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Developing countries’ external debt on rapid increase

Capitalist aid used to control Third World

By VLADIMIR GANGOVSKY

A rapid increase in the volume of the external debt of the devel- oping countries to the capitalist states has been observed in the past two decades. Today it amounts to $11,000-million.

Payments on debts amount annually to $6-7,000-million. For example, Africa’s share in the

eral volume of capitalist “aid” from 1960 to 1970 fell by 50%. Their external debt during the same period, however, in- creased by 150% while the net : of earnings in the form of interest and profits from for- eign capital investments more than tripled.

An increase in liabilities on loans and credits received, even under ordinary commercial con- ditions, cannot in itself aggra- vate the payments situation. If the use of loans opens up oppor- tunities for sufficient increases in the national incomes and for- eign currency earnings of the

countries, repayment of the external debt does not ‘pose any special problem. The difficulties being experienced by the young states in repaying their debts are explained by the specific features of international

capitalist credit. Credit for Control Capitalist powers vary their conditions for granting credit “aid,” depending on the- specific aims they are pursuing, and at the same time try to consolidate their positions and influence in the young states of Asia, Africa and Latin America. They attempt _ to hold the developing countries in the orbit of the world capital- ist system, to undermine their independence and to facilitate the further exploitation ‘of their manpower and _ natural re- sources. This explains why the con-

struction of infrastructure pro- jects continues to be the main sphere of application of capital- ist credits. As a rule, this means construction of seaports, air- _ ports and roads. It is common knowledge that it takes a rela- tively long time to recoup such expenditure and annual returns are comparatively small. For- eign capital is clearly not inter- ested in the creation of large- scale. metallurgical, chemical, power and other projects which are necessary to shape the na- tional economies of developing countries.

In Senegal only 0.7% of the funds appropriated for Africa by

- the European Development Fund

were used for the creation of _ industrial and power enterprises. _ Moreover, the inefficiency and, _ frequently, even unprofitable- - ness of state enterprises which

French damp fish

—~

Capitalist powers vary their conditions for granting credit “aid” depending on the specific aims

they are pursuing.

were built with financial assist- ance from capitalist countries, should be noted. Slipping Behind It should also be noted that a substantial part of the financial “aid” must be repaid in the cur-

rericy of the creditor country or

in convertible currency. This places the young states, which already suffer from a shortage of funds for international pay- ments, in a very difficult posi- tion. The point is that a consid- erable part of the machinery and equipment necessary for indus- trialization is purchased for for- eign currency. And, naturally, use of foreign currency for re- payment of external debt sub- stantially limits the import po- oe of the developing coun- es.

Statistics show that the use of

capitalist loans and credits by developing countries in the ma- jority of cases does not ensure increased opportunities for the receipt of foreign currency on a required scale. The basic reason is the expenditure of a consider- able share of the international payment currencies for purposes which have absolutely nothing

to do with the development of —

exports.

These include: food purchase, ° armaments and the creation of _

certain infrastucture projects. At the same time, eriterprises built on funds from foreign sources are often geared to the home markets of the developing coun- tries and provide only insigni- ficant foreign currency earnings.

Special studies show that prospects for change are not bright. According to, estimates

by experts of the Secretariat of UNCTAD, if the currently exist- ing export and import growth- rates of developing countries (excluding the group of oil ex- porting countries which are in specific conditions) are main- tained, by 1975 the deficit in their trade balance will amount to $15,000-million and by 1980 will be $28,000-million.

If prospects for exchanges in the balance of payments are con- sidered with regard to move- ment of capital, the deterioration in the payments positions of de- veloping countries becomes even more evident: in 1975 the export of profits on investments is es- timated at $16,000-million, and in 1980 — at $24,000-million.

Thus, even today the chance

of debts being repaid on time by -

the majority of the developing

Ex-U.S. ambassador to Chile to head African affairs

What is the U.S. planning for

By K. KHACHATUROV Novosti Press Agency

The recent appointment of Nathaniel Davis to the post of U.S. assistant secretary of state for African Affairs gave occasion for the U.S. press to emphasize the range of his abilities and and interests. He is a bachelor - of arts and doctor of philosophy, a lawyer and diplomat. He studied the Russian language and was a lecturer in USSR history in Am- erican universities. He learned Spanish in the Central Univer- sity of Venezuela and read lec- tures on U.S. history. Davis served in Moscow, Prague, Sofia and Rome, and was the U.S. am- bassador to Guatemala. More

rarely newspapers mention his.

activity in the Office of Strategic Services, the predecessor of the Central Intelligence Agency. But in most cases the name of Na- thaniel Davis is associated with

the tragedy of the Chilean peo- .

ple.

Davis became U.S. ambassa- .

dor to Chile after Salvador Al- lende came to power. At about the same time the leadership of the mighty I.T.T. concern sent an extensive memorandum to Kissinger pointing out that in the preceding seven years the Unit- ed States had invested more than a billion dollars in Latin America.

But U.S. prestige and influence are at a low ebb in Latin Ameri- ca, the memorandum said, be- cause U.S. policies and diploma- cy have been weak and indeci- sive. The present moment is a most expedient time to reap-

praise and strengthen them, the -

PACIFIC TRIBUNE—FRIDAY, MARCH 21, 1975—Page 10

_memorandum stressed. The role

of the chief of a “fire-brigade,” urgently formed by the State Department, was given to Davis.

Davis resorted to the notori- ous “overripe pear’ policy in Chile. It boiled down to the fol- lowing: To allow the Chilean pear to ripen and to rot; in other words, to create such internal and external conditions for the

‘Popular Unity government which

would lead to its collapse. The “overripe pear” policy was a thoroughly worked out program for subversive economic, political and ideological measures called upon not only to do away with the Popular Unity government but also to strangle the Chilean people. Economic and financial blockade of Chile was put in the foreground. :

However, the March, 1973 elections, during which the num- ber of. the Popular Unity sup- porters increased, erased the plans of the enemies of the Chi- lean people. The Chilean pear- tree did not rot, it continued to bear fruit. It was at that time that bayonets were resorted to. Nathaniel Davis cast aside dip- lomatic protocol. Several months before the fascist coup, the strike of truck owners paralyzed the country’s entire economy. The broad Chilean public had every reason to accuse the CIA and Nathaniel Davis of organiz- ing the strike. A group of mem- bers of the Chilean Parliament

* demanded that the U.S. ambas-

sador should be declared per- sona non grata for his very close relations with the CIA.

Some days before the coup Davis made a blitz trip to Wash-

imperialism is

collapse of Portuguese colo

ington. Soon it became known that Washington knew about the

. beginning of the revolt some ten

hours before the overthrow of the Allende government.

A month after the fascist coup Davis was given a high post in the U.S. State Department.

The switching of Davis’ activ- ities to Africa cannot but alarm the public in the states of that continent. It is not a secret that interested in “Chilesation” of a number of countries in Africa, in the first place those countries which have a progressive way of social de- velopment. The aspiration of the peoples of African ‘countries towards full independence and unity on the basis of the strug- gle against imperialism, and the onial-

te:

Mozambiquans demonstrating th U.S. government planning to “Chileanize” such countries?

states is quite limited.

The solution to the problem of ~ solvency is linked to the need | for certain changes, both in the — economies of the debtor-coun- | tries and in the system of their | external economic relations. The | main condition for finding a way out is to increase the effi- ciency of the ‘use of loans.

This in; the first place con- cerns the realization of certain changes, in the economy increas- ing the share of those branches upon which the efficient use of national accumulations depends. This will ensure the expansion of reproduction with the aid of internal resources and consé- quently, allow savings in foreign currency which is in short sup- ply. . e Another important condition for strengthening solvency is the creation of a stable foundation for the accelerated development of export branches of the eco- nomy.

The struggle against foreign private capital, the establish- ment of effective state control over its activities and restric- tions on the free exports profits by foreign investors must be listed as key conditions for improving the currency and fin- — ancial situation of developing | countries.

A purposeful policy directed at creating and fulfilling condi- | tions for solving the problem of — the repayment of external debts would make it possible to con- | — siderably weaken financial de- pendence upon capitalist states | — in the future. :

Africa?

ism have evoked a reaction on the part of those external forces | which inspired and organiz the bloody coup in Chile,

Davis’ new appointment is applauded by the racist leaders of South Africa and Southern Rhodesia who hold the sam@ — views as the fascist butchef | Pinochet. According to. the | French press, the South Africat — rulers have welcomed the ap” | pointment of Nathaniel Davis to the post of U.S. assistant secre tary of state for African affairs. —

However, the “Chilesation” 0 — Africa is as hopeless a task the “Chilesation” of Latin Am& rica and other regions of thé Third World. The Pinochet jum ta’s activity arouses disgust and condemnation rather than a de- sire to borrow it.

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Sin enact beige Suen tip 22

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eir support for FRELIMO. Is