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Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1985
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Expatriate workers

Naiem Sherbiny’s article, “Expatriate labor in Arab oil-producing countries” (December 1984) is a good example of methodical, precise work. But I have some thoughts on the conclusions.

The underlying data for the analysis are based on 1980. The projections for immigrant foreign labor to selected Arab oil exporters are based on the medium-growth scenario of non-oil GDP. Given the perceptibly reduced oil production and reduced growth rates since the base year, the projections for immigrant foreign labor seem exaggerated. This thought is confirmed particularly by the now-published Fourth Development Plan of Saudi Arabia (1985–90), which forecasts a reduction in foreign labor of about 600,000.

Since Sherbiny did his analysis for three growth scenarios, the discussion of the implications of the low-growth scenario (in a later article?) could be useful.

Dr. Eckhard Freyer

University of Bonn

Naiem Sherbiny responds:

Recent developments in the Arab oil economies were factored in the projection exercise and the article’s point, therefore, remains valid: the slowdown of economic growth is unlikely to reduce the stock of expatriate workers.

Moving targets

Paul Streeten’s article on development economics in the June 1985 issue is a salutary reminder of a neglected economic truth—there is a problem to every solution. But is it meaningful to pose the paradox quite this way? Problems of efficiency and equity—a pertinent distinction not drawn by Streeten—arise precisely because there are no once-and-for-all solutions in a dynamic universe of risk and uncertainty. The policy maker has to learn to shoot at moving targets. Therefore, what the “doer” seeks are not unique equilibrium solutions but a flexible problem-solving capability to cope with persistent and unforeseen disequilibria. Thus, illustratively, in coping with a balance of payments problem (deficit) what the authorities aim at is not a neat accounting balance (or surplus) but a generally sustainable balance of payments position, that is, one which can be sustained by normal capital inflows and without resort to controls. Perhaps the last word should rest with a doer. “In the real world there is no such thing as an unmitigated good and an unmitigated evil. Each action has its own counterpart.” (Ghulam Ishaq Khan, Chairman of the Development Committee, interviewed in Finance & Development, June 1985).

Anand G. Chandavarkar

IMF

African problems, African solutions

Regarding the World Bank’s third report on Sub-Saharan Africa, excerpted in your December 1984 issue, I do agree with two of its points: (1) national rehabilitation and development programs must be designed and implemented to increase the efficiency with which financial and human resources are used, and (2) there must be a more active role for nongovernmental institutions and the private sector.

While these points are part of the essential solutions, the main answer has been neglected. Failure to develop “appropriate technology” is the main cause of Africa’s problems, since a large part of its workforce resides in rural areas.

We (the Young African Scientists and Engineers, Overseas) have been calling for an “International Conference on Appropriate Technology” for Africa. We also believe the World Bank should provide financial support and interest-free loans for firms and organizations developing appropriate technology.

We can solve Africa’s economic problems by increasing production. If Africa is unable to feed itself, however, no development of any kind can be achieved.

M. Ade Iman

Istanbul, Turkey

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