Follow up on the Article: Development (1/3) Africa’s Access to Mineral Resources (Geopolitics Section)
There is wisdom in a multitude of counsel. Should Africa listen more to the West? Now-Developed Nations often promote free markets, democracy and worker rights to Developing Nations. Following Ideal values is enforced with aid and sanctions. For example, some have prosed cutting aid to African countries supporting Russia, which the African countries call non-alignment instead.
The Book Kicking Away the Ladder by Ha Joon Chang argues that the West didn’t follow these Western-imposed standards to the top, and enforcing them is a way of not allowing developing nations to develop, hence the book’s name.
These values are admittedly ubiquitous; rejecting them just because they are promoted to Africa is immature.
From the African Development Group, this is the issue Professor Chang raises –
“If the policies and institutions that rich countries are recommending to poor countries are suitable and appropriate, one would expect that growth and development would be the rule, rather than the exception, during the last three decades when developed countries started turning on the pressure on developing countries to adopt the so-called “global standard” policies and institutions,”
In this award-winning book, Professor Chang argued that all major developed countries used interventionist economic policies to get rich and then tried to forbid other countries from doing the same. He spoke at the African Development Bank Group and worked in the UN due to this and his other works.
Counter Argument
The most recognised critic of the book is Douglas Irwin, an Economics professor who authored a study on the American Smoot-Hawley Protectionist Tariff Act of 1930. Protectionism is the theory or practice of shielding a country’s domestic industries from foreign competition by taxing imports (customs). He argues Ha Joon only looked at countries that succeeded despite protectionism in the 19th Century and ignored those who pursued protectionism more and failed because of it. A metaphor would be studying 90-year-old lifetime smokers to conclude smoking is good. I will lay Ha Joon’s argument for you, with some additions, and you can conclude.
Free Market? Protectionism.
Ha-Joon thinks Protectionism develops an economy, not the free market or specialisation promoted in Econ101. Once industries have been given time to develop, are well diversified and are thus a self-sustaining closed system, only then opening them to the Free Market works. For proof, consider how the economies of the US, EU, Russia, China and Africa have fared due to the current trade war. All things equal, how can Russia cope with sanctions on oil prices and many foreign companies and funding leaving?
The greatest proponents of the Free Market have been most skilled at using protectionism to develop their industries. These are examples in recent history:
15th Century Britain (King Henry VII 1489)
- Unindustialised Britain exported raw wool to then developed Low Countries (Holland and Belgium)
- Laws banned the export of raw materials like wool. Reducing supply to low countries and protecting budding domestic industry
- Skilled immigration policy (poaching Textile Workers)
18th Century America
- After attaining Independence in 1776, America was underdeveloped compared to European Powers. Protectionism, not Free Trade, led to the remarkable closing of that gap.
- A new 5% customs duty on foreign products encouraged domestic industry
- 25% customs duty during a conflict with Britain in 1812. The higher rate lasted past the war climbing to 40% in 1820
Modern America
The US was considered the 2nd most protected before World War 2. The Free Market value is more characteristic of the US today; however, there is still some protectionism in line with national interests. Today there is the coordination of Lithography Technology denial against China. It also exists amongst allies; talking of the US’s 2022 Inflation Reduction Act, Macron noted it was “Super Aggressive for our (EU) companies” and that “Perhaps this law will solve your problems, but it will make mine worse”
Democracy & Liberty
Liberty and Democracy invoke the United States; they see it as a duty to promote Democracy worldwide. Liberty means being free within society from oppressive restrictions imposed by authority on one’s way of life, behaviour, or political views. Rich countries exploit poor ones depriving them of the Liberty the West promotes. Ha Joon Chang uses Britain’s historical dominance over colonial interests as proof of the trend.
British dominance over US
- in the 17th and 18th Britain exploited East American colonies for their Timber, Furs and Tobacco to use in their industries. Raw materials from all the colonies were then used in that developed protected economy
- Britain outlawed America from constructing key steel-making infrastructure (rolling and steel mills)
- This explains the US in the late 18th Century and after.
The dominance is not limited to states or state bodies, but the private sector also participates in Rockerfella monopolistic type actions. Developed nations’ foreign policy and multinational business activity are often symbiotic by design. Consider the Oil Industry in the Middle East.
Here, in the SADC region, analyst Rutendo Matinyarare on SABC alleged a containment of both Zisco Steel and Eskom by external players for business and geopolitical reasons post Independence.
Democracy
Developing nations are often accused of not being sufficiently democratic. It is thought that democracy leads to prosperity. Whilst most developed countries are democratic, they were not so when they came into power. In the UK, women could only vote in 1928; thus, democracy spread, and ironically colonialism continued. Being asked about human rights in an interview, President Kagame noted that “Human Rights” don’t come from the West; people pursue these rights for their own benefit. In recent history, developing nations have done the most to afford their people human rights. He meant developing countries need no encouragement to keep human rights or be democratic.
Property Rights
Professor Chang then highlights how Property Rights aren’t absolutely necessary for Economic development. Property Rights ensure entrepreneurs and the community keep their property from seizure by the State. This would incentivise value creation. Unlike what they say, in its 18th-century development, Britain violated intellectual property rights and gave public land to the private sector. Not to mention actual theft from colonies.
Worker Rights
Historically, abuse of workers’ rights, including child labour and forced long working hours, were widespread in now-developed countries (NDCs), such as Britain and the United States, as they industrialized. This exploitation was integral to their economic growth during the 18th and 19th centuries. Even into the 20th century, some Western societies, like Denmark, did not implement strict workers’ rights laws until 1925. However, the same unregulated path to economic development is not open to today’s developing nations. To aid the growth of developing nations, the historical context of the NDCs’ industrialization must be considered, acknowledging that these nations cannot and should not replicate the NDCs’ earlier exploitative labour practices.
DRC
A parallel situation exists today, particularly in the Democratic Republic of Congo (DRC), a leading supplier of cobalt, which is vital to the tech industry. Just as labour abuses marred the industrial growth of NDCs, the cobalt supply chain in the DRC is facing scrutiny due to reports of child and forced labour. Some tech giants are indirectly benefiting from these exploitative practices, according to a 2020 Australian Strategic Policy Institute report. Yet, akin to other developing nations pursuing ethical paths to economic growth, the DRC has an opportunity to turn around its cobalt industry. By establishing rigorous labour regulations, ending child and forced labour, ensuring fair wages and safe conditions, and fostering transparent partnerships with tech companies committed to responsible sourcing, the DRC can transform its cobalt sector into a sustainable development engine, mirroring the more advanced and ethical growth strategies of contemporary developing nations. Is Big Tech held equally responsible (to DRC) for the labour violations?
Hope
Developing nations are in a position to grow their industries if they can employ a level of protectionism to grow diversified economies. They can grow their industries supported by institutions of Welfare and Democracy, which is a better way to develop. Similarly, NDCs cannot engage in the dominance politics of the past. At the recent Paris Climate Finance Summit, President Ruto remarked that the World Bank and IMF are “hostage” to rich nations leading to Africa paying “8 times more” to borrow. He argued for a more equal model of global financing, whereby all members paid in a way that didn’t promote some’s national interests over others. The Summit shows cooperation in bringing the aforementioned values and development. All nations have a role to play.
In the future, we will discuss the Game Theory between developing and developed countries.
