Topics: World Bank, United Nations, Poverty Pages: 5 (1594 words) Published: January 9, 2013
Dependency Theory and Colonial Heritage. Many have tried to draw upon the legacy of the colonial system to explain the reasons for underdevelopment in many areas of the world. Most areas that suffer from poverty today are former colonies the developed nations, for the most part, are former metropoles. The colonizers exploited their underlings in colonies, turning them into suppliers of cheap raw materials and restricting the infrastructure construction, leaving former colonies with only basic facilities. In many cases, when the colonizers departed, the nations were left with artificial boundaries that separated them from each other without regard for their historical development. This fuelled subsequent separatism and military conflicts, hampering economic progress. Thus, if one looks at straight-line boundaries in Africa which we are now learning in DS 202, it becomes obvious that those were artificially created. The colonizers, in particular the British Empire, were suppressing the industrial development in their colonies because they viewed them as sources of cheap imports and at the same time large markets for their industrial goods. An example of north-eastern Brazil that often surfaces in literature on underdevelopment, (Taylor 2001) claims that north eastern Brazil in the 19th century would have appeared to be an ideal place for a textile industry with its high quality cotton and existing demand for sugar bags cloth and slave clothing. However, to develop the textile industry, it would take years during which the industry should have been shielded from foreign competition with import tariffs and quotas. This was surely not something Britain would allow in its colony. As a result, the fledgling Brazilian textile enterprises proved unable to withstand the competition with Britain's textile industry. Britain, like almost any metropole, was interested in selling to the colony, not developing industry inside it. As of 1822, when Brazil received independence, it was a larger export market for Britain than all the rest of Latin America combined (Taylor, 2001). Naturally, even as Brazil proclaimed independence, Britain did not want to lose this lucrative market and demanded a trade treaty with Britain which prohibited import substitution tariffs (Taylor, 2001). Brazil was forced into this treaty by its political weakness. In this way, former metropolitan powers keep control of their former colonies to varying extents, blocking their effective development. In newly independent nations of Latin America, for instance, the warfare that often preceded proclamation of independence devastated regional and national economies (Kinsbruner 1994 pg 126). Although this perspective is not universally recognised, the IMF and the World Bank for imposing policies said to aggravate third world countries. The stated goals of both institutions are certainly to spearhead economic growth in nations they service with their financial programs. Critics , however , point out that loans from the World Bank and the IMF often come with conditions that block the road to sustainable development and make poverty even worse . The Structural Adjustment Policies (SAPs) imposed by the IMF as a prerequisite for qualifying for its loans often aggravate the deplorable condition of the third world nation. Thus, SAPs often call for reduction in government expenditures for health, education and other government services for the sake of debt repayment. In this way, third world nations are dragged into the quagmire of debt repayment, as their interest provides income for Wall Street banks and other financial institutions. IMF policies urge third world countries to increase their exports of raw materials and agricultural products in to cope with debt - an immediate concern. This, however, reduces the amount of food available to the poor inside the country and can lead to starvation second, does not create conditions for building processing industries that will...
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