|
The Orthodoxy conception sees development as associated with economic growth in the context of International Trade. The purpose of this school of thought is the transformation of backward economic, traditional subsistence economy into modern and industrial economy which means production of surplus goods and increase cash flow. After the end of the Israeli-Arab War in 1973, the price of the oil fell and there was crisis. The flow of cash was reduced and development went down. It was the stumbling price of oil that made it impossible for the developing states to sustain the economic growth. Thus, they needed to rely on the developed states for aid.
That was the beginning of the problem of the developing states. Due to the economic recession caused by dwindle oil, thus, they undertook massive borrows of cash from Western Banks to sustain economic growth. Dependency theorists argued that the existing international Economic System is inherently biased against the South. The roots
of this unequal relationship between the periphery (the third world) and the core (the First world) can be traced to the sixteenth century, when European countries began to colonize the southern hemisphere.
In this relationship, the periphery exported raw materials to the industrializing states in Europe (and later to the US and Japan), and in turn the North exported manufactured goods to the periphery. More recently, MNCs based in the North have replaced the colonial powers in sustaining this relationship. According to dependencistas (adherent of dependency theory), this unequal relationship has ensured that the Third world states
remained global economy’s "hewers of wood and drawers of water."
This fundamental inequality of the economic relationship between North and South fueled development in the North and stifled it in the South. The disadvantaged position of the South stems from the fact that most Southern countries economies depend heavily on the export of primary products-that is, raw materials, such as, timber, oil and metals, and agricultural goods such as coffee and bananas.
Beginning in the sixteenth century, the periphery supplied the raw materials and foods for the economies of Europe, and then for the Industrial Revolution in Europe and later US. In turn, the periphery imported manufactured goods from the industrial states. They contended that this division of labour encourages the Third world to remain exporters of primary goods and discourage the development of a modern manufacturing sect
By 1970s, it had became apparent that the Orthodoxy had failed and people started advocating for another paradigm of development, especially during the debt crisis after the end of the Israeli-Arab war, and hence, the massive borrowing of capital from the developed states by the Third World, especially African states. To save the International Bankrupt System, SAP was introduced to the Third World countries, and as conditionality by the developed states through the financial institutions (IMF and IBRD). Some of the conditionality was reduction in the government expenditure, trade liberalization, devaluation of currency, etc, and his brought about an unintended hardship to the Third World.
Hence, 1970s was described as the "lost decade" to Third world because it was characterized by debt crisis, no impressive development, it was also the peak of the SAP. Half of the Third world states experienced declining GDP as a result of the interest
rate for debt servicing became so outrageous that the debt crisis was compounded. Thus, Third world states lost their legitimacy, the states could not fulfill their social responsibilities, and there was fluctuation in commodity, uncertainty in the global market for African product. The Western World adopted stringent protectionist policies that made it difficult for African goods to penetrate the markets of the developed states. The advocate of the Orthodoxy predicted that development would twinkle down but rather than closing the gap, it became widened, that is, between the poor and rich. Hence, it was as a result of these that there was an urgent call for the New International Economic Order (NIEO).
The NIEO emanated primarily from the Third World countries. NIEO was a call for the reform of the existing International Economic System and particularly the decline terms of trade. They were also concerned to defend their right, to exercise sovereignty over the natural resources and reform producer cartel. Also, NIEO was a call for a stable and just commodity prices, and international food and Agricultural programme, technology transfer from North to South and the democratization of the economic system. NIEO started from 1960s when the new states formed a coalition of the world poor and it was called the Group of 77 (G77) and they used their voting power to organize United Nation
Conference for Trade and development (UNCTAD).
This UNCTAD conference later became a permanent organ of UN through which the global South could express their interest concerning developmental issues. NIEO arose from the economic and political tension between the developed and the developing nations. As a result of success of OPEC in increasing petroleum prices (1970-1973), this success motivated the Third world and serve as a catalyst to pull all the members together in the call for NIEO.
|
Tags
You must be logged in to add tags.
|
Writer Profile
akinbo a. a. cornerstone
A prolific Nigerian writer with a gift for words. Wrote under the pen name of Fad and Quad during the Military Era. Currently uses the "pscornerstone" signature.
An activist with religious inclination and respect for cultural heritage, he grew up streetwise and with great love for his country, Nigeria.
He believes that he who holds the word holds the world.
|
Comments
You must be a TakingITGlobal member to post a comment. Sign up for free or login.
|
|
