Massive transfers and mutual interests

The second ‘oil shock’ and associated changes in prices of manufactures that started to disturb the world economy at the end of 1978 have brought a deficit in the balance of payments of most of the South that appears chronic. However, its effects on patterns of production and consumption are by no means wholly harmful. If there were massive resource transfers to the South, these would perpetuate a pattern of growth which is simultaneously oil-intensive and in general inegalitarian. They would permit the NICs to service their now considerable debts to private companies and threaten the economies of the North, especially in view of the limits to world oil consumption in the next few years.