ECONOMIC INTELLIGENCE WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79B00457A000200020001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 50
• Document Creation Date: December 12, 2016
• Document Release Date: January 8, 2002
• Sequence Number: 1
• Publication Date: September 8, 1977
• Content Type: REPORT

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Secret
Economic Intelligence Weekly
Secret
ER EIW 77-036
8 September 1977
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? 5B(1), (2), and (3)
Automatically declassified on:
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Noforn-Nocontract
8 September 1977
25X6
25X6
North-South Dialogue: Back to the Table . . . . . . . . . . . . . . . .
Discussions between representatives of the industrialized countries and the
LDCs will resume in earnest this month, with particular attention going to
three issues-the common fund for commodities, LDC debt relief, and the
US "basic human needs" proposal.
France: Barre Program Yields Mixed Results . . . . . . . . . . . . . . .
The Prime Minister hopes next week's visit to Washington will generate
favorable publicity to help offset the political impact of disappointing
economic trends.
Cuban Nickel: Excellent Hard Currency Earnings Potential . . . . . . . . .
In the event of full normalization of US-Cuban commercial relations, Cuba
could quickly boost hard currency earnings from nickel exports-from $45
million annually to as much as $125 million.
EC Inroads into US Steel Market . . . . . . . . . . . . . . . . . . . .
European Community producers, pressed by sluggish demand at home,
more than doubled steel shipments to the United States in first half 1977
compared with first half 1976.
Notes
USSR: Railroads Fail To Deliver Needed Fuels and Ores . . . . . . . 20
Mauritania: Military Expenditures Strain Economy . . . . . . . . . . 21
J
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Noforn-Nocontract
The North-South dialogue, which last peaked at the Conference on Interna-
tional Economic Cooperation (CIEC) meetings in May and June, will resume in
earnest this month. In the United Nations and various associated bodies, three
issues-UNCTAD's common fund for commodities, LDC debt relief, and the US
"basic human needs" approach-will be on center stage this fall. Agreements that
would entail profound change in the international economic order are unlikely this
year because:
? The North-generally committed to a slower pace of changes-had
captured and retains the initiative in the exchanges because of its more
forthcoming stance at the last CIEC meetings.
? The countries of the South, whose economic interests vary widely, find
difficulty in crystallizing their positions, the more so as the issues become
more concrete.
? Several of the most pressing LDC demands have already been scheduled
for extended discussion in particular UN bodies.
Both industrialized and developing countries will probably take a bargaining
approach in preference to confrontation. Nonetheless sizable gaps remain between
LDC proposals and the industrialized countries' responses.
Changes in the Dialogue During the CIEC Period
In the past two years, the North-South dialogue has moved from recurrent
acrimony to moderate-if not always sympathetic-exchanges. There have been
several major factors in this evolution.
? The CIEC meetings themselves, coming after a series of unilateral
demands and proclamations from the South, provided a forum for more
rational consideration of the key economic issues. As discussions became
more detailed, the LDC representatives found it increasingly difficult to
assure that all of their constituency could be satisfied by any particular
resolution. This process of education, bargaining, and negotiation had a
sobering effect on the more radical elements in the dialogue.
Note: Comments and queries re ardin Economic Intelligence Weekly are welcome. For the text, they may
be directed to f the Office of Economic Research, for the
Economic Indicators, to of the OER,
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? The LDCs now view global economic conditions as less threatening.
New institutional arrangements in multilateral finance, greater flows of
private capital, and the vigorous use of import restraints generally have
brought these countries through the global recession with less-than-ex-
pected setbacks to their development plans. For most, foreign exchange
reserves are back to previous norms, exports are up, and real GNP growth
is close to trend rates.
? LDC expectations that OPEC would use its power to uncritically
support LDC demands have steadily declined.
? Expressions of concern by the new US administration-including efforts
to avoid import controls, support for expanding the World Bank's capital
base, and support for a common fund-and the ongoing review of US-LDC
relations have encouraged a belief that the United States is working
seriously to meet key needs.
This fall's North-South talks will get under way in the reconvened 31st UN
General Assembly (13-16 September), which is dedicated to a review of the accords
reached last June at CIEC. These four days will at most allow countries on both
sides to present their versions of "successes" and "failures" and to indicate priorities
and approaches for future discussions.
Last December, when it became necessary to postpone CIEC's conclusion until
1977, the 31st General Assembly was also extended so that it could review the
conference. The LDCs left open the implicit threat that rhetoric and discord could
be expected in New York if CIEC failed. Because of CIEC's progress in several key
areas, we do not expect the LDCs to push for confrontation; indeed, most pf them
now express the view that CIEC produced limited but real gains.
? The industrialized countries showed a willingness to negotiate.
? A political commitment to a common fund was achieved.
? The $1 billion special action program got off the ground.
The LDCs will, of course, argue that these measures and other agreements at
CIEC fell far short of meeting their needs. Although little evidence exists, we expect
that some LDC representatives will use next week's session to voice their displeasure
at the industrialized countries' refusal to accept a broader list of LDC demands.
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The industrialized countries regard CIEC results as progress in understanding
each side's concerns. They consider that the concessions necessary to avoid a
confrontation were not too costly. These countries will stress that CIEC decisions in
support of a common fund, the $1 billion special action program, and agreements to
consider measures in trade and finance were steps toward a new international order.
They will probably voice disappointment at the refusal of the LDCs to agree to an
energy dialogue and to accept the improved debt relief procedures offered jointly by
the United States and the EC. The industrialized nations will affirm their
commitment to continue' discussions on outstanding issues while stressing the
benefits of a nonconfrontational atmosphere.
The LDCs are likely to propose that a Special Session of the UN General
Assembly be convened early in 1980 to review progress on North-South issues and
to provide a time limit for achieving tangible objectives. Such a proposal reflects the
belief, still held by many LDCs, that they need to constantly flog the industrial
nations to approach their version of a new international economic order.
At the 32nd UN General Assembly, which opens on 20 September, a scant four
days after the close of the 31st General Assembly, North-South economic
discussions will focus on an agenda for the coming years. Discussions of an
international strategy for the Third Development Decade are likely to gain
momentum during the session. Developing countries will also lobby at these
meetings for progress on the common fund (when negotiations reconvene on 7
November) and on debt relief (to be taken up at the UNCTAD ministerial meeting in
January 1978).
The "basic human need" focus of the United States will likely evoke
considerable discussion among the UN delegates. We have observed few exchanges
among the LDCs on what they think of the emerging US policies. Most LDCs-and
industrial countries, too-seem to be waiting for more details on the US program.
LDC reactions will probably be mixed.
? In general, the LDCs will welcome what they perceive to be increased
US interest in the Third World. They may note, however, that an emphasis
on basic human needs side steps specific LDC proposals for massive
changes in the international economy and for an increased LDC role in
international institutions.
? Many LDCs probably will be suspicious about how the new US policy
will be translated into action. They will want to know more about how
the basic human needs strategy links to political issues of human rights;
Brazil, Indonesia, and the Philippines, for example, may react by pushing
the statement of nonintervention in domestic affairs contained in the
Manila Declaration.
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? Others-India, Sri Lanka, Egypt, Zambia, Tanzania, Jamaica, for
example-will probably welcome the new US emphasis on basic human
needs because it coincides with their own professed commitment to the
poorest.
Discussions on the common fund are still following two tracks: (a) ongoing
sessions on individual commodities and (b) periodic meetings on structure and
financing (which will resume for four weeks on 7 November). Even though most
commodity exports are generally performing better than at any time since the early
1970s, the common fund issue remains at the forefront of the North-South
exchange because:
? The South recognizes that the North has become more attentive to
commodity problems since the outset of CIEC.
? Falling prices in copper, sugar, cotton, coffee, and tea have rekindled
concern among several key LDCs-for example, Peru, Zambia, the
Philippines, Egypt, and Sudan-on terms-of-trade issues.
? A well-structured timetable exists for the various meetings, and each
session provides an opportunity for more detailed discussion.
The decision by the industrial countries at the London Summit last spring that
there should be some sort of common fund seems to have captured the initiative on
this issue. With serious -negotiations imminent, the LDCs are faced with two relaters
questions-deciding what they want and how flexible they should be in the
negotiations. Beyond price intervention, many LDCs want to ensure that the fund
will provide something for everyone, with a so-called second-window to finance
various measures unrelated to buffer-stock management.
? African countries, with many exports not suitable for the buffer-stock
program, believe that LDCs suffering from a commodity problem should
be able to receive aid from the second window, even if no agreement
exists on the commodity affected.
? Some LDCs believe that the second window should give aid to finance
export diversification. Indeed, a Pakistani official recently noted that, to
the extent buffer stocks in commodities raise commodity prices and
reduce the quantity demanded, the LDCs will need additional support.
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? Some LDCs that are net importers of the commodities likely to be in
the program-most notably India and Pakistan-want the second window
to provide financial compensation wherever common fund activities raise
their import bills.
These attempts to expand the purpose of the common fund are opposed by many
Latin American and Southeast Asian countries, which believe that such action could
jeopardize agreement.
A second dilemma-how far to deviate from a common position once it has
been determined-has not yet been addressed. Flexibility will be difficult to achieve
because it would force the LDCs to reopen large group discussions on such thorny
issues as the source of common fund financing, the second window, and price
indexation.
The debt relief issue will likely come in for animated discussion in the corridors
at the UN General Assemblies and also in UNCTAD. Through last December's CIEC
meetings, the issue received considerable attention from both sides because of (a)
the Third World perception that the non-OPEC LDCs would not show substantial
recovery in their international payments and (b) the anxieties of bankers in
developed countries over the reliability of particular borrowers and the size of the
total debt. Since then, the strategy of the North-case-by-case adjustments-has
achieved widely accepted results in Egypt and Zaire. The net result is that the LDCs,
many of which are still faced with record repayments irY 1977 and 1978, have not
been able to tie their concern to a particular defect in current international
arrangements. Moreover, the creation of the Witteveen Facility and the demon-
strated flexibility of private bankers in dealing with LDC problems point to a wide
range of possibilities in meeting debt problems over the next few years.
The LDCs appear encouraged by the responsiveness of the North to their
financial problems and by a sense of regained economic momentum. They now
argue that debt relief should be viewed in the larger context of overall economic
development and should be provided when growth rates fall below goals established
in the UN's Second Development Decade. One related LDC proposal is that the
US/EC debt relief procedures tabled at CIEC should be combined with the LDC
proposals to form a negotiating text. The industrial countries reject this proposal
because they are unwilling to concede anything more on this issue.
Complicating the debt issue is the current effort of the UNCTAD secretariat to
carve out a mandate on international monetary and financial issues. Now that the
commodity discussions and common fund negotiations are enmeshed in details,
UNCTAD is apparently looking for an issue to keep it in the forefront of the
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North-South dialogue. Most industrial countries do not want debts discussed in the
LDC-dominated UNCTAD, regarding it as a poor forum for guarding creditor-coun-
try interests. They would prefer discussions to be held in the IMF/IBRD
Development Committee, which they can more easily control and which has greater
technical expertise. Efforts to limit the UNCTAD role, however, are coming under a
concerted LDC attack. The result is that several European countries-notably Britain
and West Germany-have expressed an unwillingness to take a strong stand against
UNCTAD involvement.
The North's evolutionary approach to changes in the international economy is
fundamentally at odds with the oft-stated LDC demands for major overhaul. The
LDCs nonetheless seem prepared to tacitly accede to the industrial country
approach for the immediate future, for at least four related reasons:
? LDC demands for massive changes-for example, those put forward in
the Manila Declaration of 1976-were in part intended to jolt the
industrialized countries into action. Thus, the current round of discussions
within the new US administration and among the industrialized countries
on specific North-South issues represents an LDC success. Most LDCs do
not want to endanger favorable policy shifts by pushing too hard on
unrealistic demands.
? Some of the richer and more dynamic LDCs do not want radical
changes in the existing system and agree with the incremental approach of
the industrialized countries.
? Most non-OPEC LDCs-sobered by OPEC diffidence on some key
issues-realize that their power to force change on the industrialized
countries is limited. At best, the LDCs can prod the industrialized
countries by appealing to their interest in global economic cooperation,
by pressing humanitarian concerns, and by threatening confrontation at
the United Nations that potentially could spill over to other international
issues.
? Wide differences in economic conditions within the Third World are
creating stresses among the LDCs. The concept of differential treatment
that underlies many LDC proposals for changes in the economic
relationship between the industrialized countries and the LDCs is now
being used by the poorest countries to demand their own differential
treatment within the LDC group. This is an element in the African and
South Asian demands for a second window in the common fund.
Similarly, in the area of debt relief, some poorer LDCs with small
international debts and scant prospects of debt crises want concessions
tied to minimum rates of economic growth.
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While these factors combine to impede the action of the LDCs and allow the
industrialized countries grefiter freedom in determining the pace of decisionmaking,
in no way do they reduce the general LDC feeling that progress must be made on at
least some issues. (Confidential Noforn)
FRANCE: BARRE PROGRAM YIELDS MIXED RESULTS
French Prime Minister Raymond Barre hopes next week's visit to Washington
will generate favorable publicity to help offset the political impact of disappointing
economic trends.
Barre's prime strength, his reputation as an economist and administrator, is
being undermined by the failure of his economic stabilization program to yield
obvious benefits. In its first year of implementation, the Barre plan has slowed wage
increases and reduced the trade deficit, but inflation has continued unabated and
unemployment has increased substantially. Without radical improvement in the
economy, which we do not foresee, the governing center-right parties will have
difficulty overcoming the lead of the Socialist-Communist alliance; polls show the
Leftists ahead by a 54-46 margin, looking toward Parliamentary elections next
March.
Barre's Inheritance ....
In August 1976 Barre took over the reins of an economy still convalescing from
recession. The economic slump itself had been comparatively mild in France; in
1974 and even 1975, real GNP had registered small gains. The adverse psychological
impact, nevertheless, was enormous in a country that had experienced steady real
growth averaging 5.5 percent for two decades.
By the fall of 1976, the recovery, which had begun strongly a year earlier, was
slowing down. Industrial output was leveling off, and unemployment still was near
its recession high. Both consumers and businessmen lacked confidence. At the same
time the trade balance had shifted back into substantial deficit, and retail price
inflation-which had slowed to 10 percent-showed signs of reaccelerating. France's
worst drought in several decades was compounding both of the latter difficulties.
His Policy Response ....
Faced with this conflicting set of problems, Barre promptly decided to focus
on inflation. In part he was inspired by West Germany's success in slowing price
increases. Even more, however, he was determined to prevent France from joining
Britain and Italy as one of the weak sisters of Europe. The latter two countries, he
felt, were caught in a vicious circle of wage increases/ price increases/ payments
deficits/ currency depreciation/ wage increases/ and so forth. Fearing a similar
development in France, Barre believed he had to act firmly to return France to its
earlier pattern of rapid and stable growth.
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France: Selected Economic Indicators
Index; 1970=100,
Seasonally Adfusted
M1
Total
Non-Food
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The new Prime Minister announced a broad package of anti-inflation moves
within a few weeks of his appointment. The centerpiece of the program was a strict
guideline that wage increases should not exceed rises in the cost of living. Bane did
not seek formal wage controls, but the government pledged to follow the guideline
in its own wage settlements and vowed to exert maximum pressure on business to do
likewise. In addition, Bane sought to cut growth of the broadly defined money
supply (M2) to 12.5 percent in 1977 and to reduce the government deficit. Finally,
the Bane Plan included two measures aimed specifically at breaking inflationary
psychology: a three and a half month general price freeze and a reduction in the
value-added tax on most manufactured products.
Bane's most dramatic success has come on the wage front, where the rate of
increase has been substantially reduced. During the first two quarters of 1976, the
increase in average hourly wages had accelerated to a 17.1-percent annual rate. After
Barre took office, wage increases began a steady decline, reaching a 9.4-percent
annual rate in first quarter 1977-the smallest quarterly gain since 1969. While the
rate bounced back to 13.9 percent in the second quarter, this did not substantially
violate the Bane Plan guideline. In real terms, wage gains continued to slow in the
second quarter, hitting an annual rate of only 1.0 percent.
Paris also has engineered a striking deceleration of monetary growth, to well
within the Barre limits. For the 12 months ending May 1977, M2 had grown only
11.3 percent, compared with a 20.3-percent rise for the 12 months ending in May
1976. For the narrowly defined money supply (M1), the slowdown was even more
spectacular-from 19.0 percent in May 1976 to 8.1 percent in May 1977.
Bane has achieved considerable success in the foreign sector, where the trade
deficit has declined substantially and the franc has held steady. The trade balance
had moved back into deficit late in 1975 as the French recovery got under way. The
problem became critical during second half 1976 when the deficit widened to record
levels; the drought was beginning to take its toll, cutting agricultural exports and
causing increased imports of food and energy. Since November the situation has
improved fairly steadily. The deficit declined more than 65 percent from fourth
quarter 1976 to second quarter 1977. Had it not been for the lingering effects of the
drought-which continue to affect agricultural trade flows-a small trade surplus
might have been recorded.
Bane's imposition of a restrictive policy at a time when recovery already was
slowing almost inevitably meant slower economic growth in 1977. Most observers
expect a smaller increase in real GNP this year-perhaps 3.5 percent, down from 5.2
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percent last year. Industrial out-
put has been erratic: stagnant in
late 1976, up sharply in first quar-
ter 1977, then down somewhat in
the second quarter.
Slower growth has brought
with it a surge in unemployment-
up 24 percent over the past 12
months, to two and one-half times
the pre-recession level. All of the
increase has occurred since the
start of 1977, according to the
official French seasonally adjusted
data. A CIA seasonally adjusted
series shows the increase occuring
much more evenly over the past
12 months. High unemployment
has become a chief point of attack
for the Socialist/Communist oppo-
sition leaders, who further
charge-with much justification-
that the government figures badly
understate the true unemploy-
ment problem.
The government's other
major weak spot is the consumer
price index-which continues to
rise at a 10-percent pace, defying
Barre's original hope of slowing it
to 6.5 percent by the end of 1977.
In part, the process of rooting out
several years of accumulated in-
flationary pressures is taking
longer than expected. Even more,
however, the problem is due to a
factor outside Barre's control-the
rise in food prices. Over the past
12 months, the food component
of the price index has jumped
14.4 percent, while nonfood
prices have gained only 7.9 per-
cent. The spurt in food costs, in
France: : Unemployment
T+~~m_._
Official `
-French
pasonafly
France Forein? Trade
5iJlioq. US$
Adjusted
Series
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turn, is largely attributable to (a) severe drought, which badly hurt French vegetable
crops and pasturage last year, and (b) a rise of 136 percent in prices of imported
unprocessed foods in the 12 months through last April.
Prime Minister Barre has repeatedly emphasized that curing France's economic
ills will require several years of careful economic management. From this longrun
perspective, the overall results of the Barre Plan to date are positive even though
they fall short of his original expectations. Unfortunately for the center-right's
cause, his successes have come in areas that have little voter appeal: restraint on
wages and the money supply and improvements in the trade balance. By contrast,
his relative failures-unemployment and inflation-are only too visible to the man in
the street.
Outlook: Moderate Improvement
On the whole the economic picture is likely to improve between now and
election time but not enough to win back alienated voters. The government's biggest
worry-unemployment-should look better over the next six months. The official
total will at worst level off at about the current level; it is more likely to register a
slight decline. Any apparent drop, however, will be due more to the peculiarities of
the seasonal adjustment process used by the French than to a genuine improvement
in the labor market.
Inflation should show some signs of slowing by March, due to normalization of
the agricultural situation and slower growth of wages and money. Larger harvests
also could contribute to a further reduction of the trade deficit. Economic growth
will continue to be relatively weak, getting only a small boost from measures
announced last week-additional credits for industry, more aid for the poor, and
lower interest rates. (Confidential Noforn)
CUBAN NICKEL: EXCELLENT HARD CURRENCY
EARNINGS POTENTIAL
In the event of full normalization of US-Cuban relations, Cuba could quickly
boost hard-currency nickel sales from the present $45 million annually to as much as
$125 million, mainly through diversion of supplies now being shipped to the
Communist countries. By 1985, after the completion of Havana's current program
to expand nickel capacity, hard currency sales could reach $200 million at current
prices and could account for 15 to 20 percent of total hard currency earnings,
double this year's share.
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Large Cuban laterite deposits-nearly 6 percent of world nickel reserves-pro-
vide Havana the opportunity to greatly diversify its hard currency exports, now 80
percent sugar. Cuba was beginning to take greater advantage of this opportunity at
the time of the 1959 Castro takeover. Following the US trade embargo, technical
difficulties restricted output and discouraged new investment. Resolution of these
difficulties since the late 1960s has restored production to near capacity. Cuba can
Cuba: Nickel Production and Exports
Thousand Tons, Metal Content
1971
1972
1973
1974
1975
1980'
19851
Production
36.5
36.7
35.2
33.9
37.3
47
77
Oxides
18.0
17.5
17.0
16.5
18.3
23
53
Concentrates
18.5
19.2
18.2
17.4
19.0
24
24
Exports
33.2
31.7
38.3
34.0
30.9
46
74
Oxides
16.1
12.5
20.1
16.6
11.9
22
50
USSR
6.0
0
0
0
0
0
15
Other CEMA
3,5
4.3
4.52
4.52
4.52
6
10
Non-Communist
6.6
8.2
15.62
12.12
7.42
16
25
Concentrates
17.1
19.2
18.2
17.4
19.0
24
24
Domestic use
NegI
Negl
Negl
Negl
Negl
1
3
Stock changes
3.3
5.0
-3.1
-0.1
6.4
0
1 Projected.
2 Estimated.
produce approximately 37,000 tons annually in two US-built plants located in
Holguin Province:
? The Nicaro plant, which uses a relatively unsophisticated technology to
produce 18,000 tons of marketable nickel oxides.
? The Moa Bay plant, which uses a sophisticated sulfuric acid leaching
process to produce 19,000 tons of nickel concentrates.
Limited access to non-Communist markets has kept Havana dependent on the
Communist countries for 75 percent of its $190 million annual nickel exports. Strict
enforcement of US import sanctions on goods containing Cuban nickel has caused
Western steel industries to restrict purchases from Havana. Cuba thus has remained a
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residual supplier to the free market and has difficulty maintaining its market share
during periods of slack demand. Although itself a net nickel exporter, Moscow
purchases practically all of Cuba's concentrates. One-quarter of Cuban nickel oxide
is sold to Eastern Europe, leaving the remaining three-quarters-an estimated 14,000
tons-available for the West. Despite recent price shaving, Havana has been unable to
sell this entire amount to the West, and stocks have risen.
While Havana's economic planners currently assert that normalization of US-
Cuban commercial relations will not affect traditional trade patterns, we believe that
Cuba would try to quickly exploit nickel's hard-currency earnings potential. Low
world sugar prices and concern over $1.4 billion in outstanding debts to Western
countries have recently led to a sharp cutback in imports of Western capital goods
needed for the 1976-80 investment plan. Probable US insistence on a slow reentry of
Cuban sugar to the US market will make nickel the best vehicle to finance initial
Cuban purchases of US machinery and grain.
In these circumstances, we believe Havana would seek to divert nickel ship-
ments from the USSR to the United States. Strong US demand for concentrates
represents an $80 million potential market for Cuba. ALouisianarefinery-owned by
Amax Corporation and constructed in the late 1950s to process Cuban concen-
trates-probably would take a substantial share of Moa Bay's output. The denial of
Cuban concentrates following the US embargo had forced the refinery to remain
closed until 1974 and is a factor limiting current production to about 80 percent of
its 36,000 ton capacity. Access to Cuban concentrates would allow the United
States refinery to operate at full capacity while reducing its dependence on competi-
tors for raw material supplies.
Havana would have to overcome some Soviet resistance to divert its concen-
trate shipments to the US market. Despite its position as a net exporter, Moscow
would be reluctant to lose the Cuban concentrates because they replace an equiva-
lent amount of domestic nickel that is sold for hard currency. Moreover, Moscow
extracts about 1,000 tons of needed cobalt from the Cuban concentrates. Since the
Soviets support the US-Cuban trade normalization efforts as a step toward reducing
their subsidization of the Cuban economy, we believe they would eventually go
along with the diversion.
Expansion Plans
Cuba's current $400 million nickel expansion program is part of its strategy-
adopted under Soviet prodding-of spurring exports. Although delays are occurring,
the Soviet-financed program should double annual nickel production capacity by
1985, to 77,000 tons.
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? Construction of a new 30,000-ton nickel oxide facility at Punta Gorda
under way; the opening of the first 10,000-ton line, originally scheduled
for 1980, should take place in 1982-83, with full production by 1985.
? Expansion of the Nicaro oxide plant should raise capacity by 25 per-
cent to 22,500 tons by 1978-79.
? Expansion of the Moa Bay plant should increase nickel concentrate
capacity by 26 percent to 24,000 tons by 1978-79.
Although the Council for Mutual Economic Assistance (CEMA) plans to finance a
30,000-ton oxide facility at Las Camariocas, little work has been done, and
production can not get under way until the late 1980s.
Since the Communist countries will have little need for additional nickel
supplies, about 60 percent of the $325 million exports (at 1977 prices) in 1985 will
be available for hard-currency sale. Havana will give the West priority to purchase
the initial 25,000 tons of oxides and probably the 24,000 tons of concentrates. To
repay Soviet financial assistance, Havana has committed 15,000 tons of new oxide
production to the USSR. Cuban sales to Eastern Europe could double from the
current 4,500 tons to help finance increased Cuban imports from the area.
Havana is relying on Soviet technology in the expansion effort, and the new
production lines will be simple Soviet modernizations of techniques currently
employed in Cuba. This unsophisticated technology is well understood by the
Cubans. The higher operating costs of Soviet equipment will be more than offset by
(a) the lower cost of Soviet technical assistance and (b) the expected continuation of
Soviet subsidies for petroleum and other raw materials used in nickel production.
Soviet petroleum charges to Cuba have not risen as fast as those for Eastern Europe.
Moreover, a Soviet-Cuban agreement to hold their bilateral terms of trade constant
already restricts the rise in Cuban production costs through 1980 and could
continue beyond.
Western participation in the expansion program probably will be limited to
marketing arrangements to help Havana penetrate the oligopolistic world nickel
market. Depletion of the world's high-grade nickel sulfide deposits benefits Cuba by
increasing demand for higher cost laterite. To compete with major multinational
corporations, Havana may well try to ally itself with small Western nickel firms that
enjoy established market positions but have limited resource supplies. (Secret
Noforn-Nocontract)
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
Seeking outlets for excess capacity, EC and other foreign steel producers have
again been turning to the US market. An import surge in first half 1977 was led by
West European producers, who slashed export prices in an effort to spur sales.
Prospects for continued weak demand and depressed operating rates in foreign
producing countries point to continued efforts to export to the US market.
First Half Export Surge
Foreign steel producers sharply increased their exports to the US market in
first half 1977. Steel shipments to the United States in the first quarter rose 11
percent from a year earlier and jumped another 39 percent in the second quarter, to
United States: Imports of Steel Mill Products
Thousand Tons
Change
1st Half
1st Half
(1st Half
1977 over
Share of
Import Market
Share of
Import Market
1976
1977
1st Half 1976)
1st Half 1976
1st Half 1977
Total
5,788
7,301
26
100
100
Japan
3,519
3,552
1
61
49
EC
915
2,004
119
16
27
Canada
652
879
35
11
12
Latin America
76
181
138
1
2
Other
626
685
9
11
10
a record annual rate of 17.2 million tons. US imports as a share of total
consumption jumped from 14 percent last year to 18 percent in first half 1977.
Unlike 1974 and 1976 when rising US steel imports were attributable to
increased Japanese sales, the first half 1977 runup resulted from sharply higher
shipments by EC countries. Imports from the EC more than doubled during the first
six months and accounted for 72 percent of the first half increase in US steel
purchases. Canada and Latin American countries accounted for 22 percent of the
import increase, Japan for 2 percent.
8 September 1977 SECRET
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The EC's share of the
US import market jumped
from 16 percent in first half
1976 to 27 percent this
year, as all EC producers re-
corded large increases in
their steel exports. Increases
ranged from a high of 247
percent for Italy to a low of
41 percent for the United
Kingdom. On a tonnage
basis, France and West Ger-
many recorded the largest
increases, up 350,000 and
260,000 tons, respectively.
In contrast, steel shipments
by the Japanese rose only 1
percent, while their market
share declined by 12 per-
centage points, to 49 per-
cent.
Impact of Export Surge
on US
-Foreign Steel Sales to US Market
Million Tons
The first half surge in
foreign steel shipments was
a major factor in the decline
of the US industry opera-
ting rate, down from first ' 1970 1971 1972 1973 1974 1975 1976 1977
half 1976 by 4 percentage Steel Imports as a Share of US Consumption
points, to 78 percent of ca- 13.8%117.9%116.6%112.4%113.3%113.5%114.1%117.0%
pace y. nigher steel snip-
ments from abroad, also re-
sulted in inventory accumu-
lations for both US producers and consumers, with consumer inventories rising an
estimated 250,000 tons in the first six months, and producer stocks about 300,000
tons. The US net steel trade deficit in first half 1977 totaled $1.8 billion, more than
triple the first half 1976 deficit and 15 percent of the overall US trade deficit.
EC Export Drive
Among major steel producers, the EC has been hardest hit by the slow pace of
economic growth in the industrialized countries. Last year EC producers operated at
SECRET 8 September 1977
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SECRET
an average 67 percent of capacity, compared with 77 percent in Japan and 79
percent in the United States. In an effort to bolster sagging output and improve
depressed operating rates, EC producers mounted an export drive early this year.
While protecting their own market from imports, EC producers cut list export
prices and offered sizable discounts on a wide range of steel products. Although list
prices were cut by only 2 percent in first half 1977, down from $290 a ton to $285
a ton, discounts of as much as 25 percent for some products resulted in a large price
advantage for EC exporters. The price differential was further widened as other
major competitors raised their steel prices. Japanese producers increased their export
prices by nearly 4 percent, and US producers hiked domestic prices 6.9 percent.
While all EC producers have cut prices, French and British steel producers have
made the deepest cuts. British steel plates and structurals have been delivered in the
United States for $60 to $90 a ton less than the US price and nearly $50 a ton under
the Japanese price; French steel rods are being sold at less than $200 a ton,
compared with a US domestic price of about $225 a ton.
The EC export drive is narrowly concentrated on the US market. During first
half 1977, total EC steel exports (excluding intra-EC sales) were up 37 percent
compared with a year ago. Increased sales of 1.1 million tons to the United States
accounted for nearly 70 percent of this gain. Higher sales to other West European
countries accounted for the bulk of the remainder.
The first half export drive provided no net relief to EC steel producers as
softening demand at home more than offset higher exports. Indeed, steel output
declined 3.7 percent from a year earlier, and operating rates slipped 2 percentage
points, to 65 percent of capacity. Stronger foreign sales did help EC producers
reduce their excess inventories by an estimated 225,000 tons in the first half.
Prospects for second half 1977 suggest continued sluggish demand, low
capacity utilization rates, and worsening profit margins in major producing
countries. EC producers will be under pressure to continue offering large price
discounts on steel products. We expect sales efforts by the EC to continue to
concentrate on the US market. Japan, meanwhile, probably will keep exports to the
US market at last year's level to avoid intensifying protectionist sentiment. Although
we do not expect steel shipments to the US market in the second half to continue at
the record second quarter pace, they probably will exceed first half levels and total
about 15.5 million tons for 1977, up 20 percent from 1976. (Confidential)
8 September 1977 SECRET
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Next 1 Page(s) In Document Exempt
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
25X6-
Notes
USSR: Railroads Fail To Deliver Needed Fuels and Ores
The Soviet railroad system once again is failing to deliver the quantities of
fuels, ores, and other commodities scheduled under the annual plan.
? Deliveries of coal from the Donets and Kuznetsk Basins are behind
schedule.
20 8 September 1977
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? Already the railroads are being urged to transport fuel needed for the
winter; in July the situation with regard to fuel shipments was "cause for
alarm" according to the Soviet press.
? In one illustrative case involving the Omsk Oil Refinery, failure to keep
up with the production plan was attributed to inadequate rail facilities.
The chronic failure of the rail system to meet plan quotas could be of
particular concern to the Soviet leadership in 1977 because of (a) the probability of
a second, consecutive record grain harvest-which could prove disruptive to
industrial production schedules in the latter part of 1977-and (b) the ever-increas-
ing importance of the flow of Siberian fuel and raw materials to the western
industrial areas. The generally poor performance is the result of the longstanding
failure of Soviet planners to allocate sufficient resources to expand and refurbish rail
capacity. At the same time, the Soviet system has proved inflexible in meeting
modern-day demands for improvements in efficiency. In the case of the railroads,
the Soviets have failed to (a) sufficiently reduce turnaround time of railcars, (b)
provide feeder lines and factory rail facilities in timely fashion, and (c) upgrade the
railroad work force. (Confidential)
Mauritania: Military Expenditures Strain Economy
Because of the conflict over the Western Sahara, Mauritania's national budget
has soared in the past year, with defense accounting for a third of total
expenditures. The stagnation of world copper and iron ore prices has caused a
drop in the government's income at a time when new resources are required to
cover expanding defense costs. Only the aid of the conservative oil-producing
states-Saudi Arabia, Kuwait, and the United Arab Emirates-keeps Mauritania's
economy afloat. In 1976, these three nations contributed more than the
equivalent of the national budget to help the government in various ways-for
example, to support its currency, to purchase modern arms, and to keep
government services functioning.
Much-needed development projects have been abandoned or postponed for
lack of investment funds. Two important agricultural projects along the Senegal
River-the project for exploiting the phosphates of the Kaedi region and the
Gorgol River irrigation scheme-have been shelved, and the expansion of the road
transport system has been delayed.
The government has imposed a series of special taxes to help finance the
growing military effort. Local companies are obliged to contribute 2 percent of
their annual turnover, while salaried workers are taxed an extra 1 to 3 percent of
their monthly wages. With inflation reaching a rate of more than 30 percent and
8 September 1977 SECRET
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growing shortages of basic foodstuffs-rice, sugar, and cooking oil-discontent
among the population is on the rise. (Confidential)
25X6
22 8 September 1977
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
25X6
Nuclear Energy
(ER 77-10517, August 1977, Unclassified)
This report presents an overview of the Free World nuclear industry. It assesses
the supply/demand outlook through the mid-1980s for uranium mining and milling
operations, uranium enrichment services, nuclear fuel fabrication facilities, the
potential impact of the international sale of nuclear power plants, the lower
forecasts for installed nuclear generating capacity, and nuclear power plant
performance.
*A copy of this publication may be obtained by callin
8 September 1977
25X1A
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
Secret
Secret
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
ECONOMIC INDICATORS
Prepared by
ER El 77-036
8 September 1977
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
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
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
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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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
INDUSTRIAL PRODUCTION INDEX: 1970=100, seasonally adjusted
Japan
West Germany
130
120
s 113
y v
JAN APR JUL OCT JANAP$r04~Ld P&r F 'leage 2602fl6~/d N: (trA-kbP-MTB0i9457'A00i'106620dd1-TR JUL OCT
1972 1973 1974 1975 1976 1977
A-2
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United Kingdom
Canada
JAN APR JUL
OCT
JAN
APR JUL
OCT JAN APR JUL OCT JAN
APR JUL OCT
JAN APR
JUL OCT
JAN APR JUL OCT
Percent
AVERAGE ANNUAL
Percent
AVERAGE ANNUAL
Change
GROWTH RATE SINCE
Change
from
GROWTH RATE SINCE
LATEST
from
Previous
1 Year 3 Months
LATEST
Previous
1 Year 3 Months
MONTH
Month
1970 Earlier Earlierl
MONTH
Month
1970 Earlier Earlierl
United States
JUL 77
0.5
3.7 6.4 10.4
United Kingdom
JUN 77
-5.1
0.1 --0.2 -5.6
Japan
JUL 77
-0.9
3.8 1.2 . 0.7
Italy
JUN 77
-7.2
2.7 33 -16.9
West Germany
JUN 77
1.8
2.2 3.6 -6.6
Canada
JUN 77
0.3
4.1 45 1.4
France
JUN 77
3.2
3.6 4.1 --8.0
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 UNEMPLOIor Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
PERCENT OF LABOR FORCE
West Germany
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United Kingdom
6
Italy (quarterly)
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT' JAN APR JUL OCT
1972 1973 1974 1975 1976 1977
United States
JUL 77
6,744
7,406
6,737
United Kingdom
AUG 77
1,414
1,309
1,316
Japan
MAY 77
1,140
1,120
1,030
Italy
/6 IV
777
699
776
West Germany
JUL 77
1,049
1,050
1,009
Canada
JUN 77
847
722
856
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
roughly comparable to US rates. For 1975-77, 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 20percent to be roughly comparable with US rates.
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A-5
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DOMESTIC PRI CES1 INDEX: 1970=100
Japan
1Wholesale price indexes cover industrial goods.
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United Kingdom
Semilogarithmic Scale
266
191
Percent
Change
f
AVERAGE ANNUAL
GROWTH RATE SINCE
Percent
Change
from
AVERAGE ANNUAL
GROWTH RATE SINCE
LATEST
rom
Previous
1970
1 Year
3 Months
LATEST
Previous
1970
1 Year
3 Months
MONTH
Month
Earlier
Earlier
MONTH
Month
Earlier
Earlier
United States
JUL 77
0.6
8.5
7.2
5.5
United Kingdom
JUL 77
1.3
14.9
20.9
17.1
JUN 77
0.7
6.6
6.9
8.3
JUL 77
0.1
14.0
17.6
8.0
Japan
JUL 77
-0.5
7.7
1.1
-2.6
Italy
JUN 77
0.3
15.8
15.9
6.7
JUN 77
-0.5
10.7
8.5
8.5
JUL 77
0.8
13.2
20.3
14.3
West Germany
JUN 77
0
5.3
2.7
1.7
Canada
MAY 77
-0.1
10.2
10.1
10.4
JUL 77
-0.1
5.6
4.3
3.1
JUL 77
0.9
7.5
8.4
10.3
MAR 77
0.9
8.4
8.2
7.6
France
JUL 77
0.9
9.1
10.1
10.9
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lP QR7y@@g457A000200020001-9
GNP'
Constant Prices
Constant Market Prices
Average
-
Average
Annual Growth Rate Since
Annual Growth Rote
Since
Percent Change
-
Percent Change
Latest
from Previous
1 Year
3 Months
Latest
from Previous 1 Year
Previous
Month
Month
1970
Earlier
Earlier'
Quarter
Quarter 1970 Earlier
Quarter
United States
Jun 77
- 0.2
3.2
4.1
3.3
United States 77 II
1.6 3.2 4.7
6.4
Japan
Apr 77
3.1
10.7
6.4
16.0
Japan 77 1
2.5 5.5 4.9
10.2
West Germany
Jun 77
0.9
2.4
4.4
-9.8
West Germany 76 IV
1.8 2.5 4.5
7.3
France
May 77
- 1.1
- 1.4
-7.1
-13.2
France 76 IV
0 3.9 4.9
0
United Kingdom
Jul 77
3.6
1.2
-1.2
4.6
United Kingdom 77 1
-1.9 1.6 -1.3
-7.5
Italy
Mar 77
0.2
2.9
-0.3
16.3
Italy 76 IV
4.8 3.4 9.4
20.6
Canada
May 77
-0.8
4.2
1.8
-13.6
Canada 76 IV
-0.6 4.8 3.4
-2.5
' Seasonally adjusted.
Seasonally adjusted.
'Average for latest 3
months compared with average for previ
ous 3 mon
ths.
FIXED INVESTMENT'
WAGES IN MANUFACTURING'
Non-residential; constant prices
Average
Annual G
rowth Rot
e Since
Average
Percent Change
Annual Growth Rate
Since
Latest
from Previous
1 Year
3 Months
Percent Change
Period
Period
1970
Earlier
Earlier'
Latest
from Previous 1 Year
Previous
Quarter
Quarter 1970 Earlier
Quarter
United States
Jul 77
0.6
7.5
7.6
8.1
United States 77 11
2.2 2.1 9.6
9.0
Japan
May 77
1.4
17.3
10.6
7.3
Japan 77 1
0.2 0.9 3.9
0.8
West Germany
77 11
1.7
9.5
7.5
7.2
West Germany 76 IV
3.3 1.1 5.0
13.8
France
77 1
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
-0.6 0 3.4
-2.5
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 States, Japan, and Canada,
hourly wage
_
rates for others. West German and French data refer
to the beg
inning of t
he quarter.
' Seasonally adjusted.
' Average for latest 3
months compared with that for previous
3 months.
MONEY MARKET RATES
Percent Rate of Interest
1 Year
3 Months
1 Month
Representative ra
tes
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
France
Coll 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
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
Annual
Growth Rat
e Since
Annual Growth Rate Since
Percent Change
Per
cent Change
Latest from Previous
1 Year
3 Months
Latest from 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
1 1.3
1 1.6
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
1 1.3
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 Curren
cy
OFFICIAL RESERVES
Average
Annual
Growth Rat
e Since
Billion US $
Percent 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
Apr 77
1.0
21.1
13.7
15.1
Italy Jun 77
9.7 4.7 5.2 6.4
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
Cumulative (Million US $)
Latest
Cumulative (Million US $)
Period Million US $ 1977
1976
Change
Latest
Period Million US $ 1977 1976 Change
United States z
77 1 -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
,702
1,188
514
West Germany Jun 77
-630 -1,256 1,105 -2,361
France
77 1 -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. -2,183 1,988
Italy
77 I
-929 -929 -
1,413
484
Italy 76 III
779 N.A. -2,232 -3,329
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 dollars at the current market rates of exchange.
' As recommended by the Advisory Committee on the Presentation of Balance of Payments
' Seasonally adjusted.
Statistics, the Department of Commerce no longer publishes a basic balance.
EXCHANGE RATES
TRADE-WEIGHTED EXCHANGE RATES'
As of 26 Aug 77
Spot Rate
Percent Change from
Percent Change from
As of 26 Aug 77
US $
1 Year
3 Months
1 Year 3 Months
Per 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
0.10
' weighting is based on each listed coun
try's trade with 16 other industrialized countries to
reflect the competitive impact of exchange rate variations among the major currencies.
 Approved For Release 2002/02/01 : CIA-RDP79BOO457AO00200020001-9
Big Other Com- Big Other Com-
World Seven OECD OPEC 2 munist Other World Seven OECD OPEC P munist Other
UNITED STATES'
1974 ............. 97,908
45,884
16,870
6,690
2,258
26,206
107,997
53,332
10,912
17,256
1,078
25,419
1975 ............. 107,191
46,941
16,180
10,768
3,421
29,881
103,414
49,807
8,818
18,371
1,253
25,165
1976 ............. 114,997
51,298
17,607
12,552
3,935
29,605
129,565
60,387
9,738
24,995
1,572
32,873
1st Qtr ........ 27,360
12,184
4,159
2,751
1,144
7,122
29,339
13,717
2,479
5,570
356
7,217
2d Qtr ........ 29,695
13,383
4,527
3,113
1,036
7,636
31,650
15,247
2,491
5,582
333
7,997
3d Qtr ........ 27,437
11,944
4,114
3,103
850
7,426
33,734
16,693
2,401
7,156
423
7,061
4th Qtr ........ 30,505
13,787
4,807
3,585
905
7,421
34,842
14,730
2,367
6,687
460
10,598
1977
1st Qtr ........ 29,458
13,681
4,602
3,602
951
7,162
37,361
16,070
2,745
8,324
397
9,825
Apr ........... 10,548
4,686
1,613
1,080
352
2,817
13,249
5,714
873
3,060
152
3,450
JAPAN
1974 ............. 54,480
19,101
7,477
5,446
3,915
18,541
62,046
18,780
7,303
19,965
3,119
12,879
1975 ............. 54,822
16,567
6,091
8,406
5,283
18,475
57,856
16,929
6,084
19,427
3,383
12,033
1976 ............. 67,364
22,406
8,588
9,277
5,049
22,044
64,895
17,534
7,778
21,877
2,926
14,780
1st Qtr ........ 14,429
4,848
1,827
1,872
1,289
4,593
14,832
4,083
1,696
5,213
671
3,169
2d Qtr ........ 16,431
5,402
2,092
2,271
1,348
5,318
15,903
4,347
1,943
5,400
677
3,536
3d Qtr ........ 17,542
5,897
2,272
2,476
1,135
5,762
16,818
4,497
2,137
5,406
747
4,031
4th Qtr ........ 18,962
6,259
2,397
2,659
1,277
6,370
17,342
4,607
2,002
5,858
831
4,044
1977
1st Qtr ........ 17,911
5,848
2,449
2,459
1,409
5,746
17,452
4,717
1,845
6,246
801
3,843
Apr ........... 6,870
2,241
846
967
464
2,352
5,766
1,537
664
1,776
298
1
491
WEST GERMANY
,
1974 ............. 89,188
30,998
37,605
4,268
6,884
9,433
68,962
23,762
26,079
8,406
3,209
7,506
1975 ............. 90,063
28,331
36,407
6,777
9,029
9,519
74,986
27,085
27,755
8,228
4,167
7,751
1976 ............. 101,989
33,372
41,720
8,231
8,575
10,091
88,230
31,008
31,351
9,718
5,050
11,103
1st Qtr ........ 22,467
7,855
9,437
1,705
2,064
1,406
20,147
6,790
7,114
2,189
1,046
3,008
2d Qtr ........ 24,570
8,147
10,019
1,832
1,771
2,801
21,571
7,478
7,778
2,222
1,127
2,966
3d Qtr .... . ... 26,147
8,134
10,445
2,235
2,385
2,948
21,792
8,136
7,900
2,575
1,550
1,631
4th Qtr ........ 28,805
9,236
11,819
2,459
2,355
2,936
24,720
8,604
8,559
2,731
1,327
3,499
1977
1st Qtr ........ 27,804
9,281
11,609
2,307
2,156
2,451
24,084
8,465
8,828
2,578
1,270
2,943
Apr ........... 9,230
3,058
3,849
799
694
830
7,991
2,892
2,949
756
428
966
FRANCE
1974 ........... . . 46,388
19,345
15,245
3,164
1,874
6,760
52,820
22,040
13,874
8,848
1,547
6,511
1975 ............. 53,005
19,959
15,183
4,952
3,094
9,817
54,238
23,040
14,350
9,448
1,591
5,809
1976 ............. 55,680
22,438
16,081
5,080
3,558
8,523
64,255
27,750
16,894
11,359
2,384
5,868
1st Qtr ........ 13,639
5,524
3,921
1,240
917
2,037
15,529
6,567
4,157
2,817
595
1,393
2d Qtr ........ 14,769
5,911
4,395
1,222
1,059
2,182
16,187
7,149
4,324
2,610
593
1,511
3d Qtr ........ 12,409
4,922
3,446
1,292
729
2,020
14,840
6,431
3,733
2,746
577
1,352
4th Qtr ........ 14,863
6,081
4,319
1,326
853
2,284
17,699
7,603
4,680
3,185
619
1
612
1977
,
Jan-Feb ........ 9,644
3,938
2,852
873
499
1,482
11,278
4,659
3,044
2,023
367
1
185
UNITED KINGDOM
,
1974 ............. 37,160
11,765
17,006
2,567
1,197
4,625
54,510
18,272
18,253
8,020
1,849
8,116
1975 ............. 41,731
12,339
16,515
4,553
1,480
6,844
53,147
18,301
18,274
6,962
1,771
7,839
1976 ............. 46,352
14,026
17,803
5,132
1,625
7,768
56,224
19,332
19,271
7,291
2,240
8
090
1st Qtr ........ 11,615
3,409
4,414
1,238
433
2,121
13,639
4,357
4,975
1,825
510
,
1,972
2d Qtr ........ 11,560
3,531
4,379
1,254
422
1,974
14,133
5,058
4,626
1,738
590
2,121
3d Qtr ........ 11,089
3,437
4,186
1,265
389
1,812
13,861
4,746
4,573
1,891
597
2,054
4th Qtr ........ 12,088
3,649
4,821
1,376
381
1,861
14,591
5,171
5,097
1,836
543
1,944
1977
1st Qtr ........ 13,150
4,008
5,145
1,516
413
2,068
15,575
5,786
5,068
1,784
514
2,423
Apr ........... 4,427
1,264
1,754
531
152
726
5,064
1,875
1,666
501
185
837
Approved For Release 2002/02/010: CIA-RDP79BOO457AO00200020001-9
 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
Developed Countries: Direction of Trade'
(Continued)
Big
Other
Com-
Big
Other
Com-
World
Seven
OECD
OPEC 2
munist
Other
World
Seven
OECD
OPEC 2
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
4,505
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
CANADA4
1974
............. 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
1 Data ore unadjusted. Because of rounding, components may not add to the totals shown.
' Including Gabon.
3Import data are f.a.s.
Import data are f.o.b.
Approved For Release 2002/02/01 : &If-RDP79B00457A000200020001-9
 A roved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
FOREIGN MME BILLION US $, f.o.b.,.seasonally adjusted
United States
14.0
12.0
10.0
Approved For Release 2002/02/01A_1 91A-RDP791300457A000200020001-9
 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
United Kingdom
1977
CUMULATIVE (MILLION US $)
LATEST
MONTH
MILLION
US $ 1977
1976
CHANGE
LATEST
MONTH
MILLION
US $ 1977
1976
CHANGE
JUL 77
10,150
70,105
65,646
6.8%
4,675
31,142
25,155
23.8%
12,476
85,019
67,199
26.5%
5,116
34,461
28,885
19.3%
Balance
-2,326
-14,914
-1,553
-13,361
Balance
-441
-3,319
--3,730
411
Japan
JUL 77
6,654
45,471
37,169
22.3%
JUN 77
3,924
21,624
17,087
26.6%
4,951
35,180
30,759
14.4%
3,505
22,216
19,096
16.3%
Balance
1,703
10,291
6,411
3,880
Balance
419
-591
--2,008
1,417
West Germany
JUL 77
9,657
66,317
56,282
17.8%
Canada
JUN 77
3,719
22,475
18.774
19.7%
8,384
54,989
46,344
18.7%
3,703
21,728
18,940
14.7%
Balance
1,273
11,328
9,938
1,390
Balance
16
747
-166
912
France
JUN 77
5,321
31,139
28,085
10.91.
5,791
32,807
28,784
14.0%
Balance
-469
-1,668
-699
-969
Approved For Release 2002/02/01A:,qIA-RDP79B00457A000200020001-9
 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
FOREIGN TRADE PRICES IN US $1
United States
West Germany
INDEX: JAN 1975 =100
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
i p'pt oved For RD WS ? 2002/02/Oi 9d1A-RDP79BOMWi 7000200020001-9
1Export and import plots are based on five month weighted moving averages.
A-14
 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
France
United Kingdom
Italy
Canada
1974pproved Frease 2002/0.f6CIA-RDP791Aa4757A000200020001-9
613741 8-77
 Approve,I,Eptf3ef5 26%JQftbP1ffdP796T1AQn0020001-9
MONEY SUPPLY'
INDUSTRIAL PRODUCTION '
Average
Annual
Growth Rate
Since
Average
Percent Change
_
Annual
Growth Rote Since
Latest
from Previous
I Year
3 Months
Percent Change
Month
Month
1970
Earlier
Earlier
Latest
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
18.6
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
31.3
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
35.9
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
Annual Growth Rate Since
Average
Percent Change
Annual Growth R
ate Since
Latest
from Previ
ous
1 Year
Percent Change
_
Month
Month
1970
Earlier
Latest
from Previous
1 Year
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
155
375
389
Brazil
Oct 76
-0.4
14.5
26.5
17.0
India
May 77
4,431
1,006
2,258
3,481
India
Sep 76
-3.8
9.2
6.4
-6.6
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
Approved For Release 2002/02/016,:>BIA-RDP79B00457A000200020001-9
 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
Apr 77 Exports
- 1.2
38.6
13,904
11,244
23.7%
Apr 77 Imports
-11.5
- 1.1
16,077
16,064
0.1%
Apr 77 Balance
-2,173
-4,821
2,648
76 IV Exports
-97.9
-47.8
N.A.
N.A.
N.A.
76 IV Imports
76 IV Balance
-93.5
-54.7
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
Mar 77 Exports
77.7
11.2
6,496
5,612
15.7%
Mar 77 Imports
- 18.2
3.2
5,650
6,595
14.3%
Mar 77 Balance
845
-982
1,828
Iran
May 77 Exports
32.1
14.4
34,022
28,883
17.8%
Mar 77 Imports
135.4
9.1
15,148
12,200
24.2%
Mar 77 Balance
14,710
12,956
1,754
South Korea
May 77 Exports
60.8
29.6
11,347
7,632
48.7%
May 77 Imports
106.6
27.4
11,661
9,562
21.9%
May 77 Balance
-313
-1,931
1,617
Mexico
May 77 Exports
25.9
28.9
5,071
4,240
19.6%
May 77 Imports
-33.8
-23.1
7,665
8,728
- 12.2%
May 77 Balance
-2,594
-4,488
1,894
Nigeria
Apr 77 Exports
-25.0
5.2
13,706
11,320
21.1%
Dec 76 Imports
Dec 76 Balance
83.0
6.6
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
Taiwan
May 77 Exports
2.6
17.5
11,519
8,305
38.7%
May 77 Imports
51.7
21.7
10,091
8,199
23.1%
May 77 Balance
1,427
105
1,322
Thailand
Jan 77 Exports
66.6
45.2
3,282
2,420
35.6%
Mar 77 Imports
26.3
21.9
4,198
3,748
12.0%
Jan 77 Balance
-283
-825
541
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
AGRICULTURAL PRICES MONTHLY AVERAGE CASH PRICE
7.5 $ PER BUSHEL
Kansas City No. 2 Hard Winter Chicago No. 2 Yellow
250
100
2.30'
50
1-30 AUG
II 0 0 II
1977 1973 1974 1975 1976 1977
1.0 $ PER POUND
Memphis Middling 1 1/16"
0.8
25
100
7.63
0
130 AUG II
2,000
COFFEE/TEA
TEA
London Auction
COFFEE
Milds Washed
350
300
1,500
0.5340
1,000
200
500 World Raw New York No. 11 1,500
30 AUG 0.5230
24 AUG 0.5335
JUL 77 0.5938
AUG 76 0.7536
2 /
J 1.61
50
30 AUG
7.36
24 AUG
7.55
JUL 77
7.36
50
AUG 76
9.99
30 AUG 1.76
24 AUG 1.77
JUL 77 ' 2.07
AUG 76 2.86
26 JUL 113.8 24 AUG 205.00
JUL 77 133.2 JUL 77 242.88
AUG 76 73.0 AUG 76 153.05
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
PER HUNDRED WEIGHT
37.5
No. 2 Medium Grain, 4% Brokens,
f.o.b. mills, Houston, Tex.
30.0 o
7.5 :
800
400;
320
41 Percent Bulk, f.o.b. Decatur
$ PER METRIC TON
400
30 AUG
145.00
24 AUG
137.50
JUL 77
163.35
AUG 76
175.27
1-30 AUG 100
200 160:
COCOA
325 C PER POUND .... ...
19 AUG 213.50
12 AUG 225.00
JUL 77 231.80
AUG 76 106.88
$ PER METRIC TON $ PER POUND
7,000 0.5;
6,000 0.4
CPYRGHT25 -'=
2.000
1973 1974 1975 1976 1977
0.2,-
3,000
11 1,000 n 11 0
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.
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 Approved For Release 2002/02/01 : CIA-RDP79B00457A000200020001-9
INDUSTRIAL MATERIALS PRICES MONTHLY AVERAGE CASH PRICE
COPPER WIRE BAR
140 0 PER POUND
PER METRIC TON
4,000
30 AUG
24.7
31.0
24 AUG
25.1
310
JUL 77
25.3
31
0
.
800
AUG 76
21.9
250
30 AUG
24 AUG
JUL 77
AUG 76
24.9
LME US
30 AUG
23,6
34.0
24 AUG
23.3
34.0
80'
JUL 77
24.5
34.0
AUG 76'
33.5
39.9
60 ''.
TIN
C PER POUND
650;_..
550
1,000
350
34.0
23.5 500
250
150 $ PER LONG TON
LME US
51.8 60.6
51.9 60.6
56.4 68.4
69.7 74.6
1-30 AUG
200
1973 1974 1975 1976 1977
1-30 AUGI I `1,000
1976 1977
11
1976 1977
$ PER METRIC TON ?150 250 $ PER TROY OUNCE
Us
30 AUGI 167.0'146.0
24 AUG 167.0145.6
JUL 77 167.0 '149.6
AUG 76 180.0 3157.9
25 125
1-30 AUG
_-II
1977
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6,000
1977
1.30 AUG
II
1977
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CPYRGHT
ALUMINUM
Major US Producer
t per pound
53.00
48.00
47.09
40.43
US STEEL
Composite
$ per long ton
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
t per pound
42.00
43.00
44.55
53.50
NICKEL
Major US Producer Cathode
$ per pound
2.16
2.41
2.20
2.01
MANGANESE ORE
48 Percent Mn
$ per long ton
72.00
72.00
72.00
67.20
TUNGSTEN ORE
65 Percent W03
$ per short ton
9,641.12
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
d per troy ounce
439.71
453.72
425.81
493.94
GOLD
London Afternoon Fixing Price $ per troy ounce
144.19
136.31
109.65
163.08
10 1973
11
1977
LUMBER INDEX6
160
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 lb composite."
4Quoted 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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