80 SOCIAL SCIENTIST financed by the commercial banks and about 50 per cent of the medium and long-term loans of these countries also came from the same sources. The emergence of the commercial banks as an additional source of international liquidity had one important implication. The banks no doubt helped to put off the inevitable financial crisis arising out of the unmanageable payments situation that the developing countries have been facing for a few years. In the 1980's however, and especially in 1982 and 1983, the financial crisis faced by the developing countries has brought the international banking system itself to the brink of a collapse, which has resulted in a spate of debt rescheduling moves. The repayment period is extended by a few years to prevent the indebted countries from declaring insolvency. In a system where the accumulated debts of the non-OPEC developing countries have gone up from dollars 102.6 billion in 1970 to dollars 250.9 billion in 1980 (increasing at a compound annual rate of 9.4 per cent), the latter figure itself possibly being a serious underestimate, the importance attached to external finance in the prescriptions for global recovery made in the report under review is difficult to understand. The more important factor than the improvement in lending conditions and easier access to liquidity is the reform that is required in the world trading system. This appears to have taken a backstage in the report. The continued inflation and recession in the international economy have led to imperfections in the trading system. The developed countries have reacted to the adverse effect inflation has caused to their competitiveness in trade, by adopting protectionist policies. This has narrowed .down the market available to . the developing countries for their manufactures. These countries face a difficult situation on yet another front. The conditions attached to the loans they have had to seek from agencies like the IMF have often forced them to adopt several 'structural adjustment policies' which include a substantial opening up of their economies. This opening up, together with the deflation enforced by the IMF, has put an effective check on their growth process. * The hope of any improvement of the trading system, according to the report, lies in the international negotiations which are conducted periodically by GATT and UNCTAD. The experiences of the GATT meeting in 1982 and the UNCTAD VI in 1983, however, leave very little scope for such optimism. In both these conferences the posture of the developed countries regarding protectionism saw a further stiffening. The report suggests various short, medium and long term solutions to resolve the present crisis facing the international economy, but in the prevailing circumstances the chances of success of the modified Bretton Woods system appear to be rather slim. BISWAJIT DHAR Research Scholar, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi