1

POLITICS OF DEVELOPMENT
AND
UNDERDEVELOPMENT.

UDOCHUKWU OGBAJI
OBIOZOR AJIE

2010
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CHAPTER ONE
DEVELOPMENT AND UNDERDEVELOPMENT
DEVELOPMENT
Development is a normative concept referring to a multi-
dimensional process. Some scholars argue that development must be
relative to time, place and circumstance, and dismiss any universal
formula.
Increased economic efficiency, expansion of national economic
capacity and technological advancement are generally accepted as
necessary conditions if development is to be sustainable, as are
economic and industrial diversification and adaptability in the face of
shocks. Additional ingredients, attached by writers from various social
sciences includes changes in social structure, attitudes, and motivation
or specify the purposes of economic improvement, increases in Gross
National Product (GNP) and average real incomes are means, not
ends.
However, in some accounts, increase of general social welfare
embraces even spiritual and cultural attainment. Personal dignity and
group esteem, development being defined as the fulfillment of the
necessary conditions for the realization of the potential of human
personality. At its simplest term, development is the increasing
satisfaction of basic needs such as food. Controversy surrounds the
extent of such needs. Is education one of them? Development is
customarily translated into improvements in certain social indicators and
indicators of the (physical) quality of life, such as life expectancy. Ideas
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of development engender debate over the theoretical and empirical

relationships between the rate and pattern of economic growth, the
distribution of the benefits and equity.
Traditionally, development meant the capacity of a national
economy whose initial economic condition has been more or less static
for a long time, to generate and sustain an annual increase in its Gross
National Product (GNP) at rates perhaps 5% to 7% or more (Todaro &
Smith 2003 in Obi & Nwanegbo 2006).
Development, within this perspective was seen almost as purely
an economic phenomenon, thus the major index of development has
been a growth of income per capita or per capita GNP. It was believed
that the benefits of growth will invariably extend to all segments of
society. This process is referred to as the “tickle down effect”.
Development has been defined as a type of social change in which new
ideas are introduced into a social system in order to produce higher per
capita incomes and levels of living through more modern production
methods and improved social organization. (Rogers 1969, in Obi &
Nwanegbo 2006).
However, the disappointing performance of most countries that
pursued development from the traditional approach, led to a new
thinking of the concept of development.
The mindless pursuit of development through an increase in the
income per capita without a thought on how the benefits of growth are
distributed in the society resulted in greater income disparities; a few
very rich people and a mass of people wallowing in abject poverty.
While the rich were getting very much richer, the poor were getting
miserably poor. It became apparent that the “trickle down effect” did not
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take place. Furtado described this phenomenon as “growth without

development”, and this showed that the traditional approach to
development has failed to address the need of the developing
countries, hence the need for a new conceptualization of development.
However, Walter Rodney sees development both from the level of
the individual and that of the society as a whole. At the level of the
individual, development implies increased skill and capacity, greater
freedom, creativity, self-discipline, responsibility and material well being.
On the level of the society, development cannot be seen as purely as
an economic affair, but rather as an overall social progress which is
dependent upon the outcome of man’s efforts to deal with his natural
environment.
The questions to ask about a country’s development are
therefore: what has been happening to poverty? What has been
happening to unemployment? What has been happening to inequality?
If all three of these have declined from high levels, then beyond doubt
this has been a period of development for the country concerned. If one
or two of these central problems have been growing worse, especially if
all three have, it would be strange to call the result “development” even
if per capita income doubled (Seers 1969, 3).
Development in this sense is just not all about growth but all about
people. It only ascertains that the gains of growth are redistributed to
provide for a better quality of life for everyone.
According to Ake, Development is the process by which people
create and recreate themselves and their life circumstances to realize
higher levels of civilization in accordance with their own choices and
values.
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However, other conditions that have been included in

development are increasing national self-determination, predicated on
the notion that development is something a country does to itself and
means reducing external dependency, more fashionable now are
notions of environmentally sustainable development, or development
that meets the needs of the present without compromising the ability of
future generations to meet their own needs and feminist theories of
development that emphasizes gender and women’s issues specifically.
Democratization, accountable government and a respect for human
rights have also recently become more prominent as features of political
development contained by the generic sense of development.
Development, then, values increased freedom, after all, the most
basic for all may be the freedom to define your own needs, taking part
in decisions that affects your own life. Economic development cannot
be divorced from the other aspects of development. Its principal
contribution is to enhance the range of human choice for all members of
society without discrimination. Modern observers of the third world
argue that whatever else development is, it must be participatory –a
“bottom up” exercise where ordinary people understand, initiate and
control the process.

UNDERDEVELOPMENT
The concept of underdevelopment appears to be clear enough to
many but its precise meaning remains contentious between
dependency and modernization theorists. The distinction appears
clearer when we seek to understand the causes and not the features of
the phenomenon. The fact that the world is divided between the rich
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and the poor; the developed and the underdeveloped, is not contentious
at all. It is a social reality. The other point is that the gap between the
underdeveloped world and the developed is not static or narrowing but
continually widening. Three quarters of the world’s population in Africa,
Latin America and Asia ‘live’ in a condition of poverty and penury. To
many of them, the future still looks bleak. The question therefore is:
what is Underdevelopment? Is it natural? What is the cause? Is it
possible to overcome underdevelopment? (Aja 1998, 49.)
Whether by bourgeois or Marxist standards, underdevelopment
defines a relative condition in which a society lacks autonomous
capacity to control and mobilize socio-economic formation for a
sustainable economic growth and development necessary to effect
physical, mental, material and technological fulfilment without
dependence on external stimuli. The Third World states fit well into this
model. In a very simple way, underdevelopment means a condition of
economic and technological backwardness which, together, constrains
the evolution of stable and enduring political system and dynamic
external relation. (Offiong 1980,15)

Underdevelopment is not natural. It is not divine. To believe

otherwise, is to accept that the creator of the universe, God, is partial.
This is not so. Well understood, underdevelopment is a human factor. It
is man-made. In fact, it is a product of history. It defines relatively not
the total absence of development features, but the gap between one
state of development and the other. This understanding is vital. We
have the underdeveloped countries because there are developed
countries for comparison. The history of underdevelopment dates back
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to the contact between Europe and the rest of the world, in which case
there is no history in any attempt to separate or de-link the
phenomenon of imperialism and colonialism from the emerging socio-
economic formation of the new nations at the end of colonialism in
many parts of the world. To think as modernization theorists are inclined
to do, that neither imperialism nor colonialism dislocated and
disoriented pre-capitalist economies is just to be unfair to history. It is
unimaginable how the many decades of European political and
economic domination of Africa, Latin America and Asia would have no
adverse economic and technological effects. The irony of this inclination
becomes clearer against the practice of capital accumulation in the
metropoles and the periphery. In Western Europe, the state promoted
the virtues of freedom of economic enterprise. Local initiatives and
creativity were encouraged and protected by the laws of the state. This
saw the development of European bourgeoisie. To the contrary, in the
periphery, the colonial state was hostile, interventionist and disoriented
the development of freedom of economic enterprise. There was no
encouragement to local industrial and technological development.
(Onyemelukwe 1974, 15). Local bourgeoisie were oppressed and
suppressed. Unskilled labour and cheap natural economic resources
were exploited by sheer brutal force to the greater affluence of the
metropoles. Certainly, the indifference of the colonial states to local
economic development in the periphery was responsible for the gap in
the stage of development between the new nations and the Western
developed capitalist states.(Aja 1998, 50).
Underdevelopment therefore refers to a socio-economic structure
which is subjugated and dominated by another social formation. It is
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usually characterized by a disarticulation mode of production, absence

or low levels of proletarianization, over marginalization of the peasantry,
low levels of productivity, high rates of unemployment and under-
employment, chronic foreign debt and balance of trade problems,
dependence on raw materials, exports and industrial product imports,
low levels of living, absolute poverty, inadequate food and poor
nutrition, low income, dictatorial and corrupt leaders etc.
However, one of the most significant outcomes of the ten decades
of British rule and imperialist subjugation of Nigeria was that it led to the
incorporation of Nigeria’s socio-economic systems to subject the
indigenous population to the needs and objectives of imperialism.
Britain was able to institute an unequal division of labour and
institutional structures and factors for reproducing this unequal division
of labour. The nature of this division of labour between Britain and
Nigeria was such that Nigeria assumed the role of supplies of cheap
labour and raw material products to Europe and importers of industrial
products from the European centre.
Under these circumstances, the traditional
society was distorted to the point of being
unrecognizable; it lost its autonomy, and its main
function was to produce for the world market
under conditions which because they
impoverished. It deprived the members of any
prospects of radical modernization. This
traditional society was not, therefore, in
transition to “modernity”; as a dependent society
it was complete, peripheral, and hence at a dead
end. (Samir Amin in Dennis Cohen and John
Daniel. 1981).
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In addition to the imposition and institutionalization of the British

capitalist mode of production, the subjugation of Nigerian social
formation also prevented the “normal evolution” of an autonomous state
and national bourgeoisie capable of “taking control” and subjecting all
external relations (particularly expropriation of economic surplus) to the
needs and logic of internal primitive accumulation and investments and
subsequently autonomous development (Samir Amin, 1980). What
actually emerged in Nigeria was a dependent state, which is lacking any
“relative autonomy” function according to the need and requirements of
British capitalism that subjected it.
This is perhaps, the fundamental root of Nigeria’s
underdevelopment. Because the state was subordinated in its
embryonic stage, and made an appendage of the British capitalist state,
the Nigeria state was unable to create “concrete conditions” necessary
for the development of autonomous capitalism, (Samir Amin, 1980). In
other words, the subjugation and integration of the Nigerian state in a
dependent and unequal relation prevented the state from making
possible conditions necessary for the evolution and formation of
autonomous capitalism in the same manner the British or German or
French state created conditions that gave impetus to the development
of European capitalism.
The different role played by the British, state and the Nigerian
state in promoting capitalist development may be better understood
when examined in relation to the development stages (and not stages
of growth as suggested by Rostow) which occurred both in Europe and
in Nigeria. The development stages are essential to an understanding
of the variations which occurred in the level of the development of
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national productive forces. According to Samir Amin (1974), (1976) Paul

Baran (1957), Immanuel Wallenstein (1976) and Walter Rodney (1972),
the development of capitalism in the centre (Western Europe) differs
from the development stages which occurred in the periphery of the
world system, such as Nigeria: first, the development of capitalism in
Western Europe, which British capitalism formed the core “stemmed
from an internal process of breaking-up the pre-capitalist mode of
production”. In this case the feudalism mode of production (Samir Amin,
1977).
According to Samir Amin, Social relations and national state that
were conducive to the “agricultural revolution which precedes- and
makes –possible the subsequent industrial revolution.
The emergence of the agricultural revolution led to the expansion
of production in agricultural and food products and the subsequent
proletarianization of the peasantry. It is this process of proletarianization
of the population that aided the rapid development of commercial
agriculture. By so doing, agriculture was able to increase the production
of marketed food products necessary for the reproduction of emerging
industrial proletariat.
Secondly, the new capitalist relations that emerge from the
subsequent industrial revolution that began to unfold provided the
stimuli for the development of a new “class alliance between the land
owners and the emerging industrialist and the growth of a powerful
national state” necessary for the defence of the interest of the new
class.
Thirdly, the development of the new class alliance and of the
powerful nation-state allowed the new class to subject all external
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relations (either in the form of long distance trade, slave trade, or direct
colonization) to the need and requirements of internal accumulation.
This subjugation of all external relations to the European social
formations led to the emergence of a “group auto centered and
interdependent (although equally advanced) central formations (e.g.
Britain), and of the peripheral formations. (e.g. Nigeria) subjected to the
logic of accumulation in the centres that dominate them”.

COLONIALISM
Colonialism is logical outcome of imperialism. It means foreign
political domination and subordination of overseas territories, not with
the motif of developing them politically and economically but, ensure
their effective economic exploitation to the affluence of the greater
metropoles. For the most part of Africa, Asia and Latin America,
colonialism was a common fate and misfortunate in the 19th and 20th
centuries. In another sense colonialism is premised on foreign direct
rule and capital accumulation.(Aja 1998, 47.). In the process,
colonialism transformed labour in overseas territories to reproduce
goods it did not consume, and to consume goods it never produced. At
the end of colonialism in many parts of the world, the common
experience was that there existed a clear distinction between political
independence and economic independence. The new nations had
political independence without economic independence because the
colonial states were not committed at all to local economic
development. So, the new nations came to be economically backward,
underdeveloped and structurally dependent in international division of
labour. This phenomenon of dependency and underdevelopment has
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continued to mark the specific feature of most economies in Africa, Asia

and Latin America. What this means is that there exists a direct link
between the contact between Europe and the rest of the world, and the
underdevelopment question.(Lenin 1975 cited in Aja 1998, 47)
DEPENDENCY
Dependency is a Marxist concept to describe the extent to which
one economy is subordinated to the other and in which case, the
external dynamics of one is conditioned by the external stimuli. The
concept of dependency was first coined by Brazillian sociologist
Fernando Henrique Cardoso. In a non-technical sense of it,
dependency means that the crucial economic decisions are made not
by countries that are being ‘developed’ but by foreigners whose
interests are carefully safeguarded. The phenomenon of dependency is
not natural. It was a logical outcome of imperialism and colonialism.
Dependency describes the extent to which an economy is structurally
disadvantaged in international division of labour that it lacks
autonomous capacity to exploit, control and manage its natural,
economic and human resources without falling prey to the dictates of
foreign economic and other interests. (Luxembourg cited in Aja 1998,
47).
The specific feature of dependency tends more to mean that no
meaningful development can take place if, the development initiative or
process of an economy depends on outside factors or external stimuli
either of capital or expertise. Dependency cannot be reasonably taken
to be natural outcome of underdevelopment but the incidental or
historical result of underdevelopment. (Aja 1998, 48). As Dale Johnson
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puts it, “Dependency is imperialism seen from the perspective of

underdevelopment.
NEO-COLONIALISM
The end of colonialism in many parts of the Third World does not
mean automatic end to foreign economic and other interests. By the
misadventure of colonialism, structural dependency still defines the
economies of most independent Third World societies. The implication
is obvious. Their economies respond to external stimuli. Their
economies are still to a large extent dominated and exploited by foreign
interests. Differing meanings to neo-colonialism notwithstanding, the
substance of neo-colonialism is the continual economic and
technological domination of the dependent economies by foreign
economic and other interests without direct political control and
subordination. Implicit is the continual export of capital and technology
from the developed countries to expand and deepen the sphere of
capitalist accumulation. This is why many Marxist scholars have
described neo-colonialism as contemporary imperialism. (Aja 1998, 48).
The mechanisms of neo-colonialism are many. They exist as
facilitators. These are Multinational Corporations (MNCs), International
Monetary Fund (IMF) World Bank and even the weak and subservient
neo-colonial states in the periphery. In material sense, neo-colonialism
is facilitated through a number of designs, such as foreign-grants and
loans, aid, economic assistance; military defence pacts and
agreements. In this way, dependent countries get more chained into the
World market dominated by the developed capitalist society.
Accordingly, France, for instance, has been able to maintain a largely
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integrated banking network and principles to appropriate neo-colonial

monetary and financial standards in many francophone African States.
In many oil producing countries in the Third World, foreign oil
companies have exercised monopoly in exploration and exploitation of
resources. In Nigeria, what belongs to her is oil locations in many parts
of the country. Lacking the indigenous technology base, the exploration
and exploitation of Nigeria’s rich oil wealth is carried out by Western oil
companies (Texaco, Chevron, Total, Elf, Mobile and Shell). The oil
servicing companies are also foreign oriented. If it is taken into mind
that oil is the commanding height of Nigeria’s economy, it permits
understanding the extent to which the country’s politics and economics
are controlled and influenced by foreign economic and other interests.
(Popov 1984, 173). As in the era of colonialism, little effort is made to
develop local technological base. The parts or spare parts of foreign
technologies are supplied from abroad. The point is that, there appears
to be no serious commitment on the part of foreign companies in the
Third World to increase the rate of the training of the host countries’
scientific and technical personnel. This is one result of brain drain from
the periphery. In the recent period, the emigration of scientific and
technical personnel from the underdeveloped countries to the leading
capitalist countries has assumed large proportions. (Aja 1998, 52).

In virtually all the underdeveloped countries in which neo-

colonialism has managed to bolster its positions, there are growing
crisis of external debt burden, food crisis, high unemployment rate,
technological backwardness or stagnation and the diversion of scarce
resources to arms imports. In the words of Professor Ake, the
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underdevelopment question is more critical in Africa by virtue of the

imperialism of African scholarship by Western social science.(Ihonvbere
and Falola 1985 in Aja 1998, 52).
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CHAPTER TWO
IMPERIALISM: AN INTRODUCTION
Imperialism is a sensitive and highly emotional phenomenon,
especially among the peoples of the third world in general and Africa in
particular. It usually evokes memories of the ugly experience of
exploitation of the developing nations by the metropole. However, no
matter what the general history of imperialism is, this course in
particularly is concerned with an aspect, or a manifestation of this
phenomenon. This is the economic dimension of the phenomenon
which we know is still on-going hence, the term CONTEMPORARY
IMPERIALISM
Many of course, prefer to refer to it as the U.S. Imperialism
considering the role the United States of America played in charting a
course for the global economy since the end of the Second World War.
The problem with this is that it tends to blame the whole issue of
exploitation and third World impoverishment on a particular nation. This
is not true, and besides, it limits the scope of our study-being restrictive
and particularistic both in form, purpose and perspective.
By way of general comments, many scholars like Bertrand Russell
are so critical of the U.S.A. and her role and leadership in the global
economy. In his article, “Peace Through Resistance to U.S.
Imperialism”, Russell maintained that U.S. imperialism is the main
manifestation of Contemporary Imperialism, and a serious cog in the
turning wheel of true lasting peace and justice. He explains that only
those who are a part of the American society and system would pretend
not to notice or appreciate the import of U.S. Imperialism.
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The present global power equation sets the United States of

America on a separate power pedestal of her own. She has neither an
equal nor a rival. This she aptly demonstrated during the operation
desert storm and is still demonstrating in her other too many global
engagements. This omnipresent character in international politics and
intervention has earned her the title: “THE GLOBAL POLICEMAN”.
Most critics of the U.S.A., especially in relation to Russell’s argument in
this discussion do not seem to accept all these as efforts at maintaining
and keeping peace in the many troubled spots of world. Rather every
such effort is seen and explained as a means of safeguarding her
global economic interests.
The United States has more than 3,300 military bases and vast
mobile fleet, bearing missiles and nuclear bombers. This scenario, it
has been pointed out threatens the fragile global peace and justice.
What angers most of the critics is the fact that more than 60% of the
world resources are owned and controlled by the rulers of less than 6%
of the world’s population. The economic, social and political
implications of this are grave and portend evil for the Third World.
Within this framework, the poverty, death and backwardness of the
Third World is explained. In the same way the military expenditure of
the U.S. exceeds the entire national income of all developing countries.
The point that is stressed here, is that if the developed nations in
general, and if the United State of America in particular, actually desire
to see the Third World develop, this could be made possible in several
ways. For instance, an Atlas Missile costs about $30 million which
approximates the cost of establishing a nitrogen fertilizer plant with a
capacity of not less than 70,000 tons per annum. Such missiles and
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several other more dangerous and costly nuclear weapon are all over
Europe and America, as well as the military bases of America and other
major powers.
An example from the United Kingdom shows that the cost of a
particular missile equals the cost of four well equipped Universities. In
real terms, one ground-to-air missile equals 100,000 tractors which can
transform the underdevelopment in the agricultural sector of most Third
World nations. The argument here again, is that if the real cost of a
ground-to-air missile, being manufactured and stock piled annually,
then it becomes evident that the under-developing of the Third World is
directly linked to the ongoing imperialistic actions of the developed
West.
At this juncture it appears only necessary to point to the mindless
practice of the U.S. of spending huge sum of money in buying out food
reserves only to destroy them later. The reason for this is to keep the
prices high enough in the world market even if this means starving
many. In this regard therefore, one would begin to understand the
American Food Diplomacy “aid-in-grain” policy. Most country of the
Third World-Ethiopia, Somalia, Chad, Zambia, and even Nigeria are
suffering from acute food shortages and their populations are starving
almost to death. For most of them too, any aid-in-grain would mean so
much to them. This is why America uses it as an effective weapon to
extort consent, support and approval of several of their obnoxious and
imperialistic programmes – at least from the recipients of these aids.
In another vein, they create scarcity of these essential supplies,
just to peg the price at whatever level they chose. All this is aimed at
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maximising their gain, materially, psychologically and strategically. For

this reason, Russell observed that:
In recent years, prices have operated against poor countries nor
merely at 5% but at 40%. The industrial production of Western
Capitalism is consciously employed not only to perpetuate the
hunger which exists in the world but to increase it vastly, for profit
… when United States capitalists hoard food and poison it, they
not only deprive the starving, but force the developing countries to
buy food at high costs.

From the above, it is deducible that the reason for this massive
investment is geared towards exploitation and domination, politically,
socially and economically. This is suggestive of the fact, that there are
kinds of imperialism – Political Imperialism which manifests in the
territorial extension of one nation into another and the overthrow of the
later’s governmental institution by the former colonialism which was
experienced by nearly all the countries of Africa, then Asia and Latin-
America is a ready example in this regard. There is also Cultural
Imperialism which like the former over-runs the behaviours of a people,
their values, norms and mores; in fact their whole life style is exchanged
with what is foisted on them as superior culture. Finally there is
Economic Imperialism which happens to be the subject of this work.
It is the disarticulation of a weaker economy by a more stable and
stronger economy, creating an imbalance, unequal and unfavourable
economic exchange regime between those involved. This favourable
trend has been deliberately created by the powers of the metropole to
strengthen their strong-hold on governments and peoples of the
periphery. With the superb organisation and network of the American
Central Intelligence Agency (C.I.A.), the U.S. can work out an agenda
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and methodology of assassination of political figures as well as

overthrow governments that are unsympathetic to the American dream,
cause and views.
The CIA for instance, with the help of the U.S. Ambassador in
Brazil, Mr. Lincoln Gordon instigated a band of reactionary generals to
crush the democratic government of Joao Goulart. Similarly in
Argentina, American troops destroyed the civilian government of Arturo
Frondizi, for the simple fact that he was not subservient to the U.S.
Imperialism, rather he stood for and spoke out in favour of the middle
class. In Ecuador, Bolivia, Guatemala and Honduras, the probing
tentacles of U.S. Imperialism have visited them. In Nigeria, most of the
suffering of the people is traceable to the U.S. harsh attitudes towards
Nigeria. There is no doubt that the internal contradictions and
complications that have continued to frustrate any game plan for
development in Nigeria by her leaders could be traceable to this fact.
There is a high incidence of corruption especially among the leadership,
ethnicity and discrimination in nearly everything done in Nigeria, yet
these could not even in concert have generated the level of misery,
poverty and hardship known today in Nigeria, without the clear
intervention of the U.S.A. in Nigeria’s Internal affairs. The global
sanctions clamped on Nigeria and the embarrassments this country and
her citizens have had to put up with these far years are the brain child
of the U.S.A. This has done, and is doing, to cripple, frustrate and
reduce to nothingness, Nigeria even within the West African sub-region,
because Nigeria has refused to sing and dance to America’s tunes.
Nigeria’s case may be a recent one, but history is replete with more
serious cases of imperialism. In the Middle East for instance, people
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are subjected to harsh economic and physical conditions in order that

America’s oil interest be adequately protected. Russell decries this
predatory and insatiable nature of U.S. Imperialism which was
eloquently displayed in Vietnam. He recounts that the poor Vietnam
masses were cruelly subjected to:
…chemicals and gas, bacteriological weapon and phosphorus,
napalm and razor bombs, disembowelment, dismemberment,
forced labour, concentration camps beheading elaborate torture-
every specie of cruelty by American Imperialism.

What is intended here is simply to show the impact of Imperialism and

how sensitive and emotional a phenomenon it is. It is not the primary
objective of this introduction to vilify the U.S. and blame her for every
woe in the world today, especially among the Third World. Russell’s
article no doubt, is a critique of the U.S.’s role in global politics and
economy. What has already been done here is to highlight this
phenomenon, to show its dangerous effects on developing economies
and not principally to put the U.S. on the spot. On the other hand, it
expresses the emptiness of excessive emotions by the Third World over
this phenomenon as development comes about only when deliberate
efforts are made towards it and not in crying out one’s eyes.
Perhaps, a final word in this respect – U.S. Imperialism and threat
to global peace would be Russell’s scathing remarks in the following
words:
In history there have been many cruel and rapacious empires and
systems of imperialist exploitation, but none before have had the
power at the disposal of United States’ Imperialists. This
constitutes a world system of oppression, and represents the true
threat to peace and the true source of danger…
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Be that as it may, imperialism should not necessarily be

seen as American or an expression of the economic life that is
peculiar to the character of the capital system which of course, the
United State appears to be leading.

IMPERIALISM: MEANING AND DEFINITION

The term imperialism harbours an appreciable degree of
confusion, which presents nearly every act or pursuit as imperialism
and thus, everybody an imperialist. Such confusion is not limited to or
peculiar with this phenomenon, rather it is a fundamental problem within
the Social Science discipline. This explains therefore, the reason and
need for theoretical analysis, as this is possibly the only way to contain
the flabby usage of terms and the fluid definitions of several social
phenomena. Another reason is that, theory offers ethnical neutrality
and objectivity thus, improving the meaning and understanding of such
a phenomenon or concept.
For a very controversial and so widely misunderstood term as
Imperialism, a better way to begin to appreciate it, would probably be to
state some of its major misconceptions. In this regard, it may be noted
that many have proffered and accepted the view that every foreign
policy that aims at an increase in the power of a nation is a
manifestation of Imperialism. This is largely incorrect and a major
misconception. What this seems to be suggesting and of course,
incorrectly, is that all those who are averse to any principle which in
effect are the embodiment of their fears, are imperialistic. This has
aptly been described thus:
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Those who are opposed on principle to a particular nation and its

policies, such as Anglophobes, Russophobes, and anti-
Americans, regard the very existence of the object of their phobia
as a threat to the world. Whenever a country thus feared sets out
to increase its powers, those who fear it must view to increase in
power as a stepping-stone to world conquest, that is, a
manifestation of an imperialistic policy.

From the above lines, it is clear to note that any policy position
that is not acceptable by another policy or nation is quickly seen as a
threat and is explained only within the context of the phenomenon-
Imperialism.
In the same vein, any foreign policy which aims at the
preservation of an already existing nation is Imperialism. This is stupid,
preposterous and certainly ridiculous. This explains why such large
nations like China, USA, or Britain were thought to be imperialistic for
the simple reason that they aspired through their foreign policies to
maintain, defend and stabilize themselves. The purveyors of this fallacy
fail to realize that behind these objectives to defend, maintain and
stabilize – are no intentions whatsoever, to acquire territories.
The argument held out by most scholars is that which has
emphasised the case of British Empire which was by and large
accepted as a Colonial Empire. The exploitation of the colonies and
their very acquisition was imperialistic both in outlook and in content.
This argument may not be carried too far than it is necessary just
because of its dimension. A note of caution perhaps, is necessary at
this point, so that events are not read and analysed out of context. An
insightful explanation in this regard is such that has been provided by
Hans Morgenthau who points out to the fact that:
 24

This economic connotation gave rise to the most intensive, most

systematic and also most popular body of thought which has
sought to explain imperialism in modern times: the economic
theories of imperialism.

The modest attempt above has been to try and establish the areas of
contradiction. Following is another attempt, not only to define but to
properly situate the phenomenon especially within the realities of the
present world. Some of the questions we shall be attempting to answer
shall include: What Is Imperialism? Does It Still Manifest and In What
Forms, In Contemporary Times? What Are The Various Theories Of
Imperialism And How Recent Are They Today?

IMPERIALISM
Barratt Brown says that it is “the inward drive or certain people …
to build empires-both formal colonies and privileged positions in
markets protected sources of materials and extended opportunities for
profitable employment of labour. The concept has thus been
associated with an unequal economic relationship between States, not
simply inequality of large and small, rich and poor trading partners, but
the inequality of political and economic dependence of the later on the
former …”.
In another vein, it has been defined as:
… the economic control and exploitation of foreign land arising
from the necessity for counteracting the impediments to the
accumulation of capital engendered by the internal contradictions
of the domestic capitalist economy. These internal contradictions
of the domestic capitalist economy are indeed germane to the
understanding of imperialism and shall be given a proper place in
the analysis of this phenomenon and in the explanation of
underdevelopment in the countries of the third World.
 25

A review of literature on imperialism reveals a great deal of

controversy and confusion, especially in what constitutes imperialism.
In this regard, James O’Connor has pointed out that “there is still much
controversy, and more confusion about the meaning of Economic
Imperialism. Here, we are inclined to think that this controversy and
confusion is not strictly limited to Economic Imperialism.
Lenin, for instance, explained this phenomenon in terms of
progressive development of capitalism. Imperialism (therefore,
means to him, the monopoly stage of capitalism which primarily
manifests five basic features which includes:
a. That, “the concentration of production and capital has developed
to such a high stage that it has created monopolies which play a
decisive role in economic life”.
b. “The merging bank capital with industrial capital, and the creation,
on the basis of this, “Finance Capital” of a financial oligarchy.
c. “The export of capital as distinguished from the export of
commodities acquires exceptional importance.
d. “The formation of international monopolist-capitalist association
which share the world among themselves and
e. “The territorial division of the whole world among the biggest
capitalist powers is completed …”
When Ake’s insight on imperialism is examined against the
background of all we have tried to discuss, it appears that he made
deliberate effort to avoid some of the confusions and controversies
associated with the definitions of the phenomenon. This was achieved
 26

by defining imperialism in “broad” and “narrow” senses. In the broad

sense, Ake sees the phenomenon simply as:
“The subordination of one country to another or at any rate the
attempt to subordinate one country to another in order to maintain
a relationship of unequal change”.

The context of this unequal relationship was identified by Ake as

including, “MILITARY, ECONOMIC, POLITICAL, CULTURAL, or some
combination of these”. What these imply is that there is military,
economic, political and cultural imperialism – i.e., a relationship of
unexchange in any or all of these areas. However, in a narrow sense,
Ake’s definition of the phenomenon follows that of Lenin in some way.
It sees imperialism as a stage of development of the capitalist mode of
production. In this respect Ake quotes Lenin-Imperialism, the highest
Stage of Capitalism-explaining that:
“Capitalism is that stage of development in which the dominance
of monopolies and finance capital has established itself; in which
the export of capital has acquired pronounced importance; in
which the division of the world among the international trusts has
begun, in which the division of all territories of the global among
the great capitalist powers has been completed”.

In the task of defining imperialism, it becomes only reasonable to

conceptualize it in terms of a certain degree, type and kind of
relationships and interaction between what Gunder Frank calls, “the
metropole” - i.e. the Industrialized Country or its members, and the
Periphery. It is not to be strictly seen within the context of, “an empire
of some particular country”. Simply put, this phenomenon, is not just
the territorial expansionist programmes of powerful countries in history
 27

as the Roman Empire, British etc. In a global sense, Gunder Frank

refers to it as:
… certain worldwide relations of the end of the 19th and the
beginning of the 20th centuries, a time of colonial expansion by the
industrialized on the industrialized or industrializing metropole.

Imperialism as represented by Gunder Frank not strictly in the few lines

quoted above, refer, by and large to the inequality in relationship
existing between the U.S. and Latin America or the near Eastern
countries. This relationship however, does not involve colonies at all.
As much as this web of inequality is appreciated, it should not be limited
or restricted to a particular area, in fact, it is the rate suffered by all
developing countries. It becomes necessary at this stage therefore, to
point to the fact that although the U.S. with all her economic, political,
military, technological muscle has been accepted as a big imperialist
monster, still there are other actors-human, state etc, that are part of
this relationship. These actors have relentlessly worked towards
protecting, maintaining and advancing the goals of his form of
relationship. The whole effort here has been to define this phenomenon
and attempt a modest explanation of the definitions. It has been
established that imperialism is a relationship. This relationship is one
contracted by unequal partners and on unequal terms, which is geared
towards the underdevelopment of the periphery while developing the
metropole. This relationship is pushed through by the stronger partner
to the disadvantaged of the weaker. What has largely been observed is
the siphoning of the raw materials and capital from either the colonies
or the periphery (the weaker partner), to generate and even accelerate
the pace of development in the metropole. This has consequentially
 28

produced a serious and deep rooted under-development in Third World

countries. By and large, it has been characterized by mindless
competition anarchy in production, in response to drive for profit and
control of domestic and international markets. The competition and
profit in league with other known contradictions of the capitalist system
constitute the vehicle that transformed capitalism to imperialism.
Imperialism itself as explained by Lenin, is not a mode of production
rather it is the zenith, the climax or the highest stage of capitalism.
Lenin continues by stating almost prophetically that it is moribund, dying
and decaying capitalism in fact, the eve of another era, or
transformation, “the eve of socialism”. What he is suggesting here, is
that at the point Capitalism reaches the level of Imperialism, its growth
process has ended, and was due for replacement by a new mode of
production on which will be based all forms of social interaction. Earlier
reference had been made to “production anarchy”. This, concept
requires some explanations and or definition. It means in production
process whatever anarchy means and qualifies. In this respect, Volkov,
(1983) has pointed out that it represents by and large,
… lack of planning and organisation and the chaotic character of
the economy developing under the conditions of the spontaneous
operation of economic laws. It is a feature of commodity
production based on private property, when manifesting process
is carried out by isolated private commodity producers who work
for an unorganised market and have little idea as to society’s
actual need for their goods and the scope of production of each
commodity in the country as a whole. The anarchy of production
is accompanied by competition between commodity producers.

In this regard, it is little wonder then, that Hobson (1902) had defined
imperialism as simply:
 29

… a depraved choice of national life, imposed by self seeking

interests which appeal to the lusts of quantitative acquisitiveness
and of forceful domination, surviving in a nation from early
centuries of animal struggle for existence.

What clearly stands out in the above definition is the fact that
Imperialism is motivated and sustained not by the interests of the nation
as a whole; rather by a few “self seeking persons or groups” that
impose policies upon the rest of the nation, purely in their own interest
and to their advantage. The politico-economic forces exerting such
pressures on the system in general are exhaustively considered in the
following analyses and chapters. Suffice to say and at this point, that
Imperialism has a class character which is its strength (in the interim)
but on the long run it becomes its ruin.
 30

CHAPTER THREE
IMPERIALISM: A CRITICAL APPRECIATION
This chapter examines the phenomenon of Imperialism in its
contemporary manifestation and proposes to present the reason
advanced for this phenomenon. In addition, an attempt at explaining
some of the issues scholars have raised will be made. This will in no
way overlook an important dimension of the task of this segment, which
is to critically appreciate.
Several reasons have been given for imperialism which includes
some of the following:
1. The breaking of narrow bounds of nationalism will encourage and
bring about internationalism which is believed to harbour co-
operation and important for global development.
2. The forcible suppression of small and weak nationalities by larger
and more powerful ones as dictated by the compulsions of
imperialism is a natural approach to world federation and eternal
peace.
In addition, Hobson (1902) has completed the reasons given above with
the following:
3. The inequality in the industrial opportunities which works to the
advantage of a relatively small groups or class within the society,
that has accumulated super flows element of income. The
accumulation of income. The accumulation of income thus
necessitates a frantic search for other areas of profitable
investment. That this leads to the violation of national boundaries,
intrusion on, and exploitation of, the economies of other lands.
 31

4. The undue influence on state policy by the wealthy class which is

both the investor and the financial manager. This class, Hobson
opines, secures a national alliance of other interests that are
threatened by movements of social reform.
5. Imperialism opens the door for securing private material benefits
for the favoured classes of investors and traders at public cost,
while sustaining the general cause of conservatism by diverting
public energy and interest from domestic agitation to external
employment. It does serve as a way of letting off some domestic
steam.
In all it is possible to observe some gaps in the reason suggested
to have been the main causes of Imperialism. These reasons appear to
have considered the fact that some of these countries could resort to
armed defence to defend themselves. Similarly, such a development
has the capacity to stifle amicable or peaceful approaches in
relationship between them. It could debilitate larger nations and even
attempt to strangle their national life through excessive and
unmanageable size. On the other, it becomes necessary to note that
internationalism requires the maintenance of, and national growth of
independent nationalities. Without this there would not be the gradual
evolution, informed by mutual respect and independence of nation.
Hobson has pointed out the fact that in the circumstance, what could be
had, would be series of unsuccessful attempts at a chaotic and…
cosmopolitanism”.
In his work, Imperialism: A Study, Hobson (1902) admits that the
psychological motives thumbed up as a reason or reasons for
Imperialism such as national pride, quest for glory and bellicosity, may
 32

be relevant but do not constitute a major cause. Hobson has pushed

the fact that the real and dominant motive for imperialism was basically
the quest for markets as well as search for greener pastures providing
opportunities for higher returns on investment. The reality of all this
hinged on the following:
a. The rapid growth of industries in Europe.
b. The increasing requirement of raw materials for industries.
c. An appreciable rise in domestic population especially in the urban
areas, requiring more food.
d. The rise in the living standard, which was in response to the
overall development in the socio-economic system. This is
considered a reason because it gave rise to the demand of luxury
goods.
e. The tendency for production to out-strip consumption.
f. The tendency towards over-saving, over investment and under
consumption.
It is not necessary here to say that in this state of affairs the employers
of labour had more money while the employees, the class that sells its
labour to survive, hard next to nothing. This class no doubt, constitutes
a higher percentage of the overall industrial set-up than the owners of
the means of production, the implication of this on the domestic
population and economy is indeed much and required to be produced.
For Hobson, the answer to the whole issue of over saving and
under consumption was in his three-prong solution of the problem:
i. That organised labour and state should insist that workers
obtained a larger share of the surplus, which will help to improve
 33

their lot and beat into shape the economic gap that had continued
to exist within the economy.
ii. A restriction of output which may be achieved by financial control
of enterprises by sharing the market. Alternatively it could be
regulated through the imposition of production quotas and tariff
barriers.
iii. Owners of capital should persuade the state to help them by
securing new markets through the establishment of protectorates,
colonies and spheres of influence.
What seems difficult to understand in Hobson’s solution to
Imperialism is the role he appears to assign the state in the whole
scheme of things. Would it be possible for a sub-set of the
contradictions, the capitalist mode of production, to turn around to
resolve the problem it or a member of the set of contradictions has
created? The state had been part of the problem of Imperialism, and to
require it to either secure new markets through the establishment of
protectorates or colonies appear a little absurd, especially for Hobson
who has seriously criticised Imperialism.
It is possible that his assessment of the benefits of Imperialism to
the British populations shows a negative and necessitated the
intervention of the state to help out the British society. His analysis of
Imperialism is that it was more or less costly and overly disadvantaged
the British economy. To him it was a truly bad business. Later,
Hobson’s criticism of Kautsky’s explanation of Imperialism as a policy of
the later shall be presented. It may be interesting to examine his
prescription of involving the state against Kautsky’s assertion that the
phenomenon is a deliberate state policy. One therefore would like to
 34

know if state involvement, for whatever reason, does not suggest or

entail policy. Let us at this instance briefly state Schumpeter’s views on
Imperialism. These views are contained in his essay, published in
1919. Here, he posits that Imperialism is characterized by an
aggressive expansionism “which has an objective beyond itself”.
This means that Imperialism:
i. May not be understood by merely examining such concrete
interests as economic or political etc.
ii. It appears insatiable by any interest in all.
iii. It is non-rational.
What could be said about the above insight from Schumpeter’s essay,
is that judging Imperialism by such interests as economic or political
interests, it may not be enough to explain the cause and course of
Imperialism. It could be any of these in addition to several other
intangible or even tangible reasons. It is not that it is either motivated
by the economic or the political or both alone. In the same way no one
particular interest satisfies it or is there any point it gets to and stops-as
a result of it, being rational.
One theme that occurs frequently in the Marxist philosophy is the
historical interpretation of matter. This attempts to establish the
dialectics and place of history in the development of matter. Marxist
Law in this respect is the Law of transformation of Capitalism to
Imperialism; hence Imperialism is the highest stage of Capitalism”.
In some way, Kautsky who himself is a Marxist, although of a
different persuasion from Lenin, Hobson, Schumpeter or others are
identified with this philosophy seem not to subscribe to the most of the
explanations offered above, about Imperialism. He appears not to pay
 35

much attention, (not as though it is not important), to the economic

content, rather he concentrates on policy point of view, as the basis of
Imperialism, Kautsky holds that:
… Imperialism must not be regarded as a “phase” on stage of
economy, but as a policy “preferred” by finance capital; that
Imperialism must not be “identified” with “present-day-capitalism”,
that Imperialism is to be understood to mean all the phenomena
of present-day-capitalism, cartels, protection, the domination of
the financial and colonial policy-then the questions as to whether
Imperialism is necessary to Capitalism becomes reduced to the
flattest tautology, because in that case, Imperialism is naturally a
vital necessity for Capitalism.

From the above explanations by Kautsky, he defined Imperialism as

thus:
Imperialism is a product of highly developed industrial capitalism.
It consists in the striving of every industrial capitalist nation to
bring under its control or to annex all large areas of agrarian
territory, irrespective of what nation inhabits it.

The above definition has an economic dimension though, yet its main
thrust is unequivocally political. It holds that it is the political instrument-
the policy that incubates as well as gives birth to capitalism. Through
the colonial policy of imperial powers regardless of their domestic
pressures, territories were brought under their rule, which more
importantly meant that all human and material resources within them
came to be subjected to imperial exploitation. This gave rise to among
other things, capital flight from these territories.
Hobson hit at this view (Kautsky) in a very strong way. He says
that it is not plausible to think of Imperialism in this perspective since
this will imply a “deliberate renunciation of that cultivation of the higher
 36

inner qualities which for a nation as for an individual constitutes the

ascendancy of reasons over brute impulse”. Hobson says that:
To term Imperialism a national policy is an impudent falsehood:
the interests of the nation are opposed to every act of this
expansive policy. Every enlargement of Great Britain nationalism
… there are even those who favour or condone the forcible
suppression of small nationalities by large ones under the impulse
of Imperialism because they imagine that this is the natural
approach to a world federation and eternal peace.

The above refutes the assertion of Kautsky that state policy in behind or
synonymous with Imperialism. We would not deny any way, the
possible influence on state policy of big investors, monopolists etc, and
their financial managers who would stop at nothing to secure some form
of national alliance of other interest within the society that may be
threatened by movements of social reform.
Let us at this stage conclude this segment with what amounts to
Hobson’s explanation of Imperialism. It is natural for people to hold
different views on a subject especially one as interesting, controversial
and emotional as Imperialism; an attempt by scholars have been made
to distinguish between the good or sane and the bad or insane types.
The question is, whether Imperialism is no longer a phenomena? Does
it then have different faces or colours? What, objectively speaking is
Imperialism? Hobson in his Imperialism: A Study, created two different
types of Imperialism: EXCUSABLE which refers to “good” or “sane”
and the INEXCUSABLE which refers to the “bad” or “insane” kind. The
sane type is accepted as legitimate and relates to colonialism. So to
him it was excusable, especially on the grounds of the consideration, he
argues, that colonialism is a response to nature and so a “natural out
 37

flow of nationality, to sparsely populated areas”. “It was also marked by

the evolution of self governing institution”.
By way of comparison, the bad or insane type of Imperialism is
that which he accepts is a global phenomenon that began about 1870.
According to him, this shade of Imperialism is characterised by the
existence of:
a) “Competing empires rather than all embracing singe empires of
the past,
b) “the dominance of financial or investment capital over mercantile
interests, and
c) “The absorption of new territories, populated by culturally
inassimilable peoples for whom self-government was not
intended.
The character and form of the insane or bad Imperialism of Hobson,
agree with Lenin’s characterization of Imperialism. What in some way
this suggests is that Hobson’s insane Imperialism or the new
Imperialism, is Lenin’s Imperialism, which to him is the highest stage of
Capitalism.
IMPERIALISM: SOME THESIS
Several theses have been proffered by scholars for the
understanding of the phenomenon-Imperialism. Some of these that
shall be considered although briefly are as follows:
a – The Under Consumption Thesis
b – The Organicism/Biological Thesis
 38

THE UNDER CONSUMPTION THESIS OF IMPERIALISM

Hobson had greatly trumpeted the idea that the cause of
Imperialism was the deep-root under consumption at some or within the
domestic environment. The fact about this Under Consumption is that it
was not real; it was artificial, as it was as a result of the poor wages
doled out to workers. This was one of the major contradictions of
Capitalism. Lenin ridiculed all those who anticipated the reformation of
Capitalism, which would correct the state of Under Consumption
perhaps, through payment of sustainable wages and the granting of
other incentives to the workers. To this expectation, Lenin appeared to
have said a loud No, as an answer, as if saying: “wash a pig, cloth a
pig, pig is a pig and will continue to be a pig”. The lack of consuming
power was an ineradicable feature of Imperialism. This appears to seal
the hope in such a transformation.
This Under Consumption thesis by Hobson assumed that
economic equilibrium would be maintained only if a ‘right’ amount of a
given income was saved. This may not be so in real sense and has
been greatly criticised. Lenin has been criticized for saying nearly:
…...all investment as capital ‘widening’, are not as capital
‘deepening’ (that is invested in technological innovations, which helped
to dissipate.… invest at through increasing the rate of depreciation.
Moreover, Hobson mistakenly saw investment nearly as a means to the
production of consumption goods and not as a form of consumption in
its own right … (Bloaney, M.F, 1976).
THE ORGANICISM/BIOLOGICAL THESIS OF IMPERIALISM
The Organicism/Biological thesis of Imperialism explains that the
human society is an organism which like every biological being,
 39

develops from a simple to a complex form of being. This biological or

evolutionary analysis of political cum economic issues, owes its origin
to Herbert Spencer who according to Hobson:
…..not only applied scientific methods to social understanding, but
also saw human society as an organism moving from simple to a
more complex ‘individual’ form. (Hobson, 1904:49-55).

A qualitative human stock was not to be realised through a mindless

struggle for survival by human species, rather could be easily alone by
eugenics, which is a scientific method of selection of wrong and virile
species. The human society has attained a level of advancement that it
is no longer necessary to engage in physical competition for survival in
order to generate, or sustain development and progress. All this could
just be done by the use of scientific method in production and
distribution which would help to create a better human stock. Eugenics
when applied in this perspective would promote human progress and
elevate it from the quantitative plane to the “qualitative”, aesthetic and
intellectual plane. “This appears to agree with the Marxist law of
transformation of quantity to quality.
JUSTIFYING IMPERIALISM?
What has been done in the preceding segment has been an
attempt at resenting certain thesis that offers reasons for Imperialism.
In the same temper, two thesis that attempt to justify this phenomenon
are presented and briefly discussed. It is obviously not enough to point
to the cause of a phenomenon, it is equally important to justify the
occurrence of the phenomenon. This part is intended to be devoted to
this purpose. In this respect we propose to discuss, (i) the Scientific
 40

defence of Imperialism which is tied to the social efficiency thesis and

(ii) the power thesis.
THE SOCIAL EFFICIENCY THESIS
This thesis posits that the human society is complex and the fact
of its complexity manifests in the intricate web of relationship occurring
within it. It requires organisation and proper maintenance to fully realise
its great potentials for the benefit of all humanity. To achieve this fact
and with due consideration to the complex nature of the human society,
it would almost naturally require races of the highest “Social Efficiency”
to pilot in the best possible way and means they deem fit, the affairs of
human beings. This would no doubt include, “conquering, ousting,
‘subjugation or extinguish races of lower efficiency”.
What this quickly suggests, is that eye brows would not be raised
at wars, exploitation by others who enjoy the advantage of military,
economic and technological supremacy. Their superiority and capacity
to dominate others, clearly distinguished them then, as superior to both
races, thus they possess a high degree of Social Efficiency.
This thesis opines that:
The good of the world, the true cause of humanity, demands that
this struggle, physical, industrial, political continue, until an ideal
settlement is reached whereby the most socially efficient nations
rule the earth in accordance with their several kinds and degree of
social efficiency.

Those who patronise this thesis have asserted in very strong

terms that:
When one race shows itself superior to another in various
externals of domestic life, it inevitably in the long run gets the
upper hand in public life and establishes its predominance.
 41

Whether this predominance is asserted by peaceable means or

feats of arms, it is none the less … (Hobson 1902, 155).

Within the above lines and body of argument, lie the statement and
justification for Imperialism. Apart from the odious feeling the word
Imperialism now generates, it is necessary to briefly explore the
meaning of the phrase “SOCIALY EFFICIENT”, which appears to be the
driving force behind Imperialism. It might not just be enough to explain
it in a simplistic fashion as a mere compound word, (social efficiency),
superficially having to do with the society and its capabilities. Any
rigorous analysis would go beyond such simplistic explanations of
concepts, phrases or terminologies, and venture to abstract the
contextual meaning of concepts or terminologies. It is in this vein that
“socially efficient” is analysed and viewed as suggestive of an opposite
term, socially inefficient which in itself is suggestive of, weakness,
poverty, intellectual inferiority, political and economic immaturity. In
effect, it approximates the idea of being strong in the struggles of life. It
represents a superior capacity of beat and subjugate other human
races that as a result of their lack of this quality-Social Efficiency are
described and referred to as the Low Races. This properly stated is the
already known concept of survival of the fittest. In this respect Hobson
explain that:
In the history of man, as throughout nature stronger, races have
continually trampled down, enslaved and exterminated other
races. The biologist says: This is so rooted in nature including
human nature that it must go on …

It becomes evident therefore that “Imperialism is nothing but this natural

history doctrine regarded from the stand point of one’s own nation”.
 42

Somehow, Hobson had expressed his optimism that Imperialism was

going to go beyond the realms of politics and economy and spread to
embrace according to him:
… a large complexity of ethical and religious finery and we are
wafted into an elevated atmosphere of imperial Christianity, a
mission of civilisation which we are to teach, the arts of good
government, and the dignity of labour.

THE POWER THESIS

A second thesis for the justification of Imperialism is the Power
Thesis. In many respect, the Power Thesis shares much in common
with the Social Efficiency Thesis, which confers on the socially efficient
or nation, the power to do just what it wants to do, when, where and to
what extent regardless of the consequences attendant on such Nations.
As may be observed, the difference between the two thesis indeed is
fine and could pass almost unnoticed. Social Efficiency is general and
all-encompassing in scope, yet conferring a measure of power.
However, it does not (primarily) emphasize raw and physical power, yet
this element is not entirely absent. On the other hand, the Power
Thesis emphasizes not only the physical force, but the political also.
The logic and essence of the Power Thesis is captured in the following
lines:
The power to do anything constitutes a right and even a duty to do
it …Here is the undiluted gospel of Imperialism, the fact of
physical struggle between white races. The fact of white
subjugation of lower races, the necessity based upon these facts,
the utility based upon the necessity, and the right or duty upon the
utility. As a revelation of the purer spirit of Imperialism, it is not to
be bettered. The English man believes he is a more excellent
type than any other man; He believes that he is better able to
assimilate any special virtues others may have; he believes that
 43

his character gives him a right to rule which no other can possess
… It is essential to the maintenance of the struggle of nations
which is to quicken vigour and select the fittest or most efficient
that each competitor shall be stimulated to put forth his fullest
effort by the same feelings regarding the superiority, the rights
and imperial duties of his country.

In this respect, what ADOLF HITLER is credited to have said makes

meaning. Hitler is quoted to have said that “the boundaries are made
by men and can always be redrawn by them. That Nature started by
establishing life and is watching the plan of power and the strongest are
her dear children”.
What has so far been done here has been to present the many
faces of this phenomenon and explain it both within the context of
certain scholars’ views as well as with some thesis. In addition, an
attempt has been made to present the basic premises for justifying
Imperialism.
However one looks at Imperialism, the facts still show it very
clearly as a total danger to the self determination of nations as well as
any meaningful development of nation too. This assertion may easily
be explained from the background of the superior military power, greed,
in an unnatural, unmitigated environment for unequal exchange.
Perhaps, the only challenge to the danger and effects of Imperialism
within a state under exploitation is the entrenchment of a functional,
vibrant and genuine democracy. Well, for African or Asian Countries,
especially, this appears to be a long shot. Democracy defined within
the understanding and in respect to gains of a particular class, is no
democracy and will rather close ranks with imperialist force and
liquidate the entire country. This appears to be the predicament most
 44

Africa countries find themselves in. When we take about Comprador

Bourgeoisie and a Rentier Economy, these phrases in many ways
described the level of political feebleness and the economic condition of
a system.
 45

CHAPTER FOUR
IMPERIALISM: THEORIES, METHODS AND INTERPRETATIONS
The theories that shall be compactly investigated here are:
a – The Marxist – Leninist Theory
b – The Liberal Theory
c – Out lines of Third World Theory/Perspectives.

THE MARXIST-LENINIST THEORY

It is founded on the well known Marxist premise theme, that
political phenomena are all a reflection of economic forces. An
assertion as this strongly holds that the political phenomenon of
Imperialism issues from, and aptly refers to the economic system within
which it emanates. For Marx, and all others who share his view, the
economic system responsible for Imperialism is nothing other than
Capitalism. He believes that what brought Imperialism is Capitalism.
Lenin in his writing repeatedly states that Imperialism is not a new mode
of production rather it is the highest and last stage of Monopoly,
Capitalism Moribund and decaying Capitalism …” Imperialism is just a
stage in the development of Capitalism. It Should be seen as the very
last stage of this mode of production since the contradiction within it
were soon going to over-run it and pave way for socialism, an entirely
new and different mode of production. Note that the nature and
complexion of capitalism are undeniably prominent in Imperialism, but
as would be anticipated, with more worrying contradictions. Nothing in
terms of the capitalist mode of production, the economic law of
capitalism-basically the surplus value and their attendant contradictions
have changed. This is so because in all capitalist societies the means
 46

of production are still in the hands of just a few people in the society or
their associations which monopolise the entire economy. This triggers-
off a class struggle within the society between the owners and
controllers of both the means and mode of production on one hand, and
the workers who survive by selling their labour for non-commensurate
wages: This state of affairs increase greatly the misery and exploitation
of the working class. The bourgeoisie (those who owns the means of
production) has one major drive, which is the maximization of profit for
them or the few monopolies.
What Contemporary Imperialism truly lacks is the clear political
content which is what differentiates it from the Imperialism that is
associated with the “subjugation and control of foreign lands …” The
acquisition of territories in the form of colonies is now a thing of the
past. The era of politically extending the territorial integrity of states is
now an anachronism. However, the economic implications which were
then important are still important today, and have assumed infact, very
swift dimensions.
Lenin wrote when markets all over Europe appeared to have been
fully exploited and thoroughly saturated. Neo-Marxist has attempted to
fault this theory of Imperialism, which is based on the premise of
surplus capital investment and market creation for further project
overseas. They point to the fact that “America’s overseas investment is
indeed very negligible to the survival of the American economy”,
however, they maintained that “the domestic economic effects of
imperial were very crucial”.
Kausky and Hilferding thinks that the explanations offered by
Mainstream Marxists do not at all explain Imperialism, at least not in its
 47

contemporary sense, they believed that Imperialism was a policy of the

state which was responding to the laws within its economic mode of
production-Capitalism. It holds therefore that an imperialistic policy
was a thing of choice to which capitalism was more displaced. This
school saw Capitalism as the main evil while Imperialism was its logical
manifestation.
THE LIBERAL THEORY OF IMPERIALISM
One of the main advocates of this school of thought is John
Hobson. He criticized the phenomenon of Imperialism and proffered
certain solution for it. He explained Imperialism within the context of
Under Consumption and the whole question of Surplus Value. The
Liberal Theory holds that the root of Imperialism is primarily the Surplus
Value, which was also identified by the Mainstream Marxists.
Note: They believed that what brought about imperialism is SURPLUS
VALUE while the Marxist-Leninist believed that it is CAPITALISM.
The liberals recognise the role of Surplus Value and the quest for
markets in foreign land for surplus goods and the investment of surplus
capital. However, Hobson has observed that imperialist expansion is
not inevitable. They argue that since the surpluses result largely in the
poor distribution of wealth, the cure then will obviously in the expansion
of the home markets through practical economic reforms which could
be in the nature of substantially increasing the purchasing power of
workers-increase of salaries/wages and eliminate over-saving. This will
drastically reduce the bank capital which is always available for re-
investment.
Basically both arguments of the Marxist and Liberal Schools are in
many respects, the same. However, the distinguishing thing is the
 48

Liberal’s faith in a domestic alternative to Imperialism. What stands to

be questioned in this option is it’s important in the face of very clear and
important historical facts. Hobson had noted that inequalities in the
distribution of wealth and income in Britain, drastically effected
consumption power of the British working class, this singular fact made
it unprofitable for capitalists to fully exploit their industrial capacity at
home, hence the idea for external markets. A nagging question in this
whole thing is how was this domestic capitalist contradiction intended to
be resolved to realise the domestic option? How appropriate was the
increase of wages of the working class an adequate solution, both in
solving the problem of under-consumption and redressing the
income/wealth maladjustment within the society? What measures
would be put in place to contain the economic consequences of wages
increase without, perhaps, a corresponding rise in production, (and the
market opportunity for the products locally)? These are some of the
questions and issues that continue to stare this alternative path and the
Liberal School of thought in the face.
For the avoidance of doubt, it is important to reiterate that
although the Liberals in many ways share views of the Marxist camp as
to what the reasons for Imperialism are, yet they differed significantly in
their suggestions for solution. Not also that the Third World Theory
believed that what brought Imperialism was Colonialism.

OUTLINES OF THIRD WORLD THEORY

Any attempt at presenting what will amount to an outline of the
Third World Theory, or Perspective of Imperialism will require
appreciating the global power equation. Somehow, this will make it to
 49

be highly rewarding. Whilst this power equation would involve variable-

aspects of power-the massive power stature of the United States of
America, the place of the Third World countries within the power
spectrum calls for some examinations. In this regard, Krauthammer
opines that:
There is but one first-rate power and no prospect in the immediate
future of any power to rival it … American pre-eminence is based
on the fact that it is the only country with the military, diplomatic,
political and economic assets to be a decisive player in any
country in whatever part of the world it chooses to involve …

To appreciate Imperialism from the Third World perspective or stand

point, it must be seen and related within the context of the unequal
relationship between industrialized and non-industrialized countries.
From the above, the relationship of power tilts to one side, and of
course, to the disadvantage of the countries in the Third World. In all,
the relationship is strictly one of exploitation and domination by the
stronger and advanced economy of every sector of the economy of the
Third World.
Apart from this general comment, what could amount to Third
World Perspective, by and large appears to be scattered perceptions of
certain personalities or groups of individuals. These have in some way
attempted to condemn the principle of colonialism and its successor-
Neo-Colonialism. If Colonialism symbolized Imperialism, its successor,
Neo-Colonialism would have certain traits and characteristics that would
make any association of it to the earlier phenomenon easier and
reasonable.
The phrase Neo-Colonialism was first used in the early 50’s by
some Afro-Asian leaders like Sukano and Nkrumah etc. Sukano had
 50

decried the economic control, intellectual and actual physical control by

a small but alien community within a nation. In 1961 at CAIRO, the
Third All-African people conference met and declared thus:
The conference considers that Neo-Colonialism which is the
survival of colonial system in spite of formal recognition of political
independence in emerging countries, which become the victims of
an indirect and subtle form of domination by political, economic,
social, military or technical (forces), is the greatest threat to
African countries that have newly won their independence or
those approaching this status …

In a nut shell, the goal of imperialist policy in the Third World is basically
to cripple emergent Third World nations, undermine their political
independence and permanently subjugate them economically by
controlling every aspect of their economy and tailoring them to suit the
world capitalist system.
What could go for an outline, uniformly common to all the
countries of the Third World in search of the Theory of Imperialism is
woven round the DEPENDENCY THEORY. An understanding of this
view point certainly will give the understanding of Imperialism from the
view point of the school. This theory may be explained within Theotonio
Dos Santos’ definition of Dependency thus:
…a conditioning situation in which the economy of the group
countries are conditioned by the development and expansion of
others …

He further explains that the basic fact is that it causes the dependent
countries to be both backward and exploited. Dependency is as a
result of the international division of labour that stimulates and permits
industrial development to take place in some countries while restricting
 51

other countries whose growth is also “conditioned by and subjected to

power centres of the world”.
DEPENDENCY THEORY, though as explained above, argues
that even as colonial masters had gone, they still exploit their colonies
which is Imperialism; it is a critique of Western Capitalist nations and
their relations with the Third World. It is a Third World response to the
economic Imperialism of capitalist countries like the U.S.A., Britain and
all other members of the European Economic Community (E.E.C.).
The theory argues that these countries have not really given up
their colonial powers but are still wielding great influence in the politics
and economy or what should have in the light of present realities be
their colonies-geographical expression, for their economic, socio-
political domination and exploitation. For Coperaso and Zare, this
phenomenon simply refers:
… to a structural condition in which a weakly integrated system
cannot complete its economic cycle except by an exclusive (or
limited) reliance on an external complement.

An important point here is to note that the Dependency Theory is not a

Unitary Theory. There are various shades of this theory as there is
variety of scholars. Through capital flight from Third World, capital
resources accumulate in the exploiter countries which they in turn dole
out to the dependent countries for their financial, industrial and
agricultural development.
So then we see how the Third World development is tied to the
interest of the West. The situation became worse by the penetrating
extractive powers of multinational companies that control the raw
material resources of poor countries. Even for their products like crude
 52

oil, still the price is very cheap by all calculations for the capitalist
(super-rich) countries. There is nothing in the relationship between the
developed economies and the developing economies provide the raw
materials that serve the industries of the developed nations and also
provide the market for their finished goods. The profit from this
transaction is not ploughed back in real sense to develop the struggling
economies of these dependent countries rather, these are carted away,
further impoverishing these nations. An aspect of this Dependency
Theory is explaining the relationship between the developed and
developing countries.
There can’t be any meaningful transformation of the economy of
these countries if they have a weak or no technological backup, at all.
In line with this also, is the shallow capital base which by extension,
explains the reason for the huge debt-burden these countries are
known to be struggling with.
This part has only attempted to sketch an outline of the Third
World perception of, and perspective of Imperialism and have neither
analysed a theory nor built one that may be referred to as a Third World
Theory of Imperialism. An in-depth understanding of this outline reveals
the many sided dimensions of Imperialism and effects on all dependent
economies. Dependency Theory simply reflects an apology for the
level of Underdevelopment in the countries of Asia, Africa and Latin
America. It also shows the difference perspectives these continents
see their unequal relationship with the metropole. Their experiences
granted may not be the same and do not require to be same but the
effect has largely shown the union trend, in the depth of extraction and
spread of exploitation.
 53

EARLY PERSPECTIVES ON DEPENDENCE

Until the 1960s, the prevailing theory of economic development,
known as modernization theory, maintained that industrialization, the
introduction of mass media, and the diffusion of Western ideas would
transform traditional economies and societies. These influences would
place poor countries on a path of development similar to that
experienced by Western industrialized nations during the 19th and 20th
centuries.
Dependency theory rejects the central assumptions of
modernization theory. In the 1960s advocates of dependency theory—
mostly social scientists from the developing world, particularly Latin
America—argued that former colonial nations were underdeveloped
because of their dependence on Western industrialized nations in the
areas of foreign trade and investment. Rather than benefiting
developing nations, these relationships stunted their development.
Drawing upon various Marxist ideas, dependency theorists observed
that economic development and underdevelopment were not simply
different stages in the same linear march toward progress. They argued
that colonial domination had produced relationships between the
developed and the developing world that were inherently unequal.
Dependency theorists believed that without a major restructuring of the
international economy, the former colonial countries would find it
virtually impossible to escape from their subordinate position and
experience true growth and development.
In the 1960s, dependency theorists emphasized that developing
nations were adversely affected by unequal trade, especially in the
exchange of cheap raw materials from developing nations for the
 54

expensive, finished products manufactured by advanced industrial

nations. They argued that modernization theory did not foresee the
damaging effect of this unequal exchange on developing nations. Even
the achievement of political independence had not enhanced the ability
of former colonial nations to demand better prices for their primary
exports.
Some developing countries attempted to counter the inequalities in
trade by adopting import-substitution industrialization (ISI) policies. ISI
strategies involve the use of tariff barriers and government subsidies to
companies in order to build domestic industry. Advocates of ISI view
industrialization as the precondition of economic and social progress.
However, many developing nations that managed to manufacture their
own consumer products continued to remain dependent on imports of
capital goods. ISI also encouraged multinational companies with
headquarters in the industrialized world to establish manufacturing
subsidiaries in the developing world.
Dependency theorists have also focused on how foreign direct
investments of multinational corporations distort developing nation
economies. In the view of these scholars, distortions include the
crowding out of national firms, rising unemployment related to the use
of capital-intensive technology, and a marked loss of political
sovereignty.
From the perspective of dependency theory, the relationship
between developing nations and foreign lending institutions, such as the
World Bank and the International Monetary Fund (IMF), also
undermines the sovereignty of developing nations. These countries
must often agree to harsh conditions—such as budget cuts and interest
 55

rate increases—to obtain loans from international agencies. During the

1980s, for example, the foreign debt of many Latin American countries
soared. In response to pressure from multilateral lending agencies such
as the World Bank and the IMF, these nations enacted financial
austerity measures in order to qualify for new loans. In the short term,
these economic policies led to higher levels of unemployment and
slower economic growth.

EVOLUTION OF DEPENDENCY PERSPECTIVES

The impressive rise of the newly industrializing countries of Latin

America and East Asia since the 1960s defied the bleak prognosis of
dependency theorists. Both Mexico and Brazil, for example, exporters
of raw materials that turned to ISI and encouraged direct foreign
investment and external loans, have experienced substantial industrial
growth. South Korea and Taiwan successfully implemented ISI policies
and became global exporters of manufactured goods. The economic
success of these nations forced a re-evaluation of the central premises
of dependency theory.

In the 1970s, sociologist Fernando Henrique Cardoso addressed

weaknesses in dependency theory. Cardoso asserted that developing
countries could achieve substantial development despite their
dependence on foreign businesses, banks, and governments for
capital, technology, and trade. He believed that developing nations
could defend national interests and oversee a process of steady
economic growth by bargaining with foreign governments, multinational
corporations, and international lending agencies.
 56

Other scholars, such as American sociologist Peter Evans, have

gone even further than Cardoso in recognizing the importance of
negotiations between governments in developing countries and
governments and firms from industrialized nations. These analysts
believe the way nations respond to dependence on foreign capital can
be as important as the dependence itself. These refinements to
dependency theory suggest the promise of new approaches to the
problem of development, approaches that seriously take into account
the role of politics and government-level negotiations in determining
economic outcomes.

POST-WAR IMPERIALISM: ORGANISATION AND EVOLUTION OF

CONTEMPORARY GLOBAL ECONOMY.

Here, we are to brief and present the account of the evolution and
organisation of contemporary world economy. Without going through
the detail, it is a well known fact that the two world wars devastated the
global economy. It caused both the loss of human and material
resources, which drastically changed the face of the world economy.
While the development dislodged many countries that had been very
powerful, it turned some others around and shot them into leadership,
renowned and formidable position in international politics. To a large
extent, the level of a country’s investment in the wars determined the
degree of its devastation economically and politically.
It may be said, without fear or contradiction that the present global
economy was shaped by the events before and immediately after the
Second World War. Far from being an exaggeration, the face the
global economy wears today is basically an American creation. The
 57

U.S.A. at the close of the Second World War knew that it was indeed,
imminent and so quickly planned ahead of time. The U.S. decided to
break all forms of isolationism which it realised in the scheme of things,
was no longer the best of foreign policy standard. Every other policy
that in the light of present realities did not offer any form of advantage to
its economy was quickly done away with.
If at the end of the war, stock were taken, it will probably have
revealed that Europe was battered in human and material terms.
Britain which played a very significant role, was owing over $70 billion.
In addition, it suffered another $8billion in private capital looses and
used up to $750 million of gold reserve. Still more, it sold some its
overseas investments worth about $6 billion. Britain’s list of losses will
seem inexhaustible, with 1/3 of her housing lost plunging the social
sector into serious trouble. Lastly, it lost about $3.5 million in its
merchant shipping.
In comparison, the U.S. emerged from this global turmoil with a
stronger economic base and a more powerful resolution to Rule the
world. The loses of the Allies eventually became the gains of the
United States, indeed a zero-sum game. This was as a result of its
limited participation in the wars. America’s Gross National Product rose
100% within the inter-war period (1935-44). It has been observed by
economic historians that U.S. gold reserve in 1932 was worth merely
$4b, which shot-up to a staggering total of $20.6 billion in 1958. The
American economy had by all ramifications and calculations overthrown
the entire global economy. It will make sense to opine here that
available economic statistics confirm that in 1914, U.S.A’s share of the
 58

over-all global capital export was a miserable 6.3% which improved and
rose to 35.3% in 1930 and by 1960, it was 39.1% almost unbelievable.
However, while United States economy was moving up, those of
Britain and France were suffering deep-cut decline or recession. The
picture is so gloomy. For Britain, the decline was like a sustained and
progressive thing: falling from sublime height of 50.3% to 43.8% and
then to a ridiculous level of 24.5% over the same period in United
States economy. The story is not different from France and Germany
that fell from 39.5% through 11.0% to a painful level of 5.8%.
From the above presentation, it is clear then that the United
States had gotten an overwhelming grip of the global economy, running
from obscurity to sublime. It is no longer difficult to appreciate the facts
and details of what emerged as the post-war economy. Its evolution
and organization, no doubt, have dictated the pace of the development
of contemporary economy. If this statement is accepted and we hope
you will have no difficulties accepting it, then, it will not be difficult also
to observe and appreciate the direction, and the impact of
(Contemporary) Imperialism. The U.S. is non-relenting in keeping what
is got during the years of turmoil, uncertainty and socio-economic and
political death. Hind sight and proper planning with a large commitment
to what is today generally accepted and largely referred to as the
American dream. The desire and drive to survive and even lead the
leaders of yesterday.
What the U.S. did to turn their circumstances and global economy
around was to re-appraise her economic policies with a view to gaining
from the whole event. For example, the United States Neutrality Act of
1935, prohibited any form of arm sales to belligerents i.e. those
 59

states/nations that are waging wars. The prevailing situation was such
that United States could benefit from; it liberalized its arms sales.
Therefore, this Act was repeated which attracted much profit by
narrowing belligerents to buy arms on cash basis. They were also to
transport these in American ships. It was a double-barrel-gain through
arms sales and transportation. The result was that U.S. gold imports
increased from $1.4 billion in 1936 (before the Act was repealed) to
$4.7 billion in 1940-only a year later.
NOTE: Another instrument that was well exploited was the Land-Lease
Act which permitted the U.S.’s government to land, lease or otherwise
supply military equipments to any country the President of America
approved.
Between 1940 and 1945, monopolies in the U.S. were able to
increase their sales anonymously making such breath-taking profits
which rose from $3.3 million in 1939 to $107.4million between 1941-45
representing 10.3% and 23.8 of the GNP respectively. The whole thing
derives from the ‘open door’ policy of the U.S.A. This gave rise to very
large starter of monopolies that began to generate unprecedented
wealth. The new economic climate in the U.S. was one that inspired
self confidence built on economic power and the realisation of the fact
that Britain was no more an economic, power of serious consequence.
What remained to be done seemed to be a tying up of the gains and
resolving to take the mantle of global leadership. This is done not
without the understanding that being a major global leader or
intervening anywhere at short notice globally requires a sound and well
rested economy which the U.S.A undoubted possessed. It may be the
realisation of this fact that informed the following declaration.
 60

American imperialism can afford to complete the work the British

started; instead of salesmen and planters, its representatives can
be brains and bulldozers, technicians and machine tools.
American Imperialism does not need extra territoriality; it can get
on better in Asia if the Tuans and Sahis stay home.

American Imperialism based it aims at wreaking vengeance on the

imperial powers, with a view to penetrating, over-throwing and side-
lining the imperial and colonial markets. These markets had been the
source of wealth and economic main-stay of Britain and other European
powers which U.S.A. was prelude. American industries were not
granted a fair deal especially in tariff thus, limiting the access to
American goods to market. The summary of everything here is just that
we have succeeded in saying about the time the idea about American
Imperialism was hatched, its objectives and achievements. In this
regard therefore, let us consider the insightful remarks of Richard
Gardner who has it that:
The First World War aids much to stimulate American concerns
with the political importance of non-discrimination. An influential
body of literature developed which cited unequal opportunity as
one of the major causes of conflict closed trade areas controlled
by imperial powers were held to deny other countries their natural
rights to their vital raw materials, markets and investment outlets.

It is quite clear that Contemporary Imperialism has rich economic

contents and less concern or quest for extra-territoriality. The above
reflects the mood of the period, American therefore, sought to break the
strangle hold of imperial powers. This does not however, observe the
political compulsions and dimensions of this problem.
When the time comes, America was well prepared to carry out her
well thought-out plans. As would be expected, her main target and of
 61

course, victim was Britain which controlled the largest political and
economic empire in the world at that time. However, the fortune of
Britain at this particular point in time had taken a nose dive and forced
her to seek for aid from American under a loan agreement between the
two countries. In 1946 for example, the total receipts by Britain to
totalled £363 million where as her payments came to £527 million, a
record deficit of £164 million. The pressure became so much on her
that the only course open was the taking of loans. However, under the
Land Lease Agreement, Britain was to remove all forms of
discrimination with regard to importation of U.S. goods into Britain and
all other protected countries and markets. In addition, Britain was to:
a. Pay for imports from U.S. in dollars or gold after 1947.
b. Spend a $930 million credit in the United States.
c. Refuse all loans to the Commonwealth Nations on more
favourable terms than the U.S. loans lend-lease principles and
facilities. All these requirements no doubt were strange and
difficult, aimed primarily at crippling the great, Great Britain.
Yet considering the need, Britain accepted them to be able to receive
an aid package worth $3.75 billion. Suffice to say that the main issue
was economic yet this fact did not divorce the political set up.
In fighting that the corridors of trade be thrown open, somehow
the very colonial principle and system was attached seriously. In fact,
United States required the European powers to recognise and agree to
the right of self-determination of colonial peoples. This would mean
independence to several of the colonial peoples who now will use their
political independence to change their economic circumstances. This
could result in their throwing open their countries for economic activities
 62

to all other countries that are interested and no longer restricted to the
colonial or imperial government. Nabudere has pointed out important
reasons for American imperialism and struggle to end colonialism to the
following lines:
The U.S.A. set out not only to generalise the ‘Open Door’ policy in
the Allies colonial territories, but to do as champions of ‘freedom’.
The strategy of neo-colonialism must be credited to the U.S.A. at
this period, for it was in its interest to hasten the implementation of
neo-colonial strategy as opposed to a ‘classical’ colonial one. The
crisis that capitalism faced and which needed solution was the
problem of liberalised trade, and the mobilisation of capital for
‘reconstruction’. This could not be done with the closed markets,
closed sources of raw materials and closed outlets for capital
exports that existed in the inter-war years.

In the forgoing, we have attempted an examination of Post War

Imperialism appreciating the evolution and organisation of the
contemporary world economy. We have dared to suggest that it was in
effect, an American strategy to dismantle the colonial system which
concentrated economic activities in the hands of the colonial (imperial)
powers. U.S.A. could not afford to watch its economy dwindle and the
flames of its prosperity gradually extinguished by the monopoly of trade
and sources of raw materials. Thus it was a well outlined plan to
destabilise the former system to pave way to yet another brand of
Imperialism in which America will assign to itself, and perform a major
role too.
To say the least about this whole development is that the political
and economic stature of Britain especially, greatly diminished. A careful
examination of the terms of most of the AID agreements/plans shows
that Britain was wholly on the receiving end. This greatly rubbed-off on
 63

her global personality and capability. There seem to have developed

then a “New World Order” in which America was equipped and was
seen as such by other nations, to play a leadership role.
At this point therefore, it becomes necessary for us to consider
the Blue Print of Multilateral System of Production, Trade and Finance
when this aspect is presented and grasped, it is hoped that every other
chip in the understanding of Contemporary Imperialism will gradually fall
in its proper place.
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CHAPTER FIVE

MULTILATERAL SYSTEM OF GLOBAL PRODUCTION, TRADE

AND FINANCE-A BLUE PRINT

In planning and realising a multilateral system of world production,

trade and finance, it must be explained here that it requires a lot of clear
headed planning with objectives clearly spelt out. In this respect then,
the whole plan rested on a tri-dimensional approach: The creation of:
a – Trade institutions
b – Monetary institutions
c – Financial cum political institutions.
The idea of creating Trade Institutions was not basically to realise a free
trade which is the dream under a monopolistic set-up, rather it is to try
as much as possible to remove or reduce all unknown and possible
trade barriers to liberalising trade. This, it was believed, would overhaul
the entire economy (globally). When this was done, it was believed,
other revolutionary measures towards improving trade would follow.
Secondly, the question of creating and developing viable
Monetary Institution was to devise a possible means of achieving
currency convertibility rather than the utopian expectation of eliminating
all forms of exchange control.
Finally there was need for well structured financial and stable
political institutions. It is only in a stable polity that meaningful economic
activities can profitable evolve and be sustained. In the absence of well
articulated financial institutions the profits of economic activities will not
be well managed; nor will there be good cash management and the
 65

proper channelization into lucrative investments or ventures: Their role

as catalysts of development can never be under estimated.
All that are explained above are precisely intended to serve as a
preface to an in-depth discourse on the institutions of (IMF)
International Monetary Fund and the (IBRD) International Bank for
Reconstruction and Development, i.e. World Bank. These two
institutions, Bretton Woods believed that they are for the realisation of
the second and third waves of the three pronged approach discussed
above. The three pronged approach was developed to fashion a
multilateral system of world production.
MULTILATERAL IMPERIALISM: IMF AND WORLD BANK
The International Monetary Fund
The World’s International Monetary system is governed largely by the
International Monetary Fund which was established at Bretton Woods in
1944 in the after math of the great depression of the 1920’s and 1930
and in preparation for the peace after the World War II. There were
fears that the protectionism and “beggar-thy-neighbour” policies that
exercised the period after the 1st World War would rear their ugly heads
again to the detriment of the world economy at large, if not to individual
countries within it. Thus the IMF was conceived originally as an
institution for stabilising the world economy, rather than an agency for
development, lending term to member countries in temporary balance
of payment difficulties. The role of development was given to the
International Monetary Fund’s sister institution the World Bank,
established at the same time. Since the International Monetary fund
was not allowed to create money, John Maynard Keynes (the Joint
 66

architect of the IMF) used to complain that his proposal for a bank had
become a fund, and what was in fact a fund had been called a BANK.
Over the years, however, and particularly recently, the role of the
IMF has changed. It has increasingly become the Bank manager of the
poor countries, and much more of a development agency, lending
longer term to cover what are now perceived as longer term structural
balance-of-payments. The role of the World Bank has also been
changing and now lends as a means of balance-of-payments support
(the function reserved for the International Monetary Fund) for what it
calls programmes of STRUCTURAL ADJUSTMENT.
With the breakdown of gold standard in the 1930s, it dawned on
countries the need for international co-operation in economic affairs.
There was a looming chaos in the global economic horizon. This was
as a result of a system of foreign exchange rates and the overall
international trade. Each country tried to secure its own interest in the
cost of others. They deliberately undervalued their currencies to secure
advantage for their exports. Competitive exchange depreciations,
exchange controls, import and export regulations and bilateral trade
pacts were the order of the day. This led to the decline of world trade.
It became clear that the monetary disorder of the world could be
corrected only by some kind of an international monetary co-operation.
Such a co-operation which was believed to have the answer for the
global economic decline would be capable of providing sufficient
flexibility through international assistance. Such assistance too, must
not affect the internal economic order of the country, as also an efficient
payment mechanism which would foster high stable levels of world
trade was necessary.
 67

Several proposals were put forward in this respect. In 1943, the

United States treasury published proposals for the establishment of an
international clearing union. This proposal was known as the WHITE
PLAN after Mr. White. Similarly the British proposed a plan known as
the KEYNES PLAN after Lord Maynard Keynes the architect of the
British Plan. However, these plans metamorphosed into a joint plan-
joint statement by experts on the establishment of International
Monetary Fund of the United and Association Nations. This became
the basis for the United Nations Monetary and Financial Conference at
Bretton Woods (New Hampshire) from July 1st to July 22nd 1944.
The purpose of the Bretton Woods Conference was to find out
means of ensuring a system of International Trade and payments
consistent with the dual objectives of high world productivity and trade
domestic employment and income with economic stability. At this
meeting, it was decided that an International Monetary Fund (IMF) be
organised embodying a working mechanism for the smooth settlement
of international payments. The International Monetary fund was
organised in 1946 and started functioning in March, 1947.
THE IMF OBJECTIVES
We could summarize the IMF objectives as follows:
1. Promotion of International Monetary Co-Operation
This is possible through a permanent institution which provides
machinery for consultation and collaboration on International Monetary
problems.
2. To Facilitate the Expansion and Balanced Growth of
International Trade
 68

They do this through the promotion and maintenance of high level

employment and real income and to the development of the productive
resources of all members as the primary objective of economic policy
members.
3. To Promote Exchange Stability
To promote exchange stability, maintain orderly exchange
arrangements among members, and to avoid competitive exchange
depreciation.

4. Establishment of Multilateral System of Payments

It was to assist in the establishment of a multilateral system of
payments in respect of current transactions between members and in
the elimination of foreign exchange restrictions which hamper the
growth of world trade.
5. Correction of Maladjustments in Balance Of Payments
They direct B.O.P’s maladjustments by lending some confidence
to members through making available the fund’s resources to them
under adequate safeguards. This will help them not to resort to
measures that are destructive to national or international prosperity.
6. Reduction in the Degree of Disequilibrium
Reduction in the degree and duration of disequilibrium in the
International balances of payments of members. These were the main
objectives that informed the establishment of the International Monetary
Fund.
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FUNCTIONS OF THE IMF

a. I.M.F functions as a short-term credit institution.
b. It provides machinery for the orderly adjustment of exchange
rates.
c. It is a reservoir of the currencies of all member countries from
which a borrower nation can borrow the currency of other nations.
d. It also provides machinery for altering sometimes, the par value of
the currency of a member country. It therefore tries to provide for
an orderly adjustment of exchange rates, which will improve the
long term balance of payments position of member countries.
e. It provides a machinery of international consultations.

The IMF was launched with $9 billion in both gold and foreign
exchange, however, with the refusal of the socialist bloc to join; this
amount was reduced to $8 billion. Every member of the fund was
assigned to a quota which can only be exchanged by a majority of 85%
of the total voter of members. By this system, U.S.A. and its major
allies got more than 85% of the quotas and could therefore, initiate any
change they desired. Initially the U.S.A. as a single major contributor to
the fund had 36% of the total quotas but now it stands at about 23%. It
is clear and must be appreciated in that respect that decision making
was tied to the total contribution (percentage quota) of each member.
From this stand point, we can see the role of IMF in the whole scheme
of America’s (Contemporary) Imperialism.
The point here is that Modern Imperialism is premised in the
global forces of the rich economy. Affluent countries that are influential
members of such global organisations as IMF have the capacity of
 70

stifling the over-all development of poor and struggling nations. These

countries have to give-up their political independence as it was-by
adopting for instance-every United States Programme of development
directly or indirectly through such a global financial body as IMF.
Refusal to swallow hook-line and sinker such ‘Western’ ‘American
made’ programmes by asserting their independence, normally, in which
case stringent measures are slammed on them, thereby distancing their
recovery and development.
The International Monetary Fund -SOME CRITICISMS
The fund was to serve as a catalyst of development especially for
developing nations but experience has proved otherwise. The IMF
conditionalities, act in a way that greatly frustrates and inhibits
development. These poor nations have become poorer and neck-
deeped into debts. The debt burden has become so heavy that these
debtor nations have simply embarked on re-scheduling and servicing of
debts than doing anything that will bring development and the general
improvement of living standard. This has taken its toll in the domestic
economy very heavily. We hasten to say that IMF has by and large
failed to solve the problems of underdeveloped, chronic debtor nations
of Africa, Asia and Latin America. In these countries the remedy is to
stimulate economic growth by long term international lending, but the
fund’s limited resources make this option impossible. Besides, the
fund is basically for short term loans. In recent years the capital of the
fund has been raised and this fact harbour the hope and expectation
that better prospects lie ahead for poor, struggling, and heavily indebted
nations.
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THE WORLD BANK (IBRD)

This was the second financial institution created at Bretton
Woods, which was officially established in June 1946 to help in the
economic problem of exchange between the owners and users of
capital. Its primary role concerns providing assistance for the
reconstruction, and the development of member nations. In 1947, the
IBRD helped France and the Netherlands with substantial loans for
reconstruction after the World War.
The IBRD started with a subscribed capital of $10 billion of which
only $2 billion was paid. The remaining $8 billion was to be on call in
proportion to members’ subscription. As would be expected, the prime
mover-main force to reckon with was and still is the U.S.A. The
reasons for this have been explained earlier. Note that the currency
that was worth anything during and after the war was the American
Dollar. Also the shape of the economy of the rest of the countries of
Europe and others was nothing to talk about. The U.S. Dollar
therefore, in the circumstances was the only usable currency at the
time. The United States originally subscribed 40% of the capital of the
Bank giving her a voting strength of 40%. At present its (U.S.) voting
strength has been trimmed downs to 25%.
The major role of the IBRD was to mobilize capital for
reconstruction and to stimulate the flow of private investment as the
establishment instrument states: that the role of the IBRD:
… was not so much that the bank could lend out of its capital as
the concept of the Bank, as a safe bridge over which private
capital could move into the international field.
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It is important to note that at the time when the World Bank was being
established by the U.S.A. The Bank, during this period could raise its
money from the U.S. money market. This meant that it could not initiate
or embark on policies that were contrary to United States monopoly
capital. To make sure that it did not frustrate the activities of local
banks, its interest rate were to be either the same or even more than
those charged in the local banks. All loans required government
guarantee from the borrowing nation. The IBRD is not allowed to
compete with private banks; consequently its funds are lent on
commercial terms at interest rates ranging from 5% to 7%.
One of the primary objectives of establishing the IBRD was to
stimulate private capital flow to Third World countries. Perhaps, it may
be necessary to systematically list the functions of the IBRD. They
include:
In Article 1 of the Agreement it is stated that
1. To assist in the reconstruction and development of territories of
members by facilitating the investment of capital for productive
purposes including (a) the restoration of economies destroyed by
war. (b) The reconversion of productive facilities to peace time
needs. (c) The encouragement of the development of productive
facilities and resources in less developed countries.
2. To promote private foreign investments by means of (a)
Guarantees or participations in loans and other investment made
by private investors and (b) to supplement private investments
when private capital is not available on reasonable terms, by
providing a suitable conditions, finance for productive purposes
out of its own capital, funds raised by it and its other sources;
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3. To promote the language balance growth of international trade

and the maintenance of equilibrium in the balance of payments by
encouraging long term international investment policy assisting in
national productivity and standard of living.
4. To encourage loans made or guaranteed so that the more useful
and urgent prefects large and small alike, will be dealt with first.
5. To conduct its operations so as to bring about a smooth
transference from war-time to peace-time economy.
The above quoted article clearly sets out the functions or objectives of
the World Bank. The membership of the IMF is prerequisite for
membership of the World Bank-IBRD. Perhaps it could be possible that
it was so made to carefully blanket the socialist countries out since they
were not members of the IMF. However, the socialist countries could
have seen the whole thing as the capitalist machinations to pocket the
economy of all the countries of the World that were capitalists although
they were too poor to be influential.

The IBRD can assist borrowing counties through:

a – By making direct loans from its own funds
b – By advancing loans out of the amount rose in the money
market.
c – It may guarantee loans in full or in part made by investment
agencies or private investor. However before granting any loan,
the Bank sends a mission to the member countries to investigate
three things:
i – Soundness of the project
ii – Soundness of the economy of the country
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iii – Whether the project is eligible to receive financial assistance

from the bank.
The World Bank is authorized to grant two kinds of loans viz:
RECONSTRUCTION and DEVELOPMENT LOANS. From the stand
point of development, especially in the third World, development loans
are very important. It is intended to create new productive facilities of
expend existing ones – like in the area of modern transport, scientific
agriculture, extension of industrialization which will create new
employment opportunities.
To realise most of the objectives set above, in the 1950s, the new
institution were created which function with the World Bank structure
and organisation. These were the International Finance Corporation
(IFC) which was created in 1956 (July) by the General Assembly
resolution adopted on December 11th 1954 and the International
Development Agency (IDA). The IDA was created under the initiative of
Senator Mulroney of USA in 1958. The statutes were presented to the
World Bank directors on January 26, 1960. The same year it became
operational. While the IFC in association with private investors,
contributes to the establishment, improvement and expansion of private
and productive enterprises so as to contribute to the development of its
member states; these investments will be made without guarantee of
reimbursement by the concerned member government, and only in
base private capital is not available at reasonable terms. The IDA
performs the opposite function of raising funds from government for
government unlike the IFC. These are mainly given on soft terms for
social projects.
 75

Our interest in all these is in the area of exposing these

institutions as agents of imperialism in contemporary times. They serve
the interest of international monopoly, capital in its efforts to continue
relentless concentration and centralization. It is a manifestation of
Imperialism.
Note, that no matter how benevolent these U.S. controlled
institutions appear to be, or are represented, they serve the American
view point, at least to the degree of America’s participation in them.
Such development does not portend good for the poor nations that are
even frustrated the more by these institutions. The loans granted are
specified for particular projects outside which the borrowing country has
no right to invest the loan.
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CHAPTER SIX

IMPERIALISM WITH CONTEMPORARY UNDER- DEVELOPMENT

In this work, we tried to establish the fact that contemporary

imperialism need not be located in the imperial (extra territorial)
possessions of imperial powers. This though, is one of the waves in the
interpretations of imperialism generally, and not strictly an interpretation
of Contemporary Imperialism. Contemporary Imperialism is more
economic than it is political, in terms of territorial extension by Western
powers etc. Here, we see the prominent role of United States not
Britain, Germany or Italy as in the days when for example, Africa was
balkanized by Europe at Berlin conference.
There is no doubt that to understand the problem of
Underdevelopment, we need to begin at the roots. This dates back to
one of the earliest times in the history of Africa and her contact with the
colonialists. We would hinge the problem of Underdevelopment on
three major economic relations of Africa and African Nations with the
rest of the developed world. These three areas are TRADE, AID and
DEBTS.
Here, we need not recount how slave trade impoverished and
underdeveloped Africa for which there has been in recent times talks
and demands for reparations. This much we know about our history
and too well also. We shall explain the relationship between African
Underdevelopment and Contemporary Imperialism.
The industrial revolution and the expanding industries of the West,
particularly Britain imposed on it an urgent need for sourcing raw-
materials. These were largely found in Africa and were cheaply
 77

imported from virtually every part of the continent. The operation and
development in British manufacturing industry by and large dictated the
pace and structure of colonial development which led to the
establishment of markets for the raw materials and supplies of finished
goods.
Africans immediately were made to participate in the whole set up
and functioned as cheap producers of raw materials. With time, many,
even amongst the British population began to question this unequal
partnership in trade etc. The agitation became more virulent with the
worsening social conditions in Britain and the growing unemployment.
This resulted in a re-appraisal of British policy in their colonies with
obvious implications in the areas of aid programmes, tariffs and colonial
industrialization. All this was aimed at infecting some stability into the
socio-economic conditions in Britain which like other European societies
was battered by the First World War. Some of the effects of the war
included, unemployment, inflation and depressed trade. There was
high degree disillusionment, political unrest seriously tending towards
anarchy or even a mass uprising.
To arrest this trend and avoid unpleasant consequences of
immense proportions, something was to be done. The reasonable thing
then to do was to export part of the British unemployed population to
Africa and occupy them somehow. This led to the “development
programme” of the colonial administration for the colonies. To buttress
this explanation is a long but important quote from BRETT’S (1977)
“Colonialism and Underdevelopment in West Africa”, in which he opines
that:
 78

Thus colonial development was treated as a central problem of

British economic policy during these years, a problem whose
solution could be expected to contribute materially and directly to
ending the crisis which the ruling class faced in one form or
another for the whole period. Stated in its most general terms,
their problems were to stimulate colonial development in
directions which would provide British Industry with the largest
possible returns to maximize consumption of British products and
export of British requirements. In this way the colonies could also
contribute directly to political stability; they could also moderate
the danger of social disruption and political upheaval, which
constituted a very real threat to established society, especially in
the years after the “First World War”.

Now, it is clear that the British programme of aid and development was
as a result of the domestic problems Britain and their European imperial
countries were going through. It was to act fast to prevent a socialist
revolution as had been experienced not long ago in Russia. It wasn’t as
though development of Africa was in the original blue print of her
majesty’s government. The overall content of the development
programme was economic. The rail-lines and roads were constructed
to reach centres of raw materials and markets, for British goods. Note:
the development programme wasn’t only to expand British commercial
interests in Africa; yes, it is a part of the entire construction works which
were meant to occupy and offer jobs for British unemployed labourers.
In the same regard, whatever aid programme then has now followed a
particular path which was designed to satisfy the donor and not the
actual areas of need.
What this largely resulted into, was a yawning gap between
underdevelopment and development. This led to their dependence on
loans that have grown out of proportions now. It continues the vicious
 79

circle of poverty-beginning with economic and human exploitation,

impoverishment, underdevelopment, huge debt burden and poverty.
These loans which are masked as ‘aid’-capital transfer-from a
reasonable chunk to Africa. Their history dates back to days before
independence, such that by the time the colonies attained
independence they were already in debt crisis. For example, in 1961 it
was revealed that most African countries were heavily encumbered with
debt, totalling $3,300 million. With setting aside of huge sums of money
for debt servicing and repayment, deepens the poor state of
development in Africa and in these countries.
African countries like their counterparts in other developing areas
of the world have become an arena of exploitation by numerous multi-
nationals. Their influence is great, so in the damaged they have caused
and are still inflicting. Bade Onimode (1983) describes the Multi-
National Corporation and their activities in developing economies thus:
…MNC’S have emerged as the powerful catalysts of multilateral
imperialism in Nigeria. They are the Trojan Horses whose
monopoly capital and advanced technology, backed by enormous
political pressure from their home governments, constitute the
dominant mechanism for integrating this and other Third World
countries more closely, and more pervasively, into the
international system of capitalist domination. These exploited
countries are ossified in the dependence status of a peripheral
neo-colonial capitalist system.

The point here is that the whole Third World, not just Nigeria, is under
the menacing grip of the MNC’S which are indeed agents of
Contemporary Imperialism. It is no secret any more that MNCS
sponsor political parties and coup d’états for political and economic
gains. The lack of sound economy and solid liquidity in concert with the
 80

widespread technological poverty in the developing countries has

constituted a major hurdle for Third World development. This fact too,
accounts for almost every input for development, on the developed
countries and the MNCS. Trade and the Aid programmes seem to
follow traditional ties which reflect the colonial relationship that had
existed decades ago. Through this, imperialism is entrenched and
sustained. Another area of MNC’S activities is in the sphere of Cultural
Imperialism where they deliberately undermine national culture in order
to promote and facilitate the penetration of imperialist values. This
becomes a vehicle to market their goods which they present to be of
very high quality and the same type of goods made by their host
countries, as being poorly made and of a low quality. They set the pace
and standard for their host countries to follow. The MNCS repatriate
huge profits more than they invested without making any significant
contributions towards the development of the local value added.
Indigenous manpower and technology have continued to be
undeveloped even as they are being used in one form or the other by
them.
In summary, the trade and Aid programmes have only helped to
realise the imperialistic designs of the developed world. Trade with the
Third World has not changed. It has been a sustained practice of the
Third World to cheaply supply her abundant raw materials to the
Imperialist West and in return they receive expensive finished products.
All these put these countries in a double disadvantaged position, losing
so much in export of their unprocessed raw materials and spending a
lot on the imported goods. Domestic development programmes, good
as they may be, lack the funds to take off. Trade that should have
 81

helped has not done so because in alleviating the unequal relationship

inherent in it. The aids have not been helpful either. What it all boiled
down to is a debt burden that has defied solution. Most of the Third
World countries have in some forms tried out Structural Adjustment
Programmes – SAP, but this has even made matters worse. Perhaps,
the way out may be the advancement of substantial Aid packages
without the conditionalities usually attached by donor nations. These
shall be used by the receiving countries in those areas they have the
greater need and not according to the dictates and desires of the donor
nations. It is perhaps, in this regard that the issue of Reparations may
be explained.
MNCS AS AGENTS OF CONTEMPORARY IMPERIALISM
The roles of the MULTINATIONAL CORPORATION (MNCS) have
been antidevelopment in the developing countries. Most of these
MNCS have been operating in their host (developing) countries for so
long now, yet they have not contributed substantially to their
development at least to the degree of their exploitation of these
countries. They certainly repatriate much more capital than they
invested which lead to further impoverishment and pauperization of
their host countries. It becomes difficult to contemplate a way out of
the economic struggle-hold of the MNC’S on these nations. The MNCS
are powerful monopoly capitalists which have modern technology which
they are very reluctant to transfer to their host countries, and they also
possess the required skill and manpower which give them such a
powerful extractive teeth in the exploitation of these countries.
By and large, the MNCS represent the over-all interest of their
nations’ policies of economic domination of weak and technologically
 82

backward nations. This they prove with such vigour to the harm of
developing economies and to the well-harm of developing economics
and to the well-being of their own home economy. What this achieves
among several other things is the widening of the already existing
inequality between the developed and the struggling to develop i.e.
developing countries. In this way, we consider the MNC’S as major
agents or the frontiers of Contemporary Imperialism. It is in this respect
that Onimode has remarked thus:
The MNCS are the most active catalysts of foreign monopoly
capitalism, whose domination of the Nigerian economy constitutes
the basic generating cause of underdevelopment … From their
hey-days as the economic conduits of British colonialism to their
current neo-colonial role as the purveyors of multilateral
imperialism, the MNC’S in Nigeria, is elsewhere in the third world,
have relentlessly nurtured some of the worst abuses of
dependency exploitation and backwardness.

Continuing, Onimode has identified areas of this colossal devastation

and depletion of the economies of the Third World countries, (emphasis
is Nigeria):
… Ownership and control of enterprises in Nigeria, the surplus
transfer associated with this, the technological castration of the
country, structural distortions of the economy, the neo-colonial
class structure cultivated by the multinationals their politics of
instability, cultural domination …

These issues by Onimode are indeed very crucial. However, we won’t

delve into their explanations because we have somehow touched them
earlier. Suffice it to say that the strange and unequal relationship
engendered and sustained by the MNC’S in their host countries and the
Third World at large, has worked to the effect of perpetuating, mass
poverty, rural decay, urban crimes, and slums which are all
 83

manifestations of the impacts of “Imperialist- pillage”, the widening

unequal development between Nigeria (the exploited developing
nations) and her (their) imperialist exploiters”.
Finally, what has resulted in this massive exploitation of resources
by external economies and their disinterestedness in the development
of these countries is the total dependence of these developed
economies by developing nations. This has greatly manifested in huge
imports of consumer and other goods, resulting consequently in the
high indebtedness of these countries presently. These debts have
turned out to be indeed, very costly on the nations. Development has
been retarded seriously as the only thing that appears important now is
debt servicing and debt re-negotiation. Apart from this, the domestic
social sector has greatly been vandalised to such an extent that most of
these countries now suffer from acute political instability. The
pressures leading to all that began building up with constant
devaluation of their currencies, the adoption of “foreign paths” of
development, that more often than not, derailed and hijacked every little
hope of development. In this dome of confusion and frustration, in
some of the Third World countries, the military had catapulted itself to
the arena of domestic politics through coups and counter coups. The
toll of this unending circle of frustration, dependence, debt and all the
crisis associated with it, is heavy and almost unbearable by these
countries. What is to be done? This seems to be the question
everyone, everywhere is asking.
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CHAPTER SEVEN

SCRAMBLE FOR AFRICA

Scramble for Africa is a phrase used to describe the sometimes

frenzied claiming of African territory by half a dozen European countries
that resulted in nearly all of Africa becoming part of Europe’s colonial
empires. The Scramble began slowly in the 1870s, reached its peak in
the late 1880s and 1890s, and tapered off over the first decade of the
20th century. Between 1885 and 1900, European powers were, at
times, racing each other to stake claims in Africa. Most Africans resisted
being taken over and ruled by foreigners. Thus, much of the latter part
of the Scramble involved European armies using modern weapons to
crush opposition and install authority over the continent’s inhabitants.

By the mid-19th century Europeans had only claimed selected

areas of Africa, mainly along the coasts. High death rates from malaria
and yellow fever kept Europeans from bringing armies and conquering
large areas of Africa; nor were they inclined to do so in this period.
Aware of the cost of maintaining colonies, the most powerful European
nations preferred either to keep trade open to all, relying on their
commercial advantage, or to reserve small, productive areas for the
trade of their own citizens. Britain possessed its Cape Colony,
strategically located at the southern tip of Africa. It also protected a few
West African commercial enclaves and held a colony of Sierra Leone,
which was populated by descendants of slaves rescued from the
Atlantic slave trade. France had annexed Algeria in 1834 and protected
trade along the Sénégal River and at two ports east of the Gold Coast
 85

(present-day Ghana). It also held an outpost at Gabon in west central

Africa. Portugal claimed territory in Angola and Mozambique. The
foreign power with the largest African territory was the weakening
Ottoman Empire, which clung to lands bordering the Mediterranean Sea
from Tunisia through Egypt, up the Nile, and down the west coast of the
Red Sea.

Still, through the 1870s Africans controlled 90 percent of the

continent. The largest African states were Muslim—the growing Mahdist
state of the Sudan, the Mandinka state of Samory Touré and the
Tukolor Empire along the upper Niger River, and the Sokoto caliphate
east of the middle Niger. East Africa was dominated by the slave and
ivory trade, with the Swahili-Arab sultanate of Zanzibar competing with
African warlords well into the interior. Beyond British-controlled areas in
Southern Africa were several African states and two Republics of the
Afrikaners (descendants of 17th-century Dutch settlers).

On the eve of the Scramble, Western Europe was a century into

the Industrial Revolution and clearly the most powerful and
technologically advanced portion of the globe. Firearm, transportation,
and communications technologies were developing at an astonishing
pace, and national pride was growing in each European country.
Furthermore, advances in medicine enabled Europeans to spend longer
periods in the tropics free of illness. Industrial production was reaching
such high levels that Europeans worried about over-production and
finding consumers for all the goods that European industries were
turning out. An economic downturn in the early 1870s brought some
Europeans to look toward the nonindustrial world. They viewed these
 86

countries as both markets for their products and as suppliers of natural

resources to fuel the industries. In addition, the strongest European
countries began fearing what would happen to the balance of power if
their rivals acquired colonies in Africa. National pride was at stake. So
was Christianity: famous Scottish missionary/explorer David Livingstone
had whet the public appetite for a Christian “civilizing” mission in this
continent full of non-Christians and torn by slave trading. Livingstone’s
death in the wilds of Africa in 1873 called attention again to the cause.

All of this resulted in the Scramble for Africa. It began with slow
territorial acquisition through the early 1880s, followed by a competitive
rush to claim African lands after the Berlin West Africa Conference
(1884-1885). The final stage of the Scramble was characterized by
slower occupation of territories and overcoming of African resistance
through the first decade of the 20th century. By 1912 all of Africa was in
European hands except Liberia and Ethiopia. The period of colonial rule
that followed brought social, political, and economic change across the
continent. The African colonies would only slowly gain their
independence, most doing so between 1955 and 1965. Some did not
achieve self-rule or majority rule until the 1980s or 1990s.

FIRST STEPS (1876-1884)

European competition over African territory in the 1870s heightened

once Belgian king Leopold II got involved. Merchants under French
government protection had been advancing up the Sénégal River with
an eye toward connecting that river with the Niger by rail. This
connection would open a vast market in West Africa’s interior. At the
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same time, British palm oil merchants were pushing up the Niger River
by steamer, and Anglo-American explorer Henry Morton Stanley was
journeying down the Congo River. In his journeys, Stanley had
discovered that the river’s upper reaches were open to trade. However,
it took Leopold to raise the stakes. For 20 years the wealthy ruler had
dreamt of creating a Belgian colonial empire. In 1876 he established the
International African Association, an organization that had stated
scientific and humanitarian goals but was truly a front to further
Leopold’s imperial design. Then, in 1879, when Britain ignored
Stanley’s offer to open Central Africa and funnel its trade to the mouth
of the Congo, Leopold employed Stanley to do just that. By 1880 the
explorer was back in the lower Congo, building road and river access to
connect the Atlantic Ocean with Stanley Falls, located about 2300 km
(about 1400 mi) upstream. Across the river in the early 1880s, French
explorer Pierre Savorgnan de Brazza was exploring and negotiating
treaties for France, forcing Stanley to obtain treaties for Leopold. Their
claims appeared to overlap near the mouth of the Congo, a land area
claimed by Portugal as well.

Events in North Africa raised tensions further. In 1881, France

occupied Tunisia to prevent Italy from gaining land on Algeria’s border.
A year later Britain occupied the bankrupt Ottoman possession of Egypt
to guarantee repayment of its huge foreign debt. France, which also
had a significant financial stake in Egypt and had shared “dual control”
of Egypt’s finances with Britain since the mid-1870s, was left without
influence. Neither France nor Germany approved of Britain taking over
Egypt, but each expressed approval to gain British support for its own
 88

colonial actions. It was fast becoming a game of European diplomatic

wrangling with African territories as pawns.

THE SCRAMBLING BEGINS (1884-1891)

While Britain, France, and Leopold were advancing their aims in Africa,
Europe’s fastest-rising military and industrial power, Germany, was
biding its time. Its leader, Otto von Bismarck, appeared content to allow
the others to expend diplomatic energy on African initiatives while
Germany concerned itself with domestic issues. However, as pressures
mounted from German merchants wanting a share of any potential
African market, Bismarck realized German interests might best be
served by his taking control of the diplomatic struggles involving Africa.
Thus, in the summer of 1884 Bismarck declared German protectorates
over three African territories—Togoland (comprising present-day Togo
and eastern Ghana), Cameroon, and South-West Africa (present-day
Namibia). Then, he joined France in calling for a conference of colonial
powers in Berlin. The stated goals of the conference were to be the
settling of Congo claims between Britain, France, and Portugal, and of
Anglo-French rivalries along the Niger River. In addition, however,
European powers recognized that rules and rationalizations were
needed for the seizing of African territories, especially for seizures that
held potential for European conflict.

The Berlin West Africa Conference (November 1884-February

1885) involved representatives of 14 European countries and the United
States. The Ottoman Empire, facing the loss of territory on all sides,
was not represented at the conference. Much of the conference work
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took place outside Berlin, as envoys moved between London, Paris,

and Brussels negotiating which European power could rightfully claim
lands inhabited by Africans. By the time the conference ended, Leopold
had secured ownership of the Congo Free State, a state 50 times the
size of Belgium; France saw acceptance of its claims to French Congo;
Portugal lost most of its Congo claims; and European powers
recognized Germany’s new protectorates. (The day following the
conference, Bismarck declared another protectorate in East Africa.) The
European nations declared free trade along the Congo and free
navigation on the Niger, stated lofty goals as their mission in African
colonies, and set out rules for additional territorial grabs. The most
significant of these rules stated that colonial powers were obligated to
notify each other when they claimed African territory. Further,
subsequent “effective occupation” of the claimed area was necessary
for the claim to remain valid. Through it all, as Europeans negotiated
their rights to African territory, not a single African was present. Once
the conference was over, it was clear that a European Scramble for
African territories was underway.

Southern Africa became a much more important element in the

Scramble a year after the Berlin Conference. At that time, word spread
of the world’s largest known deposits of gold in the Afrikaner-controlled
South African Republic (or Transvaal). Western miners and
industrialists flocked into southern Africa to profit. Among those involved
in finance and operation of the mines was British magnate Cecil
Rhodes, a leader of diamond mining in the Cape Colony. Rhodes was a
believer in the “civilizing” mission of British colonialism—he dreamed of
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a British African empire stretching from the Cape of Good Hope to

Cairo, Egypt. Thus, hoping to find still more gold north of Transvaal in
1890, he led a “pioneer column” of settlers north. These prospectors
overcame African opposition and carved out the new British colonies of
Southern and Northern Rhodesia (present-day Zimbabwe and Zambia).

Most European powers were not content to let a chance at

claiming further territory slip. France may have had the grandest
territorial desires of any nation. Its major advances were eastward from
the Sénégal River and down the Niger from its headwaters. French
armies slowly overcame opposition from the powerful Tukolor Empire
and advanced on the ancient city of Tombouctou (Timbuktu). Italy, too,
laid claim to Eritrea, on the Red Sea, and then announced a
protectorate over a large portion of Somaliland along the Indian Ocean.

FINAL STAGES (1891-1912)

The early years of the Scramble were accomplished with minimal

bloodshed, but that would not be the case in the 1890s and afterward.
Some of the most powerful African states put up strong resistance,
requiring Europeans to send in well-armed forces. Massed African
armies with outdated weapons defeated European forces on occasion,
but more frequently modern weaponry won out, producing some of the
most one-sided battles in the history of warfare.

France and Britain speeded their conquests in West Africa. France

united footholds on the coast with vast holdings of interior grasslands
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and desert by the century’s end. The major delay for the French was
caused by the Mandinka hero Samory Touré. Touré united peoples
around the headwaters of the Niger and Volta rivers and fought a
guerrilla war until he was captured and exiled in 1898. The British
overcame the Ashanti Kingdom in the Gold Coast by 1896 and
established protectorates in western and eastern Nigeria. They also
allowed the chartered Royal Niger Company to administer northern
Nigeria until the company’s forces encountered the advancing French
on the middle Niger and came into conflict with the powerful northern
Sokoto caliphate. In 1900 the British government took over the control
of the territory of Nigeria from the company. By 1903, Britain had
conquered the Sokoto caliphate.

Across the rest of the Sudan and into East Africa, resistance was
greater and tensions higher. French forces occupied the rest of the
central Sudan. These forces met resistance in present-day Chad from
Muslim forces of Rabih al-Zubayr until Rabih was killed in 1900. Britain
had its hands full taking the upper Nile because of the large Sudanese
state created by the Muslim holy leader, Muhammad Ahmad, known as
the Mahdi. In 1885 the Mahdi’s forces had taken Khartoum and killed
British general Charles George Gordon. By the 1890s the Mahdist state
was among the strongest in Africa. The British sent in troops under
General Horatio Herbert Kitchener, and in 1898 they met the Mahdist
forces at Omdurman, near Khartoum. Kitchener won a decisive victory,
killing almost 11,000 Africans and wounding 16,000 while the British
forces suffered only 430 casualties. In the battle’s wake, Kitchener
learned of a French force at Fashoda, about 600 km (about 400 mi)
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south of Khartoum, which was claiming French possession of the Upper

Nile. The Upper Nile was nominally Egyptian territory, and since Britain
occupied Egypt, it had been considered British. However, France
claimed that Britain had failed to achieve “effective occupation” in the
Upper Nile as required by the Berlin Conference. Kitchener and a
contingent of British troops immediately traveled down the Nile for a
standoff that brought the countries to the brink of war. However, the
French government, struggling with internal political problems, backed
down rather than start a war, and Britain took control of the entire
Sudan. In the meantime, the Sultanate of Zanzibar, a former slave and
ivory trading power, saw much of its mainland territory seized by Britain
and Germany. In 1890 the sultanate submitted to a British protectorate
over Zanzibar. The British declared a protectorate over Uganda in 1894,
over Kenya in 1895, and completed a railroad from the Indian Ocean
coast to Lake Victoria in 1901. The only resistance to European
takeover that was successful over the long run occurred in Ethiopia.
Here the forces of Emperor Menelik II soundly defeated an invading
Italian army at the Battle of Ādwa in 1896.

Two events in the early 1900s served to stifle enthusiasm for

colonial takeover in Africa. One was the exposure of atrocities in
Leopold’s Congo Free State. Here, colonial agents and private
companies were forcing Africans to gather raw rubber without payment
and killing or maiming those who failed to meet quotas. In the end,
international pressure forced Leopold to cede his private colony to
Belgium, and in 1908 the Congo Free State became the Belgian Congo.
The other event was the Boer War (1899-1902) in southern Africa,
 93

which pitted whites against whites. Discovery of gold in the Transvaal in

the mid-1880s had brought wealth to the Afrikaner republics in southern
Africa. When Afrikaner governments taxed foreigners heavily and stifled
foreign profit-taking, British imperialists sought to take over the region.
Cecil Rhodes’s 1895 plot to stage a revolt in the Transvaal failed.
Tensions between the mighty British government and the small, white-
ruled republics escalated until war broke out in 1899. Following early
Afrikaner success, the war settled into a brutal guerrilla struggle, putting
off ultimate British victory until 1902. In 1910 the various British colonies
at Africa’s southern tip were joined into the Union of South Africa, a
dominion of Britain.

North Africa was the scene of the Scramble’s final events. After
years of rivalry that sometimes verged on open hostilities, Britain and
France signed the Entente Cordiale in 1904. This “friendly agreement'
quietly gave France a free hand to take Morocco while it officially
removed the obsolete Egyptian “dual control” system and left Egypt to
Britain. France, Spain, and Germany quarrelled over Morocco until
1912, when France and Spain divided the territory. The same year, Italy
seized what is now Libya, the last vestige of Ottoman territory in Africa.
(The Italians were opposed by Muslim groups in the interior until 1931.)

EFFECTS OF THE SCRAMBLE

Africa on the eve of World War I (1914-1918) was nothing like the Africa
of 40 years earlier. What had been a largely independent continent with
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some foreign control of its coasts was now almost entirely in European
hands. Britain and France held the lion’s share. The British had almost
fulfilled Cecil Rhodes’s dream of an unbroken line of colonies from the
Cape to Cairo. Their colonies held promising economic potential, with
gold in South Africa and cash crops in East and West Africa. The
French controlled huge amounts of territory in North and West Africa,
but much was desert and only a few colonies were productive.
Germany would lose its African colonies in losing World War I, as would
Italy in World War II (1939-1945). Britain and France would give up
most of their colonies in the 1950s and 1960s. Spain would remain
longer but be a less-significant participant in the colonial picture.
Portugal would entrench itself and become, in the mid-1970s, the last
European power to begin to relinquish its claims.

The Scramble and its aftermath held great irony. While the
conquest was going on, events in Africa were of the greatest
importance throughout Europe. European competition for African
territory dominated headlines, brought down governments, and nearly
drove nations to war. But once the conquest was complete, Africa was
largely forgotten and not considered again until the movement for
African independence of the 1950s and 1960s.

Effects of the European takeover on Africans were considerable. In

the short term, the Scramble obviously led to Africans’ loss of control of
their own affairs. But it also brought enormous hardship to most
Africans. In addition to the deaths caused by the conquest itself, many
Africans died as a result of disrupted lifestyles and movement of people
and animals among different disease environments. Africa’s population
 95

did not begin to recover from the devastation caused by the Scramble
and its aftermath until well into the 20th century. In the long term, the
Scramble was part of a larger process of bringing non-Western peoples
into the world economy—in most cases as exporters of agricultural
products or minerals and importers of manufactured or processed
goods. Colonial governments taxed their African subjects and used the
revenues to improve the colony’s infrastructure: building roads, bridges,
and ports that connected distant locales to the outside world.
Meanwhile, institutions to improve people’s lives, such as hospitals and
schools, appeared more slowly. Colonial rule also brought elements of
Western culture—from the French and English languages and Western
political models to Coca-Cola and automobiles. It was in reaction to
European rule that Africans developed a sense of nationalism that
would help them gain independence in the second half of the 20th
century.

For Europeans, the Scramble for Africa helped set the stage for
World War I. Competition for African territory raised nationalist feelings
and kept relations tense and combative. It also gave Europeans a
sense that war was good for “national character” and not so taxing on
budgets and manpower. World War I would soon destroy these
illusions.

AFRICA : 1885-1914

France, Britain, and Germany were the three main Imperialist Powers in
Africa during the late eighteen hundreds. In February 1885, the main
European powers signed the Berlin Act, which formalized the process of
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partition of Africa. The Act included the guidelines of how each country
was to define its territories. The colonies on the West Coast of Africa
were a legacy of the fortunes that could be made out of the slave trade
there.

The French negotiated treaties with several African leaders from a

powerful military position. France focused on the military direction of the
expansion by going fort to fort and taking over control. By using military
means of obtaining territory, they were securing themselves
economically. The French, rather harsh in their administration and their
attempts to increase their economic footholds, used forced labor and
imprisonment of Africans to maintain and expand their interests.
Whenever the French were able they fostered production of groundnuts
and cotton and imposed taxation.

Britain’s imperialistic activities in Africa from 1869 to 1912 had different

motives. Britain wanted to colonize, find new markets and materials,
 97

attain revenge and world prestige, convert natives to Christianity, and

spread the English style of orderly government. They also wanted to
safeguard the country and protect their land holdings from German or
French invasion. The British wanted to protect the Suez Canal in East
Africa along with the route to the east. Control over the Suez Canal
allotted them to have financial superiority and comfort. Britain wanted to
control Africa in order to be financially secure.

Germany, a country made of imperialism itself had two main reasons for
involvement in the Scramble for Africa. Germany modeled itself after
France and Britain. Germany knew that France and Britain would not
waste their time, resources, and energy on something that was not
profitable. Germany thought that if they obtained colonies in Africa, then
they also dominate such as the two great powers did. Otto Von
Bismarck was Germany’s leader for Africa. Bismarck and the rest of
Germany simply longed to see Germany get ahead. Germany also
wanted to play the "game". They felt that colonization in would help
Germany and force others to reckon with them.
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CHAPTER EIGHT

THIRD WORLD RESPONSES TO GLOBAL ECONOMIC

RELATIONS

One thing stands out very prominently in this long discourse and it
is the fact that Africa and Africans have been for long totems of
exploitation whether during the pre-colonial colonial or post-colonial era.
Contemporary Imperialism is indeed enslavement, without overt political
domination, which is economic. This does not at all suggest the fact
that political subjugation of these developing nations is not there, not
after it had been re-introduced through the backdoor of stringent control
and exploitation by the imperialists representing monopoly capital.
The crux of this discussion will be to know if these developing
nations engaged in this unequal relationship with the developed ‘North”
desire liberation or are enjoying the dependence. If liberation, then
what efforts and machineries have been either made or set in motion
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toward their emancipation or liberation so represented in this segment

like elsewhere in this work, is not political, rather economic. After all,
these countries have achieved flag independence many years ago
instead of political cum economic independence.
Let us firstly explain the phrase, NORTH-SOUTH. North is used
as a short description for the world’s rich, industrialised, non-communist
states like U.S., Canada, Japan, Australia, New Zealand, most of which
are members of the Organisation for European Economic Corporation
and Development (OEECD). On the other hand, South is used as
short-term for worlds’ less developed or developing states ranging from
the suddenly rich but yet to industrialize oil states of the Middle East to
the poorest countries of the globe located in Asia, Sub-Saharan Africa
and in Caribbean region. The entire Third World-Asia, Africa, Latin
America all fall within this description
We have known that NORTH-SOUTH refers to the RICH and
POOR of the world and the relationship existing between them. All the
dialogue in a nutshell is about, a demand or calls for a new international
order-political and economic-in which there is considerate diffusion of
power and equal opportunity.

THE NEW INTERNATIONAL ECONOMIC ORDER (NIEO)

Because of the connections between trade and the monetary
system, only a comprehensive international effort can produce a lasting
solution to the problem of “trade wars”. But even a new version of the
Bretton Woods system will not be enough when that system was set up
in 1944; world trade was dominated by relatively few countries. Today
many new states are important participants in the international
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economic system and have priorities quite different from these older
members.
In 1974 the U.N. General Assembly passed a declaration calling
for a New International Economic Order. This declaration clearly
defined the most wide ranging conflict in international economies today,
between the Rich States (i.e. the North, because many are located in
the Northern hemisphere) and the Poor States (the South). The
members of each group are fairly easy to identify. The Richer States
are members of the organisation for Economic Co-operation and
Development (OECD), which is made up of the Developed market
economies of North America, Western and the Pacific,24-countries in
all. The Poor States often called “Less Developed Countries (LDC’S)
are members of the group of 77, an interest group set up at the first
U.N. Conference on Trade and Development held in 1964. The
membership of this group has grown to over 120 but it retains the title it
adopted when it had only 77 members. The New International
Economic Order (NIEO) foresaw three main changes:
1. Transfer of wealth from rich countries to the poor ones. The
primary demand was for an increase in official developmental
assistance from each of the rich countries to a development equal
to 0.7% of their Gross National Products. (In the 1970’s, U.S.
Foreign Aid was about 0.25% of its GNP). This aid would not be
granted directly but would be channelled through the U.N.
2. Preferential Treatment in Trade, proposals under this heading
were demands for controlling the price of commodities such as
copper and cocoa on which the economies of LDC’s often heavily
depend. Wild fluctuations in prices can cause the economies of
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these States to veer from boom to bust. One way of avoiding

such fluctuations would be to create international buffer stocks.
When demand was low, commodities would still be purchased but
would be put into such stocks; to keep prices high. When
demand was high, such stocks could then be injected into the
market to help create a balance. Another form of preferential
would be favourable access for manufactured goods from LDC’s.
Under such treatment is e.g: Shoes manufactured in Mexico
would not be subjected to the same tariffs as those shoes from
wealthier countries, even though Mexico itself applied tariffs to
keep foreign goods out. LDC’s sought such access as a way of
expanding their industrial sector and reducing their dependence
on the export of primary products.
3. Changes in international decision making machinery. At present
many important decisions in the international economy are made
by organisations such as the World Bank and the IMF.
An increased awareness of the extremes of Wealth and Poverty in
the world had by the 1970’s created a climate receptive to such
demands. When the Prime Minister of India declared, “The world’s
resources must be developed to make equitable distribution possible”,
her words were heeded because she was dealing with a country where
30% of the population (175 million people) were living below the official
poverty line; when she spoke those words the poverty line in India was
set at 30 dollars a year (compared to $3,000 a year in the United
States). It is easy to see why the leaders of most States found the
NIEO more urgent than International Monetary Issue or Free Trade.
WEAKNESSES OF THE NIEO
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Despite enthusiastic claim in the Third World, the NIEO was met
with scepticism by many Economists and Political Scientists in OECD
countries. After all, for the preceding decades, the richer countries had
been meeting the first demand transferring wealth in the form of foreign
aid. But foreign aid did not always lead to growth. Some countries
(South Korea and Taiwan) received aid and prospered. Others like
Thailand prospered without much foreign aid. Still others like India and
Egypt received aid but didn’t prosper. This mixed record made it hard
to argue that more foreign aid would lead to growth.
Advocates of the NIEO could argue on pragmatic grounds that
past aid was insufficient or poorly used. Or they could argue on moral
grounds that rich countries owe the poor ones aid as reparation for past
exploitation. Indeed, some argued that the rich were rich because they
had exploited the poor.
The factual basis of such claims is not evident. Some European States

that had colonial empires (Portugal) are not notably rich. Other

European States that are notably rich (Sweden and Switzerland) never

had colonial empire. And the attempt to draw up a balance sheet

showing the effect of empires on the less developed world leads into

thorny problems. A serious problem in many LDC’s is that population

growth is greater than economic growth. So, the wealth per person is

declining. But in some measure, population growth is the result of

health measure introduced by Western Countries when they controlled

these regions. The population of the Island of Java, to take an extreme

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case, went from 4.5 million in 1815 to 6.3 million in 1960, largely as a

result of public health measures, introduced when the Dutch controlled

the Island. (Java island, island of the Malay Archipelago, southern

Indonesia, bounded on the north by the Java Sea, on the east by Bali

Strait, on the south by the Indian Ocean, and on the west by Sunda

Strait). Would the Dutch now owe reparations because life is so hard for

all these people? Would they have owed less if they had introduced

public health measures and had let people die?

The appeal on moral grounds focuses on the suffering of

individuals in the LDC’s to close the “protein gap”. But the NIEO is
designed to benefit governments; it is intended to close the
“development gap”. The defence of sovereignty by the LDC’s means
that the rich countries have no legitimate say, to what happens to aid
once it is delivered in the hands of the ruling elite of a poor country.
That such aid often does not leave the hands of the elite gave rise to
Jimmy Carter’s comment during the 1976 Presidential Campaign that
he did not believe in taxing the poor in rich countries to help the rich in
poor countries.
Even of the pragmatic argument is rejected because foreign aid
hasn’t worked in the past, and the moral argument is rejected because
right and wrong are not so clear, we must still consider the appeal to
self interest. According to this argument, unless resources are
transferred from the rich to the poor, “It is inevitable, that we are moving
rapidly towards an international catastrophic holocaust in which
 104

civilization as we know it, may well be destroyed … If they do not get

their way”.
THE FATE OF THE NIEO
Rational agreement against the NIEO on purely economic
grounds addresses only part of the concern of the Poor States of the
world. Their demands are as much political as economic. But the
political realities of the 1980’s have made the possibility of a new order
recede far into the future. The international recession that followed the
oil price of 1980 killed off any hope of transfer of wealth from the Rich to
the Poor States. As one Third World leader remarked “know now that
we cannot squeeze blood from stone, we are now going to have one bit
of concession from them”.
Yet in another way, the world economic upheaval set off by the oil
price hikes drew the Third World more closely to the economic system
of the OECD countries. While direct transfer payments in the form of
official development aid declined, a massive transfer of resources was
taking place in the form of loans to the Third World.
REGIONAL INTEGRATION
The countries in the Third World have not resigned their fate to
the outcome of their demand on the rich and highly industrialized
nations to pump aid and more aid to them. While they await this to
come through, they decided on regional basis to co-operate or integrate
economically for their well being and development.
The idea to embark on this as a means of development has been
predicated on the following line of thought:
1. That since independence the countries in ECOWAS sub region
have been faced with myriad socio-economic and political
 105

problems. Here, we hasten to say that much of the problems lie

within the domain of the economy.
2. That these problems are so acute and demanding that single
handed solutions are inadequate if not totally impossible. There
are problems of low per capita income, small population and slim
resource bases etc.
3. The collective effort will serve better development, and form a
major pillar of development strategy.
The idea generally may have been sold to these regional groups
from the European experience after the World War II when Europe
decided to integrate to achieve a record level of recovery and
development. Also it served for them as a vehicle for the containment
of nationalism and the promotion of economies of scale. Europe saw a
threat to her existence-which was evident in the fact that it was faced
with the devastation of the World War II, the prospect and reality of
losing their empires and above all, the rise of two non-Western
European powers, this created the urgency to join forces to preserve
their security and welfare. In the case of the Third World, the threat is
there although it might not be in the form Western Europe felt it. These
were exploited ex-colonies of colonial powers, with now very weak
economies, which are compounded by a very harsh international
environment that appears insensitive to their development. The way
out of the woods then is co-operation among themselves. This on a
larger scale appears to be the whole message of South-South co-
operation and non-alignment group.
Let us first situate the whole issue of integration within three major
developments in Africa.
 106

1. African countries are now moving away from a type of regional co-
operation anchored on colonial experience to regional co-
operation based on common problems which cuts across colonial
division.
2. There is a realization among African countries that the basic
development problems are similar despite the adoption of different
political and social systems.
3. There is now an emphasis on the comprehensive market
approach to regional co-operation.
ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS)
The treaty providing for an Economic Community of West African
States was signed in Lagos on the 28 th May, 1975 by 15 countries –
DAHOMEY, GAMBIA, GHANA, GUINEA, GUINEA BISSAU, COTE
d’IVORE, LIBERIA, MALI, MAURITANIA, NIGERIA, SENEGAL,
SIERRA LEONE, TOGO AND UPPER VOLTA.
The treaty came into force after ratification by at least seven
signatory States. By early July 1975, all other except Guinea Bissau
and Mauritania had signed the treaty.
At the Lome meeting convened at the instance of General Gowon
of Nigeria and General Gbassingbe Eyadema of Togo between
December 10th and 15th 1973, the States generally agreed on the basic
issues of the sub regional economic community including trade,
customs, harmonization of financial and monetary policies, utilization of
natural resources, infrastructural links, communications and energy.
With the establishment of ECOWAS the objectives were clearly set-out
in line with the Lome agreement. They include:
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1. A programme of liberalization of trade and realization of customs

union within the community over a period of 15 years. The first
two years been devoted to ‘organizational question and fact
gathering’. The following 8 years should see the gradual
reduction or elimination of import duties, the free movement of
people, services and capital.
2. The member States are committed to industrial development and
harmonization in three stages. A fund for co-operation,
compensation and development is set up to promote and finance
development projects, provide compensation to member States
which suffer losses as a result of the location of industries and
liberalization of trade within the community and guarantee foreign
investments made in pursuance of the provisions of the treaty.
Our concern here is not to study the various organs or institutions of the
community rather the objectives as they affect their drive to integration
and co-operation. From the stated objectives, we see that the main
thrust is economic. It is heart warming to note that States of different
social and economic backgrounds within a particular region could come
under an umbrella of mutual economic developmental strategy. In all,
the attempt is to reverse the effect of many years of exploitation by
foreign powers, by coming together and pulling together as it were, their
resources.
It is a determined effort at containing the growing economic
imperialism through unequal terms of trade and the capital flight
orchestrated by the activities of Multinational Corporations.
CRITICISMS
 108

Despite all the good intensions encapsulated in the objectives of

ECOWAS, still no meaningful progress has been recorded in the area
of Economic Integration. This criticism is made in consideration of its
16 States strong membership large enough to bring about development.
It does not appear yet that ECOWAS has a different development
strategy except to the limited sense that competition and the free play of
market forces are to be facilitated. There is no indication in the
ECOWAS treaty of how such a tariff is to be implemented.
Some of the agreed provisions of the ECOWAS treaty have not
been faithfully implemented by the member States. It does appear that
the least developed members fear that the scheduled trade
liberalization measures will surely operate against their interest
Finally, shall we say that with greater commitment on the part of
member States, meaningful degree of co-operation may be achieved?
However, how this alone, devoid of capital and rapid capital formation,
technology etc; will solve the problem in this region is a question that
confront the lecturer and the student alike.
No lip service to development will be enough to change the
destiny and future of these exploited economies.
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CHAPTER NINE

THE POLITICS OF CHINA

INTRODUCTION

China, officially known as the People’s Republic of China

(Zhonghua Renmin Gongheguo), country in East Asia, the world’s
largest country by population and one of the largest by area, measuring
about the same size as the United States. The Chinese call their
country Zhongguo, which means “Central Country” or “Middle
Kingdom.” The name China was given to it by foreigners and is
probably based on a corruption of Qin (pronounced “chin”), a Chinese
dynasty that ruled during the 3rd century BC.

China proper centers on the agricultural regions drained by three

major rivers—the Huang He (Yellow River) in the north, the Yangtze
(Chang Jiang) in central China, and the Zhu Jiang (Pearl River) in the
 110

south. The country’s varied terrain includes vast deserts, towering

mountains, high plateaus, and broad plains. Beijing, located in the
north, is China’s capital and its cultural, economic, and communications
center. Shanghai, located near the Yangtze, is the most populous urban
center, the largest industrial and commercial city, and mainland China’s
leading port.

One-fifth of the world’s population—1.3 billion people—live in

China. More than 90 percent of these are ethnic Han Chinese, but
China also recognizes 55 national minorities, including Tibetans,
Mongols, Uighurs, Zhuang, Miao, Yi, and many smaller groups. Even
among the ethnic Han, there are regional linguistic differences.
Although a common language called Putonghua is taught in schools
and used by the mass media, local spoken languages are often
mutually incomprehensible. However, the logographic writing system,
which uses characters that represent syllables or words rather than
pronunciation, makes it possible for all Chinese dialects to be written in
the same way; this greatly aids communication across China.

In ancient times, China was East Asia’s dominant civilization. Other

societies—notably the Japanese, Koreans, Tibetans, and Vietnamese—
were strongly influenced by China, adopting features of Chinese art,
food, material culture, philosophy, government, technology, and written
language. For many centuries, especially from the 7th through the 14th
century AD, China had the world’s most advanced civilization. Inventions
such as paper, printing, gunpowder, porcelain, silk, and the compass
originated in China and then spread to other parts of the world.
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China’s political strength became threatened when European

empires expanded into East Asia. Macao, a small territory on China’s
southeastern coast, came under Portuguese control in the mid-16th
century, and Hong Kong, nearby, became a British dependency in the
1840s. In the 19th century, internal revolts and foreign encroachment
weakened China’s last dynasty, the Qing, which was finally overthrown
by Chinese Nationalists in 1911. Over the course of several decades,
the country was torn apart by warlords, Japanese invasion, and a civil
war between the Communists and the Nationalist regime of the
Kuomintang, which established the Republic of China in 1928.

In 1949 the Chinese Communist Party won the civil war and
established the People’s Republic of China (PRC) on the mainland. The
Kuomintang fled to the island province of Taiwan, where it re-
established the Nationalist government. The Nationalist government
controlled only Taiwan and a few outlying islands but initially retained
wide international recognition as the rightful government of all of China.
Today, most countries recognize the PRC on the mainland as the
official government of China. However, Taiwan and mainland China
remain separated by different administrations and economies. In
general, statistics in this work apply only to the area under the control of
the PRC.

After coming to power in 1949, the Communist government began

placing agriculture and industry under state control. Beginning in the
late 1970s, however, the government implemented economic reforms
that reversed some of the earlier policies and encouraged foreign
investment. As a result of the reforms of the 1980s and 1990s, the
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Chinese economy grew almost 10 percent a year from 1980 to 2005,

making it one of the largest economies in the world in the early 21st
century.

In 1997 Hong Kong was transferred from Britain to China under an

agreement that gave the region considerable autonomy. Portugal
recognized Macao as Chinese territory in the late 1970s and negotiated
the transfer of Macao’s administration from Portugal to China in 1999.

POPULATION

About 20 percent of the world’s population lives in China. Of the

country’s inhabitants, about 92 percent are ethnic Han Chinese. The
Han are descendants of people who settled the plains and plateaus of
northern and central China more than 5,000 years ago, and of people in
southern China who were absorbed by the northerners more than 2,000
years ago and gradually adopted a shared culture with them. The
remaining 8 percent of China’s population consist of minority
nationalities, such as Tibetans and Mongols. Most of the minority
nationalities are concentrated in the sparsely settled areas of western
and South-Western China.

POPULATION CHARACTERISTICS

After the Chinese Communist Party (CCP) came to power in 1949,

the government took a census to assess the human resources available
for the first five-year plan, the state’s comprehensive economic and
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social development plan. The census, compiled in 1953, counted a

population of 582,600,000. A second census, taken in 1964, showed an
increase to 694,580,000. The third census, in 1982, revealed a
population of 1,008,180,000, making China the first nation with a
population of more than 1 billion. By 2008 China’s estimated population
was 1,330,044,600.

While China’s population continues to grow, the growth rate has

slowed in step with declining fertility and birth rates. The fertility rate
(the average number of children born to each woman during her
lifetime) declined from 6.2 in the early 1950s to 1.8 in 2008. The birth
rate declined from about 45 births per 1,000 people in 1953 to an
estimated 14 in 2008, and the death rate dropped from 22 per 1,000
people to an estimated 7. As a result, the annual growth rate declined
from about 2.25 percent in 1953 to 0.63 percent in 2008. Nevertheless,
at that rate China’s population still grows by millions of people each
year. The most serious challenge created by such a large annual
population increase is employing the millions of young people who enter
the workforce each year. Although China’s economy has grown rapidly,
especially since the early 1990s, it has not been able to provide enough
good opportunities for all new workers, many of whom have only
minimal education and skills.

THE ONE-CHILD POLICY

The decrease in fertility rate recorded from the 1950s to the 1990s
resulted largely from government efforts. These efforts included
promoting late marriages and, after 1979, inducing Chinese couples to
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have only one child. This one-child policy actually allows for two or
more children under some circumstances. In addition to implementing
the one-child policy, the state has expanded the number of public health
facilities that provide birth-control information and contraceptive devices
at little or no cost. Abortion is legal, and pregnant women who already
have one or more children face social and administrative pressures to
terminate their pregnancies. However, women who belong to one of
China’s national minorities may not face the same level of pressure. In
general, government policies allow non-Han peoples more cultural
independence and permit them to have larger families. This is due to
historical trends of high mortality among minorities, Marxist ideology,
and the government’s political interest in appearing friendly and
sensitive to the needs of China’s ethnic minority peoples.

A consequence of the one-child program has been a higher than

normal ratio of males to females. Some families use new methods to
identify the sex of unborn foetuses and abort female foetuses in order to
ensure the birth of a male. In addition, reports of female infanticide in
China have been numerous. The reasons for the preference for boys
are complex but lie partly in established cultural traditions. Sons carry
on the family name and are responsible for performing ritual obligations
of ancestor worship. Perhaps more important, however, sons are
expected to care for their parents in old age. Typically, daughters care
for their husband’s parents rather than for their own. This care is of
concern particularly in rural areas, where the majority of Chinese still
live, because the state supplies few, if any, pension benefits in these
areas. Consequently, parents who have only one child prefer to have a
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son to ensure a more comfortable retirement. In 2008 there were 106

males for every 100 females in China. These statistics also reflect other
factors, such as lifespan differences between genders; therefore, a
more revealing statistic is the ratio of males to females at birth. In China
in 2008, the sex ratio was 1.11 males born for each female. By
comparison, the rate in Canada was 1.05 males for each female.

POPULATION DENSITY

In 2008 China had an overall population density of 143 persons

per sq km (369 per sq mi). However, this figure belies the extreme
differences between population densities in different parts of the
country. The vast majority of people live in the country’s historic
heartland—the plateaus, plains, and basins of eastern China. The
region’s alluvial floodplains, which have fertile soils and extensive water
resources, have always been the most productive food-producing
areas. This productivity is reflected in high population densities. In
urban areas of eastern China, population densities can exceed more
than 2,200 persons per sq km (5,800 per sq mi). By contrast, western
China has high mountains and harsh weather conditions. This region is
sparsely settled, and large areas have a population density of less than
10 persons per sq km (26 per sq mi).

MIGRATION

In the 1950s and 1960s China sought to alleviate the increasing

population pressure in the east by encouraging Han people to migrate
westward. The government also hoped the migration would help secure
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the sensitive frontier areas of the west and northwest. These areas lay
far from the center of government, and the people who lived there had
fewer cultural and historic ties to Beijing. However, Han migration to
western China slowed by the end of the 20th century. Most of the
population growth there has resulted from a comparatively higher birth
rate and declining death rate among non-Han peoples. Meanwhile, the
government also sought to control rural-to-urban migration because
there were not enough urban jobs for additional city workers. To control
the movement of all Chinese citizens, the government instituted a
household registration (hukou) system in the late 1950s. Similar to an
internal passport system, it allowed no one to move without police
permission. Such permission typically was granted only to individuals
who had obtained a job in a state-supported enterprise. Most rural
people were denied the right to move off their farm or out of their
village, even to a neighboring town.

During the political upheavals of China’s Cultural Revolution

(1966-1976), the government sent urban youth to rural areas to live and
work among the peasants. This program attempted to lessen the
perceived differences in income and material well-being between city
and countryside. The government was also motivated by its inability to
provide sufficient food for the populations of China’s growing cities.
Forced migration to the countryside decreased after the death of
Communist leader Mao Zedong in 1976. Economic reforms adopted in
1978 virtually eliminated the practice. However, the government still
controls migration from rural areas to urban areas through the
household registration system.
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Beginning in the late 1970s the government permitted limited and

temporary migration to the cities. This move came about in part
because a booming economy had created the need for unskilled
workers in construction and low-level service jobs. As a result of this
migration, China’s cities now have two classes of urban citizens. One
class works in state-supported enterprises and receives housing,
schooling for children, health care, and other subsidies. The other class
consists of those who have migrated to cities as transients to work in
construction, manufacturing, domestic service, or other low-wage
positions. Many temporary migrants do not have proper housing,
sanitary facilities, or access to medical care or educational opportunities
for their children. Despite these deprivations and difficulties, peasants
continue to migrate to cities because they perceive the opportunities for
employment and the quality of life to be better. Even so, China’s
population remains predominantly rural. In 2005, 59 percent of the total
population lived in the countryside.

ETHNIC GROUPS

China’s population comprises many different ethnic groups and

nationalities, although about 92 percent of the population are ethnic
Han. The name Han derives from the citizens of the Han dynasty (206
BC-AD 220), a period of great unity in China. During the Han dynasty the
people of the north, central, and southern plains and basins of eastern
China came to see themselves as part of the same group. They shared
a common written language, similar values derived from the ideas of
Confucius and other classical writers, and a settled agricultural system
based on growing grains, such as wheat, rice, and millet. The Han
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distinguished themselves from other peoples on the region’s periphery

whom they considered barbarians, especially the nomads and herding
peoples who inhabited the high, dry, colder regions to the north, west,
and southwest. Among the most significant of these groups were the
Mongols to the north and northwest, the Manchus to the northeast,
various Muslim Turkic peoples in the far west, and the Tibetans to the
west and southwest. Also in the southwest were large groups of people,
such as the Zhuang, who were closely related to either the mountain or
plains people of Southeast Asia.

Historically, the Chinese sought to expand their territory through

the agricultural colonization of adjacent territory. This strategy involved
sending military units and farming families to settle an area. Areas so
occupied were eventually integrated into the Chinese state. Local non-
Han peoples either adopted the culture and language of the Han, were
pushed into marginal areas unsuited for sedentary farming, or were
otherwise eliminated. This worked effectively for the Han in areas that
were suitable for intensive farming, but it was less effective in the high,
dry, cold interior. This interior region, comprising about 60 percent of
China’s present land area, remained largely unsettled by the Han until
the mid-20th century. Over the centuries some ethnic groups
acculturated and integrated into Han society more easily than others.
Some, such as the Vietnamese and the Koreans, resisted acculturation.
These groups established and maintained their own separate national
identities and territories, although they maintained close cultural and
other links to the Han.
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China’s Communist government has encouraged ethnic Han to

settle in the minority-occupied frontier areas. In addition, Han
administrators have been sent into all ethnic minority areas to provide
leadership and to secure management of the nation’s territory. As part
of this policy, the Chinese government has seized territory from the
traditional homelands of minority groups and reassigned it
administratively to a neighboring Chinese province. Ethnic Tibetans, for
example, live mainly in the Tibet Autonomous Region but also in
Sichuan, Qinghai, Gansu, and Yunnan provinces. China’s policies have
provided some benefits for the minority groups, including better
medicine and nutrition and improved economic development.

Since 1949 China has identified 55 ethnic nationalities, which

range in size from several thousand to several million members. Among
the larger nationalities are the Zhuang, Hui, Uygur, Mongols, and
Tibetans. Taken together, China’s minority peoples account for about 8
percent of the country’s total population. The minorities are growing
more rapidly than the Han because they generally have higher birth
rates. In addition, some peoples formerly counted among the Han have
since been recognized as unique minority groups.

The identification of a minority nationality is based partly on the

historical distinction between Han and non-Han. Factors considered
include a group’s traditional location in the outlying territories, a different
language, unique religious practices, or a distinctive way of life, such as
being herders rather than sedentary farmers. Some groups’ physical
appearance is very similar to or even indistinguishable from the Han,
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but they have other special distinctions. For example, Hui people are
essentially Han Chinese in all aspects except that they practice Islam.

The Han Chinese have long had familiar but sometimes troubled
relations with neighboring ethnic peoples, especially with those under
Han administrative and territorial control. Most foreign governments and
international organizations understand the security concerns in China’s
sensitive frontier regions, where many of these peoples are found.
However, China often is condemned for its heavy-handed and
sometimes brutal treatment of minority nationalities. Perhaps the best-
known occurrence of China’s controversial approach to dealing with
minority nationalities is the Chinese military occupation of Tibet in the
1950s. This occupation was followed by an uprising of Tibetans, which
the military suppressed. The events in Tibet forced the Tibetan spiritual
leader, the Dalai Lama, to flee China in 1959, and he has remained in
exile ever since. As a result of the widely published events in Tibet, and
particularly the Dalai Lama’s plight, China faced wide international
condemnation. The 20th century also saw sporadic outbursts of
violence and uprisings among the Uygur peoples of Xinjiang Uygur
Autonomous Region, many of whom have strongly resented the control
imposed on them by Han military and civil officials. Many Uygurs
practice traditional oasis agriculture in the Tarim Basin and have not
benefited from the industrialization and rapid economic growth that has
come with Han settlement of Xinjiang. As China’s economy continues to
grow and the country continues to emerge as a global power, it may
come under greater pressure to provide fair and equitable treatment to
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minority nationalities and to allow them a larger measure of autonomy

and cultural protection.

LANGUAGE

More than 90 percent of China’s inhabitants speak Chinese, the

language of the Han people, as their native language. Spoken Chinese
consists of many regional variants, often called dialects. The Chinese
dialects are tonal in nature, meaning that words are assigned a
distinctive relative pitch—high or low—or a distinctive pitch contour—
level, rising, or falling. Because the regional dialects have different
tones and syntax, they are generally mutually unintelligible.

Most Chinese speak one of the Mandarin dialects. Putonghua

(“standard speech”), the standard form of Mandarin spoken in Beijing, is
China’s official spoken language. Putonghua is spoken by an estimated
70 percent of the population, mainly in northern and central China. It is
sometimes known to Westerners as Mandarin. In addition to the
Mandarin dialects, there are six other Chinese dialect groups, spoken
mainly in southern and southeastern China. They include the Wu
dialects, spoken in the Shanghai-Jiangsu-Zhejiang area; the Yue
dialects (also known as Cantonese), spoken in Hong Kong and
Guangzhou; and the Kejia (Hakka) dialects, spoken in southern Fujian
and also in Taiwan and by many people of Chinese descent around the
world. This linguistic fragmentation, particularly in southeastern China,
has provided the basis for strong regional identity and some ethnic
variation within the larger Han community.
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Although the Chinese dialects are mutually unintelligible in their

spoken forms, they share a common written form. The Chinese written
language has existed for more than 3,000 years and has been
standardized for more than 2,000 years. It has served as an important
social cement, tying together the peoples of northern, central, and
southern China. It also has provided an essential element of culture
shared by the Han people.

One of the most ambitious efforts of the Chinese Communist

government since 1949 has been the modification of the Chinese
language. As a means of standardizing the language used by the Han,
in 1956 the government declared the dialect of Putonghua the country’s
common spoken language. The government also has made efforts to
modify the written language. The use of simplified characters—
traditional characters written with fewer strokes, or in a type of
shorthand—has increased steadily. This simplification is designed to
facilitate the government’s goal of increasing literacy. In 1977 the
Chinese made a formal request to the United Nations (UN) to have the
pinyin (phonetic spelling) method of romanization used to transliterate
Chinese place names. The pinyin method was created by the Chinese
in the late 1950s and has been steadily modified.

China’s minority people have their own spoken languages, which

include Mongolian, Tibetan, Miao (Hmong), Yi, Uygur, and Kazakh.
Formerly, many of the minority languages did not have a written form.
However, the government has encouraged the development of written
scripts for these languages, using pinyin. China’s minority groups are
encouraged to maintain traditions that promote knowledge of their
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ethnolinguistic heritage. Although Putonghua is taught in schools

throughout China, it is sometimes taught as a second language.

THE RELIGIONS OF CHINA

The traditional religions of China were Confucianism, Daoism, and

Buddhism. People often practiced and adhered to traditions of all three
religions as well as incorporating a variety of local beliefs into their
religious practice. Islam and Christianity were among the more formal
and organized religions practiced in China, but these faiths had fewer
followers.

After gaining control in 1949, the Chinese Communist Party

officially eliminated organized religion. The CCP’s move received little
resistance because Confucianism is largely secular and because most
Chinese adhered to aspects of all three major faiths; thus they lacked
strong allegiance to any single religion. Most temples, churches, and
schools of Buddhism, Daoism, Islam, and Christianity were converted to
secular purposes. Only with the constitution of 1978 was official support
again given for the promulgation of formal religion in China. The
constitution also stated that the Chinese people had the right to hold no
religious beliefs and “to propagate atheism.” The constitution of 1982,
the most recent constitution, allows citizens freedom of religious belief
and protects legitimate religious activities as defined by the state.

Since 1982 many temples, churches, and mosques in China have

reopened. Also, officially sanctioned Christian groups in the cities and
Buddhist sects in the cities and the countryside have become more
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active. An underground Christian movement has also emerged.

However, as these Christian groups lie outside the official sanction of
legitimate religious activities, they are seen as illegal and thus have
been prosecuted by the government. Practicing Christians in China
include Roman Catholics and members of various Protestant groups.

Even before the constitutional changes, ethnic Chinese Muslims,

or Hui, as well as other Muslim minority peoples such as the Uygur,
Kazakh, and Kyrgyz, continued their faith in Islam. Although Muslims
now may practice their religion more openly, the government is
suspicious of their religious activities because Islam is associated with
ethnic minorities who have resisted Han control, such as the Uygurs of
Xinjiang Uygur Autonomous Region. In Tibet, the Chinese government
has restricted the practice of Tibetan Buddhism, for instance by limiting
the number of clergy and religious buildings in the region.

In the early 1990s a man named Hongzhi Li organized a quasi-

religious movement called Falun Gong. Falun Gong is based on
concepts from traditional Chinese breathing and exercise therapy
combined with ideas from Daoism and Buddhism. The movement,
which has been remarkably popular in China, disclaims any political
goals. It sees itself as simply a loosely organized group of individuals
interested in promoting good health and individual powers through
exercise and exemplary personal habits. In April 1999 more than
10,000 of Falun Gong’s members gathered in Beijing. The gathering so
alarmed China’s Communist Party leadership that the movement was
outlawed. Since then, members of Falun Gong have been arrested and
prosecuted.
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EDUCATION

Education has played a major role in China’s long and rich cultural
tradition. Throughout much of the imperial period (221 BC-AD 1911),
only educated people held positions of social and political leadership. In
124 BC the first state academy was established for training prospective
bureaucrats in Confucian learning and the Chinese classics.
Historically, however, relatively few Chinese have been able to take the
time to learn the complex Chinese writing system and its associated
literature. It is estimated that as late as 1949 only 20 percent of China’s
population was literate. To the Chinese Communists, this widespread
illiteracy was a stumbling block in the promotion of their political
programs. Therefore, the Communists combined political propaganda
with educational development. By 2005 China’s literacy rate had
reached 87 percent, although literacy levels between the sexes were
different. The literacy rate for males was 94 percent, whereas the rate
among females was only 81 percent. Literacy in China is defined as the
ability to read without difficulty.

One ambitious CCP program has been the establishment of

universal public education for such a large population. From 1949 to
1951, more than 60 million peasants enrolled in winter schools, or
sessions, which were established to take advantage of the slack season
for agricultural workers. Communist leader Mao Zedong declared that a
primary goal of Chinese education was to reduce the sense of class
distinction among the population. This was to be accomplished by
reducing the social gaps between the manual and mental labourer;
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between the city and countryside resident; and between the worker in
the factory and the peasant on the land.

The most radical developments in Chinese education, however,

took place from 1966 to 1978, during the Cultural Revolution and the
years that followed. From 1966 to 1969 the government closed virtually
all schools and universities in China. Many of the 131 million youths
who had been enrolled in primary and secondary school became
involved in Mao’s chaotic efforts to shake up China’s new elite. These
efforts involved using students as youthful critics to attack governmental
programs and policies. Primary and secondary schools began to reopen
in 1968 and 1969, but institutions of higher education did not reopen
until the period from 1970 to 1972.

During the Cultural Revolution, government policies toward

education changed dramatically. The traditional 13 years of primary and
secondary schooling, spanning from kindergarten to 12th grade, were
reduced to 9 or 10 years. Colleges that had traditionally had a 4- or 5-
year curriculum adopted a 3-year program. Part of these 3 years had to
be spent in productive labour in support of the school or the course of
study being pursued. A 2-year period of manual labour also became
mandatory for most secondary-school graduates who wished to attend
college.

Following Mao’s death in 1976, the government began a major

review of these policies. As a result, and because of an increased
interest in the development of science in Chinese education, curricula
came to resemble those of the pre-Cultural Revolution years. Programs
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for primary and secondary education were gradually readjusted to

encompass 12 years of study (although only 9 years were made
compulsory). High school graduates were no longer required to go to
the countryside for 2 years of labor before competing for college
positions. The Cultural Revolution thus resulted in a decade of
disruption in China’s educational programs. During this period nearly an
entire generation of students simply was not educated or received only
a marginal education heavily flavoured with the radical politics of the
Maoist era.

Since the late 1970s the educational system has changed

significantly with the reinstitution of standardized college-entrance
examinations. These exams were a regular part of the mechanism for
upward mobility in China before the Cultural Revolution. During the
Cultural Revolution, radical leaders eliminated the entrance exams by
arguing that they favoured elite who had an intellectual tradition in their
families. When colleges reopened between 1970 and 1972, many
candidates were granted admission because of their political leanings,
party activities, and peer-group support. This method of selection
ceased in 1977 as the Chinese launched a new campaign for the so-
called Four Modernizations. The stated goals for this campaign, which
sought to rapidly modernize agriculture, industry, defence, and science
and technology, required high levels of training. Such educational
programs by necessity had to be based more on theoretical and formal
skills than on political attitudes and the spirit of revolution. However,
after students agitated for greater democracy in the 1970s and 1980s,
which culminated in the government’s violent crackdown on student
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protestors in Tiananmen Square in June 1989, university students were

again required to complete one year of political education before
entering college.

Chinese higher education is now characterized by the key-point

system. Under this system, the most promising students are placed in
selected key-point schools, which specialize in training an academic
elite. Students finishing secondary school may also attend junior
colleges and a variety of technical and vocational schools. Among the
most prominent comprehensive universities in China are Peking
University (founded in 1898) and Tsinghua University (1911), in Beijing;
Fudan University (1905), in Shanghai; Nanjing University (1902);
Nankai University (1919), in Tianjin; Wuhan University (1893);
Northwest University (1912), in Xi’an; and Sun Yat-Sen University
(1924), in Guangzhou. Prestigious science and technical universities
include the Beijing Institute of Technology (1940), Tongji University
(1907) in Shanghai, and the University of Science and Technology of
China (1958) in Hefei.

In the past, students received free university education but upon

graduation were required to accept jobs in state-owned industries. The
government instituted a pilot program in 1994 whereby the state
allowed university students the option of paying their own tuition in
exchange for the freedom to find their own jobs after graduation. This
enabled graduates who paid their way to choose better paying jobs with
foreign companies in China, or to demand better pay from state-owned
enterprises. By the late 1990s, all incoming university students were
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required to pay their own tuition, although government loans were

available.

Certain fields of study have grown in popularity in Chinese higher

education. While engineering and science remain very popular, other
fields, including medicine, economics, literature, and law, has grown
considerably in recent years. Another trend has been the rapid increase
in the number of advanced students who study abroad, mainly in North
America, Europe, and Japan.

In 1998–1999 China had 145 million pupils enrolled in primary schools,

and 91 million students enrolled in secondary schools. By contrast,
enrolments in 1949 had been about 24 million in primary schools and
1.25 million in secondary schools. There were 12.1 million students
enrolled in institutions of higher learning in 2001–2002.

CLASS AND SOCIAL STRUCTURE

China’s traditional class and social structure traces back more than
3,000 years to the Shang (1570?-1045? BC) and Zhou (1045?-256 BC)

dynasties. During this period a ruling class emerged from a combination

of priests, military leaders, and administrators. By the 4th and 3rd
centuries BC, the legitimacy of the ruling elite was embedded in the
writings of Confucius and other scholars.

Confucian doctrine sought to develop a framework for a stable and

harmonious society. In this framework, mutual responsibilities and
obligations were defined between ruler and subjects, husband and wife,
parents and children, father and eldest son, and eldest son and other
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siblings. If the roles were carried out properly, society would function in
a well-ordered manner. China was defined as a male-centred society in
which the family name passed down through the male line. The eldest
son was charged with performing important annual rituals that involved
reverence for deceased ancestors and parents. Veneration for
ancestors was an important part of Chinese family life, and every
Chinese home had, and typically still has, a small shrine for ancestors.

Beyond family life, Chinese social order traditionally was defined

in terms of a few main social groupings. The emperor and his
attendants were at the top of the social order. Below him was the
imperial bureaucracy, staffed at all levels—court, province, prefecture,
and county—with elite scholar officials. Through these officials, backed
by the army and other imperial policing authorities, the imperial
government administered the state and imposed its authority and
control when challenged. Farmers, soldiers, merchants, and artisans
were below the bureaucrats. This general social order persisted until
the imperial system was overthrown in 1911, although over time the
position of merchants had improved. By the 20th century, a number of
families with commercial and industrial interests had amassed great
fortunes. Their wealth permitted them the luxury of educating their
children, and through this means, their families’ status advanced in the
traditional hierarchy.

When the Chinese Communists gained power in 1949, the social

hierarchy changed dramatically. Poor peasant farmers and people who
had joined the Communist army during the revolution were held in
esteem within the party, which exercised great influence over society.
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Landlords and educated elites often were punished, and many lost their
land and other properties. In rural areas there were many executions
and other punishments for landlord families.

A peasant background continues to be important for advancement

within the party hierarchy. However, the value of education as a means
of developing skills and strong qualifications has emerged once again
as the best path to social advancement. Since the 1970s individuals
from elite backgrounds have been allowed to compete for educational
advancement as China has sought to use more fully its human
resources. In some cases, former factory owners have been allowed to
re-establish their businesses, and in this manner China has allowed a
small measure of rehabilitation of its elite governing classes from the
past. But China remains a Communist state and political system, and as
long as it continues as such, elites are likely to be viewed with suspicion
by other members of society.

COMMUNISM AND CHINA’S WAY OF LIFE

Communism has brought about far-reaching changes in China, as

the way of life of China’s people has incorporated and adjusted to
shifting ideological currents. Traditionally, the average Chinese citizen,
especially the more than 90 percent of the population who resided in
rural areas, had little or nothing to do with the central or local
government. Most people’s lives were centred on their home village or
town, and the family was the main unit of social activity and economic
production. The Communist revolution injected the Communist Party
into every level of urban and rural life and every institution of society.
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Thus for the average Chinese citizen, whether urban or rural dweller,
Communism has brought a far more intrusive role of government in
daily life and in the operation of all significant facets of the economy and
society.

However, in the years following the death of Chairman Mao in

1976, China’s leaders gradually modified the strict policies of socialist
guidance of the economy, and the role of the party in everyday life
began to diminish. This shift reflected an increasing understanding
among party leaders that the socialist approach was not succeeding.
They recognized that it had not provided a better life for the Chinese
people and was stifling economic growth. The shift has been particularly
evident in the countryside. Reforms in the rural economy have led to a
virtual privatization of rural land, with peasants acquiring long-term
leases that amount virtually to private ownership. Many peasants are
now responsible for earning their own livelihoods and supporting their
families. The state’s role in their daily lives has clearly diminished,
although it has not disappeared.

Despite the far-reaching changes in rural areas, country life

remains attuned to the seasons and focused on nearby towns and cities
for commerce and entertainment. In the rural areas surrounding large
urban areas, the pace of life has intensified as farmers have geared
their agricultural production to the growing demands of urban
consumers. Moreover, much of China’s urban industrial development
has flowed to the adjacent rural areas. In these areas land is readily
available at lower prices, and the rules concerning release of noxious
fumes, liquids, and solids are looser and often not enforced. The
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inhabitants of these rural areas peripheral to cities have greater

opportunities for employment off the farms, often in industrial or service
jobs that are not even related to the farm economy. Residents of these
areas have been increasingly drawn into a quasi-urban lifestyle, with all
of its attendant pleasures and challenges.

Traditional rural family life has been changed by the dynamism of

the nearby cities and their evolving economies. New employment
opportunities often attract the male head of household, who may later
be followed by other members of the farm family. Such employment
offers new opportunities but also new challenges. Uncertainty about the
long-term prospects for employment off the farm often makes farmers
reluctant to let go of their land and farms. When peasants leave the
farm under such circumstances, they often leave the farming to those at
home who have little interest and enthusiasm for the work, which may
be viewed as difficult and tiresome. Under these conditions, the quality
of the farm may decline, and the productivity of both land and people
may begin to diminish. Nevertheless, the off-farm jobs enhance
prospects for social as well as economic change. The new jobs bring
rural Chinese into contact with urban dwellers who have different values
and different ways of doing things.

Farther from the cities, in the more remote areas of the interior, the
traditional rural way of life is generally more prominent. In these areas,
opportunities for new off-farm jobs are limited. Yet even in these
locations, many peasants have grown dissatisfied with local conditions.
They have migrated to other provinces and distant cities in search of
more profitable employment and relief from poverty and the routines of
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village life. Such migrations are not easy, however. The peasants are
allowed to leave their villages only as temporary migrants to provide
needed labour services in those urban jobs that are the most
undesirable, difficult, and dirty. These include jobs in construction,
transportation, and domestic service. Migrants must provide for their
own lodging, food, and other needs. They are not entitled to the many
privileges and subsidies afforded urban citizens employed in the state-
supported sector of the economy—such as health care and good
schooling for their children. Yet these transients continue to leave rural
areas for the cities with dreams of either becoming permanent city
dwellers or earning their fortunes and returning to their native villages
with new wealth and power. Some have indeed done well. However, the
reality for most of these transients is a difficult life of hard work and a
second-class status, in cities far from their native villages.

In the cities, the power of the CCP and its governing apparatuses
of state power are more obvious and controlling. Most people in cities
are employed in state-operated commercial and industrial enterprises.
Workers in these enterprises must adhere to state-mandated social
rules, as well as employment rules, as the state controls virtually all
aspects of life. Access to housing, health care, and education depend
on following state-mandated guidelines of proper social conduct, such
as the one-child per family policy. In the 1990s the state initiated an
effort to privatize urban housing. By the close of the 20th century, many
state-supported employees were able to purchase apartments through
various state-supported credit arrangements.
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At the same time, city life offers many opportunities that are not
available in the countryside. City dwellers enjoy the benefits associated
with higher incomes and enhanced cultural, commercial, and
educational opportunities. China’s large cities in the eastern coastal
provinces offer many of the amenities and opportunities associated with
cities in the West. Among these are department stores containing the
latest fashions, and lodging and restaurant facilities in hotels of world-
class standards. In addition to outstanding local and non-local Chinese
cuisine, European, Japanese, Indian, and American fare is available.
American fast food, such as McDonald’s and Kentucky Fried Chicken,
is widely available.

In and around China’s great cities are found the evolving lifestyles
of the newly rich, those with strong connections in government and
commerce who can accumulate substantial wealth. Members of this
class are often eager to flaunt their new wealth. They buy fine clothing
and accessories and fancy automobiles, and even purchase large,
single-family dwellings near new private schools. Fancy restaurants,
discos, and nightclubs are trendy venues for the newly rich to show off
their wealth and status and enjoy a sophisticated lifestyle. The children
of these urbanites are the ones most likely to go abroad for foreign
study and learn foreign languages. Such education will permit them
rapid entry into the business and professional circles of China’s
increasingly globalized economy and society. While this newly wealthy
population is comparatively small, it signifies the rapidly growing
disparity in income levels between rich and poor in China’s cities.

SOCIAL ISSUES
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The increasing disparity in income levels resulting from the growth

in China’s economy has become a significant social problem. Such
disparities in income and wealth are found in both cities and rural areas.
But the largest disparities, and the most significant friction between rich
and poor, are seen in cities. The differences between those who have
good housing provided by the state and those who live in makeshift
dwellings or otherwise substandard housing are becoming increasingly
visible. Many temporary workers do not have proper access to health
care. Furthermore, they often have no access to schools, and if they
bring their families to the cities, their children sometimes turn to petty
crime. This activity causes friction with permanent local residents, who
often complain that the temporary migrants cause all of the city’s
problems. In each of China’s largest cities, such as Shanghai, Beijing,
and Guangzhou, the number of transient workers may exceed 1 million.
This issue is becoming increasingly awkward for China, whose
Communist government purports to be committed to socialist ideals of
equality and sees itself as a model of modern socialist development.

A related and serious problem is the large extent of government

corruption in China, which aggravates the disparities in income.
Government approvals are required for everything from changes in
residence to permits for building factories to exporting commodities.
Therefore, government officials responsible for granting those approvals
wield a great deal of power. Many bureaucrats abuse their power and
expect money in return for routine approval of permits. Sometimes,
payments to corrupt officials can involve very large sums of money.
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Government efforts to curb these practices have been generally

ineffective.

HEALTH ISSUES

The Chinese government seeks to provide for the physical well

being of its citizens. Major public welfare programs have included
subsidized housing, vocational opportunities, health care, retirement
benefits, and the assurance of a paid funeral. Yet services and benefits
provided in cities have always been sharply different from those
available in the countryside. City dwellers who work for the state have
received housing, medical care, and good schooling for their children.
The government has also provided benefits for disability, maternity,
injury, and old age. Such benefits are part of why many state
enterprises are in troubled financial condition and unable to show a
profit. In contrast, rural dwellers have been largely on their own for
social services. Their well-being has depended on the productivity and
wealth of the area in which they live. Since the reforms began in 1978,
the level of medical assistance and other social services in rural areas
has even been reduced. At the same time, however, rural incomes have
risen dramatically, thus better enabling peasants to take care of their
own social needs. Farmers do not receive any pension benefits. Under
Chinese custom, sons are expected to look after their parents in their
declining years.

Health care in China has improved dramatically since the

economic reforms began. In 1949 the average life expectancy in China
was 45 years. By 2008 the average had risen to 73 years (71 years for
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men and 75 years for women). During the same period the number of
medical doctors increased greatly. Despite an overall rapid population
increase, in 2005 China had 1 physician for every 662 inhabitants, as
opposed to 1 for every 27,000 in 1949. Clinics typically are found at the
village and district levels, and hospitals, in most cases, at the city and
county levels.

In the period from 1949 to 1974, a paramedical corps of so-called

barefoot doctors played an important role in bringing health services to
rural people. These personnel were trained in hygiene, preventive
medicine, and routine treatment of common diseases. They serviced
rural areas where both Chinese and Western-style doctors were scarce.
For millions of peasants, barefoot doctors were their first encounter with
anyone trained in health services. In recent years, rural incomes have
increased and the rural economy has been virtually privatized. These
developments have enabled peasants to use local clinics for less
serious illnesses and to use hospitals in neighboring towns and cities
for more serious illnesses. Typically, a fee is involved, although the
costs for such medical assistance is modest compared to such costs in
the United States. Another development in health services has been the
renewed interest in traditional Chinese medicine, such as local herbal
medication, folk medicine, and acupuncture. In rural areas, herbal
medications may represent as much as four-fifths of the medication
used.

China has launched mass campaigns in the health-care field.

Efforts to promote child immunization, eradicate schistosomiasis, and
diminish sexually transmitted infections have received widespread
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governmental promotion. Highly successful campaigns have been

waged against infectious and parasite-borne diseases that were
formerly widespread, such as tuberculosis, malaria, and filariasis
(diseases caused by the filaria parasite). By the start of the 21st
century, however, acquired immunodeficiency syndrome (AIDS) had
become an increasing concern in China. In 2005 an estimated 650,000
Chinese people were infected with AIDS.

CHAPTER TEN
THE CHINEESE POLITICAL ECONOMY

In the 1950s China’s Communist government began bringing a

majority of economic activity under state control and determining
production, pricing, and distribution of goods and services. This system
is known as a planned economy, also called a command economy. In
1979 China began implementing economic reforms to expand and
modernize its economy. The reforms have gradually lessened the
government’s control of the economy, allowing some aspects of a
market economy and encouraging foreign investment; however, the
state-owned sector remains the backbone of China’s economy. China
refers to this new system as a socialist market economy. As a result of
the reforms, China’s economy grew at an average annual rate of 10.2
percent in the 1980s and by 10.7 percent annually in the period of 2006.
This was among the highest growth rates in the world. However, the
reforms also have caused problems for China’s economic planners.
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Income gaps have widened, unemployment has increased, and inflation

has resulted from the extremely rapid and unbalanced development.

In 2006 China’s Gross Domestic Product (GDP) was $2,644.7

billion. The size of the country’s economy makes China a significant
economic power; despite this, it remains a low-income, developing
country because it must support a huge population of 1.33 billion. In
2006 China’s per capita GDP was just $2,016.10. Industrial activity
(manufacturing, mining, and construction) contributes the largest
percentage of the country’s GDP, amounting to 48 percent in 2006.
Transportation, commerce, and services together accounted for 40
percent. And agriculture, together with forestry and fishing, contributed
12 percent.

HISTORY OF CHINA’S ECONOMY

China developed an agricultural economy more than 2,000 years

ago. During the Han dynasty (206 BC-AD 220) the Chinese developed
several tools and practices that farmers in Europe and the Middle East
adopted only centuries, or even a millennium, later. The cast-iron
moldboard plow, for example, made it easier to cultivate hard or stony
land. Although heavier than wooden plows, these plows created much
less friction and could be pulled by a single animal, even in the
waterlogged clay soils of southern China.

After the Han period, however, China’s agriculture and economy

advanced more slowly. For centuries, China’s economy was based on
farming that used ancient methods, and much of the agricultural activity
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was performed at a subsistence level. By the 19th century China had an

underdeveloped agricultural economy that was backward compared to
the developing industrial economies of Europe and North America.

In the mid-19th century Britain defeated China in the Opium Wars

and forced China to create coastal treaty ports, in which foreign
residents could live and trade. A period of Western penetration
followed, during which railroads and highways were constructed, some
industrial development was begun, and new energy sources, such as
kerosene and electricity, were introduced. However, such activity had
little impact on China’s economy overall. In 1911 Chinese
revolutionaries overthrew China’s last dynasty, the Qing, and the new
Chinese republican government attempted to modernize the economy.
But in the decades that followed, civil wars and a war against Japanese
occupation stifled economic growth and development.

In 1949 the Chinese Communist Party (CCP) came to power and

founded the People's Republic of China (PRC). During the first few
years of its existence, the PRC focused on rebuilding from the ravages
of war and redistributing land to 300 million poor peasants. Then, in
1953, China implemented a planned economy, and the government
took over all means of production. The state outlined how the economy
was to be developed in a series of five-year plans, which detailed how
investment funding, production materials, and other resources were to
be allocated. Success was measured by the fulfilment, or over-
fulfilment, of the production targets and timetables established in the
five-year plans. As a result, quality and innovation became less
important than they had been in the past. The government assigned
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people to jobs and there was little possibility of job transfer. The state
also controlled wages and prices and owned all transportation and
housing. Household and personal consumption was controlled by the
government through a system that rationed food, cotton cloth, and other
daily necessities. Consequently, enterprises, families, and individuals
had very limited choice in their economic behavior.

FIVE-YEAR PLANS

The first five-year plan, implemented from 1953 to 1958, outlined

changes for all economic sectors but particularly emphasized expansion
of heavy industry. The government created hundreds of large, state-
owned, industrial enterprises, and by 1958 China had a solid industrial
base. In the agricultural sector, meanwhile, the state organized workers
into large, cooperative farms. Agricultural output increased, but not
nearly at the same rate as industry.

Initially, the authors of the second five-year plan modeled it on the

first. By the beginning of 1958, however, they had revised the plan to
address the concern of Chinese leader Mao Zedong that agriculture
was not growing as fast as industry. The revised plan was to be
accomplished through an economic and social campaign intended to
radically increase China’s agricultural production while maintaining high
industrial growth. The campaign became known as the Great Leap
Forward.
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At this time, China was becoming increasingly isolationist in its

foreign policy, and one goal of the Great Leap Forward was to make the
country self-sufficient. A key component of the program was the
establishment of small furnaces for making steel from low-grade ore,
scrap metal and even household implements. Millions of peasants and
city workers were ordered to abandon their fields and factories in order
to run primitive backyard furnaces. Although the program pushed
China’s total iron and steel production past Britain’s in just a few years,
the result over time was massive economic dislocation as well as
wasted resources, including widespread deforestation for the sake of
obtaining fuel to fire furnaces.

In agriculture, the government established huge rural people’s

communes, which brought all rural land and major farm equipment
under collective ownership. Although China sowed a huge grain crop in
1958, much of it went to waste because of inadequate transportation
and storage facilities. Worse, a policy of deep plowing and the practice
of planting grain even in conditions unsuited to its cultivation did a great
deal of ecological damage. Silting and runoff from ill-considered and
poorly executed irrigation projects, and the destruction of trees,
grasses, and ponds, contributed to catastrophic floods in 1959 and
1960. The misguided industrial and agricultural policies of the Great
Leap Forward, compounded by these environmental calamities,
resulted in three years of famine in which more than 20 million people
died.

As a result of the famine and the economic failures of the Great

Leap Forward, China launched a period of economic readjustment. By
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1965 production in many fields again approached the level of the late
1950s. The third and fourth five-year plans were begun in 1966 and
1971. However, both agricultural and industrial production were
severely curtailed by the effects of the Cultural Revolution (1966-1976),
a political campaign that was intended to revolutionize Chinese society
but that ultimately caused social chaos and near economic collapse.

In the fifth five-year plan, begun in 1976, China's leaders decided

to move at a faster pace on all economic fronts to make up for the
losses suffered in the preceding ten years. However, the biggest
economic changes occurred after the CCP, under the leadership of
Deng Xiaoping, adopted the national objective of modernizing
agriculture, industry, defense, and science and technology in 1978.
Subsequent five-year plans focused on achieving this objective.

REFORM AND OPENING

The first reforms toward achieving the new national objective

began in poor rural areas in 1979, when the government replaced
communal farming and distribution with the household contracting and
responsibility system. Under this system, individual farm households
worked separate plots of land owned by an economic collective. The
households could sell produce at farmers’ markets for whatever price
buyers were willing to pay in return for selling a certain amount of
produce to the collective at a predetermined price. The contract and
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responsibility system was successful because it gave farmers an

incentive to reduce production costs and increase productivity.

In 1984 the government shifted the emphasis of the economic

reforms to urban areas. It extended greater decision-making power to
managers of state-owned enterprises, and replaced the system of
collecting all profits with one of collecting taxes on profits and then
allowing enterprises to make their own reinvestment choices.
Furthermore, while still insisting on public (state) ownership of
enterprises as the predominant form, the government also encouraged
other forms of ownership, such as collective and private ownership.

Meanwhile, China also opened its market to the outside world. To

help quicken the pace of modernization, the state encouraged foreign
investment and the import of advanced technology. In 1980 China
began establishing special zones for foreign investment. The original
four were called Special Economic Zones (SEZs) and consisted of
Shenzhen, Zhuhai, Shandou, and Xiamen, all in southeastern China. By
the late 1990s a variety of similar types of zones had been added,
including a fifth SEZ, Hainan Island. Most zones are located in urban
economic centres, particularly coastal cities, cities along the Yangtze
River, provincial capitals, and cities and towns along China’s borders.

In 1992 the government announced the goal of establishing a

socialist market economy, meaning a market economy led by the CCP.
To accommodate this change and other economic reforms, the
government has shifted its role in the economy. Under the planned
economic system, the state determined production and pricing. In a
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market economy, however, consumer demand for goods and services

determines production and pricing. The Chinese government's new role
involves creating a stable and competitive economic environment
through the application of laws and regulations. In 2001 China became
a member of the World Trade Organization (WTO). In joining the WTO,
China agreed to further reduce government control over the economy,
including reducing state subsidies and dropping many restrictions on
foreign investment.

LABOUR

In 2006 China had a total labour force of 781 million, the largest in
the world. In 2002 agriculture, forestry, and fishing employed 44 percent
of the workforce. Mining, manufacturing, and construction employed 18
percent. The remainder, 16 percent, worked in the service sector, which
includes banking, government, transportation, tourism, and retail trade.

Official unemployment in China was 4.2 percent in 2005. However,

the real problem of unemployment and underemployment (employment
that is less than regular, full-time employment) is much more serious.
Many state-owned enterprises have more workers than are needed. To
increase production efficiency, these enterprises have begun laying off
many people. Furthermore, eliminating inefficient communal farming
methods created a huge pool of unemployed and underemployed
people in the countryside. Each winter since the reforms began, millions
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of peasants have travelled to cities in search of seasonal work. This has

caused havoc in railroad transport and social problems in urban areas
that have neither enough jobs nor housing to absorb these workers.

China's economic reforms have brought major changes to the work

place. Previously the state assigned people to jobs. Although workers
had little choice in their assignments, they generally could count on life-
long employment. Furthermore, state enterprises provided retirement,
social security, medical care, and in many cases subsidized housing to
their employees. However, these costly benefits contributed to the
losses that plagued many state-owned enterprises. Under the reforms,
enterprise managers have received greater freedom to hire and fire
workers. Job mobility has increased, but so has job insecurity. The
central government has transferred many responsibilities for retirement
and social security systems to provincial governments.

Trade unions are organized in all of China’s industrial sectors, and

more than 100 million Chinese workers belong to trade unions. Some of
the unions were founded as early as the 1920s. Many more were
founded after the establishment of the PRC in 1949. All trade unions
are under the All-China Federation of Trade Unions, an umbrella
organization of the CCP. The unions work for the interests of union
members in matters such as labor protection, workers' welfare, and the
settlement of labor disputes. The unions are also an instrument for
bringing workers and the CCP together.

AGRICULTURE
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China has 10 percent of the world’s arable land with which to

support 20 percent of the world’s population. Over the centuries, the
Chinese have built irrigation projects to the extent that almost half of
cultivated land is now irrigated. China long had a food deficit, but as a
result of new irrigation projects, improved farming techniques since
1949, and agricultural reforms since the late 1970s, China now
produces enough grain to provide a basic diet for its large population. In
lean years, however, the country occasionally must import grains.
China's agriculture is also a major source of raw materials for the
country’s industries. Chinese cotton, for example, is a key material
supplied to the garment industry. In the early 21st century China was
the world’s top producer of a number of crops, including rice, cotton,
tobacco, peanuts, potatoes and sweet potatoes, and vegetables and
melons.

ORGANIZATION OF AGRICULTURAL ACTIVITIES

In the 1950s the Communist government organized 800 million

rural people into about 52,000 people's communes. The communes
received production targets from the state and ensured that these
targets were met. Each commune was divided into about 16 production
brigades, which were further divided into about 7 production teams
usually consisting of 100 to 250 people. Each level above the individual
could hold land, tools, and other production materials under communal
ownership, and each carried out a range of production activities.

Under the commune system, it was possible to conduct large-scale

experimentation with scientific farming, to plant crops in areas with the
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most favourable soil and other natural conditions, and to develop

irrigation and drainage on an efficient scale. Although land was
collectively owned, each rural household usually had access to a small
private plot, which it was free to use as it pleased. Both production
teams and individual households were also given autonomy to market
products after official targets were met.

In the early 1980s, in an effort to increase agricultural production,

the government restructured the agricultural sector. The system of
communes and production brigades was largely dismantled, and the
household became the principal unit of agricultural production. Under
the so-called household contracting and responsibility system, each
household, after contracting with local authorities to produce its quota of
specified crops, was free to sell any additional output on the free
market. A major limitation of this system is its difficulty in achieving
economies of scale. This refers to the economic principle that an
individual household produces a smaller amount than a larger farm, but
has some of the same basic expenses (for plows, for example) and
therefore has a higher relative production cost. On a voluntary basis,
some households have organized themselves into groups for product
processing, marketing, and regional cooperation.

AGRICULTURAL PLANNING AND IMPROVEMENT

Given the very limited quantity of agricultural land in China relative

to the country’s large population, rational planning of land use is of
prime importance. An overemphasis on grain growing during the 1960s
and 1970s led to the elimination of some low-yield but otherwise very
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valuable crops, orchards, and trees; it also led to the neglect of animal
husbandry, and to environmental damage. The government has since
promoted a mixed-farming economy that is in accordance with local
environmental conditions and that also provides cash income.

The Chinese government actively pursues and promotes

agricultural mechanization, although it remains in the early stages of
development and is considered impractical in many places because of
the relatively small size of cultivated areas. Since the 1950s the state
has accomplished significant flood control and irrigation projects, which
include the construction of dams, canals, and reservoirs. Increased
irrigation, mechanization, and fertilizer use since the 1950s permit the
growth of two crops per year in areas of the Huabei Pingyuan (North
China Plain). In some parts of southern and southeastern China,
peasants are able to produce three crops per year.

To supplement agricultural production, the various levels of

government operate hundreds of state farms. These are large-scale
units run for the purpose of agricultural experimentation and for
commercial production of certain crops and foodstuffs for urban markets
or for export. State farms are usually located in newly reclaimed areas
where the rural population density is not great and modern machinery
can be used effectively.

FOOD AND OIL-SEED CROPS

About three-quarters of China's cultivated area is devoted to food

crops. China is the world's largest rice producer, and rice is the
country's most important crop, raised on about one-quarter of the
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cultivated land. Most rice is grown south of the Huai River, notably in
the middle and lower Yangtze Valley, in the Zhu Jiang (Pearl River)
delta, and also in Yunnan, Guizhou, and Sichuan provinces.

Much of the rest of China’s cultivated land is devoted to other grain

crops. Wheat is grown in most parts of the country, but the largest
growing areas are on the Huabei Pingyuan, in the valleys of the Wei
and Fen rivers on the Huangtu Gaoyuan (Loess Plateau), and in
Jiangsu, Hubei, and Sichuan provinces. Corn (maize) is grown in
northern, northeastern, and southwestern China. It is increasingly used
as animal feed and less is taken for direct human consumption.
Kaoliang (a sorghum) and millet are important food crops in North and
Northeast China. Kaoliang is also used as an animal feed and
converted into alcohol for beverages; the stalks are used to make paper
and as a roofing material. Oats are important chiefly in Inner Mongolia
and in the west, notably in Tibet.

Other food crops include sweet potatoes, white potatoes, and

various other fruits and vegetables. Sweet potatoes predominate in the
south and white potatoes in the north. Fruit includes tropical varieties
such as pineapples and bananas, grown on Hainan Island; apples and
pears, grown in the northern provinces of Liaoning and Shandong; and
citrus fruits, particularly oranges and tangerines, which are major
products of South China.

Oil seeds play a major role in Chinese agriculture, supplying edible

and industrial oils as well as other food products, and constituting an
important share of exports. The most important oil seed is the soybean,
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which is grown mainly in North and Northeast China. Chinese soybeans

are particularly good for making tofu (bean curd), and the oil made from
soybeans is used in cooking. China is one of the world’s leading
soybean producers and is also a leading producer of peanuts, which
are grown in Shandong and Hebei provinces. Other important oilseed
crops are sesame seeds, sunflower seeds, and rapeseed. The seeds
from the fruit of the tung tree also provide a valuable oil, which is used
as an additive in paints and varnishes. More than half the tung oil
produced in China originates in Sichuan.

Tea is a traditional export crop of China, and the country produces

more than 20 percent of the world supply. Green and jasmine teas are
very popular among the Chinese population, whereas black tea is
mostly for export. The principal tea plantations are on the hillsides of the
middle Yangtze Valley and in the south-eastern provinces of Fujian and
Zhejiang.

China obtains sugar both from sugarcane and sugar beets.

Sugarcane is grown mainly in the provinces of Guangdong and
Sichuan. Sugar beets, a relatively new crop for the country, are raised
in Heilongjiang Province and on irrigated land in Inner Mongolia.

FIBER CROPS

Since 1949 the Communist government has given increasing

attention to the expansion of crops for the textile industry. The most
important of these crops is cotton, of which China is the world's leading
producer. Although cotton can be grown in almost all parts of China, the
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principal cotton-growing areas are the Huabei Pingyuan, the Huangtu

Gaoyuan, the Yangtze River delta, the middle Yangtze Valley, and
Xinjiang Uygur Autonomous Region in Northwest China. The Huabei
Pingyuan yields about half the country's total cotton output.

Other important fibers grown in China include ramie and flax,

which are used for linen and other fine cloths, and jute and hemp, which
are made into sacks and rope. Ramie, a native Chinese plant similar to
hemp, is grown chiefly in the Yangtze Valley; flax is a northern crop.
The main jute-growing areas are in Zhejiang and Guangdong provinces.
Another traditional Chinese product is raw silk. Sericulture, the raising
of silkworms, is practiced in central and southern China, notably in the
Yangtze delta and some parts of Sichuan.

LIVESTOCK

China maintains a large livestock population, and livestock and

animal products are important for domestic uses and for export. Hogs
and fowl are the most commonly raised livestock. The country is the
leading exporter of hog bristles, which are used in making brushes. In
many rural areas of western China, nomadic herding of sheep, goats,
and camels is the principal occupation. In the mountains of Tibet and on
the Tibetan Plateau, yaks are a source of food and fuel (the dung is
burned), and their hair and skin provide materials for shelter and
clothing. Other livestock raised in China include cattle, water buffalo,
horses, mules, and donkeys.

FORESTRY AND FISHING

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China's forest resources are limited due to centuries of cutting for

fuel and building materials. Programs to convert open land into forests
have increased the extent of forestland from about 8 percent of the total
area in 1949 to 20.6 percent in 2005. Tree-planting campaigns
throughout the country have been organized both at the state and local
levels; rural villages have been responsible for planting 70 percent of
the total reforested area. Trees have been planted around settlements,
along roads, on the edge of bodies of water, and by the sides of
peasant homes.

The distribution of forests in China is very uneven. The northeast

and southwest have half of the country’s forest area and three-quarters
of the forest resources. Principal species cut include various pines,
spruce, larch, oak, and, in the extreme south, teak and mahogany.
Other commercial species include the tung tree, lacquer tree, camphor,
and bamboo. Major forestry products include timber, plywood,
fiberboard, pine resin, tannin extract, and paper pulp.

Chinese fishers catch about one-third of the fish caught in the

world. Aquaculture, the breeding of fish in ponds and lakes, accounts
for more than half of the total catch. Aquaculture was an important part
of traditional Chinese food production. The government’s initial five-year
plans deemphasized aquaculture, but since 1984 reform policies have
restored and modernized this activity. Carp ponds, a Chinese food
source for thousands of years, yield a significant share of the total
acquaculture catch. Prawns, crabs, oysters, and scallops are also
raised in ponds. The principal aquaculture producing regions are those
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close to urban markets in the middle and lower Yangtze Valley and the
Zhu Jiang delta. In addition to fish, China also harvests aquatic plants.

INDUSTRY

Manufacturing, mining, and construction constitute China’s

industrial sector. China’s manufactures are diverse and include such
complex products as airplanes, ships, automobiles, satellites,
electronics, and modern industrial equipment. However, many heavy
industry production facilities are outmoded and inefficient, and many
state-owned enterprises operate at a loss. High-technology industries
grew in importance after the mid-1990s.

INDUSTRIAL PLANNING

In the late 1970s the Chinese government reassessed its industrial

goals in an attempt to remedy a number of problems caused by poor
planning. In many places, self-sufficiency had been allowed to grow at
the expense of specialization, and thus enterprises often duplicated
functions performed by other enterprises. The rapid growth of heavy
industry had damaged some urban environments and drawn away
funds that could have been more usefully devoted to agriculture, light
industry, and improvement of urban facilities. Meanwhile, technology
stagnated.

In the first wave of reforms that began in 1979, the government

sought to slow the growth of heavy industry. Light industries, which
generally return investments in a shorter time period, received priority
for industrial development funds, and this facilitated their rapid
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expansion. Funds were also directed into the construction industry to

improve the living conditions of urban residents and to create job
opportunities for the urban unemployed and rural underemployed.

Since the 1980s enterprise managers have received increasing

decision-making powers. The government has introduced new forms of
management, such as leasing, shareholding, and contracting out of
state-owned enterprises. It has allowed private ownership to coexist
with state and collective ownership, and for many state-owned
enterprises to be leased, contracted out, merged, or sold. In an effort to
modernize industry, China has sent large numbers of scholars, factory
managers, and technicians abroad to acquire advanced management
and technical expertise. Following the economic reforms of the early
1990s, foreign investment in Chinese industry grew rapidly. Foreign
technology has also been imported in the form of entire factories.

ENERGY

China is one of the world's leading producers of electricity.

However, the demand for electricity is greater than the domestic supply,
especially in cities.

In 2003, 82 percent of China's annual electrical output was

generated in thermal installations, most burning coal. Hydropower
accounted for 15 percent, and nuclear power supplied 2 percent. New
coal-fired stations include several built near the large coal deposits of
North China. China’s main hydroelectric stations are at Liujia Xia on the
Huang He (Yellow River) in Gansu Province, Danjiangkou on the Han
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Jiang in Hubei Province, and Gongu on the Dadu in Sichuan Province.

Numerous other large-scale generating stations are under construction,
including one on the Yangtze River near the Yangtze Gorges, and one
on the Huang He. In 2006 China had 9 nuclear power plants in
operation.

China's waterpower resources are more plentiful than those of any

other country. A notable feature of China’s hydroelectric power industry
has been the construction of small, local power-generating plants. Local
governments and rural communes have harnessed hydroelectric
potential as an integral part of their water conservation programs,
especially in the south, where precipitation is great and rivers are swift
and often have steep gradients. In 1992 the government began
constructing the Yangtze Gorges water conservancy and power
generation project on the Yangtze River near Chongqing. The project,
known as the Three Gorges Dam, will create the largest electricity-
generating facility in the world. The project is scheduled for completion
in 2009.

COMMUNICATIONS

Communications has a centuries-old tradition in China. Nearly

3,000 years ago, Chinese built towers of fire to warn of approaching
enemies. Centuries later, posters written in Chinese characters were
put up by the government at city gates and other busy places to warn of
the presence of dangerous animals or to make known wanted criminals.
The tradition of using posters for delivering information was continued
into the 20th century. In many Chinese cities, newspapers are put on
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walls for public reading. Posters were widely used in the mid-1950s
during the Hundred Flowers Campaign, when the government
encouraged people to provide constructive criticism of the policies of
the CCP. The movement came to an abrupt end in 1957 when the
government imposed strict controls on freedom of expression. During
the Cultural Revolution (1966-1976), students hung millions of posters
with revolutionary messages on walls throughout China. In 1979
opinions expressed on what came to be known as the Democracy Wall
in Beijing were also written on posters. However, the use of posters for
expressing individual opinions was outlawed after the 1989 Tiananmen
Square Protest, in which pro-democracy demonstrators were violently
suppressed by the military.

While the traditional means of communication are waning, modern

communication facilities are developing rapidly. In the early 21st century
more than 2,000 newspapers were being published in China. Major
national newspapers include Renmin Ribao (People's Daily), the official
paper of the CCP; Jiefangjun Bao (Liberation Army Daily), the paper of
China's Central Military Commission; and Guangming Ribao
(Guangming Daily), a paper popular among scientists and educators.
Among the most influential magazines are Liaowang (Outlook) and
Qiushi (Seeking Truth). Magazines that cover social, cultural, and
economic topics are very popular. The Chinese government pressures
those who work in the media to avoid politically sensitive subjects.
Consequently, the media practices a high degree of self-censorship.

The largest radio broadcaster is the government-run China

National Radio in Beijing. There are also government-run radio stations
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at the provincial and local levels. Radio broadcasts reach more than 90
percent of the Chinese population. China's first television station was
established in Beijing in 1958. It developed into the only national
broadcaster, the state-run China Central Television (CCTV), which now
offers 14 channels in China. CCTV also broadcasts outside China with
two foreign language channels, one in English and one in both French
and Spanish. Many of the CCTV channels were developed in the 1990s
to serve the country’s rapidly growing cable television market. In
addition to the national broadcasts of CCTV, many provinces and cities
have local stations, and their broadcasts are commonly available to a
larger audience via satellite services. In 2000 there were 303 television
sets for every 1,000 people. China has the world’s largest cable
television market. In 2002 there were 75 cable television subscribers for
every 1,000 people.

China's newspapers, magazines, and radio and television stations

receive their news from the official Xinhua News Agency, and
supplement Xinhua news with their own reports. Xinhua has its head
office in Beijing, with branches in provincial capitals throughout the
country and more than 100 offices overseas. It publishes news in
Chinese, English, French, Spanish, Portuguese, Russian, and Arabic.
The other news agency in China is Zhongguo Xinwen She (China News
Agency), also a state agency, which provides news to Chinese-
language newspapers around the world.

Although most Chinese have somewhat limited access to

telecommunications services, the quality of communications equipment
is generally good. As a result of reform policies, telecommunications in
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China developed very rapidly in the 1990s. Mainline telephone service

extends to virtually all Chinese localities, but more and more Chinese
people are using mobile phones. In 2005, for every 1,000 people in
China, there were 269 telephone mainlines, compared with 302 mobile
phone subscribers. An estimated 461 million mobile phones were in use
in China in 2006.

Computers are very popular in Chinese universities and offices,

and primary and secondary schools are increasingly obtaining them.
More and more families have their own computers. As with mobile
phone use, Internet access skyrocketed in the early 21st century. In
2006 about 137 million Chinese people were online.

FOREIGN TRADE

China’s foreign trade is controlled mainly by state-owned trading

corporations at the national and local levels. Since 1979, local
corporations have gained increasing autonomy in their foreign trade
decisions. The state has relaxed some trade restrictions, which has
attracted foreign investment and increased trade activity. Chinese
companies that partner with foreign companies can import equipment
and raw materials for their own use and can export their products.

In 2004 Chinese exports totalled $593.3 billion, and imports totaled

$561.2 billion. Chief exports included clothing, accessories, and
footwear; textiles; petroleum and petroleum products; and
telecommunications and sound equipment. Among the major imports
were machinery, steel products and other metals, automobiles,
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synthetics, agricultural chemicals, rubber, wheat, and ships. Principal

purchasers of China’s export goods are Hong Kong (which is part of
China but has a separate economy), the United States, Japan, South
Korea, and Germany; chief sources for imports are Japan, Taiwan, the
United States, South Korea, and Germany.

China’s trade relations with the United States were periodically

strained in the 1990s as a result of American criticism of China’s human
rights practices. Several times the United States threatened to suspend
normal trading status, formerly called most-favored-nation trading
status, for China. With normal trading status, American tariffs on
imported Chinese goods are similar to the tariffs the United States
imposes on goods from most other countries. Without normal trading
status, the tariffs would be much higher, and the price of Chinese goods
would be higher for American consumers, which would likely cause a
decrease in the volume of trade between the two countries. However,
after China agreed to reforms designed to open a wide range of
industries to international competition and investment—such as
reducing tariffs and other barriers on imports of many U.S. industrial
and agricultural products—the U.S. Congress in 2000 passed
legislation giving China permanent normal trading status. Many experts
believed that normalizing trade with China would foster cooperation
instead of confrontation, and would therefore help strengthen support
for new environmental, labor, and human rights reforms within China.
China became a member of the World Trade Organization (WTO) in
2001. In joining the WTO, China agreed to reduce import tariffs, drop
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many restrictions on foreign investment, and abide by WTO standards

for protection of patents, copyrights, and intellectual property.

CHAPTER ELEVEN
THE CHINESE GOVERNMENT

The structure of China’s government follows a Leninist model of

one-party rule established by revolutionary leader Mao Zedong in 1949.
Under the Leninist system, the mandate to govern originates not in
elections but in the ruling party’s armed seizure of power. The claim to
legitimacy rests on the ruling party’s assertion that it serves the
interests of the people. Russian revolutionary leader Vladimir Lenin first
established this system in the Union of Soviet Socialist Republics
(USSR), and it was later adopted by or imposed on many other socialist
states. In China, the ruling party is the Chinese Communist Party
(CCP), which came to power in 1949 and established the People’s
Republic of China.

The CCP dominates policy making and policy execution through its
members in the government. Within the state (governmental) structure,
the highest organ in theory is the legislature, called the National
 163

People’s Congress (NPC). In practice, however, the most powerful state

organ is the cabinet, called the State Council, which is headed by the
premier.

China launched a period of economic reform in 1978. In the shift

from a government-controlled planned economy to a so-called socialist
market economy, specialized government agencies have been
strengthened or newly established and have been given more
operational independence. The National People’s Congress has
adopted hundreds of laws aimed at providing a more predictable
environment for economic activity, and in the course of this work it has
expanded its professional staff and its own authority. State-owned
enterprises have gained considerable autonomy and some have been
privatized, while a new sector of private and collective enterprises has
developed largely independent of direct state control. Local
governments have gained greater authority to adapt national policy to
local circumstances. They also have increased their shares of tax
revenues at the expense of taxes remitted to the central government. In
the midst of these changes, the CCP largely has withdrawn from
managing the day-to-day details of government affairs, but it has
continued to set major policy. Furthermore, through its members in the
government, the CCP has restricted political activities that promote
views contrary to the party’s objectives, in effect allowing no significant
opposition to emerge.

THE CONSTITUTION
 164

The first constitution of the People’s Republic of China went into

effect in 1954. It established the government structure and contained a
long chapter on citizens’ rights and duties. The government adopted
new constitutions in 1975 and 1978, and adopted the present
constitution in 1982. Each constitution reflected the ideological
concerns and policy priorities of the time, although none fundamentally
altered the government structure. The present constitution echoes the
formality and detail of the first, reflecting an ideological return to the
concept of rule of law. All of the constitutions nominally centralized
power in the National People’s Congress, giving it the power to appoint
and supervise the top officials of both the executive and the judicial
branches. The 1982 constitution was amended in 1993 to confirm the
practice of a “socialist market economy”; in 1999 to legitimize the
economic role of private firms; and in 2004 to provide legal protection of
private property.

Members of people’s congresses at the two lowest levels of

government-the township and county levels-are directly elected in
tightly controlled elections with limited competition. Citizens who are at
least 18 years of age may vote. Members of the people’s congresses at
the provincial and national levels are indirectly elected by the
congresses at the lower levels. Administrative leaders at all levels-for
example, county heads, provincial governors, and the premier-are
elected by the people’s congress at their level, although the person
chosen is usually the one recommended by the CCP.
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EXECUTIVE

The head of state in China is the president, who is elected to a

five-year term by the National People’s Congress. The presidency is
largely a ceremonial office. Executive powers rest with the State
Council, which is headed by the premier. The premier is nominated by
the president and elected by the NPC to a five-year term. The State
Council includes about 40 heads of ministries and national-level
commissions who are nominated by the premier and elected by the
NPC to five-year terms. In general, however, the NPC elects candidates
based on the wishes of the CCP.

Because the CCP wields so much control, the person with the
greatest real power over China’s government is the party’s general
secretary. The second most powerful person is the premier. The level of
authority that an office commands relates very much to the personality
of the individual holding the office. Often, although not necessarily, the
CCP general secretary is also the state president, combining in one
person the ceremonial prestige of the head of state and the policy-
making powers of the head of the ruling party.

LEGISLATURE

Members of the National People’s Congress are chosen for five-

year terms in indirect elections by the provincial congresses. Typically,
the provincial congresses select those delegates recommended by the
CCP. The size of the NPC is determined by law and has ranged from
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about 3,000 to about 3,500 members. Its size is too large-and its once-
a-year sessions too short (typically less than a month)-for the NPC to
conduct much debate over the legislation that it passes, the government
reports it approves, or the official appointments and removals it makes.

When the NPC is not in session, a Standing Committee of about

150 members elected from the NPC membership acts in its place. The
Standing Committee represents the congress in a variety of functions,
including passing laws, interpreting and supervising implementation of
the constitution, and ratifying or nullifying treaties with foreign
governments.

JUDICIARY

China traditionally lacked Western-style ideas of judicial

independence and due process of law. The development of a modern
legal system was first attempted in the early 20th century but revolution
and civil war ended these efforts. When the Communist government
took power in 1949, it initially made little effort to create an adequate
legal code that clearly detailed illegal activity or a uniform process for
dealing with the accused. Since reforms in 1978, however, China has
constructed the beginnings of a modern legal and judicial system. The
government has enacted hundreds of laws. Many deal with economic
subjects, but others govern the administration of prisons and the
activities of lawyers and judges.
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The Chinese legal system has four components: a court system; a

public security administration, or police component; an office of the
procurator, or public prosecutor; and a system of prisons and labor
camps. The highest court is the Supreme People’s Court, which
supervises the administration of justice by the various lower levels of
people’s courts. The Supreme People’s Court does not have the power
of constitutional supervision. That power is vested in the Standing
Committee of the National People’s Congress. Lower courts, public
prosecutors, and public security offices exist at the provincial, county,
and municipal levels. In addition, public security offices function at the
neighbourhood level. China also has begun to cultivate a cadre of
public and private lawyers, who numbered only about 5,000 in 1980 but
have since increased to more than 100,000.

In theory, judges are appointed by and are accountable to their

corresponding level of people’s congress. In actuality, however, judges
are chosen by CCP personnel departments and are supervised by the
party and the Ministry of Justice.

The procurators and courts function in close coordination with the

police and other administrative agencies. Nonetheless, they are
supposed to perform their functions independently, and citizens are
bringing economic and other disputes to court more frequently. The
CCP often acts as an informal mediator between aggrieved parties.
This type of paralegal mediation has influenced resolutions of
neighbourhood disputes, divorces, family arguments, and minor thefts.
The criminal procedure code guarantees the right to a defence, but the
defence is often just a formality or an argument by the defence counsel
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for a lighter sentence. Under a system of re-education through labour,

Chinese law permits the police and other administrative authorities to
impose up to three years of detention without trial.

Some political trials are highly publicized; among the most

prominent of these was the trial of the Gang of Four (1980-1981), who
were convicted of crimes committed during the Cultural Revolution.
Political trials of dissidents such as Wei Jingsheng, who was tried in
both 1979 and 1994 for pro-democracy activities, are closed to all but
selected viewers.

LOCAL GOVERNMENT

Local government in China is organized into three major

administrative tiers below the central government. At the level directly
below the center are 22 provinces, 5 autonomous regions, 4
autonomous municipalities, and 2 Special Autonomous Regions
(SARs). The 22 provinces are Anhui, Fujian, Gansu, Guangdong,
Guizhou, Hainan, Hebei, Heilongjiang, Henan, Hubei, Hunan, Jiangsu,
Jiangxi, Jilin, Liaoning, Qinghai, Shaanxi, Shandong, Shanxi, Sichuan,
Yunnan, and Zhejiang. China counts Taiwan as its 23rd province,
although since 1949 Taiwan has been controlled by a separate
government that fled to the island when it lost the civil war on mainland
 169

China. The five autonomous regions are Guangxi Zhuang, Inner

Mongolia, Ningxia Hui, Tibet, and Xinjiang Uygur. Beijing, Chongqing,
Shanghai, and Tianjin are the four autonomous municipalities. Hong
Kong and Macao are the two SARs.

At the second of the three administrative levels are prefectures,

counties, and municipalities. The lowest level is formed by municipal
subdivisions, administrative towns, and rural townships. Each level has
special autonomous entities inhabited primarily by minorities, such as
Tibetans in the Tibet Autonomous Region. Villages in rural areas and
residents’ committees in cities are below the formal government
structure, but these grassroots organs have governmental purposes,
such as collecting taxes, resolving disputes, and supervising population
planning.

POLITICAL PARTIES

According to the country’s 1982 constitution, China is a socialist

dictatorship of the proletariat (working class) led by the Chinese
Communist Party (CCP) in a united front with other parties. In practice,
the CCP fully orchestrates national political activity because party
members hold the most powerful government offices. Under the united
front policy, the CCP permits several minor political parties to operate in
China. These parties draw their members mainly from cultural,
educational, and scientific circles. No truly independent political parties
exist. The CCP supervises organizations serving the constituencies of
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youth, women, and labor. The most important of association is the

Communist Youth League, which had about 70 million members in the
early 21st century. This organization plays a major role in recruiting
young people who wish to prepare for CCP membership, which may
begin at age 18. Since the reforms of the late 1970s, the party has
permitted the formation of hundreds of new associations, but all are
sponsored officially or unofficially by a government or party organ.

The organization and functions of the CCP are set forth in the
party constitution; the current party constitution was approved in 1997
at the 15th National Party Congress. The National Party Congress is
the highest organ of the CCP, but in general, it convenes only once
every few years. When the party congress is not in session, the Central
Committee, a smaller organ that is elected by the full congress, serves
as the party’s highest body. The Central Committee in turn elects two
even smaller working groups: the Politburo and the Standing Committee
of the Politburo, the latter containing the most influential party members.
The Central Committee also elects the party general secretary. The
outcomes of these elections are predetermined by negotiations among
party leaders.

When the CCP held its first National Party Congress in 1921, it
had only 57 members. By 1956 membership had grown to 10 million,
and by the early 21st century there were about 60 million members,
making the CCP the world’s largest Communist party. Party members
are found in all walks of life, but most hold positions of influence in the
government, in government-run educational and cultural institutions, or
in the economy. Since reforms began in 1978, the CCP has tried to
 171

recruit members who are younger, more educated, and more

technically skilled than in the past.

Important CCP slogans include “building socialism with Chinese

characteristics” and “holding high the banner of Deng Xiaoping theory,”
referring to the economic principles of China’s former leader Deng
Xiaoping. The CCP is concerned with maintaining political stability
through a combination of patriotic indoctrination and police control. The
party’s economic priorities include increasing China’s economic
strength through a market economy that is closely guided by the
government, and reforming inefficient state-run enterprises by giving
them managerial autonomy and allowing many to become privately
owned.

ARMED FORCES

The 1982 Chinese constitution vests supreme command of the

armed forces in the Central Military Commission, a CCP organ
independent of civilian control. The country’s military force is the
People’s Liberation Army (PLA), which includes the national army,
navy, and air force. While remaining by far the world’s largest military
force, the PLA decreased in size in the 1980s and 1990s. In 1985 it was
3.9 million strong; by 2004 it had a total of about 2.25 million members
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(an army of 1,600,000, an air force of 400,000, and a navy of 255,000).

The PLA is a volunteer force. Since reform began, it has attempted to
modernize its weapons and training, but its technological capabilities
remain relatively underdeveloped, and the force is devoted chiefly to
internal security. It lacks the capability to project naval or air power
beyond the country’s coastal airspace and waters. However, China
does have a small stockpile of nuclear weapons, as well as
conventional warheads, and the capability to deliver these weapons by
medium- and long-range missiles.

The PLA has played a significant role in economic production; in

major construction efforts such as dams, irrigation projects, and land
reclamation schemes; and in disaster relief. In the 1960s, during the
most chaotic years of the Cultural Revolution, the PLA virtually ran the
nation. In 1989 it suppressed the pro-democracy demonstrations in
Beijing’s Tiananmen Square.

Separate forces associated with the PLA are the People’s Armed
Police and the railway police. Local militia forces, whose defence role
was emphasized under former leader Mao Zedong, no longer play an
important role in Chinese defense planning.

FOREIGN POLICY

When the Chinese Communist Party won the civil war in 1949, the
Nationalist (Kuomintang) government that had ruled China fled to the
island of Taiwan. For two decades the government on Taiwan received
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backing from the United States and retained the China seat in the
United Nations (UN), which gave it international recognition as the
rightful government of all China. Meanwhile, in 1950 the People’s
Republic of China, the Communist government on the mainland, signed
a treaty of friendship and alliance with the USSR, reflecting Mao’s policy
to “lean to one side” by aligning with the socialist camp. Relations
between China and the USSR deteriorated, however, due in part to
ideological differences, disagreements over strategy toward the West,
and border disputes, and by 1960 the split between China and the
USSR was evident. The two countries fought border battles in 1969 and
1970. During the 1960s, therefore, China was on bad terms with both
the USSR and the United States, and was isolated from world affairs.

Relations with the United States began to improve when President

Richard Nixon visited China in February 1972. By 1979 China and the
United States had normalized diplomatic relations. Meanwhile, the
government on Taiwan saw its international standing fall as the United
States and other foreign governments shifted their formal diplomatic
relations to the Communist government in Beijing. In the late 1980s, just
before the collapse of the USSR, China’s relationship with the Soviet
Union also warmed.

China currently pursues an independent diplomacy in which it

seeks good relations with all powers but opposes dominance by any
country, including the United States. Its resources are its large size and
population, strategic location in the center of Asia, growing economic
influence, permanent membership in the United Nations Security
Council, and status as a nuclear power. The country’s chief problems
 174

are its relative military and economic weaknesses compared to the

United States and nearby Japan. China seeks to promote relations with
all of the many countries on its periphery, while taking an
uncompromising stance in its territorial disputes with such neighbours
as India, Vietnam, Japan, and the Philippines. It insists on its
sovereignty over Taiwan and rebukes any country that accepts
diplomatic dealings with the government on that island.

As China has become a major export power, economic diplomacy

has become an important part of its foreign policy. In the 1980s China
began to seek membership in the General Agreement on Tariffs and
Trade (now the World Trade Organization, or WTO) in order to maintain
favourable tariff treatment by other markets, including the United States,
its chief export market. As part of the application process, China was
required to negotiate bilateral agreements on opening its markets with
members of the trade group. After 15 years of negotiations, China
formally became a member of the WTO in December 2001. In joining
the WTO, China agreed to reduce import tariffs, eliminate state
subsidies for farmers and state-owned firms, drop many restrictions on
foreign investment, and abide by WTO standards for protection of
patents, copyrights, and intellectual property. After China’s entry in the
WTO, the United States permanently normalized trade relations with
China, in accordance with legislation passed by the U.S. Congress in
2000. Normal trade relations, formerly known as most-favoured-nation
status, is the favourable tariff treatment the United States extends to all
but a small group of countries.

INTERNATIONAL ORGANIZATIONS
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In 1971 the People’s Republic of China obtained the China seat in

the UN, while the government on Taiwan, which had formerly occupied
the seat, was expelled from the organization. China has a permanent
seat, which includes veto power, on the UN Security Council, and the
country participates in the full range of UN agencies, including the
International Bank for Reconstruction and Development (World Bank)
and the International Monetary Fund (IMF). China is also a member of
most intergovernmental organizations in specialized fields, such as the
International Atomic Energy Agency (IAEA). China does not belong to
any military alliance or regional security organization, although it
participates in the informal Asian Regional Forum (ARF), a security
dialogue.

Developments in 1992 raised serious questions as to whether China

was still one of the few remaining Marxist-Leninist countries in an
economic sense and whether it could long remain one in a political
sense.

BASIC ISSUES AND TRENDS.

As had been true for more than a decade, senior statesman and
strongman Deng Xiaoping was, in effect, promoting a fairly sweeping
program of economic reform as a means not only of developing China's
economy but also of maintaining political stability, a condition that in his
eyes and those of his colleagues clearly and prominently included the
preservation of the Communist Party's monopoly of power. Although
 176

contrary to what appeared to be the thrust of contemporary history, the

latter objective had some important forces in its favour: the strong
preference of most Chinese for unity and order; a general desire to
avoid a repetition of the massive demonstrations of 1989 in Beijing and
the ensuing bloody crackdown; and, in particular, the fact that the
Communist Party had managed to maintain itself in power and rule the
country after its fashion for more than four decades.
On the other hand, political changes were clearly impending,
although it was uncertain whether they would prove to be major or
minor. Deng, often rumoured to be in poor health, and his immediate
colleagues, mostly octogenarians 'retired' from their former posts,
obviously would not be in the picture much longer, and no one could
say with confidence how their carefully chosen, somewhat younger
heirs apparent would perform in their absence. The gerontocrats, as
well as the younger leaders, were divided. On one side were the self-
styled reformers led by Deng, who favoured grafting capitalist features
onto a nominally socialist economy — 'socialism with Chinese
characteristics,' in the official phrase — while avoiding political reform.
On the other side were the conservatives, who were in some cases
actively opposed to economic reform on the plausible ground, among
others, that it would inevitably lead, sooner or later, to pressures for
political reform. Probably the most prominent member of this school
was senior economic planner and party disciplinarian Chen Yun, the
chairman of the party's Central Advisory Commission. To a great extent
because of Deng's ability, forceful personality, and unique prestige, the
reformers had generally been in the ascendant since 1978. This
continued to be the case in 1992.
 177

The critical question appeared to be whether, in the post-Deng era,

forces operating in favour of political reform ('peaceful evolution,' as it is
widely called in China) - the fairly rapid maturation of the economy and
society in the coastal urban areas, the demands and efforts of political
dissidents at home and abroad, and the like-would manage to break
through the seemingly firm crust of Communist Party control, at least to
the point of institutionalizing tolerance of political dissent. If not, the
possibility entertained seriously by observers in China as well as
abroad, of widespread civil disorder appeared to exist.

ELITE POLITICS.

The reformers and the conservatives agreed on the need not only
for political stability but also for symbols to reinforce the rapidly waning
influence of Marxist-Leninist ideology. One obvious choice was the
memory, 'thought,' and cult of the late Chairman Mao Zedong, who died
in 1976 and whose image underwent a conspicuous revival in 1992 in
the official propaganda media. Apparently, few took the revival
seriously. On the other hand, public criticism of it was dangerous and,
consequently, scarce. Perhaps more significantly, a propaganda cult of
Deng also took on impressive dimensions.
Deng gave a major boost to his cause of economic reform in
January by visiting the southern province of Guangdong, which borders
on Hong Kong. The visit, Deng's first public appearance in more than a
year, put his stamp of approval on the province's freewheeling
economic programs, which had promoted — or permitted — one of the
world's highest growth rates. A film, The Verdict of History, was made
about this trip. A similar enthusiasm for economic reform marked, at
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least outwardly, the proceedings of a Communist Party Politburo

meeting and of the National People's Congress, both in March, as well
as the celebration of the Communist Party's 71st birthday at the
beginning of July.
The seemingly waning influence of the conservatives was
presumably weakened further by the death, in June, of one of their
leading members, former President Li Xiannian. Shortly afterward, the
top leaders began their annual working vacation at Beidaihe, a beach
resort east of Beijing, to prepare for the upcoming 14th Party Congress.
(Party congresses are held once every five years.) It was generally
expected to be the last such meeting during Deng Xiaoping's lifetime
and therefore an unusually important occasion. One of the issues was
Deng's enthusiasm for a 10 percent economic growth rate, in spite of
the attendant risks of inflation and erosion of political control, as
opposed to the conservatives' preference for the 6 percent rate
previously decreed. In this and other matters, Deng evidently prevailed.

THE 14TH PARTY CONGRESS.

The congress, held on October 12-18, reflected a clear —

although, as usual in Chinese politics, not total — victory for one side,
Deng Xiaoping's reformers. The Central Advisory Commission, chaired
by Chen Yun and a stronghold of the 'retired' conservative elders, was
abolished. The president of the People's Republic of China, Yang
Shangkun, a leading conservative, was not re-elected to the Central
Committee. The single most powerful party body, the seven-man
Standing Committee of the Politburo, was tilted more than before in a
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reformist direction. Two conservatives (economic planner Yao Yilin and

top party organizer Song Ping) were dropped, while one rising reformer
(Zhu Rongji, generally considered a likely successor to conservative
Premier Li Peng, whose term would expire in 1993) and one figure
thought to have reformist tendencies (General Liu Huaqing, an
enthusiast for military modernization) were added. The seventh and
youngest member of the Standing Committee, also promoted to it at the
congress, was the enigmatic Hu Jintao, who had a reputation for
reformist tendencies but who had been in charge in Tibet, where a
harsh crackdown on pro-independence sentiment had been in progress
since 1987.
Some hard-line officials who had been prominent in culture and the
media were dropped from the Central Committee. Although many
conservatives retained seats, almost half the Central Committee as
constituted at the congress consisted of new members.
As might have been expected, the cause of political reform
received nothing but blows and neglect at the congress. This reaction
was foreshadowed by a definitive Central Committee statement, issued
on October 9, on the status of former Party General Secretary Zhao
Ziyang, who had espoused political as well as economic reform and
accordingly had been dismissed at the time of the Tiananmen
demonstrations in May 1989. The previous official view, to the effect
that Zhao had made serious mistakes by supporting the democracy
movement of 1989, was reaffirmed, although he was allowed to retain
his Communist Party membership. At the congress, accordingly, some
members of the Central Committee who had actively sympathized with
the democracy movement lost their seats in that body. No one spoke
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publicly in defence of them, the movement, or the cause of 'peaceful

evolution' in the future.

REGIME AND PEOPLE.

The best thing that could be said for the level of political freedom in
China was that repression was not consistent or fully effective. Despite
a rise in non-political crime and other social problems, the regime
tolerated, probably because it had no practical alternative, a sizable
number of strikes, demonstrations, and even riots. Some industrial
workers were trying, quietly and peacefully, to create a network of free
trade unions, modelled presumably on Poland's famous Solidarity,
which was anathema to the regime. Han Dongfang, a former railway
worker who had made efforts along these lines for which he had been
imprisoned after the 1989 Tiananmen uprising, was allowed to go to the
United States for medical treatment. The regime tended to favour the
idea of dissidents going abroad-if it was not considered desirable to
hold them in prison -because they were likely to suffer a loss of political
influence after doing so. A growing number of Chinese petitioned and
even sued their government for redress of grievances, although with
little effect. Some political prisoners were released, usually for effect on
public opinion at home and abroad — especially in the United States,
where congressional and public criticism of Beijing's record on human
rights continued to be a significant force. More or less in return for this
policy of less-than-total repression, Chinese dissidents tended to favor
Deng against the conservatives as the lesser of the two evils.
Concerned that only about one-third of the 180,000-odd students who
had gone abroad since 1978 had returned, the regime in June promised
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the expatriates political amnesty and their choice of jobs if they came
home.
There remained plenty of political repression in China, and
Beijing's record continued to receive consistently poor reviews from
international human rights organizations. Numerous political prisoners
continued to be beaten, tortured, sent to forced labor, or simply
detained under appalling conditions. A planned commemoration in
Beijing of the third anniversary of the Tiananmen Square massacre was
prevented by the police. Bao Tong, a prominent intellectual mentor of
Zhao Ziyang, was sentenced in July to seven years in prison, a
sentence considered unduly harsh if not totally unjustified, not only
abroad but also in China. The status of women not only failed to show
improvement but in some respects actually diminished. There was
active official and police repression of Buddhism in Tibet, of Catholics
who shunned the officially sponsored 'patriotic' Catholic Church, and of
Muslims in the northwest.

RELATIONS WITH NEIGHBOURS.

Apparently trying to walk softly while enlarging its stick, Beijing

continued the gradual warming of relations with Vietnam that had begun
a few years earlier. The process featured an increase in trade and a
state visit to Vietnam by Li Peng but fell far short of cordiality. Beijing
was clearly interested in expanding its commercial ties with non-
Communist Southeast Asia and perhaps participating in a free-trade
zone.
In Northeast Asia, Beijing showed similar interest in a free-trade
zone provided that it did not facilitate Japanese domination of the
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region. There were other concerns too. Beijing, worried that the
Communists currently ruling Mongolia might be voted out, tried to
expand its influence over its northern neighbour by commercial and
other means, partly to minimize the chances of separatist, pan-Mongol
activity in the Inner Mongolia region of China.
Although Great Britain had agreed in 1984 that China should
acquire control over Hong Kong in mid-1997, intervening developments
had been controversial for all three parties. When Hong Kong Governor
Christopher Patten visited Beijing in October 1992, he was told that his
hosts strongly disapproved of his proposals to increase democracy in
Hong Kong before 1997. Later, a Chinese official said any democratic
reforms carried out by Britain would be dismantled after 1997. China
also announced that contracts signed by Hong Kong would become
invalid in 1997. Beijing clearly did not want Hong Kong to have a
conspicuously higher level of freedom than mainland China.

RELATIONS WITH THE UNITED STATES.

As in several years past, Sino-American relations continued to be

seriously roiled by official — congressional more than executive — and
public objections to three major aspects of Chinese policy and practice:
Beijing's record on human rights; its formal and informal restrictions on
U.S. trade with and investment in China; and its export of arms and
defence-related technology to certain nations, mainly in the Middle
East.
 183

A proposal, anathema to Beijing, for a U.S. government-funded

Radio Free Asia service, which would broadcast to China as well as to
other Asian countries, appeared to be gaining ground in the United
States. Premier Li Peng met briefly with U.S. President George Bush at
the United Nations in February, but there was a standoff on the subject
of human rights in China. In May, Washington Post correspondent Lena
Sun was detained briefly by police, interrogated, and relieved of some
of her notes. In September, American academic Ross Terrill was
expelled from China.
For several years China had been holding down imports from the
United States while energetically promoting U.S.-bound exports- many
of them produced by foreign firms operating in China. In 1991, China's
imports from the United States totalled $6.3 billion, as compared with
$19 billion in exports to the United States. In March 1992, the U.S.
Congress tried to make continuation of China's most-favoured-nation
status in the United States contingent on improved performance on
Beijing's part in the three major areas, only to be met by a presidential
veto. In January, in the hope of staving off such pressures, Beijing had
reached an agreement with the United States on improved protection of
American intellectual property rights. In February, accordingly, the
United States lifted certain restrictions on technology transfer imposed
earlier on account of Chinese exports of missile technology to the
Middle East. At year's end the United States said it would send China
some military equipment bought over three years earlier but not
delivered because of the Tiananmen massacre.
China was clearly continuing to make sales of arms and advanced
defence technology that the United States found objectionable. On its side, Beijing
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objected strongly to the U.S. decision, announced in September, to sell 150 F-16 jet fighters
to Taiwan. In October, China reached an agreement with the United States on the eventual
reduction of barriers to U.S. imports. A December visit by the U.S. secretary of commerce
was portrayed by the Chinese as a sign that ties were being normalized.

CHINA IN THE 21st CENTURY

Jiang retired as general secretary of the CCP in November 2002,

launching a generational shift in the leadership of China. All but one of
the members of the Standing Committee of the Politburo, the CCP’s
inner policymaking circle, retired along with Jiang. The remaining
incumbent member, Hu Jintao, was chosen to succeed Jiang as the
party’s general secretary. Hu also succeeded Jiang as president of
China in March 2003. However, Jiang retained his post as head of the
Central Military Commission, which controls the military, and was
expected to exert considerable behind-the-scenes influence in the
governance of China.

The new leadership immediately faced a public health crisis,

working to contain the spread of a pneumonia-like illness that had
emerged in the southern province of Guangdong in late 2002. By
February 2003 new cases of the illness were reported in Hong Kong,
Vietnam, Singapore, and Canada, prompting the World Health
Organization (WHO) to issue a global alert. Scientists identified the
illness as a new contagious disease of unknown cause, naming it
severe acute respiratory syndrome (SARS). By the time WHO declared
the SARS outbreak contained in July 2003, more than 8,000 cases had
been reported in 32 countries, and the disease had caused 800 deaths.
 185

China’s initial failure to report the outbreak of a contagious disease

attracted much international criticism, and even the Chinese news
media exposed official efforts to conceal the outbreak.

Meanwhile, China pursued an ambitious space program, which

had been the focus of accelerated development since late 2001.
Signalling to the world its technological advancement, China launched a
piloted spacecraft into Earth orbit in October 2003, becoming only the
third nation to accomplish this feat. Astronaut Yang Liwei orbited the
Earth 14 times over a 21-hour period in the spacecraft Shenzhou 5
(Divine Vessel 5) before returning to Earth on October 16. The
successful launch and orbit demonstrated China’s commitment to its
space program, which also included plans for other space missions. In
2007 China launched its first spaceflight to the Moon, sending an
unpiloted lunar orbiter there on an exploratory mission.

In March 2004 the legislature of China approved a constitutional

amendment that provided the first legal protection of private property
since the founding of the People’s Republic of China in 1949. In March
2005 the legislature passed a law authorizing the use of military force
against Taiwan if its government moved toward a formal declaration of
independence. The anti-secession law heightened cross-strait tensions.
In late April 2005 the leader of the KMT (or Nationalist Party), Lien
Chan, arrived from Taiwan to meet with CCP officials, marking the first
visit by a KMT leader since the party withdrew to Taiwan at the end of
China’s civil war in 1949.
 186

In the early 2000s China’s economy ranked as the world’s fourth

largest, after the United States, Japan, and Germany. China reported
that its economy grew 9.9 percent in 2005, marking the third
consecutive year of nearly 10 percent growth. In 2007 the country’s
economy expanded by 11.4 percent, reaching its fastest growth rate in
13 years.

In March 2008 Buddhist monks in Lhasa, Tibet, led a series of

protests against Chinese rule, marking the failed Tibetan uprising of
1959. The initially peaceful protests turned violent as protesters
engaged in arson and attacks against ethnic Chinese. Protests also
erupted in Tibetan- populated areas of neighbouring provinces. The
Chinese Government responded to the unrest-the most widespread and
prolonged in the region since the 1980s-with a police crackdown.
Clashes between Chinese security forces and protesters resulted in an
uncertain number of deaths. The crackdown brought international
condemnation and, only months before the 2008 Summer Olympic
Games in Beijing were to commence, raised questions of China’s
human right record. The passing of the Olympic torch in cities around
the world became a magnet for protests against China’s policies.
 187

CHAPTER TWELVE

IS CHINA AFRICA'S NEW IMPERIALIST POWER?

China’s much increased economic activities in Africa in recent

 188

years -investments in energy and natural resources extraction and

loans to African governments- have provoked accusations that it is
becoming a new neocolonial power in the continent.

German development ministry parliamentary secretary Karin

Kortmann has led the charge, warning in November 2006, in the wake
of China’s US$1.9 billion new trade deals with African countries that
“our African partners really have to watch out that they will not be facing
a new process of colonization”.

South African President Thabo Mbeki joined in weeks later,

cautioning that “China cannot only just come here and dig for raw
materials and then go away and sell us manufactured goods”. Calling
for greater Chinese investment to build up Africa manufacturing
capability, Mbeki warned of the “potential danger” of China’s
relationship with Africa becoming similar to that which existed in the
past between African colonies and the European colonial powers.

“In the 10 years to 2004, China had made over $5bn in loans to
African countries - prompting the IMF to warn of a return to the bad old
days of crippling African debt”, the German DPA news agency reported
on January 26.

In his eight-nation tour of Africa in February 2007, Chinese

President Hu Jintao cancelled a visit to Zambia’s Copperbelt province
due to the threat of protests. A hostile reception was least expected for
a Chinese leader in the Copperbelt region, considering Beijing financed
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and built the 2000-kilometre Tanzania-Zambia (Tanzam) Railway

between 1970-76 at an estimated cost of $400 million, linking
Copperbelt with the Indian Ocean ports at Dar es Salaam and
Mombasa. The link is crucial to the export of Zambia’s prime foreign
exchange earner,copper.

Anti-Chinese sentiment grew in Zambia after 46 workers were

killed in July 2005 by an explosion at an explosives factory at the
Chinese-owned Chambishi copper mine in an accident blamed on lax
safety.

China’s economic presence in Africa has risen dramatically over

the last 10 years. Its trade with the continent surged from $4 billion in
1995 to $55.5 billion in 2006, fuelled by African oil sales to China.

From a very low base, Africa now provides 30% of China’s oil
imports, with Chinese investments in 27 major oil and gas projects,
mainly in Nigeria, Sudan, Angola and the Congo, with rising
investments in Equatorial Guinea, Gabon, Zambia, Algeria, South Africa
and Chad.

Two-thirds of Sudan’s oil exports go to China, whose state-owned

China National Petroleum Corporation owns 40%- the largest single
share-of the Greater Nile Petroleum Operating Corporation, a
consortium that dominates Sudan’s oil fields in partnership with the
Sudanese national energy company and firms from Malaysia and India.
 190

The February 17 th 2007 British Guardian observed that the wave of

Chinese investments and government-to-government loans has been
welcomed by many African leaders “as an alternative to Western
governments that preach free trade and investment but provide little of
either. China is also giving African countries billions of dollars in aid
without the political and economic strings attached by the West, and
building roads, hospitals and stadiums across the continent.”

As part of its drive to gain increased trade with minerals-producing

African countries, China wrote off $10 billion of African debt in 2000 and
it forgave another $1.2 billion in 2003.

Today, more than 700 Chinese companies are operating in 49

African countries.

Does this mean that China is emerging as a new neocolonial, or

imperialist, power in Africa, as Kortmann and other Western officials
allege?

World capitalism entered its imperialist stage at the end of the 19th
century. It was marked most significantly by the rise to dominance
within the international capitalist economic system of a few hundred
super-rich families that owned monopolistic industrial and banking firms
with investments centred in the developed capitalist countries of
Europe, North America, Japan, Australia and New Zealand, but which
also economically dominated the underdeveloped capitalist countries of
Africa, Latin-America and Asia.
 191

Despite the winning of nominal political independence by nearly all

the formerly colonial-ruled countries in Africa and Asia in the 1950s and
'60s, their economies remain dominated by the big Western
corporations, which utilise their monopolistic control of advanced
technology to extract above-average profits (“super-profits”) out of the
capitalistically underdeveloped countries.

In these conditions there is little room for any Third World country
to break into the First World imperialist club of rich nations. This also
remains true of China, a formerly underdeveloped capitalist country that
underwent a socialist revolution in the early 1950s, but in which
capitalism again became dominant in the last decade.

Despite its rapid industrialisation over the last two decades, China
remains a poor nation (with a per capita GDP of $1740, one-third that of
South Africa’s, and just a little more than that of war-torn Iraq),
dependent upon Western corporations for access to advanced industrial
technology.

Beijing’s unwillingness to obey the imperialist powers’ rules in

making trade deals and loans with other underdeveloped countries,
however, has attracted the Western corporate and political elites’
disapproval. The Western-dominated IMF, for example, imposes a
neoliberal agenda of privatisation of public assets and cutbacks in
government health and education spending as conditions for granting
much needed loans to Third World countries. Beijing’s role as an
 192

alternative loan provider to some African countries has weakened the

IMF’s blackmail of these countries.

Thus, Beijing’s 2004 $2 billion credit line to Angola on generous

terms came after Angola refused the IMF’s conditions.
China has increasingly become the imperialist West’s main workshop
for the production of cheap consumer goods, draining China’s energy,
water and other natural resources, and polluting its environment.

Chinese-owned companies’ investments in Africa are largely

driven by a basic agenda of seeking fuel and minerals inputs for the
production in China of manufactures by Chinese firms working as
subcontractors for big Western corporations, with the bulk of the profits
going to the latter.

In 2002, exports by Chinese subsidiaries of First World

corporations accounted for 25.8% of China’s exports-up from 20.3% in
1997, according to the World Investment Report 2006. According to the
WIR 2006, the value added in China by the subsidiaries of First World
corporations amounted to US$103.6 billion, and their pre-tax profits
from such operations totalled $22.7 billion.

According to the November 29, 2004, China Business Weekly, the

US-based Wal-Mart Corporation, the world’s biggest retailer, bought
$15 billion worth of products from China, mostly through a network of
5000 China-based firms. Today, Wal-Mart alone accounts for one-third
of the $60 billion in manufactures exported from China.
 193

No matter how big a share of the world’s low-technology

processing and assembly work China takes on, the imperialist
corporations will retain their monopoly of superior technology in the
decisive industries.

And while Chinese companies are becoming significant investors

in some African countries, most of the continent’s industries are
dominated by foreign direct investment (FDI) from US and European
corporations.

As the February 10th 2007New York Times noted, “China is not yet
an overwhelming presence in Africa . The juggernaut image aside,
China imports less African oil, invests less money and spends less on
aid than does the United States or Europe.”

According to the most recent UN figures, Royal FDI holdings in

Africa in 2005 were worth $96 billion, of which European firms
accounted for 61%, US firms 20%, Asian firms 8% and South African
firms 2%. Of the $29 billion of FDI that went into Africa in 2005, only
$1.2 billion (4.1%) came from China.
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CHAPTER THIRTEEN
GLOBAL GOVERNANCE

Global governance or "World Governance" is the political

interaction of transnational actors aimed at solving problems that affect
more than one state or region when there is no power of enforcing
compliance. The question of world governance arises in the context of
what is known as globalization. In response to the acceleration of
 195

interdependences on a worldwide scale, both between human societies

and between humankind and the biosphere, world governance
designates regulations intended for the global scale.

In a simple and broad-based definition of World Governance, the

term is used to designate all regulations intended to organize human
societies on a global scale.

Traditionally, governance has been associated with "governing," or

with political authority, institutions, and, ultimately, control. Governance
in this particular sense denotes formal political institutions that aim to
coordinate and control interdependent social relations, and that have
the ability to enforce decisions. However, authors like James Rosenau
have also used governance to denote the regulation of interdependent
relations in the absence of an overarching political authority, such as in
the international system. Some now speak of the development of
“global public policy".

Adil Najam, a scholar on the subject at Boston University and now

at the Fletcher School of Law and Diplomacy has defined global
governance simply as "the management of global processes in the
absence of global government." According to Thomas G. Weiss, director
of the Ralph Bunche Institute for International Studies at the Graduate
Center (CUNY) and editor (2000-05) of the journal Global Governance :
A Review of Multilateralism and International Organizations, “Global
Governance” -which can be good, bad, or indifferent-refers to concrete
cooperative problem-solving arrangements, many of which increasingly
 196

involve not only the United Nations of states but also 'other UNs,'
namely international secretariats and other non-state actors."

These "cooperative problem-solving arrangements" may be formal,

taking the shape of laws or formally constituted institutions for a variety
of actors (such as state authorities, intergovernmental organizations
(IGOs), non-governmental organizations (NGOs), private sector entities,
other civil society actors, and individuals) to manage collective affairs.
They may also be informal (as in the case of practices or guidelines) or
ad hoc entities (as in the case of coalitions).

Thus, Global Governance may be defined as "the complex of formal

and informal institutions, mechanisms, relationships, and processes
between and among states, markets, citizens and organizations, both
inter- and non-governmental, through which collective interests on the
global plane are articulated, rights and obligations are established, and
differences are mediated."

The collapse of the Soviet Union in 1991 marked the end of a very
long period of international history based on a policy of balance of
powers. Since this historic event, the planet has entered a phase of
geostrategic breakdown. The national-security model, for example,
while still in place for most governments, is gradually giving way to an
emerging collective conscience that extends beyond the restricted
framework it represents.

The question of world governance did not arise until the early 1990s. Up
until then, the term "interdependence" had been used to designate the
 197

management of relations among states. The Post-Cold War world of the

1990s saw a new paradigm emerge based on a number of issues:

 The growing importance of globalization as a significant theme

and the subsequent weakening of nation-states, pointing logically
to the prospect of transferring to the global level the regulatory
instruments no longer working effectively at the national or
regional levels.
 An intensification of environmental concerns for the planet, which
received multilateral endorsement at the Rio Earth Summit
(1992). The Summit issues, relating to the climate and
biodiversity, symbolized a new approach that was soon to be
expressed conceptually by the term Global Commons.
 The emergence of conflicts over standards: trade and the
environment, trade and social rights, trade and public health.
These conflicts continued the traditional debate over the social
effects of macroeconomic stabilization policies, and raised the
question of arbitration among equally legitimate objectives in a
compartmentalizes governance system where the major areas of
interdependence are each entrusted to a specialized international
institution. Although often limited in scope, these conflicts are
nevertheless symbolically powerful, as they raise the question of
the principles and institutions of arbitration.
 An increased questioning of international standards and
institutions by developing countries, which, having entered the
global economy, find it hard to accept that industrialized countries
hold onto power and give preference to their own interests. The
 198

challenge also comes from civil society, which considers that the
international governance system has become the real seat of
power and which rejects both its principles and procedures.
Although these two lines of criticism often have conflicting beliefs
and goals, they have been known to join in order to oppose the
dominance of developed countries and major institutions, as
demonstrated symbolically by the failure of the WTO 1999
Ministerial Conference in Seattle.

CONTEXT OF WORLD GOVERNANCE

 What is the context for referring to world governance?

There are those who believe that world architecture depends on

establishing a system of world governance. However, the equation is
currently becoming far more complicated: Whereas the process used to
be about regulating and limiting the individual power of states to avoid
disturbing or overturning the status quo, the issue for today's world
governance is to have a collective influence on the world's destiny by
establishing a system for regulating the many interactions that lie
beyond the province of state action. The political homogenization of the
planet that has followed the advent of what is known as liberal
democracy in its many forms should make it easier to establish a world
governance system that goes beyond market laissez-faire and the
democratic peace originally formulated by Immanuel Kant, which
constitutes a sort of geopolitical laissez-faire.

 Why is there a need to refer to world governance?

 199

- Because of the heterogeneity of collective preferences, which are

enduring despite globalization, which is often perceived as an
implacable homogenization process. Americans and Europeans provide
a good example of this point: they have found practically no common
ground in terms of the division between the public and private spheres,
tolerance for inequalities and the demand for redistribution, attitude to
risk, and the conception of property rights. In certain cases,
globalization even serves to accentuate differences rather than as a
force for homogenization.

- Due to the increase in global problems. This point is illustrated by the

environmental dangers threatening the planet, but is not confined to this
issue alone. It calls for the organization of collective action to be
prioritized, ahead of the integration of managing bilateral relations. This
results in a new model for representing and managing interdependence
that tends to apply to a growing number of areas.

- The final significant fact is the emergence of global civic awareness,

one of the components of which is opposition to globalization. A rapidly
growing number of movements and organizations have taken the
debate to the international or global level. Although it has its limitations,
this trend is patently a logical response to the increasing importance of
world governance issues. It is not viable to represent the global
economy as an entity undergoing rapid homogenization, nor to adhere
to a traditional representation modeled economically on the principles of
the Peace of Westphalia. Reasoning needs to be based on two
aspects: integration-which is less all-encompassing than we think-and
the solidarity born of a shared destiny.
 200

 Is world governance in crisis?

Pierre Jacquet, Jean Pisani-Ferry, and Laurence Tubiana argue

that "to ensure that decisions taken for international integration are
sustainable, it is important that populations see the benefits, that states
agree on their goals and that the institutions governing the process are
seen as legitimate. These three conditions are only partially being met."

The authors refer to a "crisis of purpose" and international

institutions suffering from "imbalance" and inadequacy. They believe
that for these institutions, "a gap has been created between the nature
of the problems that need tackling and an institutional architecture
which does not reflect the hierarchy of today's problems. For example,
the environment has become a subject of major concern and central
negotiation, but it does not have the institutional support that is
compatible with its importance."

 World governance and world government

Global Governance is not world government, and even less

democratic globalization. In fact, global governance would not be
necessary, were there a world government. Domestic
governments have monopolies on the use of force-the power of
enforcement. Global Governance refers to the political interaction
that is required to solve problems that affect more than one state
or region when there is no power to enforce compliance.
Problems arise, and networks of actors are constructed to deal
with them in the absence of an international analogue to a
 201

domestic government. This system has been termed

disaggregated sovereignty.

 The consensus example

Improved global problem solving need not involve the

establishment of additional powerful formal global institutions. It does
involve building consensus on norms and practices. One such area,
currently under construction, is the development and improvement of
accountability mechanisms. For example, the UN Global Compact
brings together companies, UN agencies, labor organizations, and civil
society to support universal environmental and social principles.
Participation is entirely voluntary, and there is no enforcement of the
principles by an outside regulatory body. Companies adhere to these
practices both because they make economic sense, and because
stakeholders, especially shareholders, can monitor their compliance
easily. Mechanisms such as the Global Compact can improve the ability
of affected individuals and populations to hold companies accountable.
However, corporations participating in the UN Global Compact have
been criticized for their merely minimal standards, the absence of
sanction-and-control measures, their lack of commitment to social and
ecological standards, minimal acceptance among corporations around
the world, and the high cost involved in reporting annually to small and
medium-sized business.
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World Governance Issues and Principles of Governance

Drawing on the many initiatives that have already been launched

in other continents, at various levels of governance and in many areas
of public action, the Charles Léopold Mayer Foundation for the
Progress of Humankind and its partners have identified five principles
on which to build governance. The problems of world governance can
be analyzed in the light of these principles.

 Legitimacy of the exercise of power and its rooting

This principle states that the "exercise of power must be linked to a

clearly expressed mandate from the people involved as to how they are
to be governed; persons placed in positions of authority must be
deemed worthy of the confidence placed in them. Limits on private
freedoms must also be reduced to a minimum and clearly perceived as
necessary for the commons. Organization of society must be based on
ethical principles that are recognized and respected."

Highly important decisions affecting the world economy are

currently taken by a handful of international institutions that are
insufficiently democratic in nature and lacking in real or full legitimacy,
rather than at the level of representative institutions, such as states or
smaller territorial units governed by directly elected representatives. In
addition, action and coordination initiatives taken by these institutions
and concretely by the United Nations system have proven inadequate
for the task of abolishing or even significantly reducing poverty,
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injustice, and inequality, and for taking effective action to reduce

environmental damage.

According to Jan Aart Scholte, the development and legitimacy of

international institutions, and world governance produce a vicious circle.
He says that "world governance as a whole remains inadequate in
terms of meeting the needs of global public policy. The lack of morality,
legal foundations, material supplies, democratic recognition and
charismatic leaders has created a deficit of legitimacy within current
systems." He goes on to say that: "This fragile legitimacy has
constituted a major obstacle to substantial growth on the worldwide
level of the regulations needed to guarantee a decent life for everyone
in a globalized world. The inadequacies and lack of legitimacy that
characterize world governance are therefore an impediment to mutual
strengthening."

According to Pierre Calame, "Current regulations do not measure

up to the current interdependences of global society. . . . any measures
taken to reinforce these regulations are unlikely to meet with general
approval if the legitimacy of those that already exist is questionable.
This happens to be the case: the UN is often considered to be a very
costly masquerade. Its democratic legitimacy is limited, stuck between
the veto power of a few big nations in the Security Council and the
hypocrisy of the principle of 'one state, one vote' that puts Nepal or
Burkina Faso at the same level as the USA. The same sort of crisis of
legitimacy can be found at the World Bank or the IMF, both of which
have become, in practice, tools that allow rich countries to impose
policies on poor countries. There exists an abundance of international
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rules formulated by faceless authorities. The fact that they have no

clear mandate, that there exists no clear-cut legal means of challenging
them, saps them of their authority and effectiveness and also discredits
in advance all efforts to formulate new rules, including in fields where
major injustices and the concept of 'survival of the fittest' are
denounced."

On the one hand, the problem is posed by the current exercise of

the existing regulatory framework of conventions and laws, notably at
the international level, as demonstrated by Rolf Künemann. Other
sources assert that certain international institutions do not actually
respect human rights.

However, attempts at conceptualization and the emergence of

new rights are part of the theoretical and normative development of the
new world governance that is beginning to take shape. One example is
the concept of decent work as elaborated by the ILO and the right to
water, widely championed by civil society.

In terms of alternative proposals, the Charter of Human

Responsibilities maintains that the secondary legal role accorded to the
concept of responsibility poses a serious problem to a new model of
world organization, which has to be based on sustainable development
rather than on aggressive high productivity and growth. A joint legal
platform should therefore act as the basis for much needed legitimacy.
This platform could be based on three key elements: the UN Charter,
the Universal Declaration of Human Rights, and the Charter of Human
Responsibilities. The latter would be a parallel document
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complementing the other two, would contain global human

responsibilities, and would be the result of an ongoing participatory
revision process open to all citizens.

 Conformity with the democratic ideal and with the principles

of citizenship

The second principle advocates the idea that "all individuals must
feel that they are part of a shared destiny, which excludes, for example,
tyranny by the majority. Rights, power, and responsibility must be
evenly balanced. No one can exercise power without being subject to
checks and balances."

Civil society is fully aware of this need and has been working for
many years to give a voice to citizens. According to the international
small-scale farmers' movement Via Campesina, "Listening to what
citizens have to say is the surest way of meeting their needs. And the
organization of world governance needs to be founded on the
satisfaction of these needs. The principles of citizenship are therefore a
necessary condition in the creation of any new model for managing the
planet."

Consequently, reform of world governance cannot be dissociated

from general reform of the state apparatus and of the public sector, a
reform that would include placing citizen participation at the core of the
decision-making process. The massive revitalization of the participatory
democracy that has characterized the last few decades (Participatory
Budgeting, Citizens' Panel, etc.) also includes proposals to make citizen
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participation the central element of the decision-making structure of

public mechanisms. Two examples are: Iniciativa Ciudadana para la
Cultura del Diálogo (2008), "Citizen Involvement in the Process of State
Reform"; and Sire-Marin, E. and R. Martelli (2008), "The New Republic
Will be Democratic and Socially Oriented".

 Competence and efficacy

According to the third principle: "The way that public and private
institutions are set up, their organizational structures and the people
working within them must all be reviewed to ensure that they remain
pertinent, and that they have the skills and the capacity required to
assume the responsibility of responding to the needs of society in all of
its diversity.” If there is no consistent, responsible, efficient, and
legitimate form of political organization of the world community, market
principles will dominate international relations and produce an anarchic
and irresponsible world governance that fails to meet social needs and
is consequently illegitimate from the political standpoint.

According to Pierre Calame and Gustavo Marin, "the market is a

trading procedure but we must define its place and its conditions of
legitimacy and efficiency for the same reasons as for other forms of
governance. We must do all that is necessary to put the market in its
place, so as to prevent work and people from being nothing more than
goods. It is now a priority to fix, by law, the domain in which the market
applies. We must move beyond the reductionist ideological view of the
economy that puts the market at the center of all exchanges."
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 Cooperation and partnership

The fourth principle states: "It is essential that everyone work

together for the commons and that governance organize relationships
and cooperation among the various types of player, whether public or
private, the various levels of governance, and the various
administrations, in accordance with procedures established by common
agreement."

The increase in global interdependences must go hand-in-hand

with an increase in interdependences in the organization of public
services, especially through intelligent forms of partnership among
public institutions, among civil-society stakeholders, and between the
former and the latter. Most public institutions have so far been acting
without any real degree of interpenetration, either by remaining isolated
from one another or by following top-down orders, which means that
they have failed to harness the power of their collective intelligence. A
set of simple basic rules that reflects social diversity will need to be
established in order to navigate in this new and complex world. Pierre
Calame has already attempted to draw up a set of rules that apply
jointly to the different levels of governance, based on the underlying
principle of Active Subsidiarity. The key objective in constructing a
legitimate and therefore democratic world governance has to be to find
solutions to the serious problem of inequalities. This means that
systems based on solidarity and redistribution need to be established.
Proposals for a Basic Income on a national scale could be applied on
the global scale, as proposed by the Basic Income Foundation, among
others. The many proposals for global-scale solidarity and redistribution
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include a Basic Food Income, the Marshall Plan, the Global, and A
Global Pension Plan.

 Relationships linking the local and the Global , and linking

the various levels of governance

We can address the problem of linking the local and global and the
various levels of governance, as part of the construction of a new world
governance, on three levels:

 Linking up levels of governance;

 Internal transformation of the state and evolution of its role;
 Construction of new mechanisms for coexistence between states
and public institutions in general, for a better reflection of the
actual links among their societies.

Adopting an effective form of world governance-not a

homogeneous world governance-raises the problem of its coexistence
with states, which have to accept handing over significant areas of their
sovereignty to the global level as well as to other levels. The goal is to
create a real linking up of competences and interaction among all
levels, from the local to the global. Meeting this goal requires joint rules
to be drawn up and guaranteeing that they are truly democratic; the
work of the higher levels, those ensuring social cohesion up to the
global level, must be founded on decisions taken at the grassroots
level.

A number of authors have conceptualized the new type of state

that will produce broader governance linking up the different levels. For
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Ulrich Beck, who champions the idea of a "cosmopolitan state," "just as

it is only the a religious state that makes the practice of various religions
possible in the first place, so cosmopolitan states would have to
guarantee the coexistence of national and religious identities through
the principle of constitutional tolerance."

Another author proposes the evolution of the current world toward

a "system of post-modern states" with the following characteristics:

 breakdown of the distinction between domestic and foreign affairs;

 mutual interference in (traditional) domestic affairs and mutual
oversight;
 rejection of force for resolving disputes and consequent
codification of self-enforced rules of behaviour;
 growing irrelevance of borders, come about both through the
changing role of the state, but also through missiles, motor cars,
and satellites;
 security based on transparency, mutual openness,
interdependence, and mutual vulnerability.

Nonetheless, "it is not that the national state will no longer be

called, in the future, to play a major role. On the contrary, it will continue
to embody the collective destiny of peoples, and it will certainly remain
the main level for building social cohesion, providing public services,
exercising the law and justice, and of redistribution and solidarity. It will
however be a state designed on other bases, as a level, albeit an
essential one, of governance, but one level among others, articulated
with the others."
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Certain authors also propound the need to build at the regional level
and to reform the United Nations system. For example, Pierre Calame
and Gustavo Marin believe that "[t]he architecture of global governance
can no longer be conceived without a redefinition of national states
themselves, of their role, their working procedures, and their articulation
with the other political orders." They also maintain that: "It is
indispensable to back the emergence of a regional level of governance,
between the states and the world." And that the Security Council
"should be a board made up of representatives of the regions of the
world. Every region would have a rotating presidency by member
states, which presidency would by the same token represent the region
in international negotiations."

An interconnecting and democratic world governance also implies

a redefinition of the role of territories and the establishment of basic
entities to encourage the emergence of a constituent citizen power. This
point is addressed by a number of proposals for re-territorialization, with
territorial communities acting as the building blocks for world
governance, and by initiatives to set up Citizen Assemblies.

Other World Governance Issues

 Expansion of normative mechanisms and globalization of
institutions

One of the effects of the unstoppable progress of globalization is

the production of increasing numbers of rules on the global scale. Jan
Aart Scholte asserts, however, that these changes are inadequate to
meet the needs: "Along with the general intensified globalization of
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social relations in contemporary history has come an unprecedented

expansion of regulatory apparatuses that cover planetary jurisdictions
and constituencies. On the whole, however, this global governance
remains weak relative to pressing current needs for global public policy.
Shortfalls in moral standing, legal foundations, material delivery,
democratic credentials and charismatic leadership have together
generated large legitimacy deficits in existing global regimes."

On another level, there is need to set up, in all spheres, an

increasing number of networks and institutions operating on a global
scale. Proposals and initiatives have been developed at various
sources: political parties, unions, regional authorities, and members of
parliament in sovereign states.

 The need for debate on the formulation and objectives of

world governance

One of the conditions for building a world democratic governance

should be the development of platforms for citizen dialog on the legal
formulation of world governance and the harmonization of objectives.

This legal formulation could take the form of a Global Constitution.

According to Pierre Calame and Gustavo Marin, "a Global Constitution
resulting from a process for the institution of a global community will act
as the common reference for establishing the order of rights and duties
applicable to United Nations agencies and to the other multilateral
institutions, such as the International Monetary Fund, the World Bank,
and the World Trade Organization." As for formulating objectives, the
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necessary but insufficient ambition of the United Nations Millennium

Development Goals, which aim to safeguard humankind and the planet,
and the huge difficulties in implementing them, illustrates the
inadequacy of institutional initiatives that do not have popular support
for having failed to invite citizens to take part in the elaboration process.

Furthermore, the Global Constitution "must clearly express a

limited number of overall objectives that are to be the basis of global
governance and are to guide the common action of the U.N. agencies
and the multilateral institutions, where the specific role of each of these
is subordinated to the pursuit of these common objectives."

Calame proposes the following objectives:

1. instituting the conditions for sustainable development

2. reducing inequalities
3. establishing lasting peace while respecting diversity.

 Reforming international institutions

Is the UN capable of taking on the heavy responsibility of

managing the planet's serious problems? More specifically, can the UN
reform itself in such a way as to be able to meet this challenge? At a
time when the financial crisis of 2008 is raising the same questions
posed by the climate disasters of previous years regarding the
unpredictable consequences of disastrous human management, can
international financial institutions be reformed in such a way as to go
back to their original task, which was to provide financial help to
countries in need?
 213

Lack of political will and citizen involvement at the international

level has also brought about the submission of international institutions
to the "neoliberal" agenda, particularly financial institutions such as the
World Bank, the IMF, and the World Trade Organization (WTO). Pierre
Calame gives an account of this development, while Joseph E. Stieglitz
points out that the need for international institutions like the IMF, the
World Bank, and the WTO has never been so great, but people's trust
in them has never been so low.

One of the key aspects of the United Nations reform is the

problem of the representativeness of the General Assembly. The
Assembly operates on the principle of "one state, one vote," so that
states of hugely varying sizes have the same impact on the vote, which
distorts representativeness and results in a major loss of credibility.
Accordingly, "the General Assembly has lost any real capacity to
influence. This means that the mechanisms for action and consultation
organized by rich countries have the leading role."

Gustave Massiah advocates defining and implementing a radical

reform of the UN. The author proposes building new foundations that
can provide the basis for global democracy and the creation of a Global
Social Contract, rooted in the respect and protection of civil, political,
economic, social, and cultural rights, as well as in the recognition of the
strategic role of international law.
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World Governance Themes

In its initial phase, world governance was able to draw on themes

inherited from geopolitics and the theory of international relations, such
as peace, defense, geo-strategy, diplomatic relations, and trade
relations. But as globalization progresses and the number of
interdependences increases, the global level is also highly relevant to a
far wider range of subjects. Following are a number of examples.

Environmental governance and managing the planet

"The crisis brought about by the accelerated pace and the

probably irreversible character of the impact of human activities on
nature requires collective answers from governments and citizens.
Nature ignores political and social barriers, and the global dimension of
the crisis cancels the effects of any action initiated unilaterally by state
governments or sectoral institutions, however powerful they may be.
Climate change, ocean and air pollution, nuclear risks and those related
to genetic manipulation, the reduction and extinction of resources and
biodiversity, and above all a development model that remains largely
unquestioned globally are all among the various manifestations of this
accelerated and probably irreversible impact.

This impact is the factor, in the framework of globalization, that

most challenges a system of states competing with each other to the
exclusion of all others: among the different fields of global governance,
environmental management is the most wanting in urgent answers to
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the crisis in the form of collective actions by the whole of the human
community. At the same time, these actions should help to model and
strengthen the progressive building of this community."

Proposals in this area have discussed the issue of how collective

environmental action is possible. Many multilateral, environment-related
agreements have been forged in the past 30 years, but their
implementation remains difficult. There is also some discussion on the
possibility of setting up an international organization that would
centralize all the issues related to international environmental
protection, such as the proposed World Environment Organization
(WEO). The United Nations Environment Programme (UNEP) could
play this role, but it is a small-scale organization with a limited mandate.
The question has given rise to two opposite views: the European Union,
especially France and Germany, along with a number of NGOs, is in
favor of creating a WEO; the United Kingdom, the USA, and most
developing countries prefer opting for voluntary initiatives.

The International Institute for Sustainable Development proposes

a "reform agenda" for global environmental governance. The main
argument is that there seems to exist an unspoken but powerful
consensus on the essential objectives of a system of global
environmental governance. These goals would require top-quality
leadership, a strong environmental policy based on knowledge,
effective cohesion and coordination, good management of the
institutions constituting the environmental governance system, and
spreading environmental concerns and actions to other areas of
international policy and action.
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Governance of the Economy and Of Globalization

The 2008 financial crisis exploded, once again, the myth that the
all-powerful free-market forces will correct all serious financial
malfunctioning on their own, as well as belief in the presumed
independence of the economy. Lacking in transparency and far from
democratic, international financial institutions have proven incapable of
handling the market's critical breakdown.

Free-market economy is incapable of meeting the population's

needs on its own. Without regulation and without consideration of social
and environmental externalities, free-market capitalism turns into an
uncontrollable machine that produces more and more wealth
concentrated in fewer and fewer hands, leading the global community
into a head-on collision with disaster and chaos. Its capacity to produce
is not in doubt: the problem is absence of redistribution, which is the
result of absence of political and citizen will to change the rules of the
game.

Nonetheless, the debate on the failings of the system has begun to

turn in the academic world into solution seeking, which is a step in the
right direction. According to Tubiana and Severino, "refocusing the
doctrine of international cooperation on the concept of public goods
offers the possibility . . . of breaking the deadlock in international
negotiations on development, with the perception of shared interests
breathing new life into an international solidarity that is running out of
steam."
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Stieglitz, on his part, argues that a number of global public goods

should be produced and supplied to the populations, but they are not,
and a number of global externalities should be taken into consideration,
but they are not. On the other hand, he contends, the international
stage is often used to find solutions to completely unrelated problems
under the protection of opacity and secrecy, which would be impossible
in a national democratic framework.

On the subject of international trade, Susan George states that

". . . in a rational world, it would be possible to construct a trading
system serving the needs of people in both North and South. . . . Under
such a system, crushing third world debt and the devastating structural
adjustment policies applied by the World Bank and the IMF would have
been unthinkable, although the system would not have abolished
capitalism."

POLITICAL AND INSTITUTIONAL GOVERNANCE

Building a responsible world governance that would make it

possible to adapt the political organization of society to globalization
implies establishing a democratic political legitimacy at every level:
local, national, regional and global.

Obtaining this legitimacy requires rethinking and reforming, all at the

same time:

 the fuzzy maze of various international organizations, instituted

mostly in the wake of World War II; what is needed is a system of
international organizations with greater resources and a greater
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intervention capacity, more transparent, fairer, and more

democratic;
 the Westphalian system, the very nature of states along with the
role they play with regard to the other institutions, and their
relations to each other; states will have to share part of their
sovereignty with institutions and bodies at other territorial levels,
and all with have to begin a major process to deepen democracy
and make their organization more responsible;
 the meaning of citizen sovereignty in the different government
systems and the role of citizens as political protagonists; there is a
need to rethink the meaning of political representation and
participation and to sow the seeds of a radical change of
consciousness that will make it possible to move in the direction
of a situation in which citizens, in practice, will play the leading
role at every scale.

The political aspect of world governance is discussed in greater detail in

the section Problems of World Governance and Principles of
governance.

GOVERNANCE OF PEACE, SECURITY, AND CONFLICT

RESOLUTION

Armed conflicts have changed in form and intensity since the

Berlin wall came down in 1989. The events of 9/11, the wars in
Afghanistan and in Iraq, and repeated terrorist attacks all show that
conflicts can become lethal for the entire world, well beyond the
belligerents directly involved. The warmongering leaders of a handful of
 219

major powers, starting with the biggest of all, the United States, have
used war as a means of resolving conflicts and may well continue to do
so. It is very likely, however, that fundamentalist Muslim networks will
continue to launch attacks in the United States, Europe, Africa, and
Asia.

At the same time, civil wars continue to break out across the world,
particularly in areas where civil and human rights are not respected,
such as Central and Eastern Africa and the Middle East. These and
other regions remain deeply entrenched in permanent crises, hampered
by authoritarian regimes, reducing entire swathes of the population to
wretched living conditions. The wars and conflicts we are faced with
have a variety of causes: economic inequality, social conflict, religious
sectarianism, disputes over territory and over control of basic resources
such as water or land. They are all illustrations a deep-rooted crisis of
world governance.

The resulting bellicose climate imbues international relations with

competitive nationalism and contributes, in rich and poor countries
alike, to increasing military budgets, siphoning off huge sums of public
money to the benefit of the arms industry and military-oriented scientific
innovation, hence fueling global insecurity. Of these enormous sums, a
fraction would be enough to provide a permanent solution for the basic
needs of the planet's population hence practically eliminating the
causes of war and terrorism.

Andrée Michel argues that the arms race is not only proceeding
with greater vigor, it is the surest means for Western countries to
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maintain their hegemony over countries of the South. Following the

break-up of the Eastern bloc countries, she maintains, a strategy for the
manipulation of the masses was set up with a permanent invention of
an enemy (currently incarnated by Iraq, Iran, Libya, Syria, and North
Korea) and by kindling fear and hate of others to justify perpetuating the
Military-industrial Complex and arms sales. The author also recalls that
the "Big Five" at the UN who have the veto right are responsible for
85% of arms sales around the world.

Proposals for the governance of peace, security, and conflict

resolution begin by addressing prevention of the causes of conflicts,
whether economic, social, religious, political, or territorial. This requires
assigning more resources to improving people's living conditions-health,
accommodation, food, and work -and to education, including education
in the values of peace, social justice, and unity and diversity as two
sides of the same coin representing the global village.

Resources for peace could be obtained by regulating, or even

reducing military budgets, which have done nothing but rise in the past
recent years. This process could go hand in hand with plans for global
disarmament and the conversion of arms industries, applied
proportionally to all countries, including the major powers.
Unfortunately, the warlike climate of the last decade has served to
relegate all plans for global disarmament, even in civil-society debates,
and to pigeonhole them as a long-term goal or even a Utopian vision.
This is definitely a setback for the cause of peace and for humankind,
but it is far from being a permanent obstacle.
 221

International institutions also have a role to play in resolving armed

conflicts. Small international rapid deployment units could intervene in
these with an exclusive mandate granted by a reformed and democratic
United Nations system or by relevant regional authorities such as the
European Union. These units could be formed specifically for each
conflict, using armies from several countries as was the case when the
UNIFIL was reinforced during the 2006 Lebanon War. On the other
hand, no national army would be authorized to intervene unilaterally
outside its territory without a UN or regional mandate.

Another issue that is worth addressing concerns the legitimate

conditions for the use of force and conduct during war. Jean-Réné
Bachelet offers an answer with the conceptualization of a military ethics
corresponding to the need for a "principle of humanity." The author
defines this principle as follows: "All human beings, whatever their race,
nationality, gender, age, opinion, or religion, belong to one same
humanity, and every individual has an inalienable right to respect for his
life, integrity, and dignity."

GOVERNANCE OF SCIENCE, EDUCATION, INFORMATION, AND

COMMUNICATIONS

The absence of a strong will to build a world governance intended

to meet people's needs and to establish social justice has, since the
mid-1990s, opened to door to a different plan: the World Trade
Organization's (WTO) agenda of liberalizing public goods and services
related to culture, science, education, health, living organisms,
information, and communication. This plan has been only partially offset
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by the alter-globalization movement, starting with the events that took

place at the 1999 Seattle meeting, and on a totally different and
probably far more influential scale in the medium and long term, by the
astounding explosion of collaborative practices on the Internet.
However, lacking political and widespread citizen support as well as
sufficient resources, civil society has not so far been able to develop
and disseminate alternative plans for society as a whole on a global
scale, even though plenty of proposals and initiatives have been
developed, some more successful than others, to build a fairer, more
responsible, and more solidarity-based world in all of these areas.

Public goods and services are those that are multiplied when
shared: knowledge, intelligence, and experience. These goods should
therefore be part of a collective and free sharing process rather than of
a market-based approach, the development of which favors only the
richest and most powerful and is therefore bound for self-destruction.

As far as science is concerned, "research increasingly bows to the

needs of financial markets, turning competence and knowledge into
commodities, making employment flexible and informal, and
establishing contracts based on goals and profits for the benefit of
private interests in compliance with the competition principle. The
directions that research has taken in the past two decades and the
changes it has undergone have drastically removed it from its initial
mission (producing competence and knowledge, maintaining
independence) with no questioning of its current and future missions.
Despite the progress, or perhaps even as its consequence, humankind
continues to face critical problems: poverty and hunger are yet to be
 223

vanquished, nuclear arms are proliferating, environmental disasters are

on the rise, social injustice is growing, and so on.

Neo-Liberal commercialization of the commons favors the interests

of pharmaceutical companies instead of the patients', of food-
processing companies instead of the farmers' and consumers'. Public
research policies have done nothing but support this process of
economic profitability, where research results are increasingly judged
by the financial markets. The system of systematically patenting
knowledge and living organisms is thus being imposed throughout the
planet through the 1994 WTO agreements on intellectual property.
Research in many areas is now being directed by private companies."

On the global level, "institutions dominating a specific sector also,

at every level, present the risk of reliance on technical bodies that use
their own references and deliberate in an isolated environment. This
process can be observed with the 'community of patents' that promotes
the patenting of living organisms, as well as with authorities controlling
nuclear energy. This inward-looking approach is all the more dangerous
that communities of experts are, in all complex technical and legal
spheres, increasingly dominated by the major economic organizations
that finance research and development."

On the other hand, several innovative experiments have emerged

in the sphere of science, such as: conscience clauses and citizens'
panels as a tool for democratizing the production system; Science
shops; and Community-based research. Politically committed scientists
are also increasingly organizing at the global level.
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As far as education is concerned, the effect of commoditization

can be seen in the serious tightening of education budgets, which has
an impact on the quality of general education as a public service. The
Global Future Online report reminds us that ". . . at the half-way point
towards 2015 (author's note: the deadline for the Millennium Goals), the
gaps are daunting: 80 million children (44 million of them girls) are out
of school, with marginalized groups (26 million disabled and 30 million
conflict-affected children) continuing to be excluded. And while
universal access is critical, it must be coupled with improved learning
outcomes—in particular, children achieving the basic literacy, numeracy
and life skills essential for poverty reduction."

In addition to making the current educational system available

universally, there is also a call to improve the system and adapt it to the
speed of changes in a complex and unpredictable world. On this point,
Edgar Morin asserts that we must "rethink our way of organizing
knowledge. This means breaking down the traditional barriers between
disciplines and designing new ways to reconnect that which has been
torn apart." The UNESCO report drawn up by Morin contains "seven
principles for education of the future": detecting the error and illusion
that have always parasitized the human spirit and human behavior;
making knowledge relevant, i.e. a way of thinking that makes
distinctions and connections; teaching the human condition; teaching
terrestrial identity; facing human and scientific uncertainties and
teaching strategies to deal with them; teaching understanding of the self
and of others, and an ethics for humankind.
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The exponential growth of new technologies, the Internet in

particular, has gone hand in hand with the development over the last
decade of a global community producing and exchanging goods. This
development is permanently altering the shape of the entertainment,
publishing, and music and media industries, among others. It is also
influencing the social behavior of increasing numbers of people, along
with the way in which institutions, businesses, and civil society are
organized. Peer-to-peer communities and collective knowledge-building
projects such as Wikipedia have involved millions of users around the
world. There are even more innovative initiatives, such as alternatives
to private copyright such as Creative Commons, cyber democracy
practices, and a real possibility of developing them on the sectoral,
regional, and global levels.
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CHAPTER FOURTEEN

REGIONAL VIEWS OF WORLD GOVERNANCE

The recent and growing interest that different regional players are
showing in world governance gives it a regional dimension that goes
beyond egocentric reasoning, turning questions like "What can the
world bring to my country or region?" into "What can my country or
region bring to the rest of the world?"

Africa

Often seen as a problem to be solved rather than a people or

region with an opinion to express on international policy, Africans and
Africa draw on a philosophical tradition of community and social
solidarity that can serve as inspiration to the rest of the world and
contribute to building world governance. One example is given by
Sabelo J. Ndlovu-Gathseni when he reminds us of the relevance of the
Ubuntu concept, which stresses the interdependence of human beings.

African civil society has thus begun to draw up proposals for

governance of the continent, which factor in all of the dimensions: local,
African, and global . Examples include proposals by the network
"Dialogues sur la gouvernance en Afrique" for "the construction of a
local legitimate governance," state reform "capable of meeting the
continent's development challenges," and "effective regional
governance to put an end to Africa's marginalization."
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United States

Foreign-policy proposals announced by the recently elected

President Barack Obama include restoring the Global Poverty Act,
which aims to contribute to meeting the UN Millennium Development
Goals to reduce by half the world population living on less than a dollar
a day by 2015. Foreign aid is expected to double to 50 billion dollars.
The money will be used to help build educated and healthy
communities, reduce poverty and improve the population's health.

Another measure that has been announced is the participation of

the North American people in foreign policy decisions via citizen
meetings at the municipal level to discuss the fundamental aspects of
policy.

In terms of international institutions, The White House Web site

advocates reform of the World Bank and the IMF, without going into any
detail.

Below are further points in the Obama-Biden plan for foreign policy
directly related to world governance:

 strengthening of the nuclear non-proliferation treaty;

 global de-nuclearization in several stages including stepping up
cooperation with Russia to significantly reduce stocks of nuclear
arms in both countries;
 revision of the culture of secrecy: institution of a National
Declassification Center to make declassification secure but
routine, efficient, and cost-effective;
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 increase in global funds for AIDS, TB and malaria. Eradication of

malaria-related deaths by 2015 by making medicines and
mosquito nets far more widely available;
 increase in aid for children and maternal health as well as access
to reproductive health-care programs;
 creation of a 2-billion-dollar global fund for education. Increased
funds for providing access to drinking water and sanitation;
 other similarly large-scale measures covering agriculture, small-
and medium-sized enterprises and support for a model of
international trade that fosters job creation and improves the
quality of life in poor countries;
 in terms of energy and global warming, Obama advocates (a) an
80% reduction of greenhouse-gas emissions by 2050( b) investing
150 billion dollars in alternative energies over the next 10 years
and c) creating a Global Energy Forum capable of initiating a new
generation of climate protocols.

Latin America

The twenty-first century has seen the arrival of a new and diverse
generation of left-wing governments in Latin America. This has opened
the door to initiatives to launch political and governance renewal. A
number of these initiatives are significant for the way they redefine the
role of the state by drawing on citizen participation, and can thus serve
as a model for a future world governance built first and foremost on the
voice of the people. The constituent assemblies in Ecuador and Bolivia
are fundamental examples of this phenomenon.
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In Ecuador, social and indigenous movements were behind the

discussions that began in 1990 on setting up a constituent assembly. [57].
In the wake of Rafael Correa's arrival as the head of the country in
November 2006, widespread popular action with the slogan "que se
vayan todos" (let them all go away) succeeded in getting all the political
parties of congress to accept a convocation for a referendum on setting
up the assembly.

In April 2007, Rafael Correa's government organized a

consultation with the people to approve setting up a constituent
assembly. Once it was approved, 130 members of the assembly were
elected in September, including 100 provincial members, 24 national
members and 6 for migrants in Europe, Latin America and the USA.
The assembly was officially established in November. Assembly
members belonged to traditional political parties as well as the new
social movements. In July 2008, the assembly completed the text for
the new constitution and in September 2008 there was a referendum to
approve it. Approval for the new text won out, with 63.9% of votes for
compared to 28.1% of votes against and a 24.3% abstention rate.

The new constitution establishes the rule of law on economic,

social, cultural and environmental rights (ESCER). It transforms the
legal model of the social state subject to the rule of law into a
"constitution of guaranteed well-being" (Constitución del bienestar
garantizado) inspired by the ancestral community ideology of "good
living" propounded by the Quechuas of the past, as well as by twenty-
first century socialist ideology. The constitution promotes the concept of
food sovereignty by establishing a protectionist system that favors
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domestic production and trade. It also develops a model of public aid for
education, health, infrastructures and other services.

In addition, it adds to the three traditional powers, a fourth power

called the Council of Citizen Participation and Social Control, made up
of former constitutional control bodies and social movements, and
mandated to assess whether public policies are constitutional or not.

The new Bolivian constitution was approved on 25 January 2009

by referendum, with 61.4% votes in favor, 38.6% against and a 90.2%
turnout. The proposed constitution was prepared by a constituent
assembly that did not only reflect the interests of political parties and
the elite, but also represented the indigenous peoples and social
movements. As in Ecuador, the proclamation of a constituent assembly
was demanded by the people, starting in 1990 at a gathering of
indigenous peoples from the entire country, continuing with the
indigenous marches in the early 2000s and then with the Program Unity
Pact (Pacto de Unidad Programático) established by family farmers and
indigenous people in September 2004 in Santa Cruz.

The constitution recognizes the autonomy of indigenous peoples,

the existence of a specific indigenous legal system, exclusive
ownership of forest resources by each community and a quota of
indigenous members of parliament. It grants autonomy to counties,
which have the right to manage their natural resources and elect their
representatives directly. The latifundio system has been outlawed, with
maximum ownership of 5,000 hectares allowed per person. Access to
water and sanitation are covered by the constitution as human rights
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that the state has to guarantee, as well as other basic services such as
electricity, gas, postal services, and telecommunications that can be
provided by either the state or contracting companies. The new
constitution also establishes a social and community economic model
made up of public, private, and social organizations, and cooperatives.
It guarantees private initiative and freedom of enterprise, and assigns
public organizations the task of managing natural resources and related
processes as well as developing public services covered by the
constitution. National and cooperative investment is favored over
private and international investment. The "unitary plurinational" state of
Bolivia has 36 official indigenous languages along with Spanish. Natural
resources belong to the people and are administered by the state. The
form of democracy in place is no longer considered as exclusively
representative and/or based on parties. Thus, "the people deliberate
and exercise government via their representatives and the constituent
assembly, the citizen legislative initiative and the referendum . . ." and
"popular representation is exercised via the political parties, citizen
groups, and indigenous peoples." This way, "political parties, and/or
citizen groups and/or indigenous peoples can present candidates
directly for the offices of president, vice-president, senator, house
representative, constituent-assembly member, councilor, mayor, and
municipal agent. The same conditions apply legally to all. . . ."

Also in Latin America: "Amazonia . . . is an enormous biodiversity

reservoir and a major climate-regulation agent for the planet but is
being ravaged and deteriorated at an accelerated pace; it is a territory
almost entirely devoid of governance, but also a breeding place of
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grassroots organization initiatives.” "Amazonia can be the fertile field of

a true school of 'good' governance if it is looked after as a common and
valuable good, first by Brazilians (65% of Amazonia is within Brazilian
borders) and the people of the South American countries surrounding it,
but also by all the Earth's inhabitants." Accordingly, "from a world-
governance perspective, [Amazonia] is in a way an enormous
laboratory. Among other things, Amazonia enables a detailed
examination of the negative effects of productivism and of the different
forms of environmental packaging it can hide behind, including
'sustainable development.' Galloping urbanization, Human Rights
violations, the many different types of conflicts (14 different types of
conflicts have been identified within the hundreds of cases observed in
Amazonia), protection of indigenous populations and their active
participation in local governance: these are among the many
Amazonian challenges also affecting the planet as a whole, not to
mention the environment. The hosts of local initiatives, including among
the indigenous populations, are however what may be most interesting
in Amazonia in that they testify to the real, concrete possibility of a
different form of organization that combines a healthy local economy,
good social cohesion, and a true model of sustainable development-this
time not disguised as something else. All of this makes Amazonia 'a
territory of solutions.”

According to Arnaud Blin, the Amazonian problem helps to define

certain fundamental questions on the future of humankind. First, there is
the question of social justice: "How do we build a new model of
civilization that promotes social justice? How do we set up a new social
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architecture that allows us to live together?" The author goes on to refer

to concepts such as the concept of "people's territory” or even "life
territory" rooted in the indigenous tradition and serving to challenge
private property and social injustice. He then suggests that the
emerging concept of the "responsibility to protect," following up on the
"right of humanitarian intervention" and until now used to try and protect
populations endangered by civil wars, could also be applied to
populations threatened by economic predation and to environmental
protection.

Asia

The growing interest in world governance in Asia represents an

alternative approach to official messages, dominated by states'
nationalist visions. An initiative to develop proposals for world
governance took place in Shanghai in 2006, attended by young people
from every continent. The initiative produced ideas and projects that
can be classified as two types: the first and more traditional type,
covering the creation of a number of new institutions such as an
International Emissions Organization, and a second more innovative
type based on organizing network-based systems. For example, a
[67]
system of cooperative control on a worldwide level among states and
self-organization of civil society into networks using new technologies, a
process that should serve to set up a Global Calling-for-Help Center or
a new model based on citizens who communicate freely, share
information, hold discussions, and seek consensus-based solutions.
They would use the Internet and the media, working within several
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types of organizations: universities, NGOs, local volunteers and civil-

society groups.

Given the demographic importance of the continent, the

development of discussion on governance and practices in Asia at the
regional level, as well as global-level proposals, will be decisive in the
years ahead in the strengthening of global dialog among all sorts of
stakeholders, a dialog that should produce a fairer world order.

Europe

According to Michel Rocard, Europe does not have a shared

vision, but a collective history that allows Europeans to opt for projects
for gradual political construction such as the European Union. Drawing
on this observation, Rocard conceives of a European perspective that
supports the development of three strategies for constructing world
governance: reforming the UN, drawing up international treaties to
serve as the main source of global regulations, and "the progressive
penetration of the international scene by justice."

Rocard considers that there are a number of "great questions of

the present days" including recognition by all nations of the International
Criminal Court, the option of an international police force authorized to
arrest international criminals, and the institution of judicial procedures to
deal with tax havens, massively polluting activities, and states
supporting terrorist activities. He also outlines "new problems" that
should foster debate in the years to come on questions such as a
project for a Declaration of Interdependence, how to re-equilibrate world
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trade and WTO activities, and how to create world regulations for
managing collective goods (air, drinking water, oil, etc.) and services
(education, health, etc.).

STAKEHOLDERS' VIEWS ON WORLD GOVERNANCE

It is too soon to give a general account of the view of world

governance stakeholders, although interest in world governance is on
the rise on the regional level, and we will certainly see different types of
stakeholders and social sectors working to varying degrees at the
international level and taking a stand on the issue in the years to come.

INSTITUTIONAL AND STATE STAKEHOLDERS

 Members of parliament

The World Parliamentary Forum, open to members of parliament

from all nations and held every year at the same time as the World
Social Forum, drew up a declaration at the sixth forum in Caracas in
2006. The declaration contains a series of proposals that express
participants' opinion on the changes referred to.

 The Military

The International Alliance of Military for Peace and Security is a

platform of expression and discussion of ideas and positions on various
topics affecting security and stability, the goal of which is to "discuss
issues of security and defense, as well as ways of promoting a new
'Consciousness of Security and Defense' to citizens, which allows them
to better understand the risks and opportunities inherent in international
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relations within a globalizing world and to participate actively in the

definition of conditions to ensure the stability of international relations
and peace." The Alliance is made up of members of the military and
other people interested in issues related to human security. Some of the
member organizations of the Alliance of Military have drawn up a
Charter for the Promotion of an "European Security and Defence
Awareness. This document is written for public opinion and formulates
objectives, tasks, and the conditions for adhering to and setting up
European-level reinforced military cooperation. One of the Alliance's
key goals is to promote the European Security and Defense Policy
(ESDP) to a broader public, without wishing to call into question
transatlantic partnership and the role of the UN. The actions of national
governments and European institutions in the areas of security and
defense must be founded on the adherence of European citizens.

 Regional organizations

The European Commission referred to global governance in its

White Paper on European Governance. It contends that the search for
better governance draws on the same set of shared challenges
humanity is currently facing. These challenges can be summed up by a
series of goals: sustainable development, security, peace and equity (in
the sense of "fairness").
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Non-state stakeholders

The freedom of thought enjoyed by non-state stakeholders

enables them to formulate truly alternative ideas on world- governance
issues, but they have taken little or no advantage of this opportunity.

Pierre Calame believes that "non-state actors have always played

an essential role in global regulation, but their role will grow
considerably in this, the beginning of the twenty-first Century . . . Non-
state actors play a key role in world governance in different domains . . .
To better understand and develop the non-state actors' role, it should
be studied in conjunction with the general principles of governance."
"Non-state actors, due to their vocation, size, flexibility, methods of
organization and action, interact with states in an equal manner;
however this does not mean that their action is better adapted."

Proposals for a New World Governance

Several stakeholders have produced lists of proposals for a new

world governance that is fairer, more responsible, solidarity-based,
interconnected and respectful of the planet's diversity. Some examples
are given below.

Joseph E. Stieglitz proposes a list of reforms related to the internal

organization of international institutions and their external role in the
framework of global-governance architecture. He also deals with global
taxation, the management of global resources and the environment, the
production and protection of global knowledge, and the need for a
global legal infrastructure.
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A number of other proposals are contained in the World

governance Proposal Paper: giving concrete expression to the principle
of responsibility; granting civil society greater involvement in drawing up
and implementing international regulations; granting national
parliaments greater involvement in drawing up and implementing
international regulations; re-equilibrating trade mechanisms and
adopting regulations to benefit the southern hemisphere; speeding up
the institution of regional bodies; extending and specifying the concept
of the commons; redefining proposal and decision-making powers in
order to reform the United Nations; developing independent
observation, early-warning, and assessment systems; diversifying and
stabilizing the basis for financing international collective action; and
engaging in a wide-reaching process of consultation, a new Bretton
Woods for the United Nations.

This list provides more examples of proposals:

 the security of societies and its correlation with the need for global
reforms-a controlled legally-based economy focused on stability,
growth, full employment, and North-South convergence;
 equal rights for all, implying the institution of a global
redistribution process;
 eradication of poverty in all countries;
 sustainable development on a global scale as an absolute
imperative in political action at all levels;
 fight against the roots of terrorism and crime;
 consistent, effective, and fully democratic international institutions;
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 Europe sharing its experience in meeting the challenges of

globalization and adopting genuine partnership strategies to build
a new form of multilateralism.

Dr. Rajesh Tandon, president of the FIM (Montreal International Forum)

and of PRIA (Participatory Research in Asia), prepared a framework
document entitled "Democratization of global governance for Global
Democracy: Civil Society Visions and Strategies (G05) conference." He
used the document to present five principles that could provide a basis
for civil society actions: “Global institutions and agenda should be
subjected to democratic political accountability."

 Democratic policy at the global level requires legitimacy of popular

control through representative and direct mechanisms.
 Citizen participation in decision making at global levels requires
equality of opportunity to all citizens of the world.
 Multiple spheres of governance, from local to provincial to national
to regional and global , should mutually support democratization
of decision making at all levels.
 Global democracy must guarantee that global public goods are
equitably accessible to all citizens of the world.

Vijaya Ramachandran, Enrique Rueda-Sabater and Robin Kraft also

define principles for representation of nations and populations in the
system of global governance. They propose a "Two Percent Club" that
would provide for direct representation of nations with at least two
percent of global population or global GDP; other nations would be
represented within international fora through regional blocs.
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CHAPTER FIFTEEN

GLOBAL GOVERNANCE: WHY? HOW? WHEN?

THE RISE OF GLOBAL GOVERNANCE

The desire to rule the world has been a part of the human
experience throughout recorded history. Alexander the Great led
Greece to dominance of the known world, only to become the victim of
Rome's quest for world dominance. The Roman Empire, built on bloody
battlefields across the land, was swallowed up by the Holy Roman
Empire, built on the fear and hopes of helpless people. History is a
record of the competition for global dominance. In every age, there has
always been a force somewhere, conniving to conquer the world with
ideas clothed in promises imposed by military might. The 20th century
is no different from any other: Marx, Lenin, and Hitler reflect some of the
ideas which competed for world dominance in the 1900s. The
competition is still underway. The key players change from time to time,
as do the words that describe the various battlefields, but the competing
ideas remain the same.

One of the competitors is the idea that people are born free,
“totally free and sovereign,” and choose to surrender specified
freedoms to a limited government to achieve mutual benefits. The other
competitor is the idea that government must be sovereign in order to
distribute benefits equitably and to manage the activities of people to
protect them from one another. The first idea, the idea of free people, is
the idea that compelled the pilgrims to migrate to America. The U.S.
Constitution represents humanity's best effort to organize and codify the
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idea of free people sovereign over limited government. It is a relatively

new idea in the historic competition for world dominance.

The other idea, the idea of sovereign government, is not new.

Historically, the conqueror was the government. The Emperor, the King,
the conqueror by whatever name, established his government by
appointment and established laws by decree. Variations of this idea
emerged over time to give the perception that the people had some say
in the development of law. The Soviet Union, for example, held
elections to choose its leaders; but the system assured the outcome of
the elections as well as the ultimate sovereignty of the government.
During the 1700s, the first idea was ascendant as evidenced by the
creation of America. During the 1900s, the second idea has again
become ascendant as evidenced by the emergence of global
governance. This report identifies and traces some of the major forces,
events, and personalities that are responsible for the rise of global
governance in the 20th century.

The League of Nations (1900-1924)

Competition for world dominance was fierce in the first quarter of

the 20th century. New, dynamic ideas emerged to fill the vacuum
created by the crumbling British Empire and the end of the colonial era.
At the turn of the century, America, though hardly a world leader, was
expanding rapidly. Economic and technological advances attracted
worldwide interest. Halfway around the world, another idea was taking
hold. The oppression of Nicholas II in Russia, combined with the
influence of Karl Marx, gave rise to the Russian Social Democratic
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Labor Party (Bolsheviks) which became the Socialist Revolutionary

Party. Under the leadership of Vladimir Ilyich Lenin, the party platform
called for the “establishment of nurseries for infants and children in all
shops, factories, and other enterprises that employ women” and for the
“nationalization and re- distribution of land.” What began as a rebellion
against the oppression of government sovereignty as imposed by Czar
Nicholas was hijacked by Lenin who, with his colleagues Stalin and
Trotsky, promptly replaced the Czar's oppression with their own. Within
weeks after Nicholas' assassination, Lenin nationalized all private,
ecclesiastical and czarist land without compensation. He introduced
press censorship, nationalized big industry, outlawed strikes,
nationalized the banks, built up a police force and ordered the
requisition of grain from the peasants to feed the Red Army. By the time
Lenin died in 1924, Stalin had consolidated his power and organized his
government to become the world's most dominant example of the idea
of government sovereignty.

Americans were far too busy earning a living to pay much attention
to the tumult in Russia. While Lenin's party was forging the Principles of
Communism in 1903, Orville Wright made his historic flight. The first
automobile trip across the United States was completed, and the U.S.
government ratified the Panama Canal Treaty. Congress created the
Federal Reserve System in 1913, and Ford Motor Company shocked
the industrialized world by raising wages from $2.40 for a nine-hour day
to $5 for an eight-hour day in 1914. Americans were divided about
entering the First World War, but did in 1917, and had a million troops in
Europe when the war ended in 1918 when the warring parties accepted
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Woodrow Wilson's “Fourteen Points” which became the basis for the
League of Nations.

Edward Mandell House was Wilson's chief advisor. He persuaded

Wilson to sign the Federal Reserve Act and he was the real architect of
the League of Nations. House was no ordinary advisor. He was
Wilson's “alter ego,” and he was an “unabashed and unapologetic”
socialist. House published a novel in 1912 entitled Philip Dru:
Administrator. The story is a recitation of socialist thinking enacted by
Dru, whose purpose was “to pursue Socialism as dreamed of by Karl
Marx,” and who, in the story, replaced Constitutional government with
“omnicompetent” government in which “the property and lives of all
were now in the keeping of one man.” In the story, Dru created a
“League of Nations” much like the League of Nations he fashioned for
Woodrow Wilson.

More importantly, House came to his position with Woodrow

Wilson from an elite circle of friends known as the “Inquiry”: Paul
Warburg, J. P. Morgan, John D. Rockefeller, John W. Davis, among
others, all of whom had direct interest in the Federal Reserve System
and great interest in the League of Nations. House was well on his way
to transforming Woodrow Wilson into his fictional Philip Dru-until the
Senate refused to ratify the League of Nations in 1920. Embarrassed
and defeated, Wilson died four years later, ironically, the same year
Lenin died.

The dream of world domination, however, did not die. House and
his friends realized that public opinion in America had to be changed
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before any form of world government could succeed. While shuttling to

Europe on post-war peace negotiations, House arranged an assembly
of dignitaries from which was created the Institute of International
Affairs which had two branches. In London, it was called the Royal
Institute of International Affairs (RIIA); in New York, it was called the
Council on Foreign Relations (CFR), formed officially July 29, 1921.

The founding President of the CFR was John W. Davis, personal

attorney to J. P. Morgan. Paul Cravath and Russell Leffingwell, both
Morgan associates, were also among the founding officers. Money for
the new organizations was provided by J. P. Morgan, Bernard Baruch,
Otto Kahn, Jacob Schiff, Paul Warburg, and John D. Rockefeller, the
same people involved in the forming of the Federal Reserve. The
purpose of the CFR was to create a stream of scholarly literature to
promote the benefits of world government, and attract a membership of
rich intellectuals who could influence the direction of foreign policy in
America. The CFR, supported by the world's wealthiest foundations and
individuals, has been extremely successful. Its flagship publication,
Foreign Affairs, is the port-of-entry for many ideas that become public
policy. The U.S. delegation to the founding conference of the United
Nations included 47 members of the CFR. The Secretary-General of the
conference, Alger Hiss, was a member of the CFR. Hiss was later
convicted of perjury for lying about having provided government
documents to a Communist espionage ring.

The first quarter of the 20th century forced America into a world
war where the strength of its economy and effectiveness of its
technology were displayed to the world. On the other side of the
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Atlantic, Russia gave birth to Stalin's version of Communism. At the

time, both nations were primarily concerned about domestic issues with
little thought of dominating the world. The Soviet Union exemplified the
idea of government sovereignty; America exemplified the idea of free
people sovereign over its government. Sooner or later, the two ideas
had to collide. Other competitors were also at work. The CFR began to
rebuild its plans for a world government, and a new competitor arose on
Russia's eastern border.

The United Nations (1925 - 1950)

While Stalin reigned over “The Great Terror,” in which an

estimated 20 million Russians were executed, and instituted the first of
a series of “five-year plans,” America struggled through some of its
hardest years. Prohibition brought organized crime, Federal Reserve
policies brought a stock market crash, drought brought a dust bowl to
the bread basket, and a nation-wide depression brought crushing
poverty to most Americans.

Franklin D. Roosevelt was elected to the White House in 1932.

The CFR was to Roosevelt what Edward House was to Woodrow
Wilson. “The organization (CFR) essentially ran FDR's State
Department.” Henry Wallace, a committed Marxist, was FDR's
Secretary of Agriculture. The “New Deal” delivered by Roosevelt
resembled the performance of Philip Dru in Edward House's novel.

By 1941, Hitler had invaded Russia and Japan had bombed Pearl
Harbor. For the next five years the world tried to commit suicide. Those
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not caught up in the war, the CFR, realized that the war provided an
excellent reason for the nations of the world to try once again to create
a global institution that could prevent war. Two weeks after Pearl
Harbor, Secretary of State, Cordell Hull, recommended the creation of a
Presidential Advisory Committee on Post War Foreign Policy. The
committee was the planning commission for the United Nations. Ten of
the committee's 14 members were members of the CFR.

The process of creating the United Nations lasted throughout the

war. The first public step was the Atlantic Charter (August 14, 1941),
signed by Roosevelt and Winston Churchill, which committed the two
nations to a “permanent system of general security.” Because Stalin
was under attack by Germany, Russia was forced to join the allies in
the Moscow Declaration (October 30, 1943) which declared the
necessity of establishing an international organization to maintain peace
and security. The Dumbarton Oaks Conversations (August, 1944) which
produced the World Bank, also settled political and legal issues that
were drafted into the UN Charter. The Yalta Summit (February, 1945)
produced a compromise which gave the Soviets three votes (USSR,
Byelorussia, and the Ukraine) in exchange for voting procedures
demanded by the U.S. Edward Stettinius made another extremely
significant concession. He agreed that the UN official in charge of
military affairs would be designated by the Russians. Fourteen
individuals have held the position since the UN was created; all were
Russians. The committee designed and FDR sold the United Nations to
the 50 nations that came to the San Francisco conference in 1945.
Among the 47 CFR members in the official U.S. delegation were:
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Edward Stettinius, the new Secretary of State, John Foster Dulles, Adlai
Stevenson, Nelson Rockefeller, and Alger Hiss. To ensure that the new
organization would be located in America, John D. Rockefeller, Jr.,
donated the land for the UN headquarters.

In his 1962 book, Why Not Victory, former Senator Barry

Goldwater recalls that the UN was approved by the Senate largely
because of the representations of the State Department which assured
the Senate that:

“ . . . it (UN) in no sense constituted a form of World Government and

that neither the Senate nor the American people need be concerned
that the United Nations or any of its agencies would interfere with the
sovereignty of the United States or with the domestic affairs of the
American People.”

Five years later, in testimony before the Senate Foreign Relations

Committee, CFR member James Warburg said: “We shall have world
government whether or not you like it-by conquest or consent.”

The ink on the UN Charter had not yet dried when the Charter for
UNESCO (United Nations Educational, Scientific, and Cultural
Organization) was presented in London, November, 1945. UNESCO
swallowed and expanded the Paris-based International Institute for
Intellectual Cooperation which was a holdover from the League of
Nations. Julian Huxley was the prime mover of UNESCO and served as
its first Director-General. Huxley had served on Britain's Population
Investigation Commission before World War II and was vice president
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of the Eugenics Society from 1937 to 1944. In a 1947 document entitled

UNESCO: Its Purpose and Its Philosophy, Huxley wrote:

“Thus even though it is quite true that any radical eugenic policy will be
for many years politically and psychologically impossible, it will be
important for UNESCO to see that the eugenic problem is examined
with the greatest care, and that the public mind is informed of the issues
at stake so that much that now is unthinkable may at least become
thinkable.”

UNESCO's primary function is set forth in its Charter:

“Since wars begin in the minds of men, it is in the minds of men that the
defenses of peace must be constructed.”

UNESCO was created to construct a world-wide education program to

prepare the world for global governance. UNESCO advisor, Bertrand
Russell, writing for the UNESCO Journal, The Impact of Science on
Society, said:

“Every government that has been in control of education for a

generation will be able to control its subjects securely without the need
of armies or policemen . . . .”

The National Education Association was a major advocate for

UNESCO. In a 1942 article in the NEA Journal, written by Joy Elmer
Morgan, the NEA called for “ . . . certain world agencies of
administration such as: a police force; a board of education . . . .”
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A year later in London, the Conference of Allied Ministers of

Education called for a United Nations Bureau of Education. UNESCO
became the Board of Education for the world.

Huxley believed the world needed a single, global government. He

saw UNESCO as an instrument to “help in the speedy and satisfactory
realization of the process.” He described UNESCO's philosophy as
global, scientific humanism. He said: “Political unification in some sort of
world government will be required for the definitive attainment” of the
next stage of social development. From the beginning, UNESCO has
designed programs to capture children at the earliest possible age to
begin the educational process.

William Benton, Assistant U.S. Secretary of State, told a UNESCO

meeting in 1946:

“As long as the child breathes the poisoned air of nationalism,

education in world-mindedness can produce only precarious results. As
we have pointed out, it is frequently the family that infects the child with
extreme nationalism. The school should therefore use the means
described earlier to combat family attitudes that favor jingoism . . . . We
shall presently recognize in nationalism the major obstacle to
development of world-mindedness. We are at the beginning of a long
process of breaking down the walls of national sovereignty. UNESCO
must be the pioneer.”

The UN and UNESCO were created in the wake of the worst war
carnage the world had ever witnessed. Conditioned by a constant
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stream of propaganda produced by the CFR in America, and by the

Royal Institute of International Affairs in Europe, the move toward global
governance was accepted and allowed to go forward. Julian Huxley
realized, however, that to be successful over the long haul, a world-
wide constituency would have to be developed. In 1948, Huxley and his
long-time friend and colleague, Max Nicholson, both of whom were
involved with the Royal Institute of International Affairs, created the
International Union for the Conservation of Nature (IUCN).

The IUCN drew heavily from the 50-year-old British Fauna and
Flora Preservation Society (FFPS) for its leadership, funding and its
members. Sir Peter Scott, FFPS Chairman, drafted the IUCN Charter
and headed one of its important Commissions. This important non-
governmental organization (NGO) was instrumental in the formation of
the World Wildlife Fund (WWF) in 1961 and the World Resources
Institute (WRI) in 1982. These three NGOs are to the United Nations
System what the CFR was to Franklin Roosevelt, or what Edward
House was to Woodrow Wilson. These three NGOs have become the
driving force behind the rise of global governance

The Cold War (1950-1970)

The dream of world dominance is not, nor has it ever been, the
pursuit by an exclusive cadre of conspirators. The dream has been held
by many different factions-often simultaneously-always in competition
with one another. By 1950, at least three major forces-all competing for
world dominance -- were clearly identified. Each of the three major
forces worked overtly and covertly to achieve their objectives.
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The Soviet Union had clearly defined its Marx/Lenin/Stalin version

of Communism. Its systematic program of expansionism -- including an
active organization in the United States -- fully intended to bring the
entire world under its control. So confident were the Soviets of their
eventual success that, on his 1959 tour of the U.S., Nikita Kruschchev
pounded his shoe on a podium before the television cameras and
declared to America: “We will bury you!”

America would have no part of a world under Communist rule.

Senator Joseph McCarthy led a crusade against Communists in
America. His campaign tarnished many non-communists but was
successful in rooting out Alger Hiss, Julius and Ethel Rosenberg, and
Morton Sobell, all convicted of espionage-related crimes. (Because of
the statute of limitations, Hiss could not be tried for espionage but was
convicted of perjury for lying about his espionage activities.)

More importantly, the televised McCarthy hearings awakened

America to the “Communist threat,” and when U.S. troops entered
Korea to fight the communists, support for the Communist Party USA
diminished steadily from a high of more than 100,000 members to its
current low of about 1000 members. American leaders did not pound
their shoes, nor proclaim a program of world dominance. American
foreign and economic policy, however, left no doubt that at the very
least, America intended to prevent the Soviets from achieving world
dominance.

The third force competing for world dominance was not the United
Nations, but the people whose dreams of a world government were
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frustrated by what the United Nations turned out to be. The annihilation
of the League of Nations by the U.S. Senate left the advocates of world
government with a large dose of reality. They realized that the UN could
exist only by the grace of the U.S. and the Soviets, and that the UN
itself could have no authority or power over the major powers. But it
was a real start toward global governance which provided an official, if
impotent, mechanism for the incremental implementation of their global
aspirations.

During the 1950s and 1960s, the UN was little more than a
debating society that occasionally attempted to referee disputes among
the major world powers. Public attention was riveted on domestic issues
and the deepening cold war. Russia's Sputnik launch was a catalyst for
the launch of the U.S. space program. Fidel Castro's embrace of
Communism in Cuba stiffened America's policy of “containment” -- first
articulated in the CFR Journal, Foreign Affairs.

The 1954 Supreme Court desegregation decision pushed

McCarthy, Communism, and the UN completely off the domestic radar
screen. Rosa Park's refusal to give up her seat on a Birmingham bus to
a white man was the fuse that ignited an explosion of racial riots.
Federal troops confronted Alabama National Guardsmen over Governor
Orville Faubus' refusal to let nine black children enter Little Rock
Central High School. Dr. Martin Luther King delivered his “I have a
dream” speech to a quarter-million people on the Mall in Washington,
and tanks rolled on the streets of Chicago and Detroit.
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Domestic events also obscured American awareness of the

creation of the World Wildlife Fund. The same Julian Huxley who
founded UNESCO and the IUCN, along with his friend, Max Nicholson,
formed the organization primarily as a way to fund the work of the
IUCN. Prince Philip, Duke of Edinburgh, served as President. An
auxiliary organization called the “1001 Club” charged an initiation fee of
$10,000 which went into a trust fund to provide ongoing revenues to
WWF. The WWF and the IUCN share an office building in Gland,
Switzerland. (In 1987, the name was changed to the World Wide Fund
for Nature, but the acronym remained the same).

Behind the scenes, America developed and launched the Nautilus,

the first of a new generation of atomic powered submarines. Both
Russia and America tested nuclear devices with ever increasing
payloads. Bomb shelters were the mainstay of civil defense, and school
children were taught to “duck-and-cover.” The official defense policy
was MAD-Mutually Assured Destruction.

Much, much further behind the scenes, plans were being

developed to refuse the MAD policy. The UN had no authority or power
in its own right to do anything about the spiraling arms race between the
world's two super-powers. It became the stage, however, on which the
advocates of global governance performed their strategic play, using
the U.S. and the Soviet Union in the starring roles. In 1961, newly
elected President John F. Kennedy presented a disarmament plan:
Freedom From War: The United States Program for General and
Complete Disarmament in a Peaceful World, also known as the
Department of State Publication 7277. The plan called for three phases
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which would ultimately result in the gradual transfer of U.S. military

power to the United Nations. The plan called for all nations to follow the
U.S. lead and disarm themselves to “a point where no state would have
the military power to challenge the progressively strengthened UN
Peace Force.” A new and improved version of the same idea was
presented in May, 1962, called: Blueprint for the Peace Race: Outline of
Basic Provisions of a Treaty on General and Complete Disarmament in
a Peaceful World released by the U.S. Arms Control and Disarmament
Agency (Publication 4, General Series 3, May 3, 1962) headed by John
McCloy.

It is neither fair, nor accurate, to say that these documents were

the product of the CFR. It is accurate, and instructive, to realize that
these documents were developed by men who were members of the
CFR. John McCloy and Robert Lovett were described as “distinguished
individuals” in an article by John F. Kennedy which appeared in Foreign
Affairs in 1957. Lovett was offered his choice of cabinet positions in the
Kennedy administration but declined, choosing instead to make
recommendations all of which were accepted by Kennedy. Lovett
recommended Dean Rusk as Secretary of State. Rusk had been a
member of the CFR since 1952 and had published an article in Foreign
Affairs in 1960 on how the new President should conduct foreign policy.
The New York Times reported that of the first 82 names submitted to
Kennedy for State Department positions, 63 were members of the CFR.
Like FDR and every President since, JFK filled his State Department
and surrounded himself with individuals who were, perhaps
coincidentally, members of the Council on Foreign Relations. Lovett,
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John McCloy, Dean Rusk, McGeorge Bundy, and Adlai Stevenson

(JFK's Ambassador to the UN), all members of the CFR, guided
Kennedy through the disastrous “Bay of Pigs” operation and the Cuban
missile crisis.

That members of the CFR have exercised extraordinary influence

on foreign policy cannot be denied. Whether that influence is the result
of organizational strategies, or the result of individuals who simply
happen to be members of the same organization, is an endlessly
debated question. Richard Harwood, of the Washington Post, observes
that members of the Council on Foreign Relations;

“. . . are the closest thing we have to a ruling Establishment in the

United States. The President is a member. So is his Secretary of State,
the Deputy Secretary of State, all five of the Undersecretaries, several
of the Assistant Secretaries and the department's legal adviser. The
President's National Security Adviser and his Deputy are members. The
Director of Central Intelligence (like all previous directors) and the
Chairman of the Foreign Intelligence Advisory Board are members. The
Secretary of Defense, three Undersecretaries and at least four
Assistant Secretaries are members. The Secretaries of the
Departments of Housing and Urban Development, Interior, Health and
Human Services and the Chief White House Public Relations man . . .
along with the Speaker of the House [are members] . . . . This is not a
retinue of people who 'look like America,' as the President once put it,
but they very definitely look like the people who, for more than half a
century, have managed our international affairs and our military-
industrial complex.”
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Article 11 of the UN Charter gives the General Assembly authority

to “consider” and “recommend” principles governing disarmament and
the regulation of armaments, but virtually no authority to enforce
disarmament. Kennedy's proposal was a bold first step toward giving
the UN the power which early, necessary compromises had stripped
from the original vision of a world government.

The Kennedy plan has never been revoked. Though modified and
delayed by political necessity, the essential principle of relinquishing
arms, as well as control of the production and distribution of arms, to
the UN has guided the disarmament policy of every American President
since JFK. Prior to the Kennedy Disarmament Plan, the UN sponsored
a Truce Supervision Operation in 1948, and a Military Observer Group
in India and Pakistan in 1949. Since the Kennedy Disarmament Plan,
the number of UN Peace-keeping operations has steadily increased.

Still further behind the scenes, the fledgling United Nations was
beginning to take shape. UNICEF (United Nations International
Emergency Children's Fund) was created in 1946 to provide emergency
relief to the child victims of WWII. It was reauthorized in 1950 to shift its
emphasis to programs of long-term benefit to children in
underdeveloped countries. It became a permanent UN entity in 1953.
UNESCO's purpose was to “educate” the world. UNICEF was created
to provide the mechanism through which that education could be
delivered to children.

UN Article 55 provides for the UN to “promote higher standards of

living, full employment, and conditions of economic and social progress
 257

and development.” To fulfill this charge, the UN Expanded Program of

Technical Assistance (UNEPTA) was created in 1949, and expanded
with a Special Fund in 1957. By 1959, the program had been
transformed into the United Nations Development Program (UNDP)
(now headed by James Gustave Speth, former President of the World
Resources Institute) which spends more than $1 trillion annually, mostly
in developing countries.

The UN Relief and Works Agency for Palestine Refugees in the

Near East (UNRWA) was created in 1949. The UN High Commissioner
for Refugees (UNHCR) was created in 1951. The UN Food and
Agriculture Organization (FAO) brought together existing international
food programs in 1946 and began its World Food Program in 1963. The
UN's International Atomic Energy Agency (IAEA) was created in 1953.
The International Civil Aviation Organization (ICAO) was created in
1947. The International Labor Organization (ILO) created in 1919 as an
instrument of the failed League of Nations was reconstituted and folded
into the United Nations in 1948. The International Maritime Organization
(IMO) was authorized in 1947. Founded in 1863, the Universal Postal
Union (UPU) became an entity of the UN in 1948. The World Health
Organization (WHO) was created in 1948. The International
Telecommunication Union (ITU) which had existed since 1865 was
folded into the UN system in 1949. The United Nations Industrial
Development Organization (UNIDO) was created in 1966. The World
Intellectual Property Organization (WIPO) was established in 1967.
These are only a few of the 130 UN agencies and organizations that
proliferated during and since the Cold War.
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While the UN organization was expanding exponentially, out of the

media spotlight which was focused on race riots and the arms race,
UNESCO plodded forward with its mission to educate the world. Robert
Muller, long-time Secretary-General of the UN's Economic and Social
Council under which the UNESCO operates, delivered a speech at the
University of Denver in 1995. His musings and recollections provide
valuable insights into the kind of education UNESCO was preparing for
the world. From Muller's comments:

“I had written an essay which was circulated by UNESCO, and which

earned me the title of 'Father of Global Education.' I was educated
badly in France. I've come to the conclusion that the only correct
education that I have received in my life was from the United Nations.
We should replace the word politics by planetics. We need planetary
management, planetary caretakers. We need global sciences. We need
a science of a global psychology, a global sociology, a global
anthropology. Then I made my proposal for a World Core Curriculum.”

The first goal of Muller's World Core Curriculum, is:

“Assisting the child in becoming an integrated individual who can deal

with personal experience while seeing himself as a part of 'the greater
whole.' In other words, promote growth of the group idea, so that group
good, group understanding, group interrelations and group goodwill
replace all limited, self-centered objectives, leading to group
consciousness.”

The World Core Curriculum Manual says:

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“The underlying philosophy upon which the Robert Muller School is

based will be found in the teachings set forth in the books of Alice A.
Bailey, by the Tibetan teacher, Djwhal Khul (published by Lucis
Publishing Company, 113 University Place, 11th floor, New York, NY
10083) and the teachings of M. Morya as given in the Agni Yoga Series
books (published by Agni Yoga Society, Inc., 319 West 107th Street,
New York, NY 10025).”

Alice Bailey established the Lucifer Publishing Company, which

was renamed Lucis Press in 1924, expressly to publish and distribute
her own writings and those of Djwhal Khul, which consisted of some 20
books written by Bailey as the “channeling” agent for the disembodied
Tibetan she called Djwhal Khu1. Until recently, the Lucis Trust, parent
organization of the Lucis Press, was headquartered at the United
Nations Plaza in New York. Bailey assumed the leadership of the
Theosophical Society upon the death of Helena Petrovna Blavatsky.
The Society’s 6,000 members include Robert McNamara, Donald
Regan, Henry Kissinger, David Rockefeller, Paul Volker, George Shultz,
and the names that also appear on the membership roster of the CFR.

Hindsight reveals that-while the United States was performing on

the UN stage, sparring with the Soviet Union, keeping score with
nuclear warheads-the forces which heavily influenced the official
policies of both the United States and the United Nations were actually
outside both governments: non-governmental organizations (NGOs).
Three distinct NGO influences were clear by the end of the 1960s: the
CFR and its assortment of affiliated spin-off organizations; the mystic,
occult, or “new-age” spiritual movement; and the growing number of
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organizations affiliated with the International Union for the Conservation

of Nature (IUCN). In 1968, the IUCN led a lobbying effort with the
United Nations Economic and Social Council (headed by Robert Muller)
to adopt Resolution 1296 which grants “consultative” status to certain
NGOs. This resolution paved the highway for global governance. The
Lucis Trust was one of the first NGOs to be granted “consultative”
status with the UN.

The Environmental Movement (1970s)

Not a single vote was cast against the Wilderness Act of 1964
when it finally reached the Senate. Congress thought it was setting
aside nine million acres of wilderness so posterity could see a sample
of what their forefathers had to conquer in order to create America. The
new law was the crowning achievement of the Wilderness Society, to
which its Director, Howard Zahniser had devoted five years of constant
lobbying. Though unnoticed at the time, the new law signaled an end to
the traditional "conservation” movement and the beginning of a new
environmental "preservation” movement. The conservation movement
might be characterized by the idea that private land owners should
voluntarily conserve natural resources; the environmental preservation
movement is characterized by the notion that the government should
enforce conservation measures through extensive regulations. By this
distinction, the Wilderness Society brought the environmental
movement to Congress. Robert Marshall, Benton MacKaye, and Aldo
Leopold — all avowed socialists- organized the Society in the early
1930s and proclaimed their socialist ideas loudly. Marshall's 1933 book,
The People's Forests, says:
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“Public ownership is the only basis on which we can hope to protect the
incalculable values of the forests for wood resources, for soil and water
conservation, and for recreation . . . . Regardless of whether it might be
desirable, it is impossible under our existing form of government to
confiscate the private forests into public ownership. We cannot afford to
delay their nationalization until the form of government changes.”

This significant event failed to register a blip on the radar screen of

public awareness. Instead, public attention focused on the racial strife,
the 1968 Democratic convention in Chicago, and the Viet Nam War
which tore apart the convention, the party, and the nation. The First
"Earth Day” in 1970, which perhaps coincidentally was celebrated on
Lenin's birthday, April 22, was viewed as little more than a festival for
flower children. The anti-war fervor, again, brought a quarter-million
protesters to the Mall, and Watergate brought down the Nixon
Presidency. The Clean Water Act of 1972 and the Endangered Species
Act of 1973 served as beacons to attract the energies and idealism of a
generation of young people who had successfully forced the world's
most powerful government to abandon a war they saw to be unjust. The
1970s witnessed an unprecedented explosion in the number of
environmental organizations and in the number of people who joined
and supported these organizations.

Among the more important but lesser known organizations formed

during this period are the Club of Rome (COR — 1968) and the
Trilateral Commission (TC — 1973). The COR is a small group of
international industrialists educators, economists, national and
international civil servants. Among them were various Rockefellers and
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approximately 25 CFR members. Maurice Strong was one of the

"international” civil servants. Their first book, The Limits to Growth,
published in 1972 unabashedly describes the world as they believe it
should be:

“We believe in fact that the need will quickly become evident for social
innovation to match technical change, for radical reform of the
institutions and political processes at all levels, including the highest,
that of world polity. And since intellectual enlightenment is without effect
if it is not also political, The Club of Rome also will encourage the
creation of a world forum where statesmen, policy-makers, and
scientists can discuss the dangers and hopes for the future global
system without the constraints of formal intergovernmental negotiation.”

That "world forum” was authorized in 1972 by UN Resolution 2997

(XXVII) as the UN Conference on the Human Environment. Maurice
Strong was designated Secretary-General of the Conference which,
among other things, recommended the creation of the United Nations
Environment Program (UNEP), which came into being January 1, 1973,
with Maurice Strong as its first Executive Director. The Conference held
in Stockholm produced 26 principles and 109 specific recommendations
which parroted much of the language in the COR publications. The
difference is, of course, that the Conference Report carries the weight
of the United Nations and has profound policy implications for the entire
world.

Another COR publication, Mankind at the Turning Point, provides

further insight into the thinking that underlies global governance:
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“The solution of these crises can be developed only in a global context

with full and explicit recognition of the emerging world system and on a
long-term basis. This would necessitate, among other changes, a new
world economic order and a global resources allocation system . . . . A
‘world consciousness' must be developed through which every
individual realizes his role as a member of the world community . . . . It
must become part of the consciousness of every individual that the
basic unit of human cooperation and hence survival is moving from the
national to the global level.”

A companion work by the same authors, Mihajlo Mesarovic and

Eduard Pestel, entitled Regionalized and Adaptive Model of the Global
World System, introduced and described a system of regionalization
which divided the globe into 10 regions, each with its own hierarchical
system of sub-regions.

The Trilateral Commission published a book entitled Beyond

Interdependence: The Meshing of the World's Economy and the Earth's
Ecology, by Jim MacNeil. David Rockefeller wrote the foreword;
Maurice Strong wrote the introduction. Strong said:

“This interlocking . . . is the new reality of the century, with profound

implications for the shape of our institutions of governance, national and
international. By the year 2012, these changes must be fully integrated
into our economic and political life.”

In retrospect, it is clear that the early work of the United Nations

was an effort to achieve global consensus on the philosophy upon
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which its programmatic work would be built. It is also clear that, despite
the disproportionate share of the cost borne by capitalist nations, the
prevailing philosophy at the UN is essentially socialist. The fundamental
idea upon which America was founded — that men are born totally free
and choose to give up specified freedoms to a limited government — is
not the prevailing philosophy at the UN, nor at the CFR, the COR, the
TC, or the IUCN. Instead, the prevailing philosophy held by these
organizations and institutions is that government is sovereign and may
dispense or withhold freedoms and privileges, or impose restrictions
and penalties, in order to manage its citizens to achieve peace and
prosperity for all. In his book, Freedom at the Altar, William Grigg says it
this way:

“Under the American concept of rights, the individual possesses God-

given rights which the state must protect. However, the UN embraces a
collectivist worldview in which 'rights' are highly conditional concessions
made by an all-powerful government.”

Another description of the difference between the two ideas is

offered by Philip Bom, in The Coming Century of Commonism:

“In the western Constitutional concept, limited government is

established to protect the fundamental natural human rights of the free
individuals in a free society. In a radical socialist concept of the state,
the citizen has a duty to the state to help the state promote the
socialization or communization of the man.”
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These fundamentally different, conflicting ideas have been

described differently by different people at different times. In 1842, Karl
Marx and Friedrich Engels preached their gospel through an
organization known as the "Federation of the Just.” In 1845 it was the
International Democratic Association of Brussels that promoted their
ideas. By 1903 the organization that championed Marxism was the
Russian Social Democratic Workers' Party before Lenin transformed it
into the Communist Party. The names used to describe the prevailing
philosophy at the UN are confusing to Americans. Regardless of the
name attached, the underlying philosophy has several common
characteristics that readily identify it as different from the philosophy
upon which America was founded. Chief among those characteristics is
the abhorrence of private property. As Philip Bom points out:

“In the Communist Manifesto, Karl Marx and Friedrich Engels identified
communism with democracy. 'The communist revolution is the most
radical rupture with traditional property relations . . . to win the battle of
democracy'. They also pointed out that, 'The abolition of existing
property relations is not at all a distinctive feature of communism . . . .
The distinctive feature of communism is . . . abolition of private
property.'”

Another tell-tale characteristic of socialist/communist philosophy is

the assumption of omnipotent government. Philip Bom addresses the
semantics problems as well as the omnipotent government issue this
way:
 266

“The war of words and world views of democracy continues but with
greater confusion of priorities. President Reagan professed that
'freedom and democracy are the best guarantors for peace.' President
Gorbachev confessed that peace and maximum democracy are the
guarantors of freedom. 'Our aim is to grant maximum freedom to
people, to the individual, to society.'”

In the Gorbachev statement, it is assumed that 'freedom' is the

government's to give. The U.S. Constitution clearly views 'freedom' to
be the natural condition of man and assigns the protection of freedom
as government's first responsibility. International equality, equity, social
justice, security of the people, democratic society all are terms used in
UN documents that have a completely different meaning in a socialist
context from the meaning understood in America.

These differences become exceedingly important in the context of

official UN documents. Consider the language in the UN's Covenant on
Human Rights, a document that bears approximately the same
relationship to the UN Charter that the Bill of Rights bears to the U.S.
Constitution.

Article 13 says:

“Freedom to manifest one’s religion or beliefs may be subject only to

such limitations as are prescribed by law . . . .”

By contrast, the Bill of Rights says:

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“Congress shall make no law respecting an establishment of religion or

prohibiting the free exercise thereof . . . .”

Article 14 of the Covenant says:

“The right to seek, receive and impart information and ideas carries with
it special duties and responsibilities and may therefore be subject to
certain penalties, liabilities, and restrictions, but these shall be only
such, as are provided by law.”

The Bill of Rights says:

“Congress shall make no law . . . abridging the freedom of speech, or of

the press . . . .” Period.

The philosophy of omnipotent government permeates virtually all

of the documents that have flowed from the UN since its inception.
Consider the preamble to the report of the first World Conference on
Human Settlements (Habitat I) held in 1976 under the auspices of
Maurice Strong's newly formed United Nations Environmental
Programme: "Private land ownership is a principal instrument of
accumulating wealth and therefore contributes to social injustice. Public
control of land use is therefore indispensable." Their recommendation:
"Public ownership of land is justified in favor of the common good,
rather than to protect the interest of the already privileged." Morris Udall
and others tried unsuccessfully to implement the Federal Land Use
Planning Act in the early 1970s influenced by those seeking to impose
global governance.
 268

In the early 1970s the UN created a Commission to Study the

Organization of Peace. As if singing in the same choir, the U.S. created
a Commission to Study the Organization of Peace. On May Day, 1974,
a proposal was submitted to the UN General Assembly calling for a
New International Economic Order (NIEO); it was adopted as a Charter
of Economic Rights and Duties of States on December 12, 1974. It
called for the redistribution of wealth and political power, and the
promotion of international justice based on the 'duties' of developed
countries and the 'rights' of developing countries.

Throughout the 1970s, college students and others joined

environmental organizations in droves. They protested, carried
placards, picked up litter, preached recycling and organic gardening,
mostly unaware that their leaders were attending conferences and
promoting agendas based on the same philosophy that America had
opposed in Viet Nam, Cuba, and the Soviet Union. Carefully crafted
documents, magnified by a cooperative media, elevated the
environment to a most noble cause. The object of near-worship for an
army of energetic activists, “the environment” as an international issue
was ripe for the picking by the advocates of global governance.

The Environmental Movement (1980s)

"Bait-and-switch” is a time-tested technique used by unscrupulous

merchants to offer one thing and then provide another. The
environmental movement of the 1970s was the unwitting victim of its
leadership which offered a cleaner environment but, in the 1980s,
delivered instead a massive program to achieve global governance.
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The United Nations Environment Programme (UNEP) had already

launched a Regional Seas Program (1973); conducted a UN
Conference on Trade and Development (UNCTAD 1974); developed a
Global Frame-work for Environmental Education (1975); established the
International Environmental Education Program (IEEP); set up a Global
Environmental Monitoring System (GEMS); set up a World
Conservation Monitoring Center at Cambridge, England (1975 as a joint
project with the IUCN and the WWF); implemented the Human
Exposure Assessment Location Program (HEAL — 1976); conducted a
UN Conference on Desertification (1977); organized the Designated
Officials for Environmental Matters (DOEM); and in 1980, published
World Conservation Strategy jointly with the IUCN and the WWF. The
DOEM is an organizational structure that requires every UN agency and
organization to designate an official to UNEP in order to coordinate all
UN activity with the UNEP agenda. UNEP was well positioned to
interject the environment into the argument for global governance.
Recognizing that communications was the key to global education,
UNESCO adopted in 1978 a "Declaration on Fundamental Principles
Concerning the Contribution of the Mass Media to Strengthen Peace
and International Understanding, to the Promotion of Human Rights and
to Countering Racialism, Apartheid and Incitement of War.” To figure
out what the declaration meant, UNESCO Director General, Dr. A. M.
McBow, appointed Sean MacBride to chair the International
Commission for the Study of Communication Problems. Their report
was released in 1980 entitled Many Voices, One World: Towards a new
more just and more efficient world information and communication
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order. The head of TASS, the official news agency of the Soviet Union,
was one of fifteen chosen to serve on the Commission.

Not surprisingly, the report said that the "media should contribute
to promoting the just cause of peoples struggling for freedom and
independence and their right to live in peace and equality without
foreign interference." It expressed concern about independent news
monopolies, such as the Associated Press and Reuters, but was not at
all concerned about state controlled news monopolies such as TASS. It
recommended a transnational political communication superstructure
"within the framework of UNESCO," an International Centre for the
Study and Planning of Information and Communication. The
Commission believed that a "new World Information Order" was
prerequisite to a new world economic order. The report reflected the
same "sovereign government" philosophy demonstrated in Article 14 of
the Covenant on Human Rights: government, UNESCO in particular,
should have the authority to regulate the flow of information to
"promote" its agenda, and minimize public awareness of conflicting
ideas. A proposal to require international journalists to be licensed
brought swift and dramatic negative re-action which pushed this
proposal to the back burner. The idea of controlling the media continues
to simmer, even though an alternative plan was developed through
NGOs.

The United Nations Development Program (UNDP) allocated

funding to establish computer network services for NGOs and
academics in Latin America. The Association for Progressive
Communications (APC) linked together networks in Brazil, Russia,
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Canada, Australia, Sweden, England, Nicaragua, Ecuador, South

Africa, Ukraine, Mexico, Siovenj, and then entered into a partnership
with the Institute for Global Communications (IGC). Known simply as
igc.apc.org, this gigantic computer network now boasts 17,000 users in
94 countries. It has exclusive contracts with several UN agencies to
coordinate, facilitate, and disseminate information about and from UN
conferences. This NGO has arrangements with at least the following
UN agencies: UN Association International Service (UNAIS); UN Centre
for Human Rights; UNICEF; UNDP; UN Division for the Advancement of
Women (DAW); UNESCO; UNEP; UN Information Centre (UNIC); UN
International Conference on Population and Development (ICPD); UN
International Emergency Network (UNIENET); UN Non-Government
Liaison Service (NGLS); UN Population Fund (UNFPA); UN Secretariat
for the Fourth World Conference on Women (UNWCW); UN University
(UNU); and UN Volunteers (UNV).

West German Chancellor, Willy Brandt, was tapped to chair

another International Commission in 1980: the Independent
Commission on International Development. The Commission report,
entitled North-South: A Program for Survival, stated:

“World development is not merely an economic process, it involves a

profound transformation of the entire economic and social structure . . .
not only the idea of economic betterment, but also of greater human
dignity, security, justice and equity . . . . The Commission realizes that
mankind has to develop a concept of a 'single community' to develop a
global order.”
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The report says that the choice is either development or

destruction; either "a just and humane society” or a move towards [the
world's] own destruction.”

For 50 years, Sweden was a socialist country. In 1976, the

socialists were dumped and conservatives took over — until 1982. Olof
Palme restored socialism to Sweden and was promptly rewarded with
the chairmanship of the Independent Commission on Disarmament and
Security (ICDST). In their report, entitled A Common Security: Blueprint
For Survival, the Commission built on Kennedy's 1962 Blueprint for the
Peace Race, and on the 1974 Charter for a New International Economic
Order, which linked disarmament with development.

The Charter's Article 13 says:

“All States have the duty to promote the achievement of general and
complete disarmament under effective international control and to utilize
the resources released by effective disarmament measures for the
economic and social development of countries, allocating a substantial
portion of such resources as additional means for the development
needs of developing countries.”

The Brandt Commission report had concluded that security meant

not only the military defense of a nation, but also required solving the
non-military problems — such as poverty — to improve the basic
conditions necessary for peaceful relations among nations. Their
conclusion was bolstered by the report of a UN advisor, Inga Thorsson,
a Swedish Under-Secretary of State, who wrote:
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“It is important that we do not content ourselves only with the actual
disarmament efforts. World disarmament is needed for world
development — but equally, world development is a prerequisite for
world disarmament. Not until we have arrived at a situation of
reasonable equity and economic balance in the world, will it be possible
to develop conditions for a lasting disarmament.”

The United States and the Soviet Union had hammered out a
policy generally known as "peaceful coexistence,” to avoid MAD —
Mutually Assured Destruction. The Palme Commission proposed a
strategic shift from collective security, insured by the superpowers for
the constellation of affiliated nations, to the concept of common security
through the United Nations. The concept also linked the transfer of
money saved by the disarming superpowers to the development of
underdeveloped nations, transferred through and redistributed by the
United Nations.

A work that began in 1973 was completed in 1981 — the UN

Convention on the Law of the Sea. The U.S. and the USSR wanted the
Convention limited to navigational questions. But a group of 77
developing nations, known as G-77, hijacked the conference and the
subsequent negotiations and wrote into the treaty the principles of the
New International Economic Order (NIEO) — a UN taxing authority. The
treaty created the International Seabed Authority (ISA) which would
have jurisdiction over all non-territorial waters and the seabed. No
seabed activity, mining, salvaging, and so forth, can occur without a
permit from the ISA.
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Application fees begin at $250,000 and a schedule of royalties is

set forth in the Convention. The Convention is the first to give direct
taxing authority to the UN. It is a legal mechanism for the redistribution
of wealth from developed nations to developing nations. The U.S. had
avoided the Convention until 1994 when President Clinton signed the
Treaty. Secretary of State, Warren Christopher, has announced that
ratification of the treaty will be a priority for the Clinton Administration in
1997.

The World Wildlife Fund (WWF) had grown dramatically by 1982,

with organizations in several countries, including the United States.
Russell Train, the President of WWF-usA, secured more than $25
million in grants from MacArthur Foundation, Andrew K. Mellon
Foundation, and from “US and Foreign governments, international
agencies, and individual gifts,” to launch a new NGO — the World
Resources Institute (WRI) headquartered in Washington, D.C. James
Gustave Speth was chosen as President. Speth, a Rhodes Scholar,
turned to the environment after the Viet Nam war and co-founded the
Natural Resources Defense Council. He became a Rockefeller protégé
and is described as “one of the most effective environmentalists alive
today.” He served as President of WRI for 11 years, then as a member
of President Clinton’s transition team, then moved to the UNDP as its
head. The WRI joined the WWF and the IUCN to become the three-
cornered NGO foundation for the global environmental agenda.

A World Charter for Nature was the chief product of a 1982 World
Conference on Environment and Development, at which Maurice Strong
said:
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“I believe we are seeing the convergence of the physical and social

worlds with the moral and spiritual. The concepts of loving, caring and
sharing . . . for a saner, more cooperative world . . . are the
indispensable foundations on which the future security system for a
small planet must now be based.”

In 1984, there was a World Conference on environmental

management. But a Conference in Vienna, Austria, in 1985 established
UNEP as a major player in world affairs when it produced the Vienna
Convention on Ozone Depleting Substances. The ascendancy of
Mikhail Gorbachev to the Soviet throne received far more media
attention than did the Ozone Treaty. Most Americans did not hear about
the Treaty until the Montreal Protocol in 1987 which banned certain
refrigerants and fire-fighting materials.

Another World Conference on Environment and Development was

held in 1987. Gro Harlem Brundtland, Vice President of the World
Socialist Party, was named as Chair. The Brundtland Commission
Report, entitled Our Common Future, embraced most of the ideas
contained in the UNEP/IUCN/WWF publication World Conservation
Strategy, including the concept of “sustainable development.” It is the
Brundtland Commission that links the environment to development and
development to poverty. The Report says:

“Poverty is a major cause and effect of global environmental problems.

It is therefore futile to attempt to deal with environmental problems
without a broader perspective that encompasses the factors underlying
world poverty and international inequality.”
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Brundtland was a member of the Brandt Commission. Maurice

Strong (who chaired the first world Conference on Environment and
Development in 1972) was a member of the Brundtland Commission.
Shirdath Ramphal was a member of the Brandt, Palme, and Brundtland
Commissions, and later co-chaired the UN-funded Commission of
Global Governance. Ramphal is a past President of the IUCN. The
Brundtland Commission succeeded in two break-through
accomplishments: (1) it linked poverty, equity, and security to
environmental issues and (2) it recognized that the environment was a
popular issue around which individuals, NGOs, and governments could
rally. The environment was firmly established as the battle-cry to
mobilize the world to create the New Economic World Order.

While UNEP was convening the first Intergovernmental Panel on

Climate Change in 1988, the UNDP was funding a Global Forum of
Spiritual and Parliamentary Leaders for Human Survival, sponsored
jointly by the UNDP's Global Committee of Parliamentarians on
Population and Development (created in 1982) and the Temple of
Understanding. The Temple of Understanding is an NGO accredited to
the UN, and one of several projects of the Cathedral of St. John the
Divine in New York City. The featured speaker at the Forum was James
Lovelock, author of The Ages of Gaia. Lovelock said: "On Earth, she
[gaia] is the source of life, everlasting and is alive now, she gave birth to
humankind and we are a part of her." The Gaia Institute is also housed
at the Cathedral of St. John the Divine, as is the Lindisfarne Association
which published G-A-I-A, A Way of Knowing: Political Implications of the
New Biology. Maurice Strong is a member of Lindisfarne and often
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speaks at the Cathedral, as do Robert Muller and Vice President Al

Gore.

The Forum produced what was called the "Joint Appeal” which
grew into the National Religious Partnership for the Environment
(NRPE). The project is endorsed by eleven major environmental
organizations, has received grants of more than $5 million, and is
currently engaged in mailing "education and action kits” to 53,000
congregations. Amy Fox, Associate Director of the NRPE, says:

“We are required by our religious principles to look for the links between
equity and ecology. The fundamental emphasis is on issues of
environmental justice, including air pollution and global warming; water,
food and agriculture; population and consumption; hunger, trade and
industrial policy; community economic development; toxic pollution and
hazardous waste; and corporate responsibility.”

The decade had begun with an eruption of Mt. St. Helens, and
perhaps a more spectacular political eruption: arch-conservative Ronald
Reagan captured the White House from arch-liberal, Jimmy Carter.
Reagan's Strategic Defense Initiative (SDI), more popularly known as
"star wars,” is cited as a major factor in the eventual collapse of the
Soviet Union. The USSR, which Reagan dubbed "the evil empire,” did
assume a new attitude about arms reduction and disarmament.
Gorbachev announced "glasnost,” a new policy of openness, and
"perestroika” a restructuring program which featured measured "free
market” opportunities. Gorbachev, who was infinitely closer to the
socialist dominated inner-circle of the UN-global-governance cabal than
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was the Reagan Administration, may well have been preparing to shift
the seat of socialist leadership from the Soviet Union to the United
Nations. The newly formulated strategy of common security, rather than
collective security could not accommodate the notion of a single state,
even the Soviet Union, as the seat of global authority. And it is now
clear that, even though it appeared to the west that Gorbachev was
moving his country toward capitalism, he never had any such intention.

Gorbachev told his Politburo in November, 1987:

“Gentlemen, comrades, do not be concerned about all you hear about

Glasnost and Perestroika and democracy in the coming years. They are
primarily for outward consumption. There will be no significant internal
changes in the Soviet Union, other than for cosmetic purposes. Our
purpose is to disarm the Americans and let them fall asleep.”

He later wrote:

“Those who hope that we shall move away from the socialist path will
be greatly disappointed. Every part of our program of perestroika — and
the program as a whole, for that matter — is fully based on the principle
of more socialism and more democracy . . . . We will proceed toward
better socialism rather than away from it. We are saying this honestly,
without trying to fool our own people or the world. Any hopes that we
will begin to build a different, non-socialist society and go over to the
other camp are unrealistic and futile. We, the Soviet people, are for
socialism. We want more socialism and therefore more democracy.”
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By November 9, 1989, when the Berlin Wall collapsed, it became

clear to the world that events had out-run Gorbachev's intentions. The
Soviet Union, along with 70 years of utopian-communist dreams,
collapsed as thoroughly as did the wall. The vacuum thus created in the
global political balance was seen as an invitation to usher in a new,
permanent balancing force — global governance.

The role and capacity of NGOs was greatly enhanced in the mid
1980s when Donald Ross of the Rockefeller Family Fund-the same
Rockefeller money pot that launched the Council on Foreign Relations-
invited the leaders of five other Foundations to meet informally in
Washington. From that meeting grew the Environmental Grantmakers
Association, a nearly invisible group of more than 100 major
Foundations and corporations. They meet annually to discuss projects
and grant proposals and decide which NGOs will be funded.

Having gained a measure of national prominence in his failed bid

for the White House in 1988, then Senator Al Gore, as chair of the
Senate Science and Technology Committee, assumed the responsibility
of advancing the global environmental agenda in America. It was Gore,
and then-Senator Timothy Wirth, who arranged special "prayer
breakfasts” with selected congressmen for James Parks Morton, Dean
of the Cathedral of St. John the Divine, to promote the National
Religious Partnership for the Environment. It was Gore who led the
Senate to approve the Montreal Protocol which banned refrigerants. It
was Gore who brought James E. Hansen, head of the National
Aeronautics and Space Administration's Goddard Institute for Space
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Studies, to the Senate chambers to testify that he was "99% certain that
greenhouse warming had begun.”

The decade of the 1980s was a pivotal period for the advocates of
global governance. The MacBride Commission had established the
principle of information management as a legitimate responsibility of the
United Nations, though only partially implemented through participating
NGOs: IGC/APC. The Brandt Commission had linked development with
peace, and the Palme Commission had linked development with peace
and disarmament as a way to shift military power to the UN and money
to the third world. The Brundtland Commission linked development to
the environment and introduced the concept of "sustainability.” The
NGOs, coordinated by the IUCN/WWF/WRI triumvirate, and funded by
the Rockefeller-coordinated Environmental Grantmakers Association,
launched a world-wide campaign to convince the world that the planet
stood at the brink of environmental disaster. It could be averted only by
a massive transformation of human societies which would require all
people to accept their spiritual and moral responsibility to embrace their
common global heritage and conform to a system of international law
that integrates environmental, economic, and equity issues under the
watchful, regulatory authority of a new system of global governance.
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CHAPTER SIXTEEN

GLOBALIZATION AND GLOCALIZATION

Globalization is a comprehensive term for the emergence of a

global society in which economic, political, environmental, and cultural
events in one part of the world quickly come to have significance for
people in other parts of the world. Globalization is the result of
advances in communication, transportation, and information
technologies. It describes the growing economic, political, technological,
and cultural linkages that connect individuals, communities, businesses,
and governments around the world. Globalization also involves the
growth of multinational corporations (businesses that have operations
or investments in many countries) and transnational corporations
(businesses that see themselves functioning in a global marketplace).
The international institutions that oversee world trade and finance play
an increasingly important role in this era of globalization.

Although most people continue to live as citizens of a single

nation, they are culturally, materially, and psychologically engaged with
the lives of people in other countries as never before. Distant events
often have an immediate and significant impact, blurring the boundaries
of our personal worlds. Items common to our everyday lives—such as
the clothes we wear, the food we eat, and the cars we drive—are the
products of globalization.

Globalization has both negative and positive aspects. Among the

negative aspects are the rapid spread of diseases, illicit drugs, crime,
terrorism, and uncontrolled migration. Among globalization’s benefits
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are a sharing of basic knowledge, technology, investments, resources,

and ethical values.

The most dramatic evidence of globalization is the increase in

trade and the movement of capital (stocks, bonds, currencies, and other
investments). From 1950 to 2001 the volume of world exports rose by
20 times. By 2001 world trade amounted to a quarter of all the goods
and services produced in the world. As for capital, in the early 1970s
only $10 billion to $20 billion in national currencies were exchanged
daily. By the early part of the 21st century more than $1.5 trillion worth
of yen, euros, dollars, and other currencies were traded daily to support
the expanded levels of trade and investment. Large volumes of
currency trades were also made as investors speculated on whether the
value of particular currencies might go up or down.

However, for some critics, globalization brings to mind nightmare

images of a world where a single, homogenized global culture sweeps
the planet, crushing whole cultures in its path. They envision a world
where major corporations and international organizations wield powers
held formally only by nation states. Everyone wears the same shoes,
eats the same food, listens to the same music and accepts the same
mainstream values.

While most agree that the dangers of waking up to find yourself in

a globalized zombie world are slim, globalization is a reality. The term
refers to the phenomenon in which economies, cultures and
governments from around the world appear to integrate toward one
global system.
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International travel and trade, the Internet and globally accessible

media outlets continue to make the world a much smaller place. Major
oil and communications companies boast greater bank holdings than
many countries' gross national products and command global political
influence. Yet the world is still a vast mosaic of traditions, societies,
values and beliefs-all the elements that make up local culture.

Conflict between cultures has defined much of human history-from

tribal turf wars and imperial conquests to clashes of religion and
lifestyle. Where different values meet, confusion and unrest can follow.
The same continues as powerful global companies move into local
areas while local areas reach out for available technology, information
and economic benefits.

This is where glocalization enters the picture-it is an answer to the

problems of globalization. Just as the word itself is a combination of
"global" and "local," glocalization involves the managed meeting of the
growing global arena with localized, everyday life. Glocalization's goal is
to ensure a globalized world is a stable and integrated place, while also
protecting the cultural heritage of local areas.

WHAT THEN IS GLOCALIZATION

A combination of the words "globalization" and "localization"

used to describe a product or service that is developed and distributed
globally, but is also fashioned to accommodate the user or consumer in
a local market. This means that the product or service may be tailored
to conform with local laws, customs or consumer preferences. Products
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or services that are effectively "glocalized" are, by definition, going to be

of much greater interest to the end user.

Glocalization is a historical process whereby localities develop

direct economic and cultural relationships to the global system through
information technologies, bypassing and subverting traditional power
hierarchies like national governments and markets.

The term glocalization is ambiguous and contested, however, denoting

both:

 the Utopian ideal of discovering a non-material “gift economy”

connecting the local and global via information technologies (as
suggested above), and
 the global corporate strategy of tailoring commodities to local
markets or fetishizing local places for the purposes of product
branding.

In contrast, "globalization" is often used as a term to suggest the

historical processes leading to a more one-way relationship
between the "global" realm inhabited by multinational
corporations, the entertainment industry, CNN, the Web, etc. and
a subjugated "local" realm where the identity-affirming senses of
place, neighborhood, town, locale, ethnicity, etc. survive (if just
barely) against the global onslaught of global capitalism, media,
and network identities.

Friedman defines glocalization as "the ability of a culture, when it

encounters other strong cultures, to absorb influences that naturally fit
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into and can enrich that culture, to resist those things that are truly alien
and to compartmentalize those things that, while different, can
nevertheless be enjoyed and celebrated as different." For example,
Friedman thinks good glocalization is when a little Japanese girl goes to
a McDonalds in Tokyo to "enjoy the American way of life and food." Bad
glocalization is when she gets off a plane in Los Angeles and is
surprised that "they have McDonalds in America, too!" The little girl
should be aware that McDonalds is not a part of the Japanese culture.
Otherwise we are headed for a very bland world: all Lexus and no olive
tree.

Wayne Gabardi writes:

" Glocalization is marked by the development of diverse, overlapping

fields of global-local linkages ... creating a condition of globalized
panlocality....what anthropologist Arjun Appadorai calls de-
territorialized, global spatial 'scapes' (ethnoscapes, technoscapes,
finanscapes, mediascapes, and ideoscapes).... This condition of
glocalization … represents a shift from a more territorialized learning
process bound up with the nation-state society to one more fluid and
translocal. Culture has become a much more mobile, human software
employed to mix elements from diverse contexts. With cultural forms
and practices more separate from geographic, institutional, and
ascriptive embeddenness, we are witnessing what Jan Nederveen
Pieterse refers to as postmodern 'hybridization.'" (Wayne Gabardi,
Negotiating Postmodernism, 33-34)
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The process of glocalization means that San Francisco and other

U.S. cities must brace to fend for themselves in the context of a
newly emerging international governing structure and an
increasingly impotent, indifferent and vestigial nation-state. For a
few advantaged cities, the process of glocalization, at least in the
short run, will create new opportunities for asserting local
autonomy and controlling their own economic destiny…. For most
cities, however, glocalization is bad news: bigger problems, fewer
resources, no help from the feds, increasingly vicious intercity
competition, and the dwindled status of powerless places
dominated by the placeless power of global business and finance.
(Richard E. DeLeon)

REASONS FOR GLOBALIZATION

Most experts attribute globalization to improvements in

communication, transportation, and information technologies. For
example, not only currencies, but also stocks, bonds, and other
financial assets can be traded around the clock and around the world
due to innovations in communication and information processing. A
three-minute telephone call from New York City to London in 1930 cost
more than $300 (in year 2000 prices), making instant communication
very expensive. Today the cost is insignificant.

Advances in communication and information technologies have

helped slash the cost of processing business orders by well over 90
percent. Using a computer to do banking on the Internet, for example,
costs the banking industry pennies per transaction instead of dollars by
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traditional methods. Over the last third of the 20th century the real cost
of computer processing power fell by 35 percent on average each year.
Vast amounts of information can be processed, shared, and stored on a
disk or a computer chip, and the cost is continually declining. People
can be almost anywhere and remain in instant communication with their
employers, customers, or families 24 hours a day, 7 days a week, or
24/7 as it has come to be known. When people in the United States call
a helpline or make an airline reservation, they may be connected to
someone in Mumbai (Bombay), India, who has been trained to speak
English with an American accent. Other English speakers around the
world prepare tax returns for U.S. companies, evaluate insurance
claims, and attempt to collect overdue bills by telephone from
thousands of kilometers and a number of time zones away.

Advances in communications instantly unite people around the

globe. For example, communications satellites allow global television
broadcasts to bring news of faraway events, such as wars and national
disasters as well as sports and other forms of entertainment. The
Internet, the cell phone, and the fax machine permit instantaneous
communication. The World Wide Web and computers that store vast
amounts of data allow instant access to information exceeding that of
any library.

Improvements in transportation are also part of globalization. The

world becomes smaller due to next-day delivery by jet airplane. Even
slow, oceangoing vessels have streamlined transportation and lowered
costs due to innovations such as containerized shipping.
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Advances in transportation have allowed U.S. corporations to

subcontract manufacturing to foreign factories. For example, in the early
2000s the Guadalajara, Mexico, factory of Flextronic International made
pocket computers, Web-connected TVs, computer printers, and even
high-tech blood-glucose monitors, for a variety of U.S. firms. Low
transportation costs enabled Flextronic to ship these products around
the world, and the North American Free Trade Agreement (NAFTA)
made the Mexico location more attractive to Flextronic.

Advances in information technologies have also lowered business

costs. The global corporation Cisco Systems, for example, is one of the
world’s largest companies as measured by its stock market value. Yet
Cisco owns only three factories to make the equipment used to help
maintain the Internet. Cisco subcontracts the rest of its work to other
companies around the world. Information platforms, such as the World
Wide Web, enable Cisco’s subcontractors to bid for business on Cisco’s
Web site where auctions take place and where suppliers and customers
stay in constant contact.

The lowering of costs that has enabled U.S. companies to locate

abroad has also made it easier for foreign producers to locate in the
United States. Two-thirds of the automobiles sold in North America by
Japan’s Toyota Motor Company are built in North America, many in
Kentucky and in seven other states. Michelin, the French corporate
giant, produces tires in South Carolina where the German car company
BMW also manufactures cars for the North American market.
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Not only do goods, money, and information move great distances

quickly, but also more people are moving great distances as well.
Migration, both legal and illegal, is a major feature of this era of
globalization. Remittances (money sent home by workers to their home
countries) have become an important source of income for many
countries. In the case of El Salvador, for example, remittances are
equal to 13 percent of the country’s total national income—a more
significant source of income than foreign aid, investment, or tourism.

THE INSTITUTIONS OF GLOBALIZATION

Three key institutions helped shape the current era of

globalization: the International Monetary Fund (IMF), the World Bank,
and the World Trade Organization (WTO). All three institutions trace
their origins to the end of World War II (1939-1945) when the United
States and the United Kingdom decided to set up new institutions and
rules for the global economy. At the Bretton Woods Conference in New
Hampshire in 1944, they and other countries created the IMF to help
stabilize currency markets. They also established what was then called
the International Bank for Reconstruction and Development (IBRD) to
help finance the rebuilding of Europe after the war. We have on justice
to the issues relating to the International Monetary Fund, World Bank
and the World Trade Organization. For fear of repetition, we will give a
brief introduction as it relates to globalization.

World Bank

Following Europe’s post-war recovery the IBRD became known as

the World Bank. Its mission was redirected to help developing countries
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grow faster and provide a higher living standard for their people. The
World Bank made loans to developing countries for dams and other
electrical-generating plants, harbor facilities, and other large projects.
These projects were intended to lower costs for private businesses and
to attract investors. Beginning in 1968 the World Bank focused on low-
cost loans for health, education, and other basic needs of the world’s
poor.

International Monetary Fund

The IMF makes loans so that countries can maintain the value of
their currencies and repay foreign debt. Countries accumulate foreign
debt when they buy more from the rest of the world than they sell
abroad. They then need to borrow money to pay the difference, which is
known as balancing their payments. After banks and other institutions
will no longer lend them money, they turn to the IMF to help them
balance their payments position with the rest of the world. The IMF
initially focused on Europe, but by the 1970s it changed its focus to the
less-developed economies. By the early 1980s a large number of
developing countries were having trouble financing their foreign debts.
In 1982 the IMF had to offer more loans to Mexico, which was then still
a developing country, and other Latin American nations just so they
could pay off their original debts.

The IMF and the World Bank usually impose certain conditions for
loans and require what are called structural adjustment programs from
borrowers. These programs amount to detailed instructions on what
countries have to do to bring their economies under control. The
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programs are based on a strategy called neoliberalism, also known as

the Washington Consensus because both the IMF and the World Bank
are headquartered in Washington, D.C. The strategy is geared toward
promoting free markets, including privatization (the selling off of
government enterprises); deregulation (removing rules that restrict
companies); and trade liberalization (opening local markets to foreign
goods by removing barriers to exports and imports). Finally, the strategy
also calls for shrinking the role of government, reducing taxes, and
cutting back on publicly provided services.

World Trade Organization

Another key institution shaping globalization is the World Trade

Organization (WTO), which traces its origins to a 1948 United Nations
(UN) conference in Havana, Cuba. The conference called for the
creation of an International Trade Organization to lower tariffs (taxes on
imported goods) and to encourage trade. Although the administration of
President Harry S. Truman was instrumental in negotiating this
agreement, the U.S. Congress considered it a violation of American
sovereignty and refused to ratify it. In its absence another agreement,
known as the General Agreement on Tariffs and Trade (GATT),
emerged as the forum for a series of negotiations on lowering tariffs.
The last of these negotiating sessions, known as the Uruguay Round,
established the WTO, which began operating in 1995. Since its
creation, the WTO has increased the scope of trading agreements.
Such agreements no longer involve only the trade of manufactured
products. Today agreements involve services, investments, and the
protection of intellectual property rights, such as patents and copyrights.
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The United States receives over half of its international income from
patents and royalties for use of copyrighted material.

CRITICISMS DIRECTED AT THE IMF AND WTO

Many economists believed that lifting trade barriers and increasing the
free movement of capital across borders would narrow the sharp
income differences between rich and poor countries. This has generally
not happened. Poverty rates have decreased in the two most heavily
populated countries in the world, India and China. However, excluding
these two countries, poverty and inequality have increased in less-
developed and so-called transitional (formerly Communist) countries.
For low- and middle-income countries the rate of growth in the decades
of globalization from 1980 to 2000 amounted to less than half what it
was during the previous two decades from 1960 to 1980. Although this
association of slow economic development and the global
implementation of neoliberal economic policies is not necessarily strict
evidence of cause and effect, it contributes to the dissatisfaction of
those who had hoped globalization would deliver more growth. A
slowdown in progress on indicators of social well-being, such as life
expectancy, infant and child mortality, and literacy, also has lowered
expectations about the benefits of globalization.

Trade Disputes, Rules, and Agreements

Given the importance of foreign trade, one of the most important

international agencies is the WTO’s Dispute Settlement Board, which is
empowered to settle trade disputes under WTO rules. Winners of such
settlement decisions by the board are allowed to retaliate against
 293

countries found guilty of unfair trade practices. Smaller, developing

countries, however, fear cross-retaliation if they confront larger, more
powerful nations.

Critics of the WTO in developing countries charge that the rules do

not help them and that they have been forced to bear the harsh
adjustment costs to free trade while developed countries have not lived
up to their liberalization commitments. According to these critics, the
terms of trade have gone against the developing countries. The value of
developing countries’ exports has declined relative to the value of their
imports. Not only have the prices of such commodities as coffee,
copper, sugar, and cotton fallen substantially for decades but also
earnings from labor-intensive manufacturing, such as textiles and
clothing, have declined as an ever greater number of developing
countries compete for the limited amount they can export to the rich
countries. At the same time the developing countries have faced
increased prices on goods they import, ranging from computer software
to airplanes to medicine.

A WTO meeting in November 2001 in Doha, the capital of Qatar,

set in motion a multiyear negotiating process aimed at further
liberalizing world trade but with a focus on the needs of the developing
countries. However, disputes over agricultural subsidies, the definition
of intellectual property rights, and whether poor countries were to be
entitled to “special and different treatment” were not easy to resolve.
The rich countries had the greater bargaining power, and their trade
negotiators were under pressure not to make concessions that would
hurt people back home.
 294

In 2003 these issues came to a head as WTO talks in Cancún,

Mexico, foundered. Representatives of a group of 21 developing
countries withdrew from the talks after the EU and the United States
failed to meet their demands for lowering agricultural subsidies. The
same countries also resented EU and U.S. proposals that they accept
new rules for foreign investment without first agreeing on the issue of
subsidies. Some observers believed that the failure of the talks in
Cancún made it unlikely that global trade rules could be negotiated by a
self-imposed deadline of January 2005.

Critics of the WTO have also charged that the developed countries
have obtained a set of trade agreements benefiting their large
corporations. The Agreement on Basic Telecommunications, for
example, opened world markets to large telecommunications
companies based in the developed nations. These companies were
previously excluded from these markets by government-owned
monopolies. The Financial Services Agreement likewise opened
opportunities for banks, insurance companies, and stockbrokers in the
developed countries as they sought to expand into new markets.

Instead of increasing economic stability, financial liberalization

caused financial crises in most of the world’s economies. An IMF study
found that 133 of the fund’s 181 member countries suffered at least one
significant banking crisis from 1980 to 1995. The World Bank identified
more than 100 major bank collapses in 90 developing or formerly
Communist nations from the late 1970s to 1994. Many economists
believe that these crises were caused by the IMF-imposed financial
 295

liberalization on countries that either lacked regulatory agencies or the

experience necessary to oversee the financial sector.

THE DEBATE OVER GLOBALIZATION

Very few people, groups, or governments oppose globalization in

its entirety. Instead, critics of globalization believe aspects of the way
globalization operates should be changed. The debate over
globalization is about what the best rules are for governing the global
economy so that its advantages can grow while its problems can be
solved.

On one side of this debate are those who stress the benefits of
removing barriers to international trade and investment, allowing capital
to be allocated more efficiently and giving consumers greater freedom
of choice. With free-market globalization, investment funds can move
unimpeded from where they are plentiful (the rich countries) to where
they are most needed (the developing countries). Consumers can
benefit from cheaper products because reduced tariffs make goods
produced at low cost from faraway places cheaper to buy. Producers of
goods gain by selling to a wider market. More competition keeps sellers
on their toes and allows ideas and new technology to spread and
benefit others.

On the other side of the debate are critics who see neoliberal
policies as producing greater poverty, inequality, social conflict, cultural
destruction, and environmental damage. They say that the most
developed nations-he United States, Germany, and Japan-succeeded
 296

not because of free trade but because of protectionism and subsidies.

They argue that the more recently successful economies of South
Korea, Taiwan, and China all had strong state-led development
strategies that did not follow neo-liberalism. These critics think that
government encouragement of “infant industries”-that is, industries that
are just beginning to develop-enables a country to become
internationally competitive.

Furthermore, those who criticize the Washington Consensus

suggest that the inflow and outflow of money from speculative investors
must be limited to prevent bubbles. These bubbles are characterized by
the rapid inflow of foreign funds that bid up domestic stock markets and
property values. When the economy cannot sustain such expectations,
the bubbles burst as investors panic and pull their money out of the
country. These bubbles have happened repeatedly as liberalization has
allowed speculation of this sort to get out of hand, such as in Indonesia,
Malaysia, and Thailand in 1997 and since then in Argentina, Russia,
and Turkey. According to critics, a strong active government is needed
to assure stability and economic development.

Protests by what is called the anti-globalization movement are

seldom directed against globalization itself but rather against abuses
that harm the rights of workers and the environment. The question
raised by nongovernmental organizations and protesters at WTO and
IMF gatherings is whether globalization will result in a rise of living
standards or a race to the bottom as competition takes the form of
lowering living standards and undermining environmental regulation.
One of the key problems of the 21st century will be determining to what
 297

extent markets should be regulated to promote fair competition, honest

dealings, and fair distribution of public goods on a global scale. See
also Development Economics.

REGULATING GLOBALIZATION

The debate over globalization focuses in particular on how it can

be regulated to address growing income and wealth inequalities, labour
rights, health and environmental problems, and issues regarding
cultural diversity and national sovereignty.

Inequality

By the late 1990s the 20 percent of the world’s people living in the
highest-income countries had 86 percent of the world’s income; the
bottom 20 percent had only 1 percent of the world’s income. An
estimated 1.3 billion people, or about one-sixth of the world’s
population, have incomes of less than a dollar a day. Inequality is
growing worse, rather than better. More than 80 countries had lower per
capita income (income per person) at the end of the 1990s than they
had at the end of the 1980s. In 1960 the top 20 percent had 30 times
the income of the poorest 20 percent. This grew to 32 times in 1970, 45
times in 1980, and 60 times in 1990. By the end of the 20th century the
top 20 percent received 75 times the income of the bottom 20 percent.
The income gap is even apparent in cyberspace. The top fifth in income
make up 93 percent of the world’s Internet users and the poorest fifth
only 0.2 percent.
 298

These inequalities in living standards and participation in the global

economy are a serious political problem in an era of globalization.
Some countries have been unable to function at even a minimum
standard of basic competence in the globalized economy. The only
profitable economic activity in some of these countries is linked to
criminal behaviour, such as the trade in illegal drugs, smuggling, and
extortion of various kinds. Governments that are helpless to stop such
activity or to collect taxes to meet basic public service needs are
characterized as failed states. Sometimes failed states can become
havens for terrorists and foreign criminals who use them as bases for
activities harmful to other governments and their people. These states
may also provide safe haven for mercenary forces that conduct raids
into neighbouring countries. In parts of Africa, for example, where
diamonds and other valuable resources attract criminal despots,
mercenary armies have been engaged in mass killing to terrorize local
populations into giving them what they want. The international arms
trade and easy importation of weapons, which allows such behavior, is
a serious problem.

Labour Rights
Young Labourers in South Asia

To stimulate economic development many developing countries

have established free-trade zones where investors are given special
benefits, such as low or no taxes, and labour unions are discouraged or
not allowed. These benefits have led to violations of human rights. For
example, the Workers Rights Consortium, supported by many colleges
and universities in the United States, has sent inspection teams to
 299

developing countries to investigate the conditions under which caps and

sweatshirts are made for university sports teams. The consortium found
violations of child labour laws, intimidation of workers seeking to have
their grievances addressed, and sexual harassment. Because only 1
percent of the projected growth in the world’s labour force is expected
to be in the high-income countries in coming decades, what happens to
the world’s lower-income workers in the developing countries takes on
added importance. It may well determine whether there will be an
overall rise in living standards as productivity gains are widely shared or
an overall decline if developing countries compete for jobs by holding
down wages and allowing harsher working conditions to attract
investment and job creation.

The UN’s International Labour Organization (ILO) has tried to level

the playing field by endorsing five widely accepted core labor standards.
These are elaborated in the ILO’s 1998 Declaration of Fundamental
Principles and Rights at Work. The first promises freedom of
association and states that workers should be able to join together and
form organizations of their own choosing. The second is the right of
workers’ organizations, including trade unions, to bargain collectively
with employers and governments. Third is the elimination of all forms of
coerced or compulsory labour. Fourth is the effective abolition of child
labour. The ILO’s Minimum Age Convention sets a basic minimum age
of 15, but if a country is less developed or if only light work is involved
the minimum age can be lower. If hazardous work is involved, the
minimum age is 18. The fifth provision is the elimination of
 300

discrimination in employment based on race, sex, religion, political

opinion, or national or social origin.

Because the ILO has no enforcement powers, it has proven

difficult to achieve these goals. In some countries governments pledge
to observe the ILO’s standards but then ignore them. Where child
labour laws are enforced, government factory inspectors often simply
demand that child workers be fired. Many observers believe that to
successfully attack the evils of child labour, child workers should not
merely be fired but should be placed in schools and families should be
compensated for the loss of income that occurs when children are
removed from factories.

Health Issues

Life-threatening diseases represent another facet of globalization.

Improvements in transportation that helped usher in globalization also
made it possible for infectious diseases to spread rapidly around the
globe. In 2003, for example, a deadly form of pneumonia known as
severe acute respiratory syndrome (SARS) originated in China and
quickly posed a worldwide health threat as airline passengers infected
with the virus spread the illness.

The best way to address these health issues often conflicts with
the WTO’s stand on intellectual property rights, in particular the patent
laws that protect medicines made by pharmaceutical companies. This
issue is particularly prominent in relation to acquired immunodeficiency
syndrome (AIDS). Of the 20 million people who have died of AIDS most
lived in poorer countries. In some developing countries the infection rate
 301

is above 30 or even 40 percent of the adult population. Today the worst

affected countries are in Africa. The disease is also spreading rapidly in
countries such as India, China, and Indonesia.

There are other killer diseases found mostly in poorer countries.

Although tuberculosis (TB) affects a small percentage of the population
in rich countries, more than one-third of the world’s population was
infected with tuberculosis in 2000. There are 8 million new cases of TB
and 2 million deaths a year from this disease, and these numbers are
climbing. More than 1.5 million people die each year from malaria,
another disease that mainly impacts developing countries. Diseases
spread by unclean drinking water and tainted food kill nearly 2 million
people a year, mostly infants and small children and mostly among the
1.5 billion people in the world who do not have access to clean water.

In the case of diseases that primarily affect poor people, little or no

research is being done to provide new medicines because the people
affected are too poor to buy them. A major struggle has emerged
regarding AIDS treatment over whether patent laws will continue to
require that people pay high prices for life-saving drugs or whether
lower-cost generic medicines can be provided. This issue has been
intensively discussed as part of the debate over the WTO’s Agreement
on Trade Related Aspects of Intellectual Property Rights (TRIPs).
Western pharmaceutical companies that do the research and
development wish to protect their investments and argue that without
such protection less will be spent to develop new life-saving drugs. The
developing countries argue that scientific breakthroughs should be
 302

shared as widely and as inexpensively as possible. They have resisted

the extension of property rights.

Environmental Issues

At least since the discovery of the ozone hole above Antarctica in

the early 1980s, there has been growing awareness that air pollutants
can cross borders and affect everyone living on the planet. The UN’s
Intergovernmental Panel on Climate Change, made up of the world’s
leading climate scientists, for example, predicts that by the year 2100
the temperature of the planet could rise by as much as 1.4 to 5.8
Celsius degrees (2.5 to 10.4 Fahrenheit degrees). This global warming
is due to the burning of fossil fuels, which occurs mainly in the
developed, industrialized world, and the destruction of rain forests,
which occurs mainly in the developing world. Already Greenland’s ice
sheet has thinned and Argentina’s South Patagonia ice fields have
retreated substantially. Glaciers are melting, and weather patterns may
already be changing.

If global warming continues, experts expect deserts to advance,

particularly across West Africa, and sea level to rise, flooding coastal
areas and submerging a number of Pacific Ocean island states. One-
third of the world’s most populous countries would be flooded by even a
small rise in sea level. While developed countries such as The
Netherlands can cope, developing countries such as Bangladesh
cannot afford to pay for the kind of dike system that currently protects
The Netherlands. Because of such dire forecasts, 160 nations in 1997
agreed to the first-ever binding pact to limit the emissions of carbon
 303

dioxide and other so-called greenhouse gases that contribute to global

warming. Known as the Kyōto Protocol, the pact represented a modest
step in limiting and rolling back harmful greenhouse gas emissions.

Environmentalists argue broadly in favour of sustainable

development. By this they mean a pattern of living that favours the
preservation of habitat, the conservation of non-renewable resources,
and the increased use of renewable energy sources so that Earth’s
ecosystems are not harmed beyond repair. Environmentalists favour
the principle that polluters should pay for the right to pollute. Concerning
genetic engineering, most environmentalists argue for a precautionary
principle that emphasizes careful study before new genetically
engineered plants or animals are introduced into ecosystems.
Genetically modified plants, according to this principle, should not be
introduced unless it is clear that no damage will be done. Some
politicians and agribusiness corporations believe such a conservative
approach would slow growth unnecessarily, lower living standards, and
result in greater costs for businesses and consumers. They favour rules
based on proven danger and far quicker introduction of genetically
engineered products and processes.

Culture

There is widespread disagreement over what, if any, regulation is

appropriate in the realm of culture. Some people fear a loss of cultural
diversity as U.S. media companies become dominant. Such companies
tend to “bundle” their products so that a blockbuster movie is promoted
by selling soundtracks, books, video games, and other products. These
 304

cultural wares are distributed worldwide, and along with reruns of U.S.
television shows, tend to replace local alternatives. The question is
whether responses by other nations, such as prohibitions against the
English language and government subsidies of national cultural
productions, are legitimate restraints of trade or represent an unfair
trade practice.

National Sovereignty

In a world that seems to grow increasingly smaller many issues

must be considered at a global level and not only at a local or national
level. However, at what point does this threaten national sovereignty—
that is, the ability of a country to be self-governing? Some
environmentalists, for example, have argued that environmental laws in
the United States can be undermined if the laws are found to violate
NAFTA. In effect, they say, the United States has lost the right to make
and enforce its own environmental policies.

GLOBALIZATION IN THE COMING DECADES

Globalization raises other questions that will be central to the 21st

century. What is the proper role for the IMF, WTO, and UN, and how
should they be governed? What is the best way to finance
development? How much autonomy should countries have when the
economic, political, and environmental decisions they make can have
global repercussions? To what extent should global institutions be able
to constrain what countries can and cannot do in an increasingly
globalized world? What is the right way to balance social and cultural
values with the need for economic efficiency? As the 21st century
 305

progresses, more and more decisions regarding these and other issues
will need to be debated.
 306

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