Wednesday, May 29, 2013

development theory

The question that has always persisted in the study of international relations in as far as globalization is concerned is whether it is enough to blame the poorer and developing nations for their predicaments. The neo-Marxist dependency theory rebuffs the point of view that the people from the least developed nations are to blame for their societies failing to develop. Rather, the main proponent of dependency theory, Frank (1975), argues that the lack of development in these nations is as a result of the nations in the West having underdeveloped them intentionally. It is the richer and developed nations that are basically to blame for the most predicaments facing the developing nations. Frank argues in support of the existence of global capitalism, a global system of capitalism where the core countries such as the United States and the United Kingdom exploit the least developed nations or the nations as Frank refers to them. From this perspective, the least developed nations are maintained the state of dependency and under-development. Friedmannm & Wayne (1977) suggest that this is due to the fact that the developed countries require cheap raw materials as well as labor from the least developed countries. Some good examples of the idea of dependency from his point of view include colonialism and slavery. The use of slavery led to tremendous gains for the slave traders and the slave holders in the 18th century. This caused a superaccumulation of capital that was principally invested in the industrial revolution in Britain and in turn helped in kick-starting the industrial development in the United Kingdom. Friedmannm & Wayne (1977) posit that in the 18th century, Europe used its developed technology to conquer, colonize and exploit majority of the third world countries. The colonies were exploited by the European nations for cheap food, raw materials and labor. While these past examples are good, it is argued by Bircham & Charlton (2001) that events illustrating dependency persist even today, especially in form of Western dominance of the global economic system, the exploitations by multinational companies (MNCs) and the reliance of the least developed countries on foreign aid. The developed countries or the so-called First World Nations have always used globalization, capitalism and cultural factors to have control over the developing nations. Behind the interconnections that are promised by globalization lie international decisions, practices and policies. These decisions, practices and policies are influenced and driven by the Western countries. The responsible parties are the leaders of the developed countries or other global actors such as the multinational companies, international organizations and powerful individuals. The controls have taken the form of cultural, economic or political. Though this paper is basically focused on the economic and political controls, it is helpful to look at the cultural factor. From the cultural perspective, this has been achieved by promoting the western culture, media and language in the developing world. In post 1970’s, globalization could be defined as neoliberal capitalism, which manifested in opening up of borders and markets, strengthen global economic connection and integration, and the last point is transnational capital mobility. However, in today’s life, it possibly be regarded as some issues and problems like economic, environmental, social and political which are no longer limit to the boundary of nation, and the reason why is that the world having become interdependent gradually. Morley (2006) states that, the globalized world as a consequence of modernity, new technologies have a vital influence on the situation. One of the most important points is that the developed and advanced new technologies could contribute to and increase the level of communication. As a result, cultural imperialism grows rapidly as an essential part of globalization. As Morley (2006) states, cultural imperialism may have still bears a ‘marked American input’, and the world market keep up the primary typifications of the original American pattern. As a consequence, cultural imperialism is a form of cultural domination, which is called ‘soft power’. Capitalism has produced a rigid system that is the international division of labor that favors the developed countries at the expense of the developing countries. This is from the point of view of the dependent nations continuing to provide the developed nations with cheap raw materials and labor as well as playing the role of the repositories of surplus capital, finished goods and obsolescent technologies. This orients the economies of the dependent nations towards the outside. Money, goods, and services flow to these nations, but the allocation of the resources is based on the economic interests of the developed countries. Thus, this division of labor becomes the basis for the explanation of inequality, poverty and lack of development among other problems facing the developing countries (Bircham & Charlton, 2001) From this point of view, Friedmannm & Wayne (1977) argue that development in the developed countries does not necessarily lead to development in the developing countries as suggested by the modernization and globalization theories. In fact, through economic research it has been revealed that economic activities in the developed countries have led to serious economic, social, political and environmental issues in the developing countries. For example, this can be understood from the dependency theory where, developed countries import raw materials from the least developed countries from which they use in generating finished products. These finished goods are the exported back to the least developed nations, at a higher cost due to the value added in the production process. According to Gregory, et al (2009) this suggests that the least developed countries would not earn sufficient for their export earnings to cater for their imports. This has led to such issues as excessive exploitation of resources in the least developed nations, which are used in catering for more development in the developed countries. Thus, the issues faced by the developing nations are as a result of the way they are integrated in the global system. Multinationals are another example of the blame on the developed nations for lack of development and related problems faced by the least developed nations. The multinationals are developed with the idea of enriching the lives of the people in the developing nations. However, the reality is that they enrich the lives of a few in the developed nations, while they cause problems in the host countries, most of which are in the developing countries. Friedmannm & Wayne (1977) posit that in the developing countries, these companies cause environmental, humanitarian and ecological devastation to the populace. In the economic system, Gregory, et al (2009) argues that it is the developed nations which are able to build up multinationals. The free market promised by globalization, make it possible for the MNCs to be established and market their products in any country internationally. The exploit labor and resources from the host countries, while the developing nations are not economically equipped achieve this in the developed world. This has led to the issue of unsustainable development and continuous underdevelopment in the least developed nations. This situation can be best explained through the dependency theory. The creation of MNCs in the least developed countries causes a dependency that cultivates the host countries as sources of raw products and cheap labor for their companies. They limit the access to developed production techniques and technologies from the developing countries to develop their economies. Another environmental issue posed by these companies is pollution, the greatest factor behind climate change and global warming. Many of these countries that are created in the developing countries are manufacturing companies whose carbon emissions are huge (Chrisman and Parry 2000). The use of the international financial organizations and the effects of their policies and decisions can also be understood through the use of the theory. These organizations are playing a major role in the issues faced by the developing nations, rather than promoting development as they are suggested to. Their financial policies and decisions are the main causes of poverty, inequality and lack of sustainable development in the developing world. These are effective forms of control that makes the developing countries lack means of production for sustainable development. Some of the international financial organizations that have been criticized for this in the past are the World Bank and the International Monetary Fund (IMF) among others, all of which are based in the developed world. The organizations suggest that for a country to be eligible for loans, and other forms of financial aid, they have to take some steps favorable to the interests of the international financial institutions. According to Bruce (1994) some of these measures though favorable to the organizations and the developed nations, are detrimental to the economies of the developing countries. For example, as argued by Chrisman and Parry (2000) the structural adjustments affect the least developed countries by increasing rather than reducing poverty and environmental problems. The present economic arrangements allow some cartels to take control of and exploit the poor nations by fostering debts. This has caused the governments in the least developed nations to give monopolies and concessions to foreign corporations in exchange to consolidation of control and financial bribes. These corporations utilize the power in such a way that affects the natural resources of the least developed nations. In many cases, most of the money that is loaned to these countries is returned to the favored foreign corporation. Some of the international institutions that have been blamed for engaging in this type of neo-imperialism are the World Trade Organization (WTO), Group of Eight, the World Bank, and the World Economic Forum (Perkins 2004). Most of the developing countries particularly in Africa are currently paying lots of money per year in servicing their debts to these organizations. This has led to the continued deprivation of the populations in the developing countries. This is a type of dependency that makes it possible for the international financial organizations to enforce Structural Adjustment Programs. These programs generally comprise of privatization plans resulting in deterioration of education, health and in general low living standards in the developing nations (Chrisman and Parry 2000). The opponents of these international financial institutions such as Reuveny (2007) have done research on the effects of policies such as devaluations by the IMF. The policy requires devaluations of currency. Reuveny (2007) goes further to argue that the IMF wants these currency devaluations as a provision for refinancing loans. It also insists that the loan be paid back in dollars or currencies from the other First World countries against which the currency of the developing country has been devalued. This causes an increase in the debt by a percentage of the devalued currency. This is a means of keeping these nations under perpetual debt and poverty. This has also led to the widening of the gap between the rich and the poor in the global system. It has been argued that the global capitalism system is designed to benefit all the players in it. However, while there might be some truth in this argument, the global capitalist system does not ensure equality in the distribution of the benefits. The greater issue is that the nation-state tends to be greatest loser in the process, given that their independence and sovereignty reduce because of effects of the post-modern tendencies. There is sufficient proof of selective benefits of the global capitalism as well as its limitations. As a matter of fact, the Marxist idea of “the rich exploiting the poor” is always present in any globalization discourse. Regardless of their seemingly altruistic mission statements as well as visions, the global structures and institutions only serve the interests of a few in the developed world. in looking at the economic gap resulting from global capitalism between the rich and the poor, the proponents of global capitalism such as Gregory, et al (2009) argue that free trade without control and measures enforced to protect the health, environment and wellbeing of the workers contributes to the strengthening of the power of the western nations, commonly referred to as the ““North” in opposition to the developing world's “South”” (Perkins 2004). There are various criticisms of capitalism that have led to the development of anti-globalization sentiments, and have led to the development of social, political, economic, cultural movements and practices. This paper will use the anti-globalization movement as one of the movements opposed to global capitalism. Anti-globalization movement is a global movement which became famous through media attention following the protests against WTO in Seattle, Washington, in late 1999. The movement is highly opposed to the policies of global capitalism or economic neo-liberalism. The movement is made up of environmentalists, anarchists, trade unionists, anti-sweatshop campaigners, opponents of privatization, land rights and indigenous rights activists, and organizations that promote human rights and sustainable development. The movement is founded on the argument that the dependency made possible by global capitalism has increase inequality, poverty and other problems for the developing nations rather than assisting them to develop. The supporters of the movement are highly critical of the policies, decisions and also conventions organized by international financial institutions such as the World Trade Organization (WTO), the World Bank, International Monetary Fund (IMF), the Group of Eight (G8) heavily industrialized nations and the World Economic Forum. The movement also targets the multinational corporations such as Nike and Monsanto, among others (Andreas, 2011). While opposed to global capitalism, the anti-globalization movement supports participatory democracy, accountable global financial organizations, and pursuing increased popular control of economic and political life in the age of more and more powerful companies. This is suggested as the most effective way of addressing the issues faced by the least developed nations without worsening their situation. This is also because capitalism has been viewed as being to blame for responsible for the reality of inequalities and increased poverty, while the ones seen as the agents of the change (the west) are going after their personal interests. This is factual as argued by Andreas (2011) that development is not achievable except for the existence of substantial inducements driving the agents of change. For example, the multinationals are seeking to manipulate the global system trying to optimize their profits. The international financial organizations and agreements have undermined national decision-making methods. As a result, companies using the global financial institutions for their financial and corporate interests are exercising their freedom to achieve free movement across borders, use of national natural resources and use of diverse human resources. Conclusion This paper discusses dependency theory in terms of the causes of lack of development in the least developed nations. From this perspective, it is not enough to blame the least developed nations for failure to develop as the blame lies on the developed nations. Problems facing the developing nations such as poverty and other issues are normally blamed on these countries. People looking into these issues have failed to put the blame where it belongs. Only a few authors have looked at the role played by their economic relationship with the developed nations, which is the main contributing factor. However, movements such as anti-globalization movement have come up to place the blame in its real context and struggle for the liberation of the least developed nations. References Andreas, P. 2011, 'Illicit Globalization: Myths, Misconceptions, and Historical Lessons', Political Science Quarterly, 126, 3 pp. 403-425, Bircham, E. & Charlton, J. (eds) 2001, Anti-Capitalism: A Guide to the Movement. London: Bookmarks Bruce R. 1994, Mortgaging the Earth: The World Bank, Environmental Impoverishment and the Crisis of Development, Earthscan Publications Ltd., London, Chrisman, L. & Parry, B. (ed.) 2000. Postcolonial theory and criticism English Association, Cambridge Frank, A.G. (1975) On Capitalist Underdevelopment. Bombay: Oxford University Press. Friedmannm, H. & Wayne, J. 1977, Dependency Theory: A Critique, The Canadian Journal of Sociology 2, 4, pp. 399-416 Gregory, D., Johnston, R., Pratt, G., Watts, M. J. & Whatmore, S. 2009. The Dictionary of Human Geography. 5th. Wiley-Blackwell, Malden. Morley, D. 2006, "Chapter 2: Globalisation and cultural imperialism reconsidered: Old questions in new guises" from Curran, James and Morley, David, Media and Cultural Theory pp.30-43, London: Routledge Perkins, J. 2004. Confessions of an Economic Hit Man, Berrett-Koehler Publishers, San Reuveny, R. X. 2007, The North–South Divide and International Studies: A Symposium. International Studies Review 9(4).