Desarrollo energético en América Latina y la economía mundial

DESARROLLO ENERGÉTICO EN AMÉRICA LATINA y LA ECONOMíA MUNDIAL via a contraction in national income. Modern economies usually con– sider this form of adjustment to be least desirable because of the high social costs associated with it. They would ralther take steps which spread the adjustment process over a longer períod of time and which hold to a mínimum the reductions in national income which oceul'. Time is normally required to arrange financing and to expand exports. Financing permits current expenditures to be sustained despite the balance oí pa'Yments deíicit, but transfers a day of reduced expenditure to the future. If the financing permits countries to con– tinue on paths of stable economic growth it eouId eventually prove "costless". The eeonomy may arrive at the point of amortization with a national income high enough to pay debt service and still be greater than the national income wouId harve been without having used fi– nancing. This depends upon the int~rest rates paid on loans aS weIl as the productivity of the resources eommanded by the borrowed capital. Inereased exports cIearly require that the economy increase its produetivity relative to the rest of the wold. This may require investment, with its "normal" gestation period, plus changes in such things as monetary poliey, trade agreements and the like. One great disadvantage of borrowing to affeet adjustment is that the amortization requirements in future time periods makes the eco– nomy much Iess flexible. Debt service obliges a country to make future payments no matter what the balance of payments problems are at that time. For exampIe a country without debt service obligations, suffering from a 10% reduetion in export proeeeds, needs to either cut back upon imports by 10% or borrow. A country which is already in debt, where debt service commits 25% of export proceeds, would have to cut back on non-debt-service payments by 13% since the debt service part of payments is not adjustable. The second country would either have to borrow more in proportion to uncommitted export proceeds 01' devalue its currency by a greather amount to adjust to the same imbalance. A best possible adjustment would be one where national income was not forced to decline by oH deficits. This implies that adjustment must be foreed upon financing and export expansiono In the very short run, the balance of payments deCicit which wouId normalIy tend to depress national income can be financed by drawing upon foreign exchange reserves aeeumulated on past transactions. Reserve alfe a form of self-finance, which gives economic policy makers the time needed to secure financing to carry the economy over a longer periodo 218