Outline and explain two criticisms other theories of development might make of dependency theory (10)

World Systems Theory (WST) criticises dependency theory (DT) because there is evidence that poorer, ex-colonies can develop within the modern world capitalist system.

Dependency theory tended to see the ‘root cause’ of underdevelopment as rich world governments (or nation states) – they believed poor countries remained poor following a history of colonialism where powerful countries such as Britain colonised other areas of the globe, for example India and many African countries and took control of these regions politically and economically, running them for their own benefit.

Dependency theory believed the unequal relationship between the coloniser and colonised (or core and satellite) disadvantaged poor countries to such an extent that they were still in a state of dependency when the colonial powers left in the 1950s and 1960s. The ex colonies were effectively turned into the exporters of low value primary products such as Tea, which kept them poor.

HOWEVER, WST points out that today nation states have lost their power to control poor countries, and that there are ex colonies which have developed by becoming semi-periphery countries, or manufacturing – India and Mexico are good examples.

Another criticism WST makes of DT is that rich ex coloniser countries can go down the development hierarchy because Nation States are no longer the most powerful actors in the modern global system controlled more by TNCs and the WTO.

A second criticism of Dependency Theory comes from People Centred Development.

DT still saw industrialisation as the root to development for poor countries, except that it should be controlled by nation states (socialism).

PCD criticises this as horrific things still happened through socialist development – as in Russia and China, and also point out that the nation state may be too large to take into account the diverse wishes of many local communities.

PCD would rather see much more diverse, localised forms of development, decided on by the people, rather than development imposed by nation states.

 

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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.

 

Glencore – The World’s Worst Transnational Corporation?

Glencore is one of the world’s largest commodities companies – it operates in 150 countries extracting natural resources such as iron and copper, but also has interests in  coal and oil, as well as numerous agricultural products.

Swiss commodities trader Glencore's logo is seen in front of its headquarters in Baar

Glencore – key facts and stats

  • It is registered in Switzerland
  • Has £128 billion in assets (2015)
  • Had a revenue in 2016 of $150 billion
  • Employs 150 000 people globally
  • The CEO is Ivan Glassenberg, who has a total net worth of around $5 billion.
Glencore revenue
Glencore’s total revenue over the last decade  = around $1.6 trillion

Criticisms of Glencore

Below are some arguments and evidence that Glencore is an example of a Transnational Company which is not really interested in promoting development in poor countries, but really just interested in extracting as much as it can for as cheaply as possible. 

Glencore commodities
Glencore – extracting commodities from 6 continents

Glencore has been widely criticized because it has made staggering profits by extracting huge volumes of natural resources out of poor countries. To put the size of Glencore in perspective, the annual revenue of the company is 10 times greater than the GDP of Zambia.

The 2013 video below documents how the company struck a deal with Zambia to mine its copper in which it extracts around $1 billion of copper per year but pays only 8% tax to the government, and gets free electricity for its mines into the bargain (paid for by the government).

This report from War on Want estimates that a combination of poor trade deals and tax avoidance costs the Zambian government $3 billion/ year, or 10% of its GPP. The report isn’t limited to just Glencore, it focuses on other mining companies such as Vedanta, none of these companies comes off as effectively promoting development in poor countries.

Glencore has also come under heavy criticisms for poor health and safety conditions in many of its mines, its record on environmental pollution and benefitting from child labour in the DRC.

Further Sources

Students might like to use these sources to assess the role of the TNC Glencore in promoting economic and social development in poor countries.

Glencore Wikipedia entry (useful for basic history/ stats)

Glencore’s ‘Supporting Development’ page – have a look at Zambia and the DRC.

Glencore paid £30 000 to compensate for a pollution related death – Guardian article

Criticisms of Glencore in Zambia by Facing Finance 

Glencore denies benefitting from child labour in DRC – Guardian article

 

 

 

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.

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.

 

A Level Sociology: Global Development Module Overview

Globalisation and its consequences

  • There are Economic, Cultural and Political elements of Globalisation
  • Optimist view of Globalisation
  • Pessimist view of Globalisation
  • Transformationalist
  • Traditionalist
  • Also…
  • Does Globalisation mean the decline of the nation state?

The problems of defining and measuring development and underdevelopment

  • How should we define and measure development?
  • The strengths and limitations of Western notions and categories of development – 1st, 2nd and 3rd World, North-South Divide, World Bank economic indicators (High to Low Income Countries)
  • The strengths and Limitations of using Economic indicators – mainly GNP/ GNI but also GDP, and HPI
  • The strengths and limitations of using Social Indicators – HDI, MDGs and others…

Different theories of development, underdevelopment and global inequality

  • Modernisation Theory – Internal cultural barriers to Development// Official Development Aid, Industrialisation, Capitalism
  • Dependency Theory – Colonialism, Exploitation and Extraction by the West// Breaking Away/ Socialism
  • World Systems Theory – Global Capitalist System – Core – Periphery –Semi-Periphery// Core Nations tend to remain dominant
  • Neoliberalism – Too much aid breeds corruption// More Trade – Deregulation, Privatisation, Low Taxation
  • People Centred Development – No Fixed path to development// Sustainability/ Democracy/ Justice
  • Bottom Billion– Four Traps//Aid and Fairer Trade and Peace

Aid, debt and trade and their impact on development

  • The strengths and Limitations of Official Development Aid
  • The strengths and Limitations of Non-Governmental Organisation Aid
  • The strengths and Limitations of Private Aid
  • The strengths and Limitations of ‘Free Trade’
  • Lots of complex stuff in the criticisms of the above – About Trade Rules! (Dumping/ Subsidies etc.)
  • The strengths and Limitations of Fair Trade
  • Also be ready for a question about ‘Debt’ and development

The role of transnational corporations, nongovernmental organisations and international agencies in local and global strategies for development. (This is done as part of the previous 4 topics!)

Development in relation to industrialisation and urbanisation

  • Arguments for Industrialisation AND Urbanisation (Modernisation Theory)
  • Arguments against Industrialisation (PCD/ Sustainable Development/ Dependency Theory
  • Arguments against Urbanisation
  • Slums (case studies!)
  • Theories – Dependency Theory/ Global Pessimism

Work, employment, education and health as aspects of development

  • How are they different in the developing world
  • How does poor education etc. act as barriers to development
  • How might improving them promote development?
  • Why might western models not be appropriate to the developing world
  • What are the limitations of each of these strategies in promoting development
  • How important each of these development goals is compared to other development goals
  • Relate all of this to theories of development

 War and Conflict in relation to development

  • The nature of conflict in the developing world (small scale civil wars, not big scale techno wars)
  • Causes of conflict in the less developed world
  • How conflict prevents development
  • The role of the developed world in conflict

Gender and Development

  • The extent of gender inequality and oppression of women in developing countries
  • How might promoting gender equality lead to development?
  • How might women be disadvantaged in the process of development?
  • Why do global gender inequalities exist? Modernisation Theory/ Dependency Theory/ Radical Feminism

Population and Consumption in relation to development

  • Intro – Higher Birth rates in the developing world and population growth.
  • Malthusian Perspectives on the causes and consequences of population growth
  • Malthus
  • Paul Erlich’s Population Bomb (Neo-Malthusianism)
  • Criticisms of Malthusianism (alternative perspectives on the causes and consequences of population growth)
    • Science and Technology can feed more people
    • Increasing wealth = decreasing birth rates (Hans Rosling ) Population Growth is due to decreasing death rates – demographic transition, an indicator of increasing wealth!)
    • Dependency theory arguments – ‘Overpopulation’ is only a problem because of resource scarcity caused by the wests overconsumption (land grabs and bio fuels).
    • Uncertainty
  • Explanations of why birth rates are higher in developing countries
  • Strategies for reducing birth rates in developing countries
  • Both of the last two – contrast modernisation and dependency theories.

 The Environment and Development

  • Context – Development has been fundamentally linked to the burning of fossil fuels, industrialisation, urbanisation and high levels of consumption
  • As a result we now face environmental problems (e.g. global warming, deforestation, pollution, toxic waste).
  • These primarily affect developing countries and harm development (outline how!)
  • Since the early 1990s – the concept of sustainable development has become big news – There are some limited International agreements – e.g. Kyoto Protocol/ MDG7.
  • Limitations of sustainable development –
  • Economic growth comes first, protecting the environment second
  • No legally binding international agreements limiting the burning of fossil fuels
  • Perspectives on what we should do about environmental problems
  • Technocentric
  • Ecocentric

Global Development Revision Notes

If you like this sort of thing, then you might like my Global Development Revision Notes

 Global Development Notes Cover53 Pages of revision notes covering the following topics within global development:

  1. Globalisation
  2. Defining and measuring development
  3. Theories of development (Modernisation Theory etc)
  4. Aid, trade and development
  5. The role of organisations in development (TNCs etc)
  6. Industrialisation, urbanisation and development
  7. Employment, education and health as aspects of development
  8. Gender and development
  9. War, conflict and development
  10. Population growth and consumption
  11. The environment and sustainable development

 

Dependency Theory Applied to Gender and Development

Dependency theory and Marxist-Feminists would probably point out that many Transnational Corporations are not interested in helping developing countries. Rather, they simply exploit patriarchal values rather than promoting real equality. They do this through taking advantage of ‘women’s material subordination’ – women put up with worse conditions than men because there is no better alternative other than to return to their roles as mothers and unpaid domestic labourers.

Women’s proportion of global supply chain production workers discloses a range of 65% to 90% women in many global supply chains, most obviously the garment industry, and in some countries it is much higher – in China, 75% of garment workers are women, in Bangladesh the figure is 85%, and it rises to 90% in Cambobdia.

The charity War on Want argues that women workers in ‘sweatshops’ in Bangladesh are exploited by the Corporations that employ them (link), although there is a view that this exploitation is gradually leading to greater emancipation for women (link).

From a Dependency perspective, increased participation in the work force also implies increased hazards for women. Women’s jobs outside the home tend to be the lowest earning, least secure, and most dangerous available in the economy, especially in periods of recession that plague most developing countries.

The following video shows the conditions of women working in Bangladesh. Although they work in hazardous and strenuous conditions, most of these women are willing to work in such environments in order to financially support their families.  http://www.youtube.com/watch?v=2wqBRWa0fno

On April 24, 2013, Rana Plaza, a garment factory outside of Dhaka, Bangladesh, collapsed, killing at least 1,127 workers. Over half of the casualties were women. In Bangladesh, the garment industry is the largest employer of women, a majority of whom live in rural areas where employment is scarce. In addition, these women are often supporting large extended families, and working for the garment industry is often the only option other than working as a farm hand. Jobs in the garment industry do much to elevate the status of women, but they are often left powerless in the face of harassment and dangerous working conditions. The Bangladesh factory collapse is a prime example of how women are often required to take jobs in dangerous industries with little to no recourse of their own. (Uddin, 2013) To read more on the Bangladesh factory collapse, visit http://www.globalization101.org/manufacturing-after-the-bangladesh-factory-collapse.

The dearth of labour laws, or ignorance and lack of enforcement of the labour codes in practice, allow for the exploitation of women. In Guatemala, women constitute 80 percent of the textile factory sector, and thousands of mostly indigenous women provide services as domestic servants. In both sectors, women have only a precarious claim on the rights to Guatemala’s legally mandated minimum wage, work-week length, leave time, health care under the national social security system, and privacy protections. Often, they are subject to physical and/or sexual abuse, according to Human Rights Watch (Human Rights Watch, 2012).

Unfortunately, even the global nature of business does not confer universal rights for these women. Many U.S.-based companies, such as Target, The Limited, Wal-Mart, GEAR for Sports, Liz Claiborne, and Lee Jeans, have contracts with Guatemalan factories and continue to honor them even if the factories break explicit company policy, such as physically examining women to determine if they are pregnant and denying health care to employees. According to Human Rights Watch, strengthening legal protection for women labourers and increasing their access to legal recourse might cement increased participation in the work as a positive development for women.

Source: http://www.globalization101.org/uploads/File/Women/Women.pdf

Industrialisation and Development

What is Industrialisation?

Industrialisation is where a country moves from an economy dominated by agricultural output and employment to one dominated by manufacturing. This will usually involve the establishment of factories in which things are produced in a rationally organized (efficient) manner. Below we look at perspectives on ‘industrialisation’ as a means of development.

Quick brainstorm to illustrate how reliant we are on industrialisation – Think of all the products you have come into contact with today. Make a list of everything that you think was made in a factory somewhere and anything that was ‘hand-made’

Industrialisation should promote economic and social development in the following ways.

  1. Industrialisation means a country can produce a wider range of higher value goods – both for sale at home and for export abroad….
  2. Industrialisation encourages the emergence of other businesses to meet the needs of factories – coal mining to provide power for example.
  3. Industrialisation eventually means a country will be less dependent on manufactured imports from abroad
  4. Industrialisation requires workers – who will be paid wages – which gives them more money and stimulates demand in the economy and further economic and social development
  5. Industrialisation requires an educated workforce (at least some workers – management – need to be educated) which encourages the government to invest in education.
  6. Industrialisation leads to urbanisation – as workers flock to factories to find work….

Arguments for the view that industrialisation leads to development

Modernisation Theory

Modernisation Theorists argue that Industrialisation lead to the West developing and this is what developing countries should do. In the 1950s and 60s, Modernisation Theorists suggested that the West should provide assistance in the form of Official Development Aid to developing countries – providing them with an initial injection of capital and expertise to enable them to build factories and power stations (hydro-electric dams were particularly favoured),  and infrastructure to kick start industrialisation. Another form of ‘industrial development’ achieved with help from the west involved providing tractors and pesticides to ‘industrialise agriculture’ – which involved the setting up of large scale farms which could produce food more efficiently than numerous subsistence small holdings.

Supporting evidence for Modernisation Theory

There are a couple of examples of countries which have successfully (at least partially) industrialised with the support of Official Development Aid from the West – the most obvious examples being Indonesia, Botswana and to a lesser extent India.

Criticisms of the idea that industrialisation results in development

Dependency Theory and Industrialisation

Dependency Theorists (Classical Marxists) argue that Industrialisation is crucial for ‘independent development’ – but it is just as crucial that developing countries control the process of industrialisation, not the West.

Supporting evidence for Dependency Theory

This was the position adopted by Russia in the 1920s and 30s, China in the 1960s – where two communist governments controlled the industrialisation process. Even though tens of millions died during these respective periods of forced industrialisation, today these two countries make up 2/4 of  the BRIC nations.

World Systems Theory and Industrialisation – Not every country can industrialise in the Global Capitalist System

Emmanuel Wallerstein argues that countries only industrialise if it benefits the West and that it isn’t in the interests of the West for every country to industrialise and grow economically.

Wallerstein sees the World Economy as being is split into 3 main regions –

The Core – Who consume high tech ‘end products’ such as cars, computers, processed foods, holidays (planes) – these are also ‘post-industrial’ service economies – mainly Europe, America, some of Asia and parts of Latin America.

The Semi- Periphery – The ‘industrialising, sweat-shop manufacturing areas – who turn raw materials into the high end products that the ‘top billion consume’ – Most of Asia and Latin America.

The Periphery – These are the poorer countries and regions who export raw materials (most of Africa but also huge swathes of Asia and some of Latin America) to the semi-periphery, who then make the products that the Core consumes.

The last half century has witnessed much of Asia and Latin America industrialise because this has benefitted the core – we can afford cheap manufactured goods because of cheap labour. However, our present model of high-consumption also requires cheap raw materials – for example minerals for mobile phones and computers, cheap cotton for clothes, and cheap grains for meat – and these will only stay cheap if the countries in the periphery stay peripheral – i.e. we require them to stay stuck at the bottom as non- industrialised exporters of cheap raw materials.

Further to this most advanced western nations are now post-industrial – only about 10% of jobs in the UK are now in the industrial-manufacturing sector. As a result, we now have more jobs in the service sector and still massive unemployment and social problems in the de-industrialised north.

 

People Centred Development – Countries don’t need Industrialisation to be socially developed

People Centred Development theory argues that the whole idea of industrialization being essential to development is very Eurocentric – this is how most Europe developed and thus modernization theorists assume that every other underdeveloped country now needs to do the same.

The two case studies of Bhutan and Anuta both remind us that Industrialisation is not the only path to development. Both of these countries have not industrialized and both populations have very good standards of living when measured by the HDI and more subjective measures of happiness. Having said this, both of these countries make use of goods that have been produced by industrialized countries.

Criticisms of Official Development Aid

Criticism 1 – The most vociferous recent critiques of Official Development Aid comes in the form of Dambisa Moyo’s recent book (2009) Dead Aid: Why Aid is not Working And How there is another way for Africa. At root, her most basic criticism  is that Official Development Aid hasn’t actually generated significant economic growth in recipient countries. According to Moyo

‘Over the past thirty years, the most aid-dependent countries have exhibited growth rates of minus 0.2% per annum.  Looked at as a whole, Africa has had over $1 trillion dollars of aid money pumped into it over the last 60 years and not much good to show for it.’

Criticism 2 (Neoliberalism) – Aid stifles the development of small businesses.

Moyo explains how this works as below…..

‘There’s a mosquito net maker in Africa. He manufactures around 500 nets a week. He employs 10 people, who each have to support upwards of 15 relatives. However hard they work, they cannot make enough nets to combat the malaria-carrying mosquito.

Enter vociferous Hollywood movie star who rallies the masses, and goads Western governments to collect and send 100, 000 mosquito nets to the affected region, at a cost of $1 million, The nets arrive, the nets are distributed and a good deed is done.

With the market flooded with foreign nets, however, our mosquito net maker is promptly out of business. His ten workers can no longer support their dependents.

Now think of what happens 5 years down the line when the mosquito nets are torn and beyond repair, we have now mosquito nets, and no local industry to build any more. The long term effect of the ‘aid injection’ has been to decimate the local economy and make the local population dependent on foreign aid from abroad.

Criticism 3 (Neoliberalism) – Aid Encourages Corruption

In 2004 the British envoy to Kenya, Sir Edward Clay, complained about rampant corruption in the country, commenting that Kenya’s corrupt ministers were ‘eating like gluttons’ and vomiting on the shoes of foreign donors. In February 2005 (prodded to make a public apology), he apologised, saying he was sorry for the ‘moderation’ of his language, for underestimating the scale of the looting and for failing to speak out earlier

According to Dambisa Moyo – If the world has one image of African statesmen, it is one of rank corruption on a stupendous scale. One of the best examples of this is Mobutu, who is estimated to have looted Zaire to the tune of $5 billion. He is also famous for leasing Concorde to fly his daughter to her wedding in the Ivory Coast shortly after negotiating a lucrative aid deal with Ronald Regan in the 1980s.

Moyo further argues that at least 25% of World Bank Aid is misused. One of the worst examples is in Uganda in the 1990s – where it is estimated that only 20% of government spending on education actually made it to local primary schools.

Moyo argues that growth cannot occur in an environment where corruption is rife. There are any number of ways in which corruption can retard growth.

  • Corruption leads to worse development projects – corrupt government officials award contracts to those who collude in corruption rather than the best people for the job. This results in lower-quality infrastructure projects.
  • Foreign companies will not invest in countries where corrupt officials might siphon off investment money for themselves rather than actually investing that money in the country’s future.
  • Aid is corrosive in that it encourages exceptionally talented people to become unprincipled – putting their efforts into attracting and siphoning off aid rather than focussing on being good politicians or entrepreneurs.

Criticism 4 – A final Neoliberal criticism of Aid is that too much aid money is spent on salaries, admin fees and conferences. Not only are these often secretive and not open to account, but this also means reduced money spent on actual development. The aid industry employs hundreds of thousands of people worldwide. For example, in the UK DEFA spent £248 million on administration in 2007/08. This has led to some referring to aid agencies as the lords of poverty – ironically, it is actually in the interests of these bureacractic agencies for poverty to exist, or thousands of people would be out of work.

Criticism 5 – Dependency theory argues there is a political agenda to aid

The allocation of US and UK aid has often depended on whether the political ideology of the developing country has met with Western Approval. Dependency theorists argue that the main point of aid is to make the recipients dependent on the donors. Many neo-marixsts argue that along with aid packages comes western values, advice, culture, and aid merely ensures that the interests of west are maintained.

  • During the cold war developing countries were rewarded with aid if they aligned themselves with the Capitalist west and against the Socialist regimes of Eastern Europe and China. Both the UK and U.S. governments refused aid to the Ethiopian government in the early 80s on the grounds that the government was Socialist.
  • A similar focus is also found in US military aid. Much military aid was sent to South America where it was used by right wing governments to repress socialist movements that were opposed to the interests of US multinationals.
  • Even with the fall of the cold war, countries are still rewarded for promoting western interests. Kenya was rewarded in 1991 for providing the US with port facilities during the gulf war while Turkey was denied US aid for not allowing them to lease its air bases.
  • In 2005 developing nations were rewarded for assisting the Bush regime’s war on terror.

NB Tied aid is now illegal in the UK by virtue of the International Development Act, which came into force on 17 June 2002. Other countries, however, still only provide aid on the basis that a proportion of the aid money is spent on products produced by the donor country.

Criticism 6 – (Dependency Theory) – World Bank aid has traditionally required countries to undertake ‘Structural Readjustment Policies’ (SAPs)

The World Bank and International Monetary Fund (IMF) are the largest and most influential of the International Financial Institutions (IFIs), and these have pursued a neoliberal development agenda since the 1980s. The damaging strings that the World Bank & IMF attach to aid, loans and debt relief often make it more difficult for poor countries to effectively tackle poverty. These strings often force poor countries to undertake Structural Adjustment Programmes – cut vital spending on health and education, or to privatise their public services, which provide opportunities for international companies to take these services over. Tanzania, Guyana and Bolivia have all been told that they must privatize their water supplies in order to get millions of pounds in aid from the world bank[1] [2]

Criticism 7 – (People Centred Development) – Top down aid is often irrelevant to the countries receiving it!

Much Official Development aid has focused on monstrous projects such as the building of dams and roads which have sapped local initiative harmed the environment and lead to social injustices[3].

Criticism 8 – (People Centred Development) –  Focusing on aid for developing countries suggests that Africans are helpless. Live Sid Yasmin Aibhai- Brown argues that concerts such as Live Aid perpetuate the idea of Africa as a helpless continent incapable of helping itself, whereas the opposite is actually true. [4]

[1] http://www.actionaid.org.uk/index.asp?page_id=1365 – extract about water privatization in Tanzania from Action Aid.

[2] See Chapter on Bolivia water privatisation, The Corporation DVD

[3]  See http://www.whirledbank.org/environment/dams.html for a critical look at the World Bank’s funding of dams in half a dozen developing countries.

[4] http://www.opendemocracy.net/globalization-G8/aid_2650.jsp – a critique of events such as Live Aid.

Arguments Against Trade as a Strategy for Development

Andre Gunder Frank (1971) argues that the reason trade doesn’t work for poor countries is a legacy of colonialism – before independence, the colonizing power simply took these commodities. After independence, developing societies are often still over-dependent on exporting these primary commodities, which typically have a very low market-value, and rich countries are happy to keep things this way because this enables them to stay rich.

Dependency Theorists point to at least the following reasons why trade doesn’t help poor countries develop:

Poor countries are often dependent on low value, primary products for their export-earnings

Examples of countries over-dependent on low-value commodities include the Ivory Coast in West Africa, which to this day remains around 33% dependent on the export of raw cocoa beans or related products; Kenya (in East Africa) which is about 30% dependent on two primary products – tea and cut flowers, and Ethiopia (also in East Africa, although never a European colony) which is about 30% dependent on income from Coffee exports.

 

malawi-tobacco
Malawi – dependent for most of its income on one primary agricultural product – Tobacco

 

According to Elwood (2004) three commodities account for 75% of total export in the poorest 50 countries, but because of the declining value of such commodities, the developing nations need to export more and more every year just to stay in the same place. One developing nation leader described it as ‘running up the downward escalator’. For example, in 1960, the earnings from 25 tons of natural rubber would buy four tractors, today it would only buy one.

Value is added to primary commodities by rich countries

Primary products such as cocoa, tea and coffee, sell for relatively low prices, so the farmers growing and selling such products make relatively little. However, once these products have been processed, branded and turned into the goods you see on the supermarket shelves, they can sell several times the original price. The problem (for developing countries) is that most of this processing and branding is done in the West. Thus, poor countries stay poor, and rich countries get rich.

With some commodities, there are several links in the chain of trade – take coffee for example – it goes from grower (in Ethiopia for example), to the local buyer, to the exporter, to the roaster (in Germany for example), to the supermarket and then to the consumer – 6 links in the chain. A bag of coffee might cost the consumer £2.50 in the supermarket, but the grower is lucky (very lucky) if they receive even 10% of this.

Two good video sources which illustrate how low-value exports don’t generate enough income for development are the movie „Black Gold which illustrates exploitation of coffee farmers in Ethiopia, and there is also Stacey Dooleys „Kids with Machetes which illustrates the low wages paid to cocoa farmers in The Ivory Coast.

The terms of trade are often biased against poor countries

Western nations impose tariffs (import taxes) or quotas (simply limits on how much a country can import) on goods from the developing world, which seriously impairs the ability of poor countries to make money from exports.

At the same time as restricting imports from poorer countries, Western governments subsidize some of their own industries. This results in over-production in some sectors, which can result in cheap, subsidized Western goods being dumped on poor countries, which undermines local industries in poorer countries. This happened in Haiti in the early 1990s, when cheap, subsidized American rice was dumped on the Haitian market, forcing local rice farmers out of business (because the American rice was cheaper.

This 2015 video from Al Jazeera focuses on this issue in Kenya – Kenyan cotton farmers are finding it very difficult to compete with subsidized American cotton farmers. You get to see the large scale U.S. operation which is subsidized by the American government, who exports their cotton: the US is the largest cotton exporter in the world. And you also get to see how American cotton production contrasts with the much smaller scale nature of Kenyan cotton production, cotton which they cannot export because they cannot compete with the subsidized US cotton.

More recently, Dependency Theorists have become concerned with the recent increase in bilateral ‘free trade’ agreements (FTAs). For example, in 2007, the EU singed FTAs with India which opened up Indian markets to the import of poultry and dairy products, despite the fact that 85% of demand is met locally by Indian farmers, and the introduction of big supermarket chains into the Indian marketplace.

Poor countries have been pressurized into exporting to clear their debts

The World Bank sees loans and debt as a ‘normal’ part of development, and poor countries are required to maintain repayments on (often low-interest) development loans to be eligible for more loans, thus keeping up repayments on loans is a crucial part of development for many countries.

Ellwood (2004) argues that this has resulted in the ‘social violence of the market’ – the constantly escalating pressure on farmers and workers in the developing world to produce more for less, which results in a problem called ‘immiserating trade’ – the more a developing country trades, the poorer it gets.

Conclusions

 Marxists conclude that the terms of world trade are far from equal. Developing countries are very much junior partners in global trading relationships and are consequently exploited by more powerful countries, TNCs and their agents.

References 

Chapman et al (2016) – A Level Sociology Student Book Two [Fourth Edition] Collins. ISBN-10: 0007597495