Desarrollo energético en América Latina y la economía mundial

DESARROLLO ENERGÉTICO EN AMÉRICA LATINA y LA ECONOMfA MUNDIAL in real output, which was expected to extend into the first haIf of 1974, failed to curb inflation. Thus, the 1973 slowdown which turned into a recession in 1974, coupled with continued inflation, should not be presented as a result of the 1973 oil price increases. As a matter of fact, the 1nternational Monetary Fund has conduded that the proxi– mate cause of the recession was the unexpected high rate of inflation. This unexpected strength of price pressure made it difficult for policy makers to engage in another round of expansionary policy lest they should worsen inflationary pressures 7 • These observations are not intended to explain the impact of the increase in the price of oil on the world economy. 1t goes without saying, of course, that the price increase became, in the words of the IMF, an additional elementt in the ongoing inflationary process. The Oil Price Change and the DeveloPing Countries. The foregoing analysis indicate that the impact of the rise in the price of imported energy on the economies of developing countries cannot be isolated from the other forces of change in the world economy that influenced the economies of the Third \'\Torld countries. The confluences in 1974 of these forces inflation, recession, rise in price of oi! and the rise in the prices of food imports, caused impor– tants shifts in the balance of payments position of the developing countries as a group. The increase in the cost of imported oH by $ 10 billion for the oil importing countries was concurrent with an increase of $ 6 billion in the cost of imported food and fertilizers during the same period 1973 10 1974 8 • Estimates as to the impact of the rise in price of imported energy on economic growth is difficult to isolate from other effects. Moreover, such impact wiII have to vary {rom country to country depending on the degree of econamic diver– sificatian, ability to attract foreign capital, ability ta maintain export markets and the relative importance af oil to total imports. Thus, in discussing the impact on oi! importing developing countries it is necessary to differentiate between two groups of countries. The first group, which has about 600 míllion of the two billion people who constitute the Third World, consists of the high income countries of Argentina, Chile, Brazil, Korea, etc. Although thesé countries expe- 'International Monetary Fund, Annual Reports, 1974-1978. $Hollis B. Chenery, "Restructuring the World Economy" in BeJa Balassa. Chan– gig Patterns in Foreign Trade and Payments (Srd ed.) (New York, Norton). pp. 55-77. 36