Economic Report of the President

equirements of the low-income countries it serves. Speedy action bythe new Congress is therefore essential.TABLE 33.—Non-oil developing countries: current-account financing, 1973-79[In billions of U.S. dollars]Item 1973 1974 1975 1976 1977 1978 1979Current-account deficit'11.5Less: Financing through transactions that do not affect netdebt positions 29.8Plus: Accumulation of reserve assets (decumulation-)...9.3Equals: Net external borrowing 411.0Long-term from official sources, net 65.5Other long-term borrowing from nonresidents, net6.6From financial institutions 64.0Other.net 62.6Use of reserve-related credit facilities, net 7 ..Other short-term borrowing, netResidual errors and omissions 8i'>436.9M3.21.23 24.93 9.610.28.61.61.65.1-1.645.9n.7-2.032.211.414.79.25.52.46.5-2.832.912.112.733.510.217.610.9674.33.9-2.51 Net total of balances on goods, services, and private transfers (with sign reversed).2 Net unrequited transfers, net direct investment, SDR allocations, gold monetization, and valuation adjustments.3 Excludes the effect of a revision of the terms of the disposition of economic assistance loans made by the United States toIndia and repayable in rupees, and of rupees already acquired by the U.S. Government in repayment of such loans. The revisionhas the effect of increasing government transfers by about $2 billion, with an offset in net official loans.•Includes any net use of nonreserve claims on nonresidents, errors and omissions in reported balance of paymentsstatements for individual countries, and minor deficiencies in coverage.6 Public and publicly guaranteed borrowing only.6 Principally bond issues (public and publicly guaranteed borrowing only) and supplier credits, net of acquisitions of long-termassets.Comprises use of Fund credit and short-term borrowing by monetary authorities from other monetary authorities.8 Errors and omissions in reported balance of payments statements for individual countries, plus minor omissions in coverage.9 Less than $50 million.Source: International Monetary Fund.A different set of concerns arises for other developing countriessuch as the exporters of manufactured goods whose long-term deficitfinancing has come to a large extent from the private capital markets.For them it is obviously critical, first, whether the slowdown in longtermbank lending since 1978 is a "pause" that will shortly be reversedor a more permanent development; and, second, whether officialresources—on which the poorer countries often have firstclaim—will be adequate to fill any remaining gap.Private FinancingIt is probable that the slowing of long-term bank lending to developingcountries reflects both a greater unwillingness on the part ofthe banks to lend and an increased reluctance on the part of somedeveloping countries to borrow. The relative importance of these twofactors is hard to establish. There is considerable evidence that anumber of developing countries have deferred borrowing. Whetherthey have done so because of high interest rates or, perhaps morecritically, because they are unwilling to accept higher spreads overthe London interbank rate (LIBOR) is unclear. Higher spreads raise28.614.411.926.112.415.815.6-1.7.235.816.218.237.813.325.119.35.8J1.1-2.452.919.411.044.515.923.417.36.1.25.0204