ECONOMIC INTELLIGENCE WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79B00457A000200010001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 48
• Document Creation Date: December 12, 2016
• Document Release Date: January 8, 2002
• Sequence Number: 1
• Publication Date: September 1, 1977
• Content Type: REPORT

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Secret
NOFORN-NOCONTRACT
Economic Intelligence Weekly
Secret
ER EIW 77-035
1 September 1977
copy N?_ 407
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Noforn-Nocontract
ECONOMIC INTELLIGENCE WEEKLY
1 September 1977
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Norway: The Economy in Good Shape on Election Eve 7
Going into the 12 September parliamentary elections, the minority Labor
government can point with pride to rising living standards and
unemployment of less than 7 percent.
Portugal: Another Mild Dose of Austerity 11
Lisbon has announced further belt-tightening measures designed to stem
the outflow of foreign exchange reserves and raise the confidence of
foreign creditors.
Egyptian Financial Gap: Reaching a Peak 14
By reaching an agreement with the IMF that entails a politically acceptable
degree of austerity, Cairo stands a good chance of regularizing the inflow
of Arab aid.
Soviet Merchant Fleet: Limited Response to
Price-Cutting Complaints 19
Faced with threats of retaliatory measures by US and other non-Communist
governments, the USSR is taking limited steps to reduce rate-cutting by its
merchant fleet.
Notes
Sino-Soviet Trade: No Big Deals 23
Guyana: Economic Problems Mount 24
Publications of Interest, Statistics
i
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NORWAY: ECONOMY IN GOOD SHAPE ON ELECTION EVE
Going into Norway's 12 September parliamentary elections, the minority
Labor government of Prime Minister Odvar Nordli can claim credit for managing one
of the most buoyant economies in Western Europe. While opposition parties have
been pointing a finger at high taxes and 9-percent inflation, the average Norwegian
knows his living standard has continued to rise. Registered unemployment is less
than 1 percent, a remarkable figure in a Europe frustrated by inadequate economic
recovery.
The Labor Party, the largest political force in Norway, is running
neck-and-neck in the polls with a group of nonsocialist parties. The Conservatives,
the second largest party, and two smaller groups, the Christian Democrats and the
Center Party, have said they will form a coalition government if they command a
majority of seats in the new parliament. A victory for the coalition could mean
slower exploitation of North Sea petroleum and reduced influence over wage
settlements.
Oil Policy
Under Labor, Oslo has adopted a fairly cautious approach toward development
of the oil and gas riches of the North Sea. This policy responds to the concern of
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many Norwegians about the potentially disruptive economic and social effects of
rapid development as well as the environmental impact. Such fears were brought to a
head last April when a spectacular blowout occured at the Ekofisk field.
The Nordli government has been able to mute Ekofisk as an election issue
because major political parties realized that certain risks are inherent in development
of oil resources. Moreover, no substantial damage appears to have been done to
aquatic life and no oil slicks reached coastal areas. After the disaster, the Prime
Minister was quick to announce that exploration north of the 62d parallel,
previously expected to start next summer, would be postponed at least until 1979.
Environmentalists and local fishermen strenously opposed development in this area,
citing potential damage to fish stocks.
The Ekofisk blowout has provided the Center Party and the Christian
Democrats an opportunity to renew their efforts to slow the. pace of exploration and
development even further. The Center Party advocates a ceiling of 1 million bJd on
oil production, compared with the generally accepted limit of 1.3 million b/d.
Through June, oil production was averaging 270,000 b/d; gas production is expected
to start later this year. If the three-party coalition comes to power, the Conservative
Party-which generally supports the Labor government's oil policies-presumably
will have to accept some slowdown in development in order to keep the new
government together.
State of the Economy
The Norwegian economy weathered the recent global recession better than the
almost any other Western economy. Real economic growth slowed to 3.5 percent in
1975 but rebounded to 6 percent last year and is expected to hold that rate in
1977. The Labor government turned to expansionary fiscal and monetary police-s to
bolster demand, in effect mortgaging future oil earnings to finance the resulting large
current account deficits. Consumer spending is being fed by rising real disposable
income; with oil revenues on the increase, the government is gradually reducing tax
rates_
Manufacturing output, which declined in 1975 and increased just 2 percent last
year, continues sluggish in 1977. Expanded oil and gas production accounted for
most of the 7-percent growth in total industrial output achieved in both 197 and
1976. Surveys indicate continued strong investment spending, although last year's
12-percent real increase almost certainly will not be matched in 1977-oil-related
investment is tapering off.
Norway is one of the few countries in Western Europe to trim its
unemployment rate this year. Now that unemployment is down to prerecession
levels, the government is easing up on various programs designed to keep people at
work-for example, loans, purchases of stock in private companies, and subsidies.
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NORWAY: Selected Economic Indicators
I r I f 1 1 1 1 1 1 1 1 ~ I r I r 1 1 t l r 1
1974 1975
Hourly Earnings in Manufacturing, Males
Registered Unemployed
2.0
1 Percent of Labor Force
iu mrv iuw iv
1974 1975
1 September 1977
I l l l l l l l l l l
1976
1 1 1 1 1 1 1~ 1 1
1977
1977
est.
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Registered unemployment, which had reached a high of 1.6 percent in fourth
quarter 1975, was only 0.8 percent by June of this year.
With unemployment abating, attention is now focused on inflation, The
government has resorted to temporary price freezes-most recently in April-to hold
inflation near the promised target rate of 8.5 percent. First half 1977 prices averaged
8.9 percent above first half 1976. Concern over inflation and the competitiveness of
Norway's traditional exports has led the Nordli government to assume a more active
role in annual wage negotiations. With earnings in manufacturing rising an average 18
percent a year since 1973, Oslo's strategy has involved limiting nominal wage
increases and thus cost pressures for producers. At the same time the government is
ensuring increases in real disposable incomes through tax cuts. Last spring unions
agreed to a 2.9-percent wage increase above cost-of-:living allowances in return for
about $200 million in tax concessions and continuation of certain food subsidies.
Real disposable income rose 3.5 percent in 1976 and is expected to increase 2.5
percent this year.
Government concern about improving Norway's competitive position in world
markets is justified by deterioration in the foreign trade account. The trade deficit
probably will be at least $3.5 billion this year, up from last year's record $3.2
billion. In first quarter 1977, the volume of exports, excluding ships, was 1.3
percent below the same period last year, while import volume was up 7.3 percent.
Brisk domestic demand will boost imports by more than enough to offset a pickup
in oil and gas exports later in the year.
Little if any reduction is expected from last year's record current account
deficit of $3.7 billion. Norway's traditionally large surplus on services disappeared in
1976, and earnings from shipping, normally a key contributor to the surplus, are
likely to remain depressed. Oslo is not anticipating a current account surplus based
on oil earnings until 1979. Even though net foreign debt is equivalent to an alarming
29 percent of GNP, Norway is having little trouble borrowing against future oil
revenues to cover its deficits.
Besides a decision to slow North Sea development, victory for the nonsocialist
coalition could lead to declining influence over?'wage negotiations. Acenter-right
government would have fewer ties with the unions than the present socialist regime.
It could hardly replace the influence and prestige of the current finance minister, Per
Kleppe, who has masterminded the socialist government's efforts in wage
deliberations. As a result, labor-management discord might increase.
While a nonsocialist government would not extend state ownership of industry,
we doubt it would liquidate current holdings. The coalition would concede that Uslo
must continue to play a role in ailing industries, particularly shipbuilding. Changes in
the status of Statoil and Noroil, the two state-owned oil companies, are unlikely
because all parties favor active state participation in oil activities, (Confidential)
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PORTUGAL: ANOTHER
MILD DOSE OF
AUSTERITY
Lisbon last week an-
nounced another belt-tighten-
ing program aimed mainly at
slowing the outflow of for-
eign-exchange reserves. While
the new program supplements
steps taken earlier to limit im-
ports and shift resources to ex-
ports and investment, it is not
bold enough to have much
near-term impact. The govern-
ment will continue to depend
heavily on foreign credits as it
gropes along the path of eco-
nomic and political recovery.
Economic Trends
Disappointing
Portuguese economic
trends are mixed. On the plus
side, industrial production re-
portedly was 10 percent
greater in first half 1977 than
in the same 1976 period. We
expect real GNP to grow 5.5
percent for the year, following
an estimated increase of only
3.3 percent in 1976 and a
drop of perhaps 7 percent in
1975. At the same time, about
15 percent of the labor force
remains unemployed. Inflation
has accelerated and may aver-
age 35 percent for 1977, even
though Lisbon this year has
been generally successful in
mP~zrgal: Industrial Production
~-lndex: I$73 _10~, seasonal adjusfed
Pgal: Wage and Price Trends
~...,___m~_ __
'~. Industry an transportation only.
3. April- May.
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limiting wage increases to 15
percent. Real wages have been
eroded to prerevolutionary
levels, fueling worker discon-
tent but contributing to hopes
for stronger revival of invest-
ment.
Dwindling foreign ex-
change reserves remain Lis-
bon's most pressing economic
problem. Despite a doubling
of emigrant remittances and a
jump in tourist earnings, the
current account deficit was
$ 5 5 0 million in first half
1977, only $100 million less
than in first half 1976. The
trade deficit-boosted by a 48-
percent rise in imports-
reached $1,025 million in the
first half. A continuing large
deficit is assured because of
this year's poor harvest-the
result of bad weather and un-
settled conditions in the farm
sector.
Reflecting the large payments imbalance and speculation on further devalua-
tion of the escudo, foreign exchange reserves dipped to a meager $50 million in
mid-July 1977 before being replenished by a $100 million loan from the Bank for
International Settlements. Due to seasonally higher receipts from tourism and the
renegotiation of several short-term credits, foreign. exchange reserves declined at a
slower pace during the first half of August and stood at $120 million on 17 August.
While Lisbon continues to hold gold reserves worth about $4 billion at the market
price, much of this already has been pledged to secure loans.
Early this summer, 11 countries, including the United States, West Germany,
and Japan, agreed to provide $750 million in medium-term credits to Portugal aver
the next 18 months. In return, Lisbon promised to work out a new economic
stabilization program in collaboration with the International Monetary Fund (IMF).
Disbursement of these bilateral loans is expected to begin some time in October,
following the conclusion of negotiations with the IMF fora $50 million second
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trarache loan. In August, Manufacturers Hanover Trust announced approval of a $30
million loan to Portugal, to be repaid out of the first disbursement of the US portion
of the $750 million package.
Before the National Assembly adjourned on 10 August, it gave final approval to
several new measures aimed at encouraging investment. It allotted $2.6 billion to
reimburse persons whose property had been nationalized, hoping to give business-
men both the means and the will to invest. However, compensation is to be paid in
low-interest government bonds over periods of up to 27 years, and the principal
amounts fall far short of investor claims. To attract foreign investors, the National
Assembly liberalized the foreign investment code. Other measures to promote
investment include laws specifying the areas of economic activity to be left to the
private sector and limiting the constitutionally guaranteed worker control over
enterprises.
The National Assembly also passed a controversial agrarian reform law, which
replaces a law enacted by the left-wing provisional government in 1975. The new law
is designed to limit Communist Party influence in southern Portugal, where large
areas have been turned into collective farms. It gives broad discretionary powers to
the Minister of Agriculture in determining the size of farming units and in con-
trolling access to official sources of credit. The new law also raises the minimum size
of farms subject to expropriation and guarantees that no landowner can be deprived
of all his property.
On 25 August, Prime Minister Soares announced a new package of austerity
measures intended to supplement the devaluation and other steps taken last Febru-
ary. The principal elements in the package are:
? A crawling peg regime for the escudo. The Bank of Portugal expects a
downward adjustment of 1 percent monthly, beginning this month.
? An average rise in petroleum-based fuel prices of 25 percent. The Prime
Minister warned that gasoline rationing will be imposed by yearend unless
consumption falls drastically.
? Authorization for banks to open foreign currency accounts for non-
residents.
? Credit controls and an average increase in interest rates-for both savings
accounts and loans-of four percentage points.
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? A reduction in govermment expenditure o:f 10 to 20 percent. Cuts, to
the extent they can be realized, presumably would fall most heavily on
subsidy programs.
? Permission for firms threatened with bankruptcy to suspend certain
costly provisions in labor contracts and dismiss redundant workers.
The contractionary nature of the package is softened by provision for a National
Development Fund to finance investment in key sectors.
Limited Short-Term Impact
The new austerity program is a step in the right direction, but it will have little
impact in the short run. Moreover, expectations for the program must be tempered
by recognition that Lisbon often does not fully implement unpopular measures.
Even so, Portugal's recent success in arranging short-term loans should enable it to
avoid a serious liquidity crunch until the big package of bilateral loans becomes
available in the fall.
By announcing a relatively moderate austerity program, the government un-
doubtedly hopes to mute criticism from its vocal leftist opposition while mollifying
foreign creditors. Since recent press campaigns had seemed to prepare the public for
more severe measures, the government may have lost an excellent psychological
opportunity to adopt a tougher, more effective program.
Recent measures aimed at investment probably will add little impetus to the
sorely needed recovery in this area. Most notably, the compensation law fal-s far
short of investor hopes. In the agricultural sector, some provisions of the new
agrarian reform law will be difficult to enforce, for instance, the return of some land
to former owners. (Confidential Noforn)
*~~*~
EGYPTIAN FINANCIAL GAP: REACHING A PEAK
Despite a record financial gap* this year, there is cause for guarded optimism
about Egypt's international :financial condition during the next few years. In the
past, Arab aid to Egypt had been supplied in astop-and-go fashion-partly because
of Cairo's resistance to economic and administrative reform. By reaching an agree-
ment with the IMF that entails a politically acceptable measure of austerity, Cairo
*This article is the eleventh in a series on the foreign financial gap faced by individual LDCs. In these articles,
financial gap is defined as the current account deficit plus amortization of medium- and long-term debt. Shifts in
short-term capital ordinarily are not included; in the case of Egypt, an exception was made because of their
importance in Cairo's debt-service commitments. Previous articles have covered -the Ph>7ippines, South
Korea, Argentina, Brazil, Taiwan, Peru, Jamaica, Zaire, and Chile.
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stands a good chance of regularizing the flow of Arab aid. Rapidly increasing
earnings from oil, the Suez Canal, and tourism will also help to alleviate foreign
exchange contraints over the next several years. In these circumstances the Egyptian
economy should be able to attract additional private investment and to maintain real
GNP gains on the order of 6 percent annually during 1977-80.
Pattern of Deficits, 1970-74
The Sadat government, which came to power in 1970, inherited an economy
plagued with inefficient economic institutions, persistent fiscal imbalance, a chronic
payments deficit, and a huge external debt. In an effort to court the West and open
up new lines of credit, Cairo moved cautiously to modify Egypt's socialist economy
by relaxing controls on foreign investment. Attempts to reduce the payments
deficit, however, were scuttled because of the government's inability to impose the
austerity measures needed to cut imports. As it was, real per capita GNP hardly
increased between 1970 and 1973, while the current account deficit hovered at
$500 million to $600 million annually.
For a brief period following the 1973 war, Egypt was able to largely ignore its
external financial problems. Arab affluence, Egypt's pivotal position in the Middle
East, and Sadat's efforts to undo the Nasir years brought a record inflow of cash and
credit, allowing Egypt to increase its imports sharply for the first time in a decade.
Between 1972 and 1974, imports more than doubled and the financial gap swelled
to $2 billion. By alleviating shortages of raw materials and intermediate goods, the
rise in imports enabled Egyptian industry to substantially increase its capacity
utilization rates.
Reconstruction of the war-torn Suez Canal area proceeded rapidly, giving a
strong push to investment spending, which rose from an average of only 12 percent
of GNP in 1967-72 to about 18 percent of GNP in 1975. Real GNP growth increased
from a high of 3-4 percent in the interwar period to 6-7 percent in 1975.
Prelude to Reform, 1975-76
The honeymoon with Arab donors ended abruptly in 1975 when aid terms
were substantially hardened. Although Arab disbursements for the year amounted to
$2.5 billion, most of it came in the second half to forestall an impending liquidity
crisis. To avoid another payments crunch in 1976, Cairo was forced to defer
repayments on $450 million in short-term debt service obligations and draw down
inventories of imported goods rather than place new import orders. As a result, the
financial gap was held to $2.7 billion, while the current account deficit was kept to
about $2.0 billion. Again the gap was filled only with the help of last minute Arab
and Western emergency aid.
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Egypt: Foreign Financial Gap
19761
19772
19782
Exportsa
1,570
1,800
2,400
2,800
Imports4
4,540
4,700
5,700
6;000
Net services
450
900
1,100
1,300
Current account deficit
-2,520
-2,000
-2,200
-1,900
Debt amortization, med-
ium and long term
-570
Change in short-term
indebtedness
-260
240
-700
-200
Financial gap
-3,350
-2,740
-3,700
-2,600
Foreign aid and other
capital inflows
3,530
2,24:0
3,700
NA
Errors and omissions
-240
5456
NA
NA
Change in reserves
60
-45
NA
NA
Provisional.
2 Projected.
4Based on partner country trade data.
3Including Egyptian portion of oil export earnings.
imports of purchases financed with private funds held abroad.
6Consists preponderantly of deferred payment of obligations.
SNet service receipts have been adjusted upward to compensate for inclusion in
In exchange for emergency aid to pay off arrears, the Sadat government in late
1976 agreed with Arab donors to more rapid implementation of economic reforms
recommended by the IMF. The difficulties in imposing these tough measures were
highlighted in January of this year when Cairo's badly bungled attempt to reduce
consumer subsidies led to the worst urban riots in two decades. Armed with the
threat of further civil disorder, the Sadat government subsequently negotiated a
compromise standby IMF load agreement requiring:
? A de facto devaluation to be accomplished by a staged shift from the
official rate of 1 Egyptian pound = $2.55 to the substantially lower
"tourist rate" of $1.43.
? A modest reduction in existing price subsidies, exempting for the time
being the most politically sensitive items such as wheat.
? Reduction in the public sector deficit by increasing revenue collection
from higher income groups-through tax reforms, tariffs on luxuries, and a
crackdown on tax evasion.
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? Decreased use of high-cost, short-term bank loans as a means of financ-
ing the government's international obligations.
To partially compensate for the decline in real wages inherent in the above terms,
the agreement permits substantial pay increases for public sector workers and a rise
in private sector wage ceilings.
Living up to the agreement is proving difficult. Egyptian authorities, for
example, had been counting on increased revenue collection and falling prices of
imported wheat to reduce the size of subsidy cuts needed to comply with IMF
expenditures guidelines. So far these improvements have not been sufficient to
offset above-budget expenditure by some government departments during first half
1977: Other ways of reducing state spending-cutting the public sector labor force
or curtailing investment-would be both politically and economically disruptive.
Cairo is particularly reluctant to cut government investment spending, which re-
mains the driving element in this year's expected 6-percent gain in real GNP.
The 1977 Payments Outlook
We expect the financial gap to approximate $3.7 billion this year, up $960
million from 1976. Most of the increase reflects higher debt amortization costs,
particularly repayment of short-term debt accumulated last year. Under terms of the
IMF standby agreement, Cairo is obligated to pay $700 million of this debt by
yearend 1977 in addition to repaying $800 million in medium- and long-term
obligations. Most of the outside support needed to meet these payments and cover
the remainder of the financial gap has already been lined up. About $2.5 billion has
been committed by Arab states and small additional Arab funds may be forth-
coming. Another $1 billion or so will come from the US government and other
sources. We project that Cairo will arrange sufficient financing to essentially cover
the $3.7 billion gap.
Despite a surge in imports, the 1977 current account deficit will probably be
held to $2.2 billion, only slightly above the 19761evel. We expect the import bill to
increase $1 billion and reach $5.7 billion, partly reflecting the need to rebuild
inventories of industrial raw materials and intermediate goods drawn down during
last year's exchange squeeze. Although price hikes associated with devaluation of the
Egyptian pound will help contain growth in purchases of foreign goods, pent-up
demand for consumer durables remains strong. Altogether, the levels we project of
imports for the industrial sector should support real GNP gains of about 6 percent in
1977.
Rapidly increasing earnings from oil, tourism, and Suez transit fees will offset
most of the rise in import costs this year. Thanks to discovery of a new high-pressure
areas in Amoco's July Field in the Gulf of Suez, Egyptian oil output has already risen
one-third over the 1976 level of 330,000 b/d and may approach 500,000 b/d by
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yearend. As a result, net foreign exchange earnings from oil should increase about
$300 million this year. Increased receipts from tourism plus another record increase
in Suez Canal revenues will boost net service earnings this year to $ l . l billion
compared with $900 million in 1976 and $450 million in 1975.
The 1978 Outlook and Beyond
The financial gap should begin to decline in 1978, dropping to perhaps $2.6
billion. The big change again will be in debt amortization costs, which should be cut
roughly in half, to $700 million. A projected $300 million gain in net oil receipts
will bring the current account deficit below $2 billion. for the first time since 1974.
This assumes (a) Cairo prices the bulk of imports at the depreciated exchange rate,
and (b) non-oil exports hold roughly steady. At this time, the major risk is that
falling cotton prices will offset the gain in other non-oil exports, which are 17ene-
fiting most from the currency change. As for financing we estimate that as much as
$1.5 billion in aid commitments have already been lined up for the next year.
This pattern of a diminishing external gap should hold through 1980..Aid
requirements will tend to shrink faster than the overall gap, especially if foreign
investment picks up in response to improvements in the Egyptian investment
climate. In any case, foreign investment in oil, tourism, and other sectors that
already have a high degree of foreign participation should continue to increase unless
political upheaval or war intervenes. Cairo will also be benefiting from increased
remittances from Egyptians working in other Arab countries.
With foreign exchange constraints thus eased, the economy should be able to
grow at about the 6-percent rate of 1975-77. Much of the growth will continue to be
concentrated in the Suez area and other "frontier" regions on the Red Sea coast and
west of Alexandria. Except in the case of tourism, growth in the interior will lag in
view of obsolete infrastructure and limited private investment opportunities.
Egypt's ability to sustain growth and payments gains beyond 1980 is question-
able. Quite likely the postwar tourist and canal traffic booms will be leveling off by
the end of the decade. If major new oil fields are not discovered quickly, growth in
oil output also may come to a halt. Tourism, oil, and increased private remittances
can help hold down the financial gap for several years. Nonetheless, Egypt over the
longer run will have to develop new export markets :in order to achieve sustained
growth of 6 percent and reasonable balance-of-payments stability. This in turn
would require rapid expansion of export-oriented industries-preferably labol?-in-
tensive-and accelerated development of the small :private sector. Although reform
measures taken by the Sadat government over the past several years provide some
incentives, more basic bureaucratic and institutional reforms are needed to spark
development of a broad-based private sector. (Confidential)
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SOVIET MERCHANT FLEET: LIMITED RESPONSE
TO PRICE-CUTTING COMPLAINTS
Faced with threats of retaliatory measures by US and other non-Communist
governments, the USSR is taking limited steps to end alleged unfair price cutting by
the Soviet merchant fleet.
The penetration by cut-rate Soviet liner services of key trade routes linking the
United States, Western Europe, and Japan has (a) boosted annual hard-currency
earnings of the Soviet fleet to more than $500 million, and (b) taken business away
from Western liner operators, who claim that Soviet rates do not cover costs.
Complaints by Western owners have led governments in the United States, Western
Europe, and Japan to consider legislation that would induce the Soviets to raise rates
and to join more conferences.* Some proposed laws would reduce or end Soviet
access to profitable routes if differentials between Soviet and conference rates
remain substantial. In response, Moscow has narrowed the differentials in certain
trades by raising its rates, but it has resisted pressures to join conferences. Most
Soviet liner rates are now within 10 to 15 percent of conference rates, a range
traditionally acceptable for independent lines.
Growing Prominence of Soviet Ships in Liner Trade
Soviet cargo liner services are the chief irritant to Western shipowners. The
Soviet Union controls the third largest liner fleet in the world, exceeded only by the
Greek and Japanese fleets. By mid-1977, the total number of Soviet international
lines* * had grown to 72, with 26 involved in the cross trades, that is, moving cargoes
between non-Soviet ports in competition with ships of other nations. Soviet ships
now carry roughly 2 percent of world liner cargo.
In managing its international liner services, the USSR has preferred to operate
as an independent outside the conference system. By late 1976, only seven Soviet
cargo lines were affiliated with conferences, and only one had joined a conference
since 1973. The USSR has avoided conference membership because it lacks ships
fast and modern enough to compete in terms of service, the principal form of
competition among conference members. As nonmembers, the Soviets are not
bound by conference rate structures and are free to compete by cutting rates.
The pace and extent of the USSR's penetration of key world liner routes are
best illustrated by its movement into US liner trades. Iiy focusing on shippers of
*A conference is an association of liner owners operating in a given direction on a given trade route. The
conference sets rates charged by its members and allots sailings among them. Other companies operating on the
same route are referred to as "outsiders" or "independents."
**A line is scheduled common carrier service for. movements of general cazgo on a prescribed trade route.
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containerized cargo for whom speed of delivery is not the prime consideration,
Soviet lines linking the United States with Western and Mediterranean Europe on the
Atlantic and with Japan and other Asian trading partners on the Pacific have taken
over almost 3 percent of US liner trade in the past six years. More than 95 percent
of Soviet carriage in US trade consists of cross-trade goods between the United
States and other trading partners (principally Western Europe, Japan, Hong Fong,
and Southeast Asia).
Soviet Carriage of Liner Cargo
in US Trade
1 Derived from unrounded data.
Western Response to Soviet Liner Practices
Price-cutting tactics in Soviet liner operations have generated complaints by
Western shipowners who have lost business to the Soviets. In response, various
Western governments have been studying the problem and some have taken steps to
check Soviet inroads.
Legislation already passed in the Netherlands and under consideration ir1 the
United States, West Germany, and Japan would curb Soviet lines serving those
countries if excessively low rates persist. The Kremlin cannot afford to ignore these
developments, which might jeopardize Soviet hard-currency earnings of a half billion
dollars annually.
The USSR has recently reduced its differentials on two of the three major liner
routes where hard-currency earnings have been greatest, namely, on the North
20 1 September .1977
In Soviet Ships
Total US
Liner Trade
(Million
Tons)
Tonnage
(Million
Tons)
Percents
1971
44.2
0.2'
0.4
1972
44.6
0.4
0.8
1973
51..3
O.S'
0.9
1974
51.4
1.1
2.1
1975
44.3
1,0
2.3
1976
50.0
1.4,
2.9
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Pacific between the United States and Japan and in Japanese/European trade. On
the third major route, the North Atlantic, differentials are already within the 10 to
15 percent range traditional for nonconference operators. Efforts to get the Soviets
to increase their participation in the conference system have not been as successful
as those to narrow the gap between Soviet and conference rates.
On the North Pacific
In May 1977, the Soviet-owned Far East Steamship Company (FESCO)
announced a general rate increase of about 15 percent on the North Pacific. This
change brought FESCO's rates to within 10 percent of the higher conference rates.
FESCO had previously eliminated some paper rates-charges for commodities not
actually moving in the trade-and had altered commodity classifications to make
rate increases easier.
In July 1976, the Soviets had entered into an understanding with Chairman
Bakke of the US Federal Maritime Commission (FMC) eventually to bring into
conferences all their lines involved in US trade. Efforts to enroll key Soviet lines on
the North Pacific nonetheless have been fruitless. For instance, at a series of four
meetings with leading Pacific conference lines between October 1976 and January
1977, FESCO refused to place its Japan - US West Coast lines in conferences.
One of the USSR's standard excuses for remaining outside of the North Pacific
conferences is the inability of its ships to compete on equal terms. To illustrate, even
though FESCO operates three of the USSR's best containerships (units of the
Khudozhnik Saryan class), these 14,000-dwt, 21-knot vessels are inferior in both
speed and size to the best Western containerships on the route. Furthermore, even
these not-up-to-scratch containerships account for less than a third of the capacity
assigned to the USSR's container lines on the route. Conventional cargo liners
predominate.
The North Atlantic is the second major trading area served by Soviet liners. The
differential there between Soviet and conference rates has never deviated greatly
from the 10 to 15 percent traditional for outsiders. At the same time, at least one
other independent on the route is charging even lower rates. As a result, less pressure
has been put on the Soviets to narrow the differential.
In July of this year, Soviet plans to join seven conferences in the North
Atlantic trade between the United States and Western Europe were scuttled. Two of
the conferences were seeking FMC approval of a scheme that would have permitted
Soviet lines to join the conferences while charging lower rates than other conference
members. This two-tier arrangement-to last until Soviet equipment and service were
1 September 1977 SECRET
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brought up to conference standards-had been challenged by the US Departments of
Justice and Transportation as a deterrent to competition. Faced with drawn-out
hearings and negotiations, the two conferences decided that pursuit of special status
for the Soviets was no longer worth the time and expense.
Because Soviet entry into the additional five conferences-originally agreed to
at a meeting in Amsterdam with the major North Atlantic conferences in September
1976-was part of a package deal involving the other two conferences that have been
challenged, the USSR will apparently not join them either. The two conferences that
offered the Soviets special status control the most important segment of the
trade-that between US east coast ports and Continental ports from Antwerp to
Hamburg. The other five cover routes to Scandinavia, the United Kingdom, and
France where traffic volumes are lower. The USSR was willing to accept regular
status (and conference rates) from these five in return for special status in the two
key conferences.
The Soviets refused to join the Continental conferences without authorization
to continue charging lower rates because ships of its Baltic Steamship Company
assigned to North Atlantic service cannot compete with the ships of the conference
lines. Most liner cargoes crossing the Atlantic are containerized. The conference
ships assigned are fast, modern, cellular containerships tailored for the trade. Almost
two-thirds of the Soviet tonnage on the route consists of slow, inefficient,
conventional cargo liners. The other third consists of advanced roll-on/roll-off ships
capable of carrying containers but designed primarily for vehicles and other wheeled
cargo. Although transit times of these ro/ro ships are competitive, their growing
involvement with vehicular cargoes reduces their ability to compete with
containerships.
Between Japan and Europe
As for trade between Japan and Europe, Soviet rate cutting an the
Trans-Siberian Landbridge-a through service for containerized cargo moving
between Western Europe and Japan using both Soviet railways and container
lines-affects conference lines on the all-sea route. I:n the past, the Landbridge has
attracted cargoes with rates as much as 40 percent below those of the all-sea
conference lines. Last April, however, its rates were raised to within 10 percent of
conference rates. A subsequent rise in conference rates widened the differential
again, but it remains smaller than at any time prior to April 1976.
Soviet lines will generally remain outside of the conference system, charging
rates 10 to 15 percent below conference rates, so long as (a) the Soviet liner fle;ets in
the North Atlantic and North Pacific trades remain uncompetitive or (b) the Soviets
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cannot arrange for a two-tier pricing system within the conferences. During talks
with British officials in London in June, Soviet Minister of the Maritime Fleet
Guzhenko told reporters that FESCO container lines on the North Pacific would
remain independent until all of their conventional ships have been replaced by
modern containerships. With deliveries of such ships running between one and two
per year, FESCO may not join the conferences until 1979. Despite plans to put
cellular containerships on the North Atlantic routes, membership in those
conferences may come no sooner.
The USSR will have a strong incentive to keep most of its rates within i 5
percent of conference rates to preserve the vital hard-currency revenues accruing
from participation in the key trades that link the United States, Western Europe,
and Japan. Rate cutting in excess of this figure would only mean increased
retaliatory measures, a development Moscow cannot afford, especially at this time of
ahard-currency squeeze. (Confidential)
Sino-Soviet Trade: No Big Deals
Both the value and the volume of Sino-
Soviet trade are likely to fall this year. Soviet
statistics for first half 1977 show two-way
trade running at about 75 percent of the level
for the corresponding period in 1976. With
the recent stabilization of economic policy in
Peking, both Chinese imports from and ex-
ports to the USSR probably will pick up for
the remainder of the year. Indeed, Chinese
and Soviet diplomats have stated privately
that trade will be only slightly lower than in
1976.
The Chinese have not received any So-
viet aircraft since second half 1976, when the
Million US $
Exports To
Imports From
1975
1st half
42
39
2d half
108
90
1976
1st half
85
86
2d half
93
152
1977
1st half
66
60
last known contract (for AN-26 and AN-30
transport aircraft) was fulfilled. Last year the Chinese informed the Soviets that they
would not buy any aircraft or power-generating equipment from the USSR, items
that in the past have comprised about one-third of Soviet exports to China. A recent
report suggests that the Chinese may buy three more AN-30s-a very small number
compared with previous years. Peking probably cut purchases because the Soviets
demanded too high a price.
1 September 1977 SECRET
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In 1976, the value of trade (measured in current YJS dollars) increased about 50
percent over 1975. A trade imbalance developed with Soviet exports-$238 million-
substantially exceeding Chinese exports-$178 million. The real value of trade
(measured in 1970 US dollars) increased only about 15 percent over 1975, with the
entire increase attributable to higher Soviet exports. The volume of Chinese exports
almost certainly declined; transportation tieups in northeast China resulting from
the Tangshan earthquake delayed planned deliveries of Chinese goods to the Soviet
border in the second half of the year. (Secret Noforn)
Guyana: Economic Problems Mount
Guyana's economic difficulties, brought on by a foreign exchange shortage,
have worsened markedly in recent weeks. Mounting industrial layoffs and labor
strife, including a sugar strike called last week by the .Marxist opposition, have
boosted the unemployment rate- beyond 20 percent and spell growing political
trouble for Prime Minister Burnham.
Depressed export earnings have shown little improvement. Continuing low
sugar prices are overshadowing the gains from a record spring rice crop and slowly
rising bauxite sales. We expect that existing import restrictions will cut imports by
16 percent from last year, reducing the record current account deficit by about
two-fifths in 1977, to roughly $105 million.
Even though the current account deficit is smaller, Guyana this year faces a
foreign payments gap of about $50 million, as yet uncovered by foreign funds. Cross
foreign exchange holdings reportedly are down to less than $20 million-only three
weeks' import cover-and will provide little help. Hope is rapidly fading for $45
million from Trinidad and Tobago, which recently canceled a similar offer to
Jamaica. Unless Guyana can garner additional foreign financing, tougher import
controls will be necessary. The result would be a further economic slowdown and
more bitter labor strife. (Confidential)
* * * ~
Publications of Interest*
OPEC Countries: Size and Distribution of Official Foreign Assets on
31 December 1976 (ER 77-10464, August 1976, Secret Noforn)
This memorandum examines the pattern of investment by OPEC countries
during 1976 and presents detailed estimates of the distribution of official foreign
assets by type of investment, location, and currency denomination.
25X'~A
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OECD Countries: Medium-Term Economic Prospects and Some Alternative
Policy Scenarios (ER 77-1 OS 17, August 1977, Confidential)
This report discusses likely trends in GNP, inflation, unemployment, and
balance of payments in OECD countries during 1977 and 1978. Emphasis is placed
on economic activity and government policy in the major foreign developed
countries.
1 September 1977 SECRET
25X6
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Secret
Secret
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ECONOMIC INDICATORS
Prepared by
The Office of Economic Research
ER EI 77-035
1 September 1977
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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 2002/01/29 :CIA-RDP79B00457A000200010001-0
1. The Economic Indicators 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 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 are revised every few months. The most
recent date of publication of source notes is 20 April 1977. Comments and queries
regarding the Economic Indicators are welcomed.
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INDEX: 1970=100, seasonally adjusted
1974 1975 1976
A-2
Semilogarithmic Scale
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United Kingdom
Italy
Percent AVERAGE ANNUAL
Change GROWTH RATE SINCE
from
LATEST Previous 1 Year 3 Months
MONTH Month 1970 Earlier Earlierl
JAN APR JUL OCT
1976
Percent AVERAGE ANNUAL _
Change GROWTH RATE SINCE
from
LATEST Previous 1 Year 3 Mon[hs
MONTH Month 1970 Earlier Earlierl ~.
United States JUL 77 0.5 3.7 6.4 10.4 United Kingdom JUN 77 -5.1 O.1 O..z - 5.6
~lapan JUN 77 0.5 3.9 3.4 3.0 ! Italy JUN 77 -7.2 2.7 3.a -16.9
'!; West Germany JUN 77 1.8 2.2 3.6 -6.6 Canada JUN 77 0.3 4.1 4. 1.4
France JUN 77 2.4 3.6 4.1 -6.1 i
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U N E M PLO I~A E NT PERCENT OF LABOR FORCE
United States
JAN APR JUL OCT JAN APR JUL OCT
APR JUL OCT
1974
APR JUL OCT JAN ApR JUL OCT JAN APR JUL OCT
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I
I
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United Kingdom
Italy (quarterly)
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT lAN APR JUL OCT
1973 1974
THOUSANDS OF PERSONS UNEMPLOYED
JAN APR JUL OCT' JAN APR JUL OCT
1976 1977
1 Year
3 Months
LATEST MONTH
1 Year
Earlier
3 Months
Earlier
LATEST MON
TH
Earlier
Earlier
United Kingdom
AUG 77
1,414
1,309
1,316
United States
JUL 77 6,744
7,406
6,737
Japan
MAY 77 1,140
1,120
1,030
Italy
76 IV
777
699
176
Canada
JUN 77
847
722
856
West Germany
JUL 77 1,049
1,050
1,009 _
France
JUL 77 1,180
950
1,039
'NOTE: Data are seasonally adjusted. Unemployment. rates for France are estimated. The rates shown. for Japan, Italy and Canada are
15 pelrcentnPespect vely endtthose for West Germany dec~eas d by 20percentitodbe roughly comparable witheUS ratesercent and
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1-~ t INDEX: 1970=100
Wholesale
iWholesale price indexes cover industrial goods.
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United Kingdom
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 Approved For Release 2002/0
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GNP '
Constant Market Prices
Constant Prices
Average
Average
Annual Growth Rate Since
Anr;ual
Growth Rate Since
Percent Change
_
Percent Change
-.
Latest
from Previous 1 Year Previous
-
Latest
from Previous
1 Year
3 Months
Quarter
C!uarter 1970 Earlier Quarter
Month
Month
1970
Earlier
Earlier'
United States 77 II
1.6 3.2 4.7 6.4
United States
Jun 77
- 0.2
3.2
4.1
3.3
Japan 77 I
2.5 5.5 4.9 10.2
Japan
Apr 77
3.1
10.7
6.4
16.0
West Germany 76 IV
1.8 2.5 4.5 7.3
West Germany
Jun 77
0.9
2.4
4.4
-8.7
France 76 IV
0 3.9 4.9 0
France
May 77
- 1.1
- 1,4
- 7.1
- 13.2
United Kingdom 76 IV
2.1 2.0 2.6 8.8
United Kingdom
1ul 77
3.6
1.2
- 1.2
4.6
Italy 76 IV
4.8 3,4 9.4 20.6
Italy
Mar 77
0.2
2.9
-0.3
16.3
Canada 76 IV
-0.6 4.8 3.4 -2.5
Canada
May 77
-0.8
4,2
1.8
- 13.6
' Seasonally adjusted.
' Seasonally adjusted.
' Average _for latest 3
months compared with average for previous 3 mon
ths.
FIXED INVESTMENT'
WAGES: IN MANUFACTURING'
Non-residential; constant prices
Average
Annul Grawrh Rare since
Average
Percent Change
_
Annual Growth Rate Since
Latest
from Previous
1 Year
3 Months
Pertenf Change
Period
Period
1970
Earlier
Earlier'
Lofesf
from Previous 1 Year Provious
Quarter
Quarter 1970 Earlier quarter
United States
Jul 77
0.6
7.5
7.6
8.1
United States 77 II
2.2 2.1 9.6 9.0
Japan
May 77
1.4
17.3
10.6
7.3
Japan 77 I
0.2 0.9 3.9 0.8
West Gerrnany
77 I
4.0
9.6
7.7
17.1
West Germany 76 IV
3.3 1.1 5.0 13.8
France
77 I
2.3
14.1
13.9
9.5
France 75 IV
8.8 4.2 2.9 40.1
United Kingdom
Jun 77
0.3
15.7
3.4
3.6
United Kingdom 77 I
-2.4 -0.2 2.0 -9.2
Italy
May 77
5.3
21.1
29.4
33.2
Italy 76 IV
10.6 3.1 15.7 49.6
Canada
Apr 77
0.8
11.4
11.6
13.4
Canada 76 IV
8.5 6.8 5.1 38.7
'Hourly earnings (seasonally adjusted) for the United Stat
es, Japan, and Canada;
hourly wage
rates for others. Wesf German and F
rench data refer
to the beg
inning of t
he quarter.
' Seasonally adjusted.
'Average for latest 3
months compared with that for previews
3 months.
MONEY MARKET RATES
Pertenf Rate of Interest
1 Year
3 Months
1 Month
Representative rates -
Latest date
Earlier
Earlier
Earlier
United States
Commerical paper
Aug 24 5.89
5.35
5.50
5.38
Japan
Call money
Aug 26 5.75
7.25
5.38
5.75
West Germany
Interbank loans (3 months)
Aug 24 4.06
4.50
4.33
4.12
y
France
Call money
Aug 26 8.25
9.56
9.00
8.63
United Kingdom
Sterling interbank loans (3 months)
Aug 24 6.60
11.08
7.83
7.74-
f
Canada
Finance paper
Aug 24 7.47
9.40
7.13
7.28
Eurodollars
Three-month deposits
Aug 24 .6.36
5.63
6.70
5.78
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US $
National Currency
Average
Average
Annua
l Growth Rata Since
Annual
Growth Rate Since
Pe
rcent Change
Percent Change
Latest fr
om Previous
7 Year
3 Months
Latest fr
om Previous
1 Year 3 Months
Month
Month
1970
Earlier
Earlier
Month
Month
1970
Earlier Earlier
United States
Jun 77
- 0.4
9.8
5.6
2.5
United States Jun 77
- 0.4
9.8
5.6 2.5
Japan
Jun 77
2.0
10.8
14.9
10.1
Japan Jun 77
0.4
6.5
4.7 - 1.0
West Germany
Jun 77
-0.5
11.3
11.6
5.4
West Germany Jun 77
-0.5
4.5
2.0 -0.9
France
May 77
0.9
11.3
7.1
3.6
France May 77
0.6
9.5
12.8 1.3
United Kingdom
Jul 77
0.6
10.6
12.9
11,1
United Kingdom Jul 77
0.4
16.0
17.0 9.7
Italy
Mar 77
0.5
11.3
16.9
16.7
Italy Mar 77
- 1.1
16.8
22.9 17.1
Canada
Apr 77
2.9
10.1
10.9
24.7
Canada Apr 77
2.9
8.5
7.2 7.1
IMPORT PRICES
National Currency
OFFICIAL RESERVES
Average
Annual
Growth Rate Since
Billion US S
Per
cent Change
Latest Month
latest from Previous
1 Year
3 Months
1 Year 3 Months
Month
Month
1970
Earlier
Earlier
End of
Billion US $
Jun 1970
Earlier Earlier
United States
Jun 77
- 1.4
13.5
7.9
2.1
United States Jun 77
19.2
14.5
18.5 19.1
Japan
Jun 77
-0.8
10.9
0.3
- 14.8
Japan Jun 77
17.4
4.1
15.4 17.0
West Germany
Jun 77
-0.1
4.4
1.7
3.0
West Germany May 77
34.3
8.8
33.6 34.5
France
May 77
- 0.5
10.5
17.4
2.5
France Mar 77
9.8
4.4
11.1 9.7
United Kingdom
Jul 77
0.7
19.7
15.7
6.6
United Kingdom Jun 77
11.6
2.8
5.3 9.7
Italy
Mar 77
- 1.9
21.2
24.6
25.8
Italy Sep 76
5.1
4.7
5.8 5.2
Canada
Apr 77
1.1
9.3
8.5
10.3
Canada May 77
5.2
4.3
5.8 5.3
CURRENT ACCOUNT BALANCE '
BASIC BALANCE '
Current and Long-Term-Capital Transactions
Cumulati
ve (Million US $)
Latest
Cumulat
ive (Million US $)
Period Mill
ion US 8 1977
1976
Change
Latest
Period Million US $
1977
1976 Change
United States z
77 I -4,317 -4,317
540
-4,857
United States
No longer published ~
Japan
Jul 77
1,530 4,637
1,242
3,395
Japan Jul 77
1,340
3,493
1,629 1,864
West Germany
Jul 77
-566 1
,618
1,188
429
West Germany Jun 77
-630
- 1,256
1,105 -2,361
France
77 I - 1,660 - 1
,660
1,316
-345
France 77 I
- 1,351
- 1,351
-2,015 663
United Kingdom
77 I
-773 -773
-502
-271
United Kingdom 76 IV
-277
N.A.
N.A. N.A.
Italy
76 IV
-882
N.A.
N.A.
N.A.
Italy 76 III
779
N.A.
N.A. N.A.
Canada
77 I - 1,624 - 1
,624
1,911
287
Canada 77 I
-583
-583
882 - 1,465
'Converted to US dollars at the current market rates of exchange.
' Converted to US doll
ars at the currant market rates of exch
ange.
' As recommended by the Advisory Com
mittee on the
Presentation
of Balance of Payments
' Seasonally adjusted.
Statistics, fha Department of Commerce
no longer pu
blishes a basic balance.
EXCHANGE RATES
TRADE-WEIGHTED EXCH
ANGE
RATES '
Spot Rate
As of 26 Aug 77
Percent Change from
Percent Change from
As, of 26 Aug 77
US $
1 Yeor
3 Months
1 Year
3 Months
Par Unit
19 Mar 73
Earlier
Earlier
19 Aug 77
19 Mar 73
Earlier
Earlier
19 Aug 77
Japan (yen)
0.0037
- 1.53
8.08
3.74
0.03
United States 6.06
1.27
-0.09
-0.19
West Germany
0.4321
22.02
9.03
1.76
0.56
Japan 4.25
10.25
3.74
-0.15
(Deutsche mark)
West Germany 25.76
6.83
1.24
0.26
France (franc)
0.2040
- 7.46
0.91
0.89
0.24
France - 7.86
- 2.42
0.35
- 0.12
United Kingdom
1.7418
- 29.22
- 1.59
1.40
0.09
United Kingdom - 29.85
- 3.25
1.17
- 0.19
(pound sterling)
Italy - 38.69
- 7.74
- 0.34
- 0.20
Italy (lira)
0.0011
-35.93
-4.55
0.44
0.18
Canada -4.69
-8.87
-2.25
0.04
Canada (dollar)
0.9307
-6.72
-8.44
- 1.95
O.IU
~ Weighting is based on each listed count
ry's trade wi
th 16 other i
ndustrialized countries to
reflect the competitive impact of exchang
e rate varia
tions among
the major currencies.
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Developed Countries: Direction of Trade'
(Continued)
Exports to (f.o.b.)
Imparts from (c.i.f.)
Big
Other
Com-
Big
Other
Com-
World
Seven
OECD
OPEC'
munist
Other
World
Seven
OECD
OPEC z
munist
Other
ITALY
1974 ........... . . 30,261
13,796
7,681
2,427
1,721
4,636
40,977
18,003
7,216
9,313
1,944
4,501
1975 ............. 34,230
15,345
7,468
3,710
2,895
4,812
37,793
17,072
6,367
6,993
2,304
5,057
1976 ............. 35,364
16,698
8,276
4,165
2,591
3,634
41,789
18,585
7,759
8,124
3,000
4,321
1st Qtr ........ 7,398
3,513
1,713
811
597
764
9,092
4,063
1,708
1,816
608
897
2d Qtr ........ 8,705
4,157
2,040
958
623
927
10,716
4,786
1,918
2,106
744
1,162
3d Qtr ........ 9,398
4,808
2,191
1,056
656
990
10,335
4,497
1,860
2,029
792
1,157
4th Qtr ........ 9,863
4,523
2,332
1,340
715
953
11,646
5,239
2,273
2,173
856
1,105
1977
1st Qtr ........ 9,668
4,520
2,264
1,236
655
993
11,299
4,964
2,130
2,166
720
1,319
CANADA"
1474
............. 32,904
27,092
2,004
548
659
2,601
33,309
26,727
1,777
2,698
257
1,850
1975
............. 32,201
26,582
1,689
700
1,153
2,077
35,435
27,887
1,621
3,174
310
2,443
1976
............. 36,840
30,783
2,077
928
1,259
1,793
38,705
31,118
2,034
3,154
369
2,030
1st
Qtr ........ 8,422
7,103
381
167
328
443
9,404
7,572
473
868
87
404
2d
Qtr ........ 9,964
8,408
480
184
346
546
10,244
8,174
683
930
96
361
3d
Qtr ........ 9,112
7,465
576
270
349
452
9,378
7,417
473
715
96
677
4th
Qtr ........ 9,342
7,807
640
307
236
352
9,679
7,955
405
642
90
587
1977
1st Qtr ........ 9,670
8,201
524
230
231
484
10,025
8,164
406
772
90
593
'Data are unadjusted. Because of rounding, components may not add to the totals shown.
z Including Gabon.
Import data are f.a.s.
Import data are f.o.b.
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FOREIGN TRADE BILLION us $, f.o.b., seasonally adjusted
United States
14.0
12.0
Japan
Approved For Release - -
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United Kingdom
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FOREIGN TRADE PRICES IN US $1
United States
West Germany
INDEX: JAN 1975 =100
lExport and import plots are based on five month weighted moving averages.
A-14
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United Kingdom
Italy
Canada
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 ApproSEIECTEDs DE~L~F'I~RD~7~~o~~~~~g2ooo10001-0
MONEY SUPPLY'
INDUSTRIAL
PRODUCT
ION '
Average
Annual
Growth Rata
Since
Average
Percent Change
Annual Growth Rate
Since
latest
from Previous
1 Year
3 Months
Percent Change
Month
Month
1970
Earlier
Earlier'
Lofesf
from Previous
1 Year 3
Months
Period
Period
1970 Earlier
Earlier ~
Brazil
Jan 77
- 3.1
35.5
28.2
49.6
Brazil
76 II
0.1
11.0 10.7
0.4
Egypt
Apr 77
1.2
18.4
23.0
45.3 ,
India
Feb 77
3.5
5.5 6.9
18.7
India
Mar 77
1.8
12.3
20.5
16.6
South Korea
Jun 77
8.3
22.7 14.3
21.6
Iran
Mar 77
14.5
30.4
52.2
41.1
Mexico
Apr 77
0.6
5.6 0.4
17.5
South Korea
May 77
3.4
3'1.3
35.0
59.6
Nigeria
76 IV
0.2
11.3 9.0
0.7
Mexico
Jun 76
-0.3
17.0
16.6
19.6
Taiwan
Apr 77
1.9
14.9 12.7
-8.4
Nigeria
Feb 77
5.9
3.5.9
54.8
65.1
Taiwan
Mar 77
-0.2
24.4
21.2
24.0
' Seasonally adjusted
.
Thailand
Feb 77
4.0
13.6
17.1
12.9
~ Average for latest
3 months comp
ared with average
for previous 3 months
.
Seasonally adjusted
.
' Average for latest 3 months comp
ared with average for previous 3 months.
CONSUMER PRICES
`
WHOLESALE
PRICES
Average
Average
Annual Growth R
ate Since
Annual Growth Rate Since
Percent Change _
Percent Change
Latest
from Previous
1 Year
Latest
from Previous
1 Year
Month
Month
1970
Earlier
Month
Month
1970
Earlier
Brazil
Apr 77
3.3
26.6
44.4
Brazil
Apr 77
4.3
27.3
45.9
India
Mar 77
0.6
8.2
9.1
India
Mar 77
0.2
9.3
11.9
Iran
May 77
2.6
12.4
29.3
Iran
May 77
1.8
11.0
22.2
South Korea
Jun 77
1.0
14.6
10.1
South Korea
Jun 77
0.8
16.6
9.1
Mexico
Jun 77
1.2
14.7
32
5
.
Mexico
Jun 77
1.0
16.5
50.9
Nigera
Jan 77
4.5
15.0
13.5
Taiwan
May 77
0
9.2
4.4
Taiwan
May 77
0.4
10.4
3.0
Thailand
Mar 77
0.9
10.0
2.7
Thailand
Mar 77
0.6
8.4
3.0
EXPORT PRICES
OFFICIAL RESERVES
US ,$
Million US $
Average
Latest Month
Annual Growth Rate Since
1 Year
3 Months
PercenT Change
End of
Million US $
Jun 1970
Earlier
Earlier
Latest
from Previous
1 Year
3 Months
Brazil
Feb 77
5,873
1,013
3,667
5,139
Period
Period
1970 Earlier
Earlier
Egypt
Apr 77
405
158
375
389
Brazil
Oct 76
-0.4
14.5 26.5
77.0
India
May 77
4,431
1,006
2,258
3,481
India
Sep 76
-3.8
9.2 b.4
-b.b
Iran
Jun 77
11,025
208
8,621
10,355
Iran
May 77
0
36.5 18.6
0
South Korea
May 77
3,519
602
1,911
2,872
South Korea
77 I
1.7
8.8 11.9
6.9
Mexico
Mar 76
1,501
695
1,479
1,533
Nigeria
May 76
-0.1
33.2 8.2
6.6
Nigeria
May 77
4,740
148
6,087
4,937
Taiwan
May 77
0.4
12.3 9.4
14.7
Taiwan
Apr 77
1,289
531
1,146
1,581
Thailand
Dec 76
2.0
13.3 13.1
77.7
Thailand
Jun 77
2,017
978
1,896
1,981
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FOREIGN TRADE, f.o.b.
Latest 3 Months
Percent Change from
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 A ppr~oved For Release 2002/01/29 :CIA-RDP79B00457A000200010001-0
AGRICULTURAL PRICES MONTHLY AVERAGE CASH PRICE
24 AUG 2.32
17 AUG 2.28
JUL 77 - 2.35
AUG 76 3.21
5 $ PER BUSHEL
Kansas City Na. 2 Hard Winter Chicago No. 2 Yellow
'250
1.24 AUG 1.24 AUG --
1973 1974 1975 1976 19 II 0 0 1973 1974 1975 1975 19 II
24 AUG ~ 5.39
17 AUG ~ 5.36
JUL 77 6.33
AUG 76 6.30
1.O $ PER POUND
Memphis Middling 1 1/i6"
24 AUG ' 0.5335
17 AUG :0.5255
JUL 77 ' 0.5938
AUG 76 - 0.7536
24 AUG 7.55
17 AUG 7.50
JUL 77 7.36
AUG 76 9.99
;;1,000
I I 1-2a AuG 1 1
n n
COFFEE/TEA
$ PER METRIC.TON 400 q PER POUND
TEA COFFEE
2,000 London Auction Milds Washed
- ""
25 JUL -
84.7
24 AUG
18 JUL
92.7
Y7 AUG
300
JUN 77
142.00
JUL 77
'.:1,500
JUL 76
80.00
AUG 76
0.5360
250
1,000
24 AUG 1.77
- 17 AUG 1.77
JUL 77 2.07
I AUG 76 2.86
2
1.82
1973 1974 1975 1976 19~I 0 50
205.00
205.00
242.88
153.05
$ PER METRIC TON
6,000
Approved For-Release -
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37.5 $ PER HUNDRED JVEIGHT.
No, 2 Medium Grain, 4% Brokens,
f.o.b. mills, Houston, Tex.
22 AUG 14.75
30.0 _i: _ M` 15 AUG 14.75
COCOA
325 ~ PER POUND
80 II
1973 1974 1975 1976 1977
SOYBEAN OIL
$ PER METRIC TON $ PER POUND
7,000 0.5
NOTE: The food Index is compiled by the Economist for 16 food commodities
which enter international trade. Commodities are weighted by
3-year moving averages of imports into industrialized countries.
JUL 77 15.25
AUG 78 14.50
SOYBEAN MEAL
$ PER TON
800
Cr~de, Tank Cars, f.o.b. Decatur
400'
24 AUG - 137.50
17 AUG 133.00
JUL 77 163.35
AUG 76 175.27
$ PER METRIC TON
__ __ - .400
139.79
1-24 AUG
?200 160'
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INDUSTRIAL MATERIALS PRICES M?NTHLY AVERAGE CASH PRICE
40 1973 1974 1975
1-24 AUG +
_LI 200
1974 1975 1971!3 1977
1-24 AUG ~ I 11,000
1976 1977 10'
24 AUG 82.2
17 AUG 62.5
JUL 77 62.8
AUG 76 g0.9
PER METRIC TON $ PER TROY OUNCE
...._.,150 250.
-=125 225
LEAD
45 ~ PER POUND
$ PER METRIC TON 1'000
24 AUG - 25.1 - 31.0
17~AUG 24.6 31.0
JUL 77 25.3 31.0
AUG 76 21.9 - 25.0
-600
gas '
25 '>
1,500 20 '
6a.a
52.6 15
Y00 200
-- --
II
19II7 0 100 1973 1974 1975 1976 1977
nnP usD
24 AUG 167.0 145.6
17 AUG 167.0 :146.1
JUL 77 167.0 149.5
AUG 76 .180.0 157.9
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 Approved For Release 2002/01/29 :CIA-RDP79B00457A000200010001-0
ALUMINUM
Major US Producer
E per pound
53.00
48.00
47.09
40.43
US STEEL
Composite
$ per long tan
357.08
339.27
327.00
289.23
IRON ORE
Non-Bessemer Old Range
$ per long ton
21.43
20.97
20.05
18.75
CHROME ORE
Russian, Metallurgical Grade
$ per metric ton
150.00
150.00
150.00
142.50
CHROME ORE
S. Africa, Chemical Grade
$ per long ton
58.50
42.00
42.00
42.70
FERROCHROME
US Producer, 66-70 Percent
E per pound
43.00
43.00
44.55
53.50
NICKEL
Malor US Producer Cathode
$ per pound
2.20
2.41
2.20
2.01
MANGANESE ORE
48 Percent Mn
$ per long tan
72.00
72.00
72.00
67.20
TUNGSTEN ORE
65 Percent W03
$ per short ton
9,788.68
10,015.64
7,166.26
5,184.16
MERCURY
NY
$ per 76 pound flask
115.00
167.55
110.00
140.00
SILVER
LME Cash
t per troy ounce
440.13
453.72
425.61
493.94
GOLD
London Afternoon Fixing Price $ per troy ounce
143.84
136.31
109.65
163.08
LUMBER INDEX6
160
CPYRGHT
10 1973
100 -1973 1974
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1Approximates 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 Ib composite."
40uoted on New York market.
5S-type styrene, US export price.
6This index is compiled by using the average of 13 types of lumber whose
prices are regarded as "bell wethers" of US lumber construction costs.
7Composite 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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