Friday, 27 November 2015

First World & Third World Ambivalence to the Underdevelopment Architecture of Third World States

One major fact is that the bourgeoisie in the Third World, particularly in Africa, have a vested interest in reproducing the status quo to maintain their positions of power, and are therefore concerned about political legitimation. A case in point is the practice of socialising debt, or, and this amounts to the same thing, the transformation of private to public debt.

Bailing out capitals—whether indigenous or foreign—means that the burden of repayment gets shifted to society at large (socialisation of debt). Interest payments must take place through increased forms of economic exploitation (lower real wages and longer hours), higher taxes usually in the form of value-added tax, an increase in the price of basic foodstuffs, higher interest rates and, indirectly, cuts in government spending in terms of education, health and welfare. New forms of political domination— usually more economically and physically coercive in nature—are required to support the ever-growing intensification of economic exploitation.

Paradoxically, the largest part of the various loans obtained by the Third World, particularly by the African states, is looted and carted away back to the foreign accounts in various banks of the First World. No wonder, developments in most African states did not correspondent to the huge debts.

In the same manner, the First World countries that have orchestrated, accentuated and continued to maintain the indebtedness of the Third World countries are doing absolutely nothing to reverse this situation. In fact, the current international economic system is designed to perpetuate this status quo. Response of the First World to attempts at debt relief, debt cancellation, debt reduction, debt refinancing or rescheduling has been highly characterised with ambivalence and apathy. Reportedly, there has been reduction in the grants given to the Third World countries by the First World countries. Also, the amount paid to the First World countries and multilateral institutions (such as the IMF and the World Bank) by the Third World countries on accumulated interests on loans and in servicing some of these loans out-weighed the paltry grants being.

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