Desarrollo energético en América Latina y la economía mundial

Pmfessor Abbas Alnasrawi I ENERGY AND THE DEVELOPING COUNTRlES non.commercial energy contributed 75% oí the total energy consumed. By 1970-71 lndia's consumption of energy had increased to 313 MTCE or by 83%. The share of non.commercial energy had dedined to 58% and that of commercial energy had increased to 42%6. 111. THE WORLD ECONOMY A<'>D THE OIL PRICE INCREASE In 1970, the oil importing developing countries had an energy deficit of 2.5 MBD (total energy consumption was 5.6 MEDOE while energy production was 3.1 MBDOE). The deficit was met by importing oil. By 1975 the deficit had increased to 3.2 MBDOE and oil imports had in– creased to 3.1 MED. Between these two points in time, several develop– ments in the world economy had taken place that impinged directly on the Third World in gener,al and the energy sector of the world econo– my in particular. Before dealing with the impact and the consequences of the 1973-74 oil price changes, it is important to review sorne of the most important developments in the world economy upon which the price changes were laid. The Econorníc Settíng and the Oil Price Rise. Much has been said and written about the impact of the 1973 oil price increases on the world economy particularly with respect to the pro– blems oí inflation ,and recession in the first half of this deeade. A careful reading oí the data would show, however, that both recession and inflation in the international economy are traceable to the econo– mic policies of the developed eeonomies. The stage for the 1974 severe recession and inflation was set in 1970-71. Beginning in late 1969, in. dustrÍalized eountries decided to initiate stimulative poliey measures to com'l:>at the economie slowdown that characterized their eeonomies. The eoincidenee of the effects of these expansionary fiscal and moneo tary policies in the industrial eountries resulted in an unusual sharp expansion in economic aetivity whieh in turn aggravated an already existing inflationary situation throughout the world. When it was realized that the rates of eeonomie gro~vth that prevailed in 1973 were unsustainable, a reversal in poliey to eurb inflation was deemed neces– sary. This shift in eeonomie poliey together with capacity constraints led to a sharp decline in the rate oí economic growth. But the decline ·P. D. Henderson. India: The Energy Sutor (New York, Oxford University Press) • p. 181. 35