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June 16, 2008


An excellent research paper by Colin De Laval - Spring 2008.

The International Monetary Fund (IMF), World Trade Organization (WTO), Group of Eight (G8), and other economic institutions of predatory capitalism are intrinsic to the continuation of exploitation of third-world countries, without them, neo-colonialism could not exist. When we study countries who have been afflicted by colonialism, we see an immense pattern of underdevelopment created by resource and industry hungry capitalists, and this economic underdevelopment trend carries over into the neo-colonialist tradition. Economic dominance, an inherent trait within neo-colonialism, follows the fundamental economic imperialism within capitalism at the expense of underdeveloped nations. Forced dependency on US and first-world goods is the only logical way to continue the first-world status, by destroying the infrastructure of these countries. MNC's (Multi-National Corporations) play an enormously important role in neo-colonialism, by being the major financier and profiteer.

What is colonialism? The dictionary defines colonialism as, "The control or governing influence of a nation over a dependent country, territory, or people." This definition of colonialism is much undefined and ignores many forces within colonialism. If one was to define colonialism in any meaningful way, one would have to explain the role of venture capitalists, apartheid and the restructuring of race politics, forced dependency and many other facts. However this definition explains more than it means to, and that would be a justification of the takeover of 'southern' nations by saying they are dependent. When colonizers would come to a prospective country, they would destroy any localized means of production that had been localized, and set up production in a way foreign to the colonized, creating dependency within oppressed communities. This dependency was pivotal to the 'logic' of colonialism, without this dependency the ushering of neo-colonialism could not have happened. Within the framework of capitalism, which was the model for the colonizers, having local competition with Multi-nationals is the most undesirable outcome. When the colonizers moved in a complete restructuring of the economic and social life of the chosen country occurred with the intent to knock out the competition and have full control over market forces. This necessity to control the economic and social life of a given colonized country led to the underdevelopment we see today within these countries. All facets of life within colonial nations was controlled or regulated by the colonizers through governing bodies set up by the imperialistic state, and this also is true within neocolonial states.
Resource rich countries in Africa are more dependent on first-world nations than on their own industrial and productionary capabilities, thus leading to economic dominance of the first world. Countries attempting to force their way out of the destitution of colonialism are economically forced to use SAP's (Structural Adjustment Policies) given out by the World Bank and IMF, but these lead to further economic dominance by first world countries. "Structural Adjustment Policies are economic policies which countries must follow in order to qualify for new World Bank and International Monetary Fund (IMF) loans and help them make debt repayments on the older debts owed to commercial banks, governments and the World Bank" These SAP's lead to forced privatization of national industries (which we saw in South Africa once independence was gained ), the wholesale cutting of social programs, shifting the economy to an export-based economy, the devaluation of currency, removing subsidies and price controlling, and a whole host of other programs . These programs lead to many problems, such as the loss of national sovereignty. This loss of national sovereignty is because of the de-localization of resource acquisition and the economic market, instead leaving market forces up to outside investors and leaving economic policy to outside bodies. The explosion of public debt within once colonized nations leads most to believe that these SAP's are meant to be used as a framework for the governance of most of humanity, due to the fact that almost all once colonized nations are in a huge amount of debt, and this also leads to a loss of national sovereignty. Privatization in neo-colonized nations follows a long lineage, dating back to the original processes of colonization, and has the same devastating effects. In South Africa, for instance, water, one of the most important resources in the world, has become privatized, following IMF regulations. During South African colonization, the Afrikaners cared little if people had water, or if the people they were oppressing would die without it it was less of a priority than raping the land for its precious resources, and the whites used most of the water and so they paid little mind to the water infrastructure within the Black Community. "When Nelson Mandela and the African National Congress (ANC) came to power, former political prisoners and guerrilla fighters took over cabinet posts and top bureaucratic offices. They wrote a new constitution, one that's unique in recognizing access to drinking water as a right of citizenship." Many folks expected amazing changes to happen, but this right to water has been the source of protests, riots, and deaths. The shift in politics of the ANC from Socialist to Capitalist led them to take on loans from the IMF and World Bank, with which they have gone down the road of privatization. The economic imperialism inherent within capitalist nations has led, in part, to this destitution of local markets. First-world economic imperialism has, through the IMF and World Bank, made its presence known in all facets of life under neo-colonialism. This economic dominance over decolonized nations is pivotal to the survival of neo-colonialism and first-world capitalist nations.
Where does logic follow when a resource rich nation has to depend on a first-world nation to survive? This roadmap follows directly to neo-colonialism. The dependency theory says, "Predicated on the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system." This is based on the Marxist analysis of inequalities within the world system, but contrasts with the view of free market economists who argue that free trade advances poor states along an enriching path to full economic integration. As such, dependency theory figures prominently in the debate over how poor countries can best be enriched or developed." This speaks volumes to anyone who has consistently followed the tide of economic coercion within decolonized states. Forced dependency brought on by colonialism has affected neocolonial states in a way that is impossible to redeem, unless measures are taken to undermine global economic organizations. Production in pre-colonial times was regulated through local markets, and production was done in a way that wasn't foreign to the populace of a given country, but once colonial powers got involved, they destroyed production capabilities in favor of setting up their own industrial capabilities, with which the local populace had less knowledge of its operation. Leon Trotsky had this to say on production within colonial states, "In the industrially backward countries foreign capital plays a decisive role. Hence the relative weakness of the national bourgeoisie in relation to the national proletariat. This creates special conditions of state power." Within this framework of colonialism, the groundwork was laid to create forced dependency (not inter-dependency) within neo-colonized states.
Multinational Corporations (MNC's) play an enormous role in propagating neocolonialism. MNC's put major pressure upon the IMF and the World Bank to force countries to agree to privatization, lesser trade barriers and 'free-trade zones' so the agenda of global capitalism can be attained. Corporate dump-offs, the process of giving developing countries outdated or broken items for PR campaigns, is a side-effect of economic dependency brought on by neocolonialism. With these corporate dump-offs, countries receive outdated machinery which no one knows how to use, so they just sit there to rot, or they are in such a state of disrepair that they cannot be used. This process of neo-colonialism is a concerted effort by MNC's to keep local agriculture and production underdeveloped, leading to forced dependency, which was talked about earlier. MNC's hold sway with international market organizations and many first-world nations, and have the power to shift SAP's in their favor. Free-trade zones (FTZ's) are, "one or more special areas of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. Free trade zones can be defined as labor intensive manufacturing centers that involve the import of raw materials or components and the export of factory products. " and, "In 1999, there were 43 million people working in about 3000 FTZs spanning 116 countries producing clothes, shoes, sneakers, electronics, and toys. The basic objectives of EPZs are to enhance foreign exchange earnings, develop export-oriented industries and to generate employment opportunities " The reality of these unassuming FTZ's is sweatshop labor and working conditions to rival Chicago in the 1800's. The reason for these FTZ's is to produce at as low of a cost as possible, with the least environmental standards, and the smallest amount of taxes, to reduce overheads and gain more profit, and more often than not, these FTZ's are placed in neocolonial states, thus perpetuating delocalization and destitution.
Culture homogenization plays into neo-colonialism, and a striking example of this would be the people of Ladakh. There are many pressures that a small society faces in the way of modernizing. Some of these pressures are tourism, the globalizing of world economy, and the Americanizing of the world. How does tourism play a role in the pressures facing a society with traditional values? Well, when tourists come through lesser advanced cultures, western cultures come with them. Imagine this: you are living in a society that has never had any contact with outside forces, and your society wears handmade clothes, has no toys (or no mass produced toys) and you have to work all day to produce for the community. Then imagine that you are this person seeing tourists trickle in with their blue jeans, nice shirts, toys, backpacks, etc. and they stare at you as if there is something wrong with you. They want to consume what you have made (clothing etc.) but you have no system in place to put monetary value on what you produce (never having seen money before) and engineers are building roads through your village, and cars are rolling through. You see how simplistic it is to get from point a to point b using modern technology, and that these people don't have to do work to produce what they wear and use. This puts pressure on the community to try and create an infrastructure to cater to these tourists, therefore adopting money, and western ways of doing things to appease the tourists. The pressures put on the culture to modernize are set in motion because the people see that outside of the community there is more to be had, more opportunity and greater objects to be had. How does the globalizing of a world economy affect small cultures and put pressure on them to modernize? As we saw in the Ladakh essay characterized by this quoted, "Until 1962, Ladakh remained almost totally isolated from the forces of modernization. In that year, however, in response to the conflict in Tibet, a road was built by the Indian Army to link the region with the rest of the country. With it came not only new consumer items and a government bureaucracy, but a first misleading impression of the world outside. Then, in 1975, the region was opened up to foreign tourists, and the process of 'development' began in earnest." A society that had been self sufficient and isolated for years had been affected rather quickly when the military built a road, and with that road came consumer items from other cultures, and that road brought tourism, and that road brought neo-colonial oppression. Neo-colonialism relies on homogeny to continue its economic and social hierarchy.
Neo-colonialism has become a facet of existence within many once colonized states, and it continues to be an issue that is pressing on the international level. Colonial history follows a dialectical materialist line, and history always repeats itself, and colonialism has followed into neo-colonialism. Economic dominance is a reality for resource rich countries afflicted by neo-colonialism, leading to many problems. One of these problems is resource reliance, because of a lack of localized sustainability, brought on by the history of colonialism. Many of these problems could be solved with an out and out revolution, or insurrection against the legacy of colonialism and neocolonialism.


June 13, 2008

World rice shortage

An excellent research paper by Marina Johnson - Spring 2008

"They're taking no chances with this year's harvest on the farms in Supamburri. Alongside the heavy machinery, there's a new feature: shotguns. The message is clear: Hand off my rice." ITV News Correspondent, Inigo Gilmore ("Rising Food Prices"). This is the heart of Thailand's rice-growing region, and there's great anticipation around this season's harvest. With many countries facing shortages, rice has never been more prized, so prized, in fact, that for the first time this area has seen significant and organized thefts of the crop. For this reason local farmers are keeping a close watch on this harvest.

Food supplies have dropped so low, enough to incite riots and protests in several developing countries. Unrest tied to food prices has been reported in Cameroon, Afghanistan, Bangladesh, Indonesia and Egypt. Widespread riots in Haiti have resulted in several deaths. Those most affected in these countries are landless laborers and urban slum-dwellers who are now spending 70 percent to 80 percent of their income for food. They can't afford the increased prices ("As Food Prices").

Haiti imports 90 percent of its food. So you can imagine, if the food prices have gone up three times over the last three years, that's going to be a country that will be very affected, "Anybody who's a wage-earner and basically has the money to buy food is suddenly finding that they can no longer put two meals on the table for their family and they have to claw it back to one." Komi Kharas, Brooking Institution ("As Food Prices").

World rice consumption has increased 40 percent in the past 30 years. Annual world production had reached a record 420 million metric tons. But global supplies have fallen to their lowest level since 1983-84 (Brinkerman). Around the world, the cost of food is going up, 83 percent in the last three years, and the rise in prices is threatening to plunge more than 100 million people deeper into poverty and hunger. This food shortage is affecting the entire world but is felt the strongest in the poorest of nations even reaching into the middle class. Reasons for this epidemic are vast; some even out of human control, but there are steps we can take to once again feed the hungry.

"What started with a shortage in Thailand and a typhoon in Bangladesh is now putting tremendous pressure on domestically produced rice," Rich Lenardson, manager of Sun Food Service Brokerage in Portland, OR. "I've sold rice since 1978 and I've never seen the kind of price increases we've seen in the past month or so here" (Brinkerman).

The high cost of fuel for transporting food, bad weather in key agricultural areas of the world, the increased food demand from developed nations and market speculations are also contributing to the high prices. "It's a complex converging of events. It's a mixture of issues ranging from bad weather -- climate change plays a role. In Australia, for instance, there's a multi-year drought that has really eaten into the global food supply," Anthony Faiola, The Washington Post ("Supply").

Several reasons are cited for the problem, high energy prices, which boost cost of food transport, climate change, which causes bad harvests in areas from Africa to Australia, and increased consumption by newly prosperous China and India, which are producing less food as farmers move to the cities. Among the numerous factors contributing to the problem are record oil prices that have driven up the cost of transporting food and increased demand.

Another factor, particularly in the U.S. and the European Union, is the diversion of crops such as corn to produce ethanol and other biofuels. In the meantime, the high prices also make it harder on aid agencies to help out; all being tied to the controversy over ethanol, the diversion of corn into a biofuel, rather than for food is an ongoing debate in this country. America produces approximately 40 percent of the world's corn and we're diverting 30 percent of our production into corn-based ethanol currently. "We've got our foot on the accelerator to produce more corn-based ethanol and to accelerate this sort of connection between food and fuel." Raymond Offenheiser, Oxfam America ("As Food Prices"). These new demands from the biofuel industry are taking up more and more of the U.S. corn production, affecting wheat prices, because farmers are inclined to plant less wheat and more corn.

A statement released by, British Prime Minister, Gordon Brown's office said that delegates planned to work with the G8 and European Union to form a global strategy that would increase support to the world's poorest countries and attempt to tackle the price problem. It was also agreed that governmental approaches to biofuels should be assessed. "Prices have surged alongside rising energy and production costs, the effects of climate change, and a squeeze on land for production. Prices have spiked as African and Asian countries rushed to secure rice stocks amid fears of social unrest." Gilmore.

In India, a country where millions live a hand-to-mouth existence, concerns about securing those domestic stocks prompted the government to ban rice exports. India is traditionally one of the largest exporters of rice in the world, and this new ban is causing alarm. The Indian government hopes it will stabilize the price of rice there, but the fear is it may push up prices elsewhere. Signs show that is already happening, India's ban follows an export ban by another major exporter, Vietnam, and all this is putting pressure on Thailand, the world's only remaining major exporter.

China has almost doubled its consumption of meat, fish and dairy products since 1990. This takes a lot of grain off global markets since, for example, it takes seven pounds of grain to produce one pound of meat. This increased demand in China reached a tipping point over the past few years, with China disappearing as one of the largest grain exporters in the world into an importer of grain virtually overnight. Demand in China and India has been increasing now for a decade or more. And globally, the system was able to cope with that demand, up until just a few years ago.

An additional 100 million people, previously not requiring food assistance, are now not able to buy food, said World Food Program, WFP, executive director Josette Sheeran. "This is the new face of hunger -- the millions of people who were not in the urgent hunger category six months ago but now are" ("Global Food"). The U.N.'s World Food Program says the problem is getting worse. Food prices are going through the roof right now, which means that every day that passes we can buy less food than the day before. The U.N.'s World Food Programme was forced to tack an additional $755 million to this year's budget of $2.9 billion to account for rising prices. Oxfam America reprehensive, Raymond Offenheiser, "I think the entire humanitarian community is very concerned about the amount of money that's going to be available for food assistance over the coming year" ("As Food Prices").

The prices of rice, maize and wheat have hit record highs and have doubled in the past year. "Foods price escalation has been especially evident in recent weeks. In Asia, the price of rice has more than doubled in less than two months, from $460 a ton at the beginning of March to more than $1,000 currently," Sheeran told the BBC ("Global Food").

The cost of staples last year rose significantly. Rice was up 16 percent; wheat rose by 77 percent. This year, the spike is even more dramatic. Since January, rice prices have soared 141 percent; one variety of wheat went up 25 percent in a single day ("As Food Prices").

Due to desert conditions and dry hot weather, Mauritania, a small country in northwest Africa, is forced to import approximately 70 percent of its food supply. This is a country that's clearly dependent on the global marketplace for its food. But in a situation like they have now, where food prices have surged to, in some cases record levels, in a very short period of time, you see a situation growing where these people are simply unable to pay for their food. The food is in the markets; they just can't afford it. People who live on less than a dollar a day have to pay 70 to 80% of their income just for food. "There was a family at a marketplace in the capital of Mauritania where they were selling their last goat. They had five goats last year, but because prices have soared as they have, these people have been forced to either sell their goats or to eat them. So what they're doing at the moment is trying to hang on to what little they have. They're skipping meals. They're eating less food. They're eating poor quality food. They used to have rice puddings, for instance, that had rich milk, as well as cooking oil and sugar, and they've dwindled that down to recipes including only rice and water," Faiola ("Supply"). Presently, situation like this are quickly becoming the norm in many countries.

And as prices started to go up, many consumers decided they would be better off to buy now because prices might keep going up in the future, creating a lot of panic buying. The countries that were previously willing to sell stopped selling, reinforcing the bubble in markets. Human resources director for Sysco Food Services of Portland, Oregon, Don Haverkamp, feels, "Consumers in some instances appear to be reacting to fear of shortages by binge buying and hoarding," A sign informs customers of a purchase limit on bags of rice at a Costco:

~Due to increased demand, we are limiting rice purchases based on your prior purchasing history. Please see a supervisor to find your limit~

Analysts trace the trouble back to India, which slapped impositions on exports last year to protect domestic supplies. The ripple effect of that decision finally started to be felt in U.S. stores. "A 50-pound bag of jasmine rice that sold retail for $22 or $23 jumped to $39, $50," says Celia Chan, president of United Pacific Co. Inc., a Beaverton, Oregon wholesaler. "Some U.S. farmers, seeing the chance to increase their own profits, are now trying to capitalize by raising the prices," she said, adding, "It's really hard on the restaurant business now" (Brinkerman).

Even though the evidence is undeniable, some experts feel that the situation is causing undue panic. "I don't know why people keep asking the same question. There is plenty of rice for consumers," David Cola, USA Rice Federation, Washington D.C. "The U.S. produces 1.5 percent to 2 percent of the world's supply, and U.S. farmers grow nearly 90 percent of the rice Americans consume each year." However, Mr. Cola is failing to acknowledge the impact outside of the United States. Regardless of one's view of the situation, at the end of the day, this is not a problem of a global food shortage. This is really a problem of distribution. This is a problem of people who don't have enough money to buy food

One might ask how this could have happened. If you can draw a line from a wheat, corn or soybean farm in the American Midwest all the way to Mauritania in West Africa, one might ask: wasn't globalization supposed to make food cheaper for poor people? For the last 15 years or so, there has been this assumption that countries like Mauritania could effectively abandon their government-fixed price systems that they had and give up this idea of having to stockpile food for a rainy day, the idea being that the global marketplace would, of course, provide. As a result, when a market increases in demand, for instance, when we see rising demand from China or India, the prices are not adjusting the way they should be, because there's an inhibitor in the market. With the situation where the United State, Europe, and Japan are protecting their famers by offering government subsidies, these subsidies allow these farmers to sell their crops for less. Smaller countries that do not offer subsidies are unable to compete in the market and soon abandon their food farms to grow cash crops. As a result, less food is grown and sold while demand is getting larger every decade.

World Bank President, Robert Zoellick: "It's getting more and more difficult every day. In many developing countries, the poor spend up to 75 percent of their income on food. When prices of basic foods rise, it hits hard. Food riots have already occurred in several nations this month. At least seven people have died in violence in Haiti, where more than half the population lives on a dollar a day or less. The price of rice there has doubled since December." ("As Food Prices"). This situation is very serious, in Egypt; rioters burned a market and neighboring school. In Thailand, a country that exports 90 percent of the world's rice, farmers now carry guns to protect their crop.

World Food Program managers call this crisis a silent tsunami that threatens to plunge more than 100 million people world wide into hunger. "It's probably the toughest challenge that we are facing as and aid organization in our history," said Bettina Luescher, a New York spokeswoman for the 45-year-old agency. The WFP bought rice in Bangkok for $460 per metric ton on March 3. Five weeks later the price hit $780 (Brinkerman).

But one of the things that has happened here is that the market for food has become connected with the market for energy, because you need fertilizer to grow your crops -- most of the fertilizer is produced from natural gas. Energy is needed to transport and distribute food, the shocks that we are now seeing and the pressures in the energy market are inevitably spilling over into pressures in the food markets. As some governments are limiting their exports to protect their own populations, we have got to reinvigorate investment in agriculture and the agricultural sector in many of these countries in order to get a sustainable, a long-term solution. One of the things we may need to rethink is, how do we want to structure food? Do we want to link this market so closely to another very vulnerable market, which is energy? Or do we want to develop different forms of agriculture, which are less energy intensive?

This is not Greek tragedy where fate is decided by the gods and humans can do nothing about it. No, we have the ability to influence our futures; we can fix this problem and need to act quickly.

Works Cited

"As Food Prices Soar, U.N. Calls for International Help." The NewsHour with Jim Lehrer. PBS. WOPB, Portland. 23 April. 2008.

Brinkerman, Jonathan. "A World of Factors Boosts Rice Prices." The Oregonian 4 (2008): A1and A4.

"Global Food Prices Dubbed a 'Silent Tsunami'." The NewsHour with Jim Lehrer. PBS. WOPB, Portland. 23 April. 2008.

"Rising Food Prices Felt Around the World." The NewsHour with Jim Lehrer. PBS. WOPB, Portland. 11 April. 2008.

"Supply, Price of Food Increases Hardship for World's Poor." The NewsHour with Jim Lehrer. PBS. WOPB, Portland. 29 April. 2008.

June 3, 2008

Group Project Questions

Soc 205 Solutions - Group exercise

1. Approaches to address issues you identified.

2. Problems those solutions might cause.

3. What are you building towards? What barriers stand in the way? How do you address them?

4. Who is left out? How do you address the situations of vulnerable and marginalized populations?

5. What about those in rural areas? In other parts of the world?