The tyranny of development

The tyranny of development

This is the first of two articles on developing economies by
Sidhesh Kaul, an observer of regional economic and political
affairs based in Jakarta.

JAKARTA (JP): On Jan. 20, 1949, president Harry Truman, in his
inaugural speech before the congress, christened impoverished
nation states as "underdeveloped areas" of the world.

In one master stroke president Truman crystallized the "us
versus them poor folks" or the "rich North versus poor South"
paradigm and thus provide a reliable benchmark by which
economists have been able to compare countries.

Truman envisioned the United States as the leader of the pack,
the torchbearer of development, with the rest of the globe --
especially the South -- as laggards. Truman saw the world as an
economic playground where countries compete for a competitive
grandstand position on the gross national product scale -- this
philosophy being premised on the assumption that a civilization's
real progress is measured by the level of its productive output.

Truman's development policy and world view spelt out the bound
duty of the rich North to coax the straggling South to enter this
race.

But coaxing poorer nations into metamorphosing themselves into
credible competitors in a global economic arena was a gargantuan
task that required the North to inject capital, transfer
technology and bring about a shift from the "old ways" in the
South.

Attitudes to work and governance, loyalty networks, values and
habits of most of the conglomerated South were tangibly different
from the developed North. Consequently these differences were
viewed as obstacles to growth (although there was a brief period
of lavish praise for "Asian Values" in between Japan's
postholocaust resurgence as an economic power and the current
economic crisis), a premise that has recently regained currency
in the ongoing economic crisis.

To convert the South into credible models involved
overpowering the barriers to growth and recasting countries in
molds that the North could deal with. Consequently countries were
treated as bland and lifeless economic models with scant regard
for the fragile societal implications, a wretched habit that
persists to this day.

Transforming the South, comprising of countries that were not
built around the premise of accumulation, meant the systematic
dismantling of established societal frameworks and institutions;
revamping of laws and regulations; changing the decision making
process in society; tinkering and fine tuning the local outlook
on what comprises good civil governance; and the eroding
established and traditional patterns of agriculture, production
and commerce.

All this so that the "laggard" South could share in the fruits
of development with the richer North. The questionable
benevolence unleashed by the richer countries via their global
developmental policies, to which history is witness to the
travails of debt-burdened impoverished nations, has made it
impossible for Third World countries to exit the race.

Almost 50 years have passed by since the implementation of
these policies but the gap between the richer and the poorer
countries has widened even more, although what these efforts have
successfully done is to give birth to and nourish and enlarge a
growing middle class elite.

The richer countries, not surprisingly, have cornered a major
portion of the global increase in productivity.

A mere glance at the newly independent countries would reveal
that theirs today is merely a continuation of their colonial
past, albeit in a more politically correct and sophisticated way;
one could propound that development and neocolonialism are terms
that could be interchangeably used.

The patterns of subjugation and dependence are similar
although the instruments deployed are considerably refined and
sophisticated. However the powers that be have at times not
hesitated to coax and persuade recalcitrant developing economies
in less subtle ways, either overtly or covertly.

The new world view on development has enabled the governments
of richer countries to squeeze concessions from the recipients in
a manner that is less problematic and troublesome than directly
assuming the worries of colonization.

While Truman was outlining his views that winter morning in
1939, foreign policy professionals and heads of large
corporations had gathered in Washington to discuss how the
postwar, postcolonization economies could be best shaped to
satisfy American economic interests.

It was this discussion that spilt over to the Bretton Woods
Conference of 1944. At the talks there were two erroneous
assumptions that were made: a) That economic growth and enhanced
world trade would benefit everyone and b) that planet earth would
not impose any restrictions to growth.

This historical meeting saw the birth of the World Bank and
the International Monetary Fund (IMF) and the seeds for the
General Agreement on Tariff and Trade (GATT) were sown.

Since their inception, and through their structural adjustment
program, the World Bank and the IMF have been pressuring the
"southerners" to open borders and to metamorphose their economies
from self-sufficient units to one that focuses on export
production. Trade agreements negotiated under the GATT umbrella
have in turn supported this metamorphosis.

To some extent the goals that were set at the Bretton Woods
Conference have been met -- international trade has increased by
a factor of almost 15 and economic growth has increased six fold.
But the World Bank, IMF and GATT have failed to alleviate poverty
and close the widening gap between the rich and the poor.

In the world view of the rich nations, domination over the
world's resources and markets is ultimately going to decide the
balance of power in the years to come and the Bretton Woods
Conference (and the institutions that it gave birth to) are steps
in that direction.

New alliances are being forged and cartelized blocs formed,
driven by economic, political and commercial reasons.
Interference in local affairs is unavoidable.

Brute force as an instrument of domination is passe. For poor
countries this scenario poses the devil's alternative -- reject
the benevolence and face deadly isolation or open up the borders
to capital, technology, imports and cultural change and bow to
the precedent condition of structural adjustment programs.

The postcolonization era has seen a systematic methodology of
subjugation being deployed by the wealthier nations. The practice
of nurturing indigenous elite continues since colonial times.

These western-trained elite swear by the tenets of the Truman
gospel and in fact are too far removed from ground reality or the
aspirations of their poor brethren. These elite are the effective
instruments of the North and harbingers of change. The North in
turn supports their efforts by generous injections of technology
and capital.