THIRD WORLD UNDERDEVELOPMENT

By, Deep Ray, NALSAR University of Law, Hyderabad. 1. INTRODUCTION The economically underdeveloped countries of South Asia, Africa, Central and Latin America, Oceania, Middle East are referred to as third world countries. These countries have some common characteristics, like poverty, high density of population, high mortality rate, dependence on developed countries etc.1 The term third world was originally coined by the French demographer Alfred Suavy in the French magazine L'Observateur, the term third world was used for the first time to refer to those countries which did not allign with the Soviet union bloc or the Capitalist bloc during the Cold War. Also, the Third World is thought to hold a position in relation to the First and Second Worlds (the developed capitalist and Communist countries, respectively) comparable to that of the Third Estate (the common people) with the First and Second estates, i.e., the clergy and the nobility. According to Alfred Suavy Like the third estate, the Third World has nothing, and wants to be something , implying that the Third World is exploited (as was the third estate) and that its destiny is revolutionary. Originally the third world bloc consisted the countries of India, Yugoslavia and Egypt. Politically, the Third World emerged at the Bandung Conference (1955), which established the Nonaligned Movement. It was widely believed that these countries could successfully court the Communist and Capitalist blocs into economic partnership without getting influenced by them. Fearing they would align with the enemy bloc, they were exploited and undermined by the First World and Second World superpowers. Most of the third world countries were colonies of strong countries like England, Germany, France, United States of America, Netherlands etc. One of the principal goals of the United Nations was to hasten the liberty of colonial rule from the world, by 1960 almost

Third World, http://www.statemaster.com/encyclopedia/Third-world, (5th April 2010)

Electronic copy available at: http://ssrn.com/abstract=1711749

all the colonies had got freedom. After liberation from colonial rule, many Third World nations were illiterate, over-populated, and politically unstable.2 The term Third World has been in use for many years now, but it is considered to be derogatory in some circles since the word third world is used to refer to poor countries, hence the underdeveloped countries are referred to as developing nations. But still the term third world is in use. In general the third world countries are less economically developed than the first world and second world countries. These countries face numerous problems like poverty, unemployment, uncontrolled population, high infant mortality rate, lack of industrialisation. The reasons for these problems are many, and there are different theories which attempt to explain third world underdevelopment.

THEORIES OF THIRD WORLD UNDERDEVELOPMENT There are two main theories which attempt to explain third world underdevelopment. They are Modernization theory and Dependency theory. These are contrasting theories which attempt to explain the causes of underdevelopment in the third world. 2.1. Modernization Theory3 : Modernization theory states that underdevelopment in the third world is primarily caused by the flawed economic policies and practices of the third world nations. The third world countries cling to traditional social and economic development models which are not conducive to economic development. Modernisation theory asserts that third world countries lack the initiative, capital, access to technology and democratic institutions necessary for economic development. The main reason for lack of development is their own practices. Modernisation theorists do believe that the first world has a role to play in the development of the third world, but their role is limited. According to Modernisation theory the heavily traditional third world societies do not believe in progressive improvement, they just live as their ancestors did. This ideology, it is argued, results in subsistence economic structures, widespread poverty and no process towards improvement. There is no believe in development, expectation of improved living conditions. Further, traditional societies frequently develop unproductive business and governmental structures where groups or individuals in position of power stagnate economic development by redistributing the profit of economic growth in their own hands. Modernization theorists argue that third world
2 3

A. R. Kasdan, The Third World: A New Focus for Development, 2nd ed. p.12 Coridon Henshaw, Theories of third world underdevelopment, http://www.talisiorder.ca/essays/TheoriesThirdWorldUnderdevelopment.pdf, (4th April,2010)

Electronic copy available at: http://ssrn.com/abstract=1711749

underdevelopment is simply the failure of third world societies themselves to advance from a traditional mindset and to nurture the same flame of creativity which ignited the European industrial revolution. Without a willingness to abandon tradition in favour of western commitments to technology, free market competition, the rule of law, science and free inquiry, the third world will not undergo economic development. Third world countries must abandon traditional cultural and social models in favour of western traditions of good government and a relatively free market system together with sound economic planning. In sum, modernization theory calls on undeveloped countries to modernize emulating first world countries. Countries failing to make the transition from traditionalism to modernity will not advance. The challenge for the third world is to transform itself towards development and modernity by following the path used by existing first world countries to promote their own economic development. In the eyes of modernization theorists, the fact that the first world reached its current point of affluence following the industrial revolution constitutes evidence that the third world can reach a similar level of development by following in the same path with the aid of sufficient support from the first world. Where the will to follow this path is lacking, underdevelopment will result. Above all, modernization theory does not describe the world economy as a zero sum process. There is no "fear that the world's benefits might be limited and that the accumulation of wealth in some hands might destroy the promise of advancement for others" 2.2. Dependency Theory : Dependency theory postulates that third world underdevelopment is not the fault of third world nations themselves. Rather, dependency theory argues that the economic well being of the first world has resulted in the impoverishment of the third world and that the existing world order is fundamentally stacked against third world economic development. While contemporary dependency theory is largely Marxist in origin, the groundwork for the concept of dependency extends as far back to Adam Smith who acknowledged that the imperialist economic practices of the European powers had denied colonized peoples the benefits of economic growth.4 Dependency theory has been advanced and largely argued by scholars within the third world itself rather than, as is the case with modernization theory, by academics in the first world. Dependency theory focuses on international economic order rather than on the social structure of the third world. In dependency theory, no society can be viewed in isolation, and third world underdevelopment must be viewed in the context of
4

www.mtholyoke.edu/acad/intrel/depend.htm, (3rd April 2010)

economic integration with the first world.5 In the eyes of dependency theorists, the main failing of modernization theory is that it ignores the world order and external influences on the third world in favour of blaming third world underdevelopment on third world countries themselves. Indeed, dependency theory argues that it is the very integration of third world countries into the global economic order that is responsible for third world underdevelopment.6 In dependency theory, underdevelopment is not merely a failure of third world countries to develop-as modernization theorists would argue-but rather the result of an active process of impoverishment.

http://home.iitk.ac.in/~amman/soc748/noah_eckstein_dependency_theory_in_comparative_education.html, (3rd April, 2010) 6 Coridon Henshaw, Theories of third world underdevelopment, http://www.talisiorder.ca/essays/TheoriesThirdWorldUnderdevelopment.pdf, (4th April,2010)

2. CAUSES OF UNDERDEVELOPMENT There are many causes of under development, some of those cause have been discussed here. Causes of under development are not same in all under developing nation states, somewhere corruption is the major cause, somewhere lack in resources are the major cause, and somewhere wrong policies are the major cause of under development. But the most common cause of under development is the dependency upon developed countries, and terrorism. European countries which have already developed all their resources and have reached a high level of development can now generate their own capital as they do not have any financial restrictions and can thus enjoyed a high standard of living, a high capital income and a high productivity. In contrast, under developed nations are said to be court up in a vicious circle of poverty. In such countries, as Asia, Africa and Latin America where financial problems and Economic stagnancy exist, people lived below the poverty line. According to Professor Ragnar Nurkse, Economic development has much to do with human endowments social attitudes, political conditions and historical accidents, implying that underdevelopment is a man-made problem, for which man-made solution need to be found. Corruption : Corruption defined as the abuse of public power for personal ends has always existed. During recent decades, however, it has grown both in terms of geographic extent and intensity. Since the mid 1970s, it has infiltrated virtually every country in the world. It was hoped that the easing of political and economic restrictions that characterized the 1990s after the end of the Cold War would have gone some way to reducing this phenomenon. Through increased openness resulting from political pluralism and the freedom of the press, the process of democratization should, under normal circumstances, mobilize efforts to overcome corruption. However, emergent democracies are still fragile and seem to find the task of tackling established self-interests a formidable one .7 Political corruption is also present. Political corruption is when government officials use their governmental powers for illegitimate private gain. All forms of government are susceptible to political corruption. Forms of corruption vary, but include bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement.

Corruption and Underdevelpment, http://www.academon.com/Essay-Egypt-Corruption-andUnderdevelopment/59373

Political injustice8 : Political injustice involves the violation of individual liberties, including the denial of voting rights or due process, infringements on rights to freedom of speech or religion, and inadequate protection from cruel and unusual punishment. Such injustice often stems from unfair procedures, and involves political systems in which some but not others are allowed to have voice and representation in the processes and decisions that affect them. This sort of procedural injustice can contribute to serious social problems as well as political ones. Economic injustice : Economic injustice involves the states failure to provide individuals with basic necessities of life, such as access to adequate food and housing, and its maintenance of huge discrepancies in wealth.9 In the most extreme cases of misdistribution, some individuals suffer from poverty while the elite of that society live in relative luxury. Such injustice can stem from unfair hiring procedures, lack of available jobs and education, and insufficient health care. All of these conditions may lead individuals to believe that they have not received a fair share of the benefits and resources available in that society. Poverty : Large populations of the 420 million people living in Latin America and Caribbean have begun the third millennium living under conditions of poverty. Near 40% of households are poor and 16% extremely poor (cepal 1999). Poverty is even more widespread and deep in rural areas where 32% of population live and work. Near 55% of rural households are poor and about 33% extremely poor. This is a sad record for Latin America and Caribbean most of its countries constituted themselves as nation states after 1810, under the liberal ideals of equality, liberty and fraternity. In Latin America & Caribbean, like in other third world areas, poverty reduction never was a major policy goal in itself until the beginning of the 1970s. The assumption was the economic development per see will reduce poverty, and economic growth was the development measurement. Terrorism : Terrorism is another cause of underdevelopment, where terrorism exists the process of development stopped. Foreign investments, trade, and exchange of goods & services which are the keys for underdeveloped states are stopped because of terrorists activities.

Dr. Frithjof Kuhnen, Causes of underdevelopment and concepts of development, http://www.professorfrithjof-kuhnen.de/publications/causes-of-underdevelopment/0.htm, (6th April, 2010) 9 Ibid.

Over Population : Overpopulation in underdeveloped countries is also an important cause of economic poverty. Although many believe that limiting population is not the solution for underdeveloped countries, it definitely is an important cause.

3. FEATURES OF THIRD WORLD COUNTRIES Illiteracy : They lack literacy, illiterate population is 10-15 %, even upto 50 % in some countries. In some African countries like Mozambique, Ethiopia, Benin, Chad literacy rate is as low as 34-35%. Even in South Asian countries like Nepal, Bhutan, Bangladesh literacy rate is less than 50%. Malnutrition : Most of these countries suffer from malnutrition. In the Asian, African and Latin American countries, well over 500 million people are living in what the World Bank has called "absolute poverty".10 According to the Global Hunger Index, South Asia has the highest child malnutrition rate of world's regions.11Countries like Bangladesh, Pakistan,Phillipines,India. In fact half of the children in India are undernourished.12 Malnutrition is a big problem in the African countries too like Congo, Ethiopia, Sudan, Zambia etc. Dependent on agriculture : Most of these countries are essentially dependant on agriculture, they have a rural or agrarian economy. For example, countries like Nepal, Bangladesh have rural economy. The Third World countries are structurally impoverished. The third world countries are continuously dependant on their economic, social, industrial development on the developed countries. Some countries have raw materials but they do not have the technology, money to convert the raw materials into finished products. For example, India has one of the richest deposits of Thodium, Bangladesh has natural gas, but these countries do not have the resources to utilise these raw materials, and hence have to depend on the developed countries.

10

The world hunger problem: Facts, figures and statistics, http://library.thinkquest.org/C002291/high/present/stats.htm ( 5th April, 2010) 11 Global Hunger Index Key Findings & Facts, http://www.ifpri.org/publication/challenge-hunger-2008global-hunger-index 12 Survey Says Nearly Half of India's Children Are Malnourished , CBS News, February 10, 2007

5. HISTORY OF THIRD WORLD COUNTRIES A number of Third World countries were former colonies and with the end of imperialism many of these countries, especially the smaller ones, were faced with the challenges of nation and institution-building on their own for the first time. Due to this common background a lot of these nations13 were for most of the 20th century, and are still today, "developing" in economic terms. This term when used today generally denotes countries that have not "developed" to the same levels as OECD countries, and which are thus in the process of "developing". In the 1980s, economist Peter Bauer offered a competing definition for the term Third World. He claimed that the attachment of Third World status to a particular country was not based on any stable economic or political criteria, and was a mostly arbitrary process. The large diversity of countries that were considered to be part of the Third World, from Indonesia to Afghanistan, ranged widely from economically primitive to economically advanced and from politically non-aligned to Soviet- or Western-leaning. The only characteristic that Bauer found common in all Third World countries was that their governments "demand and receive Western aid" (the giving of which he strongly opposed). Thus, the aggregate term "Third World" was challenged as misleading even during the Cold War period.

6 . THIRD WORLD DEBT CRISIS Many developing countries have very large debts, and the amount of money they owe is quickly increasing. Trying to pay off the debt has become a serious problem for these countries, and it causes great hardship for their people. Take the region of Sub-Saharan Africa, for example. This region pays $10 billion every year in debt service. That is about 4 times as much money as the countries in the region spend on health care and education. At the end of the '70's, many oil-exporting countries had large amounts of extra money.14 They put this money into Western banks. The banks then loaned a lot of money to Third World countries for big development projects. However, several factors (a rise in world interest rates, a global recession, and low commodity prices) caused the size of these debts to start growing very fast; several countries began to fall behind in their payments. The amount of money owed by developing countries has increased dramatically since the early 1980's. These countries now owe money to commercial banks and also to organisations like the World

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http://www.spiritus-temporis.com/third-world/ The third world debt crisis, http://www.newint.org/easier-english/money/debt.html (5th April, 2010)

Bank, the International Monetary Fund, and to First World governments. Debt has crippled many developing countries. Often based on loans taken out by prior rulers and dictators (many of which various Western nations put into power to suit their interests), millions face poorer and poorer living standards as precious resources are diverted to debt repayment.

7 . CONCLUSION It is a disgrace that in the 21st century real poverty, famine, malnutrition and lack of medical care still exist on earth. The dispute is over what will actually work in changing this state of affairs. There is a myth that the solution to poverty is : Aid, debt relief, fair trade. In reality, the solution to poverty is: democracy, free speech and a free society, capitalism, free trade. Aid and debt relief, when given to governments that care about their citizens, might do some good, at times of emergency at least.15 But poor countries do not have good governments, or they would not be poor. Aid and debt relief, when given to dictatorships like these, fuels civil wars, genocide, arms purchases and palace building; and distorts markets, often increasing poverty. Foreign aid not only wastes scarce resources in the very nations which can least afford waste, it also creates international tensions. Foreign aid has united the governments of the Third World into a cohesive unit that has but one goal: secure more aid. To accomplish this, the Third World has found that the politics of confrontation work best. 16 In their eyes, the world is divided between rich and poor, with the former having an obligation to help the latter. The basic problem with both types of foreign aid is that they strengthen the institutions which prevent progress while weakening the institutions of the Third World which could bring true prosperity. Aid increases the role of government and bureaucracy in the economic life of the Third World, while it minimizes the role of markets and private entrepreneurship. If we are to help developing nations prosper, we must find a method that creates a bigger role for institutions such as the market. One way of aiding Third World nations is through free trade. By lowering import barriers, developed countries can allow the private sectors of the Third World easier access to western markets. With the huge markets of the United States available for their products, entrepreneurs will have the opportunity to develop new industries or expand old ones. Foreign aid fails as a development policy because it destroys the incentives of the

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http://www.jstor.org/stable/3517862 http://www.informaworld.com/smpp/content~db=all~content=a713700509

marketplace and extends the power of ruling elites. Because it leads the Third World away from the free market, it actually increases Third World poverty. On the other hand, the alternative policy of free trade will give the private sector of the third world countries an opportunity to expand and flourish. it must be emphasized that free trade alone will not solve all the problems of Third World poverty. Free trade only increases the opportunities of the less developed nations.17 It will not eliminate the shackles of government regulation and intervention that dominate Third World economies. That task can only be done by the people of the Third World themselves. Yet, eliminating foreign aid and instituting free trade will at least encourage Third World peoples to develop institutions such as private property rights and free markets which will lead to growth and prosperity. It must also be said that the richer countries have a moral responsibility to help the third world countries. The relationship between the rich and the poor countries is exploitative, it should be substituted by a more equal relationship. An equitable, judicious relationship should exist. International peace will come only if there is economic justice.

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http://www.globalissues.org/issue/38/free-trade-and-globalization