Dev and Under dev Review Essay notes

Instructions:

Remember what I've mentioned in class: do your best to build an argument that integrates an aspect of

the course material. For example, you could focus on a concept (neoliberalism), or on a theory

(dependency) or on an historical trend or event and make an argument about how that concept, theory,

trend or event relates to the book. Don't try to cover all the material from the course - just focus on an

aspect that will help you to make a strong argument

Notes:

Dependency theory:

http://www.mtholyoke.edu/acad/intrel/depend.htm

Dependency Theory: An Introduction

Vincent Ferraro, Mount Holyoke College

South Hadley, MA

July 1996

[Dependency is]...an historical condition which shapes a certain structure of the world

economy such that it favors some countries to the detriment of others and limits the

development possibilities of the subordinate economics...a situation in which the economy of

a certain group of countries is conditioned by the development and expansion of another

economy, to which their own is subjected.

three common features to these definitions which most dependency theorists share:

1. dependency characterizes the international system as comprised of two sets of states,

variously described as dominant/dependent, center/periphery or metropolitan/satellite

2. Second, both definitions have in common the assumption that external forces are of singular

importance to the economic activities within the dependent states. These external forces

include multinational corporations, international commodity markets, foreign assistance,

communications, and any other means by which the advanced industrialized countries can

represent their economic interests abroad.

3. Third, the definitions of dependency all indicate that the relations between dominant and

dependent states are dynamic because the interactions between the two sets of states tend

to not only reinforce but also intensify the unequal patterns. Moreover, dependency is a very

deep-seated historical process, rooted in the internationalization of capitalism

Andre Gunder Frank, one of the earliest dependency theorists, is quite clear on this

point:

...historical research demonstrates that contemporary underdevelopment is in large part

the historical product of past and continuing eonomic and other relations between the

satellite underdeveloped and the now developed metropolitan countries. Furthermore,

these relations are an essential part of the capitalist system on a world scale as a whole.

According to this view, the capitalist system has enforced a rigid international division of

labor which is responsible for the underdevelopment of many areas of the world. The

dependent states supply cheap minerals, agricultural commodities, and cheap labor, and

also serve as the repositories of surplus capital, obsolescent technologies, and

manufactured goods.

These functions orient the economies of the dependent states toward the outside: money,

goods, and services do flow into dependent states, but the allocation of these resources are

determined by the economic interests of the dominant states, and not by the economic

interests of the dependent state.

division of labor is ultimately the explanation for poverty and there is little question but that

capitalism regards the division of labor as a necessary condition for the efficient allocation

of resources. The most explicit manifestation of this characteristic is in the doctrine of

comparative advantage.

dependency models rest upon the assumption that economic and political power are heavily

concentrated and centralized in the industrialized countries

governments will take whatever steps are necessary to protect private economic interests,

such as those held by multinational corporations.

dependency theory explains underdevelopment

dependency theorists, underdevelopment is a wholly negative condition which offers no

possibility of sustained and autonomous economic activity in a dependent state.

Dependency theory suggests that alternative uses of resources are preferable to the

resource usage patterns imposed by dominant states. For example, one of the dominant

state practices most often criticized by dependency theorists is export agriculture. The

criticism is that many poor economies experience rather high rates of malnutrition even

though they produce great amounts of food for export.

Many dependency theorists would argue that those agricultural lands should be used for

domestic food production in order to reduce the rates of malnutrition.

dependency theorists rely upon a belief that there exists a clear "national" economic

interest which can and should be articulated for each country

dependency perspective is that its proponents believe that this national interest can only be

satisfied by addressing the needs of the poor within a society, rather than through the

satisfaction of corporate or governmental needs.

Dependency theorists argue that these elites maintain a dependent relationship because

their own private interests coincide with the interests of the dominant states.

Dependency theorists argue that these elites maintain a dependent relationship because

their own private interests coincide with the interests of the dominant states.

dependency relationship is a "voluntary" relationship in the sense that these elites are

typically trained in the dominant states and share similar values and culture with the elites

in dominant states.

elites in a dependent state are consciously betraying the interests of their poor; the elites

sincerely believe that the key to economic development lies in following the prescriptions of

liberal economic doctrine.

Web source:

http://www.soaw.org/index.php?option=com_content&view=article&id=230

Lecture notes:

( 16 sept/ 2010):

Prof: Dr. Adam Sneyd

Lecture 2: Explaining Underdevelopment: Dependency

dependency theory is a product of the 3rd world

growth of rich countries has impoverished 3rd world countries ( lecture 2: explaining

under development: Dependency)

dependency thinkers argue that capitalism began to develop into a world system

centuries ago by tying people every where together and changing social structures

dependency theory is related to Marxism

the forces of international capitalism has continued to block the progress of the 3rd

world

from a dependency perspective; the expansion of the industrial world shaped the

structure of the 3rd world

African societies have been exploited by capitalism for centuries

The Atlantic triangular trade demonstrate how under dev was actively created by

European capitalists

Transnational firm and investors still dominate host countries

Dependency thinkers continue to see any level of industrialization in the third world as

weak and dependent.

Dependency thinkers recognize that there is a growing elite capitalist class in the

periphery, but do not believe that third world elites are autonomous from rich world

banks, firms, and govts

They are considered to be dependent upon the capitalist core countries

The concept of unequal and asymmetrical exchange are generally associated with

dependency theory

International trade relations between the north and south are unequal and

impoverishing and lack of progress at the wto

Liberal dependency thinkers have focused on the ways that rigid social strcutrues in the

south afford unequal power to elite compradors

Third world peoples have been involved in the capitalist system for centuries

Some liberal dependency thinkers argue for stronger states in the south to transform

capitalism to make it work for the dev of poor countries

Others regard the view that capitalism can be made to work for the periphery as

unhelpful and naive

Lecture 2 ( my notes):

Jeffrey Sachs said that : “if we pool our resources we will create future aid”

Bilateral development systems: when 1 country gives aid to another

Aid focuses on health, infrastructure, and education according to Jeffrey sachs

The rich attribute to the short falls in small countries

Dependency theorists belive that under developlement believe it is active process of capitalist

expansion

Emmanuel Wallerstein ( dev theorist) said that capitalism has developed on a world scope in

terms of agriculture and commerce and has tied everyone to the capitalist system

Resource transparency initiative: not sourcing to countries that are not transparent

The rich in industrialized countries are provided with cheap labour and cheap goods from the 3rd

world

The triangular trade provide rich profits while providing cheap labour to Britain:

1. The basis of british industrial revolution

2. Main reason how Britain got rich

3. Existed because of Capitalism

4. Profits of triangular trade raised standard living in british metropolitan areas

Capitalism depended on cheap labour

Transnational firms dominate 3rd world countries and govts ( they don’t need to pay taxes)

Dependency theorists challenge tariff from rich countries because:

1. Tariff escalation; has no duties or tariffs added on manufactured goods

2. Dictates industrial economy of 3rd world countries

Lecture 3: Imperial Ambitions, European Empires

( 21 sept/ 2010)

my notes:

Dependency thinkers see imperialism and neo colonialism cause poverty

Lecture 4: Developing Nations in international relations

( 27 sept/ 2010)

My notes:

The third world wanted 2 types of freedom; positive and negative such as poverty,

hunger, and oppression

Positive freedom is to engage with people and would not be objects but subjects and

control their own destiny

Inequality was part of the capitalist or socialist bloc ( U.S. and Soviet Union)

The 3rd world countries aided the scientific development greatly of the west through

stealing innovations. For instance innovations of compasses was in china and the middle

east before the west ever had them

Bandung conference of 1955 had 29 head of states from Asia and Africa whose goals

were to be:

1. Liberating their respective societies from colonization

2. Political leaders wanted self determination and autonomous govt

3. Didn’t want to align with either the U.S. or Soviets

Idea of south to south co operation

The brandt commission set out to produce conditions that brought on socio economic disparity

Brandt ( German Chancellor) argued for 1% of rich countries income should go to the poor,

therefore more money to least developed nations

Lecture 5: the global political economy of development

(sept 30/ 2010)

The world bank provides loans at market rates, it develops international norms, and it works to

resolve disputes

Third world indebtness has been a major problem since the debt crisis and various civil society

organizations and campaigns have pushed for debt relief and debt cancellation

The 2 most important multilateral debt relief mechanisms are the HIPC ( heavily indebted poor

countries) and the MDRI ( Multilateral debt relief Initiative)

Economic Hit man Book notes:

Ch 15 : Entering a new and sinister period in economic history

pg 87

During the 1960’s a group of countries had formed OPEC, a cartel of oil producing nations,

largely in response to the power of big refining companies

The heads of state of petroleum rich nations such as Iran knew that their positions were in

jeopardy

Pg 87:

International oil companies known as the seven sisters were collaborating to hold down

petroleum prices, and thus the revenues they paid to the prudcing countries as a means of

reaping their own windfall profits

OPEC was organized to strike back

Pg 88:

In the early 1970’s OPEC brought the industrial giants to their knees

In 1973 an oil embargo symbolized by long lines at U.S. gas stations threathened to bring on

an eoconimc catastrophe rivalling the great depression

Pg 89- 90

In 1970 keynesian economics provided the idea that govt should play a major role in managing

markets and providing services such as health, unemployment compensation, and other forms

of welfare

Pg 90:

The depression and WWII led to the creation of organizations like the world bank, the IMF, and

the GATT ( general agreement on tariffs and trade)

Ch 15: the Saudi Arabian Money Laundering Affair:

Pg 93:

Saudi society reflected the puritanical idealism of its founders, and a srict interpretation of

koranic bliefs was enforced

Religious police ensured adherence to the mandate to pray 5 times a day

Women were required to cover themselves from head to toe

Punishment for criminals was severe; public executions and stonings were common

The Saudi view of religion as an important element of politics and economics contributed to

the oil embargo that shook the western world

On oct 16, 1973 iran and the five arab gulf states including Saudi Arabia announced a 70%

increase in the posted price of oil

Pg 93- 94:

The Iraqi representative called on other delegates to nationalize American businesses in the

Arab World, to impose a total oil embargo on the U.S. and on all other nations friendly to

Israel and to withdraw arab funds from every American bank

Pg 94:

The oil embargo ended on march 19, 1974

From $1.39 a barrel on January 1, 1970 to $8.32 on January 1, 1974

There are 3 pillars:

1. Big corporations

2. International banks

3. Government

Pg 95:

After the embargo ended, Washington began negociating with the Saudis, offering them

technical support, military hardware and training, and an oppourtunity to bring their nation

into the twentieth century, in exchange for petro dollars and assurances that there would

never again be another oil embargo

An organization was created as a result of the negociations between the U.S. and Saudi Arabia

known as Jecor ( the United States- Saudi Arabian joint economic commission)

It relied on Saudi money to hire American firms to build up Saudi Arabia

Pg 96:

David Holden and Richard Johns ( part of the U.S. treasury department) conclude “ it was the

most far reaching agreement of its kind ever concluded by the U.S. with a developing country.

JECOR had the potential to entrench the U.S. deeply in the kingdom fortifying the concept of

mutual interdependence”

Pg 97:

John M. Perkins job for the organization MAIN was to find ways to assure that a large portion

of petrodollars found their way back to the U.S.

Saudia Arabia would e drawn in, its economy would become increasingly intertwined with the

U.S. and presumably it would grow more westernized and therefore more sympathetic and

integrated into our system

Opec economists were stressing the need for oil rich countries to obtain more valued added

products from their petroleum

Pg 97- 98:

Large petrochemical complexes would rise from te desert and around them huge industrial

parks

Pg 98:

Such a plan would require the construction of thousands of megawatts of electrical generating

capacitytransmission and distribution lines, highways, pipelines, communication networks,

and transporation systems, includindg new airpots, improved sea ports, a vast array of service

industries, and the infrastructure essential to keeping all the cogs turning

If possible the labour should come from other middle eastern countries ot Islamic countries

such as Egypt, Palestine, Pakistan, and Yemen

Pg 99:

The end result would be to create modern cities where once only deserts had existed

Pg 99- 100:

The true objectives of John Perkins mission were to maximize payouts to U.S. firms and

making Saudi Arabia increasingly dependent on the U.S.

Pg 100:

Private companies specializing in such activities as well as the U.S. military and defense

industry could expect generous contracts

Their presence would require another phase of engineering and construction projects,

including air ports, missile sites, personal bases, and all of the infrastructure associated with

such facilities

Conservative Muslims were furious, Israel and other neighbouring countries would feel

threathened

Pg 102:

Saudi Arabia would xome in to fill in the gap if other countries such as Venzuela, Iran, Iraq,

Indonesia would threathen embargoes, since it has vast petroleum supplies

This would discourage countries from even considering an embargo

Pg 103:

In exchange for this guarantee Washington would offer the house of Saud a commitmet to

provide total and unequivocal U.S. political, and military support therby ensuring their

continued existence as the rulers of their country

Washington imposed one critical condition:

Saudi Arabia would use its petrodollars to purchase U.S. govt securities in turn the interest earned by

these securities would be spent by the U.S. department of the treasury in ways that enabled Saudi

Arabia to emerge from a medieval society into the modern, industrialized world

The interest compounding on billions of the kingdom`s oil income would be used to pay U.S.

companies to fulfill the vision John Perkins had to come up with to convert Saudi Arabia into a

modern industrial power

Elite corps of foreigners would determine the future appearance and economic make up of the

Arabian peninsula

Pg 104- 105:

An American envoy talked to the royal family in Saudi Arabia and remided them of what

happened to Mossadegh when he tried to oust out British petroleum interests

The Anglo-Iranian Oil Co. was controlled by the British government.[6] Mosaddegh was removed

from power in a coup on 19 August 1953, organised and carried out by the United States CIA at

the request of the British MI6 which chose Iranian General Fazlollah Zahedi to succeed

Mosaddegh.[7] The CIA called the coup Operation Ajax[8] after its CIA cryptonym, and as the 28

Mordad 1332 coup in Iran, after its date on the Iranian calendar.[9] Mosaddegh was imprisoned

for three years, then put under house arrest until his death.

Pg 105:

They were left with the distinct impression that they could either accept U.S. offer and thus

gain assurances that we would support and protect them as rulers, or they could refuse and go

the way of mossadegh

The U.S. had to convince the Saudi govt, and it wasn’t a democracy

Prince W. Insisted that he did not want his coutry to follow the foot steps of Western

commercialism

He said that this objectives of the U.S. was the same objective of the crusaders a millennium

earlier: the Christianization of the Arab world

He believed that the corporatocracy were primarily seeking to expand that empire

Ch 17: panama canal negotiations and Graham Greene

Pg 118:

MAIN kept on winning contracts from the Torrijos govt

These contracts included an innovative master plans that involved agriculture along with more

traditional infrastructure secotrs

Torrijos (president of Panama) and Jimmy Carter set out to renegociate the Canal treaty

Pg 120:

Three reasons for transferring the Canal to Panama:

1. The present situation is unjust

2. The existing treaty creates far graver risks than would result from turning more control

over to the Panamanians

3. The present situation is creating serious problems for already troubled U.S.- Latin America

relations

Pg 124:

In 1977, Torrijos successfully negociated new reaties with president Jimmy Carter that

transfreed the canal zone and the canal itself over to Panamanian control

Ch 22: the American Republic versus Global Empire

Pg 150:

The global American empire is made up of big corporations, banks, and govt bureaucracies

The American republic foundation was of moral and philosophical rather than materialistic

Such institutuins possess the communications networks and transportation systems necessary

to end disease, starvation, and even wars

The global empire is self centered, self serving, greedy, and materialistic, a system based on

mercantilism

Pg 150-151:

Its arms are only open to accumulate resources to grab everything in sight and stuff its insatiable

maw

Ch 13: Conversations with the General

Pg 85:

Omar Torrijos (Panamanian National Guard and the de facto leader of Panama from 1968 to

1981) said that `` We will take back the canal (Panama canal). But thats not enough``

`` we must also serve as a model. We must show that we care about our poor and we must

demonstrate beyond any doubt that our determination to win our independence is not

dictated by Russia, China, or Cuba. We must prove to the world that Panama is a reasonable

country that we stand not against the United States but for the rights of the poor``

Ch 27: Panama; Another Presidential Death

Pg 185:

Previous leaders such as Arbenz, Mossadegh, Allende, etc lives were destroyed and sometimes

cut short because they sttod up to the corporatocracy

President Ronald Reagan administration launched the attack on Torrijos govt

Pg 186 (ch 27):

Torrijos was a champion of human rights, the head of state who had opened his arms to

refugees across the political spectrum including the shah of Iran, a charismatic voice for social

justice who many believed would be nominated for the nobel peace prize

He was assassinated by the CIA

Omar Torrijos died in a plane crash on July 13, 1981 thought to be orchestrated by the CIA

Pg 187:

Torrijos corporate enemies were the huge multinationals

These multinationals wanted to exploit latin American labour forces and natural forces such as

oil, lumber, tin, copper, bauxite, and agricultural lands

They included manufacturing firms , communication companies, shipping and transporation

conglomerates, and engineering, and other technologically oriented corporations

The torrijos- Carter treaty forced them to close down the school of Americas and the U.S.

southern command`s tropical warfare center

The school of Americas was a school that trained Latin American soldiers and policemen, and a

number of them became notorious dicatators such as Leopoldo Galtieri, Efraín Ríos Montt and

Manuel Noriega, dictators such as Bolivia's Hugo Banzer, some of Augusto Pinochet's officers

There was another option: dispose of Torrijos and renegociate the treaty with his successor

Pg 188:

If torrijos have lived he would have sought to quell the growing violence that has plagued so

many central and south American nations

Pg 189:

Torrijos would have seen actions taken by desperate people to protect their families and homes

He would have served as a role model for a new generation of leaders in the Americas, Africa,

and Asia

Ch 30: The United States invades Panama

Pg 203:

Manuel Noriega took over as military dictator of Panama

Pg 204:

He developed an unsavoury reputation for corruption and drug dealing and was even

suspected of arranging the assassination of a political rival (Hugo Spadafora)

Noriega was previously the head of the Panamanian defense forces G2 unit, the military

intelligence was in liason with the CIA.

Pg 205: ( ch 30)

Noriega became a symbol of corruption and decadence

He had spied on for the U.S. and Cuba

Noriega had directed the most significant drug running in Panama

Noriega adamantly refused to cinsider a 15 yr extension for the school of Americas

The U.S. wanted the renegociation for the re installation of the school of Americas saying that

their growing war reperations in central America they still needed it

Pg 205- 206:

On dec 20, 1989 the U.S. attacked Panama with the largest airborne assault on a city since

WWII

Pg 206:

Panama had did nothing wrong , but had insisted that the canal treaty be honoured

It held discussions with social reformers, and it had explored the possibility of building a new

canal with Japanese financing and construction companies

There was U.S. rejection of any scenario in which future control of the Panama canal treaty

might be in the hands of an independent Panama supported by Japan

Pg 207:

The U.S. characterized Noriega as a drug trafficking monster and as such he provided the

administration with an excuse for the massive invasion of Panama that only has a population of

2 million

Pg 208:

Defense secretary of the U.S. Richard Cheney claimed that 500-600 people were killed

However human rights groups say that around 3,000-5,000 were killed while another 20,000

were left homeless

Noriega was arrested and sentenced for 40 yrs in prison

Pg 209- 210:

The invasion served the goals of arrogant American politicians and their Panamanian allies at

the expense of unconsciable bllodshed

Pg 210:

The U.S. once again controlled the Panama canal

Importance of Panama canal:

The Panama Canal is a 77 km (48 mi) ship canal in Panama that joins the Atlantic Ocean and the Pacific

Ocean and is a key conduit for international maritime trade

ch 10: Panama`s President and Hero

pg 67:

The panama canal established an American zone on both sides of the future waterway,

legalized U.S. military intervention and gave Washington virtual control over this new formely

independent nation