The Multinational Monitor



Left Out

The Third World has been left out of the plans of the industrial world's managers. Now that the superpowers no longer view it as a battlefield on which they can make inroads against one another, interest in the Third World is passing. The opening of Eastern Europe is drawing much of the foreign aid and investment that might otherwise be directed south.

Moreover, Third World trading arrangements are in danger as the world enters the post-Cold War era of globalized trading. Ex-colonial powers in Europe are abandoning their traditional, relatively small trading commitments to their former colonies, especially Africa and the tiny islands of the Eastern Caribbean (the Windward Islands).

The termination of individual agreements between old colonizers and colonies which have provided Third World countries with concessionary terms is a significant threat to many African, Caribbean and Pacific (ACP) countries. For example, the special arrangement which allows the Windward Islands to export bananas to England at uncompetitive rates will be terminated with the unification of the European Community (EC). The EC-wide arrangement that will take its place is not yet finalized, but much is at stake for the Windward Islands, which garner as much as 60 percent of their export earnings from bananas. According to the London-based World Development Movement, "for the 50,000 Caribbean island workers depending on bananas for their livelihood, a free banana market in Europe would spell catastrophe, as without special mechanisms, their bananas-- between 30 and 50 percent more expensive than dollar bananas [produced on huge plantations in Panama, Honduras, Colombia and Costa Rica]--could not compete." Ironically, the Windwards' dependence on banana exports has been fostered by aid from Europe which helped build the infrastructure for the production of bananas.

A variety of EC initiatives also threaten to harm ACP economies. For example, the doubling of funds to programs designed to diversify southern Europe's production of goods imported by the EC "may reduce export opportunities of third country (such as sub-Saharan Africa) producers of tropical and semi-tropical fruits, flowers and spices," reports a World Bank study.

The impending disaster facing countries which will experience a sudden decrease in export revenue and sharp economic dislocations heightens the obligations of the old European colonial powers to provide aid to support the transition to sustainable development. Yet in 1989, the EC refused to double aid, as the ACP countries requested. Instead, the EC raised it only 40 percent, even though the ACP countries pointed out that 20 percent of the value of the previous aid packages had been whittled away by inflation.

Amidst the severe consequences threatened by a break with Europe, however, lie certain beneficial long-term possibilities. The ACP countries' economies have been structured around cash crop exports. This has brought in needed cash, but it does not provide the basis for sustainable development. The imminent cutoff from Europe offers the opportunity for Third World countries to reorient their economies.

First, developing countries must begin to produce food for domestic consumption. The production of cash crops to earn foreign exchange which is used to purchase food imports is a losing formula. It deprives countries of economic independence and promotes land concentration.

Second, the Third World must pursue regional economic integration. Regional integration will create a sufficient market for manufactured and remaining agricultural export goods. South-South linkages have long been a stated goal of the Third World, but, by and large, they have proven elusive. Differences must now be put aside and sustainable development sought under a regional umbrella. The Caribbean Community's attempt at integration, the South African Development Coordination Conference's effort to facilitate regional trade and similar plans for regional economic cooperation all deserve political and economic support.

Third, Third World countries, especially in Africa, must develop formal and substantive democratic institutions. Citizens must have the right to elect their leaders, and they also must be able to exercise control over their daily lives through democratic participation in institutions such as producer cooperatives and trade unions. Democratization is necessary to ensure that regional integration nurtures sustainable development and benefits the masses of people rather than creates low-wage, free trade zones which serve the interests of multinational corporations and domestic elites.

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