(7 of 16)
The Soviets benefited from what they accurately enough called this "crisis of capitalism." From their oil exports, mostly to the West but also to their East European allies, the Soviets earned $2 billion last year. However, Russia will rapidly scrape the limits of its self-sufficiency if it is to meet plans to expand its petrochemical industry and treble auto ownership (to 9 million cars) by 1980. Soon the Soviets will have to restrict oil sales and greatly increase the preferential prices that they charge to their Comecon partners. Last year Poland reportedly had to buy a large amount of Libyan crude, at $16 to $20 per bbl. Strapped for hard currency to pay for oil from non-Communist sources, East Germany had to restrict the expansion of its plastics and textiles industries.
The poorest countries of Africa, Asia and Latin America were the worst hurt victims of the oil squeeze. Indeed, the developing countries' extra costs for oil last year totaled $10 billion, wiping out most of their foreign aid income of $11.4 billion from the industrialized world. In black Africa, only Nigeria has any big known reserves of oil, and Gabon, the Congo Republic and Angola possess some oil. For the other black African countries, the petrobill came to $1.3 billion last year. Development plans were stymied because so much money was drained off for oil. Drought-induced hunger became worse, in part because those countries could no longer afford as much gasoline to run their tractors, or fertilizers to nourish their fields. Inflation raced at rates averaging 45%.
India suffered more than any other nation. Its oil import costs hit $1.6 billion, up fivefold in two years, leaving it little money to import food and fertilizer, machines and medicine for its hungering millions. Pakistan's plight was almost as critical; its imports of oil and fertilizer topped $355 million. Sri Lanka's rice farmers had to pay 375% more for fertilizer; they reduced their buying so much that the rice harvest fell almost 40% below expectations.
The poorest countries—those with scant resources to finance their needed imports—descended into a new category, now known as the Fourth World. The old Third World became a more exclusive, OPEC-led grouping, limited to those nations that are exploiting their rich mineral or agricultural resources. Emboldened by the oil producers' success, many other Third World countries tried to create their own price-fixing cartels for copper, iron ore, tin, phosphates, rubber, coffee, cocoa, pepper and bananas. Their leaders talked of "one, two, many OPECs." The grand plans generally failed because members have lacked the cohesiveness to make them work —so far. But the new importance of raw materials moved some big producers to raise prices unilaterally. Jamaica, for example, abrogated contracts with companies and lifted the government take for the country's bauxite by 700%.
In sum, the world has entered an era in which natural resources will count for much more than before, conservation will gain a premium over consumption, and more attention will be paid to exploiting resources than curbing pollution. All this will bring many changes in lifestyles: slower gains in real purchasing power, stricter controls on energy use, smaller cars. It remains to be seen to what extent the changes will be