GLOBALIZATION AND THE DEVELOPMENT OF UNDERDEVELOPMENT OF THE THIRD WORLD ( part 1 )

by Irogbe, Kema

INTRODUCTION

There are two contending opinions on the issue of globalization. There are some observers who believe that globalization has brought rapid prosperity to the underdeveloped countries while others argue that globalization serves the needs of the metropolitan countries at the expense of the peripheral countries. This paper posits that globalization is economic terrorism. Using a dependency theory to analyze the asymmetric relationships between the developed and the underdeveloped countries, the writer applies some economic indicators to highlight the widening gap between the two worlds. In doing so, it is argued that the socio-economic and political structure of the peripheral countries are subordinated via globalization to foster the economic interest (the superstructure) of the metropolitan countries. Although several studies have been done on the issue of globalization, there has been no systematic study done to link the activities of both the governmental and nongovernmental organizations in terms of their impact in the international political economy. This holistic approach is an attempt to fill that vacuum. Drawing from the experience of Nigeria and some other underdeveloped countries in enhancing our understanding of how globalization accelerates the underdevelopment of the periphery, the roles played by the multinational corporations, Western media technology, the lone superpower, World Trade Organization, and International Monetary Bank/World Bank, are subjected to the test of empirical reality and logical plausibility.

THEORETICAL FOUNDATION

Globalization (a homogenization of global economic, social and political order) is not synonymous with internationalization (a collaboration of nationstates in their pursuit of mutual interests). It is argued in this paper that the ideal of a universal civilization is a recipe for unending conflicts in the world. It is time to resolve the contradiction between the need to foster multiculturalism and diversity on the one hand and the promotion of globalization on the other hand.

To fully understand the system of globalization, there is the need to revisit dependency theory. Dependency theory evolved in Latin America during the 1960s and later it found favor in some writings about Africa and Asia. Since both orthodox as well as the radical writers have assimilated dependency into their interpretation of development and underdevelopment, resulting in considerable confusion, effort is made here to distinguish the nature of dependency that the underdeveloped countries are subjected to from what the orthodox scholars may claim. Contemporary perspectives of dependency reveal the contrasting forms of dominance and dependence among the nations of the capitalist world. A Brazilian social scientist, Theotonio Dos Santos, lucidly affirms that:

By dependence we mean a situation in which the economy of certain countries is conditioned by the development and expansion of another economy to which the former is subjected. The relation of interdependence between two or more economies, and between these and world trade, assumes the forms of dependence when some countries (the dominant ones) can do this only as a reflection of that expansion, which can have ...a negative effect on their immediate development.1

In other words, because of the unequal political, military, and economic relationships between a dependent economy and the dominant external economy, the structure of the former is shaped as much or more by the requirements of the external economy as by its own domestic needs. The domestic political economy is not only shaped by the interaction with a more powerful external economy, but is also shaped by the process. Indeed, the economies of the dependence would be impossible to maintain without the existence and the support of the external factors. A Chilean economist, Osvaldo Sunkel, captures this perspective:

Foreign factors are seen not as external but as intrinsic to the system, with manifold and sometimes hidden or subtle political, financial, economic, technical and cultural effects inside the underdeveloped country... Thus, the concept of "dependencia" links the postwar evolution of capitalism internationally to the discriminatory nature of the local process of development, as we know it. Access to the means and benefits of development is selective rather than spreading them. The process tends to ensure self-reinforcing accumulation of the privilege for special groups as well as the continued existence of a marginal class.2

Another fundamental concern of the dependency theory revolves around the notion that the underdeveloped countries are referred to, by many, as "developing" countries as if to say their development is evolutionary. The now developed (center) countries have never had the same historical experience compared to that of the impoverished countries of the world. Whereas the underdeveloped countries have experienced the phenomena of slavery and colonialism, it is not the case with the developed countries. The argument is that historical situations of dependency have conditioned contemporary underdevelopment in Africa, Asia and Latin America.3 Thus, underdevelopment is not an original state as some apologists would have us believe.

During the colonial era, Africa, Latin America and Asia as well as other colonized territories in the world became oriented to the export of primary products (principally agricultural), under the control of metropolitan capital, and constituted as markets for imported manufactures from the same metropolitan countries. Foreign capital came in to construct social overheads - transportation facilities and utilities that would enhance the exploitation of the people and their natural resources, and for the maintenance of law and order. With their economic and military power, Europe (later joined by the United States) successfully controlled the underdeveloped countries for their material benefits. Today, governments of the underdeveloped countries and their entrepreneurs have no control over international markets for primary products, the prices of which fluctuate and quite often are manipulated by the rich and powerful nations. Such fluctuations almost always result in unfavorable terms of trade in relation to imports.4

Dependency relations have also shaped the social structure of underdevelopment. When the imperialist powers could no longer hold on to power in the formerly colonized territories [due to armed struggle] they were forced to surrender power. The imperialists, in some cases, made sure that they left the reins of power in "good hands" They handed power over to their internal collaborators. They did not hesitate to create and finance political parties in opposition to real nationalist ones; and they also rigged elections and used various other means to make sure that they handed over to those who would continue with the colonial policies in the nominally independent countries.5 Thus, a crucial problem of underdevelopment is that in this process of dependency there is a convergence of interest between the local or internal bourgeois and the external capitalist oligarchies. The internal compradors greatly benefit from their dependency situation and they are unlikely to sever such a lucrative relationship unless they are forced to do so. In the postindependence era these national bourgeois or compradors have strengthened their relationship with their international allies. Their investments are geared towards exports and activities complementary to foreign industrial capital. They have connived with foreign interests to rob their countries of the needed foreign exchange and have been involved in all sorts of unpatriotic activities that fail to aid economic development in their countries.6 The point is that the underdeveloped countries have played a definite role in the international economy, but their internal development has been severely curtailed or "conditioned" by the needs of the dominant economies within the world capitalist system.

In the underdeveloped countries, foreign factors of production such as capital and technology have become the main determinants of economic progress and socio-political life. While the same world market promoted the expansion of development in Europe and America, it has a tendency to limit development in the dependent countries. This historical dependency has been the rooted problem of the underdevelopment in the peripheral world. Some observers believe that the further the penetration of capitalism in the name of a new and respectable lexicon "globalization", the more underdeveloped the peripheral world. As Ira Katznelson, et al., have lamented:

Dependency means, then, that the development alternatives open to the dependent nation are defined and limited by its integration into and functions within the world market. This limitation of alternatives differs from limitations in the dominant nations in so far as the functioning of the basic decisions in the world market....are determined by the dominant nations. Thus the dependent nations must make choices in a situation in which they do not set the terms or parameters of choice.7

The international system or world market upon which the underdeveloped countries depend implies a structure that is characterized by institutions, classes, and power arrangements. The dynamic process within the structure involves domination by one group -- marking a relationship of unequal development. At the core of this power relations within the international system are the multinational corporations -- the agents that foster the economic exploitation of the underdeveloped countries.

MULTINATIONAL CORPORATIONS

There has been no greater challenge to nation-states' sovereignty in the later half of the 20th century than the threat of multinational corporations (MNCs). Defenders of MNCs contend that they are the 'engine of development'. They argue that MNCs create jobs, transfer technology, reduce inflation, and make war unthinkable. But a body of evidence suggests that MNCs, whose goal is the maximization of profits, are not philanthropic institutions and they serve the interest of no one but themselves. The profound hypocrisy and inherent barbarism of MNCs' globalization lies unveiled before our eyes, turning from their homes, where they assume some respectable forms, to the underdeveloped countries where they go uninhibited. The corporations undermine not only their parent countries where they are headquartered but they cause more injuries to the periphery. MNCs unbridled operations in the underdeveloped countries cause environmental degradation, poorer nutrition and health standards, and undermine the sovereignty of host countries. Let us provide some examples.

The early 1980s' efforts of the Nestle Corporation and other international distributors of powdered dry baby formula to market their product to the underdeveloped countries provide a good case. Using sophisticated advertising techniques, the Nestle argued that dry baby formula was as good or even better than mothers' milk in providing the nutritional needs of infants and marketed the formula as the "modern1 way to care for an infant to the African and other peripheral countries. But the corporations failed to consider the quality of water supplies in the underdeveloped countries which are often undrinkable without purification. By mixing formula with water as is required, mothers in those areas exposed their babies to a number of diseases that they otherwise would have avoided by raising the infants on mothers' milk. In fact, another grave danger to infants occurred when, in efforts to economize, mothers put too little formula into each measure of water. Consequently, widespread malnutrition among infants resulted. Only after extensive worldwide publicity campaign, including efforts at the United Nations, did the MNCs reduce their baby formula marketing efforts in the underdeveloped countries.8

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