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There are a few signs that the rich nations are becoming more interested in aiding LDCs. The West German government is preparing some actions to announce at next month's economic summit meeting, in Bonn, of the seven biggest industrial powers. Included: cancellation of debts owed to West Germany by some of the poorest countries. Japan promises to increase its foreign aid to $2.2 billion by next year, double the 1976 figure, though still a pittance in comparison with the nation's $29.6 billion in monetary reserves.
Unfortunately, there seems to be little chance that these small steps will lead to any sustained effort by the rich nations to help the poor. Says U.S. Treasury Secretary W. Michael Blumenthal: "In view of our domestic problems, no substantial increase in assistance seems feasible at present." Many Western statesmen contend that the LDCs lack the infrastructure (roads, ports, dams, railways), political organization and expertise to use much more aid than they are now getting. Says West German Economics Minister Count Otto Lambsdorff: "I do not believe that a kind of Marshall Plan for the Third World—which today would have to be shouldered jointly by the U.S., Europe and Japan—is a feasible solution."
Yet a new version of the Marshall Plan that rebuilt Europe after World War II may well be the most workable solution. Only such a plan could overcome the widespread feeling among voters that much aid to LDCs is wasted because it consists of piecemeal efforts by the givers to finance uncoordinated projects. It is often forgotten that the Marshall Plan involved far more than the mere ladling out of money: it committed the U.S. to aid countries that drew up detailed and effective plans to use the cash and goods for rebuilding. This coordinated planning is vital—especially since the task of promoting growth in the poor countries will be much harder than the reconstruction of Europe was; postwar Europe had the skilled work force and industrial base that LDCs lack. A new Marshall Plan ought to commit the U.S., Europe and Japan not only to give more, but to give more according to a comprehensive and effective plan.
Formal aid would not be the only component of such a plan. One other step that the rich countries should take together is to lower the tariffs and scrap the quotas that keep many products of the LDCS—beef, sugar, cotton textiles, shoes —out of Northern markets. These rising barriers hurt precisely those LDCs, such as Argentina, Brazil, India and Mexico, that have the best chance of building sound economies based on a mix of industry and agriculture. The World Bank estimates that trade barriers cost LDCs $24 billion a year in lost exports of manufactured goods alone.
The industrial countries should also join with the poor lands in agreements to stabilize the prices of raw materials such as copper, coffee, tin, bauxite and manganese. Partners in these agreements would set up common funds to buy and stockpile commodities when prices plunge, sell off the stocks when shortages send prices soaring.