Back Matter

Back Matter

International Monetary Fund. Research Dept.
Published Date:
January 1985
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Capital importing developing countries comprise all developing countries other than the eight major oil exporting countries in the Middle Eastern region. It is recognized that this country grouping may include some countries that have positive net foreign assets.

The financing requirement is defined as the need for capital inflows, to cover current account deficits, capital flight, reserve accumulation, and other acquisition of external assets.

The key external assumptions of this scenario are: economic growth of 3 percent per annum in the industrial countries; approximate stability from 1985 onwards in the terms of trade of primary producers; stable U.S. dollar oil prices until the end of 1986, and stable real prices thereafter; a gradual decline of the dollar from 1987 onward; a stable (and, after 1988, gradually falling) level of real interest rates; no change in protectionist pressures; a modest decline (of about 2 percent per annum) in real bank exposure to developing countries; and a constant level of real foreign aid. (The deflator used to adjust nominal bank lending and foreign aid to real terms is the price of developing country imports from industrial countries.)

The recorded deterioration in the combined overall trade balance of industrial countries in the first quarter of 1985 is considerably greater than the reported deterioration in their combined balance vis-à-vis developing countries. This suggests an over-recording of imports or an under-recording of exports, amounting to about ½ a percent of industrial countries’ combined GNP. The reasons for this are unclear, but could be associated with valuation asymmetries during a period of exceptional exchange rate volatility.

It should be noted that the term “country” used in this report does not in all cases refer to a territorial entity that is a state as understood by international law and practice. The term also covers some territorial entities that are not states but for which data are maintained and provided internationally on a separate and independent basis.

Two countries which did not meet any of the above criteria were assigned to that trade category which accounted for the largest share of their exports.

The countries included here were those whose oil exports (net of any imports of crude oil) both accounted for at least two thirds of total exports and were at least 100 million barrels a year (roughly equivalent to 1 percent of annual world exports). These criteria were applied to 1978-80 averages.

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