Deterioration of development process

[Developing countries] The economic conditions, and the social conditions dependent upon them, are deteriorating in much of the developing world. For most of the countries of Africa, Latin America and the Caribbean, almost every economic signal points to the fact that development has been reversed. Per capita GNP has fallen, debt repayments have risen to a quarter or more of all export earnings, share in world trade has dropped, and the productivity of labour has declined by one or more percentage points each year throughout the 1980s. The developing world still depends on raw materials for the majority of its export earnings. But during the 1980s, real prices for the developing world's principal commodities (including minerals, jute, rubber, coffee, cocoa, tea, oils, fats, tobacco and timber) have fallen by approximately 30% below their 1979 levels.

With the fall in new commercial lending, consequent on the debt problem, and the inadequate and static levels of official aid, developing countries have no possibility to remedy their situation. Although it is still widely believed in industrialized countries that money is flowing from richer nations to the developing countries to assist in their struggle against poverty. This has not been true since 1979, at which time a net $40 billion flowed from the northern hemisphere to the nations of the south. In 1989, the southern nations are now transferring at least $20 billion a year to the north (taking into account loans, aid, repayments of interest and capital movements). If account were to be taken of the effective transfer of resources implied in the reduced prices paid by industrialized nations for the developing world's raw materials, then the annual flow from the poor to the rich might be as much as $60 billion per year.