Conflicts of Interest

Jamie Swift, Brian Tomlinson

• Publisher: Between the Lines
• Year: 1991
• ISBN:
  9781926662640
• Edition: 1
• Topic: Social Sciences
• Subtopic: Global Development Studies
• Index: Social Sciences

Ten activists, scholars, and writers analyze contemporary development issues linking Canada and the Third World, and provide an in-depth critique of Canada’s role in perpetuating poverty in the nations of the South. Widely adopted as a course text at the college and university level.

ONE
Development in the 1990s: Critical Reflections on Canada's Economic Relations with the Third World
Brian Tomlinson

IN 1980 THE Brandt Commission called upon the rich industrial nations to meet what it termed the “greatest social challenge of our times”–the massive transfer of economic resources from the North to the South.

For the Brandt Commission, an independent collection of world notables established in 1977 at the urging of Robert McNamara, then president of the World Bank, this transfer was critical to the survival of some 800 million people living in absolute destitution in the Third World. If the transfer was not forthcoming, if the North did not act to break the deadlock of North-South negotiations around a New International Economic Order, the commission foresaw a catastropic “crisis decade.” Accordingly, the commission proposed that the industrial countries support a set of emergency plans for global reform leading to economic and social justice, based not on altruism but on their own self-interest.¹

The Brandt commission generated an initial hope that the industrial countries would take up its proposed agenda and begin to bridge the widening gap between North and South. In Canada, in the same year, a parliamentary task force on North-South relations focused widespread public support on a leadership role for the Canadian government. Given Canada's strong commitment to international development as well as our role as a “middle power” trading nation, Prime Minister Pierre Trudeau did in fact promote North-South economic and political discussion at Cancun in October 1981.

In 1982 Brandt and his commission reiterated the urgency of programs for the alleviation of poverty, stressing the reform of the global framework for trade and development. Yet the appeal brought little response from the international community, which was only beginning to recognize the threat of economic collapse posed by the failure of Mexico to meet its debt obligations.

Viewed from the vantage point of the 1990s, the Brandt proposals seem hopelessly Utopian. The early years of the 1980s saw the worst economic recession since the 1930s, largely brought on by the co-ordinated policies of the central banks of Europe and North America. The global debt of Third World countries expanded exponentially during this recession and stood at U.S.$1.3 trillion by 1990. While Brandt called for economic transfers to the South of $50 to $60 billion annually, the total aid budgets of the developed countries stood at $48.5 billion in 1988, compared to $27.3 billion in 1980.²

At the same time, the transfer of resources by private sources (banks and transnational corporations) collapsed from U.S.$40.4 billion in 1980 to $18.8 billion in 1987. More astounding, the developing countries received a total of $458.1 billion in net development assistance between 1980 and 1988; during the same period these same countries paid out a total of $1.167 trillion to the industrial countries to cover amortization and services on debt owed to largely private sources.³

Between 1984 and 1988 the International Monetary Fund (IMF), one of the financial institutions to which Brandt issued the challenge of reform, became a net recipient (due to payments on current loans) of $4.2 billion from the developing countries, including the poorest countries of Sub-Saharan Africa. In 1987 these same African countries, the scene of ecological and human devastation shown on television screens throughout the North, were able to purchase 50 per cent less with their raw material exports to Europe and North America than in 1980, as a result of severely declining commodity prices. Per capita incomes in Africa declined by 20 per cent after 1981. Economic growth through exports to Northern markets, a practice long promoted by the IMF and the industrial countries, did not provide the foreign currency urgently needed to reduce mounting debts. Raw-material exports, upon which many highly indebted countries were still dependent, returned 30 per cent less to the developing countries in 1987 than in 1980.⁴

There is now widespread recognition that the poor in all but a few Asian countries have suffered dramatic declines in living standards. For the first time in the post-war period there has also been a marked decline in the living conditions of the shrinking urban middle classes in many developing countries. Throughout the Andean region of Latin America, health and nutrition expenditures were reduced by 61 per cent and education by 59 per cent in the 1980s. The International Labour Organization reported a 40 per cent increase in unemployment in Latin America between 1980 and 1984, with a 67 per cent growth in the number of unemployed. At the same time, as Susan George calculated, “In 1980, a Peruvian earning the minumum wage had to work seventeen minutes for a kilo of rice, in 1984 two hours and five minutes–over seven times as long.”⁵ Inflation and currency devaluations brought escalating food prices for those who could least afford to pay–as well as deteriorating housing, education, and health facilities.

There is no doubt that the decade's “development crisis” surpassed even the most dire predictions of the Brandt Commission in 1980. Global economic instability, resulting from the recession of 1982–83, and the failure of earlier development strategies in Africa and Latin America brought out a new and urgent interest in Canada and other Northern countries for a reassessment of development programs and economic policies with developing countries.⁶ The publication of Sharing Our Future in 1987 provided a summation of these deliberations by the Canadian International Development Agency (CIDA), Canada's official aid agency. As the first statement of a policy framework since 1975, Sharing Our Future set out a bold new strategy and action plan, which would define Canada's Official Development Assistance (ODA) policies for the next decade.⁷

CIDA's new strategy stressed the important development issues for the 1990s:

1. the alleviation of poverty through partnership programs with Third World peoples;

2. support for economic structural adjustment in the debt-ridden Third World nations;

3. increased involvement of women in development;

4. environmentally sustainable development; and

5. a concern for human rights abuses and their impact on the delivery of development programs.

The focus on these issues is indeed essential, but the key question is how CIDA's activities, based on these stated objectives and priorities, relate to the realities facing the poor Third World majorities in the 1990s. How effectively can this strategy promote ecologically sustainable development and poverty alleviation given the broader movements in the world economic order in the past decade and Canada's economic relations with the South? Fundamental to the aid strategy is the notion that “sound development is in Canada's own long-term economic interest”; Canada is seeking “complementarity between the objectives of the development cooperation program and other foreign policy objectives … within the development context.”⁸

While Canada's aid program is significant, it is not the only–or even the major–aspect of Canada's economic and political relationships with the Third World. Canadian trade and private investment with developing countries is relatively small when compared with that of Europe or the United States; nevertheless official aid is dwarfed by the flows of trade and capital investment. Therefore the potential impact of aid policies in realizing their primary purpose “to help the poorest countries and people” must be assessed from a wider perspective of economic and political relationships.

Some Statistics

Official Development Assistance (1989) $2.7 billion

Canadian exports to the Third World (1989) $11.5 billion

Canadian imports from the Third World (1989) $16.2 billion

Official exports credits for the Third World (1987) $0.9 billion

Outstanding loans owed to Canadian banks (1990) $16.0 billion

Reserves set aside by Canadian banks against Third World loan losses (1990) $9.8 billion

Value of Canadian private investment in the Third World (1985) $6.3 billion

Beginning with the Colombo Plan of 1950, the structure and impact of Canadian aid programs have been defined by economic and political relationships and their origins and motivations in Canadian business, trade, and foreign-policy interests.⁹ More profoundly, the promotion of Canadian private investment and trade with the Third World has been accompanied by a particular interpretation and definition of “development”–as rooted in “economic growth” and industrial “progress”–which is reflected in the strategy and practice of Canada's aid programs.

Canadian aid strategy, then, must be assessed from two inter-related perspectives. The first looks at the concept of “development” and North-South relations, with its deep historical patterns of dependency and social, economic, and political inequality. Rooted in a colonial past, the Third World has been integrated into a global economy now organized by and for transnational corporations (TNCs). An equitable and just development strategy should respond to this context and address the political and economic realities facing the vast majority Of the world's poor and their own struggles for survival and self-improvement. The second perspective analyses Canada's relation to these global socio-economic and political structures.

DEVELOPMENT FOR WHOM?

From the standpoint of the poor, the development strategies of the last three decades have failed dramatically. The Organization for Economic Cooperation and Development (OECD) estimates roughly that one billion people still live in poverty. With few exceptions Third World countries are economically and politically bankrupt and deeply dependent on shrinking commodity trade and economic assistance from the North. Yet growth and development are among the oldest and most powerful ideas in Western political and economic thought. Since the nineteenth century, the evolution of industrial capitalism out of agricultural societies has been seen to be an inevitable “natural development” supported by advances in science and technology and leading to improved standards of living. After the Second World War, theories of development and modernization for newly emerging Third World nations drew heavily on the experience of Europe and North America to predict a similar road.

The optimism of the early development theories was tempered by the persistence of poverty; nevertheless, more sophisticated approaches retained the underlying assumptions about “progress...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Acknowledgements
• A Note on Terminology
• Introduction
• One: Development in the 1990s: Critical Reflections on Canada's Economic Relations with the Third World
• Two: The Debt Crisis: A Case of Global Usury
• Three: Women and Development Revisited: The Case for a Gender and Development Approach
• Four: Wheat at What Cost? Cid a and the Tanzania-Canada Wheat Program
• Five: Canadian NGOs and the Politics of Participation
• Six: The Environmental Challenge: Towards a Survival Economy
• Seven: Missiles and Malnutrition: The Links Between Militarization and Underdevelopment
• Eight: A Native View of Development
• Nine: Mass Media Worldviews: Canadian Images of the Third World
• Ten: Manufacturing Legitimacy: Ideology, Politics, and Third World Foreign Policy
• Bibliography
• Contributors
• Index