ECONOMIC TRENDS IN THE TRADE OF DEVELOPING COUNTRIES*
The spectacular increase in international trade since the war has been one of the great success stories of the postwar period. Since 1948 the volume of world trade has grown thirteenfold—much faster than the growth of production over the same period. Yet in the early postwar years there was no expectation of such an outcome. Between 1913 and 1938—or indeed 1948—the volume of trade had grown only by about 10 per cent and there was little prospect of a return to what seemed then the remarkable growth of the years before the First World War when world trade grew nearly fourfold in forty years.
When I first looked at long-term trends in international trade with Just Faaland in 1952 there were few statistical sources on which one could draw and it was necessary to confine the analysis to Western Europe: the developing countries were hardly mentioned. The picture that emerged is summarized in Table 16.1 and brings out the severity of the contraction of trade in manufactures in the interwar period, imports into the four main European countries falling by 35% and exports by 42 per cent in volume between 1913 and 1937. Imports of food, on the other hand, were well maintained—in volume but not in price—while materials followed an intermediate course with a contraction in volume of 16 per cent and were the only group to show a reduction in imports from non-European sources.
For exports, the changes over that quarter of a century were rather different. Food exports fell furthest—by 46 per cent with finished goods not far behind with a fall of 42 per cent while materials fell by only 24 per cent. There was little in the experience of those years to prepare one for the extraordinary expansion in trade in manufactures over the last forty years and for the increasing dominance of trade in manufactures over food and raw materials.
* An earlier version of this paper was presented at a conference in Bergen on ‘Aid and Poverty’ in January 1982 and subsequently published in the Conference volume with that title edited by Professor J.R. Parkinson.