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A History of Wealth and Poverty: Why a Few Nations are Rich and Many Poor, by John P. Powelson.
Appendixes for Chapter 23Appendix 23.1: Selected References to Power and Economic Distortions in the Third World TodayAlthough I have collected many similar illustrations, only one or occasionally two are reported for any one Third World country. Countries are listed in alphabetical order: Algeria: "President Houari Boumedienne . . . built steel mills and petrochemical plants only to find a world glut of steel and petrochemicals. He also pushed through a plan to collectivize farms, . . . that encouraged young people to move to the cities [turning] Algeria, once nearly self-sufficient in foodstuffs, into a huge importer." [516] Argentina: "[F]iscal deficits . . . typically exceed 10 percent of the gross national product, tax evasion as a way of life, low productivity, a bloated state payroll and heavy dependence on the state by private enterprise . . . poor quality of manufactured goods protected by high tariffs, the large amount of business that is done off the books. . . . [The President] plans to reduce the state's role in the economy [and] intends to 'privatize private enterprise,' an allusion to the custom of the Government's guaranteeing markets and profits for private businesses." [517] Bolivia: "[C]ontrols keep a long list of essential items at prices well below production costs. . . . Many Bolivians have become ingenious smugglers, buying goods at home and slipping them into neighboring countries to sell at a handsome profit." [518] Brazil: "[President Fernando] Collor's deflationary plan . . . was to freeze all bank accounts and change the currency. . . . As the Brazilian economy went into shock and prices crashed, those with any cash at all . . . were in a position to take advantage of such opportunities as a stock market that lost 60 percent of its value, or to purchase state enterprises for sale at 30 percent of their value." [519] Burma (Myanmar): "At least 5,000 Burmese are being forced to move from Myanmar's cities to new, ill-prepared outlying towns where malaria and hepatitis are rampant. . . . Once in their new areas, which can be up to 50 miles away, the Burmese are required to buy land and secure and pay for Government permits to rebuild." [520] Dominican Republic: "The State Sugar Council owns and manages 12 large sugar plantation factories, which were the property of the dictator Rafael Trujillo. . . . Trujillo institutionalized the use of cheap Haitian migratory labor. . . . By 1983 the Dominican Government was paying the Government of the Haitian dictator Jean-Claude Duvalier as much as $2,250,000 a year under the arrangement." Even after the overthrow of Duvalier, Haitian workers are recruited with the promise of well-paying jobs. When they arrive at the border, "they are seized by the army and taken by truck to one of the 280 or so plantation villages." [521] Equatorial Guinea: President Francisco Nguema, "a paranoid despot, destroyed his nation's economy by expelling almost the entire Spanish population of 7,000 and killing or forcing into exile about one-third of the African population. The population is now 300,000." [522] Egypt: In a cotton factory, "a lot of the problems can be traced to the government, including state-produced cotton yarn that breaks on the loom and the 34 official signatures it sometimes takes to ship an order. . . .The price [of underwear] is set by government-owned spinning companies, which have a monopoly on the production of yarn from raw cotton and have deficit problems of their own. Importing cheaper cotton yarn is no solution because Egypt would only tack on customs duties of up to 65 percent to protect state companies." [523] Ethiopia: "Villagization was heralded by President Mengistu [as] the answer to the many difficulties of the . . . peasantry. By being grouped together, the argument went, peasants would be able to produce more and have easier access to such services as schools and health clinics. . . . Unspoken, but more to the point, in the view of many Ethiopian and Western researchers, villagization was an effort to increase the power of the state by marshaling people in more easily controlled groups." [524] Ghana: "[S]oldiers demolished stalls and goods in one of the market places in this rundown capital. . . . [T]he action was taken because the market women were selling goods at prices above those set by the government. . . . The new Rawlings Government barred the women from selling certain essential commodities, including milk, sugar and textiles." [525] "Information percolates up in Ghana through a hierarchy of fear. Everyone must report anyone who seems suspicious or he himself becomes suspect." [526] Haiti: Leslie Delatour, the minister of finance, "has stanched the hemorrhaging of public funds, closing, amid enormous protest, two large state enterprises . . . that had helped serve as conduits from the public treasury to private pockets. He has reduced the tariffs that protected the monopolies making up Haiti's structure of 'crony capitalism' and slashed export taxes on coffee and other commodities." [527] Honduras: "Cohbana, the state agency charged with exporting bananas, loses more than $3 million a year. Meanwhile, Honduran banana exports lag behind those of other banana-exporting countries. Cohdefor, a state enterprise with a monopoly on the lumber industry, has lost $290 million since its inception. . . . Graft plays a large part in these losses." [528] "The Government began legal proceedings today aimed at jailing all 53 members of Congress who supported" the appointment of the Chief Justice of the Supreme Court, jailed in a political struggle, on charges of treason and plotting against the existing political system. [529] India: "India's planning apparatus might be Adam Smith's vision of hell. Businesses must obtain permission to enter markets or leave them, to build new factories or close old ones, to import or export. Opening a tourist hotel requires 43 licenses, which take years and millions of under-the-table rupees. Much industry is government-owned often with dreary results. . . . Labor, of course, is not free, and state enterprises use lots of it. In Calcutta, the bus company employs 35 people for every vehicle it owns." [530] Indonesia: "Massive amounts of capital are wasted by being poured into protected industries. One Jakarta-based economist says that more than $3 billion has been sunk in the projected steel works at Cilegon, in West Java, an investment that he notes 'can't possibly pay.'. . . When the Indonesian newspaper Sinar Harapan referred forthrightly to Suharto family monopoly interests last fall, it was closed." [531] Iraq: "Iraq's government is essentially a family affair and army politics became bizarrely entwined with family politics. . . . Problems exist elsewhere in the repressive apparatus that keeps the regime in power." [532] Kenya: A report discusses "the Kenya Government's decision to build a 60-story prestige building . . . [costing $200 million, which] can be put to much better purposes, like assisting the credit-starved agrarian sector." [533] Liberia: A report cites "President Doe's growing appetite for government-subsidized extravagances. He owns a small fleet of luxury automobiles and is said to spend lavishly on clothes and jewelry. . . . "Well-connected senior Government workers have also grown wealthy through lucrative business opportunities, obtained through the executive mansion." [534] Mexico: "[A] labyrinth of regulations encourages many legitimate business innovators to remain in the underground. The alternative can mean months or years of delays and costly legal assistance." [535] Morocco: "[A]t the bottom of Morocco's troubles lies . . . the defeat of a true market economy by the concentration of power and wealth in a bloated network of bureaucrats and well-connected families ultimately controlled by the monarch." [536] Nigeria: "In a crackdown on dissent, the Government this year disbanded the National Trade Union Council, the National Students' Union and the National University Professors' Union. Thirty universities were temporarily closed. Journalists have been detained. Magazines have been seized. . . . Keeping officers happy involves allowing as many officers as possible a chance for power and personal enrichment." [537] Pakistan: "Some ministers and top officials are said to have made fortunes out of kickbacks on contracts with government-owned steel and flour mills, and from deals in which government land worth millions of dollars was obtained for as little as $20,000, then quickly resold." [538] Peru: "[O]nly 1 percent of Peruvian laws emanate from the body created to make them: Parliament. The other 99 percent derive from the executive . . . with no interference, no debate, no criticism and, often enough, without the knowledge of those affected by them." [539] Senegal: A report points out that "27 companies completely operated by the state and 75 quasi-public concerns, all of which together employ 25,000 people, four times the manpower that some critics say is needed in these enterprises. . . . an economy under very tight control." [540] Sierra Leone: "Economists attribute the rice shortage largely to the low prices paid to producers in Sierra Leone's overvalued currency. . . . [I]mporting rice spins off more money than growing it. . . . Lack of foreign exchange has meant that spare parts are now scarce. That, in turn, has led to frequent power outages. . . . There is no longer a functioning railroad. . . . A farmer who does manage to bring in a good crop may not be able to get it to market." [541] Sudan: "[A] wave of political terror has claimed doctors, lawyers, journalists, poets and trade unionists. Hundreds have been detained and scores executed for the crime of dissent. . . . [T]he press has been shackled, trade unions abolished and political parties stripped of their property by military rulers." [542] Syria: "Because of the atmosphere of pervasive insecurity, anyone who is anyone in Syria has his team of bodyguards. These men prey on the populace at large, stopping cars and breaking into homes with impunity." [543] Tanzania: "[A]ccording to World Bank dictates, the Government raised the producer price of cotton two years ago. The cotton growers, responding as they were supposed to, worked harder and harvested twice the amount of cotton as they had in the past. But the roads to the cotton farms were so poor, trucks were unable to get to the harvest, much of the cotton went bad in storage and the farmers were left unpaid. Some cotton farmers persevered for a second season, but with the same results." [544] Turkey: "[T]orture is still being used by the Turkish police in nearly every case of arrest." [545] Venezuela: "Down here, powerful families with close ties to government often control whole industries nearly by themselves. . . . Near monopolies are common, as in much of Latin America. . . . [F]riends in politics are almost a requirement for business success here." [546] Zaire: "Some of [President] Mobutu's overseas real estate holdings are public knowledge. They include chateaus in Spain and Belgium, a townhouse in Paris, a villa near Monte Carlo, an estate in Switzerland, a horse ranch in Portugal and a villa in the Ivory Coast." [547] Zimbabwe: "[I]nvestment is being undermined partly by the foreign-exchange crisis but also by price controls and labor regulations, that have deterred entrepreneurs from expanding capacity. . . . Zimbabwe is . . . establishing new parastatals and new interlocking, and even duplicative, state organizations to manage its economy." [548] Appendix 23.2: Selected References to Structural Adjustment
Appendix 23.3: Skilled versus Unskilled Labor in the United States
Appendix 23.4: Political and Economic Reforms in South Africa during the 1980/1990s.This list was compiled partly from Jerry B. Eckert's articles in the Christian Science Monitor, "Economics can Defeat Apartheid," 28 March 1989, and "Rethinking South Africa," 21 April 1989, and partly from current news sources. 1978: Eating places, theaters, rest rooms, public parks desegregated. 1979: Government began investing millions in job training for black productivity and incomes. In the most recent twelve years [1977-89], real black income rose 65 percent, while real white income declined 5 percent. 1980: Beginning of massive investment in black education. Fifteen classrooms per working day are built. Expenditure on black schooling has grown 30 percent per year. Aim is to bring black education up to white before desegregation. 1981: Black and mixed-race unions legalized. Strikes for higher wages, some successful. Sports integrated. 1984: Uniform tax laws for all races. Universities desegregated. 1985: Mixed marriages act and Morality act repealed. Job reservations acts (reserving specific jobs for whites) largely bypassed and not enforced. 1986: Racial barriers removed for "international" hotels. South African citizenship restored to citizens of homelands. Pass laws abolished. Government announced it would no longer enforce Group Areas Act (which placed areas off limits for black homes). "Gray areas" (mixed-race residences) appearing in Johannesburg, other major cities. Sales of liquor allowed to all races. Separate systems of courts removed. U.S. Congress imposes Federal sanctions on South Africa. 1987: Job Reservations Acts repealed. 1987 and 1989: Dutch Reformed Church states that segregation is a sin. 1989: Free Settlement Areas Act permits residential areas to apply for and be granted exemptions from Group Areas Act, thus becoming nonracial. National Party adopts "black vote in five years" as party platform for September elections. Johannesburg desegregates swimming pools and recreation centers. All beaches opened to persons regardless of color. 1990: Buses in Johannesburg open to all races. 1991: Apartheid land laws abolished. Law defining people by race repealed. President George Bush lifts most US Federal sanctions; those of many localities in U.S. remain. 1992: Whites in referendum overwhelmingly approve negotiations to end minority rule. 1993: African National Congress accepts the idea of power-sharing with white elements. Parliament adopts laws giving blacks participation in government; elections are called in which a black president would be possible. Nelson Mandela calls for ending of sanctions. Other countries and U.S. localities start to comply. New constitution abolishes apartheid. 1994: Nelson Mandela elected the first black president. Appendix 23.5: References to Groups and Emerging Pluralism in the Third WorldI. Groups with Promise of Becoming Bargaining Agents
II. Corporate Groups Co-opted by the Power Group
III. Groups with Unfocused Objectives
FootnotesCopyright © 1994 by the University of Michigan. First published in the USA by the University of Michigan Press, 1994. Published on the World Wide Web by The Quaker Economist with permission from the University of Michigan Press, 2005. This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.5 License. |
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