economies experienced a swing of $65 billion towards a surplus. These disequilibria have induced uncertainty about exchange rates, about interest rates and even about future economic policy in major countries. 87. The second set of disequilibria is related to shifts in the pattern of trade and current account imbalances between market developed and developing countries. The swings here have also been unprecedented. According to IMF, the current account deficit of 123 indebted developing countries declined from $113 billion in 1981 to $38 billion in 1984, largely in order to adjust to the sudden drying up of financial flows and to meet interest payments on their debts. The deficit of the major borrowers in 1981, nearly $40 billion, was virtually eliminated by 1984. But this balancing of external accounts has been achieved at the expense of internal equilibrium; deep cuts have been necessary in real incomes, stringent import controls have often been resorted to and inflation has been accelerated. Trade surpluses of 4 to 5 per cent of GDP well into the 1990s represent a precarious -18- course and depend on market access. Since all indebted developing countries must attempt to promote exports, the only way to avoid a futile battle over market shares is to restore sustained growth in world output and trade under a more open multilateral trade system - a system in which developed countries, in particular, would accommodate, not resist, shifting patterns of comparative advantage, refraining from bilateral and discriminatory action. 88. The challenges to multilateral co-operation posed by those two unprecedented and unsustainable sets of related disequilibria cannot be overemphasized. Multilateral action is required in four broad areas. 89. First, monetary policies and fiscal balances in the major market developed economies have such an impact on the world economy that there is a need for 
**Analysis**
The text discusses the impact of disequilibria in economies, trade, and current account imbalances on the global economy, highlighting the need for multilateral cooperation to address these challenges. The focus is on economic policy, trade, and the role of developed and developing countries in promoting sustained growth and stability.

**Category**
International trade, Economic development