Book Review

Debt and Development

The Development Dictionary:
A Guide to Knowledge as Power

Edited by Wolfgang Sachs
London: Zed Books, 1992
306 pp.

Reviewed by Holley Knaus

IN A JANUARY 20, 1949 SPEECH, President Harry Truman stated, "We must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas." As Truman and countless other leaders and experts saw it, achieving U.S.- and European- style industrial societies was the goal of the "development" path, meaning that Third World, rural, indigenous and subsistence cultures had a long way to go.

 The contributors to The Development Dictionary trace the beginning of the "Age of Development" to this speech of Truman's. Development theorists believed their prescription would lift the world's population out of perceived poverty and misery by turning peasants and subsistence farmers into wage-earners and consumers. Thirty years later, industrialization's toll on society and the environment becomes more and more clear, and the gap in wealth between North and South has greatly widened.

Development has failed and is dying as a project, The Development Dictionary contributors write, but the development mindset has been absorbed by government and U.N. officials, by grassroots activists in the North and the South, by citizens of industrialized countries and by the millions of people who in 1949 suddenly became "underdeveloped." The Development Dictionary is a collection of critical essays which explore several concepts associated with development, such as needs, environment, poverty and progress. The essays trace the historical and anthropological evolution of these terms, exposing their loaded meanings and the biases on which they are constructed. The critics argue that development is more than a socio-economic program, but is indeed a particular "cast of mind" that is based on dangerously flawed premises and has the power to "mold reality."

Current use of "development" simplifies the term to the point where the end purpose of the process becomes nothing more than the achievement of the U.S. model of an industrial cash economy. The traditional meaning of the word, evolved from biology and philosophy, from Darwin, Hegel and Marx, was all but wiped out when the term was co-opted by Truman.

Gustavo Esteva writes, "Two hundred years of social construction of the historical-political meaning of the term, development, were successfully usurped and transmogrified. A political and philosophical proposition of Marx, packaged American- style as a struggle against communism and at the service of the hegemonic design of the United States, succeeded in permeating both the popular and intellectual mind for the rest of the century."

 Contributors blast the idea that the U.S. (and European) model represents the ideal end goal of the historical process. The environmental crisis reveals too clearly the failure of this model, and will only be compounded if the South continues to develop along Northern lines. Wolfgang Sachs writes, "If all countries ĉsucessfully' followed the industrial example, five or six planets would be needed to serve as mines and waste dumps. It is thus obvious that the ĉadvanced' societies are no model; rather they are most likely to be seen in the end as an aberration in the course of history."

 Destruction of cultural diversity has been another of development's major crimes. The Development Dictionary contributors argue that there is an inherent bias against cultural diversity in the development project; if there is only one mode of ideal existence (the U.S.-European industrial model) then other cultures are somehow backwards or behind or "underdeveloped." As Sachs writes, "In this view, Tuaregs, Zapotecos or Rajasthanis are not seen as living diverse and non-comparable ways of human existence, but as somehow lacking in terms of what has been achieved by the advanced countries. Consequently, catching up was declared to be their historical task. From the start, development's hidden agenda was nothing else than the Westernization of the world."

 Development has failed on less theoretical and more concrete grounds as well: in 1960, Northern countries were 20 times richer than Southern countries; they are now 46 times richer. More devastating perhaps is the destruction of traditional ways of life and the simultaneous failure to provide a viable alternative to historic lifestyles. Sachs writes, "People are caught in the deadlock of development: the peasant who is dependent on buying seeds, yet finds no cash to do so; the mother who benefits neither from the care of her fellow women in the community nor from the assistance of a hospital. ... Shunned by the ĉadvanced' sector and cut off from the old ways ... they are forced to get by in the no- man's-land between tradition and modernity."

 The Development Dictionary is a scholarly work which examines the language and concepts of development theory in great detail, taking for granted the horrendous consequences of the practical application of this theory. The premise behind the book is that language both reveals and shapes perceptions, and that perceptions in turn shape policy.

The highly academic style of the book may frustrate some readers who question the importance of tracing the history of certain words and concepts. The book, however, represents more than just an intellectual exercise. The essays are written with anger and compassion, and with the premise that development discourse has become so pervasive - and so limiting - that it must be challenged at its roots. As Sachs writes in his introduction, "Our essays on the central concepts in the development discourse intend to expose some of the unconscious structures that set boundaries on the thinking of our epoch. We believe that any imaginative effort to conceive a post-development era will have to overcome these constraints."

 The essays set out to challenge not only policymakers but activists of both the North and South who have fallen into using this type of language - Multinational Monitor, for example, which often refers to "developing countries." The Development Dictionary demands that activists question their own biases and ways in which their analysis may be tainted or limited. It paves the way for a discussion in which non-Western ways of life are not seen as aberrations, but as viable alternatives.


The Debt Boomerang:
How Third World Debt Harms Us All

By Susan George
London: Pluto Press, 1992
202 pp.

Reviewed by Natalie Avery

THE DEVASTATING IMPACT of the Third World debt on the poor countries of the South has been well-documented. The direct and indirect consequences of the debt burden have included cutbacks in health programs and related outbreaks of disease, like cholera; surging unemployment; and overexploited rainforests and other natural resources. Social movements - both sporadic and sustained - have emerged throughout the Third World in response to the debt crisis and related issues, and academics and activists in both the North and South have produced numerous studies detailing the debt's harsh toll on developing countries. Even the monolithic World Bank has begun to respond to this pressure, by at least rhetorically acknowledging the need for a change in approach to the grinding problems which continue to crush the South.

Susan George, a fellow of the Institute for Policy Studies and the Transnational Institute, is among the league of critics who have spent their careers working to expose the failure of development policies in the Third World. Her first book, published in 1976, How the Other Half Dies, explores the political, social and trade policies that cause world hunger and exacerbate disparities between rich and poor peoples and nations. In her 1988 A Fate Worse than Debt, George examines the anatomy and handling of the debt crisis, suggesting alternative approaches. While the work of George and her colleagues has helped spark concern for problems in the Third World, a mass movement calling for definitive action to change the policies behind the suffering has failed to materialize. If Northern governments and multilateral lending agencies are to take more than rhetorical steps toward reform, public pressure against them must increase.

 George's latest work, The Debt Boomerang, argues that while the movements of those suffering from debt in the Third World are essential, reform will only occur when more citizens in the North become involved in the struggle.

In The Debt Boomerang, George and her colleagues move away from moral appeals to people in the North to work to resolve the debt crisis, concluding those entreaties have proven vastly insufficient. While acknowledging that the effects of the debt crisis weigh overwhelmingly on the South, George and her colleagues hope to convince more people in the North of the need for change than has previously been possible by bringing to light the impact of the crisis on the North. She writes in her introduction, "We hope this book may show that while any standard of human decency or any ethical imperative demands a change in debt management, so does enlightened self interest."

George launches The Debt Boomerang with an analysis of the relationship between environmental devastation and the debt crisis of the 1980s. While touching on several environmental issues, this chapter focuses on the massive deforestation that has taken place in the last decade. George argues that the pressure to increase export earnings to keep up with debt service payments stimulated increased exports of timber and beef (involving the clearing of forestland for grazing pasture). Similar pressures have resulted in the destruction of mangrove forests in coastal areas to make way for ponds to increase shrimp and prawn harvests for export.

George stresses that, rather than trying to prove "a crude, one to one causality," she is endeavoring to show "some extremely disturbing correlations." She and a team of researchers found that the largest Third World debtors deforested the most or the fastest during the 1980s. Further, they discovered that many deforesting nations also had extremely high debt service ratios, the ratio of debt payments to export earnings which indicates the relative weight of a country's debt.

The repercussion of this massive deforestation takes its toll on both the North and the South through the build-up of greenhouse gases which concentrate in the atmosphere and contribute to global warming. George writes that "deforestation itself is contributing more today to the greenhouse effect than it did a decade ago before the debt crisis emerged. ... Forests ... act as ĉsinks' for absorbing carbon dioxide, so the fewer the trees, the less carbon can be removed from the atmosphere. [C]utting or burning of timber emits the familiar greenhouse trio: carbon dioxide, methane and nitrous oxide whose presence in the atmosphere increased significantly between 1979 and 1989."

George argues that environmentalists must recognize the linkages between the debt and environmental devastation if they are to be effective. She ends this chapter with an appeal to those fighting for the earth to adopt a broader perspective that includes recognition of the negative impact of Northern economic policies on the South.

 Another repercussion of the debt crisis, George argues, is manifested in the growing drug problem in the North. While the U.S. government bombs coca crops and mounts pressure against the governments of Peru, Bolivia and Colombia, it scarcely acknowledges the economic issues that underlie these countries' dependence on the drug trade.

 Despite massive U.S. pressure against the drug suppliers and growers in the South, market forces have prevailed. The coca export trade has been so successful in earning foreign exchange for these countries that they are now virtually dependent on the coca growing and processing industry to service their huge debts. Furthermore, George argues that indebted Latin American countries are more likely to facilitate drug export industries in order to provide some means of survival for the tens of thousands of people displaced by International Monetary Fund economic austerity programs who cannot find a livelihood in the legal economy. "The government has promulgated several different measures designed to recycle coca dollars into the economy," a Bolivian economist told George.

 George does not argue that the drug problem would be instantly resolved if the debt problem were dealt with constructively. But she does believe that policymakers must examine both the deeper issues behind the demand for drugs and the desperation that forces nations, with their governments' acquiescence, into a dependence on supplying the North with these substances.

Taxpayers in the North are adversely affected by the debt crisis in other ways. While the frenzied and irresponsible lending policies of Northern banks have caused the most profound suffering in the Third World, Northern citizens are themselves paying for the banks' recklessness. George analyzes the web of government regulations and tax breaks which enables banks to write off Third World debt as "losses" for tax purposes, while continuing to extract debt service payments from those loans. The banks thus collect a huge subsidy from Northern taxpayers.

 The debt crisis has also resulted in job loss in the North. Debt-strapped Third World countries compete for industries by selling themselves as low-wage havens for multinationals which eagerly shift production from the North to the South in order to take advantage of paltry environmental and labor standards and regulation. Furthermore, many Third World countries, adhering to strict structural adjustment programs (export-driven austerity measures usually involving trade liberalization, privatization and reduced government spending), shrink their economies and devalue their currency, making imports more expensive. As a result, the North loses huge potential markets and sacrifices more jobs.

 The Debt Boomerang is strongest when its analysis relies on well- documented facts and figures. The chapters on the environment, the drug trade, the banking industry and lost jobs and markets are each meticulously researched, lending strength to the book's arguments on these issues. George's analysis in the final sections of her book, however, rests on shakier ground. In these chapters, she attempts to link the debt crisis to problems of immigration and war. While George and her colleagues do make use of some compelling data in formulating these arguments, they ultimately fail to make the kinds of linkages established in the earlier chapters.

 A major weakness of the chapter on conflict and war, written by George's colleague Dan Smith, is its failure to bolster or even fully articulate the "boomerang" argument. Smith's assertion that the poverty and deprivation generated by the debt crisis contributes to the growing violence in the Third World is indisputable. A debt-driven structural adjustment program clearly led to food riots in Venezuela , but the effect of that violence was felt minimally - if at all - in the North. The chapter's focus on debt-related violence in the South is never tied to any consequences in the North (other than in one or two speculative paragraphs in the section's conclusion), which serves to undercut the book's stated premise of convincing Northern readers of their own interest in dealing constructively with the debt.

 These weaknesses, however, do not detract significantly from the overall impact of the book. The Debt Boomerang is a convincing effort to persuade Northern citizens that they should care about the debt crisis for their own sake, as well as for the benefit of the Third World. Hundreds of millions of suffering people in Africa, Asia and Latin America can only hope it succeeds.