The system of generalized preferences The problem of the underdeveloped countries in this point lies, fundamentally, in their strong lack of technology (almost completely dependent on the great industrial powers), in their low levels of productivity, and in their quality many times. deficient.

By country, regardless of their low degree of development and industrial diversification —which in some countries such as Brazil, India, Mexico, Argentina, is not so low—, the possibilities of expansion of manufacturing exports by the LDCs are really limited. These possibilities are further reduced by the increasing competition of the industrial nations with each other.

Faced with a situation like this, already in the First UNC-TAD, the need was appreciated that in order to force the exports of manufactured goods from the LDCs, the developed countries should grant them a favorable tariff treatment. In this way the issue of the preferences of the industrial countries (IP) in favor of the LDCs was raised.

The project followed various endorsements, until in the Second UNCTAD an agreement in principle was reached; Subsequently, this agreement continued to be discussed, with a view to concluding a system of Generalized Preferences (GSP).

In short, with the GSP that was established, LDCs are granted access, duty-free or with reduced tariffs, to IPs' manufacturing markets. Such preferences are granted "for free", in one way.

Now let's see some details:

a) Duration period. At this point, agreement was soon reached that the preferences could be granted for a period of ten years, extendable for a similar period.

b) E/ system of preferences. Just as the USA, the EFTA countries and Japan were in favor of a linear reduction system (accompanied by a safeguard clause to avoid market distortions), the EEC advocated a different method, based on the opening of duty-free tariff quotas for LDCs.

c) Beneficiary countries. Which countries could benefit from a GSP? In principle, all underdeveloped.

One of the great problems of the LDCs, if not the most important, lies in their insufficient capital formation, which generally does not reach 15 percent of the GNP, preventing, by the way, growth like that of the developing countries. industrial (IP).

The problems of insufficient savings and investment by LDCs have been addressed to some extent through credits from the IMF, IFC, IDA, and also through bilateral aid, generally "tied" or "tied".

But in all these cases, the aid levels have depended on the general economic situation in the Pl and on their specific interests. It is not strange, if one remembers the decisive weight of IPs in financial organizations and the underlying dominance structure in bilateral relations between IPs and LDCs.

For this reason, both in the first and second UNCTAD, and in the intermediate and subsequent works, one of the topics that most attracted the interest of the LDCs was that of international financing, which occupied the deliberations of the III Commission of the Conference, in which progress was made in the development of a typology and a doctrine of financial aid.

In this sense, today we can refer to two different types of financing, depending on the objectives pursued: complementary financing (or supplementary, as it is also sometimes said) and compensatory financing.

But while the problems of complementary and compensatory financing are interesting, much more so is the general issue of financing in a basic sense, as a set of financial resources that the LDCs should aspire to receive annually from the Pl.

In this sense, in the Second UNCTAD a resolution was approved according to which the IPs would have to transfer annually 1 per 100, at least, of their PNB to the LDCs. But as Dr. Prebisch emphasized in 1969, what is missing is the specification of the period in which this resolution of such importance must be fulfilled.

Some countries have already done so which, unfortunately, are not the ones that contribute the most in terms of volume of aid; but its moral effect is of great importance.

The problems of the LDCs are naturally not limited to the trade balance of basic products and manufactures and the capital balance (financing), but also affect the balance of services, and within this balance, the problems of maritime transport and freight.

The problem is of interest to LDCs for three main reasons:

a) The LDCs are, in general, peripheral in Prebisch's terminology, that is, they are located on the periphery of the IPs, generally south of the 30° parallel of North latitude, and almost always very distant from the large international markets that make up Western Europe, the US and Japan. By chaff, the weight of transportation in the final price is very strong. Indeed, it was brought from long distances; for example, RIO de la Plata-Europe or USA; India-Europe; o Southeast Asia-USA, Europe or Japan.

b) As we have already seen, the main source of external resources of the LDCs are basic products, which generally have little value per unit of weight (contrary to what happens with manufactures and capital goods), therefore which, together with the long distances, the incidence of transportation in the final price of the products exported by the LDCs reaches in many cases 20 PERCENT of the CIF value of the product.

As we have seen, the problems of underdevelopment cannot be solved with the conventional methods followed until the end of the 1970s. Above all, taking into account the impact of the successive oil shocks in the poorest countries.

For this reason, based on the forecasts of the Economic and Social Council of the United Nations (ECOSOC) since 1974, the idea of ​​designing a New International Economic Order (NIEO) was launched.

And later, it was even necessary to think of a fourth category of countries, beyond the Third World, which receive the dramatic name of the Fourth World, or the comparatively more euphonious Least Developed Countries (LDCs). Of those two issues, NOEI and PMA. Intimately related to each other, we deal with in this section.

In its June 1974 Resolution, the United Nations General Assembly presented four main perspectives of the NIEO:

• The need to support the development efforts of poor countries in all areas, changing the current rules; especially with regard to the trade regime and the international monetary system, on the understanding that both discriminate against the LDCs.

• Advisability of increasing the participation of the LDCs in world production, both industrial and agricultural, propitiating the expansion of their commercial activities. of transpose, and of communication.

• Possibility of modifying the conventional patterns of evolution of trade and technology flows. from its hegemonic North/South orientation to another of more equitable exchange.

• Requiring States to behave decently towards each other; according to what is established in the rules of conduct that appear in the "Cana of Economic Rights and Duties of the States", of 1974.