THF CURRENT number of Social Scientist is devoted to a discussion of certain themes relating to the international economy. It does not purport to provide any comprehensive account of all the major contradictions in that area, rather, it focusses only on certain parts of the kaleidoscope that constitutes contemporary world capitalist economy.
The articles contained in this number fall into several distinct groups. Those by Iqbal Gulati and Prabhat Patnaik are directly concerned with international issues. The IMF which is normally not permitted to borrow on the international capital market is today short of funds for making loans. The World Bank which can raise funds is supposed to provide "development assistance" for projects rather than balance of payments support. Consequently, the entire job of international lending to meet Third World payments difficulties now falls to private multinational banks. It is this enormous privatisation of the recycling business, and the decline in importance of Bretton Woods institutions, which, no matter how odious they may have been, had at least official representation from a number of Third World countries, that forms the backdrop to Gulati's article. Never in recent years has international financing been so completely dominated as now by private institutions over which there is no multilateral surveillance. The Baker Plan was perhaps an attempt to introduce some order into this anarchy. But after the latest move by Citicorp to prepare for a write-off of Third Word debts, which effectively nullifies the Baker Plan, the contradiction alluded to by Gulati gains added pertinence. This contradiction also features in Patnaik's article. Given the trade imbalance between the U.S. and Japan, he argues, any recovery in the advanced capitalist world, unless it comes about through reflation in Japan, which is doubtful, would necessarily entail greater encroachment upon Third World markets. On the other hand, such a recovery will be inflationary, unless Third World commodity prices are kept low. If the Third World, whose purchasing power is thus going to remain squeezed, is to absorb more commodities, capital exports would have to be made to it, but the multinational banks are currently reluctant to undertake such capital exports. The anarchy of privace decision-making therefore stands in the way of recovery in the advanced capitalist countries. Patnaik, also draws attention to the role of the World Bank and the IMF in imposing "structural adjustment" upon Third World countries, whose consequence is to keep commodity prices subdued.
The papers by C.P. Chandrashekhar and W.D. Lakshman present