Third World Economy

The misery of the world's 42 poorest countries can be reversed only if financial aid is doubled, debt is reduced or written off and the nations slash their soaring birthrates, a U.N. report said Friday. The birthrates in the poorest nations exceed, and therefore negate, whatever economic growth is achieved, it said. "It will be of the utmost importance for the governments of the least-developed countries to turn around in the 1990s the alarming trend in high population growth," the report said.

The United States and Japan are heading for another round of serious trade frictions, this time amid a growing danger that the dispute could spill over and damage the broader foreign policy relationship between the two. The immediate potential flash point is a spate of U.S.-mandated deadlines this spring on an array of thorny trade negotiations. So far, the Bush Administration has kept a low profile, lest it seem to be interfering with Japan's hotly contested elections, which took place Sunday.

Debts of East European and Third World countries are due to rise next year despite the plan of Treasury Secretary Nicholas F. Brady to ease some of the heaviest burdens on debtor countries. "When you have a vibrant, growing economy--like Indonesia, for example--debt can be a good thing if it doesn't grow too fast," John M. Underwood of the World Bank said. "It's a sign that foreigners have confidence that it's a good place to put their money."

President Bush's trip to Costa Rica today is expected to be buoyed by a surprise development--the announcement of a major debt-reduction package for that nation under a Third World debt-relief plan outlined by U.S. Treasury Secretary Nicholas F. Brady. Although details were still being ironed out Thursday, negotiators for Costa Rica and about 250 commercial banks were reported to have agreed in principle on a plan that would significantly pare back the estimated $1.

The annual report of the International Monetary Fund has never been a real spellbinder, but this year its authors may have outdone themselves: The volume is so lackluster that even veteran IMF watchers had difficulty spotting anything new. Inadvertently, perhaps, the lapse may be symbolic. Only a few years ago, the 152-country IMF was a major force in global economic policy-making, at the center of efforts to manage the global debt problem.

Third World debtors had to pay $50.1 billion more to service their debts to the United States and other creditors last year than they received in new loans--a major drain on their already cash-strapped economies--the World Bank reported Sunday. The figure, contained in the bank's annual report and made public before its annual meeting here Sept. 23, was almost a third larger than in 1987, when the net pay-back totaled $38.3 billion.

Pirated copies of computer software were pulled off store shelves Tuesday as a copyright protection agreement took effect between the United States and Indonesia. The price of an edition of Lotus Development Corp. software shot up overnight from $1.50 for a bogus copy to $422 for the Cambridge, Mass., manufacturer's original version.