Abstract
The world-wide boom and inflation in 1972–73 caused a steep rise in the prices of many commodities including oil. As a result, various pessimistic views developed on the subject of access to commodity supply. Since these views have already been analysed in several reports,1 a brief summary is all that will be given here without referring to the details of the argument:
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i)
Mankind will face a serious physical shortage of natural resources in the future (this is a view which might have been influenced by the “Limits to Growth” approach of Meadows and others.2
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ii)
Conflicts in commodity trade epitomise the confrontation between North and South. The rise in commodity prices relative to those for industrial products could be regarded as a radical move by the less developed countries (LDCs) to correct the present inequality of international income distribution.
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iii)
A small number of commodity-exporting countries have attempted to raise prices by exercising their power to control markets, for example through cartels. This tendency will strengthen and spread to more commodities. In other words, the success of OPEC will probably lead to its imitation for other commodities.
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Notes
See, for example, the Brookings Institution, A Tripartite Report, Trade in Primary Commodities: Conflict or Cooperation?, Washington, 1974,
and Carl E. Beigie, Wolfgang Hager, and Sueo Sekiguchi, Seeking a New Accommodation in World Commodity Markets, Triangle Paper No. 10, The Trilateral Commission, New York, 1976.
Donella H. Meadows et al, The Limits to Growth, Universe Books, New York, 1972.
See UN, Price Movements of Basic Commodities in International Trade 1950–1970, Series M, No. 29, Rev. 1/add. 1, 1971. Price developments for selected categories of commodities are shown in Appendix Table 2–1. For individual commodities, price developments vary. For example, the price of copper ore increased sharply in the latter half of the 1960s.
US Department of Commerce, Survey of Current Business, March, 1976.
UN, Department of Economic and Social Affairs, The Impact of Multinational Corporations on Development and on International Relations, New York, 1974.
See Lawrence B. Krause and Sueo Sekiguchi, “Japan and the World Economy” in Hugh Patrick and Henry Rosovsky (eds.), Asia’s New Giant, the Brookings Institution, Washington, 1976.
Agency for Resources and Energy, Annual Report on Resources and Energy, Tokyo, February, 1976. Available in Japanese only.
The investment insurance system in Japan covering the political risks of investment is on the whole similar to those of the United States and West Germany. Japan also ratified the IBRD Convention on the Settlement of Investment Disputes in 1967. See OECD, Investing in Developing Countries, third edition. Paris, 1975.
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© 1979 Atlantic Institute for International Affairs
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Sekiguchi, S. (1979). Investment in Natural Resource Development. In: Japanese Direct Foreign Investment. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-81406-0_2
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DOI: https://doi.org/10.1007/978-1-349-81406-0_2
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