What factors either hinder or promote development?
...an gold helped to set up the Dutch as one of the main economic power houses in Europe in the 17th century. Moreover the British themselves named a new gold coin that was established in 1663 ‘the guinea’ after the region In Africa where the merchants acquired it. Big banks such as Lloyds TSB and Barclays were initially set up from money from the slave trade when it was a legal and legitimate business. African, Asian and Latin American resources and commerce helped in a major way to strengthen the trans-national links between European economies. The world wide slave trade was a basic factor in the underdevelopment of Africa. It saw million of skilled, healthy and young men and women removed from their provinces or villages to become slave labour for people who were lining their own pockets. From the slave trade capitalism expanded on a worldwide level and later led to imperialism which later led to colonialism. This is the time when the colonisers gained the most and the colonised lost the most, economically and physcologically. Europeans set out to control every aspect of less developed countries in Africa, the Americas and Asia. They saw it as a good opportunity to control huge amount of raw materials, find areas of profitable investment and to find new markets and products that they could benefit from. Colonialism is the “political control of peoples and territories by foreign states whether accompanies by significant permanent settlement (settler colonies) or not” (Poverty and development into the 21st century. Pg- 242 T. Allen and A. Thomas (oxford University press 2000) European ideologies of racial superiority contributed to the mindset at the time which was truly unfair for Africans. For example “ Lord Delamere controlled 100,000 acres of Kenya’s land, the Kenyan had to carry a kipande pass in his own country to beg for a wage of 15 to 20 shilling per month” ( How Europe underdeveloped Africa- pg151 - W. Rodney Howard University press 1981). King Leopold of Belgium made millions only for Belgium from exporting rubber, gold, diamonds and ivory from their colony now known as the Congo. The Dutch and the British made super profits from mining in the South Africa and Namibia. “De Bears consolidated mines made made a profit that was both phenomenal and consistently high. Between $26 million and $29 million in the 1950’s.” (How Europe underdeveloped Africa- pg152 - W. Rodney Howard University press 1981). European countries also made millions from taking gold, diamonds, iron ore, copper, zinc, tin and many other natural resources from countries such as guinea, Sierra Leone, Nigeria, Ghana, Uganda, Rwanda and many more. Europe made millions from Asian, American and African resources which played a huge part in European development. It is clear that the disparities in development today are due to the relationship between the exploited and the exploiters. The most powerful colonial countries in recent history are still the most powerful in the world today. It is also clear that it is due to their relationship with the world economic markets and their high status within the system. It should not be forgotten that these powers played a major part in the systems establishment. It is crystal clear that for a society to develop it needs to have stable economic growth which creates money to be invested in basic infustructures such as health and education which in turn will create a better well being and standard of living for the peoples in the said society. Today the western world is still able to curb the development of developing countries through the institutions that were created to sustain and develop the current economic system of trade and investment. All of the main institutions were established after the end of the Second World War to create a global economy which would be fair for all peoples and nations according to neo liberals. This is how neo liberal policies are pushed onto developing countries encouraging them to reform there economies and submit to the free market and its forces. Neo liberals use the relative success of East Asia, specifically, China, Taiwan, South Korea, Singapore and a few others, as examples of developing countries actually economically developing under the umbrella of neo liberal capitalist policies. They see these countries as being able to improve upon their economy by increasing the production as well as the income per head through industrialization. Industrialisation involves a move from the rural practices of producing raw materials or agricultural goods, as is synonymous with most developing countries, to more city based work producing goods based on industrial needs. But there is plenty of evidence around the world that shows that industrialisation does not work and in some cases creates more problems. Examples can be taken from the huge shanty towns that appear all over big cities in the third world as the influx of people moving to the cities cannot be supported by the housing facilities in the city. This creates direct poverty as these people must find other means of supporting themselves, but it is most likely they cannot. And at the end of the day developing countries are still dependant on the more developed countries for investment, which leads to economic growth. In light of that, I definitely agree with structuralist’s who believe that trade system is unfair because of the way the third world is structurally placed in the global economy. Moreover the industrial manufactured goods produced by the west are in more demand than the raw, agricultural and mineral materials and commodities the third world has to trade. So in its structure the system is against the third world. The imbalance created by this means that the third world countries imports will be more than their exports. As a consequence of this the said country will have deficits and debts and will be in the hands of the WB and other institutions as it will need loans to sort out its deficit. This is how the spiral of third world debt began and it is how countries development is hindered. I also agree to a certain degree with dependency theorist who believe that a direct move away from the capitalist system is the only way forward for developing countries. East Asian countries have been able to develop by producing goods for developed countries companies at a cheap rate with cheap labour. So in reality they are only benefiting a little bit while the owners of the companies in question are making huge amounts of money. The main neo liberal economic institutions in the world today are the World Bank (WB), the international monetary fund (IMF). The main institution for trade is the world trade organisation (WTO). All of these institutions were established by the Bretton woods charter which was negotiated in July 1944 by the main European powers. The IMF and WB were established to “secure international monetary cooperation, stabilize exchange rates and expand international liquidity for the sake of international trade and full employment” International political economy- R. A. Isaak- Prentice- Hall, inc 1991) These economic institutions do not give equal opportunities as they will only invest in economies which they see as having good governance and sound economic practices. It may sound like a fair system but there have been many instances when these institutions have invested in corrupt and brutal regimes most notably in South America and Africa. As the WB and IMF perform audits on all countries it is very hard to acquire funding from any other source. In essence if the institutions want they can hinder a countries development by limiting the money entering the country from the west. It is also widely known that the leader of the IMF should always be a European and the leader of the WB should only be American. It shows where the power lies within the institutions. The decades after the establishment of the IMF, WB and WTO developing countries knew that they were not getting a fair deal. Moreover from the beginning the developing countries demanded a change to the trading system which would make it more equal. In 1974 the United Nations (UN) adopted a declaration and programme of action on the establishment of a new international economic order (NIEO). In my view the guidelines the NEIO set forward are exactly what developing countries need to develop further. The NEIO demanded improved terms of trade and access to markets, reform to the major economic systems, recognition of the problem of...