Word: ldcs
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...goes throughout the Third World. Just as ordinary inflation bites deepest among poor people, the petro-squeeze hurts the yearning, less developed countries (LDCS) most of all. They can afford the painful pinch of rocketing costs for energy and petroleum-based products such as fertilizers and other chemicals much less than affluent industrial nations can. Climbing oil costs consume precious foreign exchange, make it harder to buy farm equipment or factory machinery, and curb development spending on agriculture, industry, education and health...
...advanced nations are worried about the rise in oil prices, the LDCs and the world banking system have even more cause for concern. In the aftermath of the fourfold price rise of 1973, U.S. banks led the way in trying to "recycle" the dollars that flowed into the oil-producing states and were then invested in the West or parked for short periods in the major institutions of industrialized nations. Much of this money was loaned to the hard-pressed developing countries to help them pay their ever heavier oil bills. The international banking system came through that operation...
...banks alone have $48.7 billion in loans outstanding to needy LDCs...
Though bankers agree that they are nearing the point where additional loans to LDCs could be an unacceptable risk, relatively well-off countries such as Mexico, with its new-found oil riches, and Brazil will continue to find a welcome. Middle-income states such as South Korea, the Philippines and Taiwan will also find lending officers receptive. But the traditional weaklings, such as Dahomey, Upper Volta, Turkey, Zaire, Egypt and others, will face a real struggle trying to get additional loans. Says one White House economist: "For the weaker LDCS the choice will be either lowering their living standard...
...Federal Reserve reported last week, fully 24% of all U.S. foreign bank loans-mostly commercial-have now been made to non-oil-producing LDCs...