The negative effects of Capitalism in the Third World

Capitalism in the Third World is a system in which a few rich people control most of
the money and the money is used to serve the interest of elites to detriment of
large portions of the population. To be specific, it is a destructive force that works to
increase poverty in Third World countries. Rich people in these countries have much
more power than in advanced democratic countries and they use this power to
support wrong economics policies that gives less opportunities to the poorest
people to improve their conditions of life. An example of how Third World economies
work against the interests of most of the people is shown in the example of the
Structural Adjustment Programs SAPs created by the IMF and the World Bank in
1974-75. It promised benefits to developing countries with the implementation of
adjustments recommended by the banks together with bank loans for the
development of these economies. It was created to help poor countries to improving
conditions for the masses of the people and to escape from poverty. But instead of
helping poor people, this adjustment comes to increase their problems such as the
loss of existing jobs, ruined local companies and the decrease of wages. As
Sthephanie Black shows in her film Life and Debt, the negative effects of
globalization is to enhance inequalities in Third World countries because the elite
monopolize the opportunity and rob the people of their fair share in the increase of
the trade. This is not so different from colonization of African and Europe in the 19 th
century. People think that they are helping the country by increasing trade but they
only disrupt the local economies and enrich the elite without benefit to the masses
of the people. Perhaps it is correct to say that the IMF and the World Bank are a
modern form of colonization by western powers. Therefore I think that capitalism is
a destructive force in Third World countries because it helps the wealthiest people

to increase their wealth and power through their control of the countries politics,
economy and military.
At first, when countries of the Third World thought about the Structural
Adjustment Program SAPs that tried to globalize industrialization, they never
concerned themselves with the paradox of progress. In other words, they never
thought about the consequences of sweeping away its old system to make way for
globalization. In the film Life and Debt, Stephanie Black uses a sequence of
conflictive images to show how globalization came to destroy local agriculture and
industries with the removal of import controls and subsidies. This was done because
the people with the power benefited most from the destruction of local economies
and ordinary people had no power to control the effect of the economic changes on
their lives. For example, she emphasizes in the movie that it is impossible in
Jamaica with a local producer to compete with the importation of bananas with big
companies such as Doll, Chiquita and Del Monte. These intensive farming methods
destroy the local economies that ordinary people depend on to live. This new
system comes to hurt local and small companies and gives advantage to rich big
companies that are controlled by the elite who do not care about the ordinary
people in their society. In addition, Black also shows how workers are abused in
factories created by international companies in places like the Kingstone Free Zone,
and describes how workers suffer abuse and violation of civil rights. This is again a
result of the lack of civil society in these developing countries where ordinary
people do not have the right or the power to demand fair treatment from the elites.
In addition, when factories close shop and leave the country they never pay the
workers the years of service with the company. In chapter seven of his book Planet
of Slums, Mike Davis argues that in China and the industrializing cities of

Southeast Asia, millions of young women indentured themselves to assembly lines

and factory squalor. Women, according to recent research, make up 90 percent of
the 27 or so millions workers in Free Trade Zones. Davis condemns global
capitalism as a major cause of poor people suffering and womens exploitation. It
shows that globalization is huge problem in countries from the Third World because
ordinary people do not have the same rights we have in advanced countries to
demand fair treatment and a fair share of the countries wealth. That is the result of
the globalizing process. To illustrate, women in El Salvador work in a very poor
conditions, sometimes the factories are built of aluminum and the heat is inhuman.
They have to work Monday to Friday from 7 am to 5 pm, it is 10 hours a day with a
salary of seven dollars a day. It means that Americans Factories are saving at least
83 dollar a day per worker. It is a very sad thing because having very basic meals
there such as beans, rice, and corn tortillas costs 10 dollars a day. Why should poor
people in Third World countries spend all their income from international companies
on basic food. This is because they have no power to demand more fair treatment
and the IMF and the World Bank do not care about fairness for poor people. They
only care about total production even if all the wealth goes to a few people at the
top.
To conclude, capitalism is a destructive force for any society if ordinary
people do not have political or economic power to demand a fair distribution of the
countries wealth. Efforts by the IMF and World Bank may increase production but
ironically they may disrupt the local economies that provide an essential standard of
living for most ordinary people. This is because the economic benefit in the Third
World goes to the top few families that hold all the power in the society. Therefore
capitalism is a very destructive force in society when people are not given the

opportunity to improve their life by getting a fair share of the countries production.
By focusing only on production the IMF and the World Bank become part of the
Western colonial system of exploiting ordinary people in developing countries to
make the elite rich. To change the situation we must make sure that western help
for Third World economies depends on equal progress in the countries democracy
and freedom for ordinary people.