UNEQUAL EXCHANGE 1965 - 1995

WORLD TREND AND WORLD TABLES


Gernot Köhler

School of Computing and Information Management
Sheridan College
Oakville, Ontario

Canada L6H 2L1

gernot.kohler@sheridanc.on.ca

November 1998


1. Introduction


This study continues my measurements of unequal exchange and includes data for the years 1965 and 1995. (The previous study has data for 1995; see, Köhler 1998). I am presenting (1) highlights and a summary of global trends of unequal exchange, 1965 - 1995; and (2) the statistical tables upon which this summary is based (in the Appendices). The calculations are based on trade data from U.N. trade statistics and on purchasing power parity data from the World Bank (and Penn World Tables). The underlying theory and method are explained in the previous study.



2. Corroboration of Aminís Estimate


Professor Amin published an estimate of the magnitude of unequal exchange between developing and advanced countries for the year 1966. According to Amin the global total of unequal exchange in 1966 was US $ 22 billion (22 thousand million) at exchange rates of 1966 (Amin 1976:144). My estimate for 1965 is US $ 19 billion (see, Appendix B). Amin's and my estimates are thus very similar even though they are based on two different methods of estimation. (More on Amin's numbers, see Appendix D)



3. National Trends: Selected Countries


Table 1 shows trends of unequal exchange for selected countries; other countries are listed in Appendix A.



Table 1. Unequal Exchange 1965-95, Selected Countries


                     Unequal Exchange
                          gain (+)
                          loss (-)
                        as a percent
                          of GDP

                       1965   1995

                          %      % 
AFRICA               
     Mozambique          -8    -75
     Nigeria             -1   -172
     Egypt               -1    -21

ASIA
     Indonesia           -8    -52
     India               -1    -18
     China (mainland)     0    -47

AMERICA, Central and South
     Brazil              -5     -4
     Mexico              -3    -28
     Peru                -6     -5

EUROPE, Central and East
     USSR/Russia          0    -10
     Czechosl./Czech R   +1    -46
     Romania             +1    -29

OECD Countries
     USA                 +1     +6
     France              +2     +7
     Germany-W/Germany   +2    +11
     Japan               +1    +11
     United Kingdom      +3     +6


Sources and notes: see, Appendix A




Table 1 shows significant increases in the magnitudes of unequal exchange between 1965 and 1995; that means increased losses for many non-OECD countries (e.g., Indonesia, from a loss of -8% of GDP in 1965 to a loss of -52% of GDP in 1995, due to unequal exchange) and increased gains for OECD countries.



4. Trends by Center/Periphery of the World-System


When the world is subdivided into but two groups of countries -- namely, center versus periphery, or, OECD versus non-OECD countries, the trends are, as shown in Table 2.



Table 2. Unequal Exchange 1965 and 1995, by Center/Periphery

                     Unequal Exchange
                         Gain (+)
                         Loss (-)

               CENTER                PERIPHERY
           (% of OECD GDP)      (% of NON-OECD GDP)

1965           +1.4%                 - 1.8%

1995           +8  %                 -24  %


(Number of countries: OECD N=19 (1965) and N=22 (1995); NON-OECD N=88 (1965) and N=97 (1995))

Sources and notes: see, Appendix A



Table 2 shows that OECD countries (center) increased their gains from unequal exchange from +1.4 % of their combined GDPs (1965) to +8 % (in 1995). The losses for non-OECD countries (periphery) increased from -1.8% of their combined GDPs (1965) to -24 % (in 1995). ("Non-OECD" in this table includes China and USSR, as well as (ex-)Warsaw Pact countries).



5. Trends by "Three Worlds"


The center-periphery view above can be refined by separating out the Socialist/Communist camp. In Cold War times, the West (First World, NATO, OECD) was rivalling the East (Second World, Warsaw Pact, COMECON), both competing for allies in the South (Third World, non-aligned countries, developing countries). The trends of unequal exchange for these groups of countries are presented in Tables 3 and 4.



Table 3. Unequal Exchange and "Three Worlds"

         OECD       USSR     China   NON-OECD       NON-OECD
         countries  /Russia          excl. China,   incl. China,
                                     USSR/Russia    USSR/Russia 
YEAR     (A)        (B)      (C)     (D)            (E)

                    percent of aggregate GDP
                       gain(+) loss(-)

1965     +1.4%        0 %      0 %   - 3.9%         - 1.8%

1995     +8  %      -10 %    -47 %   -20  %         -24  %


Sources and notes: see, Appendices A,B and Kohler (1998: Appendix)



Table 3 shows that the two major Socialist/Communist states -- namely, (mainland) China and the USSR, had fairly equitable trade with the West in 1965 (unequal exchange = 0% of GDP). By 1995 this favourable situation had deteriorated to -10% for Russia and - 47% for China. The "South" ("Third World" without China and USSR) had already a significant amount of unequal exchange losses in 1965 -- namely, -3.9 percent of the combined Third World GDPs. This deteriorated to -20 % in 1995.

The data for (ex-)Socialist/Communist states are incomplete. Here is the available information (Table 4):



Table 4. (Ex-)Socialist/Communist Countries

                      Unequal Exchange
                          Gain (+)
                          Loss (-)
                         As % of GDP

                        1965     1995
                           %       %
Bulgaria                   .     -54
China                      0     -47
Czechoslov./Czech R       +1     -46

Estonia                   ..     -16
Hungary                    .     -16
Kasakstan                 ..     - 6

Kyrgystan                 ..       0
Latvia                    ..     - 7
Lithuania                 ..     -22

Poland                     .     -18
Romania                   +1     -29
USSR/Russian Fed           0     -10

Slovakia                  ..     - 8
Ukraine                   ..     - 1
Uzbekistan                ..     - 3

Yugoslavia                 0       .

All above                 +0.1%  -31%  (percent of aggregated GDPs)



Sources and notes: Appendix A
"." = data incomplete  ".." = did not exist as an independent country


Table 4 shows that the Socialist/Communist countries had fair trade with the OECD countries in 1965 (unequal exchange ranging between 0% or +1% per country). By 1995 this situation deteriorated to unequal exchange amounting to -31% of their aggregate GDP.



6. World Trend


The global trend of unequal exchange between OECD countries and non-OECD countries is summarized in Table 5.



Table 5. World Trend of Unequal Exchange 1965 - 1995

                   World Total of Unequal Exchange

             in current      in constant      as a percent
             U.S. dollars    U.S. dollars     of global GDP
             at current      (1995=100)
             exchange rates
             (billions)      (billions)
                (A)             (B)             (C)

1965            19              84              0.9 %

1995          1752            1752              6.6 %


Sources: Appendices A, B and Kohler (1998:Appendix)
Note: price deflator of 0.2274 based on World Bank. World Tables, various years.



Table 5 shows the global trend, as follows:
    Column (A) shows the amount of unequal exchange in current U.S. dollars of 1965 and 1995. The figure of 19 billion in 1965 is similar to Amin's estimate of 22 billion for 1966. By 1995 the total volume of unequal exchange had increased to 1752 billion (= 1.75 trillion) U.S. dollars. -- These two figures include the effect of inflation and cannot be compared directly.
   In column (B) the values from column (A) have been converted into constant U.S. dollars at 1995 values (1995=100). The figure for 1995 remains unchanged (namely, 1752) and the figure for 1965 becomes 84 billion (in terms of 1995 dollar values). The total amount of unequal exchange between non-OECD and OECD increased 21-fold between 1965 and 1995. This reflects two developments -- namely, (a) more trading volume (6 times more) and (b) greater exchange rate deviations.
    Column (C) shows the trend of unequal exchange relative to global GDP. Unequal exchange between non-OECD and OECD increased from 0.9% of global GDP (in 1965) to 6.6 % of global GDP (in 1995).



7. Impact of the Exchange Rate System


The data suggest that the neoliberal system of exchange rates prevailing in 1995 created significantly more unequal exchange than the exchange rate system prevailing in 1965 which had some Keynesian features. A major reason for this is that the neoliberal exchange rate system allows for greater exchange rate deviations from purchasing power parity.



8. Historical Trend of Unequal Exchange 1865-1995


Going back a century, what was the magnitude of unequal exchange in the 19th century? The following quotation provides a preliminary estimate:

"Mandel, Amin, and Arghiri Emmanuel (1972) contend that the core/periphery relationship altered during the late nineteenth century due to the emergence in the 1880s of a wage differential between core workers and peripheral workers. Previous to that, workers in both the core and the periphery had received subsistence wages, but in the late nineteenth century, due to the diminishing reserve army of labor in England and because of partial success of labor struggles there, wages for English workers began to rise above subsistence. This brought about the "unequal exchange" analyzed by Emmanuel (1972)..."(Chase-Dunn 1989: 59)

Based on this observation, it may be estimated that unequal exchange prior to 1880 may have been equal to zero (null). When we use this observation as an estimate for unequal exchange in 1865, we can construct an historical trend, as follows (Table 6):



Table 6. Historical Trend of Unequal Exchange 1865 - 1995

                      Unequal Exchange
                            as a
          % of World GDP    % of Periphery GDP    % of Center GDP

1865             0   %                0  %                 0  %
1965             0.9 %              - 1.8%                +1.4%
1995             6.6 %              -24  %                +8  %

Sources: Chase-Dunn 1989:59 and Table 2 above.



Table 6 shows an historical "explosion" of unequal exchange over the last three decades from 0.9% of world GDP to 6.6% of world GDP.



9. Conclusion


The findings suggest that the absolute and relative magnitude of unequal exchange has increased significantly within the last thirty years, taking from the poor and giving to the rich.

For further details the reader is invited to examine the tables in the Appendices and to pursue some questions of his/her own.



10. References

Amin, S. (1976) Unequal Development. New York, USA: Monthly Review Press [translated from the 1973 French original]

Chase-Dunn, C. (1989) Global Formation: Structures of the World- Economy. Cambridge, USA: Basil Blackwell

Emmanuel, A. (1972) Unequal Exchange: A Study of the Imperialism of Trade. New York, USA: Monthly Review Press [translated from the 1969m French original]

K
öhler, G. (1998) "The Structure of Global Money and World Tables of Unequal Exchange", Journal of World Systems Research 4: 145-168

Penn World Tables (1998) available on the internet at:
http://datacentre.chass.utoronto.ca:5680/pwt

United Nations (1965) International Trade Statistics Yearbook 1965


The appendices are organized, as follows:
Appendix A -- World Table of Unequal Exchange 1965-1995 (Comparison Table)
Appendix B -- World Table of Unequal Exchange 1965 (Base Table)
Appendix C -- Methodological Details Concerning Base Table 1965
Appendix D -- Amin's Estimate for 1966 




APPENDIX A -- WORLD TABLE OF UNEQUAL EXCHANGE 1965 - 1995
              (COMPARISON TABLE)


GROUP = NON-OECD
(N=88 countries (1965) and 97 countries (1995))

Country           UNEQUAL EXCHANGE
                      gain (+)
                      loss (-)
                    1965     1995
                      % of GDP
Algeria               .      -47%
Angola              -25%    -203%
Argentina            -1%       0%
Armenia               .        0%
Bahamas               .       -1%

Bahrain               .      -11%
Bangladesh            .      -33%
Barbados            -13%      -5%
Belize                .      -34%
Benin                 .      -11%

Bhutan                .        0%
Bolivia             -23%     -26%
Brazil               -5%      -4%
Bulgaria              .      -54%
Burkina Faso          .       -7%

Cameroon             -7%     -68%
Cape Verde            .       -2%
Central Afr R       -11%     -29%
Chad                 -7%       .
Chile                -1%     -26%

China                 0%     -47%
Colombia             -3%     -24%
Comoros               .       -8%
Congo               -15%     -99%
Costa Rica           -8%     -35%

Cyprus               -1%       .
Czech R/Czechoslov.  +1%     -46%
Dominican Republic   -3%     -33%
Ecuador             -10%     -53%
Egypt                -1%     -21%

El Salvador         -13%      -4%
Estonia              ..      -16%
Ethiopia             -3%     -10%
Fiji                -17%     -39%
Gabon                -7%       .

Gambia              -25%     -10%
Ghana                +2%     -30%
Greece                0%      -4%
Guatemala            -6%     -12%
Guyana               -8%       .

Honduras             -7%     -39%
Hong Kong           -13%      -7%
Hungary               .      -16%
India                -1%     -18%
Indonesia            -8%     -52%

Iran                -19%       .
Iraq                -41%       .
Israel               +2%      -2%
Ivory Coast         -17%       .
Jamaica               0%     -39%

Jordan                0%      -8%
Kasakstan            ..       -6%
Kenya                -6%     -35%
Korea (note a)       -7%
Kuwait                .      -13%

Kyrgystan            ..        0%
Latvia               ..       -7%
Liberia              +2%       .
Lithuania            ..      -22%
Madagascar          -11%     -18%

Malawi               -4%     -93%
Malaysia            -12%     -79%
Maldives              .      -16%
Mali                 -1%       .
Malta                +1%       .

Mauritania           -1%       .
Mauritius           -40%    -127%
Mexico               -3%     -28%
Morocco              -4%     -28%
Mozambique           -8%     -75%

Myanmar              -1%       .
Nepal                 .      -36%
Nicaragua           -53%    -112%
Niger                 0%     -33%
Nigeria              -1%    -172%

Oman                  .      -23%
Pakistan             -6%     -27%
Panama               -1%     -21%
Papua New Guinea    -27%     -46%
Paraguay             -3%      -4%

Peru                 -6%      -5%
Philippines         -11%     -36%
Poland                .      -18%
Portugal (note a)    -5%
Qatar                 .       -4%

Reunion              +7%       .
Romania              +1%     -29%
Rwanda              -12%       .
Saint Kitts and N     .      -10%
Saudi Arabia         -1%       .

Senegal              -5%     -12%
Sierra Leone        -54%       .
Singapore            +1%      +4%
Slovakia             ..       -8%
Solomon I             .     -116%

Somalia             -10%       .
Southern Africa      -2%      -8%
Spain (note a)       -2%
Sri Lanka           -12%     -60%
Suriname            -13%    -228%

Syrian Arab Republic -1%     -55%
Taiwan               -9%       .
United R of Tanzania -4%     -31%
Thailand             -9%     -40%
Togo                 -3%     -18%

Trinidad and Tobago -39%     -42%
Tunisia              -2%     -56%
Turkey               -3%     -10%
Uganda               +2%     -16%
Ukraine              ..       -1%

Russian Fed./USSR     0%     -10%
United Arab Emirates  .        0%
Uruguay             -22%      -2%
Uzbekistan           ..       -3%
Vanuatu               .       -7%

Venezuela             .      -35%
Yugoslavia            0%       .
Zaire                +2%       .
Zambia               -6%     -17%
Zimbabwe             -3%     -56% 

NON-OECD SUMMARY
number of countries  88       97
average (arithmetic) -8%     -33%
unequal exchange as
% of NON-OECD GDP    -1.8%   -24%



GROUP = OECD (N=19 countries (1965) and 22 countries (1995))

Country            UNEQUAL EXCHANGE
                    1965     1995
                     % of GDP
Australia            +1%      +6%
Austria              +1%      +9%
Belgium-Lux          +4%     +14%
Canada               +1%      +5%
Denmark              +2%      +9%
Finland              +4%      +9%
France               +2%      +7%
Germany, Fed R       +2%     +11%
Iceland              +8%      +6%
Ireland              +2%     +13%
Italy                +1%      +6%
Japan                +1%     +11%
Korea, R (note a)            +10%
Netherlands          +2%     +17%
New Zealand          +1%      +6%
Norway               +3%      +7%
Portugal (note a)             +4%
Spain (note a)                +6%
Sweden               +3%      +7%
Switzerland          +1%      +7%
United Kingdom       +3%      +6%
United States        +1%      +6%

OECD SUMMARY (note a)
number of countries  19       22
average (arithmetic) +2%      +8%
unequal exchange as
% of OECD GDP (a)    +1.38%   +8%



LEGEND
(.)  insufficient data
(..) country did not exist as a sovereign state

SOURCES
for 1965: World Table of Unequal Exchange 1965 (Base Table), see Appendix B
for 1995: World Table of Unequal Exchange 1995 see, Kohler 1998: Appendix

NOTE (a)
Three countries (Republic of Korea, Portugal and Spain) were "developing countries" in 1965 and are placed with the "NON-OECD" group for 1965. The group summaries for 1965 treat these three countries as NON-OECD for the year 1965. However, in 1995 these three countries were OECD countries and are placed in "OECD" for 1995 and are included in the group summaries for OECD for the year 1995. 

 


APPENDIX B -- WORLD TABLE OF UNEQUAL EXCHANGE 1965 (BASE TABLE)


1. INTRODUCTION

Losses or gains from unequal exchange are calculated as the difference between a "fair value" of exports/imports and the "actual (unfair) value" of exports/imports. The estimation formula is:

                           T = d*X - X                 

where
d = the exchange rate deviation index (also designated as "ERD" in the     literature)
X = the volume of exports from a low- or middle-income country to     high-income countries (valued at the actual exchange rate)
T = the unrecorded transfer of value (gain or loss) resulting from     unequal exchange

In the table (below) this formula is applied to the data for 107 countries for the year 1965.


2. HOW TO READ THE TABLE

The table presents the step-by-step calculations. Countries are arranged in alphabetical order and in two groups -- first, non-OECD countries and, secondly, OECD countries. The losses or gains from unequal exchange are shown at the right-hand side (in terms of U.S. dollars and as a percent of the country's GDP).




WORLD TABLE OF UNEQUAL EXCHANGE 1965 (BASE TABLE)

GROUP = NON-OECD
(N=88)(= all except "industrialized countries")
                                                               Exchange   Fair
Country             GDP     Popul  GDP per capita Exports to   Rate       Value of  UNEQUAL EXCHANGE
                    1965     1965    1965   1965     OECD      Deviat'n   exports   LOSS(-) GAIN(+)
                    US$              US $   PPP $        US $     D/C    (G/1.2)*F  J=F-H   K=J/A
                    (mln)   (mln)   (mln)   (mln)  year   (mln)  (ratio)   ($ mln)   ($mln) %of GDP
               (A)    (B)   (C)   (D)  (E)  (F)   (G)    (H)    (J)    (K)

Angola         580    5.3   109   306 1965  106   2.82   249   -143   -25%
Argentina   21,454   22.3   963  1529  65   926   1.59  1225   -299    -1%
Barbados       118    0.2   500   988  65    23   1.97    38    -15   -13%
Bolivia        584    3.8   152   412  65   105   2.71   237   -132   -23%
Brazil      21,071   84.3   250   576  65  1197   2.30  2298  -1101    -5%

Cameroon       729    5.8   125   211  64   131   1.69   184    -53    -7%
C.Afr.Rep.     153    1.7    88   200  65    18   2.26    35    -16   -11%
Chad           286    3.3    85   217  65    17   2.54    37    -19    -7%
Chile        6,667    8.6   772  1029  65   612   1.33   680    -68    -1%
China       70,177  715.2    98   170  65   600   1.73   866   -266     0%

Colombia     5,914   18.5   320   548  65   437   1.71   623   -187    -3%
Congo          169    1.1   158   309  65    40   1.95    65    -25   -15%
Costa Rica     593    1.5   398   742  65    88   1.87   138    -49    -8%
Cyprus         363    0.6   623   811  65    49   1.30    53     -4    -1%
Czechoslov.  8,834   14.1   626   556  65   403   0.89   298   +105    +1%

Dominican R    965    3.8   252   382  64   108   1.52   137    -29    -3%
Ecuador      1,106    5.3   209   484  64   115   2.32   222   -107   -10%
Egypt        5,614   29.4   191   295  65   157   1.54   202    -45    -1%
El Salvador    796    3.0   264   550  65   138   2.08   239   -101   -13%
Ethiopia     1,371   25.4    54    89  65    92   1.65   127    -35    -3%

Fiji           153    0.5   329   639  65    41   1.94    66    -25   -17%
Gabon          203    0.5   422   592  65    84   1.40    98    -14    -7%
Gambia          44    0.4   106   244  65    12   2.31    23    -11   -25%
Ghana        2,067    7.8   265   263  65   212   0.99   176    +37    +2%
Greece       5,996    8.6   701   912  65   207   1.30   224    -17     0%

Guatemala    1,333    4.5   295   581  65   135   1.97   221    -87    -6%
Guyana         212    0.6   348   506  65    76   1.46    92    -16    -8%
Honduras       513    2.3   224   359  65   103   1.60   138    -35    -7%
Hong Kong    2,181    3.6   609  1009  65   754   1.66  1042   -287   -13%
India       53,740  487.3   110   225  65   962   2.04  1636   -674    -1%

Indonesia    5,978  106.0    56   167  62   341   2.96   841   -500    -8%
Iran         6,480   24.1   269   763  65   923   2.84  2180  -1257   -19%
Iraq         2,478    8.0   311   961  65   644   3.09  1660  -1016   -41%
Israel       3,650    2.6  1424  1340  65   292   0.94   229    +63    +2%
Ivory Coast    956    4.6   208   434  65   227   2.08   394   -167   -17%

Jamaica        930    1.7   534   634  65   195   1.19   193     +2     0%
Jordan         417    2.0   212   496  65     2   2.33     3     -1     0%
Kenya        1,037    9.6   108   205  65    99   1.90   156    -58    -6%
Korea, R     3,012   28.4   106   318  65   131   3.00   328   -197    -7%
Liberia        297    1.2   248   282  65   126   1.14   119     +6    +2%

Madagascar     819    6.0   136   358  65    77   2.63   169    -92   -11%
Malawi         231    3.9    59   124  65    12   2.11    21     -9    -4%
Malaysia     2,711    9.5   285   509  65   678   1.79  1011   -332   -12%
Mali           245    4.7    52   149  65     1   2.87     3     -2    -1%
Malta          148    0.3   463   525  65    15   1.13    14     +1    +1%

Mauritania     188    1.1   172   273  64     5   1.58     7     -2    -1%
Mauritius      230    0.7   311   950  65    59   3.05   151    -92   -40%
Mexico      21,739   44.9   485  1015  65   837   2.09  1460   -623    -3%
Morocco      3,019   13.6   222   376  65   314   1.70   444   -130    -4%
Mozambique     744    8.4    88   387  65    24   4.38    87    -63    -8%

Myanmar      2,000   24.3    82   119  64    59   1.44    71    -12    -1%
Nicaragua      384    1.8   213   679  65   122   3.19   325   -203   -53%
Niger          587    3.7   160   183  65    15   1.14    15     +1     0%
Nigeria      6,967   58.5   119   158  65   668   1.33   739    -70    -1%
Pakistan     5,486   52.6   104   285  65   243   2.73   553   -310    -6%

Panama         635    1.3   479   617  65    69   1.29    74     -5    -1%
Papua New G    345    2.1   161   508  65    58   3.15   152    -94   -27%
Paraguay       443    2.1   214   390  65    28   1.82    42    -15    -3%
Peru         4,800   11.5   416   753  65   562   1.81   848   -286    -6%
Philippines  5,582   32.4   172   378  65   722   2.19  1319   -597   -11%

Portugal     3,777    9.1   414   764  65   357   1.85   550   -192    -5%
Reunion        230    0.4   588   379  65    33   0.64    18    +15    +7%
Romania      3,605   19.2   188   188  65   253   1.00   212    +42    +1%
Rwanda         129    3.2    40   104  65    13   2.57    29    -15   -12%
Saudi Arabia 2,320    4.8   484   595  65   900   1.23   921    -22    -1%

Senegal        832    3.9   212   349  65   118   1.65   162    -44    -5%
Sierra Leone   340    2.5   137   337  65   174   2.46   357   -183   -54%
Singapore    1,266    2.5   511   570  65   265   1.11   246    +19    +1%
Somalia        274    3.0    90   290  65    17   3.21    45    -28   -10%
South Afric 10,774   20.1   535   767  65  1086   1.43  1297   -211    -2%

Spain       23,778   32.1   742  1393  65   704   1.88  1101   -398    -2%
Sri Lanka    1,731   11.1   156   350  65   229   2.25   430   -201   -12%
Suriname       166    0.3   499   885  64    45   1.77    66    -21   -13%
Syria        1,632    5.3   306   565  65    40   1.84    62    -22    -1%
Taiwan       2,794   12.6   221   501  65   293   2.26   552   -259    -9%

Tanzania       884   11.6    76   118  65   120   1.55   155    -35    -4%
Thailand     4,079   30.7   133   359  64   288   2.70   650   -361    -9%
Togo           170    1.7    97   144  65    25   1.48    31     -6    -3%
Trinidad & T   709    0.9   782  1897  65   273   2.42   552   -279   -39%
Tunisia      1,016    4.6   219   354  65    72   1.61    97    -25    -2%

Turkey       8,425   31.2   270   563  65   321   2.08   557   -236    -3%
Uganda       1,745    8.1   216   179  65   124   0.83    85    +38    +2%
U.S.S.R.   283,214  230.1  1231   892  65  1388   0.72   838   +550     0%
Uruguay        978    2.7   363  1158  65   130   3.19   345   -215   -22%
Yugoslavia  12,274   19.4   632   735  65   436   1.16   423    +13     0%

Zaire        4,521   17.6   257   161  65   178   0.63    93    +85    +2%
Zambia       1,054    3.6   292   403  65   452   1.38   520    -68    -6%
Zimbabwe     1,042    4.4   238   329  65   217   1.38   249    -33    -3%

NON-OECD SUMMARY N=88
1. sum (for N=88):
           670,279 2437.8                 24047              -11870
2. sum without China, USSR (for N=86):
           316,888 1492.6                 22059              -12153
3. average (arithmetic, for N=88)                 1.91                 -8%
4. average (weighted by exports (for N=88)        1.79
5. unequal exchange as
   % of NON-OECD GDP (for N=88)                                     -1.77%
   % of NON-OECD GDP (for N=86) without China, USSR                 -3.84%



GROUP = OECD (N=19) (="industrialized countries")

Country             GDP     Popul GDP per capita Imports from Exchg Rate Fair Value UNEQUAL EXCHANGE
                    1965     1965   1965   1965  NON-OECD c's Deviat'n   of imports LOSS(-) GAIN(+)
                    US$             US $   PPP $        US $     D/C     (1.79/G)*F J=H-F   K=J/A
                    (mln)   (mln)   (mln)  (mln)  year (mln)    (ratio)   ($ mln)   ($mln)  %of GDP
               (A)   (B)   (C)   (D)  (E)  (F)   (G)     (H)    (J)    (K)

Australia   24,142   11.4  2120  2733  65   618   1.29   858   +240    +1%
Austria      9,539    7.3  1315  1871  65   420   1.42   528   +108    +1%
Belgium-Lux 16,543    9.4  1751  2082  65  1274   1.19  1919   +644    +4%
Canada      51,801   19.7  2632  2560  65   878   0.97  1615   +738    +1%
Denmark     10,172    4.8  2138  2616  65   508   1.22   743   +235    +2%

Finland      8,295    4.6  1818  1981  65   526   1.09   865   +338    +4%
France      99,277   48.8  2036  2243  65  3620   1.10  5882  +2262    +2%
Germany-W  114,391   58.6  1951  2400  65  4717   1.23  6866  +2149    +2%
Iceland        496    0.2  2559  1905  65    27   0.74    66    +39    +8%
Ireland      2,695    2.9   937  1215  65   166   1.30   229    +63    +2%

Italy       67,843   52.0  1305  1740  65  2792   1.33  3748   +956    +1%
Japan       91,022   98.9   920  1399  65  4166   1.52  4906   +740    +1%
Netherlands 20,048   12.3  1631  2289  65  1493   1.40  1904   +411    +2%
New Zealand  5,461    2.6  2072  2855  65    94   1.38   122    +28    +1%
Norway       6,984    3.7  1876  2034  65   309   1.08   510   +201    +3%

Sweden      22,305    7.7  2884  2912  65   788   1.01  1397   +609    +3%
Switzerland 13,914    5.9  2376  3300  65   437   1.39   563   +126    +1%
UK         100,026   54.4  1839  2310  65  6294   1.26  8971  +2677    +3%
USA        695,821  194.3  3581  3581  65  7905   1.00 14151  +6245    +1%


OECD SUMMARY
sum (for N=19):
         1,360,776                        37033        55843 +18810
average (arithmetic, for N=19)                    1.21                 +2%
average (weighted by imports from NON-OECD)       1.21
unequal exchange as
% of OECD GDP (N=19)                                                +1.38%



WORLD SUMMARY OF UNEQUAL EXCHANGE 1965 (N=107 countries)

1. World GDP        2,031,05. U.S.$ millions  =2.03 trillion
                                             (=sum of GDPs for N=107)
2. Gains (OECD)       +18,810 U.S.$ millions (N=19)
3. Losses (NON-OECD)  -11,870 U.S.$ millions (N=88)
4. Error               -6,940 U.S.$ millions due to missing data for                                              NON-OECD countries
5. Gains (OECD)         +0.93 % of world GDP
6. Losses (NON-OECD)    -0.58 % of world GDP
7. Error                -0.35 % due to missing data for NON-OECD countries


SOURCES

Source 1= U.N., International Trade Statistics Yearbook 1965,
          Table A and country tables #4 or #5 "Trade by principal           countries..."
Source 2= Penn World Tables (1998), from the internet at:
          http://datacentre.chass.utoronto.ca:5680/pwt
Source 3= for classification of countries as "industrialized" or not:
          World Bank. World Tables 1980, p. 471

CALCULATIONS

variable P [not shown in the table, but used in some of the calculations]=            "price level" from Penn World Tables (variable P in source)

col. A = B * C
col. B = from source (Penn World Tables)
col. C = D * P / 100
col. D = from source (Penn World Tables, variable CGDP)
col. E = from source (U.N., International Trade Statistics Yearbook 1965)
col. F = from source 1 (U.N.),
         using the following conversions from local currency data to U.S.          dollars:
         (1) for exports of NON-OECD country to OECD:
             (a) sum in local currency and obtain % of total exports
             (b) apply percent (from a) to total exports given in U.S.                  dollars
         (2) for imports by OECD country from NON-OECD:
             (a) sum in local currency and obtain % of total imports in                  local currency
             (b) calculate total imports in U.S. Dollars =
                 total imports in local currency (from source 1), divided                  by exchange rate (from source 2, Penn World Tables)
col. G = 100 / P (from source 2)
col. H = two formulae:
         (1) for NON-OECD country: H = (d/1.2)*exports = (G/1.2)*F
             (1.2 is the average exchange rate deviation of OECD countries,               see above)
         (2) for OECD: H = (1.79/d)*imports =(1.79/G)*F
             (1.79 is the average exchange rate deviation of NON-OECD               countries, see above)
col. J = F - H (for NON-OECD) and J = H - F (for OECD)
col K = J/A as a percent


CHINA DATA
China (mainland) was not recognized by the U.N in 1965 and is not included in Source 1 (U.N.) like the other countries. However, the imports from China (mainland) to OECD countries are given under each OECD country in local currency (e.g. French francs). I converted these local values to U.S. Dollars, using the exchange rates from Source 2 (Penn World Tables).
The resulting total for exports from China (mainland)is US$592 million.
The total of US$592 million is composed of trade flows from China (mainland) to OECD countries, as follows, in US $ millions (1965), to:
Australia 26; Austria 5; Belgium-Luxembourg 14; Canada 13; Denmark 10; Finland 6; France 44; Germany FR 72; Iceland 0; Ireland 0; Italy 38; Japan 224; Netherlands 25; New Zealand 1; Norway 5; Sweden 15; Switzerland 12; United Kingdom 81; USA nil.

**end of 1965 Base Table



APPENDIX C -- FURTHER METHODOLOGICAL DETAILS CONCERNING THE WORLD                 TABLE FOR 1965 (Base Table)

(a) Exclusion of countries:

Countries which are not shown in the tables are missing due to missing data. For these countries either trade data or PPP data or both were missing in my sources.
     Luxembourg is lumped together with Belgium because the export/import data were given that way in the source. (The GNP-related data are for Belgium.)

(b) Two calculation models:

There are two calculation models, one for non-OECD countries and one for OECD countries. Both use the same formula (see above) with two slight variations.

    MODEL 1 for non-OECD countries:

Here I measure the export flow from each individual non-OECD country to the block of OECD countries. Since the exchange rate deviation for the block of OECD countries is d = 1.2 (i.e. deviation from the U.S. dollar), the exchange rate deviation between the individual non-OECD country and the block of OECD countries is not d(to OECD) = d/1.0 since the d calculated from the source gives the deviation to the U.S. dollar. Instead, the deviation to the block of OECD is d(to OECD) = d/1.2 .

    MODEL 2 for OECD countries:

Here I measure the import flow from the block of non-OECD countries to each individual OECD country. Since the exchange rate deviation for the block of non-OECD countries is d = 1.79 (i.e. deviation from the U.S. dollar), the exchange rate deviation between the individual OECD country and the block of non-OECD countries is not d(to non-OECD) = 1.0/d since the d calculated from source gives the deviation to the U.S. dollar. Instead, the deviation to the block of non-OECD is d(to non-OECD) = 1.79/d .


(c) Statistical discrepancies and errors:

There are three statistical discrepancies and errors which the reader should be aware of, namely:

(1) The world GNP shown in the table is not exactly the same as the world GNP which may be shown elsewhere. This is due to the fact that numerous non-OECD countries are missing in the table. However, I did not correct that in order to keep the numbers in the table consistent with each other. (The same applies to world population.)

(2) The total of exports from non-OECD to OECD shown in the table is not the same as the total of imports by OECD from non-OECD. This is a result of a large number of missing non-OECD countries. As the data for the OECD countries are complete, the larger of the two totals (namely, total imports by OECD from non-OECD) is the correct figure and the total of exports from non-OECD to OECD is understated.

(3) The total losses shown for non-OECD countries are not the same as the total gains by OECD countries. This is a consequence of missing data for non-OECD countries. As the data for OECD countries are complete, the total gains by OECD countries is the correct total for global exploitation due to unequal exchange. The total of losses by non-OECD countries is understated. However, the losses for individual non-OECD countries shown in the table are correct for each individual country.

 


APPENDIX D -- Amin's Estimate for 1966

Amin writes with reference to the year 1966:

"The hidden transfer of value from the periphery to the center, due to the mechanism of unequal exchange, are of the order of $22 billion ...The imports that the advanced countries of the West receive from the Third World represent, it is true, only 2 or 3 percent of their gross national product, which is about $1.2 billion in 1966. But these exports from the underdeveloped countries represent 20 percent of their product, which was about $150 billion. The hidden transfer of value due to unequal exchange is thus of the order of 15 percent of this product ... The contribution that this transfer makes ... comes to about 1.5 percent of the center's product."
(Amin, Unequal Development, 1976, p. 144)

Comments:
(a) Amin estimates the magnitude of total unequal exchange (1966) as $22 billion. My estimate for 1965 is $19 billion. Both estimates are very similar.
(b) Amin expresses the $22 billion as a percent of the center's combined GDP as 1.5% (1966). My corresponding estimate for 1965 is 1.4%. Both estimates are very similar.
(c) Amin expresses the $22 billion as a percent of the periphery's combined GDP as 15% (1966). My corresponding estimate for 1965 is 3.9% (if China and USSR are excluded from "non-OECD") or 1.8% (if China and USSR are included). This discrepancy results from a difference in the numbers used for the periphery's product (Third World aggregate GDP). Amin uses $150 billion as the product of "the underdeveloped countries" (see quotation above). In my base table for 1965 (see, Appendix B) the combined GDP for non-OECD is $670 billion (with China, USSR included) or $317 billion (with China, USSR excluded). It appears that Amin's figure of $150 billion refers to the group of countries which the World Bank classifies as "low-income", whereas my figure is more inclusive and refers to NON-OECD (which includes low and middle-income countries).

**end