Word: ldcs
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These figures from the World Bank point up the desperate poverty in many of the 100 nations that are euphemistically classified as less developed countries (LDCs). People in the industrialized countries with pressing economic problems of their own might well say, "So what?" Poverty has long been a fact of life, and Americans especially feel that they have done more than their share in giving foreign aid since World War II. It is not, however, a question of altruism. The advanced countries have an urgent self-interest in improving a situation that in a few years may well overshadow...
...self-interest is partly political: poverty in the LDCs provides fertile soil for demagogues. So far this spring, there have been three political outbreaks: a Marxist coup in Afghanistan, bloody riots in Peru, a guerrilla invasion of Zaïre. Each has had special causes, but the potential will exist for many more such explosions until the 3 billion or so citizens of LDCs can see some prospect for improvement in their lives. A few years ago, a French author wrote a futuristic novel in which the world's hungry banded together in a kind of vengeful crusade...
...economic conditions of the Third World, of course, are not uniform. The OPEC nations have become world financial powers, and a handful of once depressed countries, such as South Korea and Taiwan, are developing flourishing new industries. But the majority of LDCS have been knocked backward in the 1970s by a devastating one-two punch: oil price boosts that have raised the cost of running the most primitive factories and farm machines, and recession in the industrial world that has restricted markets for cotton, copper, cocoa, tin and other raw materials sold by less developed lands. In many countries...
Triffin's views are echoed by other critics. Congressman Henry Reuss, the influential Wisconsin Democrat who heads the House Committee on Banking and Finance, argues that the IMF should take over more of the burden of lending to LDCS from private U.S. banks. FRB Chairman Arthur Burns called on American banks to take a hard look at their overseas lending policies. Burns spoke of borrowings "that are uncomfortably large in relation to the debt-servicing capabilities of many countries...
...Harry Taylor, executive vice president of Manufacturers Hanover Trust: "Each lending bank regularly reviews conditions in a particular borrowing country and makes a decision about what the country's lending limit should be." Moreover, bankers point out, most of their loans are concentrated among richer and more productive LDCS where the risk of default presumably is lowest -such countries as Brazil, Mexico and South Korea. By contrast, countries like Pakistan, Peru and Ghana get little commercial-bank credit. Finally, bankers argue, a substantial cut in foreign loans now could lead to social and political disruption in some LDCs...