THE TRANSFER OF WEALTH FROM THE SOUTH TO THE NORTH/97basket of goods from the South could buy 52 per cent less In 1992
than It could In 1980. In other words, a country In the South must
export twice as much to obtain in exchange the same quantity of
goods from the industrialised world.
OPEC member countries have seen their terms of trade plummet
even further. In 1992, the real price of crude oil was one-third of
what it was in 1981.
For sub-Saharan Africa, from 1986 to 1989 alone (just four years)
the fall in the terms of trade meant S55.9 billion in lost earnings.
Ninety per cent of exports from half the countries of Africa is made up
of raw materials.
Fifteen countries belong to the 'severely indebted middle-income
country' (SIMIC) category: Argentina, Bolivia, Brazil, Chile,
Colombia, Cote d'lvoire, Ecuador, Mexico, Morocco, Nigeria, Peru,
the Philippines, Uruguay, Venezuela and Yugoslavia. Between 1981
and 1989, the deterioration in the terms of trade cost them S247.3
billion.
Above and beyond this downward tendency and market sensitivity
to marginal fluctuations, industrialised countries have aggravated
the problem by manufacturing substitutes: synthetic fibres, artificial
sweeteners, and so on.
The most recent substitute, and not a minor one at that, would
allow countries of the North to label as 'chocolate' a product they
make that has virtually no cocoa in it. The European Commission
has authorised European chocolate makers to substitute cocoa butter
(produced in the South) with fat, totalling up to 5 per cent of the
product's net weight. The Commission realises that this would
trigger a fall in cocoa exports to the European Union (EU), leading to
an inexorable fall in the price of cocoa on the world market and
severe poverty for the South's cocoa farmers. But the European lobby
is very powerful. This is a clear example of EU protectionism against
the South.
Even when they export manufactured goods, countries of the
South generally lose out in trade with the North. Between 1980 and
1990, the price of the South's manufactured exports increased in
nominal terms by 12 per cent. During the same period, the G7's
manufactured exports rose 35 per cent in price (UNDP, 1992). In
real terms, the South's manufactured exports dropped in price, the
North's rose.