The "Developing" World

An arguement can be made that the reason the developing world is in such desperate straits is not because of the striving it makes to become developed, but because of the striving of the developed world to stay rich.

Disease is the result of poor medicine, of malnutrition, of poverty.

The drive to become rich follows a yellow brick road that attempts to grow or build the things rich nations want to buy, instead of what the developing country itself needs. This is often the sort of thing the rich countries will no longer do--leading to such catastrophes as the Bhopal accident.

Or, there will be the growing of grains, and othere agricultural produce to feed the rich countries cattle. But there will be no growing of produce for local consumption.

To establish industries requires capital equipment only rich nations can provide--at a cost. This is the beginning of massive debt.

And then the IMF will force countries to accept draconian measures to receive loans to keep afloat, after they have gone bankrupt trying to make money--cut health care, cut education, cut anything that does not contribute to the repayment of foreign debt.

The Jubilee 2000 program, and others, are moves to forgive all developing world debt.

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I'm not sure you ever know what I'm talking about DMan. legbagede has, in my experience, a clear mind and a penetrating insight.

Will node my homework on IMF conditionality in 3rd world debt tonight, but can't let this annoying buzzing sound bother me all day.

World Bank loans, IMF loans and domestic foreign aid are apples, pears and oranges. They are different sources of cash, coming from different organisations at different times. That said, as themusic mentions in his wu, conditionality attached to IMF/WB loans took off in a big way in the 1980's and 90's. Both the World Bank and the IMF are pressured by wealthier countries and multinationals (such as industrial concerns and private lending institutions) to include clauses in their loan agreements that essentially state "before you pay this back, you pay us back first". It's become incredibly convoluted, and leads to more instances of default and non-payment than ever.

ASEAN member states were lucky/smart enough to get in on IMF handouts early on, before conditionality became an integral part of third world lending. Unlike African nations, by and large they made good on the money - but they are still considered developing, not developed countries, lending credence to the underdevelopment thesis. Combine a relative lack of conditionality with domestic political climates of generally decent leadership and law-abiding populations and it becomes somewhat clearer why they didn't perhaps succeed, but were at least able pay their lenders back, where, say, Tanzania or Rwanda did not.

When people discuss debt relief, they are usually talking about individual countries forgiving the foreign aid that has been dispensed to specific developing nations in the past. That is a small ratio of actual debt, and because of the tendency for third world states to have oppressive regimes, civil war/unrest, and few favours to bestow upon rich countries, debt forgiveness would require far more diplomatic wrangling than will ever be witnessed in our lifetimes. Do you think that profit-minded multinational lending institutions would forgive a debt? Do you think, as a lending institution, the IMF can afford to? The Jubilee 2000 movement has a compelling argument...but reality does not need one.

Ack!, on this subject, a reading recommend is order : An empire wilderness : travels into America's future by Robert D. Kaplan...the point being without major international readjustment, this planet will be a very shite place for about six billion really pissed-off marginalized people. If you think that's not the West's most looming security issue, you're daft.

"Give me one good reason why any developing nation should get billions of dollars of freebies because they're poor? Maybe you should ask the military juntas that rule there."

...political corruption is a major setback for developing nations. Harsh as is it to say, most of the world is not yet ready for democracy or capitalism, yet both are being thrust upon every corner of the globe, through foreign aid and foreign direct investment. Free trade is accelerating that trend, despite that fact that (according to the 1998 UN Human Development Report) the world's richest 20% of the population garner 82.7% of the world's income, while the world's poorest 20% gets 1.4% of the world's income.

"Given the massive amount of free aid that the world has shoveled into developing nations, you would expect at least some industrial development. Look around in Africa. All industries are owned by foreign investors. Probably because the local people have no incentives, due to a plethora of reasons, from oppressive regime to social problems."

In order for local development to flourish, you have to establish an stable economic infrastructure…to do that you need a wide skill and knowledge base…to do that means you need wide-spread education…to do that means you need a fair and balanced media and grass-roots literacy. Other wise, you just get more poverty, more wasted resources, more corrupt leadership taking the rest of the population for a ride.

"Compare that to China, which is still a "developing nation" (as classified by the WTO), but where over 80% of industry is locally owned…China, not exactly the most democratic country on Earth, is doing well. Just last year, they imported hundreds of billions of dollars of American goods. And yet, they still have a trade surplus with America.."

...yet even in China the gap of rich to poor is swelling, hell, even in the USA between the mid-70s & the late 80s, this trend has gotten even more medieval, with the average real income of the top 1% of families rising by 78% while the bottom 20% of earning families' wages decreased by 10.4% - the current development process is just speeding up the widening gap.

"The problem is obviously not this crap about imperialism and capitalism, but plainly domestic problems. Debt is imminent. No company or nation starts off without incurring debt. Breaking even takes years, even decades, especially for a nation. You cannot weep to other nations about your debt and expect freebies."

Breaking even, development in other words, actually took the West centuries. The industrial revolution started in the late 1700s and didn't come full circle until now 200 years later. Yet organizations like the World Bank and the International Monetary Fund expect results in terms of months. That's insane. The same goes for democracy, meaning universal suffrage and human rights, which have been in place for less than a century anywhere in the world. It took even longer, and outgrowth of the Western Enlightenment, almost 300 years…

"Tossing money into a troubled nation and expecting returns is completely futile. Canceling foreign debt will result in more debt. I'm sure the African dictators love the free foreign money. Look where North Korea shoveled their aid to? Their nuclear program, that's what."

...foreign aid never has been or should be about 'expecting returns', this is humanitarian development, it's supposed to make the world more stable and sane. It's not day trading man, it's just humane, and to conflate the two is wacked. But you're also very right about the waste, the misuse of the money has to stop, because otherwise the planet and most of the people on it are in for a nasty next century.

"Growth for the sake of growth is the ideology of the cancer cell." - Edward Abbey

Ignore that wisdom at your/our peril.