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The New Economic Plan
| Article
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14538 |
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Section : |
CURRENT ISSUES
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| Issue
Date : |
3 / 1988 |
1,386 Words |
| Author
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Kazuo Tanikawa
Kazuo Tanikawa is senior deputy secretary-general of the
Liberal Democratic Party and a member of the House of
Representatives. |
Since World War II, the world economy has developed under a free trade system illustrated by GATT (General Agreement on Tariffs and Trade) and the IMF (International Monetary Fund), with the United States playing a central role due to its overwhelming political and economic power.
In spite of huge U.S. security outlays in the postwar period--including the Government appropriation for Relief in Occupied Areas, assistance to Japan and West Germany amounting to $1.6 billion from June 1946 to March 1950, the European Recovery Program (known as the Marshall Plan) totaling $16 billion during the four years following April 1948, and the two oil shocks encountered from 1960 to the mid-1970s--the United States was still able to develop its own economy, and thus lead the world economy into expansion.
In 1985, however, primarily due to three economic conditions--a strong dollar, high oil prices, and high interest rates--the characteristics of the early 1980s world economy started to change. The overwhelming economic superiority of the United States began to recede, while Europe and Japan were gaining relative economic strength. Additionally, discussions focused on economic growth in developing countries, which had previously been disregarded ad a major factor contributing to the development of the world economy. U.S. exports to Japan, for example, began to move steadily upward from 1980, while U.S. exports to Central and South America, Africa, and the Middle East--areas that had imported from the U.S. four times as much as did Japan--dropped from $82.9 billion in 1980 to $71.4 billion in 1986. This corresponded with growth rates in the developing countries. From 1970 to 1980, Central and South American countries recorded an average economic growth rate of 5.8 percent and African countries, 3.7 percent. From 1980 to 1986, the two areas suffered a slowdown in growth which dropped to 1.0 percent.
According to the U.S President's Economic Report for 1987, U.S. commodity exports to Mexico decreased $9 billion (50 percent) and those to the other Central and South American countries fell $8 billion (37 percent) from 1981 to 1983, primarily due to the shortage of foreign currency funds in those countries.
Putting aside the oil-producing countries, consider the twofold rise of U.S. exports to Central and South America and Africa from $27 billion in 1977 to $69.5 billion in 1981. If U.S. exports to these areas had continued to grow after 1981 at nearly this rate, even if U.S. imports during this period increased $100 billion, the U.S.
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