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Explaining South Korea’s Development #1

Korea was a Japanese Colony from 1910 to 1945, providing food and fuel for the ‘motherland’.

Following the fall of the Japanese Empire at the end of World War II, Korea was divided along the 38th parallel into North and South Korea, North Korea controlled by communist Russia, and South Korea governed by the United States, pitching Communist and Capitalist modes of development against each other.

Following the brutal Korean War of 1950 to 1953 (which was the first war of the ‘cold war’ and was brutal enough to result in 4 million deaths) both North and South Korea lay decimated: plundered by 50 years of colonial rule and then a decade of fighting their infrastructures lay in ruins.

South Korea’s economy stagnated in the decade following the Korean war, but then grew rapidly, and today South Korea is one of the world’s leading economies, whereas North Korea stagnated under hard-line communist rule.

Given the fact that the two countries share common histories up until the end of WW2, and given that they share similar cultures and climates, these things cannot explain their divergent experiences in development since 1950 – and thus South Korea’s development (and North Korea’s lack of it) can only be explain by the social and economic development strategies (and their consequences) adopted by the South Korean government since the 1950s.

Following the war South Korea received some support for reconstruction from the US. As a percentage of gross national income South Korea received a very similar level of support to Kenya in the 1960s. But International Development Assistance was not the answer to Korean poverty. USAID reported that Korea was a ‘bottomless pit’ that could not be helped by development funding.

In 1961, when General Park Chung-Hee came to power in a military coup, South Korea’s yearly income was just $82 per person (for comparison Ghana’s was $179 at the time). In 1962 Park turned civilian and went on to win three elections before seizing the presidency for life. His rule was strict and South Korea was a highly disciplined society.

Park surrounded himself with able colleagues and made some astute political moves: During the Vietnam war, South Korea sent troops to support US efforts and was richly rewarded. In the mid 1960s, revenues from the Americans for Korean troops in Vietnam were the larges single source of foreign-exchange earnings.

Park was authoritarian and stifled liberties, but he put in place policies which effectively modernized South Korea.

Five year plans for economic development were at the heart of his strategy. Growth was steady during the 1960s as new factories producing basic goods were built, and in 1973 Park launched the ‘Heavy and Chemical industrialization programme’ which estalished the first steel mills and car manufacturing plants, which formed the backbone for industrial development and moved South Korea away from reliance on agricultural products.

As a result of Park’s economic policies, Per Capita income grew by more than 5 times between 1972 and 1979, reaching $1000 per capita by 1977, and all of this with very little reliance on aid.

Growth depended on Import Substitution Industrialization (ISI), which mean reducing dependence on imports and replacing them with domestically produced products. In practice this meant protecting basic goods such as clothing, hand tools and processed food.

Citizens were also heavily disciplined: they were mobilized like soldiers into factories and consumption was also tightly controlled: for example, foreign cigarettes were band, and citizens were encouraged to report anyone smoking imported tobacco products.

Every spare cent of foreign exchange earned from exports was used to import new machine imports to further industrialization and over many years South Korea’s manufacturing processes evolved to become more and more technologically sophisticated and eventually the nation transitioned to producing manufactured goods for export to foreign markets.

The history of the Samsung Corporation illustrates the successful development of the South Korean economy.

Samsung began selling dried fish, fruit and vegetables to China in 1938, before moving into flour milling and confectionery manufacturing, then textile weaving. In the early 1970s it invested in heavy, chemical and petrochemical industries and produced the first black and white television for domestic sale in South Korea in 1972. In the second half the 1970s Samsung moved into producing home electronics for export, and today is one of the world’s leading technology companies.

The result of all of this is that South Korea has seen one of the fastest rates of economic growth since WW2 – it’s GDP was over $28 000 in 2016.

However, South Korea’s development did come at a cost: political freedoms were limited (although Korea is now a democracy) working hours were very long, and gender inequality high. Today, South Korea has one of the highest suicide rates in the world and widespread alcohol dependency.

Sources:

Summarized from Brooks (2017) The End of Development.

 

 

 

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Dependency Theory – Revision Notes

Dependency Theory claims that Colonialism had a negative impact on the satellite territories in Africa, Asia and Latin America; that neocolonialism keeps the ex colonial master rich and the ex colonies poor, and that in order to develop the ex colonies need to isolate themselves from the capitalist system, protect themselves from the ‘free market’ and develop internally, through socialism for example.

Colonialism made rich countries rich and poor countries poor

  1. Stealing land and resources which decimated local populations through slavery, disease and displacement of local populations.
  2. Increasing ethnic conflict by selecting one ‘pro-European group’ to govern over all other ethnic groups in the territories.
  3. Turning the colonies into mono-crop plantation systems, dependent on low value agricultural exports, which hampered their development post-independence.
  4. MOST IMPORTANTLY (and most difficult to understand and evaluate) – colonialism established a world capitalist system which locked poorer countries into unequal power relations with richer countries – if poor countries wished to develop within the system, they required expensive imports from the industrialised European powers. For this reason, poor countries will always remain poor within this system.

Neo-Colonalism keeps poor countries poor because:

  1. Unfair terms of Trade and unfair trade rules lock poor countries into unequal relationships with the west
  2. Transnational Corporations play a major role in exploiting countries today, not just rich countries
  3. Aid through the World Bank is used by rich countries to promote ‘neoliberal’ policies which make rich countries easier to exploit.

To develop, developing countries need to isolate themselves from the capitalist system (protectionism)

Dependency Theory argued  that developing countries should seek to break away from the world capitalist system and find their own path way to development – mainly through socialism – development through socialism means countries focus on their own development, seeking to produce everything for themselves rather than integrating into a global trade system.

 

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Forging the American Empire

Is it possible to perceive the making of modern America as a sort of colonial project? One in which the new American capitalist class colonizes the so called American wilderness for the benefit of Capitalism? This is the argument Andrew Brooks makes in his recent book – The End of Development:

On 4 July 1776 the newly independent United States of America consisted of 13 colonies that were formally ceded by Great Britain in 1783. The United States then expanded Westwards, and by the time of the Gadsden Purchase from Mexico in 1853, the modern boarders of the contiguous United States were established.

American expansion.jpg

Formal territorial expansions were legally and politically essential. Annexation first provided new space for capitalism, then new Americans came, conquered and combined land, labour and capital to generate wealth. Fundamentally though it was the direct control and space and the westward advance of Europeans and their conflicts with other Americans that were the real means of making the nation.

The whole history of the United States is one of occupation and land seizure: rather than territorial colonialism abroad,  there was unprecedented territorialism at home. Ironically, the American war of Independence (1775 – 1783), far from being a pure anti-colonial struggle, was rather a moment that enabled expanded imperialism led by the European Americans. Once the revolution had freed the settlers, they conquered the res of the North American continent and reorganized the space for capitalism. This meant removing the Native population to make room for an expanding immigrant population, as was advocated by Benjamin Franklin.

Benjamin Franlklin Colonialism Indians.jpg

The popularization of the notion of ‘wilderness’ was a key ideological tool which promoted this expansion Westwards – the great interior of the new United States was portrayed as wild country which was the antithesis of civilization, full of wild savages, both of which needed to be overcome in order for progress to be made.

(Of course in reality, neither were true, many Native American Tribes had rich cultures which managed the land they had occupied for centuries in a sustainable manner).

In the 19th century, the American capitalist was a colonist at home, enjoying what the European capitalist had to travel to Africa or Asia to achieve: profits were accumulated through imported slaves, and later indentured Chinese labour on the Pacific Coast.

Profit was also accumulated via exploitation of Native Americans through trade. Indigenous peoples exchanged pelts for fish hooks, guns and knives, which benefited whites and forged a relationship of dependency.

Rifles changed the balance of power between tribes, causing warfare between native peoples, as well as intensifying hunting practices. Established cultures and ways of life that had existed for centuries were wiped out in a few short decades. For instance, muskets used by Metis hunters nearly wiped out buffalo in the Red River valley of North Dakota.

Metis-indians buffalo-bones.jpg
Metis indians shipping buffalo bones in North Dakota

Fur trading was one of the first major economic activities, but American capitalism soon diversified and grew as it learnt the lessons of the industrial revolution in Britain, and it was a rapid industrialization as the USA was both unencumbered by old social relations such as Feudalism, and all the necessary resources to fuel industry were on home soil.

Ultimately, Brooks argues that any time Washington, Hamilton, Adams or Jefferson referred to the ‘Federal Union’ in their presidential address, they were really referring to the process of forging an American Empire – except they didn’t need ships to go and do it in far away places, they had plenty of ’empty’ territory right next door.

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The End of Development?

20170923_100207A summary of The End of Development: A Global History of Poverty and Prosperity, by Andrew Brooks (2017)

This blog post covers Part 1: Making the Modern World

Chapter 1: environmental determinism and early human history

The argument in this chapter is that nature (as in the natural environment) does not determine human society and culture, rather it is more accurate to talk of humans shaping nature, especially since the emergence of agricultural societies 12000 years ago.

From between 12-8000 years ago, agricultural societies emerged independently in 11 distinct places, and in each region, these societies domesticated crops and animals, thus adapting to and changing local environments in different ways.

Agricultural societies eventually came to dominate hunter gather societies because they are more resistant to environmental shocks, given their greater capacity to store food to see them through famine periods.

Early agricultural societies also allowed for the development of a specialized division of labour, and were organised along feudal lines, with a tiered hierarchy of ruling classes taking tribute from those working the land. Europe in the 15th century was only one such system among many historical antecedants.

Brooks rounds this chapter off by reminding us that Europe did not colonize the rest of the world because of some kind of manifest destiny based on a unique set of environmental and cultural advantages, there were plenty of other cultures existing around the world in the 15th century that had similar features to the European feudal system.

What Europe did have was an emerging capitalist system, it is this that sets it apart and explains its rise to globalpower from the 15th century onwards.

Chapter 2: colonizing the world

This chapter outlines a brief history of colonialism, starting with the early colonial projects of Spain and Portugal in the Americas, which provided the silver and gold which kick started the global capitalist economy.

Brooks goes on to outline European colonial expansion across the globe more generally, arguing that European big business, governments and religion all worked together to dominate The Americas, Asia and Africa – often exploiting existing power structures to establish rule: profit, politics, piety and patriarchy all played a role in reshaping the colonial world from 1992 to 1945.

Brooks breaks down the history of colonialism something like this:

1500 – 1650 – Spanish and Portuguese colonialism – which involved the extraction of gold and silver, which was used to finance wars against Islam and other European nations. Spain also borrowed heavily from Holland on the basis of expected future returns from its mines in Latin America.  This led to the establishment of financial centers in Holland, and increasing wealth. Span eventually went into decline as its wars were unsuccessful and its colonial returns decreased

1650 – 1900 – Dutch and British colonialism – A newly rich Holland and Britain took over as the main colonial powers – state building was essential to this – a combination of political power and the granting of monopolies to the Dutch and British East India companies (for example) led to the increasing dominance of these two powers.

Brooks also outlines how slavery and the industrial revolution were crucial to the rise of these two powers, and includes a section on the famine in India to illustrate how brutal their colonial projects were.

It’s also important to realise that increasing inequality was an important aspect of Colonialism – obviously between Europe and poorer parts of the world, but there were also some colonies which were more prosperous (such as Australia) and also, within the the mother countries and colonies, this period of history led to increasing inequality.

The chapter rounds of by pointing out that from 1900, the base of world power is already starting to shift from European centers to America.

Chapter Three: American Colonialism 

This chapter starts with the ‘rise and fall of Detroit‘ which illustrates how industrial capitalism led to huge economic growth in America from the late 19th century to the 1960s, only to decline once industrial production moved abroad.

Brooks now argues that, following US Independence in 1776, American capitalists essentially focused on colonising the homeland rather than overseas territories, as there was so much land and so many resources within America – typically treating native Americans as non-people, who ended up in reservations.

There was some expansion overseas during the 19th and early 20th centuries – most notably with establishment of the Panama canal, but the ideology of American isolationism prevented this from happening.

It was effectively WW1 which led America to become to the world’s global hegemon – through lending money to the Allies, it built up huge economic dominance, which only grew as Europe was thrown into turmoil during WW2, following which America rose to dominance as the country which would seek to ‘develop’ the rest of the world, which is the focus of part two of the book….. (to be updated later)

 

 

 

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The End of Poverty? A Documentary taking a ‘Dependency Theory’ View of Underdevelopment and Development

This 2008 Documentary seeks to answer the question of why there is still so much poverty in the world when there is sufficient wealth to eradicate it.

In order to answer this question, the video goes back to 1492, which marks the start of European colonialism and the beginning of the global capitalist system, making the argument that European wealth was built on the back of a 500 year project of extraction and exploitation of the Americas, and then Asia and Africa.

Using various case studies of countries including Venezula, Bolivia, and Kenya the video charts how brutal colonial policies made the colonies destitute while the wealth extracted led to the establishment of global finance, the industrial revolution, and the foundation of a global capitalist system which locked poor countries into unequal relations with rich countries.

Following Independence, a combination of unfair trade rules  and debt, managed through global institutions such as the World Bank and the World Trade Organisation have effectively kept these unequal relationships between countries in place, meaning wealthy countries have got richer while many ex-colonies have remained destitute.

This video is quite heavy going, and jumps around from continenent to continent a bit too much for my liking, which, combined with a lot of sub-titles (as many of the people interviewed are not English-speakers) does make it quite hard to follow. Nonetheless, this video does offer a systematic account of a Dependency Theory view of underdevelopment and development, including interviews with numerous politicians and activists from development countries as critical thinkers such as Amartya Sen, Joseph Stiglitz and Naomi Klein, among many more.

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A Very Brief History of the Democratic Republic of Congo

This year I’m using the DRC as a major case study in underdevelopment (it is last on the UN’s HDI rankings after all) – Here’s my (mainly cut and paste from Wikipedia) very brief history of the DRC – I’ll add in video links, general links, pictures and extracts from numerous books later… 

The Stuff in italics below each heading are the ‘key historical reasons for underdevelopment’

Pre-Colonialism

It was quite nice, suggesting Western Nation States f***ed The Congo Up 

[Pre-Colonialism, tribes in the region were doing pretty well for themselves – Organised into the Kingdom of Luba, according to Wikipedia – Each of these kingdoms became very wealthy due mainly to the region’s mineral wealth, especially in ores. The civilization began to develop and implement iron and copper technology, in addition to trading in ivory and other goods. The Luba established a strong commercial demand for their metal technologies and were able to institute a long-range commercial net (the business connections extended over 1,500 kilometres (930 miles), all the way to the Indian Ocean). By the 16th century, the kingdom had an established strong central government based on chieftainship.’

The African Congo Free State (1877–1908) – Colonialism, Brutalisation and Extraction

History of Colonialism

King Leopold II of Belgium formally acquired rights to the Congo territory at the Conference of Berlin in 1885 and made the land his private property and named it the Congo Free State.Leopold’s regime began various infrastructure projects, such as construction of the railway that ran from the coast to the capital of Leopoldville (now Kinshasa). It took years to complete. Nearly all such projects were aimed at increasing the capital which Leopold and his associates could extract from the colony, leading to exploitation of Africans.

Rubber was the main export from the Congo Free State, used to make tyres for the growing automobile industry, and the sale of rubber made a fortune for Leopold.

Leopold’s colonization of the Congo was incredibly brutal. Thousands of Congolese were forced to work on Leopold’s Rubber plantations, and the practice of cutting off the limbs of the natives as a means of enforcing rubber quotas was widespread. During the period of 1885–1908, millions of Congolese died as a consequence of exploitation and disease. In some areas the population declined dramatically; it has been estimated that sleeping sickness and smallpox killed nearly half the population in the areas surrounding the lower Congo River.

The actions of the Free State’s administration sparked international protests led by British reporter Edmund Dene Morel and British diplomat/Irish rebel Roger Casement, whose 1904 report on the Congo condemned the practice. Famous writers such as Mark Twainand Arthur Conan Doyle also protested.

The Belgian Congo (1908–1960) – Colonialism, Condescension and More Extraction

In 1908, the Belgian parliament took over the Free State from the king. From then on, as a Belgian colony, it was called the Belgian Congo and was under the rule of the elected Belgian government. The governing of the Congo improved significantly and considerable economic and social progress was achieved. The white colonial rulers had, however, generally a condescending, patronizing attitude toward the indigenous peoples, which led to bitter resentment from both sides. During World War II, the Congolese army achieved several victories against the Italians in North Africa.

Independence and Political crisis (1960–1965) – Turmoil and Transition

The Belgian Congo achieved independence on 30 June 1960 under the name ‘The Democratic Republic of Congo’. Just previous to this, in May a growing nationalist movement, led by Patrice Lumumba, had won the parliamentary elections. The party appointed Lumumba as Prime Minister. Shortly after independence, most of the 100,000 Europeans who had remained behind after independence fled the country, opening the way for Congolese to replace the European military and administrative elite.

On 5 September 1960, Kasavubu dismissed Lumumba from office. Lumumba declared Kasavubu’s action unconstitutional and a crisis between the two leaders developed. Lumumba had previously appointed Joseph Mobutu chief of staff of the new Congo army. Taking advantage of the leadership crisis between Kasavubu and Lumumba, Mobutu garnered enough support within the army to create mutiny. With financial support from the United States and Belgium, Mobutu paid his soldiers privately. Mobutu took power in 1965 and in 1971 changed the country’s name to the “Republic of Zaïre”.

Mobutu and Zaire (1965 – 1996) – Dictatorship (propped up by the United States), extreme corruption, yet more extraction and infrastructure deterioration

Corruption, Aid, The United States, Cold War

The new president had the support of the United States because of his staunch opposition to Communism. Western powers appeared to believe this would make him a roadblock to Communist schemes in Africa.

A one-party system was established, and Mobutu declared himself head of state. He periodically held elections in which he was the only candidate. Although relative peace and stability were achieved, Mobutu’s government was guilty of severe human rights violations, political repression, a cult of personality and corruption. By 1984, Mobutu was said to have $4 billion (USD), an amount close to the country’s national debt, deposited in a personal Swiss bank account. International aid, most often in the form of loans, enriched Mobutu while he allowed national infrastructure such as roads to deteriorate to as little as one-quarter of what had existed in 1960.

During the 1970s and 1980s, Mobutu was invited to visit the United States on several occasions, meeting with U.S. Presidents Richard Nixon, Ronald Reagan and George H. W. Bush. In June 1989, Mobutu was the first African head of state invited for a state visit with newly elected President Bush. Following the dissolution of the Soviet Union, however, U.S. relations with Mobutu cooled, as he was no longer deemed necessary as a Cold War ally.

The first and second Congo Wars (1996 – 2003) – Rwanda’s Ethnic conflict heads west while neighbouring nations plough in and extract resources    

End of the Cold War, Ethnic Conflict, Rwanda, Resource Curse

By 1996, following the Rwandan Civil War and genocide and the ascension of a Tutsi-led government, Rwandan Hutu militia forces (Interahamwe) had fled to eastern Zaire and began refugees camps as a basis for incursion against Rwanda. These Hutu militia forces soon allied with the Zairian armed forces to launch a campaign against Congolese ethnic Tutsis in eastern Zaire.

A coalition of Rwandan and Ugandan armies, led by Lawrence Kabila, then invaded Zaire to overthrow the government of Mobutu, launching the First Congo War. By May 1997, Kabila had made it to the capital Kinshasa, named himself president and changed the name of the country back to the Democratic Republic of Congo. Mobutu was forced to flee the country.

However, a few months later, President Kabila asked foreign military forces to return back to their countries because he was concerned that the Rwandan military officers who were running his army were plotting a coup against him. Consequently, Rwandan troops in DRC retreated to Goma and launched a new Tutsi led rebel military movement (the RCD) to fight against their former ally, President Kabila, while Uganda instigated the creation of another rebel movement called the Movement for the Liberation of Congo (MLC), led by the Congolese warlord Jean-Pierre Bemba. The two rebel movements, along with Rwandan and Ugandan troops, started the Second Congo War by attacking the DRC army in 1998. Angola, Zimbabwe and Namibia became involved militarily on the side of the government.

Kabila was assassinated in 2001 and was succeeded by his son Joseph Kabila, who organised multilateral peace talks which to the signing of a peace accord in which Kabila would share power with former rebels. By June 2003 all foreign armies except those of Rwanda had pulled out of Congo. On 30 July 2006 DRC held its first multi-party elections. Joseph Kabila took 45% of the votes and his opponent, Jean-Pierre Bemba took 20%. On 6 December 2006 Joseph Kabila was sworn in as President.

Contemporary Conflicts in the DRC (2003 – Present Day) – Numerous groups fighting over various things

Ethnic Conflict, Rwanda, learned violence.

There are a number of rebel groups still operating mostly in the Eastern Democratic Republic of Congo. It is widely suspected that Rwanda is funding some of these rebel groups. A lot of the recent conflicts seem to go back to the Hutu-Tutsi conflict from Rwanda.

The FDLR -The Democratic Forces for the Liberation of Rwanda- Consist almost entirely ethnic Hutus who wish to regain power in Rwanda. The FDLR contains some of the ‘original Hutu genociders’ who carried out the genocide in Rwanda and currently have about 7000 troops still in operation in the DRC. Some of the leaders of the FDLR are facing trial for crimes against humanity in the ICCJ

 

 The CNDP – In 2006, the Congolese military declared that it was stopping operations against the FDLR. This lead to some troops mutinying and the foundation of the CNDP, or  The National Congress for the Defence of the People,  mostly consisting of ethnic Tutsis, whose main aim continued to be the eradication of the Hutu FDLR. The CNDP consisted of approximately 8000 troops and was believed to be backed by Rwanda.

The M23 Rebels – In March 2009, The CNDP signed a peace treaty with the government, in which it agreed to become a political party and its soldiers integrated into the national army in exchange for the release of its imprisoned members. Its leader, Lawrence Nkunda was also arrested and is now facing trial at the United Nations Court for ‘Crimes against humanity’.

However (here we go again) in 2009 Bosco Ntaganda, and troops loyal to him mutinied from this new ‘integrated army’ and formed the rebel military March 23 Movement, claiming a violation of the treaty by the government. M23 claims that some CNDP troops have not received jobs in the military as promised by the government and also want some limited political reforms.

M23 is estimated to have around 1500 – 6000 troops and as recently as November 2012, M23 captured the city of Goma, with a population of over 1 million, and the provincial capital of the Kivu Province in Eastern DRC, with the aim of getting its political demands met.

Rwanda is widely suspected of funding this rebel group as well, although both Rwanda and M23 deny this.

Other Rebel Groups – In addition to the above there is on and off fighting amongst other rebel groups. For example, Joseph Kony’s Lord’s Resistance Army moved from their original bases in Uganda (where they have fought a 20-year rebellion) and South Sudan to DR Congo in 2005.

 

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Dependency Theory

This post is a brief summary of the Dependency Theory view of Development and Underdevelopment. It is, broadly speaking, a Marxist theory of development.

Andre Gunder Frank (1971) argues that developing nations have failed to develop not because of ‘internal barriers to development’ as modernization theorists argue, but because the developed West has systematically underdeveloped them, keeping them in a state of dependency (hence ‘dependency theory’.)

The World Capitalist System

Frank argued that a world capitalist system emerged in the 16th century which progressively locked Latin America, Asia and Africa into an unequal and exploitative relationship with the more powerful European nations.

This world Capitalist system is organised as an interlocking chain: at one end are the wealthy ‘metropolis’ or ‘core’ nations (European nations), and at the other are the undeveloped ‘satellite’ or ‘periphery’ nations. The core nations are able to exploit the peripheral nations because of their superior economic and military power.

From Frank’s dependency perspective, world history from 1500 to the 1960s is best understood as a process whereby wealthier European nations accumulated enormous wealth through extracting natural resources from the developing world, the profits of which paid for their industrialisation and economic and social development, while the developing countries were made destitute in the process.

Writing in the late 1960s, Frank argued that the developed nations had a vested interest in keeping poor countries  in a state of underdevelopment so they could continue to benefit from their economic weakness – desperate countries are prepared to sell raw materials for a cheaper price, and the workers will work for less than people in more economically powerful countries. According to Frank, developed nations actually fear the development of poorer countries because their development threatens the dominance and prosperity of the West.

Colonialism, Slavery and Dependency

Colonialism is a process through which a more powerful nation takes control of another territory, settles it, takes political control of that territory and exploits its resources for its own benefit. Under colonial rule, colonies are effectively seen as part of the mother country and are not viewed as independent entities in their own right. Colonialism is fundamentally tied up with the process of ‘Empire building’ or ‘Imperialism’.

According to Frank the main period of colonial expansion was from 1650 to 1900 when European powers, with Britain to the fore, used their superior naval and military technology to conquer and colonise most of the rest of the world.

During this 250 year period the European ‘metropolis’ powers basically saw the rest of the world as a place from which to extract resources and thus wealth. In some regions extraction took the simple form of mining precious metals or resources – in the early days of colonialism, for example, the Portuguese and Spanish extracted huge volumes of gold and silver from colonies in South America, and later on, as the industrial revolution took off in Europe, Belgium profited hugely from extracting rubber (for car tyres) from its colony in DRC, and the United Kingdom profited from oil reserves in what is now Saudi Arabia.

In other parts of the world (where there were no raw materials to be mined), the European colonial powers established plantations on their colonies, with each colony producing different agricultural products for export back to the ‘mother land’. As colonialism evolved, different colonies came to specialise in the production of different raw materials (dependent on climate) – Bananas and Sugar Cane from the Caribbean, Cocoa (and of course slaves) from West Africa, Coffee from East Africa, Tea from India, and spices such as Nutmeg from Indonesia.

All of this resulted in huge social changes in the colonial regions: in order to set up their plantations and extract resources the colonial powers had to establish local systems of government in order to organise labour and keep social order – sometimes brute force was used to do this, but a more efficient tactic was to employ willing natives to run local government on behalf of the colonial powers, rewarding them with money and status for keeping the peace and the resources flowing out of the colonial territory and back to the mother country.

Dependency Theorists argue that such policies enhanced divisions between ethnic groups and sowed the seeds of ethnic conflict in years to come, following independence from colonial rule. In Rwanda for example, the Belgians made the minority Tutsis into the ruling elite, giving them power over the majority Hutus. Before colonial rule there was very little tension between these two groups, but tensions progressively increased once the Belgians defined the Tutsis as politically superior. Following independence it was this ethnic division which went on to fuel the Rwandan Genocide of the 1990s.

An unequal and dependent relationship

What is often forgotten in world history is the fact that before colonialism started, there were a number of well-functioning political and economic systems around the globe, most of them based on small-scale subsistence farming. 400 years of colonialism brought all that to end.

Colonialism destroyed local economies which were self-sufficient and independent and replaced them with plantation mono-crop economies which were geared up to export one product to the mother country. This meant that whole populations had effectively gone from growing their own food and producing their own goods, to earning wages from growing and harvesting sugar, tea, or coffee for export back to Europe.

As a result of this some colonies actually became dependent on their colonial masters for food imports, which of course resulted in even more profit for the colonial powers as this food had to be purchased with the scant wages earnt by the colonies.

The wealth which flowed from Latin America, Asia and Africa into the European countries provided the funds to kick start the industrial revolution, which enabled European countries to start producing higher value, manufactured goods for export which further accelerated the wealth generating capacity of the colonial powers, and lead to increasing inequality between Europe and the rest of the world.

The products manufactured through industrialisation eventually made their way into the markets of developing countries, which further undermined local economies, as well as the capacity for these countries to develop on their own terms. A good example of this is in India in the 1930s-40s where cheap imports of textiles manufactured in Britain undermined local hand-weaving industries. It was precisely this process that Ghandi resisted as the leading figure of the Indian Independence movement.

Neo-colonialism

By the 1960s most colonies had achieved their independence, but European nations continued to see developing countries as sources of cheap raw materials and labour and, according to Dependency Theory,  they had no interest in developing them because they continued to benefit from their poverty.

Exploitation continued via neo-colonialism – which describes a situation where European powers no longer have direct political control over countries in Latin America, Asia and Africa, but they continue to exploit them economically in more subtle ways.

Frank identities three main types of neo-colonialism:

Firstly, the terms of trade continue to benefit Western interests. Following colonialism, many of the ex-colonies were dependent for their export earnings on primary products, mostly agricultural cash crops such as Coffee or Tea which have very little value in themselves – It is the processing of those raw materials which adds value to them, and the processing takes place mainly in the West

Second, Frank highlights the increasing dominance of Transnational Corporations in exploiting labour and resources in poor countries – because these companies are globally mobile, they are able to make poor countries compete in a ‘race to the bottom’ in which they offer lower and lower wages to attract the company, which does not promote development.

Finally, Frank argues that Western aid money is another means whereby rich countries continue to exploit poor countries and keep them dependent on them – aid is, in fact, often in the term of loans, which come with conditions attached, such as requiring that poor countries open up their markets to Western corporations.

Strategies for Development 

  1. Breaking away from dependency

  2. Associate or dependent development

  1. Breaking away from dependency

This view argues that dependency is not just a phase, but rather a permanent position. The only way developing countries can escape dependency is to escape from the whole capitalist system. Under this category, there are different paths to development:

  • Isolation, as in the example of China from about 1960 to 2000, which is now successfully emerging as a global economic superpower having isolated itself from the West for the past 4 decades.

  • A second solution is to break away at a time when the metropolis country is weak, as India did in Britain in the 1950s, following world war 2. India is now a rising economic power.

  • Thirdly, there is socialist revolution as in the case of Cuba. This, however, resulted in sanctions being applies by America which limited trade with the country, holding its development back.

  • Many leaders in African countries adopted dependency theory, arguing that and developing political movements that aimed to liberate Africa from western exploitation, stressing nationalism rather than neo-colonialism.

  1. Associate or dependent development.

Here, one can be part of the system, and adopt national economic policies to being about economic growth such as

Import substitution industrialisation where industrialisation produces consumer goods that would normally be imported from abroad, as successfully adopted by many South American countries. The biggest failure of this, however, was that it did not address inequalities within the countries. ISI was controlled by elites, and these policies lead to economic growth while increasing inequality.

Criticisms of Dependency Theory

1. Some countries appear to have benefited from Colonialism – Goldethorpe (1975) pointed out that those countries that had been colonised at least have the benefits of good transport and communication networks, such as India, whereas many countries that were never colonised, such as Ethiopia, are much less developed.

2. Modernisation theorists would argue against the view that Isolation and communist revolution is an effective path to development, given the well-known failings of communism in Russia and Eastern Europe. They would also point out that many developing countries have benefitted from Aid-for Development programmes run by western governments, and that those countries which have adopted Capitalist models of development since World War Two have developed at a faster rate than those that pursued communism.

3. Neoliberalists would argue that it is mainly internal factors that lead to underdevelopment, not exploitation – They argue that it is corruption within governments (poor governance) that is mainly to blame for the lack of development in many African countries. According to Neoliberals what Africa needs is less isolation and more Capitalism.

4. Later on we will come across Paul Collier’s theory of the bottom billion. He argues that the causes of underdevelopment cannot be reduced to a history of exploitation. He argues that factors such as civil wars, ethnic tensions and being land-locked with poor neighbours are correlated with underdevelopment.

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The New Rulers of the World – summary of the documentary by John Pilger, which seems to be a pretty unambiguous dependency theory perspective on the role of the World Bank, the IMF, and Transnational Corporations in globalisation. The video focuses especially on their role in underdevelopment in Indonesia.

Neoliberalism

People Centred Development