The double-bind of oil and aid – a way out

Abstract

In the search for a solution of the present oil problem very little attention is apparently being paid by the developed nations to the plight of the non-oil producing developing countries (LDCs). While the emphasis of analysis so far has been on the effects on the balance of payments of the industrial Western World and on the huge surpluses accruing to Arab oil producing states, the fact remains that the non-oil producing LDCs are the ones who will suffer the most from the present oil crisis. This article calls attention to the particular predicament which the present oil crisis poses for these countries, and shows that given their fragile economic structures, their limited range of options and scope for effective action, they are in fact its real casualties. Moreover, the author suggests a possible way out of what, for the majority of them, can only be described as a veritable double-bind.

JEL: Q40, F35, O19