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Thing 11

Africa is not destined for underdevelopment

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Chang, H. (2011). Thing 11. In Chang, H. 23 Things They Don't Tell You About Capitalism. Bloomsbury Press, pp. 112-124

Since the late 1970s (starting with Senegal in 1979), Sub-Saharan African countries were forced to adopt free-market, free-trade policies through the conditions imposed by the so-called Structural Adjustment (SAPs) of the World Bank and the IMF (and the rich countries that ultimate control them). [...] By suddenly exposing immature producers to international competition, these policies led to the collapse of what little industrial sectors these countries had managed to build up during the 1960s and 1970s. Thus, having been forced back into relying on exports of primary commodities, such as cocoa, coffee and copper, African countries have continued to suffer from the wild price fluctuations and stagnant production technologies that characterize most such commodities. The result was often a collapse of prices in those commodities due to a large increase in their supplies, which sometimes meant that these countries were exporting more in quantity but earning less in revenue. The pressure on governments to balance their budgets led to cuts in expenditures whose impacts are slow to show, such as infrastructure. Over time, however, the deteriorating quality of infrastructure disadvantaged African producers even more, making their 'geographical disadvantages' loom even larger.

as a result of these policies: stagnation (of course)

today's equivalent of SAPs are "Poverty Reduction Strategy Papers"

by Ha-Joon Chang 7 years, 7 months ago

Since the late 1970s (starting with Senegal in 1979), Sub-Saharan African countries were forced to adopt free-market, free-trade policies through the conditions imposed by the so-called Structural Adjustment (SAPs) of the World Bank and the IMF (and the rich countries that ultimate control them). [...] By suddenly exposing immature producers to international competition, these policies led to the collapse of what little industrial sectors these countries had managed to build up during the 1960s and 1970s. Thus, having been forced back into relying on exports of primary commodities, such as cocoa, coffee and copper, African countries have continued to suffer from the wild price fluctuations and stagnant production technologies that characterize most such commodities. The result was often a collapse of prices in those commodities due to a large increase in their supplies, which sometimes meant that these countries were exporting more in quantity but earning less in revenue. The pressure on governments to balance their budgets led to cuts in expenditures whose impacts are slow to show, such as infrastructure. Over time, however, the deteriorating quality of infrastructure disadvantaged African producers even more, making their 'geographical disadvantages' loom even larger.

as a result of these policies: stagnation (of course)

today's equivalent of SAPs are "Poverty Reduction Strategy Papers"

by Ha-Joon Chang 7 years, 7 months ago

[..] rich countries do not suffer from ethnic heterogeneity not because they do not have it but because they have succeeded in nation-building [...]

drawing on the fact that Rwanda is nearly as homogeneous in ethno-linguistic terms as Korea

by Ha-Joon Chang 7 years, 7 months ago

[..] rich countries do not suffer from ethnic heterogeneity not because they do not have it but because they have succeeded in nation-building [...]

drawing on the fact that Rwanda is nearly as homogeneous in ethno-linguistic terms as Korea

by Ha-Joon Chang 7 years, 7 months ago

[...] The Japanese and German cultures were transformed with economic development, as the demands of a highly organized industrial society made people behave in more disciplined, calculating and cooperative ways. In that sense is more of an outcome, rather than a cause, of economic development. It is wrong to blame Africa's (or any region's or any country's) underdevelopment on its culture.

apparently until the early 1900s, Japanese people were considered lazy; same for Germans until early 1800s

by Ha-Joon Chang 7 years, 7 months ago

[...] The Japanese and German cultures were transformed with economic development, as the demands of a highly organized industrial society made people behave in more disciplined, calculating and cooperative ways. In that sense is more of an outcome, rather than a cause, of economic development. It is wrong to blame Africa's (or any region's or any country's) underdevelopment on its culture.

apparently until the early 1900s, Japanese people were considered lazy; same for Germans until early 1800s

by Ha-Joon Chang 7 years, 7 months ago