Features of the Development Project Unit: Nation-states Goal: Economic growth, industrialization Two variants of the project: free enterprise capitalism central planning and socialism

National industrialization Import substituting industrialization (ISI) model: -- Replacing industrial imports with domestically produced industrial goods -- Protecting domestic industries How to do that?

“National” industrialization -- Ideal of national, and internal growth -- Internationalization of “national” economies through - foreign direct investment - foreign aid -- The Development Project was first tested in Latin America (ECLA) in the 1950s

The International Context of Developmentalism Chapter 3 in Development and Social Change

Ingredients of the Development Project Organizing concept of development National framework International framework Industrialization Agro-industrialization “Development states”: managing investments and political alliances Creation of new inequalities

The International Framework American bilateralism: Marshall Plan by the US (1946-1953) a new “triangular trade” Foreign aid Who got most of the aid? Why? What was the rationale behind the Marshall Plan and American foreign aid?

Multilateralism: Creation of the Bretton Woods institutions (IMF and World Bank) (founded in 1944)

Functions of the IMF and the WB - Stabilizing national financial and revitalizing international trade (IMF) Funding Third World imports of First World manufactures (IMF) Deepening Third World primary exports to the First World (WB) Funding large-scale infrastructural projects (WB)

Anything wrong with the roles of the IMF and the WB? Division of labor? Ecological consequences? Social consequences? What are the structures of the IMF and the World Bank?

Third World Responses to the Politics of Developmentalism The Nonaligned Movement (NAM) (1955): demands for independence from the Soviet Union and US UNCTAD (1964): demands for reform in the world economy Did these demands have a positive consequence?

Differentiation within the Third World Newly Industrializing Countries (NICs) Most of the “development” took place in NICS Third World manufacturing was concentrated in 8 countries

What are the features of the NIC model? What were the consequences of the NIC experience?

Consequences of the Development Project Western control over the Development Project Capital-intensive industrialization A “global” model of development emerged by the 1970s, instead of “national” development A new international division of labor

A new international division of labor By the 1970s: -- Western financial and technology transfer to developing countries -- Industrialization in some developing countries -- Some developing countries became exporters of manufactured goods -- First World countries exported more agricultural goods than the Third World

Why did Third World countries become food importers? The role of agriculture in the new international division of labor: A- Food aid B-Green Revolution

Agriculture under the Development Project American food aid Public Law 480 Program 1- cheap food exports 2- famine relief 3- barter of food and raw materials

Consequences of food aid Third World dependency on US grains Developing countries became consumers of US grains: by the 1970s, Third World bought half of US farm exports “Peasant agriculture” declined Food aid subsidized urban workers Diets changed

Consequences of food aid The US also exported feed grains First World consumers consumed more meet “Hamburger connection”: Deforestation and land clearing Third World middle classes also consumed more meat “Engel’s Law at a global scale”

Green Revolution Plant breeding technologies supported by the US, FAO, UNDP and World Bank -- High-yielding varieties (HYVs) of seeds -- Inorganic fertilizer use -- Chemical pesticides and herbicides  Increased agricultural productivity

Consequences of the Green Revolution “Petro-farming” Green Revolution was the “ISI” of agriculture! Expansion of chemical agriculture Expansion of industrial farming Feeding urban populations in the Third World Decline of peasant agriculture Negative ecological consequences Economic differentiation among peasants

Summary The development project resulted in: -- industrialization in some Third World countries -- industrial agriculture in some Third World countries -- growth of urban working classes -- rural to urban migration, urbanization -- “urban bias” -- land reform in some countries -- growing food imports in many Third World countries -- ecological degradation -- differentiation among Third World countries -- a new international division of labor

The development project turned out to be global, rather than national