EXTERNAL DISTRIBUTION OF THE ECONOMIC INTELLIGENCE WEEKLY REVIEW 13 APRIL 1978

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01316A001000070003-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 49
• Document Creation Date: December 12, 2016
• Document Release Date: January 7, 2002
• Sequence Number: 3
• Publication Date: April 13, 1978
• Content Type: LIST

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Economic Intelligence
Weekly Review
13 April 1978
FBI 71-11 flf~~,
I,',' ,lent MW
2s
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SECRET
NOFORN-NOCONTRACT
13 April 1978
Current Survey
Major Recent Developments Affecting the International Economy .....
The Netherlands: "Dutch Disease" More Than a Gas Problem ......... 3
Although the gas bonanza has impaired the competitiveness of other
Dutch exports, it continues to present enviable opportunities for perma-
nent advances in economic well-being.
World Metals: Slow Price Recovery in 1978 ..........................
The market for most metals almost certainly will be characterized by
sluggish demand, abundant metal processing capacity, high inventories,
and unsatisfactory profits.
USSR: Declining Middle East Market Share ............................ 13
The Soviets have progressively lost ground in the booming Middle East-
North African market, political and technological factors keeping them
from full participation in the economic development of the region.
USSR Helps Eastern Europe Cover Trade Deficits .................. 17
China Adds Record Tonnage to Merchant Fleet ................... 18
Recent Firming of Copper Prices ............................... 19
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NOFORN-NOCONTRACT
Current Survey
MAJOR RECENT DEVELOPMENTS AFFECTING
THE INTERNATIONAL ECONOMY
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Note: Comments and queries regarding the Economic Intelligence Weekly Review
are welcome. For the text, they may be directed to F- I of the
Office of Economic Research, telephone for the Economic Indicators, to
of OER, telephone
13 April 1978
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French economic policy will continue to stress stabilization rather than stimula-
tion, given the recent election victory of the center-right.
1' lie current consultations with opposition leaders are mainly for political effect.
Economic growth should pick up slightly from the mediocre 2.9-percent pace of
last year, but a strong surge is not likely. Consumer spending almost certainly will
continue soft: a genuine investment boom is unlikely -because substantial excess
capacity remains in most industries; nor will the economy get much stimulus from the
government or from exports. Consequently, little or no reduction in unemployment is
in prospect. On the favorable side, although unions had been expected to react to a
leftist defeat with a wave of strikes, labor leaders seem demoralized and no major
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disruptions are in the offing. Inflation should edge down slightly, to perhaps 8.5
percent from December to December. The current account deficit should decline by
perhaps one-third, to about $2 billion. Balance of payments and inflation consider-
ations remain important policy constraints, with French econometric simulations
indicating that these problems will be significantly aggravated if real growth
accelerates. (Secret Noforn-Nocontract)
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The Dutch economy continues to sputter despite the rich heritage of natural gas,
which cushions the balance-of-payments impact of high oil prices. Many Dutch
businessmen even cite the gas bonanza-or government handling of it-as a prime
cause of slow economic growth, rising unemployment, and declining export competi-
tiveness. Prime Minister Andreas van Agt hopes to remedy the situation by curbing
encroachment of the public sector on the private. He will move cautiously because his
parliamentary majority is both small and precarious.
We believe that the gas deposits have enabled the Dutch to live substantially
better in the last five years than would otherwise have been the case and that the
deposits will continue to present enviable opportunities for permanent advances in
economic well-being. To reap these benefits, the Dutch must allocate more of the gas
revenues to investment and stem the rising tide of social welfare measures.
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Some well-publicized observers of the Dutch economic scene now assert that the
Netherlands' huge natural gas resources are a curse in disguise. Many businessmen
blame the natural gas windfall for the appreciation of the guilder, which has squeezed
profits and discouraged investment. Furthermore, businessmen relate the jump in
government revenue from gas to the even greater increase in social welfare spending.
This, they say, has brought higher direct and indirect taxes that have spurred labor
unions to push up wages by 140 percent from 1970 through 1977. Businessmen and
others believe that the guilder's strength has rested almost wholly on gas exports and
substitution of gas for imported oil. Whatever the causality, natural gas production
and revenues have risen sharply since 1973 while profits and investment have
declined, real GNP growth has slowed, and unemployment has soared.
Netherlands: Natural Gas Production
1970 71
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Last year the government received gas revenues amounting to about $3.6 billion,
10 percent of central government receipts. Gas revenues have increased to six times
the 1973 level, boosted by rising production but mainly by sharp hikes in gas prices,
which have moved roughly in line with oil prices. Since the 1973/74 oil crisis, The
1970
1971
1972
1973 1974
Million US $
1975
`1976
19771
Central government revenue ........
Of which:
166
260
380
601 1,032
2,169
2,780
3,600
Export revenue ........................
52
86
134
231 437
Percent
870
1,172
1,510
Share of total central
government revenue ..................
1.9
2.4
2.8
3.3 4.9
8.2
9.4
9.6
Hague has renegotiated prices with the international oil companies under long-term
contract to develop the gas reserves. Originally the companies kept 30 percent of
profits; now they retain only 5 percent, with the balance going to the government.
Gas export prices and government revenues are likely to continue rising, with
sales volume leveling off. In an effort to make reserves last through the end of the
century, the government has stopped signing new export contracts and has taken steps
to discourage domestic gas consumption. The Dutch signed big long-term contracts
after gas was discovered in the early 1960s, fearing that nuclear power soon would
render gas obsolete as a fuel source. Now nearly 40 percent of the 56.5 trillion cubic
feet of proved reserves is committed under contracts that have another 15 years to run.
The economic difficulties afflicting the Dutch are severe but not unique. While
the Netherlands has experienced a substantial slowdown in economic growth, so have
West Germany and Belgium, its neighbors and principal trading partners. After
averaging 5.3 percent in 1970-73, real GNP growth slumped to a meager 1.3 percent
in 1974-77. Annual growth in West Germany and Belgium dropped from 1970-73
rates of 4.2 and 5.6 percent, respectively, to 1974-77 rates of 1.5 and 1.7 percent.
Slower economic expansion inevitably led to a troublesome rise in unemployment. The
number of jobless in the Netherlands is expected to average about 240,000 in 1978,
roughly 6 percent of the labor force. Unemployment now is five times the 1970 level.
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A decline in private investment and a slowdown in exports underlie the recession.
Heal private investment fell 3.4 percent from 1973 to 1977, slipping from 21.6 percent
of GNP to 19.4 percent. Since 1974 the annual increase in exports has averaged less
than 1 percent in constant prices; increases in export volume had averaged about 10
percent annually in 1971-74. Exports equal about 50 percent of GNP, although their
weight would be much less on a value-added basis since they have a high import
content.
The guilder has appreciated relative to most other currencies in recent years,
eroding the competitiveness of nongas exports. The guilder has stayed in the European
joint currency float or "snake" since its inception in 1972. Over that period it has lost
only 3.5 percent of its value in terms of the strong deutsche mark. While businessmen
also complain of rising labor costs, Dutch wages have not risen unusually fast
compared with wages in neighboring countries on a national currency basis.
Netherlands: Hourly Wage Increases '
National
Currency
us $
Netherlands ......................................
130
215
West Germany ................................
96
184
Belgium ............................................
165
241
France ..............................................
132
169
United Kingdom ..............................
172
105
Italy ..................................................
233
151
United States ....................................
63
63
Canada ..............................................
100
112
The ratio of export prices to import prices, excluding trade in energy, rose 3
percent from 1973 to 1976. If energy is included, however, the ratio declined 5
percent. Net oil imports increased from $500 million in 1973 to $2.5 billion in 1976,
while gas exports rose less-from $500 million to $1.9 billion. Domestic inflation has
been generally in line with recent West European experience, with consumer prices
rising 10 percent in 1975, 9 percent in 1976, and 7 percent in 1977.
Policy to Date
Gas revenues, although not earmarked for specific purposes, have helped finance
a massive increase in government expenditures, largely on social welfare programs.
Government spending has risen an average of 15 percent annually since 1970, leaving
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Selected Countries: Ratio of. Export to Import Prices
1971 ............................ 98 99 95 103
1972 ............................ 100 100 98 107
1973 ............................ 99 98 99 104
1974 ............................ 94 99 95 95
1975 ............................ 94 101 95 102
1976 ............................ 94 101 93 101
the Netherlands with one of the highest ratios of government spending to GNP in
Western Europe. Successive cabinets have contributed to what now rivals Scandinavia
for the most complete and costly welfare system in Western Europe. About 45 percent
of the government budget is devoted to education and social services.
Gas revenues alone were not sufficient to cover the growing expenditures, so taxes
were increased sharply. Tax receipts of all sorts rose from 40 percent of GNP in 1970
to 47 percent in 1976. In comparison, taxes rose from 33 percent of GNP to 37 percent
in West Germany over the same period and from 35 percent to 40 percent in Belgium.
Before leaving office in November 1977, the Labor-Christian Democratic
administration of Prime Minister Joop den Uyl admitted a need to curb public
expenditures and promote private investment. Den Uyl envisioned only moderate
restraints: government budget deficits would be limited to 5 percent of national
income, and the ratio of government spending to national income would be allowed to
increase by no more than 1 percentage point annually through 1980. Government
officials also planned to restructure the economy by promoting high technology
industries such as electronics. They considered a scheme to allocate future gas
revenues to research and development intended to benefit both old and new
industries. Little was done, however, because the Den Uyl government functioned
only as a caretaker in second half 1977.
Proponents of the "Dutch disease" hypothesis have a good case on the matter of
export competitiveness. From 1970 to 1977, Dutch nonenergy export prices rose 118
percent measured in dollars, a larger increase than recorded by any of seven
important competitors. Most of the loss of competitiveness was due to exchange rate
changes. In . national currencies, Dutch nonenergy export prices rose only 48 percent,
the second-lowest increase in the eight-nation group. Guilder appreciation, in turn,
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Selected Countries. Export Price Increases '
Percent
National
Currency
US $
Netherlands' ..................................
48
118
West Germany ................................
36
114
France ..............................................
88
112
Italy ..................................................
195
109
United Kingdom ..............................
184
107
Belgium ............................................
49
107
United States ....................................
91
91
Canada ..............................................
90
87
' 1977 over 1970.
' Estimate; excludes energy.
was due primarily to natural gas, which enabled the Netherlands to post current
account surpluses averaging nearly $2 billion in the mid-1970s.
The broader charge that gas revenues somehow caused the huge increase in
government expenditure and the rise in taxes has little foundation. Gas revenues
facilitated the rise in outlays and almost certainly enabled it to go further than it
would have otherwise. But government spending, particularly for social welfare, was
rising rapidly before the advent of sizable gas revenues and surely would have
continued to mount. Indeed, without gas revenues, Dutch firms and individuals
probably would have faced even larger tax increases.
The gas windfall, while not the main cause of Dutch problems, does not seem to
have been put to the best use. In essence. a temporary bonanza has been used to
finance increased consumption. Allocation of the gas revenues to projects promising
more lasting benefits would have been sounder policy. For example, the income could
have been used to provide subsidies or tax cuts aimed at stimulating investment.
On the plus side, the gas-related surplus in the current account has offset a
substantial flow of Dutch investment abroad, which will yield a return stream of
earnings in future years. Depressed profitability at home and monetary policy
centered on low interest rates have encouraged investors to look abroad. In the five
years through 1976, net direct investment abroad amounted to $1.6 billion. By
yearend 1976, the Netherlands had become the largest foreign investor in the United
States, holding assets valued at $6.2 billion.
The center-right government formed last December apparently is reconsidering
the whole matter of gas revenues and government outlays. Prime Minister van Agt has
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promised to curb public spending and reduce taxes. The administration's shaky
parliamentary majority, however, raises doubts about Van Agt's ability to resist
popular demands for more spending. He is thus likely to take a timid approach to
controversial proposals. The ruling Christian Democratic-Liberal coalition holds just
77 of the 150 seats in the crucial lower house. Moreover, seven left-wing Christian
Democrats are sympathetic to the opposition Labor Party and have refused to give the
government their unconditional support.
World metals producers, struggling to recover from their worst recession since the
1930s, probably will see prices rise no more than 10 percent on average in 1978. This
gain-which amounts to practically nothing in real terms-will reflect cost-push price
pressures assisted by protectionist measures. The market for most metals will continue
to be characterized by sluggish demand, abundant metal processing capacity, high
inventories, and unsatisfactory profits.
Our composite index of world metals export prices fell 2 percent by yearend
1977, mirroring the slow economic recovery in the Free World, lagging demand, and
large supply overhangs. This created a world market awash in metals at prices
frequently below production cost. The composite index, which is dominated by steel,
dropped 5 percent by mid-1977, largely because of price cuts by Japanese and EC
steel producers. The slump in steel prices stemmed from the growing gap between
world capacity and demand. With consumption declining, countries dependent on
steel exports struggled to maintain already depressed operating rates.
Price fluctuations in nonferrous metals exhibited a variety of patterns:
? Huge inventories swamped the zinc market last year, forcing the average
price 17 percent below 1976's average 32 cents per pound.
? Near-record demand for copper was insufficient to absorb sizable surplus
stocks, and prices fell to their lowest levels in real terms since 1950.
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? The bottom dropped out of the nickel market as demand sagged and the
industry piled up large stockpiles; prices fell 15 percent to $2.06 per pound
by yearend.
? In sharp contrast, tin prices soared to record levels in 1977 as supplies fell
short of demand. Increased consumption also gave a boost to aluminum
prices.
? Lead prices held firm last year at a record average of 28 cents per pound,
largely due to increased battery demand in the United States and diminish-
ing world stocks.
US Domestic Metals Prices
index: 1972-100
240 r
80 I I
Jan Jul
1972
Jan
I
Jul
1973
Jan
Jul
1974
575588 4 78
Outlook Tarnished for Most Metals
I
Jan
I
Jul
1975
I
Jan
I
Jul
1976
Jan Jul Jan
1977
We expect little improvement in 1978 for most metal producers. OECD
industrial production-a good indicator of activity in world metals markets-is
expected to increase 3.75 percent this year compared with last year's 4.25 percent.
Most metal markets thus will continue to be characterized by sluggish demand
growth, excess capacity, and brimming inventories.
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Market adjustments toward supply/demand balance in 1978 will continue to be
hampered by the inelastic response of the metals producers to lower prices. For
example, many LDC producers, with foreign exchange earnings more important than
operating profits, continue production as long as revenues cover out-of-pocket costs.
Because of excess capacity and surplus stocks, particularly in copper and zinc, we see
only a slight firming of world metals prices during the remainder of 1978.
Depressed world prices are intensifying protectionist sentiment within the
developed countries, particularly the United States and the EC:
? The EC and the United States have adopted import floor prices for steel.
? US producers have petitioned the US International Trade Commission for
tariffs to protect domestic copper and zinc markets.
? The EC is considering a scheme to monitor the production and export of
zinc.
Despite these measures, downward pressure on US domestic metals prices will
persist so long as foreign producers look to US markets as a vent for their metals
susplus. The gap between our composite index for US metals prices and world export
prices may narrow as foreign steel producers raise prices closer to the US level. In any
case, we expect the glut of world metals will prevent US producers from establishing
the markups necessary to regain former profit levels.
A generally weak market will prevail in 1978, with our world price index
unlikely to show a gain of more than 10 percent. Factors leading to moderate price
increases are: (a) rising production costs for most metals, (b) protectionist measures for
steel, and (c) speculative anticipation of an improved copper market. Specificially we
believe that:
? World steel consumption should increase by 3 to 4 percent over depressed
1977 levels. Despite somewhat higher demand, most major foreign steel
producers will still operate at only 65 to 75 percent of capacity. As a result,
major foreign producers probably will not be able to hike export prices
beyond 5 to 10 percent this year.
? Although a 5-percent rise in copper consumption, coupled with increasing
producer costs, should boost prices from their low March 1978 levels, quotes
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probably will average no more than 10 percent above last year.* The
tremendous inventory accumulation of more than 2 million tons will
dampen the salutary effect of any production cutbacks.
? "Total demand for lead Will remain high this year-about the same as
1977-as consumers begin replenishing inventories. A small increase in
production will prevent the shortfall that occurred last year. Although the
price should increase moderately this year, it will fall short of the 31 cents
per pound reached last year.
? Zinc production should continue to outstrip consumption in 1978, raising
stocks of zinc concentrates and slabs to an estimated 2.4 million tons. Prices,
now at their lowest level since 1973, should remain well below last year's top
price of 31 cents per pound.
? Rising tungsten production from new mines and GSA stockpile releases
this year will supply the small rise in consumption we expect in 1978.
Barring unusually large Chinese sales or Soviet purchases during the year,
prices should remain firm, although below the mid-1977 peak.
? Mainly because of only moderate growth in the steel market, nickel
demand will not improve much over last year, and excess capacity will
continue to accumulate. Although the market may strengthen as consumers
build up inventories and producers cut output, we expect prices to remain
depressed.
? World demand for aluminum, spurred in part by energy-related empha-
sis on lighter weight vehicles, is expected to grow by about 5 percent and
reach a record 15 million tons in 1978. Because of large inventories,
production is unlikely to increase at the same rate; output of primary
aluminum worldwide probably will average about 88 percent of capacity. As
a result, prices of primary aluminum, could
increase from their present 53 cents per pound to about 60 cents per pound
(US producer price) in 1978.
? The sharp upward thrust in tin prices under way last year probably will
reverse in 1978 as prospects for sizable releases of tin from L'S stockspiles-as
much as 50,000 tons over the next several years-relieve the strong
speculative pressure behind current high prices. Malaysia is trying to spur
output by reducing restrictive taxing and licensing procedures; even so,
prvssures on supplies will persist.
'For information on recent firming of copper prices. see the Notes, below-
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USSR: DECLINING MIDDLE EAST MARKET SHARE
The USSR has progressively lost ground in the booming Middle East-North
African market. * While much of the erosion reflects the souring of Egyptian-Soviet
relations since 1973, Moscow also has seen its market share fall in states with pro-
Soviet leanings such as Iraq and Syria. Nevertheless, the USSR has doubled its hard
currency earnings from the area since 1973, primarily because of increased military
shipments. The Soviets are in a good position to maintain military sales; they are
constrained by political and technological factors from taking full part in the
economic development of the region.
* The largest Middle East-North African markets are Algeria, Egypt, Iran, Iraq, Kuwait, Libya, Saudi Arabia, and
Syria. Data in this article cover only these eight countries.
Middle East: Imports
Billion US-$
60 r-`
Total Military Deliveries
from the USSR
Total from the
USSR
0
1970 1971 1972 1973 1974 1975 1976 1977
Est.
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Strong Position Before 1973
Moscow's economic push in the major Middle East and North African countries
began with its military-economic agreements with Egypt in the mid-1950s. These
were followed by similar pacts with Syria and Iraq in the late 1950s, with Algeria and
Iran in the 1960s, and with Libya in the 1970s. Along with these agreements, the
Soviets provided $4.4 billion in economic assistance, about one-half for showpiece
projects such as Egypt's Aswan Dam and expansion of the Ifelwan Steel Mill, Syria's
Euphrates dam, Iraq's Baghdad-Basra railroad, and Iran's Isfahan Steel Mill. On the
military side, aid commitments had reached the $9 billion mark by 1973.
Sparked by these agreements, Soviet trade with the region increased rapidly
(luring the 1960s and early 1970s. In 1973, total Soviet sales reached $3.7 billion,
giving Moscow more than one-fifth of the Middle East-North African import market.
The second largest supplier to the area-the United States-sold $1.9 billion worth of
goods in 1973. Reflecting wartime deliveries, almost three-fourths of Soviet exports
were military equipment, primarily for Syria, Egypt, and Iraq. The Soviets had
enjoyed a near monopoly on military sales to these countries and Algeria since the late
1950s.
Sales of Soviet civilian goods to the region reached almost $1 billion in 1973-7
percent of the area's civilian imports. The Soviet share of the top markets rose steadily
between 1970 and 1973, to 25 percent in Egypt, 19 percent in Iraq, and 14 percent in
Syria. Soviet civilian exports to these countries were largely tied to barter arrange-
ments and aid programs.
Postwar Slippage
Soviet military exports to the Middle East lost momentum after the war, dropping
from $2.8 billion in 1973 to $1.4 billion in 1976. Worsening relations with Cairo all but
eliminated Moscow's military assistance program; deliveries had peaked at $800
million in 1973. Military deliveries to Iraq and Syria also fell sharply from the war-
swollen levels of 1973. Soviet military exports rebounded in 1977 to nearly $1.8 billion,
reflecting large deliveries to Syria, Libya, and Iraq.
Soviet nonmilitary sales to the Middle East and North Africa rose from $1 billion
in 1973 to $1.6 billion last year; the decline in the dollar against the ruble probably
accounted for one-fifth of the increase. As a share of the regional civilian import
market, the Soviet position slipped badly during the period, however, fell to a mere 3
percent in 1977.
Most of the absolute increase in Soviet sales during 1974-77 was divided among
Iraq, Iran, and Algeria. Nonmilitary shipments to Egypt stood at approximately $300
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USSR: Exports to Selected Middle East and North African Countries
Million US $
Algeria' ......................................................
69
87
167
7
35
209
Egypt ..........................................................
363
374
276
640
808
4
Iran ................................................................
188
185
577
58
100
38
Iraq' ............................................................
66
191
382
39
610
620
Kuwait ' ......................................................
11
11
30
-
-
25
Libya E ........................................................
14
19
29
35
10
545
Saudi Arabia ' ............................................
6
4
19
-
-
-
Syria ............................................................
46
97
137
53
1,199
350
Total ........................................................
763
968
1,617
832
2,762
1,791
Of which:
Hard currency ................................
152
293
598
81
655
1,399
Hard currency trade partners.
z Hard currency trade partner for military sales.
million in 1976 and 1977, down from $400 million in 1973. Exports to Syria rose only
moderately over the period.
Swing Toward Hard Currency Sales
The erosion of relations with Egypt and the increase in sales to Libya and Iraq
have boosted the hard currency content of Soviet exports. Last year nearly 60 percent
($2 billion) of total Soviet exports to the area involved hard currency sales; in 1970, the
figure was only 15 percent. The Soviets garnered a $1.5 billion hard currency trade
surplus with the region in 1977, up from only $165 million in 1970. The region
accounted for 15 percent of total Soviet hard currency merchandise exports in 1977.
Most of the increase in hard currency earnings comes from multibillion-dollar
military sales, particularly recent deals with Iraq and Libya. Hard currency civilian
sales have been made primarily to Iraq and Algeria. Civilian sales to Saudi Arabia and
Kuwait have been negligible. Aside from these sales, the Soviet natural gas deal with
Iran permits the USSR to sell its own gas to Western Europe, generating hard currency
earnings of $300 million annually.
Soviet civilian sales to the Middle East and North Africa consist mainly of heavy
equipment for basic industries, steel, cement, and other raw materials or semimanu-
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factures. The Soviets import oil, gas, and agricultural products from these countries.
The presence of 4,000 to 5,000 Soviet technicians in the Mideast is dwarfed by
contingents from most other countries heavily involved in area development.
Moscow's trade with Egypt is now down to a bare bones exchange, involving
Soviet coal, petroleum products, and some industrial machinery in return for Egyptian
agricultural products and raw materials. Cairo sent home Soviet military advisers in
1972 and let contracts for civilian technicians lapse in 1973-74, replacing them with
Westerners. Last year, Sadat halted deliveries of cotton to the USSR, one of the main
commodities the Soviets had been importing as repayment for Egypt's $4 billion
military debt. The USSR currently accounts for only 6 percent of Cairo's imports
compared with 30 percent in 1970. The share should drop still further as Egypt
expands economic ties with the West. Sadat is moving ahead with an open door policy
toward Western investment and is concentrating development efforts on Western-
oriented sectors such as tourism and oil.
While USSR-Syrian military relations are on the upswing, Soviet economic
activity is in a holding pattern. Soviet civilian sales to Syria last year fell back to 1975
levels, and the only major economic assistance programs are land reclamation and
power projects that date from the 1960s. Moscow's share of Syrian civilian imports has
dropped from 14 percent in 1970 to 5 percent in 1977. Current Soviet development
assistance is mainly confined to the Euphrates dam complex and the expansion of
Syria's oil industry. The latest Soviet-Syrian economic agreement, signed in 1976,
opened a $300 million line of credit; as in the past, however, it probably will be drawn
slowly.
The USSR has done better in sustaining civilian sales to Iraq. Even so, Moscow
provides only about 10 percent of Iraqi imports compared with a high of 19 percent in
1973 and 13 percent in 1970. The Soviets currently are still working on oil projects at
Rumaila and other fields and on irrigation and electric power projects. More work on
these projects is implied in the 1976 economic agreement with Baghdad but no major
new Soviet contracts in other sectors are under negotiation.
Soviet nonmilitary transactions with Libya have been minimal. Most of the boom
in Libyan imports-from $600 million in 1970 to nearly $5 billion last year-has gone
into infrastructure projects undertaken by firms in Europe, japan, and developing
countries. Moscow never has supplied more than one percent of Libyan civilian
imports. An ambitious trade agreement was signed in 1976 and a major contract for
Soviet nuclear reactors was awarded last year. Moscow, however, does not appear to
be bidding on other contracts for power and infrastructure projects.
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 Approved For Release 2002/09/04: CIA-RDP79T01316A001000070003-0
Aside from the Iranian-Soviet gas deal, Moscow's economic role in Iran currently
is confined to expansion of the Isfahan Steel Mill and some smaller foundry, housing,
and cement projects. The Soviets also have bid on commercial contracts for part of a
natural gas pipeline. Iran now receives about 5 percent of its imports from the USSR,
down from 12 percent in 1970.
Prospects
Soviet civilian sales to the Mideast and North Africa will continue to be outrun by
exports from Western nations and leading LDCs. The Libyan reactor deal is the only
major equipment contract won by the USSR in the region since 1976, and the
development programs of most of the Middle Eastern states are creating little demand
for such traditional Soviet hard currency earners as raw materials and semimanufac-
tures. In addition, competition from advanced LDCs such as India and South Korea,
and from Eastern Europe as well, is erasing the former Soviet edge in heavy
construction projects-roads, railways, ports, and other infrastructure.
Prospects for military sales remain good. Moscow's principal advantage is the
ability, if need be, to ship large amounts of modern hardware on extremely short
notice. The most important markets will continue to be Syria, Iraq, and Libya; the
latest deal pending is an agreement for $400 million in arms for Syria, expected to be
financed b Lib a. Other countries, such as Kuwait, probably will make spot
purchases.
Notes
USSR Helps Eastern Europe Cover Trade Deficits
The Soviet Union continues to provide substantial assistance to its East European
partners in covering their rapidly rising trade deficits with the USSR. These deficits,
which totaled nearly $2 billion last year compared with $160 million in 1974, have
been incurred largely because of rising Soviet oil prices. Moscow's help in sustaining
deficits of this magnitude is particularly welcome at this time since the East
Europeans are also faced with severe hard currency trade and payments problems.
Ruble trade credits have been extended to most of the East European countries.
Moscow has also arranged some indirect hard currency relief. A multiyear agreement
with Hungary, for example, provides for the exchange of "hard" goods for Hungarian
13 April 1978 SECRET
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 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
1974
1975
1976
1977
Oil as a Percent
of Soviet Exports
in 1976
Total ....................................
-157
-771
-1.171
-1,923
Bulgaria ............................
-70
-178
-117
-223
19
Czechoslovakia ................
-10
-178
-130
-331
25
East Germany ..................
-18
-469
-583
-809
17
Hungary ..........................
18
-58
-67
-145
21
Poland ..............................
-122
-57
-353
-440
22
Romania ............................
45
169
79
25
0
' Based on Soviet trade statistics.
' Preliminary.
Converted at the average monthly ruble-dollar exchange rates.
meat that had been shut out of the EC market. Moscow sometimes has allowed the
East Europeans to divert exports to the West to augment hard currency earnings. In
other instances, the Soviets have provided above-plan deliveries of needed raw
materials and semimanufactures that otherwise would have to be imported from the
West.
Higher oil prices have accounted for more than half the increase in the value of
Soviet exports to the five countries running deficits with the USSR. Only Romania,
which does not import Soviet oil but buys other raw materials from the USSR, enjoys a
surplus in its Soviet trade, and even this has been dwindling. Moscow upped its oil
prices 20 percent last year, and another 20-percent hike is scheduled for 1978,
foreshadowing continuing big deficits and the need for further Soviet financial
25X1 A support.
China Adds Record Tonnage to Merchant Fleet
In 1977, China spent $350 million to buy 127 ships for its rapidly growing
international merchant fleet. The acquisitions, almost all used vessels, were purchased
at rock bottom prices in the currently depressed ship market. Total acquisitions
reached a record 1.7 million deadweight tons (DWT), bringing the Chinese interna-
tional fleet to about 6 million DWT. The expansion program will increase the share of
PRC trade carried on Chinese ships and enable Peking to cut chartering costs, which
amounted to over $50 million in 1977. Chinese ships carried 60 to 70 percent of
China's trade in 1977: by 1985, under the present expansion policy, China will be able
to carry almost all its trade on its own ships.
25X1A
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 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
Recent Firming of Copper Prices
Prices of copper on the London Metal Exchange (LME) have strengthened in
recent weeks due to increasing bullishness among traders. Market optimism has been
sparked by the announced agreement between Zambia, Zaire, and Peru to cut
production by 15 percent. Zaire decided in late March to meet sales commitments
with purchases from LME copper stocks, which have dropped by 10 percent to
570,000 tons since mid-January, thus adding further to upward speculative pressures;
LME prices have risen from 54 cents a pound in early March to 60 cents on 10 April.
The impact of these moves will be temporary, as several basic factors militate
against strong market recovery this year. Although consumption may reach a record 7
million tons this year, demand will remain well below capacity, which has increased
steadily since the previous consumption record of 6.9 million tons in 1973. Prospects
are further dampened by (a) the 2 million tons of refined copper which continue to
overhang the market, (b) Chile's refusal to go along with production cuts, and (c) the
basing of Peru's 15-percent cut on capacity rather than on last year's production; this
permits Peru to observe the letter of the agreement and still produce more than last
year as new mines come on stream.
Communist Military Support for the Rhodesian Insurgency
(ER 78-10190, April 1978, Secret Noforn-Nocontract-Orcon)
This research paper discusses the increased Soviet and Cuban military aid to the
Rhodesian insurgents during 1977 and the ability of the insurgents to continue
fighting after a negotiated settlement.
25X1A
25X6
* Copies of these publications may be obtained by calling)
13 April 1978
(telephone [phone].
25X1A
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 Secret
Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
 Mr Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
Assessment
Center
Economic Indicators
Weekly Review
13 April 1978
ER EI 78-015
13 April 1978
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 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
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 2002/09/04: CIA-RDP79TO1316AO01000070003-0
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
1. The Economic Indicators Weekly Review provides up-to-date information
on changes in the domestic and external economic activities of the major non-
Communist developed countries. To the extent possible, the Economic Indicators
Weekly Review is updated from press ticker and Embassy reporting, so that the
results are made available to the reader weeks-or sometimes months-before receipt
of official statistical publications. US data are provided by US government agencies.
2. Source notes for the Economic Indicators Weekly Review are revised every
few months. The most recent date of publication of source notes is 16 February 1978.
Comments and queries regarding the Economic Indicators Weekly Review are
welcomed.
Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
 BIG SIX FORLFStW9itOQI-7fQ3S
Industrial Production
140
130
INDEX: 1970=100, seasonally adjusted
Semilogarithmic Scale
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 4ppMed For Relg 002/09/04 i6yf dRDP79T01316,,,l"l00007000 g
1 including Japan, West Germany, France. the United Kingdom Italy, and Canada. A-2
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
Consumer Price Inflation
Percent, seasonally adjusted, annual rate
5.8
4.0
Note: Three-month average compared with previous three months.
Trade Balance
4.0
Billion US $, f.o.b., seasonally adjusted
-3.0
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975
Industrial
Production
Big Six
AVERAGE ANNUAL
Percent Change GROWTH RATE SINCE
LATEST from Previous 1 Year 3 Months
MONTH Month 1970 Earlier Earlier2
Consumer Prices
Big Six JAN 78 0.1 9.3 7.2 4.0
United States JAN 78 0.8 6.5 6.8 5.8
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1976 1977 1978
3 Months
LATEST MONTH 1 Year Earlier Earlier
Unemployment Rate
Big Five JAN 78 4.2 4.0 4.3
United States IAN 78 6.3 e.4 b.8
LATEST MILLION CUMULATIVE (MILLION US $)
MONTH US $ 1977 1976 Change
Trade Balance
Big Six JAN 78 2,650 36,783 15,821 20,962
United States 13PJ 79 -2,379 -27,393 -5,635 -21,758
Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0 tinyn 4-'8
2Average for latest 3 months compared with average for previous 3 months, seasonally adjusted at annual rate.
A-3
 A proved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
INDUSTRIAL PRODUCTION INDEX: 1970=100, seasonally adjusted
United States
Japan
West Germany
130
120
A~ roved For Release 200210'9/07: CIA-I OP79T0'T316~k0~F000'070~903-(71 OCT
1974 1975 1976 1977 1978
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
United Kingdom
-110 -
X120
111
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
Percent
Change
AVERAGE ANNUAL
GROWTH RATE SINCE
Percent
Change
from
AVERAGE ANNUAL
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
t?3
0.4
3.4
4.5
0.7
United Kingdom
JAN 78
-0.4
0.4
-2.5
-0.6
Japan
t=J3 78
-0.2
4.2
6.2
13.8
Italy
JAN 78
4.5
3.3
-3.5
25.5
West Germany
r1EC 77
1.7
2.4
2.6
4.7
Canada
UEC 77
0.2
3.9
3.6
2.9
France
JAN 78
3.3
3.2
-1.6
4.4
Approved For Release 200?~/09/04 : CIA-RDP79TO1316AO01000070003-0
n Approved
lAverage for latest & Proved
compared with average for previous months.
 UNEMPLOYI1~E~t' !T For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
PERCENT
United States
West Germany
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
Approved For Release 20022Ob9/04 : CIA-RDP79TO1316AO01000070003-0
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
United Kingdom
A labor force survey based on new definitions of economic activity sharply raised the official estimate of Italian unemployment in first quarter 1977. Data for earlier periods thus arenot comparable.
Italian data are not seasonally adjusted.
Canada
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
THOUSANDS OF PERSONS UNEMPLOYED
1 Year 3 Months LATEST MONTH 1 Year 3 Months
Earlier Earlier Earlier Earlier
United States i EB 78 6.090 7,183 6,818 United Kingdom P;9 AR 78 1,400 1,321 1.428
Japan JAN 78 1,130 1.000 1,060 Italy 781 1,520 1,459 1,598
West Germany T! R 78 1,022 1,007 1.031 Canada 1AN 78 891 780 886
France cFB 78 1,042 998 1,065
NOTE: Data are seasonally adjusted. Unemployment rates for France are estimated. The rates shown for Japan and Canada are
roughly comparable to US rates. For 1975-78, the rates for France and the United Kingdom should be increased by 5 percent and
15 percent respectively, and those for West Germany decreased by 20 percent to be roughly comparable with US rates. Beginning in
1977, Italian rates should be decreased by 50 percent to be roughly comparable to US rates.
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 Approved For Release 2002/09/04: CIA-RDP79T01316A001000070003-0
CONSUMER PRICE INFLATION Percent, seasonally adjusted,
annual rate'
5 2.9 Average Annual Rate of Inflation 1981-1972
West Germany
1973 1974 1975 1976 1977 1978
"Three-month average compared with pr ftW8VCUtFor Release 2002/09/04: CIA-RDP79T01316A001000070003-0
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
35
30
25
20
15
10
35
30
25
20
15
15
10
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
Percent
Change
AVERAGE ANNUAL
GROWTH RATE SINCE
Percent
Change
AVERAGE ANNUAL
GROWTH RATE SINCE
LATEST
from
Previous
1970
1 Year
3 Months
LATEST
from
Previous
1970
1 Year
3 Months
MONTH
Month
Earlier
Earlier2
MONTH
Month
Earlier
Earlier2
United States
fl 9 7P
0.4
6.5
6.4
6.6
United Kingdom
,..
0.5
13.4
9.5
6.1
Japan
":I3 78
0.7
9.9
4.2
-1.4
Italy
78
0.5
13.1
13.1
11.7
West Germany
'JAR 78
0.3
5.3
3.0
2.8
Canada
1 AN 78
0.5
7.5
9.0
9.8
France
JAN 7S
0.3
8.9
9.2'
6.7
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A-9
1.7
 Approved For Release 2002/09/01gi ff TS7,9T01316A0 1 -
Persw
A-rag.
Amud Growth Rat. Svc.
Chong.
P
Aserop.
Anal Growth Rate Since
ch
Leta from P
Warlr W
,.riou. 1 Year Prenws
ater 1970 Earir Cud.
L
M
ahti
onth
er
fr
ap.
cent
om Awdon
Month
1970
I Year
Earlor
3 Months
E'S"
United States
77 IV
United
Sta
tes
Japan
77 IV
Japan
S
ep 77
0.7
West Germany
77 IV
West G
erm
any
J
an 78
5.8
France
77 III
0.9
France
N
ov 77
-12.0
United Kingd
77 111
- 1.4
United
Kin
gdom
F
eb 78
10.1
Italy
77 III
- 10.3
Italy
- 11.1
Canada
3:4
Canada
WAY 04-d-
s A.erog. for latest 3 mmtfe concord with asrag. for prsvian 3 monttu.
FIXED ED INVESTMENT'
Arroq.
Annjd Growth Rats Siu.
United States
Japan
West Germany
France
United Kingdom
Italy
Canada
' Secnonaty adi-ed.
Perc.nr chap.
Lahti from Pr.rioo 1 Yea Preece.
Wart. Water 1970 Earir Quatr
77 IV
77 IV
77 111
77 111
77 III
United States
Japan
West Germany
France
United Kingdom
Canada
Eurodollars
Commercial paper
Call money
Interbank loans (3 months)
Call money
Sterling interbank loans (3 months)
Finance paper
Three-month deposits
Asxog.
Annul Growth Rate Sim*
United States
Japan
West Germany
France
United Kingdom
Italy
P.rcont Chap.
Latest hors Previous I Year 3 Months
Period Period 1970 Earlier Earlier'
' Mo..y eawrirps (nmotdy od)nt.di For rho Uniad Stow, Japan, and Canada, hourly wags
raht fa orlrn. Wet German and fronds date rofr to MMs b. ining of rte. quote.
- Asuroge Jar latest 3 nsont s conpa.d with Msot for pnrtan 3 months.
1 Yea 3 Month. 1 Month
Latest Date Eager Earlr Eeir
Apr 5
Apr 7
Apr 5
Apr 7
Apr 5
Apr 5
Apr 5
Jan 78
Dec 77
77 IV
77 IV
Jan 78
Dec 77
Approved For Release 2nn2/n9/n ._C.~
A-101
 EXPORT 4oved For Release 2002/09/04: CI
-R@7j0H11001000070003-0
us $
National Currency
Average
Average
Annual Growth Rate 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
Dec 77
1.1
9.3 3.0
6.2
United States Dec 77
1.1 9.3 3.0 6.2
Japan
Jan 78
-0.7
11.0 11.9
20.0
Japan Jan 78
-0.8 5.3 -7.3 -4.2
West Germany
Dec 77
6.3
12.1 11.9
49.6
West Germany Dec 77
2.1 4.4 1.0 10.2
France
Nov 77
-0.5
11.0 9.0
-3.8
France Nov 77
-0.7 9.0 6.1 -7.0
United Kingdom
Feb 78
-0.2
12.1 22.7
33.8
United Kingdom Feb 78
-0.4 15.3 8.2 3.6
Italy
Oct 77
-0.6
10.9 12.7
0.2
Italy Oct 77
-0.9 16.3 16.0 -0.7
Canada
Nov 77
-0.5
8.4 -3.5
-23.0
Canada Nov 77
0.5 9.3 8.6 -12.7
IMPORT PRICES
OFFICIAL RESERVES
National Currency
Average
Annual Growth Ra
te 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
Dec 77
-1.6
12.6 6.1
-3.3
United States Jan 78
19.5 14.5 18.7 19.0
Japan
Jan 78
-2.4
7.6 -18.2
-33.4
Japan Mar 78
29.2 4.1 17.0 22.8
West Germany
Dec 77
-1.2
3.8 - 1.8
-4.1
West Germany Jan 78
40.7 8.8 34.4 35.7
France
Nov 77
-0.3
9.8 4.7
-5.3
France Oct 77
10.1 4.4 9.6 9.9
United Kingdom
Feb 78
0.3
17.7 1.6
-5.4
United Kingdom Jan 78
21.4 2.8 7.3 20.4
Italy
Oct 77
-4.3
19.8 10.9
-3.0
Italy Jan 78
11.4 4.7 6.7 11.1
Canada
Nov 77
0.6
8.7 15.2
-7.3
Canada Feb 78
3.7 4.3 5.3 4.2
CURRENT ACCOUNT BALANCE
'
BASIC BALANCE '
Current and Long-Term-Capital Transactions
Cumulative (Million
US S)
Cumulative (Million US S)
Latest
Latest
Period Million USE
1977 1976
Change
Period Million US $ 1977 1976 Change
United States 2
77 111
-4,302 -
13,064 -48
-13,016
United States
No longer published 2
Japan
Feb 78
1,801 1
1,112 3,680
7,432
Japan Feb 78
1,963 7,876 2,696 5,180
West Germany
Feb 78
240
3,584 2,659
926
West Germany Feb 78
528 -1,648 2,472 -4,120
France
77 IV
136 -3,179 -5,721
2,541
France 77 IV
149 -3,218 -6,842 3,624
United Kingdom
77 III
916
-691 -1,539
848
United Kingdom 77 111
2,238 3,995 -1,585 5,581
Italy
77 III
2,390
1,629 -2,028
3,657
Italy 77 III
2,520 2,128 -2,083 4,211
Canada
77 III
-1,150 - 4,106 - 3,215
-890
Canada 77 111
346 -446 3,239 -3,684
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 EXCH
ANGE RATES'
Spot Rate
As of 7 Apr 78
As of 7 Apr 78
Percent Change from
Percent Change from
Us $
1 Year 3 Months
1 Year 3 Months
Per Unit
19 Mar 73
Earlier Earlier
31 Mar 78
19 Mar 73
Earlier Earlier 31 Mar 78
Japan (yen)
0.0046
19.96
26.20 9.85
1.92
United States 0.35
-5.65 -1.63 -0.23
West Germany
0.4959
40.05
18.63 5.83
0.10
Japan 24.32
23.37 9.38 1.93
(Deutsche mark)
West Germany 32.91
8.18 2.15 0.15
France (franc)
0.2197
-0.31
9.23 3.95
0.30
France -10.03
-2.32 0.07 0.30
United Kingdom
1.8742
-23.84
9.00 -2.79
0.66
United Kingdom -29.34
1.56 -5.71 0.76
(pound sterling)
Italy -42.15
-6.48 - 1.02 -0.04
Italy (lira)
0.0012
-33.62
4.26 2.71
0
Canada -12.30
-10.04 -4.65 -0.62
Canada (dollar)
0.8770
- 12.10
-7.56 -3.88
-0.49
' Weighting is based on each listed country's trade with 16 other industrialized countries to
Approved For Rele
ase 2002/09/04: CIA
-RPM'P T'C 'm"16'1P00`11b0O7V10 ? a-rOamong the major currencies.
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
Big Other Com- Big Other Com-
World Seven OECD OPEC munist Other World Seven OECD OPEC munist Other
UNITED STATES
1975
.............
107.65
46.94
16.25
10.77
3.37
29.82
103.42
49.81
8.83
18.70
0.98
25.08
1976
.............
115.01
51.30
17.68
12.57
3.64
29.44
129.57
60.39
9.75
27.17
1.16
31.09
1st
Qtr
........
27.37
12.18
4.11
2.75
1.08
7.24
29.34
13.72
2.40
6.07
0.27
6.88
2d
Qtr
........
29.69
13.38
4.51
3.11
1.01
7.51
31.65
15.36
2.41
6.07
0.28
7.54
3d
Qtr
........
27.43
11.94
4.09
3.11
0.78
7.42
33.74
15.24
2.40
7.55
0.31
8.24
4th
Qtr
........
30.52
13.79
4.97
3.60
0.76
7.26
34.84
16.07
2.55
7.48
0.30
8.44
1977
.............
120.17
53.92
18.53
14.03
2.72
30.97
156.70
70.48
11.08
35.44
1.22
38.48
1st
Qtr
........
29.46
13.75
4.73
3.14
0.86
6.98
37.37
16.07
2.76
8.97
0.30
9.27
2d
Qtr
......
31.67
14.39
4.81
3.69
0.71
8.07
40.45
18.14
2.77
9.31
0.35
9.88
3d
Qtr
........
28.75
12.23
4.39
3.58
0.47
8.08
39.50
17.73
2.78
8.92
0.32
9.75
4th
Qtr
........
30.29
13.55
4.60
3.62
0.68
7.84
39.38
18.54
2.77
8.24
0.25
9.58
JAPAN
1975
.............
55.73
16.56
6.07
8.42
5.16
15.87
57.85
16.93
6.08
19.40
3.36
12.05
1976
.............
67.32
22.61
8.59
9.27
4.93
17.84
64.89
17.58
7.78
21,88
2.91
14.72
1st
Qtr ........
14.44
4.89
1.83
1.87
1.28
3.76
14.84
4.09
1.70
5.22
0.67
3.16
2d
Qtr ........
16.42
5.46
2.09
2.27
1.32
4.39
15.89
4.35
1.95
5.40
0.66
3.54
3d
Qtr ........
17.54
5.95
2.27
2.47
1.09
4.52
16.81
4.51
2.14
5.41
0.74
4.01
4th
Qtr ........
18.92
6.30
2.40
2.66
1.24
5.17
17.34
4.62
2.00
5.86
0.84
4.01
1977
1st
Qtr ........
17.89
5.89
2.45
2.46
1.36
5.73
17.44
4.72
1.84
6.24
0.79
3.85
2d
Qtr ........
19.73
6.73
2.41
2.91
1.19
6.49
17.88
4.88
2.10
5.74
0.86
4.30
3d
Qtr ........
20.63
7.40
2.47
3.05
1.33
6.38
17.63
4.68
1.84
5.88
0.84
4.39
Oct
& Nov .... 14.26
4.93
1.56
2.21
0.94
4.62
11.98
3.00
1.36
4.17
0.59
2.86
WEST GERMANY
1975
.............
91.70
28.33
36.44
6.78
8.81
11.05
76.28
27.09
27.78
8.24
4,87
8.21
1976
.............
103.63
33.44
41.86
8.25
8.72
11.04
89.68
31.28
32.64
9.73
5.93
10.01
1st
Otr ........
23.79
7.92
9.54
1.71
2.09
2.47
20.49
7.13
7.59
2.19
1.33
2.23
2d
Qtr ........
24.96
8.21
10.12
1.84
2.08
2.64
21.94
7.70
8.13
2.22
1.43
2.42
3d
Qtr ........
25.53
8.00
10.28
2.24
2.13
2.78
22.14
7.56
7.89
2.57
1.49
2.58
4th
Qtr ........
29.35
9.31
11.92
2.46
2.42
3.15
25.12
8.88
9.03
2.73
1.67
2.78
1977
1st
Qtr ........
28.19
9.28
11.62
2.31
2.11
2.67
24.45
8.46
8.85
2.58
1.42
3.14
2d
Qtr ........
29.20
9.59
11.79
2.69
2.07
3.06
25.21
9.09
9.04
2.43
1.54
3.11
3d
Qtr .......
28.75
9.20
11.45
2.71
2.26
113
25.27
8.99
8.97
2.54
1.65
3.12
Oct
& Nov ....
21.32
7.13
8.65
1.90
1.24
2.40
17,85
6.35
6.79
1.65
0.96
2.10
FRANCE
1975
.............
52.87
20.00
15.50
4.90
3.13
8.61
53.99
23.04
14.33
9.43
1.94
5.21
1976
.............
57.05
22.49
16.15
5.08
3.23
8.75
64.38
27.81
16.93
11.36
2.24
6.01
1st
Qtr ........
13.97
5.52
3.93
1.24
0.84
2.08
15.52
6.57
4.16
2.82
0.56
1.42
2d
Qtr ........
15.02
5.91
4.41
1.22
0.98
2.23
16.19
7.15
4.33
2.61
0.55
1.53
3d
Qtr ........
12.81
4.97
3.49
1.29
0.67
2.09
14.97
6.49
3.77
2.75
0.55
1,41
4th
Qtr ........
15.26
6.08
4.33
1.33
0.75
2.35
17.70
7.60
4.68
3.19
0.58
1.65
1977
1st Qtr ........
15.68
6.25
4.55
1.39
0.75
2.74
17.89
7.50
4.84
3.06
0.52
1.97
2d Qtr ........
16.69
6.60
4.79
1.57
0.83
2.90
17.96
7.84
4,71
2.65
0.61
2.15
3d Qtr ........
14.75
6.02
4.08
1.32
0.67
2.66
16.14
6,99
3.85
2.87
0.62
1.81
Oct & Nov ....
11.45
4.60
3.13
0.99
0.41
2.32
12.11
5.25
3.12
2.10
0.46
1.18
UNITED KINGDOM
1975 .............
44.03
12.55
16.59
4.55
1.56
8.64
53.35
18.47
18.52
6.91
1.68
7.67
1976 .............
46.12
14.03
17.53
5.13
1.39
7.92
55.56
19.66
18.81
7.29
2.08
7.65
1st Qtr ........
11,60
3.41
4.37
1.24
0.38
2.17
13.50
4.69
4.64
1.82
0.49
1.83
2d Qtr ........
11.46
3.53
4.32
1.26
0.37
1.95
13.96
5.04
4.57
1.74
0.56
2.03
3d Qtr ........
11.03
3.43
4.11
1.26
0.32
1.87
13.69
4.75
4.54
1.89
0.51
1.98
4th Qtr ........
12.03
3.64
4.74
1.38
0.31
1.93
14.41
5.17
5.06
1.84
0.51
1.81
Approved For Release 2002449104: CIA-RDP79TO1316AO01000070003-0
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
Developed Countries: Direction of Trade'
(Continued)
World
Big
Seven
Other
OECD
OPEC
Com-
munist
Other
World
Big
Seven
Other
OECD
OPEC
Com-
munist
Other
UNITED KINGDOM
(Continued)
1977 .............
57.44
16.99
22.56
6.79
1.63
9.47
63.29
24.02
21.34
6.31
2.40
9.22
1st Qtr ........
13.14
4.02
5.16
1.52
0.35
2.09
15.45
5.80
5.12
1.78
0.49
2.26
2d Qtr ........
14.35
4.20
5.72
1.69
0.44
2.30
16.52
6.02
5.73
1.70
0.58
2.49
3d Qtr ........
14.59
4.47
5.55
1.75
0.46
2.36
15.20
6.05
4.74
1.44
0.66
2.31
4th Qtr ........
15.36
4,30
6.13
1.83
0.38
2.72
16.12
6.15
5.75
1.39
0.67
2.16
ITALY
1975 .............
34.82
15.61
7.86
3.72
2,46
4.67
38.36
17.32
6.75
7.85
2.09
4.34
1976 .............
36.96
17.41
8.69
4.23
2.18
3.96
43.42
19.35
8.04
8.12
2.65
5.24
1st Qtr ........
8.01
3.80
1.86
0.83
0.53
0.87
9.77
4.37
1.83
1.82
0.54
1.21
2d Qtr ........
8.85
4.22
2.09
0.97
0.52
0.95
10.83
4.85
1.94
2.10
0.63
1.31
3d Qtr ........
9.45
4.51
2.22
1.07
0.53
0.99
10.33
4.51
1.85
2.03
0.67
1.26
4th Qtr ........
10.65
4.88
2.53
1.36
0.59
1.14
12.49
5.62
2.42
2.17
0.81
1.46
1977
1st Qtr ........
9.80
4.56
2.30
1.26
0.53
1.15
11.37
5.00
2.14
2.18
0.60
1.45
2d Qtr ........
11.47
5.33
2.61
1.51
0.60
1.42
12.49
5.51
2.24
2.50
0.64
1.60
3d Qtr ........
10.93
5.01
2.51
1.41
0.63
1.37
10.55
4.39
1.80
2.10
0.73
1.53
Oct ...........
3.72
1.76
0.81
0.48
0.20
0.47
4.25
1.92
0.78
0.66
0.28
0.61
CANADA
1975
............. 33.84
26.30
1.73
0.71
1.20
2.00
38.59
29.78
1.70
3.43
0.32
2.02
1976
............. 40.18
32.01
2.03
0.81
1.25
2.09
43.05
33.55
1.82
3.48
0.38
2.56
1st
Qtr ........
9.18
7.39
0.43
0.47
0.33
0.42
10.40
8.05
0.42
0.95
0.09
0.59
2d
Qtr ........
10.75
8.61
0.50
0.18
0.34
0.56
11.61
9.02
0.45
1.02
0.10
0.70
3d
Qtr ........
9.94
7.74
0.56
0.20
0.35
0.53
10.12
7.75
0.47
0.80
0.10
0.69
4th
Qtr ........
10.31
8.27
0.55
0.26
0.23
0.58
10.91
8.73
0.48
0.71
0.09
0.58
1977
1st
Qtr ........
10.35
8.37
0.53
0.23
0.22
1.00
10.92
8.64
0.43
0.82
0.09
0.94
2d
Qtr ........
11.34
9.23
0.54
0.24
0.29
1.04
12.28
9.92
0.47
0.74
0.10
1.05
3d
Qtr .......
10.25
8.12
0.54
0.23
0.29
1.07
10.38
8.17
0.43
0.82
0.07
0.89
Oct
........... 3.80
3.10
0.19
0.09
0.06
0.36
3.82
3.11
0.14
0.21
0.02
0.34
Approved For Release 2002/09/04 AMA-RDP79TO1316AO01000070003-0
 Approved For Release 2002/09/04: CIA-RDP79T01316A001000070003-0
FOREIGN TRADE BILLION US $, f.o.b., seasonally adjusted
United States
14.0
12.0
10.0
Approved For Release 2002/09/04: CIA-RDP79T01316A001000070003-0
A-14
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
United Kingdom
6.0
5.0
4.0
1.5
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
CUMULATIVE (MILLION US $)
CUMULATIVE (MILLION US $)
LATEST
MONTH
MILLION
US $ 1977
1976
CHANGE
LATEST
MONTH
MILLION
US $ 1977 1976
CHANGE
United States
FEB 78
9,922
14,439
1 21 ,206
147,696
114,860
120,495
5.5%
22.6%
United Kingdom
FEB 78
5,819
5,656
56,132
59,024
44,643
51,108
25.7%
15.5%
Balance
-4,516
-28,490
-5,635
-20,855
an
Ja
FEB 78
7,969
79,212
65,751
20.5% =
Italy
JAN 78
3,727
45,007
32
37,957
40
025
18.6%
10
3%
p
5,345
61,752
56,004
10.3%
3,511
44,1
,
.
Balance
2,625
17,460
9,747
7,713
Balance
216
876
-2,068
2,944
West Germany
FEB 78
10,825
117,787
101,923
15.6%
Canada
JAN 78
3,202
42,035
189
38,355
37
255
9.6%
5
2%
8,839
96,533
83,574
15.5%
2,932
39,
,
.
Balance
1,986
21,254
18,349
2,905
Balance
271
2,846
1,100
1,746
France
FEB 78
5,935
65,087
56,967
14.3%
5,920
67,389
61,068
10.4%
Balance
15
-2,302
-4,101
1,799
Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
A-15
 FOR El pr fgAbr Lel,St*IC.r~g/ !j4C J gDD719T01316A001000070003-0
West Germany
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1974 A roved17 Re lease 2001/ i/@4 : CIA-RDP3:F0'1316A0010MM03-0
tExport and import plots fire based on live-month weighted moving averages.
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
United Kingdom
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1 532%-pzOroved For Fie 7ass9e 2002/09/0 ?Zk-RDP79T0+i1Z6X001000070M(P
A-17
 ApprsnttT t& qR?yAf.; CIA -F j56- QWfgg11000070003-0
MONEY SUPPLY '
INDUSTRIAL PRODUCTION'
Avwoy.
Away.
A,.wd Growth Rats Since
A-,d Growth Rot. Sin,.
fit" Ct1O1p
Prat Charge
Lq*ad
From Prarious
1 Yea
3 Montu
Latnt
hom P,.riou,
I Year 3 Months
Month
Month
1970
Earir
Eair'
Period
Pried
1970 Eari.r E016.r'
Brazil
Oct 77
2.9
37.1
47.4
42.2
India
Dec 77
3.3
4.7 4.6 2.5
India
Oct 77
1.6
13.6
15.2
23.1
South Korea
Dec 77
3.8
22.1 20.1 10.1
Iran
Jan 78
4.8
28.3
27.9
21.0
Mexico
Sep 77
0.2
6.0 5.3 11.2
South Korea
Jan 78
6.1
31.9
47.6
23.8
Nigeria
76 IV
0.2
11.3 9.0 0.7
Mexico
Oct 77
4.9
19.5
26.6
21.9
Taiwan
Jon 78
15.5
17.2 25.4 56.8
Nigeria
Apr 77
-2.3
36.9
47.5
99.7
s.osa aoy atd.
Taiwan
Oct 77
3.2
24.8
29.1
30.6
Array. For latnt 3 ntonlt <
ompwd with arraye for prwlou, 3 monMr.
Thailand
Jul 77
2.7
13.5
14.7
12.4
J Avraer for 6tmf 3 moat. concord with arrays for preon 3 month,.
CONSUMER PRICES
WHOLESALE PRICES
Arrogs
Annud Grow! Rots Si-
Away.
Prcant Chop.
Amud Growth
Rot. Sin,.
Lat.t
Iran Pr.riov. 1 Ysr
Pr,.nt Chong.
Month
Month
1970 Eori.r
Latest
from Pr.v'soas
1 Yoor
Brazil
Fab 78
3.6
27.7 39.7
Month
month
1970
Eor6r
India
Dec 77
0
8.1 7.8
Brazil
Feb 78
4.0
27.7
36.4
Iran
Jan 78
0.5
12.0 18.9
India
Jan 78
-0.3
8.5
3.0
South Korea
Feb 78
2.1
14.5 13.0
Iran
Jan 78
0.8
10.2
9.2
Mexico
Nov 77
1.1
14.9 22.0
South Korea
Feb 78
1.8
16.2
10.9
Nigera
Aug 77
3.4
16.8 29.3
Mexico
Nov 77
0
16.1
23.1
Taiwan
Jan 78
1.7
10.0 7.1
Taiwan
Jan 78
1.0
8.3
1.5
Thailand
Dec 77
-0.4
8.4 8.8
Thailand
Oct 77
-1.2
9.7
5.5
EXPORT PRICES
OFFICIAL RESERVES
us $
Arco .
Mon US S
Aor d Growth Rot. Sin,.
Law
month
P.rwm Chap.
I Yew
3 Months
Lmmt
from Promo.
1 year
End of
Mawr US S An 1970
Eorir
Eorir
Prig
Priori
1970 Ear6r
Brazil
Oct 77
6,041 1
,013
5,007
6,144
Brazil
Oct 77
-2.8
12.7 2.1
India
Nov 77
5,069 1
,006
3,003
4,525
India
Mar 77
-0.9
9.6 17.9
Iran
Feb 78
13,728
208
10,142
11,511
Iran
Dec 77
0
33.1 9.9
South Korea
Jan 78
4,418
602
2,883
4,246
South Korea
77 Ill
0.9
8.6 6.5
Mexico
Mar 76
1,501
695
1,479
1,533
Nigeria
May 76
-0.1
27.3 12.3
Nigeria
Jan 78
3,900
148
4,738
4,551
Taiwan
Nov 77
1.0
11.9 8.6
Talwan
Dec 77
1,447
531
1,607
1,442
Thailand
Dec 76
2.0
13.3 13.1
Thailand
Jon 78
1,950
978
1,885
1,906
Approved For Release 2002/09Y@4: CIA-RDP79TO1316AO01000070003-0
 Approved For Release 2002/09/04: CIA-RDP79TO1316AO01000070003-0
FOREIGN TRADE, f.o.b.
Latest 3 Months
Percent Change from
3 Months 1 Year
Latest Period
Earlier'
Earlier 1977
1976.
Change
Feb 78 Exports
-13.6
-5.7
12,137
10,128
19.8%
Feb 78 Imports
-6.7
-0.2
11,999
12,346
-2.8%
Feb 78 Balance
138
-2,218
2,356
Nov 77 Exports
-51.5
-0.2
5,414
4,618
17.2%
Nov 77 Imports
101.8
29.4
4,798
4,098
17.1%
Nov 77 Balance
616
520
96
Iran
Dec 77 Exports
52.0
-2.8
24,237
23,475
3.2%
Dec 77 Imports
-6.1
12.5
12,561
11,513
9.1%
Dec 77 Balance
11,676
11,962
-286
South Korea
Jan 78 Exports
111.9
39.8
10,046
7,715
30.2%
Jan 78 Imports
51.7
28.6
10,526
8,405
25.2%
Jan 78 Balance
-480
-690
210
Mexico
Oct 77 Exports
-29.0
34.3
3,367
2,573
30.9%
Oct 77 Imports
70.1
8.3
4,189
4,838
- 13.4%
Oct 77 Balance
-822
-2,266
1,443
Nigeria
Nov 77 Exports
-25.5
13.4
4,384
3,620
21.1%
Dec 76 Imports
Dec 76 Balance
86.7
8.4
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
Taiwan
Jan 78 Exports
68.3
22.2
9,361
8,166
14.6%
Jan 78 Imports
87.5
17.0
8,511
7,599
12.0%
Jan 78 Balance
850
567
283
Thailand
Oct 77 Exports
-24.9
8.2
2,917
2,424
20.3%
Nov 77 Imports
-14.1
25.7
3,805
2,956
28.8%
Oct 77 Balance
-538
-234
- 304 ?
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AGRICULTURAL PRICES MONTHLY AVERAGE CASH PRICE
5 APR 3.35
29 MAR 3.13
MAR 78 3.07
APR 77 2.51
Kansas City No. 2 Hard Winter Chicago No. 2 Yellow
250
1-5 APRII
1974 1975 1976 1977 1978
RICE
37.5 S PER HUNDRED WEIGHT
No. 2 Medium Grain. 4? Brokens.
f_o.6. mills, Houston. Texas
27 MAR
22.50
20 MAR
22.50
MAR 78
22.75
5
APR 77
14.50
1-27 MAR I I
1-5 APRII
0
1974 1975 1976 1977 1978
5 APR 7.59
29 MAR 7.70
MAR 78 7.68
APR 77 10.10
5 APR 0.5475
29 MAR 0.5630
MAR 78 0.5586
APR 77 0.7435
1-5 APR 11
COFFEE/TEA
400 E PER POUND
COFFEE
2,000 Other Milds Arabicas, ex-dock New York
300
1,500
1,000
200
5 APR 174.64
29 MAR 179.74
MAR 7B 175.21
APR 77 317.88
TEA
London Auction
FEB 78 108.0
JAN 77 106.0
DEC 77 93.6
APR 77 156.0
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5 APR 6.64
29 MAR 6.81
MAR 78 6.55
APR 77 9.76
:200
1-5 APR ii
SOYBEAN OIL/PALM OIL
$ PER POUND $ PER METRIC TON
SOYBEAN OIL
Crude, Tank Cars, f.o.b. Decatur
5 APR 0.2618
29 MAR 0.2845
MAR 78 0.2699
APR 77 0.2960
Crude, Bulk, c.i.f. US Port
5 APR 0.2750
29 MAR 0.2800
MAR 78 ',. 0.2825
APR 77 0.2890
1-5 APR I
1976 1977 1978
$ PER METRIC TON 400
350
-11300
1 250
200
171.17
150
1-5 APRgPYRGHT
SOYBEAN MEAL
$ PER TON
400
5 APR
173.00
29 MAR
177.00
MAR 78
176.48
320;
APR 77
273.95
200
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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500
-400
1-28 MAR11
1977 1978
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INDUSTRIAL MATERIALS PRICES MONTHLY AVERAGE CASH PRICE
COPPER WIRE BAR
140 c PER POUND
LEAD
S PER METRIC TON C PER POUND
45
3.000
2.500 35
5 APR
29 MAR
MAR 78
APR 77
1-5 APR 11
1974 1975 1876 1977 1978
ZINC
100 C PER POUND
LME
1)S
000
2
5 APR
26.6
.
29 MAR
23
9
7y
.
550
MAR 78
23 1
APR 77
29.6
1.500
1-5 APRII 0 150 1-5 APRIL 4,000
0 1974 1975 1976 1977 1978 1974 1975 1976 1977 1978
PLATINUM
S PER METRIC TON150 250 S PER TROY OUNCE
125 225
100 200
75 175
1-5 APRIL 0 100 1-5 APRIL
0 1974 1975 1976 1977 1978 1974 1975 1976 1977 1978
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ALUMINUM
Major US Producer
E per pound
53.00
53.00
51.00
41.00
US STEEL
Composite
$ per long ton
389.60
359.36
339.27
306.72
IRON ORE
Non-Bessemer Old Range
$ per long ton
21.43
21.43
21.43
19.18
CHROME ORE
Russian, Metallurgical Grade
$ per metric ton
NA
150.00
150.00
150.00
CHROME ORE
S. Africa, Chemical Grade
$ per long ton
56.00
58.50
58.50
39.00
FERROCHROME
US Producer, 66-70 Percent
C per pound
41.00
41.00
43.00
45.00
NICKEL
Composite US Producer
$ per pound
2.07
2.11
2.35
2.20
MANGANESE ORE
48 Percent Mn
$ per long ton
67.20
72.28
72.00
69.38
TUNGSTEN ORE
Contained Metal
$ per metric ton
18,947.00
20,236.00
22,729.00
12,830.00
MERCURY
New York
$ per 76 pound flask
151.00
141.14
166.15
128.66
SILVER
LME Cash
it per troy ounce
536.74
476.67
479.23
434.91
GOLD
London Afternoon Fixing Price $ per troy ounce
181.64
158.86
149.17
127.93
LUMBER INDEX6
140
- 1,000
120
CPYRGHT
Sy:Tthetic5 (SR)
20
10 1974
1-5 APRII
1976 1977 1978
100 1974 1975
1-28 MARII
1976 1977 1978
lApproximates 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 U S.
3As of 1 Dec 75, US tin price quoted is "Tin NY lb composite."
4Quoted on New York market.
5S-type styrene, US export price.
6 This index is compiled by using the average of 13 types of lumber whose
prices are regarded as bellwethers of US lumber construction costs.
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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