Thus we can see that for the whole period the primary producing countries were in deficit. One point should be made on this, auch countries .ss South Africa and New Zealand are included in thie category. Aleo world prices have, moved agninst primary preducts during this period, ec that to obtain an equivalent amount of money more of the product would have to be exported. Henri Vallin writing in the Susmer 1966 issue of International Heviaw mckes the point very tellingly in relation to Mrumah's down all ".seathe real conspiracy that brought j‘krumah down was not the military one...The real conspiracy was the gatastrophic decline in the Brice of cocoa durj h & iit Li it was in ate fifties. (Emphasis in original}. rom a peak of ower #1,000 a ton in 1957-58, the price dropped to #504 in 1963-64 and down as low as A210 last summer..." This of course revesla one side of the picture, the transfer of surplus value to the imperialet powers and the unbalanced trade of the colonial countries. However, thie ita- . al? presenta @ contradiotion because the lower the income of these countries the less they are able to import. Mandel indicatec how this is partially overcome "...the adverse evolution of the terms of trade ig no absolute check on the imports of manufactured goods by underdeveloped countries, so long as supolementary parchasing power can be found: a) in the reverme of the native ruling classes, exchanged for imported luxury goods (which sight imply 8 drein of gold and silver, if the adverse trend of the terms of trade ersates « belance of payrents deficit); b) through an ineresse in the quantities of primary products produced and exported, which might offset the efiecta of the adverse movement of the terms of trade on the balance of paymente: ¢) through 4 cevelopment of capital exporte by industrialized countries, which play the role of gredit, enabling the underdeveloped countries to increase their importa of manufactured goods..."(1). It is thie last point thet has especial relevance for ua here. Referring back to the table of Primary producin; countries trade balances wa can see why the provision of credit assumes euch an important part of the question of international liguidity. Allowing for some effect from Mandel's a) and recognising that the ultimate cutoome of b) will probably be a decline in income the question of credit assumes Bn overwhelmingly predominant place not only for the underdeveloped countries but aleo for the imperialist powers. In thie context it is interesting to note thet immediately after the coup in Ghana, Buropean banks advanced a losn to the military regime, and the 1.0,F. moved in a little later with a larger lesan, ‘This * had previously been refused Nirumsh, for obvious Teseons, but the imperialists were very anxious that the economy of Ghana should not grind to a étendstill completely, for that would imply 6 oeseation of importa. Totel reserves of gold and foreign currencies for industrial countries in 1955 eteod at 237.50 billion, by 1964 they had risen +o 249.69 billion. However, those of the primary producing countries had only risen from #10.52 billicn in 1955 to £12.69 billion in 1964.(2) Sf -_ = ese 2 Ss 68S eS ee ne ele lee ee ee ae eo (1). Vandel op.cit (2). Table 29, Economic Review. Fov. 1965.
a
Therefore os @ whole world liquidity was becoming emaller in relation to ineresaged world trade, and the primary producing countries were actuslly sloping back. Their position vas worsening. From the point of view of the needa of the primary producers they should have hed access to more liquidity. Balogh explains thia go - "Foor countries will probabiy have a greater. need for holding reservea than richer ones, and this for two reasona. On the one hand, the instability of primary products markets and of harvesta is notorious, and they costly depend on a few producte of thie type, which increased their risk. On the other hand their capacity to obtain eredite on resacnable terma is much Yess than that of the richer countries, unless purposive international institutionel arrangements are made...The limitations on the choice of policy (e.g» the prohibition of direct control ever imports and exports) imposes disproportionate burdens on poor countries. Their acceptance of guch burdens is rational only if international arrangements are made to offset this burden by special rrants or ¢redit arrangements." (1)
However, from the point of view of the underdeveloped countries, the sugeested remedies are at best onlypallistives that cannot bagsic- Allyalter the situation. Their poverty and slow seve loperee remains a function of the imperialist powers just eo lone aa thet relationship exists. Loang can only be a short term measure, nor sinedia the coat of them be ignored. But from the imperialist point of view grants and loans are very profiteble. The profitability of losns needs no explanation, both in terme of interest and induced exports. Granta need a werd or sa more. Seen from the point of view of 'neticoneal interests! the grants of aid by the imperialist powers to the underdeveloped countries seen to be very Bltruistic. Hov.ever, seen from the point of view of the monopolists who are intergsted in exporting to such countries, either consumer gooda or capital goods, these granta are A permonent eubeicy ta them. In juet the same way overseas military expenditure can be geen not aa a dabit in the balance of payments socount of, say, Britain, but aa a gift to the monopolists. The point here ia that the whole economy, via texation pays for sid and military expenditure, ehilet the monopoliete makes the profits. True enough that they also pay taxes, but this is only o fraction of the cost of either of these items, particularly in Britain Where the incidence of taxation oh consumption has risen far aore. than taxes on companies since the middle=-fiftice.
Another aspect of this question is that more and more the developed countries whe do give aid are tying the loans, so that the recipient counitry ia fereed to buy from the donor. The United States has recently been in conflict with the Internstional Devaloment Agency over the question of making the quota that it subseribes to tha agency tied. At present 90 per cent of U,G. aid ia tied, and because of the balanee of payments difficultice it is azicountering, + wante to increase this,(2).
At the moment it is difficult to predict how the imperislist powera will resolve the problem of internetional liquidity. ‘ithont the present
—_-_ = = ee = SF SF SS SS SO Se eee le Oe Oe le le lee et le Zt SZ 1) 1 Part Yol. ll pp 243-244,