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Simply... The West's Debt To The Third World


new internationalist
issue 189 - November 1988

the West's
debt to the
Third World

In the West we readily accept the idea of Third World debt
and forget that our present wealth has been built on riches plundered
by our colonizing ancestors. NI takes a broader, historical look at
debt and asks 'Who owes what to whom?'

Illustrations: Clive Offley

Pioneer European settlers used several methods to take land from indigenous people. In Aotearoa (NZ) the concept that land could be possessed was entirely foreign to Maori thinking. This enabled settlers to buy land from them at ridiculously low prices. In Australia, Canada and the Americas, killing native people was the method usually favoured by settlers. Later European governments got in on the act and set about invading and colonising large chunks of the globe. Vast territories were turned over to growing cash crops and extracting minerals for Western interests. Today ex-colonies remain locked into these impoverishing patterns of land use and borrowing money is often their only way to survive.

Illustrations: Clive Offley

European colonizers also sought raw materials like gold, diamonds and timber. King Sugar had accrued massive wealth in Europe which generated the scientific and technological innovations that led to the industrial revolution. As technology progressed the hunger for raw materials grew. In 1885 seven European powers invaded Africa for their share of what King Leopold of Belgium described as 'this magnificent African cake'. Today many Third World countries remain dependent on selling their commodities to the West. But the West has manufactured substitutes and commodity prices have crashed - making it increasingly hard for Third World countries to earn enough to repay their debts.

Illustrations: Clive Offley

The colonists soon had plenty of land and a labour force was needed. They devised a simple solution to this problem : the slave trade. Around twelve million Africans were captured and transported to work the cotton field and sugar plantations of the Caribbean and North America. Later in India and Africa whole villages rounded up and forced to work for minimal wages set by foreign officials. Resistance was met by beatings, fines or imprisonment. Unions were forbidden. It can be argued that forced labour has not ceased but merely changed its form.

The fall in commodity prices means that Third World countries must produce more to earn the same amount. This has to be spent on repaying debts to the rich world: the fear of no more loans keeps them in line. High costs, low wages and merciless poverty are the price that Third World people pay.

Illustrations: Clive Offley

In order to kill and enslave indigenous peoples, Europeans had to believe their victims were sub-human. The history, culture and knowledge of these people were denigrated and the contributions they had made to European thought forgotten. When the settlers of Canada and North America took Indian land, they conveniently ignored that the Indians had taught them how to cook local foods and prepare herbal medicines. And when racism exploded in the eighteenth century - to justify slavery - it wiped out any acknowledgement of African achievements. The history of mathematics - long held by the Classical Greeks to have originated from Ancient Egypt - was swept under the academic carpet and lost. This ignorance continues today, reinforcing racism and giving an ideological justification for the idea of 'Third World debt'.

Illustrations: Clive Offley

European settlers got the best of both worlds. Not only did they steal land, labour and raw materials from native peoples: they sold European goods to them as well. In North America and Canada, they swapped iron pots, tools and guns with Indians for furs and food. And later, they traded guns and other manufactured goods with rich Africans in exchange for slaves. Third World markets provided outlets for manufactured products, enabling the growth of Western industry. And developing countries continue to buy Western goods and services - often with Western loans - for ill-conceived development projects recommended by Western 'experts'.


Illustrations: Clive Offley Finally colonizing nations discovered more direct ways of profiting from Third World peoples: they simply demanded money from them. The British introduced a system of taxation in Africa which forced the Africans to work for their colonizers simply to pay their taxes. In the same way, the West continues to make large sums of money from Third World debt. Loans frequently come straight back to us from the purchase of Western goods. We buy Third World commodities for a song. And we receive a steady income from interest on Third World debts. So who owes what to whom?

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New Internationalist issue 189 magazine cover This article is from the November 1988 issue of New Internationalist.
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