ECONOMIC DEPENDENCY AND THIRD WORLD UNDER DEVELOPMENT NIGERIAN EXPERIENCE
ABSTRACT
This study examines the relationship between the third world countries and the western capitalist countries. It shows dependency as a phenomenon or problem of relationship that gave rise to the economic growth and development of the western world in expense of the third world societies which are economically underdeveloped, and lack the capacity and ability to control the economic system or productive processes of the societies. In our attempt to analyze and address this problem we used dependency theory for the analytical framework while documentary research method was employed in gathering and analyzing data. Unequal relationship between Nigeria and countries of the western world coupled with negative role of the Nigeria economic elite was discovered as the major problem, it was ascertained that this problem is historically rooted in foundation of the society, as such, ordinary measures are not suitable, rather concrete type in form of socialist transformation is recommended by the study.
TABLE OF CONTENTS
Title page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of content vi
CHAPTER ONE
Introduction 1
Statement of the problem 2
Objective of the study 2
Significance of the study 3
Theoretical frame work 4
Hypothesis 5
Literature review 5
Definition of the terms 17
Method of data collection/analysis 20
Scope of the study 20
Limitation of study 21
Reference22
CHAPTER TWO
THE ORIGIN OF DEPENDENCY RELATIONSHIP BETWEEN THE NIGERIA AND WESTERN WORLD
2.1 The pre colonial political economy 23
2.2 The colonial political economy 28
2.3 Post colonial political economy 36
CHAPTER THREE
THE RELATIONSHIP BETWEEN NIGERIA AND THE CAPITALIST COUNTRIES OF THE WESTERN WORLD
3.1 Dependency relationship 44
3.2 The positive roles of multi national corporations 46
3.3 The negative role of multinational corporations 50
3.4 High rate of importation in Nigeria 53
3.5 Foreign loan in Nigeria 58
3.6 The roles of international financial institution in
Nigeria 64
CHAPTER FOUR
NEGATIVE ROLES OF NIGERIAN ECONOMIC ELITE
4.1 Problem of corruption 70
4.2 Foreign oriented economic policies 75
4.3 The structural adjustment programme (SAP) 77
4.4 National Economic Empowerment
Development strategy (NEEDS) 81
4.5 Lack of ability of self reliance 86
CHAPTER FIVE
5.1 Summary 90
5.2 Conclusion 91
5.3 Recommendation 91
Bibliography 97
CHAPTER ONE
INTRODUCTION
Economic dependency is the lack of capacity and ability to control the economic system or productive process of a society such that the society as a state depends on foreign developed economy states for leadership and control through regulations and some economic institution. The country that are depending on the rest are mostly poor countries of the third world, Nigeria is a typical poor third world country and underdeveloped that depend on the western world for decision and implementation of economic policies , thereby contributing to the economic development of the west to her own detriment. For example, (SAP) structure Adjustment programme of 1986, National Directorate of employment (NDE) of 1986, Petroleum Trust Fund (PTF) poverty alleviation programme etc. all seems to have end in failure after gulping in estimate material and human resources, funded with loan and the associated intrest.
Since the economic structure is disarticulated, being the main structure; the foundation; on which rise the political super structure; and which controls both the intellectual and material production, the implication is the underdevelopment of the entire society. The state of underdevelopment of the entire society raises serious alarm in whole third world countries and the international community. Historically, most of the third world countries suffering dependency. Passed common rigorous stages of development from slavery to colonialism/imperialism, and to and to the contemporary globalization. What distinguished one stage from the other was the intensification of the rate of suppression and exploitation mounted on the poor third world countries by the economically developed west.
1.2 Statement Of Problem
What makes human is the ability to be independent from the wills of other people. People of the third world are regarded as sub-human being because of absolute economic dependency on the western developed economies. The problem of the study is that Nigeria like other third world countries has being suffering underdevelopment which emanated from dominant exploitative character of the western economies on which those of the third world depend. The foregoing raises some major questions:
- What is the major cause of economic dependency in Nigeria?
- What is the role of Nigerian economic elite in the economic dependency problem of the country?
What role do multinational companies play in sustaining economic dependency?
1.3 OBJECTIVES OF THE STUDY
In the light of the consideration therefore is the purpose of this work which becomes the task of identifying the historical forces which has generated economic underdevelopment has continues to reproduce itself till today. This history of economic underdevelopment will be traced from the period of colonization to the present time.
It is the aim of this study to examine certain crucial concepts that are closely related to the problem of economic dependency and underdevelopment, specifically:
- It will investigate the major cause of economic dependency in Nigeria.
- To discover the impact or the role Nigerian economic elite in the economic dependency problem of the country.
- To examine the role of Multinationals in the economic dependency of Nigeria
1.4. Significance Of Study
This work will serve as material to other researcher and in practical it will serve as a tool to the government guiding them on implementation of policies, this policies shall serve as a guide to Nigerians development.
This work, prescribes how to manage the nations resources, for the benefit of the general citizens, and this will determine the relevance of the existing government policies.
1.5. Theoretical Framework- Dependency Theory.
It is important to explain what the theory is all about in order to achieve a more concrete understanding of the theoritical framework of the study to this end, therefore, a theory functionally can be defined as a set of ideas, which provide an explanation for something. In this study, some scholars in Latin America and Africa have there views concerning this theory. They include: Dos Santos ,Andre Gunder etc.
According to Dos Santos (1979) “Dependency relates to a situation which the economy of certain countries is conditioned by the development and expansion of the other to which the former is subjected .The relation of inter dependence between two or more economies , and between these and the world trade ,assumes the form of dependence when some countries the dominant ones which are the capitalist nations like America can expand and can be self sustaining while other countries the dependent ones like Nigeria can do this only as a reflection of expansion which can have either a negative or positive effect on their immediate development. ”There basic assumption is that there is a dialectical relationship between development and underdevelopment ,in other words according to Andre Frank(1975) “Development and under development are two different sides of a universal historical process. ”To him what causes under development in third world is as a result of what brought about development in Europe and America.
This dependency concerns the centre which refers to the technological advanced countries of the world and the periphery refers to the third world countries, also, when looking at this theoretical framework we talk about the centre of the centre which refers to the urban areas of the world. Centre’s of the periphery refers to the urban centre of the developing countries like Nigeria, periphery of the centre refers to the rural areas of the industrialized countries while the periphery of the periphery refers to the rural areas of the developing country.
This is a relationship where the centre of the developed countries dictates the terns of their co-existence economically, socially and politically. there is an exploitative and vertical relationship between the centre of the centre and the centre of the periphery in this setup. Looking at this case the periphery is subordinate to the centre. In this, the centre is assigned the role of manufacturing industrial products while the periphery produces primary goods – raw materials and needed resources, the periphery now depends on the centre for her economic survival and consumption of the already made products.
I prefer this theory because it truly illustrates the exploitative natures of the developed countries to the less developed country. (LCD) which led to dependency.
1.6. Hypotheses:
For the purpose of guidance and in order to achieve the statements of problems and the objectives of this study, the researcher has proposed the following hypothesis.
- The unequal exchange between the advanced capitalist countries and third world country like Nigeria enhances economic dependency.
- The activities of the Nigeria economic elite sustain the dependency problem of Nigeria.
- The activities of Multinational Corporations perpetuates Nigeria continued dependent on the advanced countries.
1.7. Literature Review
Many articles and books have been written on the problems of economic underdevelopment in the third world countries as a whole some western written attributed this to the third world inferiority towards industrialization and that they are incapable of thinking constructively. They also said that the third world countries have to go through the long stages which the western nations have gone before reaching their present level of development. Some African writers on the other hand blamed this on the integration of third world economy into the capitalist system.
In Rodney book how Europe underdeveloped Africa (1972), he succinctly said , “when two societies of different sorts come into prolonged and effective contact, the rate and character of changes taking place in both is seriously affected to the extent that entirely new patterns are created two general rule can be observed to apply in such cases. Firstly, the creator of the two societies (i.e the one with less economic capacity) is found to be directly affected- and the bigger the gap between the two societies concerned the more detrimental are the consequences”.
Secondly, assuming that the greater societies do not survive, they ultimately it can resume their own independent development only if it proceeds to a level higher than that of the economy which have previously dominated it.
What Rodney (1972) is basically saying is that underdevelopment results from unequal interaction between two societies. The more this unequal relationship lasts, the more the backwardness of the less privileged ones, that this underdevelopment is a sign that societies have come into contact when they were in different levels. He further said that if the underprivileged society hopes that it can make any head way in that type of relationship, that it is deceiving itself. The poverty of the less privileged one is the development of the other. This situation will be worsening as far as the relationship continues. He gave example of the European capitalism and the indigenous hunting societies of America and the Caribbean. He said that the contact between the two nearly exterminated the later. This can be applicable in what is happening in the capitalist society today, this is a warning that as far as the relationship lasts, the third world countries will not make any breakthrough to industrialization. From experience, it could be seen that the situation is worsening instead of improving. He uses Soviet Union, china and Korea as the concrete instances of the operation of this rule. He said that these countries were nearly exterminated when they came into contact with the more mature capitalism of the western Europe that these three societies advanced to their present state of development because they succeed these relationship with the capitalist world and followed a new path altogether. He went further to conclude by saying that, “indeed”, as far as the two biggest socialist states are concerned, (the soviet union and china), societies development has already catapulted them beyond states such as Britain and France, which have been following the capitalist path for centuries.
Walter Rodney (1972) catalogued the disadvantages that go with the unequal relationship with the advanced countries. He mentioned poverty stagnation, greed etc. he traced the present predicament of Africa to the time it came into contact with the advanced countries. The contact was made in the 15th century. This contact is the result of the underdevelopment of Africa today. That while Africa continues to stagnate, Europe continues to develop and that before this contact, Africa be developing on their own pace- but has been degenerating since its contact with the capitalist world. At the end he recommended the sourcing of this relationship and the adoption of socialist mode of production as Soviet Union and china have done. He said that socialism aims at and has significantly achieved the creation of plenty, so that the principle of egalitarian distribution becomes consistent that the satisfaction of the wants of member of the society. That when this is achieved, the workers and the peasants will be in control of the economy that the exploitation and misery will end. What Rodney(1972) has said is what is really happening to Africa today. I strongly share his view that the serving of the relationship between the two .tough he did not tell us the consequences of the serving of the relationship and how to avoid it.
Fanon (1961) argued that Europe is literally the creation of the third world. The wealth which smoothen her is that which was stolen from the underdeveloped people. “He went as far as saying that we should not tremble with gratitude when any help comes from Europe. He says this should be the ratification of a double realization: the realization by the colonized people that it is there due, and the realization by the capitalist power that in fact they must pay”. What Fanon (1961) is basically saying is that Africans should realize that Europe was created by them and therefore should disregard anything that comes from them in the name of gifts or aid. Fanon (1961) enumerated the criminal activities of the colonialists in their robbery adventure in Africa. These include deportations, massacre, forced labor and slavery.
These are the methods that capitalism used to increase its wealth its gold or diamond resources and establish its power. He said that violence was their main instrument of accumulation. He mentioned in detail how the European activities affected the underdevelopment of Africans both mentally and physically, the imposition of western culture on Africa.
He further castigated the indigenous bourgeoisie for their activities which is instrumental to the internal weakness of the colonized. He said this traditional weakness which is almost congenital to the national consciousness of underdeveloped countries, is not solely the result of the mutilation of the colonized people by the result of the colonial regime. It is also the result of the intellectual laziness of the national middle class, of its spiritual penury and of profoundly cosmopolitan mould that its mind is set in. According to him, this bourgeoisie class who took over from the colonialist had little or nothing before they came into power. At the attainment of independence, they engaged in the accumulation of capital to the neglect of the masses that stood behind them during the time of struggle for independence. Instead of investing in productive ventures, they prefer to invest in the one that will yield quick money. Hence, he succinctly remained. “The landed bourgeoisie refuses to take the slightest risks and remained opposed to any ventures and to any hazard , it has no intention of building upon sand, it demands solid investments and quick returns. On the other hand, large sums are spent on display on cars, country house and all those things which has been justly described by economists as characterizing an underdeveloped bourgeoisie”.
Fanon (1961) after condemning bourgeoisie activities recommended that it should not be allowed to find the conditions necessary for its existence and growth. In other words, the combined effort of the masses led by a party and intellectuals who are highly conscious and armed with revolutionary principles ought to bear the way to this usefulness and harmful middle class. He also recommended the complete obliteration of the type of business to which this group of people engage in. finally, he advised the underdeveloped countries not to imitate the European way of life and not to expect anything from them but to try and fashion out new life for the entire people of the underdeveloped society and recommended socialism if possible by violence.
Fanon (1961) is really saying that the Europeans and nefarious activities of the indigenous bourgeoisie is true. But unfortunately he did not tell us how this indigenous bourgeoisie emerged and the condition which was instrumental to their emergence and behavior. In other words, he failed to tell us the conditions or the forces that made the activities of the group of people successful.