The Developing World
- Term itself is a rather problematic - who defines what is developed. Suggests that these nations are all striving to emulate the Western ways (developed). The idea is rather value laden, and is somewhat insulting toward these countries. - Other terms - LDC's, Third World, etc.
- However, these terms are even worse.
- Another problem is that we will be addressing a rather broad group, from Maylasia to Tanzania, from Botswana to Bangladesh. Different rates of growth as well as differing social systems. For the next few lectures, we will be discussing the common problems that each faces on the road to economic and political progress as well as the ways in which specific nations have addressed these problems. We will also look at some of the ideologies that have emerged from the developing world and how they have impacted upon the political system as a whole.
- While National self determination has become one of the fundamental principles of the United Nations it is a rather recent development in world history. For millinea the concept of empire had been more or less accepted as being a valid one, particularily among those who sought to create an empire. From the Roman to the British Empires, there was a sense that the exercise of rule over alien peoples was not an altoghether sordid notion.
- While all of the empires throughout history have had opponents, it was not until rather recently that the concept has come under near - universal scorn.
- In this century, especially in the period following the second world war, we have seen the empires of various European nations unravel and the birth of a multitude of newly sovereign entities. We should remember that the number of nation states in the United Nations has more than tripled since its inception, with most of the new members being former colonies. It is also worthy of note that at the close of the Second War, much of Asia and Virtually all of Africa was under the rule of states removed by half a world.
- The purpose of this lecture will be to offer some thoughts on the processes of imperialism and decolonization, to set the table for the ramifications of these events for the present time.
2. Extraction versus Settlement Colonies
- While the terms imperialism and colonialism are often used interchangebly, there is a distinction between the two. This confusion is partly the result of the use of the term imperialism to mean virtually any type of external rule and the fact that external areas of rule were refered to as colonies. However, the imperial possessions could usually be divided into two categories -those being based on extraction and those based on development. The latter involves settlement by a substantial number of Europeans, with the commercial purpose being one of development - farming, etc., and with these areas being settled by peoples impelled to go abroad to carve out an existence, rather than as a temporal home where the Europeans intended to amass riches and then return to the host country. Some examples of this include Canada, The United States, Australia, New Zealand, South Africa, - and to a lesser extent Algeria and Kenya. The states would develop in a different fashion than extraction based societies - the settlers themselves would provide a strong influence over the political development and forced those in London and Paris to take their views into account.
- Extraction based possessions involved the temporary placement of Europeans for the purposes of Commerce and Governance. Ex. India, where the second and third children of the Aristocracy would go to serve as reps of a commercial concern such as the East India Company, or to serve as officers in the British Army, Civil Servants, etc. However, a majority of these people did not see India as home, but as a place to earn a living to enable them to return home to live out their years. These type of imperial possessions are the ones which are relevant for our purposes.
- The foundation of European expansion was the three G's - Gold, God, and Glory.
- The intial motivations for the home country were involved in the idea of mercantilism, which stressed the idea of the government regulating the economy in order to increase state power and security through the accumulation of such resources as silver and gold.
- favorable balances of trade.
- Captive markets and sources of resources.
- Even the adoption of free trade and the development of capitalism did not dampen the idea of expansion.
- Robinson has said that there were three stages to imperial expansion - "To begin with Europe attempted to lever local regimes into the collaboration necessary to open their countries to trade and commerce from the outside. This soon proved unsatisfactory, however and one European power or another assumed direct political control, though still using native collaborators to see that its policies were carried out. Finally, as local independence movements grew strong they were able to destroy the existing collaborative mechanisms and the Europeans were forced to leave."
- By 1900, the British Empire controlled a fifth of the world's land area and 25% of the earth's population were British subjects. The Sun never sets on the British Empire. Not bad for a people who have yet to figure out central heating, and still boil all of their food, including bread. Anyway, the point of this is that prior to the Second World War, much of the earth was ruled as colonies, by various European nations.
- Another factor prompting this tendency toward empire is that unlike the United States and Russia, if the European powers wished to expand, they would have to go abroad to do so. Also, the closed nature of European social systems.
- African land rush in the 1800s. One of the results of this, and other imperial ventures, is that the maps that were drawn reflected agreements between European nations rather than local conditions. Areas that were ehtnically homogenous were carved up and the resulting nations were often amalgamations of diverse and hostile groups - ramifications for the present.
- Extraction Colonies had their economies oriented toward serving the interests of the European ruler. They were usually geared toward the supply of one product. Ex. Egypt and Cotton. Supporting industries did not develop as they could not compete with the flow of goods from home. The purpose of these colonies was to serve as sources of raw materials and consumers of finished products. Bad deal in that resources are finite.
- Ramifications for the present is that most of the LDC's have their economy based on a single commodity. Subject to price fluctuations which leads to instability.
- Analogy - Stock Market. Exception - Oil.
- This required the cooperation of natives to serve as administrators - plantation overseers, lower level civil servants. Creation of education systems - would prove to be partly responsible for their undoing as the locals would not reach equality in the eyes of the Europeans.
4. Colonial Attitudes
- Civilizing Missions
- Constraint on Local Abuses
- Went beyond missionaries
- Belief in the essential superiority of the Europeans and of their civilizations. We still see some remnants of this with respect to the way indigenous people are treated in the Americas.
- In essence, imperial ventures required required moral justification by implying that the European civilization and culture would benefit the locals even if they failied to realize this.
- French - Creating Societies of "little Frenchmen" - Saigon, Algeria
- British were less sanctimonious.
- Underpinning this idea was that it was the ethnocentric belief that it was the duty of the Europeans to promote their culture to the rest of the world.
- Left the locals with somewhat of an identity crisis. They were between the Europeans and the tradtitional culture. Esp the locals who were involved as collaborators, they were not fully accepted by the Europeans, yet they were alienated from their own culture.
- Fanon - "Wretched of the Earth"
- Forster - "Passage to India"
5. How The Colonies Were Lost
- Even though a majority of the imperial possessions had yet to be acquired, it could be said that the American revolution was the beginning of the end for the Empires. The US experience provided an example of how a colony could successfully rebel against external rule and it created a nation that would prove to be a powerful opponent of colonialism.
- In the early part of this century the colonies began to lose their legitimacy, those who opposed empire on moral grounds began to have their voices heard.
- Following World War I, the problem emerged of what to do with the colonial possessions of the losers. While one might argue that the victors were eager to grab these territories as a sort of reparations, yet as WWI was supposedly fought for the principles of democracy and the rights and the freedoms of humankind, this would have seemed rather hypocritical. The answer to this dilemma was a plan proposed by General Jan Smuts of South Africa.
- The solution that the League of Nations' reached was the creation of a mandate system, where territories that were not deemed ready for self government would be placed under the tuteledge of industrilized nations. The mandates were to apply the principle that the well being and development of such people form a sacred trust of civilization. Rather paternalistic and extremely ehtnocentric.
- An argument may be made that this was little better than colonialism, however, another element of pressure was provided to the eventual end of the colonial system.
6. World War II and the Awakenings of Native Nationalism
1. Success of the Japanese Army in Asia, eroded any existing notions of the superiority of the Europeans.
- Disruption of Governing Bodies
- Emergence of local resistence forces - Viet Nam. Also, served to galvanize local opponents of colonialism - role of education.
- War Efforts of Colonies - Ex. India
2. Bankrupting of Colonial Powers, and the reluctance to bear the costs of colonies and the loss of will.
3. Opposition of the two most powerful nations at the close of WWII, the US and the USSR. History of America and the sense of idealism. Also, there was a reluctance to accept the notion that the United States had fought the Second World War to help preserve European Empires (mention the idealism of Wilson).
- This occured at different paces depending on the region and the colonial overlords - in most cases the transition was relatively quick, and painless, at least for the European power. However, in others, war was required in order to free the colonial possessions from European rule - Algeria, Vietnam; Rhodesia and the problem of settlers.
- Result was that the 1950s and 1960s saw the number of state which interacted in the world system more than triple. Former colonies became sovereign entities removed from formal European rule. However, these states will contend that the West still attempts to control their destiny via international institutions. Neo-colonialism.
Results of Imperialism - Certain of the effects of imperialism continue to impact upon the political lives of the former colonies in todays time:
1. Arbitrary Borders - Limited homogenaity
2. Economies geared toward the demands of the European Country - 1 product or one commodity producers
3. Internal Divisions - alliance for the expulsion of the Europeans, but it will quicky disintegrate following their removal
4. Culturally Uncertain - Divisions within Societies - holdover from the days of colonialism
5. Certain grudges toward the West concerning exploitation - relevance for such issues as world bank conditions for loans, rainforests, etc.
6. Population Explosions - Western Medicine and reduction of infant mortality without a corresponding change in cultural attitudes to family size.
- Largely weak economically and with unstable political systems
- Traumas of western democracy
- Pre-industrialized economies
- Some of the reasons that explain why they are where they are date back to the colonial experience and their births as nation states.
- We will now focus on the economic and political problems confronting the Developing world.
Large numbers of the world's population exist in an atmosphere of poverty that hopefully, none of us will ever know. While there are some spectacular cases such as the famines in Ethiopia, Sudan and Somalia, which serve to attract much of the attention of the Western media, this is not the total picture. In 1990, the World Bank estimated that more than 1 billion people have incomes of less than $370 per year, it was also estimated that more than 700 million people suffer from chronic hunger. This is indicative of the problem that is faced by many of the people's of the developing world. This division of the world into developed and underdeveloped countries occurs largely along geographic lines with the with the developed economies largely existing within the northern hemisphere, and comprising Europe and North America - exceptions being Japan, Oz, N.Z. and the four tigers (Singapore, Hong Kong, South Korea, and Taiwan).
Another division is that many of the LDC's are former colonies - exceptions being the Tigers and the settlement colonies.
Three Basic Inequalities in the World Economy
1. Uneven distribution of wealth between North and South. The group of seven nations - The US, Germany, Italy, France, Japan, UK, and Canada - contain less than 14% of the world's population, yet they consume 42% of the world's energy, generate 51% of its exports and consume 53% of the goods and services world wide.
- Clearly there are strong discrepancies in consumption between the first and the third worlds. To a degree (qualify this) this translates into serious inequities in the quality of life.
US GNP/Person - $22,000
Zaire - $165
- In short, the industrialized world enjoys a disproportionate share of material wealth if one is to divide this wealth by the earth's population.
- analogy - capitalists and proletariat
2. Uneven Rates of Growth exist throughout the developing world. It is generally assumed that the economies of the industrialized nations are growing at a faster pace than those of the developing world, and that this serves to accentuate the existing inequalities.
- However, a caveat must be added to this assertion. States such as the Four Tigers, Chile, China, Maylasia, etc. have growth rates which far outstrip those of the industrialized countries, yet this does not negate the general trend.
- One other point that this raises is the diversity of nations within the developing world. This is a broad group that includes nations of varying size and material reserves. This creates a great deal of difficulty in promoting common interests between the LDC's that are beginning to achieve economic growth and those which have failed to realize such gain. Serves as an impediment to collective action - group of 77, etc.
3. There are also inequities of income within the developing world to a greater extent than exist within the industrialized democracies. This has led to the creation of dual incomes within many LDc's. In Brazil, India, Egypt, Peru and Kenya, the top 10% of the population makes between 40 and 50% of the national income. Leads to a polarization within the societies as some become integrated into the world economy while others remain impoverished. New Collaborator class.
- First and Third Worlds Within Societies
- Urbanization (Table from Papp p. 376)
Why is this so
- Two schools of thought have emerged to explain the inequities of wealth that have persisted between the developed and the developing world. The first focuses on local conditions as being primarily repsonsible for these problems, while the latter focuses on the effects of the international sytem.
A. Local Conditions
1. Character of governments - Experience of many of these countries with imperialism has had a continuing impact upon their politics. In one sense, those who come to power following the colonial government have a perception of capitalism and the role of the state entirely different from our own. They equate capitalism with imperialism and the domination of the people by an external force. Consequently, the LDC's have seen a variety of bizarre economic experiments and radical attempts to equalize income within their societies - Marxist leanings - particularily among the early leaders within these societies.
Even those leaders without a Marxist bent face certain common obstacles resulting from a lack of institutionalization - explain this with respect to time - of the government.
- equalize benefits
- Short term thinking
- Lack of industrial base
- Results of arbitrary rule
2. Limited Education and High Illiteracy - Pre-industrial societies have different
needs for education - crops, herds, etc. This is very useful for life in pastoral
or agricultural societies, but has limited applicability for advanced economies.
Also, there is the continuing dilemma of where emphasis should be placed in
education, due to the scarce funding availible - mass or specialized education.
Has been placed in the humanities, rather than establishing a technical or engineering
base - reflects the predispositions of the leaders; the result is that the most
educated elements of the societies have limited practical skills, which causes
3. Bloated Bureaucracies - Must find something to do for the the educated urbanites, create jobs for them within the bureaucracy to keep them from following the examples of their fathers. One of the results of this is
4. Corruption - While the bureaucracies are overbloated, the supply of government resources is not. This leads to the bureaucrats receiving limited salaries and results in them being succeptible to corruption. Way of life in many parts of the developing world - Asia Development Bank and Mr. Grimes. MNC's have a tendancy to exacerbate this problem.
5. Traditional Society - May be threatened by new education. Especially problematic in rural areas. Also, another problem with the recent nature of these countries, as well as their inappropriate boundaries, is the principle loyalty being held to the family rather than to the state - influence of both corruption and government policy.
6. Overpopulation - Western medicines - longer lives and limited infant mortality, has meant enormous increases in the population.
7. Culture - Problem with this idea in Weber and Confucianism.
B. The international System
- Dependency Theory - Largely developed by the Economic Commission on Latin America - Andres Gunder Frank, Raul Prebisch, Fernando Cadoszo, James Caporaso.
- Emerged as a reaction of the developing world to a trend within the litarature to focus on indigenous factors as being the primary explanatory factors of the failure of the LDC's to develop,
- This school of thought chooses to emphasize the inequities of the world capitalist system and the perceived efforts by the industrialized nations to preserve the unequal relationship between the developed and the underdeveloped countries. This assumes that the first world seeks to keep the LDC's in their role as the supplier of raw materials and the market for finished products. Further, it presumes that the world has a finite supply of resources, and that as the industrialized nations seek to preserve their over-consumtive standard of living, they conspire to see that all nations do not develop equally and therefore keep the LDC's in a subordinate position.
- The presumtion is that the industrial economies seek to maintain the dominance of colonialism without the expense and the trouble - neo-colonialism; or the economic dominance over the LDC's. This is done through unequeal terms of trade; with the support of the banks and International Organizations's; and the Multinational Corporations.
- Personally, I have a great deal of trouble accepting the conspiratorial nature of this school; however, these three points merit further examination.
1. Unequal Terms of Trade - Commodities for finished goods. Most of the LDC's are producers of one commodity which is traded for higher value added finished products. Commodity market is also very unstable - few are scarce enough to provide any leverage for the producer cartels - oil is perhaps the only commodity which might be the exception to the rule - discuss the fate of the producer cartels. Because of their role as producers, there is very little trade between the nations of the developing world - transpires with first world nations as value adding intermediaries - finishing raw materials supplied by the LDC's.
- The Ldc's via the group of 77 and the UN have suggested several modifications to change this - stabilization of commodity prices, lowering of tariffs on goods emanating from the LDC's, encouragement of regional trade arrangements between the LDCs.
2. The Banks - This refers principally to the debt crisis of the 1980s. The LDC's assert that many of these loans were pressed on them at usurious interest rates. They may also have been contracted by the previous regimes leaving their successors in serious difficulty.
- By the 1980s, many of the nations of the developing world faced staggering debt burdens.
- Interest - principle barely touched
- In the mid-1980s, Mexico's yearly debt servicing was 1/3 of its GNP. Brazil's was 20%; this means that in Mexico, 1/3 of all $ from goods and services produced in that country would have had to have been paid to foreign lenders if Brazil was to meet its obligations.
- In the 1970s, the price of crude oil skyrocketed following the OPEC embargo, the oil producing states subsequently invested huge sums of money in Western Banks. The Banks had to find a way to get a return on this money, so salesmen were sent out to the developing world to peddle loans. They found willing markets as commodity prices were in an up-cycle, and there was a general euphoria over the ability of OPEC to stand up to the West, believed that they could do the same and a number of other commodity cartels were formed.
- Much of this money was squandered on large scale development projects that were little more than points of pride and gaudy success symbols in order to prop up shaky regimes. Also, for those countries not fortunate enough to have significant oil reserves, they also had to pay more for their oil.
-However, the interest rates were rather high - had to pay off the depositors - and became higher with the inflation of the late 1970s. Then in the early 1980s, the recession in the industrialized countries from 81-83 hammered the economies of the developing world. Collapse in commodity prices, partly driven by desperation. Death of the little OPEC's.
- Led many to threaten to forfeit the obligations. After all, how do you foreclose on Brazil.
- Brady initiative of 1989 stressed debt reduction with the banks and the IOs as the key players. The IMF and the World Bank were asked to infuse new money with stringent guarentees of reform by the debtors, while the banks were asked to cooperate in one of several alternatives - (1) Debt buybacks at a reduced rate; (2) exchange of old debt for new debt at reduced interest rates; (3) exchange of old debt for new secured by designated assets. In essence the banks were asked to accept partial payment instead of no payment - various countries had defaulted on loans - would have seriously messed up the banks if this practice had spread.
- Problems have been addressed, but not without some objections from the developing world. IMF/World Bank reforms have caused serious discontent, also rather paternalistic.
- LDC's have asked for the provisions of long term loans at low rates of interest, and which are payable either in local currency or in goods. They have asked for increased mulitlateral aid without strings from IOs as well as a net flow of aid from developed countries in the amount of 1% of national incomes (US - .25% of its GNP is paid in foreign aid).
3. The MNC's
- Serve as a lightning rod for criticism from the LDC's. Four principle criticisms are offered: (1) low wages, in comparison to the home country are paid to locals (of course this is the attraction); (2) Failure to reinvest profits in the LDC's; (3) Swamp local firms - not only with respect to production, but also in terms of attracting local investment; (4) Undervalue the contributions of locals to the final product.
- Also, there are the persistent fears of political meddling and the ties between the MNC's and the host governments. Experience of Chile and Allende. Disparity in power between huge mnc's and micro states. Investment in the developing world, as a whole decreased in the 1980s, MNC's fingers were burned by the events in Chile, Iran, etc.
- MNC's are useful in that they are a source of investment, which cannot be obtained locally, and jobs. However, they still create unease in countries with experience as colonies - the belief that foreign control continues to be exercised even after the country has achieved independence. There is an inherent suspicion that the MNC's do not have the interests of the LDC at heart.
- American fears of Japan
New Examination of LDCs
- Role of the IMF, World Bank
- Competition for MNCs in the wake of the Soviet collapse.
- Developing Countries as threats, rather than recepticles of exploitation.
- Economic Gains
- Does Economic liberalization lead to Democracy?
Both Approaches have their draw backs. For the first approach, it is difficult to believe that all of the LDC's have the same problems, and it is clear that the impacts of imperialism are felt in much of the world - borders, economies, sp meddling. For the latter, the countries of East Asia stand in stark contrast to the idea that the first world is entirely succesful in keeping the countries of the third world in poverty. Following the Second World War, Korea and Taiwan were as poor or poorer than equatorial Africa, and Singapore and Hong Kong lacked the resource base of many of the LDC's, yet they were all able to establish export based economies and thrive in the last two decades.
Also, the idea of completely placing the onus on the developed world seems rather paternalistic in that it does not hold the developing world accountable for their own mistakes. Their Opinions