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The Dependency Theory within the Third World Countries
The Dependency Theory within the Global South
The Dependency theory explains that there has been unequal and unjust distribution of resources and power in third-world countries (White S. & Seth-Smith, 2014). The development of businesses, companies, and running of the states are not justifiable. This was mainly because there has been misuse of the limited resource available. Developing countries face challenges of less power, low education levels, underdeveloped financial systems, and in most cases, are dominated and controlled by the developed nations in the world. This essay elaborates on the dependency of nations, the impact of unequal resource distribution, and the influence of foreign variables on business in developing countries such as Jamaica. (Economics Assignment Help)
The article “Democratic Wealth: Building a Citizens’ Economy: Economic Justice requires more independence, not less” by White S. & Seth-Smith N. (2014) postulates that businesses in developing nations face hard times to sustain the unfavorable business environment (White S. & Seth-Smith, 2014). Their basis was on the fight for independence and minimization of dominance. There was a need for fighting for the republican equation and freedom and corruption reduction for economic development (White S. & Seth-Smith, 2014). On the other hand, the article “Dependency Development and Foreign Policy: The Case of Jamaica by Biddle W. J & Stephens J. D. (1989) postulates that the development of organizations in developing countries depends on the policies of developed nations. The two articles have emphasized the ways to ensure the successful growth of businesses. The independence of organizations ensures that there is healthy competition in the world for success. Dominance limits the freedom to pursue one’s targets, and it implied that the cooperation had less to achieve (Biddle & Stephens, 1989). Third-world countries like Jamaica face many challenges from the prominent leadership and dominance of financial elites. From the articles, It was only acceptable for the private sector to be controlled by political power to minimize missus of power.
In some cases, where private sectors are allowed to operate independently, the benefits are unequally distributed, with a few benefiting the most at the expense of many. In this way, political and economic elites intervene to control the private sector from sacrificing the many for the benefit of a few (Biddle & Stephens, 1989). The private sector benefits the most with minimization of dominance. However, they were forced to accept political orders like paying taxes. The maximization of independence and freedom achieved more as compared to the depreciation of dominance.
These articles discussed the impact of corruption and political powers in third-world countries. Corruption has led to slow economic growth (Biddle & Stephens, 1989). Few people in political power and leaders of organizations benefit the most in the sacrifice of many. In developing economies like Jamaica, privatization has led to the exploitation of public assets (Biddle & Stephens, 1989). Public investments are transformed into individual wealth. Both developing and developed nations suffer from privatization as there has been a direct transfer of public assets for personal gains in the sacrifice of many powerless people.
White S. & Seth-Smith postulated that the Jamaican government focused on privatization, liberation, and devaluation. The articles postulate that privatization in developing nations such as Jamaica led to slow growth and collapse of economic strategies as there was the misuse of resources. There was, therefore, the need to call for government agency intervention (Biddle & Stephens, 1989). Urgent government intervention in the private developed organizations such as Google was necessary. It ensured workers’ rights were protected, and the operating companies under their jurisdiction are taxed. This intervention also benefits the developing companies as they can be exempted from paying tax and giving access to public grants. There was a need for the private sector to change its benefits to fight corruption and boost public interest.
Developing countries depended entirely on the developed nations. Right Theory, Wrong Variable: Foreign Variables and Monetary Policy by Pologne (2014) agreed with White, S., & Seth-Smith that the success of developing organizations in third world countries primarily depends on the core companies in developed countries. They formed organizations that influence the success of organizations in developing nations. Policies, values, strategies are entirely based on the independent organizations in the developed countries (Biddle & Stephens, 1989). One can understand that the dependency might cause negative impacts on the dependent nation. The political elites tend to form policies in independent countries that affected developing countries’ economic development (Biddle & Stephens, 1989). For example, in Jamaica, despite the Jamaican business favoring the promotion of economies in the United States of America, America’s policymakers formulated policies that negatively affected aluminum extraction. During Michael Manley’s Peoples National Party era, I learned that major militantly offensive movements ensured a face out of aluminum multinationals in the 1970s (Biddle & Stephens, 1989).
According to Pologne (2014), comparative research was done on the effects of foreign markets on the price levels in Jamaica. A chart was drawn to demonstrate the influence. It was evident that the domestic money supply changes did not change Jamaica’s cost of living. The study showed high positive elasticity in consumer price levels and exchange rates. The positive relationship between the consumer price index and money supply could only be associated with open economies like Jamaica. It was postulated that open developing economies had a big influence on their domestic price index from foreign determinants. This led to inflation in the country where the price levels of goods and services were high. From the graphs illustration, foreign variables like the exchange rates and Us money supplied displayed an enduring influence on the domestic rates and domestic money supply. It was clear that, with inflation, the value of domestic currency depreciates. In this regard, developing economies find it challenging as imports became extremely expensive and export less expensive in the foreign markets (Pologne et al., 2014). According to Pologne et al. (2014), authorities in small developing countries should always be ready to expect high exchange rate fluctuations. There was a need to be very flexible and adaptive to the high fluctuations to maintain such inflation rates under control.
These articles have also demonstrated the impacts of foreign developed companies on the local developing companies in Jamaica. The article exploits the case of aluminum extraction in Jamaica by the Us government. This led to both positive and negative impacts on Jamaican’s economy. Negative impacts included cases where people in the developing nation were forced to work tirelessly with minimized income and harsh working conditions. Positive impacts brought on Jamaican’s economy were that the developed economy supported other local companies in Jamaica by providing resources. Such resources may include funds, materials, and a ready market for the products. Even though there will be fast growth of companies in the third world nations, most of the companies’ wealth will be taken only to benefit the developed organizations. The development of companies in developing nations such as Jamaica faces economic resistance as the valuable resources are utilized by their core companies (Pologne et al., 2014).
As postulated by these articles, one can see that developing countries face many challenges from the developed countries. Developing nations such as Jamaica have high dependency ratios with low incomes, high population, low productivity, and high consumption rate. The high population has contributed to the common living standards where people are forced to work under little or no pay. The hard times in the countries have led to the intervention of foreign nations reducing their capability further. Developed nations export valuable products from their efforts, leaving the developing country with very little to invest in their countries. This had increased disparities between the rich and the poor. According to this article, developing nations tend to fight for liberty and independence.
From the articles, one can conclude that, despite the negative impacts caused by the foreign policies in the economies of developing nations, foreign policies also cause positive results in developing countries such as Jamaica. The benefits may include trade promotion, financial support to establish industries and infrastructure, commercial negotiations, and ensuring a market for their goods, identifying a helpful resource, constructing roads, and finding new markets for products in developed countries have boosted the growth of businesses in developing nations. I have come to agree with the articles that through the extraction of Aluminum in Jamaica, there was an improvement in the living standard of people in the North Coast of Jamaica. Jamaican residents were employed in the extraction sites, arrangements, and transportation of extracted Aluminum.
From the articles, one can discover that the intervention of foreign nations also provides the necessary funding where developing countries like Jamaica lack. Thus, local businesses were improved. Businesses benefitted by offering service to both United Nations elites and the workers from the construction sites. Foreign governments constructed roads to help in the importation of extracted Aluminum. Even though the country lost its most beneficial product, locals benefitted from good roads, which boosted their businesses. Developing nations also ensured the provision of modernized health facilities. It has been elaborated that Jamaicans benefitted from the constructed health facilities in the region.
One can agree with Biddle W. J., Stephens J. D. and White S., Seth-Smith on the dependency theory that other developed countries had modernized health facilities, improved education systems, developed infrastructure, highly skilled military power, and other resources. These powerful nations made it easy to overtake and make political and economic policies that governed the developing and underdeveloped countries. These articles have vividly elaborated on the effects of unequal and unjust distribution of natural resources globally. These disparities have forced most of the countries to be misused by the developed nations. The developed nations identify and exploit valuable resources in the developing nations because these nations are more powerful and have enough funds. The differences between the United States of America and a developing country such as Jamaica have been elaborated.
These articles have been very informative and clearly illustrate the history of developing countries such as Jamaica, the challenges they face during the development, and the exploitation of developed countries. I have been able to add knowledge from what I knew before reading the articles on the benefits of national dependency. Furthermore, the impacts of external forces like the exchange rates and foreign change in money supply on developing economies like Jamaica. The articles have well described the advice authorities should take to solve the inflation problem and controlled the fluctuation of prices in the foreign markets.
References
Biddle, W. J., & Stephens, J. D. (1989). Dependent development and foreign policy: The case of Jamaica. International Studies Quarterly, 33(4), 411-434. https://academic.oup.com/isq/article-abstract/33/4/411/1793848
Pologne, M. C., Rangel-Gonzalez, E., & Blanco-González, L. (2014). Right Theory, Wrong Variable: Foreign Variables and Monetary Policy in Jamaica. Social and Economic Studies, 57-87. https://www.jstor.org/stable/24384099
White, S., & Seth-Smith, N. (2014). Democratic Wealth: Building a Citizens’ Economy. London: openDemocracy. http://staging.community-wealth.org/sites/clone.community-wealth.org/files/downloads/book-white-smith.pdf
