including expanded credit facilities for exporting companies, tax offsets for
investment, youth employment programs, and increased public sector employment.
The government nevertheless acknowledges that the fiscal tightening is likely to raise
unemployment.
Labor fears that the new program also could lead to another decline in real
wages. Moreover, the unions are disturbed by the shelving of Social Democratic
proposals for income to reform. housing subsidies, and worker co-ownership. The
success of the entire economic program depends on restraint in wage settlements.
Failure to give the unions some concessions outside the pay field could bring trouble as
early as November, when negotiations are to begin on a new national labor contract.
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International trade restrictions have expanded rapidly since the 1973/74 OPEC
oil price hike, despite reductions in tariffs under the General Agreement on Tariffs
and Trade (GATT). Countries have imposed restrictions within the GATT framework,
which permits nontariff trade restrictions in special circumstances.
Weak global economic performance since 1973 has supplied the major impetus
for the new import restrictions. Restrictions in developed countries have been directed
largely at industrial products to counter depressed industrial employment; most
countries have long maintained protection against agricultural imports.
Underlying the immediate cyclical causes of the trade restrictions are fundamen-
tal changes in world production and consumption patterns. Because of shifting cost
advantages, Japan has strengthened its position as a major exporter of higher
technology industrial products. Developing countries such as Hong Kong, Taiwan, and
South Korea have become important suppliers of lower technology manufactures to
industrial countries and are moving into higher technology areas with a widening
range of exports. Industrial countries affected by these developments recognize the
need for long-run structural adjustment of production and employment, but the
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adjustment is being delayed by the economic pressures attending slow growth and by
the political pressures of business and labor interests.
The nontariff barriers that have dominated recent trade restrictions include
import quotas, "voluntary" export agreements or orderly marketing arrangements
imposed on exporting countries, minimum price regulations on imports, import
licensing requirements, and antidumping regulations against goods imported at
"unfair" prices. The restraints have been directed mainly at textiles, iron and steel,
footwear, and selected consumer electronics, such as television receivers. These
categories represent about 10 percent of world trade, but the value of items within the
trade categories affected by the new restrictions is estimated to be less than 5 percent.
The Most Common Nontariff Restrictions
Quantitative restrictions specify maximum quantities of im-
ports of particular items over a given period.
Discriminatory bilateral agreements are trade agreements
with individual exporting countries that result in different de-
grees of trade restraint on exporters of the same product.
Export restraints restrict exports at the urging of importing
countries which would otherwise unilaterally apply import curbs.
Minimum price regulations specify the minimum prices at
which selected goods may be imported and are directed at
foreign exporters who are deemed to charge artifically low
prices.
Licensing requirements allow the discretionary administrative
curbing of imports.
Antidumping and similar regulations are countervailing ac-
tions, usually in the form of nontariff charges, against goods
regarded as being imported at unfair prices.
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European Community: Import Restrictions'
Total ............. ............. ........._.....
5
9
6
Chemicals and fertilizers ....
5
3
0
Electronics ............................
0
1
2
Food ......................................
0
0
0
Footwear ................................
0
1
0
Machinery ............................
0
0
0
Rubber and products ..........
0
0
0
Steel and other metals ........
0
3
0
Textiles E ................................
0
1
3
Wood ....................................
0
0
1
Other ...... ........... ..... ........_......
0
0
0
4
0
0
2
0
0
0
0
2
0
. 0
23
13
41
2
2
4
0
0
1
2
0
2
1 _
0
0
0
4
2
0
0
2
0
1
6
17
5
22
0
1
0
1,
0
2
' Action taken under the safeguard, surveillances, and antidumping provisions. Many of the actions did not
apply to all EC members or to all exporting countries.
Excluding restrictions under the General Agreement on Tariffs and Trade Multifiber Arrangement.
Restrictions on textiles have been the most intensive, being based on the GATT
Multifiber Arrangement between countries that together account for more than 80
percent of the $60 billion world trade in textiles. At the present time, the restrictions
are concentrated on imports valued at about $7 billion a year. The value of steel
imports subject to recent minimum price regulations in the European Community
(EC) and the United States exceeds $18 billion a year. The trade in footwear and
consumer electronics subject to recent restrictions is each worth less than $2 billion
annually.
The United States, the EC, the European Free Trade Association, Canada, and
Australia have imposed textiles restrictions that have mainly affected Hong Kong,
South Korea, and Taiwan, the largest LDC exporters. US, Canadian, and Australian
import restrictions on footwear have been largely directed at South Korea and Taiwan.
Japanese television receivers have been restricted by the United States and the United
Kingdom. The United Kingdom has also restricted television receivers from Singapore,
South Korea, and Taiwan.
Countries have reacted both politically and economically to recent import
restrictions. Political reactions often take the form of representations to the GATT or
to the governments of restricting countries. Affected exporting countries have tried to
cushion the shock by developing new markets abroad and by discouraging investment
in the sectors suffering from excess capacity. Direct retaliatory action on import
restraints has been isolated and minor.
28 September 1978 SECRET
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Japan, a focal point of import restrictions, has defended its market position in
various ways. Among other actions Japan:
? Refused to voluntarily restrain shaped steel exports to the United Kingdom
in mid-1977; the British countered with antidumping action.
? Formally protested to the GATT the 1977 request by the United States for
restrictions on color television exports.
? Questioned the 1977 dumping allegations by the United States and the EC
regarding certaiv steel products.
? Turned down a November 1977 EC request for additional restraints on
shipbuilding prices and production capacity.
Elsewhere in the non-Communist world, the EC has sought more favorable
treatment for its exports under the Canadian global import quota on footwear.
Australia has threatened action against imports from the Community if EC restraints
on Australian primary commodities continue. To counter the repercussions of import
restrictions imposed by other countries, the EC informed Taiwanese business interests
and Hong Kong and South Korean officials of its reservations about any diversion of
surplus footwear to the Community. Canada is monitoring steel imports and
accelerating antidumping procedures to head off steel diverted from restricted US and
EC markets.
Among the LDC '; the three largest textile exporters (Hong Kong, South Korea,
and Taiwan) are making various adjustments to new restrictions. Hong Kong, with 47
percent of its employment in manufacturing and 48 percent of its exports based on
textiles and clothing, is seeking, to expand sales of traditional product lines in Africa
and the Middle East and is placing more emphasis on higher fashion output for
industrial country markets. South Korea has restricted the installation of additional
capacity in the textile industry, which provides 24 percent of manufacturing
employment and 32 percent of exports and is encouraging a shift to higher quality
textile exports not yet regarded as sensitive by industrial countries. South Korea is also
intensifying its long-established export diversification program with emphasis on
machinery and heave industry. Taiwan, less dependent on textiles for employment
and exports than Hone; Kong or South Korea, expects light and heavy industry to take
up the slack in textile exports.
Reactions become more complicated when the indirect impact of trade restraints
affects third countries. For example, Taiwan has been monitoring the sharp increase in
imports of color television cornponents from Japan for assembly by Taiwanese firms
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that followed the 1977 US restraint on Japanese color television receivers. In another
case, the US footwear orderly marketing arrangements with South Korea and Taiwan
were reportedly being circumvented by the assembly of South Korean and Taiwanese
footwear in the Philippines and Hong Kong for export to the United States.
France Announces Takeover of Steel Industry
The steel industry rescue plan announced by France on 20 September is
tantamount to a nationalization scheme. The plan calls for sweeping reorganization
under new management named by Paris; major government financial assistance; and,
most importantly, conversion of a large share of the industry's debt into government-
controlled capital stock. If approved by the National Assembly next month, the plan
will result in the government, state-run banks, and autonomous state-owned banks
holding 85 percent of the outstanding capital stock of the key steel producers.
The French steel industry has been operating at about two-thirds of capacity for
the past few years. While prices and sales are down, the industry has been forced by
unions and the government to limit layoffs. As a result the industry is practically
bankrupt. Yearly operating losses total nearly $1.5 billion and servicing costs of the $10
billion debt are approaching 20 percent of annual sales.
Earlier restructuring plans, discussed between the industry and government, ran
afoul of union opposition to labor force cuts and of industry resistance to the terms of
financial overhaul. A limited restructuring plan, involving supplementary investment
by the government and the elimination of 16,000 jobs over a two-year period, was
agreed on in mid-1977.
The latest program is much more drastic. It calls for creation of three holding
companies to take over steel operations accounting for about 80 percent of French
steel production. The holding companies will have equity capitalization of $460
million. Paris will directly take ownership shares amounting to 15 percent of this
amount in place of debt owed the government. Two state-run banks will convert debt
equivalent to 40 percent of capitalization into shares, and the three autonomous state-
owned commercial banks will convert $137 million of their outstanding loans into
stock, giving them 30-percent ownership. The remaining 15 percent stays in private
hands.
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The takeover plan seems compatible with the evolving Davignon Plan to aid and
restructure the steel industry of the European Community. On the other hand, it is
strikingly inconsistent with current Giscard/Barre efforts to curb government inter-
vention in the economy. The plin bears an ironic resemblance to measures advocated
by the leftist parties defeated in the March 1978 legislative elections.
The steel industry has given the plan reluctant approval, stressing the possibility
that Paris and the banks may sell their shares to the private sector once the industry's
financial health is restored. Labor reaction is mixed. While welcoming greater
government control, union representatives have warned that labor will not tolerate
massive dismissals. The government, while conceding that reductions are inevitable,
has denied reports in the financial press that 10,000-20,000 additional jobs will be
eliminated. Job reductions nonetheless will be the key to any successful restructuring,
and moves in this direction are bound to cause labor trouble.
South Korea Further Liberalizes Imports
South Korea has removed import restrictions on 299 commodity sub-items and
will lower average tariff rates from 36 percent to 25 percent effective 1 January. The
latest measures, which follow the removal of barriers on 136 commodities in May and
47 in July, continue the cautious loosening of South Korean trade and payments
controls. The Pak government hopes the freer flow of imports will reduce inflation,
now running at a 1.5 percent annual rate, and gain Korea credit in GATT/MTN
discussions. According to optomistic government estimates, the new measures will
generate an additional $200 million in imports this year and $300 million in first
quarter 1979.
28 September 1978
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Assessment
Center
Economic Indicators
Weekly Review
28 September 1978
ER EI 78-039
28 September 1978
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This publication is prepared for the use of U.S. Government
officials. The forma:., coverage and contents of the publication are
designed to meet the specific requirements of those users. U.S.
Government official; may obtain additional copies of this document
directly or through liaison channels from the Central Intelligence
Agency
Nun-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
Nun-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
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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.
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 BIG SIX FOREIC
Industrial Production
INDEX: 1970=100, seasonally adjusted
Unemployment Rate
8
4
-- --? -^? -??,..~ JMIY MP JUL UUT JAN APR
1973 Appjg For Release ?4/08/30 : CI 1,
Percent
IL 9 iTOe / OLHOOU~OU& / O Ib5- I R JUL OCT
~5 1977 1978
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Percent, seasonally adjusted, annual rate
Percent Change
AVERAGE ANNUAL
GROWTH RATE SINCE
3 Months
LATEST MONTH I Year Earlier Ester
LATEST
from Previous
1 Year
3 Months
Unemployment Rate
MONTH
Month
1970
Earlier
Earlier2
Big Five
JUN 78 4.5 4.3 4 3
Industrial
Production
United States
JUN 78 5.7 7 1 6"
Big Six
JUN 78
0.5
2.9
2.8
3.7
United States
JUN 78
0.5
3.8
4.9
12.8
LATEST
MILLIOTI ' ?CIMULMTiVE CMNTLL O 1 Tis $7
MONTH
US $ 1978 1917 Change
Big Six
JUN 78
0.6
9.2
8.2
7.2
Trade Balance
United States
JUN 78
0.9
6.7
7.4
10.7
Un
t
i
ed States
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2Average for latest 3 months compared with average for previous 3 months, seasonally adjusted at annual rate.
 Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
INDUSTRIAL PRODUCTION INDEX: 1970=100, seasonally adjusted
United States
36
]AN APR JUL OCTANNPpEoffi For Rre'leafe 200006/30T: C A-RL/P8 -T 02M0 800670005- 1 N APR JUL OCT
1973 1974 :1975 1976 1977 1978
A-4
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120 es r
>I
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUI 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
from
GROWTH RATE SINE
LATEST
from
Previous
1 Year
3 Months
LATEST
Previous
1 Year
3 Months
MONTH
Month
1970
Earlier
Earlierl
MONTH
Month
1970
Earlier
Ear.ierl
United States
AUG 78
0.5
3.9
6.2
9.1
United kingdom
Jui 78
0.1
0.6
0.5
Japan
JUL 78
0.7
4.0
8.7
5.5
Italy
11-IJ 78
-0.6
31
48
West Germany
JUL 78
3.4
2.5
6.1
9.5
Catnoc1q.
7tiL 78
0.5
4,0
2.1
France
JUN 78
-0.8
2.9
-1 .b
5.4
It
lAverage for latest 3 months coAnibilr dovedeForoReleasm 2904/08/30 : CIA-RDP80T00702A000800070005-1
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UNEMPLOYMENT RATE
United States
Japan
x.,11^p~~
West Germany
2.3
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN
1973 1974 1975 1976
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United Kingdom
Italy (quarterly)
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.
- - - - ^^~ ^~coo JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1975 1976 1977 1978
1 Year 3 Months
Earlier Earlier
THOUSANDS OF PERSONS UNEMPLOYED
1 Year 3 Months
Earlier Earlier
United States
AUG 78
5,968
6,821
6,149
United Kingdom
AUG 78
1,392
1,414. _
,366
Japan
JUN 78
1,310
1,190
1,180
tta l1
II 78
1,455
,4dt
.,,20
West Germany
AUG 78
997
1,044
997
C1 r+ada
a
JUL 78
927
ee5
33,1i
France
AUG 78
1,277
1.174
1,113
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.
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CONSUMER PRICE INFLATION Percent, seasonally adjusted,
United States
29 .Average Annual Rate of Inflation 1961.1972
West Germany
15
10
5
3.1
France
JA1I APR JUL OCT JAN APR JUL -OCT JAN APR JULOCT JAN
APR
1973 1974 1975 1976 1977
1Thee-month average compared with previous three months.
JAN APR JUL OCT
1978
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A-B
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United Kingdom
- 25
I
20
Canada
4.2
r yv
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR
1973 1974 1975
Percent AVERAGE ANNUAL
Change GROWTH RATE SINCE
from
LATEST Previous 1970 1 Year 3 Months
MONTH Month Earlier Earlier2
Percent
AVERAGE ANNUAL
Change
GROWTH RATE SINCE
from
Previous
1970
1 Year
3 Months
Month
Earlier
_arlier2
11
'3 1
0.8
13.1
!1 9
4,7
F Japan JUN 78 0.3
West Germany JUL 78 0.1
LATEST
MONTH
1.9 10.1 tlnite~Kingdom _!HHL 7'
s.5 b.1 Italy IG
2.3 1.7 cenapp J L 7?
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A-9
 United States
Japan
West Germany
France
United Kingdom
Italy
Canada
' Seasonally adjusted.
United States
Japan
West Germany
France
United Kingdom
Italy
Canada
' Seasonally adjusted.
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Percent Chaps -
Latest from Previous 1 Ye,sr Previous
Quarter Quarter 1970 EorSsv Quarter
78 I
78 I
77 IV
78 1
78 II
78 1
78 I
77 IV
78 I
Nonresidential; constant prices
Average
tonal Growth Rate Since
Average
Annual Growth Rate Since
Percent Change
Latest Iran Previous 1 Yeti Previous
Quarter Quarter 1970 Earlier Quarter
MONEY MARKET RA TES
United States Comme,.-cial paper
Japan Call money
West Germany Interbprik loans (3 months)
France Call money
United Kingdom Sterling interbank loans (3 months)
Canada Finance paper
Eurodollars Three-month deposit
United States
Japan
West Germany
France
United Kingdom
Italy
Canada
se -x*y o4mtod.
Average for latest 3 months compared with average for previous 3 months.
WAGES IN MANUFACTURING'
United States
Japan
West Germany
France
United Kingdom
Italy
' ifourtr earnings (seasanaly adjusted) for the United States, Jaan, and Canada; hourly wage
rater for others. West German and French data refer to the beginning of the quarter.
'Average for latest 3 month compared with that for previous 3 months.
Sep 13
Sep 15
Sep 13
Sep 15
Sep 13
Sep 13
Sep 13
1 Year 3 Months 1 Month
Latest Date Earlier Earlier Earlier
Average
Annual Growth Rate Since
Percent Change .--__--__-
Latest from Previous 1 Year 3 Months
Month Month 1970 Earlier Earlier'
Jul 78
Apr 78
Jun 78
Jan 78
Aug 78
May 78
Jun 78
Average
Amual Growth Rate Since
Pennant Change
Latest from Previous 1 Year 3 Months
Period Period 1970 Eager Earlier'
Jul 78
Apr 78
78 I
77 IV
May 78
Jun 78
May 78
--Approved ease-2UO -
A-l0
 EXPORT PR* proved For Release 2004/08/30
US $
IA-jRTpQkWA000800070005-1
National Currency
Average
Average
Annual Growth Rate Since
Annual Growth Rap Since
P
Latest f
Month
ercent change --_.
rom Previous 1 Year 3 Months
Month 1970 Earlier Earlier
Percent Charge
Latest from Previous 1 Year Months
Month Month 1970 Earlier Earle,
United States
May 78
0.4
9.4
5.0
8.3
United States
May 78
0.4
9.4
5.0
8.3
Japan
Jul 78
1.2
11.7
27.0
39.1
Japan
Jul 78
-5.8
3.8
-4.3
-8.8
West Germany
Jun 78
1.7
11.5
12.9
-4.0
West Germany
Jun 78
0.7
3.9
-0.1
4.9
France
Jun 78
2.2
11.5
13.6
7.8
France
Jun 78
0.6
8.8
5.3
-2.8
United Kingdom
Aug 78
3.5
12.2
20.9
38.7
United Kingdom
Aug 78
1.0
15.1
8.4
6.9
Italy
Apr 78
-0.6
10.9
9.6
6.7
Italy
Apr 78
-0.6
15.4
5.7
-1.6
Canada
May 78
1.8
8.4
0.3
3.8
Canada
May 78
-0.2
9.3
7.0
6.0
IMPORT PRICES
National Currency
United States
Japan
West Germany
France
United Kingdom
Italy
Canada
Percent Change
Latest from Previous
Month Month
May 78 -0.3
Jul 78 -6.6
Jun 78 -1.6
Jun 78 -0.6
Aug 78 -0.1
Apr 78 -0.7
May 78 1.7
' Converted to US doles at the current market rates of exchange.
,As recommended by the Advisory Committee on the Presentation of Bato.e of =ovmsnt,
Statistics, the Department of Commerce no longer publishes o basic bator..e.
United States
Japan
West Germany
France
United Kingdom
Italy
Canada
End of Bi lan Us
Jun 78 18.9
Aug 78 29.2
Jul 78 41.1
Apr 78 10.6
Jul 78 17.6
Jun 78 13.2
Jul 78 4.6
S Jun 1970 E-16
14.5 19.2
4.1 17.8
8.8 35.1
4.4 10.0
2.8 13.6
4.7 9.7
9.1 5.0
Earlier
19.2
27.7
41.3
10.2
17.7
10.6
4.6
BASIC BALANCE'
Current Account and Long-Term Capital Transactions
Latest
Period
Mi
cron US $
1978 1977
Change
Cumulative (MiNion US S)
Latest
United States
7
8 I
-
6,954
-
6,954
-4,158
-
2,796
Period Milian US S 1978 1977 t. nwroe
Japan
J
ul 78
2,050
1
0,879
4,630
6,249
United States
No longer published 2
Japan
J
ul 78
650
6,231
3
513 2
718
West Germany
J
ul 78
-868
2,831
1,406
1,425
,
,
West Germany
J
ul 78
-881
1,915
-2
363
4
278
France
7
8 1
-84
-84
-1,628
1,543
,
,
France
7
8 I
-863
-863
- 1
889
1
025
United Kingdom
7
8 I
-803
-803
-896
94
,
,
United Kingdom
7
8 I
-326
-326
543
-869
Italy
7
8 I
288
288
-1,025
1313
Canada
7
8 I
-
1,273
-
1,273
-1,484
212
Italy
7
7 III
2,427
N.A.
N.A.
N.A.
Canada
7
8 I
-668
-668
-584
-84
Converted to US doN,rs at the current market rates of exchange.
Seasonally adjusted.
EXCHANGE RATES
Spot Rate
As of 22 Sep 78
us S
Per Unit
TRADE-WEIGHTED EXCHANGE RATES'
As of 22 Sep 78
Average
Annual Growth Rate Since
1 Year 3 Months
1970 Earlier Earlier
12.8 5.4 6.8
5.8 -20.9 -22.7
3.0 -5.9 -12.5
9.1 0.2 -9.1
17.2 3.0 5.0
18.9 4.7 -8.3
9.7 13.1 1.9
I Year 3 Months
19 Mar 73 Earlier Earlier 15 Sep 78
1 Year 3 Months
19 Mar 73 Earlier Earlier 15 lip it
Japan (yen)
0.0053
39.56
42.24
J 9.001
1.46
United States
-3.09
-9.19
-2.28
-0.32
West Germany
0.5119
44.00
19.061
6.09
1.15
Japan
43.00
37.58
7.82
1.24
(Deutsche mark)
West Germany
31.73
4.71
1.21
0.29
France (franc)
0.2288
3.11
12.89
3.14
0.11
France
-10.27
-2.06
-2.31
- OL90
United Kingdom
1.9698
-20.32
13.03
5.93
0.45
United Kingdom
- 28.44
1.17
1.96
- 0.25
(pound sterling)
Italy
-42.15
-6.85
-1.39
-0.16
Italy (lira)
0.0012
-31.26
6.89
3.41
0.66
Canada
-16.60
-12.15
-5.63
-1.16
Canada (dollar)
0.8515
-15.13
-8.50
-4.39
-0.95
L. Approved For Release 2004/08/30_: tCI DP 00W YAN?808Uf@?fl k - m. -.
 Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
Big Other Com-
World Seven OECD OPEC munist Other
UNITED STATES
1975 ......................... 107.65 46.94 16.25 10.77 3.37 29.82
1976 ........................ 115.01 51.30 17.68 12.57 3.64 29.44
1977 ....................... 120.17 53.92 18.53 14.02 2.72 30.98
1978 .........................
1st Qtr ............... 30.94 13.65 4.60 3.76 1.00 7.93
Apr ...................... 12.06 5.40 1.68 1.38 0.42 3.17
JAPAN
1975.............. ............ 55.73 16.56 6.07 8.42 5.16 15.87
1976 .......................... 67.32 22.61 8.59 9.27 4.93 17.84
1977 .......................... 81.11 28.62 9.73 12.03 5.32 26.01
1978
1st Qtr 22.11 7.83 2.39 3.35 1.32 7.22
Apr ..................... 7.89 2.80 0.80 1.19 0.57 2.53
WEST GERMANY
1975 ......................... 91.70 28.33 36.44 6.78 8.81 11.05
1976 ........................ 103.63 33.44 41.86 8.25 8.72 11.04
1977 ......................... 119.28 39.01 48.00 10.78 8.59 12.90
1978
1st Qtr ......_........ 32.45 11.17 13.05 2.76 1.97 3.50
FRANCE
1975 .......................... 52.87 20.00 15.50 4.90 3.13 8.61
1976 .......................... 57.05 22.49 16.15 5.08 3.23 8.75
1977 .......................... 65.00 25.90 18.19 5.97 3.00 11.94
1978
1st Qtr ..... .......... 18.49 7.66 5.07 1.57 0.66 3.53
Apr 6.74 2.82 1.90 0.56 0.28 1.18
UNITED KINGDOM
1975 ......................... 44.03 12.55 16.59 4.55 1.56 8.64
1976 ......................... 46.12 14.03 17.53 5.13 1.39 7.92
1977 .... ........ ............ 57.44 16.99 22.56 6.78 1.63 9.48
1978
1st Qtr 16.86 5.09 6.27 2.03 0.55 2.92
Apr ...................... 5.75 1.73 2.19 0.74 0.18 0.91
ITAL. t
1975 .......................... 34.82 15.61 7.86 3.72 2.46 4.67
1976 .......................... 36.96 17.41 8.69 4.23 2.18 3.96
1977 ......................... 45.04 20.92 10.20 5.85 2.45 5.62
1978
1st Qtr 10.80 5.25 2.37 1.37 0.48 1.33
CANADA
1975 ........................ 33.84 26.30 1.73 0.71 1.20 2.00
1976 ......................... 40.18 32.01 2.03 0.81 1.25 2.09
1977 ........................ 42.98 34.77 2.13 0.94 1.06 4.08
1978
1st Qtr .............. 10.75 8.78 0.55 0.23 0.22 0.97
Apr 4.20 3.44 0.16 0.08 0.07 0.45
Source: International Monetary Fund, Direction of Trade.
Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
 Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
Developed Countries: Direction of Trade'
Billion US $
Imports from (c.l.f.)
Big Other Com-
World Seven OECD OPEC munist Other
UNITED STATES
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
Apr ......................
JAPAN
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
Apr ......................
WEST GERMANY
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
FRANCE
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
Apr ......................
UNITED KINGDOM
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
Apr ......................
ITALY
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
CANADA
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
Apr ......................
103.42 49.81 8.83 18.70 0.98 25.08
129.57 60.39 9.75 27.17 1.16 31.09
156.70 70.48 11.08 35.45 1.22 38.47
43.14 20.39 3.51 8.15 0.47 10.62
15.42 7.54 1.27 2.73 0.18 3.70
57.85 16.93 6.08 19.40 3.36 12.05
64.89 17.58 7.78 21.88 2.91 14.72
71.33 18.87 7.93 24.33 3.41 16.79
18.32 5.04 2.06 6.46 0.87 3.89
6.28 1.64 0.74 2.01 0.36 1.53
76.28 27.09 27.78 8.24 4.87 8.21
89.68 31.28 32.64 9.73 5.93 10.01
102.63 36.38 37.37 10.12 6.14 12.62
53.99 23.04 14.33 9.43 1.94 5.21
64.38 27.81 16.93 11.36 2.24 6.01
70.50 30.28 18.24 11.82 2.46 7.70
19.76 8.58 5.40 3.05 0.64 2.09
6.79 3.02 1.84 1.00 0.23 0.70
53.35 18.47 18.52 6.91 1.68 7.67
55.56 19.66 18.81 7.29 2.08 7.65
63.29 24.02 21.34 6.31 2.40 9.22
18.87 7.44 6.68 1.80 0.55 2.40
5.67 2.27 2.04 0.39 0.16 0.81
38.36 17.32 6.75 7.85 2.09 4.34
43.42 19.35 8.04 8.12 2.65 5.24
47.56 20.80 8.67 9.03 2.80 6.26
38.59 29,78 1.70 3.43 0.32 2.02
43,05 33.55 1.82 3.48 0.38 2.56
44.67 35,67 1.77 3.05 0.33 3.85
10.80 8,60 0.44 0.77 0.08 0.91
4.61 3.84 0.18 0.03 0.19 0.37
Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
 Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
FOREIGN TRADE BILLION 'US $, f.o.b., seasonally adjusted
United States
14.0
12.0
10.0
OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
A-14
 Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
United Kingdom
Semi logarithmic Scale
LATEST
MONTH
MILLION
US $ 1978
1977
CHANGE
9
9
316
80
12
8%
}
5
865
43
965
250
36
21.3%
United States
AUG 78
12.46
14,090
0,625
111,601
,
96,366
.
15.8%
UnitedKingdom
AUG 78
,
5,752
,
45,474
,
39,281
15.8%
Balance
-1,621
20,976
-16,050
-4,926
Balance
113
-1,509
-3,031
1,522
4
096
28
846
25,115
14.9?,
Japan
JUL 78
7,700
54,344
45,157
20.3%
l
Italy
JUL 78
,
4
626
,
27
458
25
501
7.7%
5,556
37,967
35,555
6.8%
,
,
,
Balance
2,144
16,377
9,602
6,775
Balance
-529
1,388
-386
1,775
West Germany
JUL 78
10,890
78,259
66,376
17.9%
Canada
MAY 78
3,621
18,983
17,435
8.9?0
4%
9
203
64,604
55,039
17.4%
3,401
17,447
16,713
4.
Balance
,
1,687
13,655
11,337
2,318
Balance
219
1,536
722
814
France
AUG 78
7,254
51;160
44;220
15.7%
Approved For Release 2004/08/30, gA-RDP80T00702A000800070005-1
 Approved For Release 2004/08/30: CIA-RDP80T00702A000800070005-1
FOREIGN TRADE PRICES IN US $1
United States INDEX: JAN 1975 =100
Japan
West Germany
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
lEXPO,t and 9 A, gveecb Fo r?t l se weighted moving 2004/08 I 9C9A-RDP80T(@a2TA000800070 E$
,A-16
 Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
Italy
APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1974 1975 1976 19~7777 11g 8g
Approved For Release 2004/08/30: CIA-RDP80T00702A000800& P9a-1,,
A-17
 Approvece[-El b2j3tVL3e6$Al jU 8 I&AW?840070005-1
CIT
MONEY SUPPLY'
INDUSTRIAL PRODUCT
ION '
Average
Areal
Growth Rate
Since
Average
Percent Change
---
Annual Growth Rote Since
Latest
from Previous
1 Year
3 Months
Percent Change -
" --
- -
Month
Month
1970
Earlier
Earlier
Latest
from Previous
1 Yea
3 Months
Period
Period 1470
Earner
Earlier
Brazil
Mar 78
2.7
36.4
43.3
34.7
India
May 78
1.3 5.6
9.1
20.6
India
Mar 78
2.0
13.8
15.7
15.3
South Korea
Jun 78
-1.2 22.5
20.1
26.5
Iran
May 78
0.4
29.0
21.4
66.2
Mexico
Apr 78
13.1 6.7
14.11
8.6
South Korea
Jun 78
4.3
31.6
30.4
20.9
Nigeria
78 I
6.8 11.0
0.12
29.9
Mexico
May 78
3.9
20.8
33.0
24.9
Taiwan
Apr 78
1.5 15.3
17A
- 2.0
Nigeria
Mar 78
5.6
35.3
18.9
3.3
Taiwan
Mar 78
5.3
25.2
31.0
24.3
' Seasonally adjusted
.
Thailand
Jan 78
2.7
13.2
13.7
21.5
s Average for latest
3 months compared with average 1nr previous 3 rsotths.
I Seasonally adjusted
.
'Average for latest 3 months compared with overage for previous 3 months.
CONSUMER
PRICES
WHOLESALE
PRICES
Average
Annual Growth
Rate Since
Average
Percent Change
--
Annual Growth
Rate Since
Latest
from Previous
1 Year
Percent Change
Month
Month
1970
Earlier
Latest
from Previous
1 Year
Month
Month
1970
Earlier
Brazil
Jun 78
4.1
28.3
38.0
India
May 78
0.3
7.4
1.6
Brazil
May 78
3.4
28.4
34.5
Iran
Jun 78
-0.1
12.2
10.2
India
May 78
0.6
8.0
-2.8
South Korea
Aug 78
0.3
14.5
13.5
Iran
Jun 78
- 1.3
10.7
9.3
Mexico
Jun 78
1.4
15.0
17.3
South Korea
Aug 78
0.1
15.7
10.9
Nigeria
Dec 77
2.9
16.5
30.6
Mexico
Jun 78
1.3
16.6
16.8
Taiwan
Apr 78
1.8
10.1
7.6
Taiwan
Mar 78
1.1
8.2
1.2
Thailand
Apr 78
1.0
8.6
8.8
Thailand
Jan 78
-0.2
9.5
6.4
EXPORT PRICES
OFFICIAL RESERVES
us $
Million US $
Aswage
Latest Month
Annual Growths
Rate Sinco
-
I Year
3 Months
Percent Chatpo
End of
Million US $ Jun 1970
Earlier
Earlier
Latest
from Previous
1 Year
Month
Month
1970
Earlier
Brazil
Feb 78
6,733
1,013
5,878
5,994
Brazil
Feb 78
0.4
14.0
1.5
India
May 78
6,123
1,006
4,431
5,563
India
Mar 77
-0.9
9.6
17.9
Iran
Jul 78
11,982
208
11,592
12,584
Iran
Jun 78
0
30.8
0
South Korea
Jun 78
4,199
602
3,502
4,269
South Korea
78 1
0.7
8.7
7.7
Mexico
Mar 78
1,766
695
1,422
1,723
Nigeria
May 76
-0.1
27.3
12.3
Nigeria
Jul 78
1,250
148
4,495
3,768
Taiwan
Mar 78
-0.7
11.2
3.8
Taiwan
Mar 78
1,433
531
1,349
1,447
Thailand
Dec 76
2.0
13.3
13.1
Thailand
Jun 78
2,161
978
2,017
2,161
Approved For Release 2004/08/30 : tl-IW-RDP80TOO702AO00800070005-1
 Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
Latest 3 Months
Percent Chang. from
3 Months 1 Year -- --
Latest Period Earlier' Earlier 1978 1977 Change
May 78 Exports
84.8
-3.7
4,743
4,979
-4.7%
May 78 Imports
26.6
1.4
5,110
4,939
3.5%
May 78 Balance
-367
40
-407
Feb 78 Exports
-19.6
-8.9
1,476
1,620
-8.9%
Feb 78 Imports
-24.0
-9.9
1,444
1,315
9.9%
Mar 78 Balance
32
306
-273
Iran
Jun 78 Exports
29.9
3.4
11,756
11,902
- 1.2%
May 78 Imports
- 1.6
1.6
5,705
5,259
8.5%
May 78 Balance
4,087
4,871
-783
South Korea
Jun 78 Exports
83.3
24.5
5,704
4,517
26.3%
Jun 78 Imports
95.5
20.8
6,138
4,923
24.7%
Jun 78 Balance
-434
-406
- 28
Mexico
May 78 Exports
-2.2
6.5
2,037
1,773
14.9%
May 78 Imports
11.6
25.7
2,340
1,868
25.3%
May 78 Balance
-304
- 95
-209
Nigeria
Jun 78 Exports
90.8
-21.8
1,810
2,451
-26.1%
Aug 77 Imports
56.1
80.1
2,535
1,640
54.6%
Aug 77 Balance
716
979
-263
Taiwan
Apr 78 Exports
-27.6
32.3
3,365
2,543
32.3%
Apr 78 Imports
-14.5
20.4
2,869
2,338
22.7%
Apr 78 Balance
496
205
291
Thailand
Apr 78 Exports
27.0
3.2
1,277
1,221
4.6%
Apr 78 Imports
-6.5
14.3
1,449
1,251
15.8%
Apr 78 Balance
-172
- 30
-141
Approved For Release 2004/08/.lit'9CIA-RDP80T00702A000800070005-1
 Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
AGRICULTURAL PRICES MONTHLY AVERAGE CASH PRICE
WHEAT
$ PER BUSHEL
7.5
Kansas City No. 2 Hard Winter
20 SEP
3.23
13 SEP
3.24
AUG 78
3.13
5.0
SEP 77
2.46
2.5
3.22
1-2L SEP
1974 1975 1976 1977 ' 1978'-'0
RICE
$ PER HUNDRED WEIGHT
15.01
7.5'
No. 2 Medium Grain, 4% Brokens,
f.o.b. mills, Houston, Texas
$ PEFI METRIC TON SUGAR
C PER POUND
1-11 SEP II
1974 1975 1976 1977 a978m
Memphis Middling 1 1/16 Inch
2,000
350
1-20 SEP !1
1976 1977 1978 0
20 SEP 8.01
13SEP 8.12
AUG 78 7.06
SEP 77 6.60
COFFEE
Other Milds Arabicas, ex-dock New York
20 SEP 156.17
13 SEP 158.67
AUG 78 136.66
SEP 77 190.05
TEA
London Auction
JUL 96.2
JUN 98.3
MAY 78 94.9
SEP 77 89.6
Approved For Release 2004/08/3(M:22IA-RDP80T00702A000800070005-1
 Approved For Release 2004/08/30 : CIA-RDP80T00702A000800070005-1
SOYBEANS
S PER BUSHEL
Chicago No. 1 Yellow
20 SEP 6.74
13 SEP 6.61
AUG 78 6.43
SEP 77 = 5.22
200
1-20 SEP II 1-20 SEP1I
0 80' 1974 1975 1976 1977 1978
1974 1975 1976 1977 1978
SOYBEAN OIL/PALM OIL
0.5 $_. PER POUND
O.J.
20 SEP 0.3050
13 SEP 0.3000
AUG 78 0.2848
SEP 77 0.2160
500
SOYBEAN MEAL
S PER TON
44 Percent Bulk, f.o.b. Decatur
400
20 SEP
170.00
13 SEP
167.50
AUG 78
163.28
SEP 77
143.50
SOYBEAN OIL 1970=100
Crude, Tank Cars, f.o.b. Decatur 1,000
20 SEP 0.2856
13 SEP 0.2865
AUG 78 0.2631 -.,Boo 400
SEP 77 0.1917 0.2935 '
1974 1975 1976 1977
AUSTRALIA UNITED STATES
Boneless Beef, Wholesale Steer Beef,
12 SEP 96.50 16 SEP 83.00
5 SEP 95.00 9 SEP 80.92
AUG 78' 91.78 AUG 78 80.13
SEP 77'''. 64.18 SEP 77 63.04
1-20 SEP II
1978
96.46
1-12 SEP
1-12 SEP II
1978
FOOD INDEX
500 -
1-12 SEP
1978
NOTE: The food index is compiled by the Economist for 16 food commodities
which enter international trade. Commodities are weightedbY
3-year moving averages of imports into industrialized countries.
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INDUSTRIAL MATERIALS PRICES MONTHLY AVERAGE CASH PRICE
COPPER WIRE BAR
140 S PER POUND...,.
$ PIER METRIC TON
20 SEP
65.7
68.6
13 SEP
65.2'
67.6
AUG 78
64.7
68.0
2
500
SEP 77
54.3
60.6
,
ZINC
100 C PER POUND
45 LEAaD
35
TIN
650 G? PER POUND
??a,,, e,r'28.4
'1 /..... .. 500
1-20 SEP
0 _. ._ ,., 0 150
1974 1975 1976 1977 1978
STEEL SCRAP
150 $ PER LONG TON
1-19 5E'..P11
1974 1975 1976 1977 1978
MP USD
13 SEP 250.0 262.5
AUG 78 241.5 265.4
SEP 77 167.0 150.6
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A-22
..... 1-211 ;EP II 1,000
1.977 1978 10
LME US
20 SEP 29.1 330
13 SEP 28.8 33.0
AUG 78 28.0 32 2
SEP 77 23.3 34.0
$ PER METRIC TON 150
...
LME US $ PER METRIC TON
1,000
20 SEP 32.1 35.0
13 SEP 31.3 35.0
AUG 78 29.0 32.6 '800
LME US
20 SEP 646.6 624.5
13 SEP 645.6 683.6
AUG 78 589.2 639.5
SEP 77 506.2 556.4
1-20 SEP 11 4,000
PLATINUM
250 $ PER TROY OUNCE __
1-20 SEP 11
1978 200
674.0
$ PER METRIj_TQN
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ALUMINUM
Major US Producer
E per pound
55.00
53.00
53.00
48.00
US STEEL
Composite
$ per long ton
419.31
389.60
359.36
327.00
IRON ORE
Non-Bessemer Old Range
$ per long ton
22.55
21.43
21.43
20.51
CHROME ORE:
Russian, Metallurgical Grade
$ per metric ton
NA
NA
150.00
150.00
CHROME ORE
S. Africa, Chemical Grade
$ per long ton
56.00
56.00
58.50
42.00
FERROCHROME
US Producer, 66-70 Percent
t per pound
42.00
41.00
41.00
44.00
NICKEL
Composite US Producer
$ per pound
2.02
2.06
2.16
2.24
MANGANESE ORE
48 Percent Mn
$ per long ton
67.20
71.80
72.26
72.00
TUNGSTEN ORE
Contained Metal
$ per metric ion
17, 907.00
18,822.00
19,494.00
16,045.00
MERCURY
New York
$ per 76 pound flask
166.00
155.17
124.29
116.90
SILVER
LME Cash
t per troy ounce
554.58
525.95
453.91
428.96
GOLD
London Afternoon Fixing Price
$ per troy ounce
208.95
183.66
149.52
114.14
RUBBER
60 C PER POUND
INDUSTRIAL MATERIALS INDEX
300,
250
1-12 SEP II
1977 1978
LUMBER INDEX6
160
(Approximates world market price frequently used by major
world producers and traders, although only small quantities of
these metals are actually traded on the LME.
2Producers' price, covers most primary metals sold in the US.
3As of 1. Dec 75, US tin price quoted is "Tin NY lb composite."
4Quoted on New York market.
5S-type styrene, US export price.
6 This index is compiled by using the average of 13 types of lumber whose
prices are regarded as bellwethers of US lumber construction costs.
/Composite price for Chicago, Philadelphia, and Pittsburgh.
NOTE: The industrial materials index is compiled by the Economist for 19 raw
materials which enter International trade. Commodities are weighted by
3-year moving averages of imports into industrialized countries.
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