the World Economy:
The Energy Situation
and the New International
DANIEL P. HANN
Whenever one undertakes the writing of such a grandiose topic as "perspectives on the future of the world economy" he or she risks being too broad and thereby appearing superficial or too narrow and thus accused of being myopic and lacking a feel for the big picture. This paper, therefore, does not pretend to address the gamut of possible issues facing the international economy; rather I select what are perceived to be two major challenges facing this decade. The first challenge to be explored centers around the energy situation in the world economy and an examination of some possible avenues for policymakers; the second challenge confronting the world economy involves the future of the New International Economic Order.
The current energy situation is casting an ever darker shadow over the world economy and perhaps no single topic is of greater importance to all economies, whether industrialized or developing, than that of energy. The continued upward trend of petroleum prices since 1972 does not seem to be abating (see Figure 1). As a result, the oil-importing economies of the world are faced with larger current account deficits, higher inflation rates, and lower growth rates. In all likelihood the supply of energy will remain tight throughout this decade forcing policymakers to take more stringent actions.
According to World Bank estimates, world production of primary____________________