Lecture 9.1 DEPENDENCY THEORY Introduction Proponents: Walter Rodney, Samir Amin, Claude Ake, Wallestian, Andre Gunder Frank etc. A. Focuses on the historical origins and the subsequent development of underdevelopment. Basic tenet that all contemporary societies are integrated into a single world economic system, the capitalist system

Lecture 9.2 A. Basis its roots in the Latin American historical experience 1. which had been long in long contact with European imperialism. 2. Been colonized in the 15 th century BC and did not regain independence until first two decades of the 19thh century.

Lecture 9.3 A. In the 1960s social scientist begun to construct theories to explain the inability of Latin American countries to escape from limits imposed upon them by their former colonial powers and by both political and economic dominance by the USA. B. Dependence- means a situation in which the economy of certain country is conditioned by the development and expansion of other economies to which the former are subjected. C. Sometimes termed neo colonialism- the survival of the colonial system in spite of formal recognition of political independence in emerging countries.

Lecture 9.4 A. Tenets: 1. All developing and underdeveloped states are depended on the developed as for technology, finance and capital, monetary systems and trade. Capitalist has monopoly over means of production. 2. Dependency and monopoly is synonymous with control of exploitation. 3. Dependency is a result of the incorporation of the developing countries into the capitalist system

Lecture Incorporation was a result of imperialism and colonialism which saw the building of the first networks not for the integration of all countries economies but for the facilitation of the exploitation of raw materials to the capitalist center B. Solutions: 1. Development can only be realized if capitalism is overthrown.

Lecture Self-reliance through import substitution, rapid industrialization behind high tariffs. B. Thomas. B identified 3 components of self reliance: 1.partial disengagement- reducing proportion of trade, monetary and technical assistance with capitalist center 2. Restructuring relations- deliberate fiscal and monetary policy aimed at altering consumer values. 3. reassociation

Lecture 9.7 A. Reasons for failures: 1. Third world industries had no comparative advantage thereby creating inefficient industries 2. The strategies were not aimed at export led growth hence crippled performance of their economies. 3. Third world markets are small and products cannot be absorbed completely by the domestic market

Due to excessive protection the quality of goods diminished 2. Because of the need to imports machinery and technology there was Balance of payment and debt problems.

9.9 A. Critique of the theory: 1.criticised for believing that the problems faced by LDCS are external rather than internal. 2. Degree of exploitation cannot be measured 3. Criticized for circular reasoning (the chicken egg reasoning) underdevelopment and dependency. 4.use of single independent variable 5. Tends to emphasize conflict, revolution and violence 6. Failed to define development

9.10 A. Has contributed to the understanding of the mechanism of poverty and underdevelopment, the complexity and intensity of interaction between the developed and developing countries, the impact of internal B. Alliance is not alliance of countries but class in the center and ruling class in the periphery.

9.11 A. Bourgeoisie in the periphery are being bought by those in the center (collaborators within classes in the center. WHO WILL DELINK? B. Its survival is dependent on this, hence it cannot be nationalistic- at most it is comprador. C. It does not mean that every ruling class is comprador others are nationalistic

Lecture 9.12 A. It’s a symbolic relationship – It is but is there is commonality of interest. B. Parasitic class –because it feeds upon its own people(translated also to international arena). C. Strategies –import substitution-Who will get what. - New International Economic O rder1970s (It has died/ failed ) - realigning –South Co-operation ( G77, OAU)

Lecture 9.13 ? If ruling is Comparable why do they need to realign with others. V.?Singapore developed as a result of linkage with the west-Opened up the economy for MNCs hence became a regional headquarters

Lecture 9.14 A. BENEFITED: - Employment, Infrastructure, Generates economic spill off to the locals - Foreign exchange $90 billion exchange reserves - 4 million population, 1 million foreigners, 3 and ½ thousand MNCs Y. United Arab Emirates- success has been achieved by opening up