GORAN OHLIN
PROFESSOR G. OHLIN, of the Wenner Gren Center, Institute for International Economic Studies, University of Stockholm, prepared a report on "The place of paper in development and foreign aid," at the instance of FAO's Advisory Committee on Pulp and Paper, and in collaboration with FAO and Unesco.
Extract from a report to FAO's Advisory Committee on Pulp and Paper
When paper shortage is cited as an obstacle to educational and cultural development: reference is often made to the scarcity of foreign exchange. Where an effective demand for paper is suppressed by import restrictions or currency controls, that scarcity is of course an operative bottleneck.
It is doubtful whether currency shortage should be regarded as a major problem in meeting purely educational paper requirements. In poor countries the consumption of paper in schools seems to be as low in those where foreign currency is freely available as where it is in short supply. The entire foreign exchange component of educational expenditure is small, and the paper share of it even smaller. Even a considerable increase in the coverage of compulsory education and of paper use in schools would not absorb an impressive share of available foreign exchange. In India, for instance, where foreign trade per caput is relatively low, it would yet be possible, even if no paper whatever were produced domestically, to import all the paper currently used in primary schools at the cost of a fraction of 1 percent of export earnings.
But educational expenses as a whole form a substantial part of government budgets, and here the financial pressure is acute. Decisions about paper expenditure in schools are usually made not by individual consumers but by public authorities whose most pressing problem is the supply of funds of any kind. True, textbooks and school supplies are not always free of charge to all pupils, but even then the import end/or manufacture of educational supplies is usually in the hands of the government which also prescribes the norms of consumption. In such decisions scarcity of foreign exchange as such does seem to be a major consideration.
What is clear, however, is that paper is in underdeveloped regions an expensive commodity - more expensive than in Europe in absolute terms, and many timed more so in terms of local incomes. Compared to the salary of a teacher, for instance, the paper used by his pupils probably costs as much as 40 times more in many poor countries than in rich European countries. By any standards of adequate and effective modern education there is undoubtedly an unsatisfied need for paper in African and Asian schools, but the need is not merely for paper to be bought against local currency, it is for all the resources that education requires, among them paper.
The distinction between education and mass media may be said to be more tenuous in underdeveloped countries than elsewhere. Newspapers and magazines obviously constitute the principal vehicle of information and ideas that make literacy functional. A Unesco report remarks:
"It is self-evident that the raising of educational standards in the underdeveloped countries calls for the dissemination of knowledge of farming and industrial techniques, health and community development, among other things. But when one is attempting to accomplish in a matter of years a task which it has taken centuries to complete in the advanced countries, the traditional means of education alone prove inadequate. It is here that the mass media, unsurpassed in speed, range and force of impact, offer the greatest possibilities for effective action".1
1 Mass media in the developing countries. Unesco reports and papers on mass communication, No. 33 (Paris, 1961), p. 15
In most African and Asian countries, the press is concentrated in large cities, and the levels of circulation are low (Table 1). In Africa, the circulation of dailies as well as of periodicals is also restricted to a few countries, and many more lack any daily press at all. Apart from a few large enterprises in countries which have received assistance for the purpose, most newspapers cannot afford to maintain their own presses and have their printing done under contract.
In Asia, the multiplicity of scripts is an additional obstacle. If Japan is excluded, daily circulation in 1961 was only 1.6 copies per 100 persons. On the other hand, rapid gains have been scored recently. In Pakistan, where the consumption of newsprint has increased sharply as domestic production has got under way, circulation has increased nearly fivefold since 1955 In India, daily circulation has doubled since that year, and the number of dailies has increased from 330 to 465.
TABLE 1.- DAILY NEWSPAPERS AND THEIR CIRCULATION
|
|
Total number of daily newspapers |
Circulation per 100 inhabitants |
||
|
Around 1950 |
Around 1962 |
Around 1950 |
Around 1962 |
|
|
Africa |
200 |
240 |
1.0 |
1.3 |
|
North America |
2.100 |
2.200 |
27.0 |
25.0 |
|
South America |
600 |
750 |
6.0 |
8.0 |
|
Asia |
1.300 |
1.750 |
3.0 |
4.0 |
|
Europe |
2.000 |
2.500 |
22.0 |
23.0 |
|
Oceania |
100 |
110 |
31.0 |
30.0 |
|
U.S.S.R. |
400 |
460 |
11.0 |
18.1 |
SOURCE: Unesco.
The quantities of paper and newsprint demanded for general publishing purposes are very much greater than those required for school use alone, and there are clearly many countries in which the imports of paper for mass media are being curbed by trade restrictions and currency controls. Where imports are made by state trading corporations it is difficult to say, without special information, whether they are lower than they would otherwise be, but the presumption is that the object of such practices is not only to secure favorable terms but also to ration supplies. Thus the Indian press is said to be subject,
"because of import restrictions on newsprint and machinery, to certain powerful government restraints although comment is free and policy unhampered. Because of acute foreign exchange difficulties, the pattern of newsprint buying has changed largely during recent years: there are quotas strictly enforced on consumption and much importing is channeled through the State Trading Corporation."2
2 Survey of India. The Times London, 26 January 1962.
Restrictions on paper imports are of course often caused by a desire to develop and protect domestic paper manufacture. Some countries have curtailed paper imports drastically or completely when paper making plant of their own has been installed, and many or most countries also obstruct paper imports by tariffs.
In such cases paper needs may be met, though at higher prices than on world markets. There are also countries - for instance, those belonging to the franc zone - where exchange restrictions are not serious, and others where it is claimed that applications for paper imports are always given favorable treatment.
Taking the underdeveloped regions as a whole, it nevertheless seems plain that there is an unsatisfied demand for paper for publishing and mass communications purposes, although its magnitude cannot be readily estimated. The immediate demand is obviously limited by the printing capacity available. There may at present be a certain slack in the utilization of such capacity and thus room for the immediate absorption of certain quantities of newsprint and printing paper. In the long run, however, any genuine development of literacy and mass communications will require a radical increase of printing facilities. Table 2 shows the marked difference between labor in the printing and publishing sector in the essentially underdeveloped areas grouped in Category IV, which includes Africa, Asia, and a few Latin-American countries, and in those countries where industrialization has e' good foothold, that is, those of Category III which includes Japan, Chile, Mexico, Venezuela, Portugal, Spain, and Yugoslavia. The expansion between 1938 and 1953 is, however, almost entirely attributable to Japan.
TABLE 2. - RELATIVE SIZE OF LABOR FORCE ENGAGED IN PRINTING AND PUBLISHING IN COUNTRIES AT DIFFERENT LEVELS OF INDUSTRIALIZATION, 1938 AND 1953
|
Category |
Percent of total labor force in manufacturing and mining |
Per 100,000 of total population |
||
|
1938 |
1953 |
1938 |
1953 |
|
|
I |
4.4 |
3.9 |
471 |
515 |
|
II |
2.8 |
2.8 |
209 |
219 |
|
III |
2.4 |
3.5 |
133 |
205 |
|
IV |
1.9 |
1.9 |
35 |
36 |
|
WORLD |
3.4 |
3.3 |
158 |
171 |
OURCE: United Nations, Patterns of industrial growth (New York, 1960), Table 11, p. 113, and Table 9, p. 104.
NOTE: Countries of the world were grouped Into tour categories according to degree of the industrialization, measured by value added in 1963 in manufacturing per head of population. The grouping, in U.S. dollars, was: I, 200 and over; II, 100-199; III, 50-99; IV, below 50.
Considerable efforts are under way to develop printing and other facilities for the press in underdeveloped countries. Training in journalism and the graphic arts is being given, sometimes with bilateral or international support, and gifts of printing equipment are included in foreign aid programs. It does happen, however, that such skills and equipment are not utilized because of lack of funds to purchase newsprint and paper, and there is an evident demand for paper in connection with efforts of this kind.
A great and urgent demand for a commodity does not in itself constitute a sufficient reason for foreign aid to be given in that particular form. The list of goods urgently needed in developing countries is endless. To the extent that they must be imported some will be supplied through foreign aid, but others will imported through ordinary channels and paid for out of export earnings, exchange reserves, or untied foreign loans and grants where such are available. Imports specifically arranged under some foreign aid projects are not necessarily the most urgent, nor can it be assumed that what is imported in such ways would not in different circumstances have been imported through other channels. Projects selected for special treatment in foreign aid, programs are above all characterized by the fact that the donor believes them to contribute to economic growth. Some "hard" justification in such terms is usually required for projects of foreign assistance. But such requirements serve principally to satisfy donors that aid is not squandered. Economically speaking, foreign aid merely relieves a shortage of foreign exchange and, so long as conventional imports form a substantial part of the receiving country's trade, donors cannot control the composition of imports unless special arrangements are made to ensure that ordinary purchases of some particular commodity are not curtailed when it is also received under an aid program, or unless commodity gifts are larger than what would normally have been imported.
The fact that paper imports and consumption in underdeveloped regions are very low is no prima facie indication that resources made available through foreign aid would be more welcome and beneficial in that form than in others. Rather, it may be taken to suggest the opposite. To the extent that policy makers place a low priority on paper imports or restrict the use of foreign exchange for such purposes, it may be suspected that the governments of these societies are under the impression that they would be better served if foreign resources put at their disposal took other forms, for instance, that of capital goods. It is, of course, an entirely different matter if specific requests for paper are made by underdeveloped countries. Such requests have indeed been made, especially in connection with discussions of international assistance in the field of education, but within the regular machineries for foreign aid they seem to have been rare. The shipments of paper that have been made in connection with foreign aid programs have been few and until recently of modest scope.
To donor countries, capital goods projects will seem preferable to aid in the form of consumer goods, not only because of their more immediate contribution to growth and development but also for administrative reasons. Specific investment projects are by their nature self-terminating and give rise to an opportunity to assess and reconsider the direction of foreign assistance. An undertaking to supply consumer goods - and from this point of view paper is one - may easily turn into a self-renewing commitment which foreign aid authorities, dependent on short-term appropriations, will regard with unease. To cover the needs of such supplies in an emergency or to tide a country over a gestation period in which domestic capacity is being created is one thing, but to attempt to meet by commodity I aid a persistent and growing need is an entirely different matter, and it also entails the danger of impeding the, growth of production capacity in receiving countries.
Generally speaking, countries engaging in bilateral foreign aid do so only after conducting a careful scrutiny of needs and priorities in receiving countries. One may well ask whether there is any reason for aid in the form of paper to be treated as a special case or whether there are any grounds for multilateral action to provide this particular kind of aid.
There do, in fact, seem to be two major arguments for the promotion of paper aid to underdeveloped countries at the present time, and for special consideration of the needs of this commodity.
1. The creation of an efficient educational system in underdeveloped countries is without doubt one of the urgent tasks facing them - perhaps the most crucial one. Without a modicum of success in this field, economic or political development stands little chance of being fulfilled. It is difficult to further this effort by international assistance. Advice and counsel in teacher training, educational planning, and textbook writing can be given, but the scarce resource is above all national teachers. Paper aid to the school systems in poor countries can be only a modest contribution to their over-all educational effort. The same is true, however, of all foreign aid which can never be more than a marginal contribution, although sometimes extended in especially strategic areas. Paper aid can be such a strategic contribution, and to an undertaking of which the direct economic benefits are intangible and assert themselves only gradually. There is good reason to think that economic planners, overwhelmed by short-term problems, are compelled to underinvest in education, and that educational authorities fight against heavy odds in the struggle for scarce public resources in underdeveloped countries. Donors of foreign aid should regard educational aid - in the form of paper, building materials for schools, food for school meals, etc. - as a contribution to the formation of indispensable "human capital" and not as a type of "soft" aid.
Economic benefits apart, there is a strong humanitarian case for the promotion of education and literacy, for it is surely a basic tenet of faith in the civilized world that these are prerequisites of the good society.
Similar arguments can be made for aid intended to support the development of mass media such as newspapers and magazines in countries where these are few or absent. Aid in the form of newsprint would there form a valuable complement to programs planned or already under way to develop a press that will serve vital functions of a broadly educational nature and increase the flow of information.
2. It is also plain that the guiding principle of foreign aid should be mutual convenience. There is no reason why the composition of foreign aid should not be influenced by availability in donor countries as well as by the needs of the receivers. It clearly is a step toward a more rational joint allocation of resources to use goods in excess supply in donor countries for purposes of foreign aid, provided that this does not conflict with other objectives of either party. The use of food surpluses for development aid is so far the only major example of such practice. In that case, surpluses are already in the possession of the governments of the donor countries. But such countries may at times have an interest in mobilizing underutilized industrial capacity on certain lines. This could serve contra-cyclical purposes and make possible a greater volume of aid at the same sacrifice of resources, as the real cost of utilizing excess capacity would, from a national point of view, be zero. The capital cost in the paper industry, for instance, is about 30 percent of normal prices. Even if it is assumed that only plant and equipment is underutilized, paper produced on the margin of unutilized capacity could therefore be said to have a resource cost to the giving country one third lower than the full cost price.
For obvious reasons, this argument is of limited applicability. "Excess" industrial capacity is often obsolete; deliberate attempts to employ it may retard a readjustment to the requirements of economic change. Moreover, foreign aid programs require a certain amount of stability and should not be the footballs of domestic stabilization policy. But in a situation where a temporary ease of supply exists in a certain line, donor countries have a legitimate reason for wishing to shift some of their foreign aid into such lines and away from those where supply is in the short term less elastic. To the large producers and exporters of pulp and paper - Canada, the United States, and the Scandinavian countries - which anticipate a few years of excess capacity, this should be a reason to consider committing additional parts of their foreign aid resources in a form which would contribute to educational and cultural advancement rather than to physical capital formation. In view of the especially large surplus of newsprint capacity, there should also be a case for the support of developing mass media as well as of school needs proper.
To raise the standards of paper consumption in primary schools in underdeveloped countries by providing more liberal quantities of textbook paper and writing paper would have lasting consequences, even if specific paper aid were to come to an end in a few years. Standards of consumption change irreversibly, and the improvement in the quality of education would be permanent. Similarly, the establishment and growth of newspapers and magazines would break through the static and historical basis of paper rationing that at present impedes change in many countries.
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Earlier in the year the United Nations organized at Geneva a huge Conference on the Application of Science and Technology for the Benefit of the Less Developed Areas. This conference ended on a note of confidence, it had strengthened the foundation for the exchange of information on how to solve the problems that afflict two thirds of mankind - problems of hunger, malnutrition, poverty and squalor. The conference included in its scope forestry and forest products - the survey and management of forest resources, silviculture, extraction and forest industries, and pulp and paper - and one of its lessons was that foresters and forest industries must adapt themselves to the needs of the nonindustrialized countries. This new thinking was the theme of a recent issue of Unasylva (Number 67) which, at the same time, attempted to indicate how forestry is linked to FAO's Freedom from Hunger Campaign. |
