Introduction
It is believable that most of the trade and economic decisions are taken by a handful of nations and it can be prejudiced that they are the major stake holders in present unsustainable world economy.
There are multiple forces acting together, some from within the 3rd world nations and some from outside, pushed by developed nations. We can call these perspectives as internal causation as well as external causation perspectives respectively.
External causation is a wrong prejudice but since most of the 3rd world countries were exclusively economically dependent on their former colonizers, so there are direct evidences in support of this perspective. Similarly, there are multiple forces acting within the nations themselves which lead to certain kinds of policies and development patterns; so, they are also accountable.
Below is an attempt to track the patterns in many of the 3rd world economies.
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External Causation Perspective
Cycle of Exhaustion:
It is a cycle/catch in which most of the 3rd world countries are trapped, which has led to severe problems ranging from political instabilities in most of the African countries to poor HDI in south Asian countries. First I want to give a brief introduction of the whole idea and then will try to relate it with many of the existing global problems:
Stage 1:
Starting point: (a 3rd world economy, just after world war-2, if it is liberated)
- Independent and independent in policy formation and resource control
- Poor material strength, moderate trade and all the attributes of a nation after 2nd world war
Stage 2:
Now for most of the cases, imperialist powers who once have been colonizers, want to have resource control in the target 3rd world country. For this, they follow three paths:
• Direct/indirect invasion: Iraq, Afghanistan,
• Creation of dummy governments: Somalia, Arabian countries, Pakistan, many countries in Eastern Europe, most of the African countries and until very recent past most of the Latin American countries.
• Crippling down the economy to follow Bretton Woods system (World Bank, IMF: - representatives of modern capitalism which has given birth to unsustainable development (consumption-led development), terrorism, global warming, chronic Africa and a lot of seen and unseen global problems) like we had in India in 1991 economic reforms.
Here resource control doesn’t mean direct control but control in policy formation and decision-making. In 2nd stage the overall target is to achieve this control by any means.
Stage 3:
Exclusive investment patterns: By exclusive investment patterns we mean-
• Capital intensive investments which leads to more investment but less employment generation or wealth creation in actual terms. For example, in India, we have IT sector. It can absorb only computer literates and English speaking youths which comprise less than 10% of the youth population.
• Neglect of traditional or age-old industries like Kanpur had been a major industrial centre in north India but could not receive required investments so it is gradually dooming. Agriculture is the best example.
• Contracted growth circle: At this stage, growth is enjoyed by a very small section of the economy so that most of the people are non-participants in the process. Also, there are a very large number of people forming the periphery and a larger no. of people is outside the periphery of the growth circle. All 3rd world countries are victim of this phenomenon that income gap between different sections of society is increasing at an uncontrollable rate.
• Neglect of pro-people policies which lead to deprivation of masses from basic necessities of survival. Neglect of health care facilities, abolition of different subsidies, absence of check in spread of genetically modified seeds, promotion of cash-crops at the cost of cereal crops (one cash-crop economies of Africa are the best examples). Overexploitation of natural resources being the most important as most of the people are directly or indirectly dependent on them for their survival.
• There are a lot many dimensions in which it can be traced.
Stage 4:
Bust
4th stage can be said as bust as in this stage:
• Social, health and economic indicators go down leading to increase in poverty, unemployment, decrease in purchasing power, worsening health conditions, social instability and a lot more. Global warming (which is an eventual outcome of this tendency to exploit world at cost of everything) is a good way to hide the cunning policies!
An example of Mongolia (after policy changes in 1989):
Statistics for Mongolia 1989-1998.
Source: Mongolian Statistical Yearbook, 1998. Referred from a paper by Erik S. Reinert (editor), Globalization, Economic Development and Inequality: An Alternative Perspective (editor), Cheltenham, Edward Elgar, series ’New Horizons in Institutional and Evolutionary Economics’, 2004.
It shows how different economic indicators have worsened due to certain policy changes and exclusive investments. Similar data for many sectors can be generated for most of the 3rd world countries.
• Returning back of investments: Being dependent economies, returning back of investments is obvious. Though not exact but, recent returning of FIIs from Indian market after recession fears in west shows how fast the investments will return (Sensex in India came down from 20000 to 13000). However, there is no sound proof to it and needs to be studied more.
• Political instability, rise in extremism like insurgency, terrorism etc. Most of south Asia and Africa is facing it. Latin America has overcome it.
Some examples (protests by people against government or any kind of policy or angst against any immediate event). One can find that year 1989 saw policy changes in Mongolia and same year witnessed public protest for the first time in its history. Even Seoul is witnessing increased public protests after it adopted new policies in late 70s and early 80s. Same is true for other places in the representative data below. (info is related to city and number of public protests/unrests in a given year)
Source: Polyarchy Study, International Peace Research Institute, Oslo (PRIO), I am forgetting the source of data; however I am having data of social disturbances in many urban cities across the world covering more than 40 countries.
Annual Social Disturbance Events 1960-2006
We can see increase in number of urban disturbances increasing day by day and these continents are inclining more towards Bretton Woods system progressively in these years.
Source: Urban Social Disturbances in Asia and Africa, Henrik Urdal, Senior Researcher, International Peace Research Institute, Oslo (PRIO)
Some countries are recovering from this state but most of the African nations have failed to do it. So these nations are back to stage 1.
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Citations:
• Latin America has started its 1st cycle in 1920s and ended in 1980s and some parts of 1990s. After 1990s, we saw rise of socialist forces because people rejected Bretton Woods. They have restarted with 2nd cycle and are now at 3rd stage. This time they are more conscious to prevent duplication.
• China, India and many of the similar countries are at 3rd stage and are facing huge problems in getting out of it. With the help of extensive knowledge substitution, creation and dissemination systems, China, some SE Asian countries, some countries of Eastern Europe have greatly managed to come out of the cycle. India needs long way to go!!
• African countries are in permanent exhaustion. Many of them are at 2nd stage and some like South Africa has come to 3rd stage. Recent denial of cheap AIDS medicine to its people shows the condition. Milk-trap of Philippines is also another example. Similarly there are many-many examples to support this pattern.
There are more citations but they need sound theoretical support and mathematical proof. That will require some more analysis.
The external causation is not all about Bretton Woods, it only represents a set of policies which have been existing since times of David Ricardio.
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In this analysis, we have neglected the role played by internal forces within a 3rd world country and said that imperialists/neoliberals are fully responsible for it. But it is not the case. There are many internal forces acting from within. I have not analyzed internal causation in greater details because it is too complex in case of India but I am doing it. Some of my observations are (internal causation):
• In most of the 3rd world countries, there is a big and influential section which is born in a 3rd world country but follow the legacy of colonizers. They restrict many processes of knowledge substitution, creation and dissemination which makes majority of the population helpless in this knowledge driven modern world. It can be said that poor African countries can’t support knowledge substitution, creation and dissemination, but big nation like India is also victim of these neo-feudalism. Here also, majority of the population is having non-English background so they can’t access most of knowledge and information. Also linguistic discrimination has a profound effect on Indians that we always regard ourselves inferior and the same happens with all 3rd world countries. However China, Korea, even Russia realized this problem and build their own knowledge substitution, creation and dissemination systems which empowered their common man and helped them a lot to keep away from this cycle.
Most of these neo-feudal have their aspirations in west or west denominated consumerism, so it is a general mentality “raam naam ki loot hai loot sako to loot” which has created discrimination, corruption, wrong-policy making….. and a lot of other problems.
• The problem of global warming can’t be completely related to it but it has its base in exploitative consumerism pillared by people in Bretton Woods. And the same people are here also, so this is the connection.
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Now after viewing the problem in an integrated pattern gives us some clues to solve the problem. Since, ours is a knowledge driven economy, so most of the solutions will revolve around empowering people with knowledge and information as well as localization of economic process so that each member can participate in knowledge creation and dissemination. Some of them are:
1. Promoting participative dynamism in industries, centers of excellence and people so that a 3rd world country can have a strong knowledge substitution, creation and dissemination system. It will empower anyone to fight from corruption, discrimination, enable her/him to understand many problems and find solutions for insurgency, terrorism, political instabilities, global warming, health care, education, employment, agriculture etc.
2. Creation of intermediate/appropriate technologies so that majority of the people can be brought in development circle and then a person will not be a consumer only he will be a producer also. It will also help in empowerment.
Along with this, we will have to design certain vocational courses at very low or subsidized teaching costs so that even less skilled or less educated people can learn them and use them. Development of intermediate technologies will spur new horizons of economic engagements. Strict environmental rules will be of great support for them and also we have to avoid any unsustainable development pattern.
3. Redefining the so-called “rational behavior” so that economy could be understood in an inclusive way. We will have to create multiple new identities of human away from being a consumer only. Story of stuff http://www.storyofstuff.com/ has made an excellent attempt to represent the idea in an understandable way.
Realism has been a strong instrument to design policies by the designers of Bretton Woods, so we need to design certain new political instruments which thoretize different perspectives. Other Canon, a school of thought currently developing to explain economy in a different perspective is a strong step in this regard. Post Autistic Economics is also a strong attempt.
Shock Doctrine (by Naomi Klein) was also a good attempt to explain workings of Bretton Woods. Similarly we have to evolve different ideas from different perspectives and let all be experimented; we will eventually get the best in coming decades.
4. Creation of new identities other than religion, nation, gender etc so that human engagements could be diversified and many problems of insurgency, terrorism, violence, ethnic clashes etc can be solved. For this we will have to separate religion from polity and science. It is very much needed in countries of South Asia, Middle East, and Africa.
Regarding women empowerment, there is an idea “Leelavati”. It is an extension of adult literacy program .It can be extended with the help of NGOs, Govt. and independent activists across the globe starting with India. The idea is to compile some volumes of books like literacy program books with increasing complexities, dealing with the issues of rights, duties, healthcare, mathematics, business, politics, law, geography, sciences and other things in form of short stories, events and citations modeled to local language (written and/or spoken). It will greatly help women in attaining money muscles and machine with which they have been kept away for millennia.
5. In 15th, 16th, and 17th centuries when modern world was taking theoretical foundation, things like democracy, market, state-non-state actors, humanism etc originated. We will have to redefine some of these ideas and give new flavor to feminism (political feminism).
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Plan of action: (what we can do)
# Create a platform for convergence of industries, centers of excellence, and people and promote innovation and application developments to achieve the targets of knowledge substitution, creation and dissemination.
IIT Kanpur is aggressively working on a platform named PoWER. Many interest/project based groups have been formed and many steps for long-term skill-building and application developments have been taken. A sum of Rs 2 crore has been allocated by the institute to support these activities of student endeavor. Similar initiatives are being propagated at IITD with a name Technocracy and other IITs also.
# Create intermediate/appropriate technologies (http://en.wikipedia.org/wiki/Appropriate_technology ) that are eco-friendly, cheap, simple and can be used by masses to increase their productivity without much changing their life-style.
We can work with many NGOs like National Innovatin Foundation, Delhi Science Forum to efficiently channelize problems and their solutions. We can also create some enterprises like SammaN Foundation which is integrating the local manual-rickshaw transport by improving quality of seats, facilities given to passengers, taking care of rickshaw-pullers and their families.
# We, a group of students have attempted to create an alternative to IUPAC nomenclature (predominant chemical nomenclature system) as our attempt towards experimentation with knowledge creation. In this regard, we have done some logical nomenclature of elements and compounds.
Viz: Aluminum: Suhaxapara सुहक्षपरा सु comes from सुचालक meaning conductor: the objective behind emphasizing this property is its being substitute of copper in electrical industry; also copper is limited. ह comes from हलका meaning light; point to be noted is Aluminum is light and hence used in aviation industry. क्ष comes from क्षयरोधी as Aluminum is resistant to corrosion and hence a better substitute to Iron in many industries; also emphasizing corrosion means we are taking it as a grand challenge. परा comes from परावर्ती meaning reflective. Pure Aluminum is extremely reflective and here परा also refers to group identity of Aluminum as every group has its identity in this system.
Similarly knowledge can be created in all sectors engaging everybody. Issues like its lack of internationalization is baseless as no German or American ever thinks about their counterparts in other parts of the world. Focus should be micro-level engagement of people and such processes will definitely do that. Then only we can have local economy and participative democracy.
# Define rational behavior and human identity in feminist way. Heterodox economics need to be institutionalized as a starting point.
A group is needed to study male and female characters, their behavior and then propose a new identity of humans as we have been identified so far as consumers but in fact it is a conspiracy. Inculcate this new identity in education from basic childhood. Promote freedom and love (family values and community living).
# Do a complete analysis of the problem with different perspectives and redefine economics with sustainable development at its core rather than consumerism or dependence on foreign economies. So it means that we will have to adapt some of the Gandhian philosophy and make its hybrid with latest developments in technology, connectivity and participation. Post Autistic Economics is a major step in this regard.
# Institutes of International Studies: Another idea upon which we are building is creating ‘’Institutes of International Studies” evenly distributed in all parts of India. Think for a center named Indo-German Institute of International Studies. It targets cultural exchange, scientific exchange, academic exchange and business & economic exchange. For this, it has a world class university township also including a trade center and a political high commission. The business center will foster businesses in both countries as well as channelize them. Political high commission will help in forging healthy relationships between the two countries. The university will be meant for cultural exchange, joint researches, joint labs, ventures and joint industrial projects. Regions around this township will teach German as a third language and there will be a bilingual (Hindi, German)/trilingual (Hindi, German, vernacular) newspaper focusing on India, Germany and their mutual interests. Similarly if similar centers emerge across the country then we will be able to make India a “Grand Cosmopolitan” which will have long-term implications for India and the world.
The need for such an institutes is also immense as existing centers for different types of exchanges are not well planned and their functioning is not proactive and supportive as we have observed 2 important BRICS nations: Russia and Brazil and the quality and efficiency of services and help they provide needs great improvements.
# Green Economy:
The major issues under green economy are:
1. Localization of economy: Through local currency, local finances and decentralization of economic production, planning, decision making and knowledge systems.
2. Green Jobs: Currently, energy or waste or water audit is not mandatory in any of the countries. If through legislations, these audits are made mandatory like account audits and we have statuary bodies like Institute of Energy Auditors of India or Institute of Water Auditors of India like Institute of Chartered Accountants of India then it will definitely be a big source of green jobs. Also it will make us accountable of our consumption of environmental resources.
3. Organic Lifestyle: Currently, we are living a highly energy and chemical intensive lifestyle which is a root cause of overexploitation of environmental resources. If we change our consumption patterns and consume only organic and sustainable products then definitely, we will reduce great burdens on this nature. Asal, an enterprise selling only organic and sustainable products is a good example in this regard.
4. Green Community: One of the interesting experiments at IITK is going towards green community. The whole idea is to make it zero water, zero waste, clean air, clean traffic and green energy consuming community. Currently, baseline survey of water (including rainwater, sever water and potable water), solid waste and energy audit of the campus are going on. A team is working on installation of air-quality monitoring stations in the campus and another team will soon start baseline survey of GT Road from IIT gate to Rawatpur for primary understanding of the problem.
# Educational Reforms: Currently we are not working much on educational reforms but some of our tea-members are focusing on creating new paradigms for inclusive and participative education. We are promoting a group of students to design a new logo: the graphical language taught to children. The logo we are designing can have commands in any language and any script even customized by the child who is programming. This type of freedom has multiple real and psychological effects in long run.
# Many more ideas and actions can be evolved and can be worked upon.
We are currently trying to develop our understanding towards all contemporary issues and evolve a cross-country network of developmentalists.
