PROBLEMS OF THE EXTERNAL SECTOR OF DEVELOPING COUNTRIES

It is an incontrovertible fact that economically underdeveloped countries, as deflned, say, in terms of a relatively low level of per capita income,1 are, by and large, far more dependent on external economic relationships than their more advanced sister nations. Nowhere is this dependence more immediately apparent than in the importance of international commodity trade to developing countries, whether measured by the large proportion of exports in national product,2 the Qonsiderable importance of imported capital goods in the annual increase of development capital,s or by the often substantial amount of imported agricultural staples in domestic consumption.4 This dependence is more subtle though hardly less extensive in terms of key foreign-owned resources at work in the economy. Even if the annual flow, in whatever form, of " foreign aid," so-called, is discounted, the continuing viability of much of the present structure of agriculture and the industry in the developing countries, particularly in the export sector, is far more closely tied to the presence of private foreign capital and managerial and other skills than is true of countries generally understood as developed,~ despite the mounting concern in many of these over the real or imaginary threat of foreign economic domination. The purpose of this paper is to explore in depth some of the more important characteristics and less fortunate econoinic consequences of the external orientation and dependence of typically developing countries. No claim is made to originality in exposing or analyzing the problems discussed