The North-South Dialogue: From Conflict to Compromise

A version of this paper was originally prepared for the conference "Alternatives to Growth" held in Houston, Texas, October 19-21, 1975. The present version will appear in a forthcoming book, Alternatives to Growth, co-edited by Robert E. Sweeney and Dennis L. Meadows.

The conflict between the poor developing nations living in the Southern Hemisphere and the rich industrial countries of the North has entered a new phase in recent months. At long last the countries of the world are coming seriously to grips with the growing material inequalities between a handful of affluent nations in North America, Western Europe and Japan (which account for less than 18 percent of the world population but more than 60 percent of world income), and the scores of poor countries in Asia, Africa and Latin America which constitute the bulk of humanity but enjoy very little of the earth's bounty.

The North-South struggle, brewing for years, had its first climactic manifestation in the 1971-72 negotiations between the Organization of Petroleum Exporting Countries and the multinational oil companies for a higher crude oil price. OPEC's success in its first real bargaining with the companies put the geo-economics of petroleum at the very center of world politics. The oil price adjustments of 1973-74, and the consequences of the Arab oil embargo, made the world realize-however reluctantly and painfully-that the inevitable had finally occurred. The blissful era of plentiful and ridiculously cheap hydrocarbon fuels from the Middle East came to a fateful end.

A direct and highly significant corollary of the oil price rise was a warning to the world that the limits to the interminable growth of energy and raw materials consumption were not merely physical but also political and financial. OPEC's solidarity in resisting Western political pressure during the 1972-73 boom, and its remarkable resilience in holding the oil price line in the face of falling demand during the 1974-75 economic recession, have given other raw-materials producing countries hope for more equitable arrangements with the industrial world.

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