>Just these points alone demand a thorough rethink - what does not
>cut any ice is simply labling things Imperialistic when there is no
>current theory which takes these new aspects on board. You mentioned
>the export of capital, no doubt it happens to some degree, but what
>I can work out the massive and crippling loans which reduced
>countries to neo-colonies took place decades ago and the major
>exports now are in the form of loan extensions (I am not quite sure
>how much actual capital moves in this case).
***** ... Guarantee the fulfilment of basic human needs for all and get out of the vicious circle of debt.
Eric Toussaint and Arnaud Zacharie (Committee for Cancellation of the Third World Debt - COCAD, CADTM in French) April 2001
translated by Vicki Briault
...The champions of neo-liberal globalization tell us that the Developing Countries (in which they include Eastern Europe) must repay their external debt if they wish to benefit from constant flows of funding. In fact, ever since the debt crisis in 1982, the flows have been going from the Periphery to the Centre, and not the other way as the leaders of the international financial institutions would have us believe. In the last two decades, there has been a massive net transfer of wealth from the Periphery to the Centre. The added mechanism of debt repayment has become a powerful support to those previously in operation (unfair trading, exploitation of natural and human resources, the brain drain, repatriation of profits to the parent company, etc.). Since 1982, the populations of the Periphery countries have sent their creditors the equivalent of several times the Marshall Plan [2], (with the local capitalist elite skimming off their commission on the way).
It has become urgent to adopt the opposite view from that of official discourse: the Third World's external public debt must be cancelled. Close scrutiny reveals that the Third World debt is slight compared to the historic social and ecological debt owed it by the rich Northern countries. In 2001, the Third World debt (former Eastern bloc countries not included) comes to about 2,100 billion dollars (of which about 75% is public debt), merely a small percentage of the world debt which comes to more than 45,000 billion dollars. (The total sum of public and private debt for the USA alone comes to 22,000 billion dollars). If the Third World's external public debt were to be entirely cancelled without indemnifying the creditors, it would be a paltry loss of barely 5% in their portfolios. On the other hand, to the populations liberated at last from the burden of debt, those sums, which could be used to improve health and education, create jobs, etc., would mean a lot. Indeed, the repayment of the Third World's external public debt represents, on average, expenditure of about 200-250 billion dollars a year, that is about 2-3 times the amount required to satisfy basic human needs as defined by the United Nations.
[2] The Marshall Plan (1948-1951) was the brainchild of the US President Harry Truman's administration under the name of the European Recovery Program. It was later to be known by the name of the Secretary of State at that time, Georges Marshall (who was Chief of General Staff from 1939 till 1945), charged with implementing it. Between April 1948 and December 1951, the United States granted aid worth 12.5 billion dollars, in the form of loans to sixteen European countries. The Marshall Plan's aim was to facilitate the reconstruction of a Europe devastated by World War II.
Considering that the equivalent of 1 dollar in 1948 would be 6.28 dollars in 2001, the cost of the Marshall Plan in 2001 would be 78.5 billion dollars. If all debt repayments made by the Third World in 1999 are taken into account, i.e. 300 billion dollars (Source: World Bank, GDF, 2000), they would have paid their industrialized country creditors the equivalent of about 4 Marshall Plans that year alone. By the same token, since 1980, 43 Marshall Plans (more than 3.450 billion dollars) have been sent to the creditors of the Centre by the peoples of the Third World.
<http://www.forumsocialmundial.org.br/bib/toussainteng.asp> *****
What struck Lenin as characteristic of imperialism in the early 20th century was that surplus capital was typically exported from economically advanced nations to economically backward ones (in the case of Britain, to British colonies; in the case of France, to Russia; and so forth) where "profits are usually high, for capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap," "expanding and deepening the further development of capitalism throughout the world" (_Imperialism, the Highest Stage of Capitalism_ at <http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch04.htm>).
This type of export of capital still goes on marginally, in the forms of both portfolio and direct investments, but not enough capital is exported today from the core to the periphery to absorb into regular wage labor newly proletarianized migrants from rural areas who are ruined by "free trade" of heavily subsidized agricultural (most importantly grain) exports from the USA and Europe; at the same time, the core insists on the maintenance of protectionist tariffs and quotas against textile and apparel exports from the periphery (Cf. Walden Bello, "Reform of the WTO is the Wrong Agenda," at <http://www.foodfirst.org/pubs/backgrdrs/2000/s00v6n3.html>). "The World Investment Report...says foreign investment continues to be unevenly spread geographically, with the United States, Japan and the European Union (EU) accounting for 71 percent of the world's investment inflows and 82 percent of outflows in 2000. The EU gained as both a recipient and source of FDI in 2000. The United States remained the world's largest FDI recipient with $281,000 million in incoming foreign investment" (http://usembassy.state.gov/tokyo/wwwhec0217.html).
Moreover, foreign investors in the Third World may not be bringing much fresh capital from abroad -- they may very well borrow from Third World banks, thus crowding out domestic firms from domestic capital markets (Cf. Volker Bornschier, Christopher Chase-Dunn, & Richard Rubinson, "Cross-National Evidence of the Effects of Foreign Investment and Aid on Economic Growth and Inequality: A Survey of Findings and a Reanalysis," _American Journal of Sociology_ 84.3 [1978], pp. 651-683; Ann E. Harrison & Margaret S. McMillan, "Does Direct Foreign Investment Affect Domestic Firms' Credit Constraints?" at <http://papers.nber.org/papers/W8438>).
Most importantly, as you can see from Eric Toussaint and Arnaud Zacharie's article excerpted above, whatever positive developmental effect foreign investment may cause is more than cancelled by the drain on capital that debt servitude imposes on the Third World (also keep in mind that foreign investment outside the core is heavily concentrated in a few promising markets in the semi-periphery to begin with: "Northeast Asia -- Hong Kong, China, Korea and Taiwan -- 'was the brightest spot for FDI in the developing world,' with $143,000 million in inflows" at <http://usembassy.state.gov/tokyo/wwwhec0217.html>).
Today, after a decade of anemic neoliberal economic recovery, we are once again heading in the direction of global economic recession (e.g., The World Investment Report 2001 "underlines that the 40 percent drop in FDI with respect to last year's record high of $1.3 trillion was the sharpest fall reported in the past 30 years, and the first decline registered since 1991" at <http://www.jubilee2000uk.org/worldnews/northamerica/Biggest_drop_foreign_investment.htm>).
To sum up, if "the historical mission of capitalism" consists, as Lenin thought, in "the development of the productive forces of society," it is clear that today's capitalism is unable to accomplish it in the periphery (much less accomplishing it for the benefit of the masses) and only succeeds in creating an ever widening gap between the core and the periphery (as well as between the rich and the poor within nations). That's imperialism today. -- Yoshie
* Calendar of Anti-War Events in Columbus: <http://www.osu.edu/students/sif/calendar.html> * Anti-War Activist Resources: <http://www.osu.edu/students/sif/activist.html> * Student International Forum: <http://www.osu.edu/students/sif/> * Committee for Justice in Palestine: <http://www.osu.edu/students/CJP/>