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close this bookMaldevelopment - Anatomy of a Global Failure (United Nations University)
close this folder2. The decade of drift: 1975-1985
View the document(introduction...)
View the documentThe excitement of the Bandung plan (1955-73)2
View the documentThe battle for a new international economic order (NIEO): 1974-1980
View the documentStructural costs; the stakes; the struggle for the NIEO
View the documentAfrica: from the Lagos plan (1980) to the world bank plan and the United Nations Conference (1986)
View the documentDebt and the threat of a financial crash
View the documentThe efforts of radical African nationalism: adjustment or delinking?6
View the documentNotes

The battle for a new international economic order (NIEO): 1974-1980

From the late 1960s to the early 1970s (before the 'oil crisis' of 1973-74), the world system entered a long period of structural crisis from which we had not emerged some 18 years or so later. A more systematic analysis of the character of this crisis will be offered below (cf. Chapter 8).4

The overt crisis of the world system over more than 15 years is evidence of a new dimension to what is at stake in the international division of labour, since the crisis commits all the forces of earth to a great battle that will decide the pattern of international power for generations to come. Shall we see a perpetuation of the polarization between the United States and the USSR? Shall we see a polycentric world of five partners (United States. Europe, Japan, USSR and China)? Or shall we see a polycentric world with a more even balance between the great powers and the regions of the Third World (India, Brazil, Latin America, South-East Asia, the Arab and African world)?

The perspectives opening to Africa and the Third World must be seen in this light. More particularly the issue that arises is as follows: on what axes can the international division of labour evolve in regard to the differing strategies of the powers? What strategies can the Third World regions devise in response to the differing strategies possible?

If we must look ahead and not backwards, identify the changes under way in the international division of labour and study their significance, it is because the history of underdevelopment is one of adjustment by the periphery to mutations and evolutions at the centre. In other words 'development' of the periphery has never allowed it to 'catch up' the centre, since each stage of the centre's evolution has meant a new stage in the international division of labour, and the latter goes on being unequal and assigning the periphery subordinate roles.

We have tried elsewhere to trace this history of stages in unequal international specialization, particularly for Africa, in regard to the stages of the constitution and evolution of the world capitalist system. For the Third World as a whole we have come to an end of certain characteristics of the previous periods, but not so in the majority of African countries; these characteristics are mainly subordination of the periphery in the role of suppliers of raw materials and agricultural crops, then import substitution industrialization for the local market (a market distorted by unequal income distribution engendered by the previous stages). The next stage may be accelerated industrialization of the periphery for exports to the centre, through the dumping on the periphery of light and heavy 'classic' industries, and concentration at the centre of new industries as the basis for a renewed model of accumulation: atomic and solar energy, space, genetic engineering and synthetic food production, exploration of the seabed, information science.

This new model of distribution of tasks would remain unequal like the previous (surviving) model. The very logic of the system, the reason for dumping classic industries on the periphery is the possibility of exploiting manpower that is cheap not only in absolute terms but also relative terms, that is in comparison with the productivity of the labour it can supply.

The battles fought during the 1970s were over control of this new international division of labour in prospect. The bourgeoisies of the periphery understanding of their proposals for a new international economic order was that they would participate as partners worthy of the name, whereas the multinationals had an opposing concept of industrial relocation entirely controlled by worldwide capital.

The development of the so-called newly industrializing countries, particularly in east Asia, which did accelerate in this period, was part of this logic. Concentration of clusters of industries in certain parts of the periphery led to the question being raised of possible candidates in Africa. In this context a country can attract multinational companies' capital provided it can already offer a numerous proletariat, skilled cadres - at least of intermediate level - and some capital (to provide the necessary infrastructure and later finance the establishment of industry properly speaking) and as long as the multinational companies retain control of operations through a monopoly of technology and market influence. Few African countries fulfil these conditions, with the exception of South Africa. But the great oil producers (Algeria in particular) and the few countries less heavily populated and more advanced in urbanization and secondary and university education (Egypt primarily and then perhaps Nigeria and Morocco) did seem potential candidates.

One topic of debate of the time was the character of these potential 'sub-imperialisms'. Such 'sub-imperialism' is characterized by the concentration of exports of capital and technology from the centre, intended to enable the beneficiary to export classic industrial products to the centre and secondarily to the less favoured areas of the periphery and by this means to cover dues to the centre on capital and technology. The concentration of classic industries in these countries, combined with the high rates of exploitation of their proletariats, would enable the bourgeois 'sub-imperialists' to benefit from a sufficient share in the surplus to ensure the system's economic and political balance. If ambiguities and false issues are to be avoided in this debate, it is absolutely essential to give up the unfortunate expression 'cub-imperialism' that first came into use to describe the phenomenon of Brazil, as the expression is a poor description of the new stage in the unequal development of the periphery. The reference to imperialism suggests the export of capital, whereas in feet the 'sub-imperialisms' under discussion are importers, just as they import their technology from the centre. The significant point is agreement on content, namely the position occupied by the countries in the new international division of labour. The expression 'conveyor belt' or 'lumpen-development' would, in our opinion, be more appropriate.

The outlook implies a sharpened differentiation within the Third World. The cleavages already apparent in Africa (coastal countries and the so-called 'less developed' of the interior) are accentuated by this new factor. The great majority of African countries are still typically colonial in their economic and social structures, based on a colonial trade economy, as the 'development' policies pursued since independence have done no more than continue those implemented before the 1960s. But it was possible at the time to believe that some countries in Africa were in a position to play the role taken on by others elsewhere: Mexico and Brazil in Latin America, Iran in the Middle East, India in south Asia, Korea in east Asia.

At the time and in contrast to the prospects of the world system's reorganization, certain African countries insisted on their determination for autonomous, self-reliant, and 'socialist' development. Under the circumstances they could do no more than express a more or less serious political intention, as there had been no change in the economic and social structures: or go forward with the initiation of new social patterns characterized by internal class alliances in contradiction with the position offered the country in the international division of labour - whether that inherited from the previous stages or that in prospect.

The prospect of the new international division of labour was scarcely encouraging. For the conveyor belt countries it could mean no more than a kind of 'lumper development', marked by rising unemployment and immiserization of the masses, for the other countries a status of 'cub-colony' and a worsening of their situation as was already to be seen in the Sahel region hit by famine, and for the cause of African unity a step backwards that might be irrecoverable.

To the degree that the 'rationalist' social patterns entered into contradiction with this outlook, it was possible to envisage en 'alternative strategy'. This proposed to compel the North to adjust to the demands of the NIEO and by this means institute a transition that could still be called socialist, with its own social aims (full employment, education, social justice). Algeria under Boumedienne's government seemed to be leading this group of countries. It must, however, be understood that so long as dependence on technology and access to external markets are not challenged, the institute of transition to socialism remains vulnerable. Here, Egypt's experience should be considered. At the level of industrialization Egypt was by far the most advanced African country. Egyptian industry, entirely nationalized, was well ahead of that in any other country on the continent. The internal social relations peculiar to Nasser's Egypt explain why these nationalizations were not accompanied by more radical challenges as to the destination and type of product, the technologies, and so on. The result was a blockage in this type of development, contradictory only in part with the international division of labour. This blockage (how was imported technology to be paid for, how could further industrialization be financed) led to the about-turn we know of, indicating the surrender of the Egyptian bourgeoisie to the dictates of world capitalism and of its American component in particular.

The actual changes that ensued, especially after 1980, dashed the hopes of the earlier years. Not only were the claims of the NIEO rejected, but also there was virtually no redeployment. The Reaganite counter-attack, aimed at restoring the threatened US hegemony, led to Western unity, albeit transitorily, and to the West's lining up as a whole against the Third World. A strategy of 'recompradorization' of the latter replaced the collective negotiations and concessions. Under the hammer blows of the 'preadjustment' offensive imposed by the IMF, taking advantage of Third World debt, the nationalist regimes surrendered one by one. But the widespread recompradorization did not prevent further differentiation within the Third World. We shall come back to the significance of this in Chapter 7. In our view the so-called newly industrializing countries are the real periphery of today and tomorrow, while the others - 'delinked by default' - are passively undergoing the fate of the 'fourth world' as it is called nowadays. This sad outlook for the greater part of the African continent, and one that tempers the extent of the seeming 'economic successes' of the countries appearing to be exceptions to the rule, is not surprising. It should come as a surprise only to those who fail to understand that the process of the worldwide expansion of capitalism is not solely a process of development but likewise a process of destruction.

All these negative evolutions have wiped out past hopes in a positive drawing together of the European, Arab and African worlds within the prospect of rebuilding a polycentric, balanced world conducive to better development of the Third World. We shall return to this striking move backwards and the political regression that has occurred north and south of the Mediterranean and the Sahara (cf. Chapter 4).