Economic Dependency And Third World Under Development
This study examines the relationship between the third world countries and the western capitalist countries. It shows dependency as a phenomenon or problem of relationship that gave rise to the economic growth and development of the western world in expense of the third world societies which are economically underdeveloped, and lack the capacity and ability to control the economic system or productive processes of the societies. In our attempt to analyze and address this problem we used dependency theory for the analytical framework while documentary research method was employed in gathering and analyzing data. Unequal relationship between Nigeria and countries of the western world coupled with negative role of the Nigeria economic elite was discovered as the major problem, it was ascertained that this problem is historically rooted in foundation of the society, as such, ordinary measures are not suitable, rather concrete type in form of socialist transformation is recommended by the study.
1.1 Background Of The Study
Economic dependency is the lack of capacity and ability to control the economic system or productive process of a society such that the society as a state depends on foreign developed economy states for leadership and control through regulations and some economic institution. The country that are depending on the rest are mostly poor countries of the third world, Nigeria is a typical poor third world country and underdeveloped that depend on the western world for decision and implementation of economic policies , thereby contributing to the economic development of the west to her own detriment. For example, (SAP) structure Adjustment programme of 1986, National Directorate of employment (NDE) of 1986, Petroleum Trust Fund (PTF) poverty alleviation programme etc. all seems to have end in failure after gulping in estimate material and human resources, funded with loan and the associated intrest.
Since the economic structure is disarticulated, being the main structure; the foundation; on which rise the political super structure; and which controls both the intellectual and material production, the implication is the underdevelopment of the entire society. The state of underdevelopment of the entire society raises serious alarm in whole third world countries and the international community. Historically, most of the third world countries suffering dependency. Passed common rigorous stages of development from slavery to colonialism/imperialism, and to and to the contemporary globalization. What distinguished one stage from the other was the intensification of the rate of suppression and exploitation mounted on the poor third world countries by the economically developed west.
1.2 Statement Of Problem
What makes human is the ability to be independent from the wills of other people. People of the third world are regarded as sub-human being because of absolute economic dependency on the western developed economies. The problem of the study is that Nigeria like other third world countries has being suffering underdevelopment which emanated from dominant exploitative character of the western economies on which those of the third world depend.
The foregoing raises some major questions:
- What is the major cause of economic dependency in Nigeria?
- What is the role of Nigerian economic elite in the economic dependency problem of the country?
- What role do multinational companies play in sustaining economic dependency?
1.3 Objectives Of The Study
In the light of the consideration therefore is the purpose of this work which becomes the task of identifying the historical forces which has generated economic underdevelopment has continues to reproduce itself till today. This history of economic underdevelopment will be traced from the period of colonization to the present time.
It is the aim of this study to examine certain crucial concepts that are closely related to the problem of economic dependency and underdevelopment, specifically:
- It will investigate the major cause of economic dependency in Nigeria.
- To discover the impact or the role Nigerian economic elite in the economic dependency problem of the country.
- To examine the role of Multinationals in the economic dependency of Nigeria
1.4. Significance Of Study
This work will serve as material to other researcher and in practical it will serve as a tool to the government guiding them on implementation of policies, this policies shall serve as a guide to Nigerians development.
This work, prescribes how to manage the nations resources, for the benefit of the general citizens, and this will determine the relevance of the existing government policies.
1.5. Theoretical Framework- Dependency Theory.
It is important to explain what the theory is all about in order to achieve a more concrete understanding of the theoritical framework of the study to this end, therefore, a theory functionally can be defined as a set of ideas, which provide an explanation for something. In this study, some scholars in Latin America and Africa have there views concerning this theory. They include: Dos Santos ,Andre Gunder etc.
According to Dos Santos (1979) “Dependency relates to a situation which the economy of certain countries is conditioned by the development and expansion of the other to which the former is subjected .The relation of inter dependence between two or more economies , and between these and the world trade ,assumes the form of dependence when some countries the dominant ones which are the capitalist nations like America can expand and can be self sustaining while other countries the dependent ones like Nigeria can do this only as a reflection of expansion which can have either a negative or positive effect on their immediate development. ”There basic assumption is that there is a dialectical relationship between development and underdevelopment ,in other words according to Andre Frank(1975) “Development and under development are two different sides of a universal historical process. ”To him what causes under development in third world is as a result of what brought about development in Europe and America.
This dependency concerns the centre which refers to the technological advanced countries of the world and the periphery refers to the third world countries, also, when looking at this theoretical framework we talk about the centre of the centre which refers to the urban areas of the world. Centre’s of the periphery refers to the urban centre of the developing countries like Nigeria, periphery of the centre refers to the rural areas of the industrialized countries while the periphery of the periphery refers to the rural areas of the developing country.
This is a relationship where the centre of the developed countries dictates the terns of their co-existence economically, socially and politically. there is an exploitative and vertical relationship between the centre of the centre and the centre of the periphery in this setup. Looking at this case the periphery is subordinate to the centre. In this, the centre is assigned the role of manufacturing industrial products while the periphery produces primary goods – raw materials and needed resources, the periphery now depends on the centre for her economic survival and consumption of the already made products.
I prefer this theory because it truly illustrates the exploitative natures of the developed countries to the less developed country. (LCD) which led to dependency.
For the purpose of guidance and in order to achieve the statements of problems and the objectives of this study, the researcher has proposed the following hypothesis.
- The unequal exchange between the advanced capitalist countries and third world country like Nigeria enhances economic dependency.
- The activities of the Nigeria economic elite sustain the dependency problem of Nigeria.
- The activities of Multinational Corporations perpetuates Nigeria continued dependent on the advanced countries.
1.7. Literature Review
Many articles and books have been written on the problems of economic underdevelopment in the third world countries as a whole some western written attributed this to the third world inferiority towards industrialization and that they are incapable of thinking constructively. They also said that the third world countries have to go through the long stages which the western nations have gone before reaching their present level of development. Some African writers on the other hand blamed this on the integration of third world economy into the capitalist system.
In Rodney book how Europe underdeveloped Africa (1972), he succinctly said , “when two societies of different sorts come into prolonged and effective contact, the rate and character of changes taking place in both is seriously affected to the extent that entirely new patterns are created two general rule can be observed to apply in such cases. Firstly, the creator of the two societies (i.e the one with less economic capacity) is found to be directly affected- and the bigger the gap between the two societies concerned the more detrimental are the consequences”.
Secondly, assuming that the greater societies do not survive, they ultimately it can resume their own independent development only if it proceeds to a level higher than that of the economy which have previously dominated it.
What Rodney (1972) is basically saying is that underdevelopment results from unequal interaction between two societies. The more this unequal relationship lasts, the more the backwardness of the less privileged ones, that this underdevelopment is a sign that societies have come into contact when they were in different levels. He further said that if the underprivileged society hopes that it can make any head way in that type of relationship, that it is deceiving itself. The poverty of the less privileged one is the development of the other. This situation will be worsening as far as the relationship continues. He gave example of the European capitalism and the indigenous hunting societies of America and the Caribbean. He said that the contact between the two nearly exterminated the later. This can be applicable in what is happening in the capitalist society today, this is a warning that as far as the relationship lasts, the third world countries will not make any breakthrough to industrialization. From experience, it could be seen that the situation is worsening instead of improving. He uses Soviet Union, china and Korea as the concrete instances of the operation of this rule. He said that these countries were nearly exterminated when they came into contact with the more mature capitalism of the western Europe that these three societies advanced to their present state of development because they succeed these relationship with the capitalist world and followed a new path altogether. He went further to conclude by saying that, “indeed”, as far as the two biggest socialist states are concerned, (the soviet union and china), societies development has already catapulted them beyond states such as Britain and France, which have been following the capitalist path for centuries.
Walter Rodney (1972) catalogued the disadvantages that go with the unequal relationship with the advanced countries. He mentioned poverty stagnation, greed etc. he traced the present predicament of Africa to the time it came into contact with the advanced countries. The contact was made in the 15th century. This contact is the result of the underdevelopment of Africa today. That while Africa continues to stagnate, Europe continues to develop and that before this contact, Africa be developing on their own pace- but has been degenerating since its contact with the capitalist world. At the end he recommended the sourcing of this relationship and the adoption of socialist mode of production as Soviet Union and china have done. He said that socialism aims at and has significantly achieved the creation of plenty, so that the principle of egalitarian distribution becomes consistent that the satisfaction of the wants of member of the society. That when this is achieved, the workers and the peasants will be in control of the economy that the exploitation and misery will end. What Rodney(1972) has said is what is really happening to Africa today. I strongly share his view that the serving of the relationship between the two .tough he did not tell us the consequences of the serving of the relationship and how to avoid it.
Fanon (1961) argued that Europe is literally the creation of the third world. The wealth which smoothen her is that which was stolen from the underdeveloped people. “He went as far as saying that we should not tremble with gratitude when any help comes from Europe. He says this should be the ratification of a double realization: the realization by the colonized people that it is there due, and the realization by the capitalist power that in fact they must pay”. What Fanon (1961) is basically saying is that Africans should realize that Europe was created by them and therefore should disregard anything that comes from them in the name of gifts or aid. Fanon (1961) enumerated the criminal activities of the colonialists in their robbery adventure in Africa. These include deportations, massacre, forced labor and slavery.
These are the methods that capitalism used to increase its wealth its gold or diamond resources and establish its power. He said that violence was their main instrument of accumulation. He mentioned in detail how the European activities affected the underdevelopment of Africans both mentally and physically, the imposition of western culture on Africa.
He further castigated the indigenous bourgeoisie for their activities which is instrumental to the internal weakness of the colonized. He said this traditional weakness which is almost congenital to the national consciousness of underdeveloped countries, is not solely the result of the mutilation of the colonized people by the result of the colonial regime. It is also the result of the intellectual laziness of the national middle class, of its spiritual penury and of profoundly cosmopolitan mould that its mind is set in. According to him, this bourgeoisie class who took over from the colonialist had little or nothing before they came into power. At the attainment of independence, they engaged in the accumulation of capital to the neglect of the masses that stood behind them during the time of struggle for independence. Instead of investing in productive ventures, they prefer to invest in the one that will yield quick money. Hence, he succinctly remained. “The landed bourgeoisie refuses to take the slightest risks and remained opposed to any ventures and to any hazard , it has no intention of building upon sand, it demands solid investments and quick returns. On the other hand, large sums are spent on display on cars, country house and all those things which has been justly described by economists as characterizing an underdeveloped bourgeoisie”.
Fanon (1961) after condemning bourgeoisie activities recommended that it should not be allowed to find the conditions necessary for its existence and growth. In other words, the combined effort of the masses led by a party and intellectuals who are highly conscious and armed with revolutionary principles ought to bear the way to this usefulness and harmful middle class. He also recommended the complete obliteration of the type of business to which this group of people engage in. finally, he advised the underdeveloped countries not to imitate the European way of life and not to expect anything from them but to try and fashion out new life for the entire people of the underdeveloped society and recommended socialism if possible by violence.
Fanon (1961) is really saying that the Europeans and nefarious activities of the indigenous bourgeoisie is true. But unfortunately he did not tell us how this indigenous bourgeoisie emerged and the condition which was instrumental to their emergence and behavior. In other words, he failed to tell us the conditions or the forces that made the activities of the group of people successful.
A group of writers, i.e, western writers has a contrary view of with Rodneys (1972) writing, to this group of writers, colonialism was not responsible to African underdevelopment, that the relationship benefited the colonized more than the advanced countries, thus they said that “ it is possible too that the development of colonies –particularly in the more backward areas of the world may be a source of profit neither to the metropolitan or any other advanced country, but that in itself would not prove that the enterprise was not worthwhile, for the increase in material the well being of the colonial population might , in terms of real wealth, more than offset the slight decline caused elsewhere by subsidizing the colony”. This writer agreed that the enterprise was worthwhile but that what the colonists gathered as material wealth was used to develop the colonies. But somewhere in this country they seem to contradict themselves by saying that there was a sort of unequal relationship between the colonial powers and the colonized where not allowed to developed its own indigenous technology because such would compete with the technologies to the advanced societies which would in turn hamper the expansion of their market , this in effect shows that the enterprise benefited anything from European powers more than the colonized if the colonized really benefited anything from it , these group of writers only talked about the expense of administering the colony by the colonized , that it was only a negligible part of this collection that went to the colonized while the rest went to the mother land of the colonists
Ake (1981) a political economy of Africa, he dealt extensively on the contemporary features of Africa , the chain of events that generated the present condition of Africa and how they might be changed in the future , he traced the history of Africa from the colonial period to the history of Africa from the colonial period to the neo-colonial period . he also direct extensively on the strategies which the national leaders have adopted to effect development, these strategies failed to work because of the international atmosphere which make the plan unrealistic, but said that “more often than not, the plan is really not a strategy for development but an aggregation of projects and policies, which may sometimes be incompatible” this suggests that the leaders tends to tackle the problem from the wrong angle like the other writers mentioned already, he agreed that the underdevelopment of Africa is as a result of its long contact with capitalism, also he said that the national bourgeoisie contributes a lot to underdevelopment of Africa , but he went further than Rodney (1972) and Fanon(1961) to show the conditions that led to the emergence of the petty bourgeoisie, the instrument of this accumulation and the national post-colonial state.
According to him, the post-colonial state involves itself in the class struggle. That is to say that the state was highly politicized . the state is an instrument of wealth accumulation, said he” partly because of this fact whose significance is the perception of the state as being very partial)and partly because the state power in question is highly developed, there is a better struggle to gain control of it , a critical focus of this struggle is the control of government, which is the formal access to state power, thus in Africa those in Africa, those in office do all they can to perpetuate their hold on it, and those out of office do all they can to get it, there is hardly any restraint beyond prudence as to permeable means for this struggle. Because of the state and the ruling class, the boundary between them is blurred. the implication of this and he went on “ is a crudely oppressive class rule; because the state and government are too involved in the class struggle, and because of the high premium placed on political power on the tone in politics is highly authoritarian and hegemonic faction of the bourgeoisie adopts a siege mentality
Fortunately, the tendency to accumulate through the use of state power rather than through productive activities makes post Colonial capitalism less conducive to the development of productive forces and the increase of surplus”. In conclusion, he recommended socialism but went on to say that the state of the development forces in Africa will be detrimental to the attainment of socialism. He also mentioned the interaction of the external forces as an obstacle to socialism, but said that “in the long run objective conditions are more likely to move Africa to socialism.
Offiong (1980) Nigeria imperialism and dependency recommended a change in the international economic order. Like the three writer already mentioned, he believed that the underdevelopment of the third world countries is brought about by capitalists intervention in the economy of the third world countries. Thus he asserted that, the perseverance and extensive interactions (imperialism and exploitation) of the developed countries are the underlying reason for third world underdevelopment, and the distorted and balanced growth in those countries. The distortions in the organization and utilization of a nations human and natural resources makes it extremely difficult for such a country to make a transition for a balanced and self-sustaining growth . But this transition has to be made in order to cope successfully with the survival challenges; he traced the history of underdevelopment from the period of slavery to the present stage of neo-colonialism. He discusses obstacles that impede Africa much towards economic freedom. He goes on to say that foreign aid is an instrument of dependency. He refuted the allegation that multinationals the in developing the economies of the host nations. Instead they prompt the policies of their mother country and commit all sort of atrocities that are detrimental to their hosts growth. He also sees the CIA as an instrument of promoting interest of multinationals. This is why the USA is concerned with the activities of the leaders in the third world countries. He further criticized the local bourgeoisie who collaborate with their international counterparts to defraud and exploit their fatherland. But unlike Fanon (1961) did not recommend how these local bourgeoisies should be brought under control. He examines the effect of underdevelopment in the third world countries.
Unlike Ake (1981) Offiong (1980) did not trace the history of the active local bourgeoisie and what gave rise to their nefarious activities and how to deal with them. He dwells extensively on the activities of the multinationals but did not recommend an effective way of checking them. His moral recommendation on how to bring multinationals under control is utopian, knowing fully well that once they are allowed to exist at all in a country, that it will be impossible to bring their nefarious activities under control. Even the moves already taken to check their activities by the third world countries have proved abortive. I strongly believe that anything short of outright nationalization of the multinationals will not be an effective move to achieve economic independency. So far the third world countries are still in contact with the developed countries, the question of achieving new economic order recommended by Offiong (1980) will never materialize. It is another way of maintaining dependency. Finally, his failure to recommend the serving of contact with the developed countries reduces the achievement of new economic order or attainable.
Nwankwo (1981) like Offiong (1980) dwells extensively of the nefarious activities of the multinational corporation (MNCS) in Nigeria, but unlike Offiong,(1980) he recommends outright nationalization of these companies. He enumerated the visible activities of the multinationals which include
- Monopolization of the means of production.
- The repatriation of profits etc.
On the invisible activities of MNCS, he says that they engage in transfer pricing and over invoicing after weighing the advantages and disadvantages of the multinationals, he concluded that their disadvantages outweighed the advantages. He argues that that the contributions of these corporations are at belt Illusory.
Nwosu (1980) on the other hand sees Nigerian entrepreneurs as responsible for the Nigerian economy by foreign investments. To him, the inability of the indigenous businessman to invest in productive ventures accounts for the incessant multiplicity of foreign industries in the country which are the extend arms of the multinationals, instead of investing in productive venture they engage in contracts and quick money yielding business, according to him trading and the contracting activities are regarded as the quickest means of increasing income. Entrepreneurial attitude accounts for preponderance of foreign entrepreneurs in the manufacturing sector of Nigerian economy. The industrial scene is dominated by industries which are invariably the extend arms of multinationals, the absence of Nigerians in conceiving , designing and implementing manufacturing activities on their own has led to a new type of economic domination of the economy by foreign companies who subtly dictate terms and type”. He goes on to say that unless this attitude to production is changed that the prospects of industrial take-off will still be undermined. In other words, the attitude of the indigenous upper class towards production undermines industrial take-off in Nigeria , that crying against the perseverance domination of the Nigerian economy, through factual is not enough that the most important is the economical emancipation for the citizens by Nigerians both industrially and collectively in order to dominate the reunite capability for self reliance. In the end he recommends mass production and processing of manufactured goods into useable commodities by Nigerians them success as a pure way to self reliance.
All the text books so far reviewed are basically saying the same thing but from different angles, this boils down to the conclusion that the underdevelopment of the third world countries in general and Nigeria in particular is due to the integration of their economy into the capitalist system. The contents of these lectures and more will unfold as we precede the other chapters
1.8 Definition Of Terms
To avoid distortion and misinterpretation of words, there is need to define some concepts used in this work.
Is the “process whereby society or social institutions change or move from traditional or less developed ones to those that characterize the developed ones. For this work, modernization is seen as involving a complex or changes in institutions or societies for the betterment of citizens.
This means depending on the developed countries for over economic problems, that is the wholesale importation of western art crafts for our developmental purposes, we depend on the west for goods and services which we cannot create for ourselves with the resources available at disposal.
Is the ability of a country to deal with its environmental through the knowledge of science and technology and applying this in changing its environment. Therefore, development connotes training in the art of using local resources and creative human energy in the problem solving rather than a wholesale limitation of the path to a good life that some societies have achieved.
This means economic backwardness which results from the inability of a country to deal with its environments, the underdevelopment is characterized by lack of indigenous industry, inadequate production of food, unscientific agriculture, underdevelopment is not absence of development but it makes sense only as a way of comparing levels of development. Underdevelopment is very much tied to the fact human social development has been uneven and from a strictly economic view part some human groups have advanced further by producing more and becoming wealthier.
These are the internal bourgeoisie that is those that help the westerners in the control of means of production.
These are the individual that own and control the means of production .the achieve that with the help of the comprador in exploiting the nation.
Multinational Corporation( MNCs):
These are foreign oriented companies in less developed countries(LDCs) .
These are aids given to less developed nations or countries(LDCs)
Economic elite are the individuals that help in influencing economic policies in some countries of the world.
These are western allied nations that situate in Europe and North America and have colonies in Africa and other third world countries.
These are monetary or fiscal institutions that give loan to other countries especially third world countries.
These are guidelines used in the economic development of a nation. In Nigeria new have (SAP) Structural Adjustment Programs.(NDE)National Directorate of Employment. etc.
These involve the movement of goods from outside the country to another, in this sense it involves the western capitalists and third world countries.
This involves the movement of goods from a country to other countries.
This involve documentary research method was used in gathering and analyzing data for the project work. Again review of relevant textbooks, newspapers, internet and all relevant publications and journals on economic dependency are used in this work. Therefore, the method of data analysis is explanatory in nature.
Since the method of data is based on secondary source, the method of data analysis is based on the qualitative method of data analysis, which is explanatory in nature. This would help in finding out the degree of effectiveness of what led to third world dependency.
1.10 Scope Of Study:
This study focus on what led to the third world dependency Nigeria to be precise. However, this study is confined on the underdevelopment of Nigeria.
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