Imperialists Shift Burden of Economic
Crises On to Developing Countries

by Fu Ching-yen

[This article is reprinted from Peking Review, #18, May 4, 1973, pp. 15-16.]

      The imperialist countries in recent years have often been saddled simultaneously with an over-production crisis and a financial and monetary crisis. To get out of the fix which is fraught with contradictions, they have used every means to shift the burden of the crises on to the people of the Asian, African and Latin American countries. This has meant serious economic difficulties and substantial losses for many countries. The imperialists’ selfish actions against the third world have aroused strong opposition from the peoples of Asia, Africa and Latin America.

Getting Rid of “Surplus” Commodities

      Pushing “surplus” commodities is an old imperialist trick to shift the burden of crises on to others. Although the competitiveness of U.S. monopoly capital’s products has weakened in capitalist markets in recent years, the United States has never let up unloading commodities on the Asian, African and Latin American countries. U.S. exports to the Asian, African and Latin American regions in 1970 totalled 12,990 million dollars, more than four times that in 1950. The growth rate of U.S. exports to developing countries in 1970 (15.2 per cent more than in 1969) was greater than the growth rate of total U.S. exports (1970 saw an increase of 13.7 per cent over that of 1969).

      The sale of “surplus” industrial products formed a major portion of these exports. U.N. statistics show that in 1970 the export of machinery and transport equipment by “developed” capitalist countries to the developing countries made up 41 per cent of the total value of their exports to these countries, while other manufactured goods took up 28 per cent. The dumping of “surplus” farm products also showed an increase. These farm products from the imperialist countries brought untold calamity to the villages of many Asian, African and Latin American countries

      bankruptcy, land lying in waste and large numbers of peasants forced to become homeless.

Forcing Down Prices of Primary Products

      To control and plunder the developing countries and to shift the burden of over-production crises on to them, the imperialists have for a long time forced the Asian, African and Latin American countries to rely mainly on producing and exporting one or two kinds of raw material or agricultural products to maintain their national economies. Such mono-crop economies make these countries easy prey for imperialist monopoly capitalists to control and plunder.

      With 63 per cent of its cultivated land devoted to rubber growing, Malaysia finds it impossible not to accept “surplus” food grain from the imperialists. With 90 per cent of its foreign trade earnings coming from petroleum, Venezuela cannot but import “surplus” mining equipment and other industrial equipment from the imperialists. Since cocoa makes up 70 per cent of Ghana’s exports, coffee 68 per cent of Colombia’s exports, cotton 53 per cent of Egypt’s exports, sugar 58 per cent of the Dominican Republic’s exports, tea 66 per cent of Sri Lanka’s exports, etc., the imperialists find them an easy victim on to which to shift the burden of their crises.

      Forcing down prices of mineral ores and products is the most common method the imperialists use to pursue this end.

      The drop in prices of primary products in the capitalist world markets, which has occurred several times since World War II, always has been aggravated when a crisis breaks out.

      An example of this was the August 1969 U.S. economic crisis in which the demand for rubber dropped as production sagged in the automobile and other industries using this product. The result was a “surplus” of natural rubber and the monopoly capitalists resorted to dumping their stocks to force down the price of rubber, thus bringing disaster to the developing countries which produce it.

      Taking the index of Malaysia’s export price of rubber for 1963 as 100, it was 96 in 1969, 78 in 1970, 64 in 1971 and down to 54 in April 1972. The sharp drop in rubber prices brought enormous losses to the developing countries, as illustrated by the fact that though Malaysia’s rubber exports in 1970 showed a 14 per cent increase over that of 1969 it actually earned 14 per cent less than in 1969.

Expanding Export of Capital

      The imperialists also use the method of expanding the export of capital and promoting the export of commodities. Export of capital mainly takes two forms. One method is direct investment. Apart from plundering the developing countries’ mineral resources and agricultural products, another important goal of this method is to seize markets. By direct investments in developing countries to set up enterprises and sell commodities, the monopoly capitalists are able to bypass tariffs and restrictions on imports and foreign remittances established by various countries to protect their own national industries and commerce; to get huge savings in transport and insurance; to compete better against other foreign companies which use cheap labour; to directly control the markets and grab big superprofits. In the last few years, direct investment abroad by U.S. monopoly capital has increased at a rate of more than 10 per cent per annum. By the end of 1971, it had reached 86,000 million dollars, of which 27 per cent were invested in developing countries, more than double that in 1960.

      Another methidd is by state monopoly capital’s bilateral and multilateral “aid” which is a cover for the imperialists’ attempt to attain their aims of military and political infiltration and the sale of “surplus” commodities. Statistics show that from the middle of 1945 to the middle of 1971, total U.S. foreign “aid” reached as high as 149,600 million dollars. Apart from having to pay high interest, the countries receiving loans must also buy outdated U.S. machinery and equipment at prices higher than the international market prices. The U.S. State Department admits that more than 75 per cent of all “aid” given is in the form of U.S. commodities. What is more, the greater part of such “aid” is used in the communications and electric power departments which are very necessary for the monopoly capitalists to plunder the riches of the developing countries and to sell their “surplus” commodities.

Shifting the Burden of Monetary Crises

      Buffeted by recurrent monetary crises, the imperialists are trying to shift the losses incurred on to the countries of the third world. A most striking example is the losses in foreign exchange reserves sustained by the Asian, African and Latin American countries as a result of the capitalist world’s monetary crises. At the end of 1971 the capitalist world’s gold and foreign exchange reserves totalled 129,800 million dollars with the reserves of the Asian, African and Latin American countries taking up only 22,780 million dollars of which 75.9 per cent was in the form of foreign exchange, mainly U.S. dollars. When the dollar devaluates, the imperialists shift the burden of the losses on to the developing countries which have U.S. dollars as their foreign exchange reserves. The dollar devaluation in December 1971 brought a loss of about 1,200 million dollars to the foreign exchange reserves of Asian, African and Latin American countries.

      Since the beginning of 1973, the capitalist world’s monetary crises have grown ever more acute, centring on the crisis of the dollar which was in fact twice devalued. The foreign exchange reserves of many Asian, African and Latin American countries have thus sustained still more serious losses.

      The monetary crises have also brought heavy losses to the developing countries’ foreign trade. About one-quarter of the Asian, African and Latin American countries’ exports go to the United States. In 1971 when the developing countries’ exports to it were about 15,000 million dollars, the dollar devaluation brought a loss of 1,200 million dollars to the Asian, African and Latin American countries in their exports to the United States.

      The so-called “new economic policy” pushed by the U.S. Government in August 1971 is a typical case of shifting the burden of monetary crises on to others. A Mexican economist estimates that the U.S. Government’s application of a surcharge on imports has caused the Latin American countries a loss of 1,500 million dollars in exports to the United States, with Mexico alone sustaining a loss of 48 million dollars. As a result of the dollar devaluation and the resultant readjustments in the parities of other currencies during the monetary crisis in the latter part of 1971, the foreign debt of many developing countries greatly increased. Material published by the Secretariat of the Third Session of the U.N. Conference on Trade and Development estimated that the developing countries suffered a loss of about 2,500 million dollars.

      The imperialist countries’ egoistic policies of expansion and plunder as well as their evil acts of shifting the burden of their economic and monetary crises on to others have aroused strong dissatisfaction and resistance from the developing countries and their peoples. The call for the third world to unite and safeguard national interests has resounded from the tribunals of many international conferences. Countries which mainly rely on exports of primary products have united in various ways to oppose imperialist economic plundering. The struggle of the developing countries against the imperialists shifting the burden of their economic crises on to others has become a powerful force which is further developing and deepening the contradictions inherent in imperialism.

Return to Peking Review article list