Magazine article UN Chronicle

Oil Shocks Cause Alarm

Magazine article UN Chronicle

Oil Shocks Cause Alarm

Article excerpt

Kil shocks cause alarm

A world economic recession, predicted by the United Nations Conference on Trade and Development (UNCTAD) in its annual Trade and Development Report, 1990, could have a severe impact on LDCs, as new oil-price "shocks" threaten their already weak economies.

Only a few Asian economies and some members of the European Economic Community could avoid a recession, said Roger Lawrence, an UNCTAD Director and head of the Report team, at a press conference on 13 September at Headquarters.

The UNCTAD survey, published on 1 August, the day before Iraqi troops moved into Kuwait, stated that Latin America and Eastern Europe were expected to have particularly poor growth performances in 1990, and the world's rich countries would also be affected in the wake of oil price rises in August.

If oil prices remained high, UNCTAD warned, growth in the major countries of the Organisation for Economic Co-operation and Development could fall by one quarter to one half a percentage point. Oil imports could absorb up to one half of Eastern Europe's total hard currency earnings, he said.

In developing countries, a $30-per-barrel price would add $26 billion per year to their import bill. …

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