The Year of Economics: Developing Countries and Non-Fuel Minerals

Over the past three years, a dramatic change has taken place in the world market for one key raw material, oil, whose production and reserves are heavily concentrated among the so-called developing countries of the world. Now, as part of the energy crisis, the developed countries of the world face the certain prospect of very much higher fuel costs in coming years, and the continuing threat that adequate supplies may be withheld either for political reasons or in a process of rather one-sided bargaining with the key producer countries in the now-famous OPEC grouping (the Organization of Petroleum Exporting Countries).

Inevitably, the question arises whether a similar transformation may be in store for one or more of the widely traded minerals not used for fuel. From the standpoint of the developing countries that produce substantial shares of these minerals, such a transformation represents a hope-after successive disappointments with aid flows, transfers of know-how, trade liberalization, and international commodity agreements-that they may now succeed in obtaining from advanced countries increased resources through the operation of the market in changed circumstances, and possibly through alliances emulating OPEC. Conversely, for the consuming countries, such a prospect could be alarming, raising the specter that to the already astronomical amounts they have to pay for oil will be added heavy increases for their other mineral needs, not to mention the chance of having on occasion to do without.

However viewed, the future terms of trade in non-fuel minerals can be deeply significant for individual countries, for the overall balance of economic power in the world, for the welfare of very large numbers of people. To what extent is a transformation in prospect?