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The political economy of development
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"When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist".
(Dom Helder Camera -former archbishop of Olinda, Recife, Brasil) (1984)
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More on Africa
by Róbinson Rojas Sandford(1997)

In the 1990s a tri-polar global economy consolidated around spheres of
influence clearly defined in different geographical areas. Three major
centres of economic activity:
                          United States
                          Japan, and
                          European Union

By and large, the spheres of influence were Latin America for United
States, South and East Asia for Japan, and Africa for the European
Union, with major inroads into Central and Eastern Europe (the former
central planned economies).

For a detailed account of the three spheres of influence, see
R. Rojas: The transnational corporate system in the late 1990s 


Since the late 1950s, the European Community related to Third World
countries very much along the lines of colonial times. Africa, the
Caribbean and the Pacific were main targets for economic intercourse,
political influence and sources of raw material and cash crops.

History played a critical role in moulding the development posture
of the European Community and its members.

There was a focus on Africa, creating at least two zones of influence:
former British colonies and former French colonies.

There was also a notion "of natural partnership" with Africa, the
Caribbean and the Pacific.

EC's countries aims were:

a) securing a supply of raw materials
b) securing a market for European manufactured goods
c) "protect" the regions from the USSR and People's China efforts to
   spread socialist regimes

Two main instruments were used by the European Community in its
development policy:

                 -trade preferences for African, Caribbean and
                  the Pacific former colonies, and
                 -direct aid

Asian and Latin American developing countries were never extended
trade preferences by the EC.

By and large, both tools became one big political instrument in the
hands of Britain and France to protect the interests of their national
big businesses in Africa.

Between 1958 (Treaty of Rome) and 1975, when the LOME Convention was
created in Lome (Togo), the European Community developed the main tenets
of its development policy.

The Lome Convention united the European Community and a group of
African, Caribbean an Pacific states (the ACP) in an agreement which
includes among its most notable features:

                        trade preferences,
                        aid, and
                        special facilities (*)

(*) notably the System for Stabilization of Export Earnings (STABEX)
    totally financed by the EC then, the EU, now. And a Special
    Facility for mining products -bauxite/aluminium, copper/cobalt,
    iron, tin, phosphates, manganese and uranium- called SYSMIN.

When it first entered in effect in 1975, the Lome Convention was
"heralded as the only agreement that brought industrial countries and
developing countries together as 'equal partners' in mutual recognition
of their interdependence in seeking economic growth and development...

"..over the years some of the initial optimism has dissipated; indeed,
some ACP spokemen have claimed that the two sides now relate to each
other more as 'aid donors' and 'recipients' than as 'equal partners'...

"...available empirical evidence has tended to show that bilateral aid
from EC countries has been allocated among developing countries much
more on the basis of donor interests than on that of recipient country
needs " (A. Maizels and M. Nissanke, "Motivations for Aid to Developing
Countries", World Development, Vol. 12, No. 9, 1984 -the study covers
France, Germany, Great Britain, United States and Japan)

E. R. Grilli, "The European Community and the Developing Countries",
Cambridge University Press, 1993, argues that "the drafters of the
first Lome Convention were convinced that the extension of trade
preferences to the ACP countries would boost their export capacity and
hence encourage economic growth and development..."

"...this objective does not seem to have been achieved: although ACP
exports to the Community, excluding crude and refined petroleum products,
have increase in value by 51 percent between 1976 and 1983, their share
of total EC imports from outside the community during this period fell
from 6.3 percent to 4.5 percent.."

The official point of view of the EC has been that "ACP states have
limited themselves to traditional exports...they have failed to match
the productivity and quality advances of Asian and Latin American

But the ACP point of view is totally different. They say that "some
elements of the Convention, in fact, hinder the growth of their exports
...the Convention's safeguard clause tends to inhibit growth in areas
where they could enjoy the greatest dynamic comparative advantage and
provides a powerful disincentive to their industrial development".

In 1993 the Lome Convention accepted Eritrea as a member, increasing to
70 the number of African, Caribbean and Pacific states linked to the 15
members of the European Union.

                (percentage of total imports)
                      1976  1980  1985  1990  1992  1994

ACP                    6.7   7.2   6.7   4.7   3.7   2.8
Asia                   4.2   5.9   6.5  11.0  13.6  13.1
Latin America          5.3   5.1   6.5   4.6   5.1   5.4
Mediterranean          6.1   6.1   8.1   6.5   6.2   6.1
All developing states 44.8  42.4  34.7  31.2  29.2  34.2
source; EUROSTAT

Parallel to the above trend, total aid conceeded by the EU to Africa
is consistently decreasing in real terms:

EU.- TOTAL AID.-AFRICA.- (ECU per capita)

1958   9.7
1964   7.7
1971   5.8
1976   4.1
1981   2.6
1986   2.9
1990   2.8

European Union trade and aid concessions have been always tied to
one another. Several factors and tendencies have been shaping the
pace of adjustment in EC (then EU) development policies:

-Africa is not anymore the "natural complement" of Europe, rather
 is of little direct economic value and has become a quasi-permanent
 political burden.

-Since 1985 aid is given only if structural adjustment programmes are
 implemented (rolling back the state, devaluation, deregulation,
 liberalization, extremely favourable conditions for foreign investment
 and production for the European markets, and free-trade)

-Closing links with Asian and the Central and Eastern European states

                1955     1985    1955     1985    1955     1985

Food             6.8      8.4    14.3     15.7    10.3      5.1
Fuels            1.9      1.8     6.6      3.0     2.0      0.1
Manfactures   72.3     83.4    64.6     72.0    72.6     87.7


Food            50.7     42.0    58.9     12.8    26.9     14.3
Ores, metals    15.1     15.8    19.5      3.1     8.1      5.0
Fuels           12.7     24.0     0.3     72.6     3.8      1.4
Manufactures     1.7     14.3     3.8      6.0     4.4     71.8
source: UNCTAD, "Handbook of International Trade and Development
                 Statistics", United Nations, 1988


There has been, though, a consistent trend in the African continent
relations not only with the EC/EU, but with the US and Japan. The
rate of profits reaped by transnational corporations from industrial
societies have been extremely high.
          Average 1971-1991 in US$ millions.- 1991 prices.            

Country/                        Factor Payments
   Region                          to abroad      Gross Domestic Product

Sahelian and Coastal Western Africa:
Benin                                -16.3             1,886
Burkina Faso                          11.7             2,669
Cape Verde                            -3.7               331
Cote d'Ivoire                       -886.1             7,283
Gambia                               -17.1               229
Ghana                                -79.7             6,413
Guinea Bissau                         -4.0               211
Guinea                               -42.1             2,937
Liberia                              -41.7             1,030
Mali                                 -23.1             2,451
Mauritania                           -67.1             1,030
Niger                                -70.3             2,284
Nigeria                           -3,057.6            34,124
Senegal                             -175.3             5,774
Sierra Leone                         -32.5               743
Tchad                                -34.9             1,236
Togo                                 -41.2             1,633
Total                             -4,574.7            69,595  (6.6%)

Central Africa:

Cameroon                            -588.6            11,666
Central African Republic             -12.1             1,202
Congo                               -185.7             2,909
Equatorial Guinea                     -1.4               136
Gabon                               -360.3             4,863
Sao Tome and Principe                 -0.3                47
Zaire                               -518.0             8,117
Total                             -1,666.4            28,940  (5.8%)

Eastern Africa and Horn of Africa:

Burundi                              -22.0             1,035
Djibouti                             -                   217
Eritrea                              -                   ..
Ethiopia                             -36.5             5,982
Kenya                               -350.2             7,125
Rwanda                                -3.8             1,579
Somalia                              -24.6             1,035
Sudan                               -156.9            10,094
Tanzania                             -71.9             2,223
Uganda                               -40.4             2,527
Zambia                              -360.6             3,831
Total                             -1,066.9            35,431  (3.0%)

Southern Africa:

Angola                                ..               6,010
Botswana                            -119.7             3,644
Lesotho                             +349.9               578
Malawi                               -54.6             1,986
Mozambique                          -102.5             1,219
Namibia                              -73.7             1,600
Swaziland                            -10.3               645
Zimbabwe                            -227.9             5,543
Total                               -588.7            14,637  (4.0%)

South Africa                      -4,043.4            91,167

Total 102 developing countries   -69,594.6         3,526,029  (1.97%)
Total Africa                     -11,940.1           239,770  (5.00%)


1970   35,000
1975   41,000
1980   47,200
1985   55,000
1989   55,900
1990   59,800
1991   62,100
1992   62,700
1993   57,100

Average official development assistance 1970-1991 in US$ 1991
                            47.6 US$ billion
Average Factor Payments to Abroad 1971-1991 in US$ 1991
                            69.6 US$ billion

Memorandum item: AID is financed with taxes paid by all industrial
                 societies citizens
                 FPA go directly to the pockets of the owners of
                 transnational corporations
                 Therefore: the population of industrial societies
                 finance the survival of the societies bled by
                 international capital
(source: World Bank Indicators 1995, World Development Report 1993)