The Outline of a "Development Surcharge" on Oil

Abstract

This paper tries to assess the dimensions of an international tax on oil that could counterbalance the effects of price increases on the Third World. Such schemes are necessary corollaries of the declaration of a New International Economic Order and in the long run even in the interest of industrialized countries. Part of the price paid by importing firms should be refunded to governments of net-importing developing countries. Assuming a ''maximum-solution" of paying the differences between current and 1972 prices, the sums needed are relatively small. During the seventies (except 1979) these sums, added to development assistance actually given by OECD countries , would not have even reached the promised  0.7 % aid target if all developing countries had benefited. If only the poor had been considered (Least Developed and Most Seriously Affected Countries) much smaller sums would have been sufficient. In 1979 only around 0.02 % and 0.075 % of OECD GNP would have picked up the bill for these groups respectively. The tax-rates on exports would always have been smaller than value-added-tax rates in Northern countries. Such sacrifices to help the poor seem tolerable.