c

Ê

 

History is built of examples of the annexation foreign territory and the domination of weaker by
stronger power. Nevertheless, there is a vital difference between the empire building of pre-
capitalist times and that of the capitalist times. At the end of the fifteenth century, the new
colonial powers of Western Europe used their military powers (skill and expertise) to pursue the
well-trodden paths of plunder, piracy and annexation of foreign territory. But at that time
Europe was on the threshold of major up heavals: the feudal system was in crisis, trade and
commodity production were becoming increasingly important and the seeds of the capitalist
mode of production were spouting. The exploitation of the business opportunities found overseas
stimulated a vast growth in worldwide trade. The commercial revolution of the sixteenth and
seventeenth centuries, which unfolded along with the geographical discoveries and overseas
conquests, helped break down the feudal barriers to production and accelerated the rise of
capitalism. From the middle of the sixteenth or at the time of Merchant capitalism, European
traders combed the coast of Africa, Asia and Latin America in search of slaves, spices, gold and
in conquest the existing trade routes. Keith Griffin defines it as ±³It was the combination of
European military superiority and her relative material poverty, which shaped events in the early
phase of European expansion by advanced military technology and it was made necessary by the
inability of Europe to engage in trade on equal terms with wealthy nations of the East. Asia had
much that Europe wanted but Europe could offer almost nothing that was desired in India´ i But
the unilateral transfers of wealth from African, Asian, and South-American continents
constituted in historical terms, an almost instantaneous as increment in the economic surplus
which largely concentrated in the hands of capitalists who could use it for purposes of industrial
investments. Thus West made the industrial revolution and at the same time the internal
development of Asia, Africa and Latin America were discontinued. Their confrontation with the
West actually had a regressive effect on the level of social structural complexity was the
combined outcome of demographic, economic and political decline of these areas.

In the period of (1850-1900) known as the colonial age, most new Marxist writers argue that the
merchant capitalism, while hugely profitable to Western Europe, was nevertheless an obstacle to
the more efficient organization of production and control over raw materials that the new
manufacturing capitalist class sought as their business expanded and competitor with one
another. Colonialism potentially allowed much greater profit because it meant the introduction of
more efficient systems of farming and mining as well as greater control over the labor force.
Nineteenth century colonialism was seen as a valuable political instrument controlling overseas
territories for the further development of industrial capitalism in the West. The main
characteristics of this period is that increased territorial responsibility due to conquest, gradually
and at first reluctantly, replaced the comparatively arbitrary exploits of commercial plunders
with a more deliberate administrative system designed to adopt the socio-economic organization
of the colony to the needs of the mother countries. In doing so, the Marxist view holds, European
imperialism further underdeveloped these already territories. Through the tax system, the
 -

production of marketing/ crops and minerals, organization of market outlet, system of law and
order and monetary system, the mother countries started their imperialistic ruling in these areas.

But the present phase is the phase of neo-colonialism and it is the new form of exploitation in the
peripheral countries. The neo-colonialism was first examined at the length by Nkrumah
(Nkrumah, 1965), the Ghanian president of the early sixties. He argued as ±³The essence of neo-
colonialism is that the state which is subject ti it is, in theory, independent and has all the
trappings of the international sovereignty. In reality its economic system and thus its internal
policy is directed from the outside´ii It appeared that, about a decade after the end of the second
world war, the old colonial dominance had finally collapsed, the weakness of the European
powers, the emergence of United States and nationalist movements in the third world brought
about a fairly shift end to empire. By the end of 1945, Second World War, most colonies had
won their independence and the world virtually free of colonies. But once the monopolistic
control over the production and marketing of the periphery¶s export produce had been
consolidated and the market outlets had been guaranteed, there was no longer a need for direct
political control by the mother countries over their colonies.

Through the development of multi-national corporations all over the world by the centers and in
the name of aid and trade, they are maintaining their dominance in the third worlds countries. In
the back-stage of aid and trade, their hidden purpose, is to hold the internal dominance of the
poor and third world countries. These aid and trade are coming to third from multiple source but
their aim and purpose are same and just.

î 
 

In the world of capitalism, globalization and free trade, some institutions, organizations and
countries are helping the third world countries with trade and aid. At the present time aid and
trade in the main source and tools of control and exploitation. These institutions and institutions
are created directly or indirectly by the super power countries to strengthen their dominance and
power all over the world. These institutions, organizations and countries help the countries of
Asia, Africa and Latin America to ensure their dominance. We know that British ensured their
power and dominance on India after independence in the name of business and trade. These
situations happened in Malaysia, Indonesia and other Latin countries. Andre Gunter Frank told it
the new form of colonialism and it¶s the indirect colonialism and imperialism. Now, we can see
the some institutions that ensure their dominance and authority all over the world in the name of
aid and trade.

  

International Bank for Development and Reconstruction had been established to help the Europe
after world war second that became known as the World Bank later. Early in the summer of
1944, Allied Troops columns rolled eastward through France. Berlin lay on the horizon. Second
 å

World War had entered its final phase and Allied victory was just a matter of time. Having begun
to ponder the possible shape of post war world, the Allied leaders held a conference to discuss
the structure they would give to the world economy. This meeting took place at a hotel in Bretton
Woods, New Hampshire. The absence of USSR signaled the imminent split of the world
economy into blocs, the Western capitalist one and the Eastern state-socialist one. The Bretton
Woods conference would provide the blue print for the postwar capitalist economy. The World
Bank was created to invest money in the reconstruction of war-ravaged Europe. When it had
completed this task, it turned its attention to the development of the third world.iii For that time
World Bank is helping the third world but their aim and purpose have been changed. Now they
provide aid and exchange trade to ensure their dominance in the host countries.

The World Bank provides over $24 billion in assistance to developing and transition countries
every year. The Bank's projects and policies affect the lives and livelihoods of billions of people
worldwide - sometimes for the better, but very often in controversial and problematic waysiv.
Today, the Bank's mission is to reduce poverty. It has over 184 member countries and provides
over $24 billion annually for activities ranging from agriculture to trade policy, from health and
education to energy and mining. The World Bank provides funding for bricks-and-mortar
projects, as well to promote economic and policy prescriptions it believes will promote economic
growth. For example, part of the over $300 million the Bank is currently providing the West
African country of Niger funds health programs addressing HIV/AIDS and irrigation. However,
the Bank also promotes more controversial projects in the country, like privatization of state
enterprises.

Critics of the initiative claim that the priorities of Aid for Trade schemes are misplaced in that
they aim simply to facilitate trade creation, and are not geared toward poverty reduction. Some
assert that the liberalization measures at the core of the Aid for Trade process, such as lowering
import and export tariffs, could aggravate rather than alleviate poverty, since they eliminate an
important source of tax revenues and limit governments¶ capacity to foster domestic capacity.
Meanwhile, the increase in imported goods as a result of trade reforms can undercut local
production lead to significant job losses. This could particularly affect unskilled and semi-skilled
workers. Some observers, such as the Vice President of Tanzania, have also expressed their
concern that donors will not actually provide new funds, but instead simply reallocate existing
social sectors like health and education toward infrastructure such as ports and roads aimed at
development commitments. They fear this could actually result in the diversion of funds from
priority facilitating exports.

The Gramscian thinker Sadik Unay (2010)v talked about the activities of WB and showed the
major criticism against WB rose. The primary criticism raised against the World Bank concerns
the fact that, in its fifty years record, the Bank has failed to accomplish either of its goals in its
inception. It could not become the chief agent of post-war European recovery, which was
predominantly realized through the Marshall Plan, and it could not promote development in the
Third World. On the contrary, it was accused for undermining LDC development by prioritizing
 ‰

Western official and corporate interests, aligning itself with the orthodox neoliberal paradigm
and making vital mistakes in the selection of projects.

Second, the Bank is widely accused of adopting a top-down hierarchical approach to the design
and implementation of development policy by imposing its will and conditions to national
governments. It is maintained that high ranking developmental technocrats, rather than the public
officials and civil society institutions from the borrowers determined the policy priorities in Bank
operations. Moreover, strict conditionality of Bank loans which were frequently incorporated
into IMF-led structural adjustment packages created significant pressures on the borrowing
states.

Third, the Bank is fiercely criticized for ignoring the social and wider environmental impact of
its policy recommendations and projects. Over the course of its lifetime spanning to a period
longer than half a century, the World Bank has been subject to strident criticisms from a wide
audience ranging from the anti-globalization left to the market triumphalist right. In the
meantime, the Bank has become involved in intense disputes about whether its policies reflect
sound economic management or whether it amounts to a strategy ofµre-colonization¶ (Tandon,
1994). It was also claimed that the Bank¶s raison d¶être in the form of environmentally
sustainable poverty alleviation became irrelevant as the Bank continued to serve the predominant
interests of industrialized countries and their corporate elites (Rich, 2003, 353).

Fourth, various criticisms are directed at the Bank¶s history of extensive involvement with many
of the world¶s most notorious dictatorships in line with American and Western foreign policy
interests. The most notable examples cited concern cordial relations between the Bank and the
Apartheid Regime in South Africa, Nicolai Ceausescu of Romania and Ferdinand Marcos of the
Philippines which resulted in the release of generous credits. Breaches of fundamental human
rights and liberties, in some cases, were openly supported through economic support programs
and project sponsorships designed to consolidate authoritarian regimes.

The last cluster of criticisms specifically focus on the involvement of the Bank in intensifying
policy dialogue with Southern governments since the 1980s and its increasingly active role in
Stabilization and Structural Adjustment Programs (SAPs) partnering the IMF. It is widely argued
that the Bank predominantly emphasized market-friendly growth policies to create sound macro-
economic environments, while often neglecting the severely negative social repercussions
including the dissemination of acute poverty associated with those policies. Besides these
mainstream criticisms, some analysts asserted that the Bank has been essentially a creature of the
Cold War environment designed to contain the spread of communism in the Third World. In the
same vein, it is argued that the World Bank has totally lost its relevance to global configuration
of power in the post-Cold War era and partial attempts at institutional rejuvenation through
emphasis on poverty alleviation and sustainable development were doomed to failure from the
beginning.
 º

Ê

  
 

International Monetary Fund (IMF) was formed in 1944 at the Bretton Woods conference. The
IMF was set up to provide short-term loans to governments facing balance-of-payments
difficulties, the problem a government encounters when more money leaves its economy through
imports, capital flows and spending abroad than enters it. The IMF was to lend governments the
money they needed to cover their balance-of-payments deficits. The IMF later extended credit
beyond its members¶ resources. It is an organization of 187 countries, working to foster global
monetary cooperation, secure financial stability, facilitate international trade, promote high
employment and sustainable economic growth, and reduce poverty around the world. IMF's
fundamental mission is to help ensure stability in the international system. It does so in three
ways: keeping track of the global economy and the economies of member countries; lending to
countries with balance of payments difficulties; and giving practical help to members.

IMF¶s resources are provided by its member countries, primarily through payment of quotas,
which broadly reflect each country¶s economic size. At the April 2009, G-20 Summit, world
leaders pledged to support a tripling of the IMF's lending resources from about US$250 billion to
US$750 billion. To deliver on this pledge, the current and new participants in the New
Arrangements to Borrow (NAB) agreed to expand the NAB to about US$550 billion, which was
approved by the Executive Board of the IMF on April 12, 2010. When concluding the 14th
General Review of Quotas in December 2010, Governors agreed to double the IMF¶s quota
resources to approximately US$745 billion and a major realignment of quota shares among
members. When the quota increase becomes effective, there will be a corresponding rollback in
NAB resources.

Recently (2004), the major arguments against IMF have been raised from America. Dr. Ron Paul
is a US Congressman from Texas said about the activities of IMF that- Very few Americans
realize the extent to which Congress sends billions of their tax dollars overseas to fund the most
counterproductive foreign welfare schemes imaginable, always in the guise of helping the poor.
A recent report by the congressional Joint Economic Committee on which I serve highlights the
reckless manner in which one organization, the International Monetary Fund, wastes their money
around the world. The IMF provides a perfect illustration of the both the folly of foreign aid and
the real motivations behind it. The IMF touts itself as a bank of sorts, although it makes ³loans´
that no rational bank would consider-- mostly to shaky governments with weak economies and
unstable currencies. The IMF has little incentive to operate profitably like a private bank, since
its funding comes mostly from a credulous US Congress that demands little accountability. As a
result, it is free to make high-risk loans at below- market interest rates. The real purpose of the
IMF is to channel tax dollars to politically-connected companies. The huge multinational banks
and corporations in particular love the IMF, as both used IMF funds-- taxpayer funds-- to bail
themselves out from billions in losses after the Asian financial crisis. Big corporations obtain
lucrative contracts for a wide variety of construction projects funded with IMF loans. It¶s a
familiar game in Washington, where corporate welfare is disguised as compassion for the poor.
 [

In fact, IMF loans often do far more harm than goodvi. At best IMF borrowers are governments
of countries with little economic productivity; at worst the money ends up in the hands of corrupt
dictators. Either way, most recipient nations face huge debts they cannot service, which only
adds to their poverty and instability. IMF money ultimately corrupts those countries it purports to
help, by keeping afloat reckless political institutions that destroy their own economies.
Government-to-government transfers through a middleman like the IMF cannot produce real
growth. When capital remains in private hands, it is allocated to its most productive uses as
determined by the choices of consumers in the market. Placing capital in the hands of politicians
and bureaucrats inevitably results in inefficiencies, shortages, and economic crises, as even the
best-intentioned politicians cannot know the most efficient use of resources.

American taxpayers already lend various governments more than $5 billion annually through the
IMF, at a yearly cost of over $300 million because of loan defaults and subsidized interest rates.
Now the IMF wants to double its pool of funding, which will put taxpayers on the hook for $12
billion in loans at a cost of about $750 million each year. Furthermore, since the IMF creates
³drawing rights´ accounts that are redeemable in US dollars, it in essence prints US dollars when
it increases those drawing rights. This is a clear violation of our national sovereignty, and a vivid
example of why we should stop participating in international schemes like the IMF altogether.

The IMF and other complex schemes only serve to obscure the real issue: Why should US
taxpayers be forced to send money abroad? Certainly the Constitution provides no authority for
foreign aid. In historical and practical terms, redistribution of wealth from rich to poor nations
has done little or nothing to alleviate suffering abroad. Only free markets, property rights, and
the rule of law can create the conditions necessary to lift poor nations out of poverty.

 
  
 

The World Trade Organization (WTO) is also has been created at the conference of Bretton
Woods. It is the only global international organization dealing with the rules of trade between
nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world¶s
trading nations and ratified in their parliaments. The goal is to help producers of goods and
services, exporters, and importers conduct their business. The WTO is run by its member
governments. All major decisions are made by the membership as a whole, either by ministers
(who usually meet at least once every two years) or by their ambassadors or delegates (who meet
regularly in Geneva).

The basic principles of WTO are, that are provided by the organizational procedures:

1.‘ Trade Without Discrimination

p‘ No Most Favored Nation (MFN) Treatment - no special deals to trading partners,

all members of WTO must be treated the same
 

p‘ No National Special Treatment - locals and foreigners are treated equally

2.‘ Freer Trade

3.‘ Predictability through Binding - promising not to raise tariffs is called binding a tariff and
binding leads to greater certainty for businesses

4.‘ Promoting Fair Competition

5.‘ Encouraging Development and Economic Reform

Criticism of the WTO fall into two broad categories:

1.‘ 
  

   The WTO is very strongly committed to trade liberalization
which means a movement towards free trade both in the reduction and elimination of
tariffs and a removal of non-tariff barriers such as quotas. This, however, is controversial.
There are some, particularly in development studies and development economics, who
are doubtful that free trade and deregulation are in fact good for developing countries or
the best development paradigm. In fact it is often felt that free trade is actually bad in a
variety of ways for poorer countries and beneficial mainly to richer ones. If this is so then
the WTO's philosophy has serious problems (its own principles are mutually
contradictory) and the WTO is at its very basic level biased towards the richer countries.
The other main criticism of the WTO's philosophy comes from environmental circles. It
is felt that the free trade/deregulatory paradigm are detrimental to the environmental
protection and preservation. In fact some environmentalists would argue that the idea of
the ultimate economic good being material improvement (GDP growth) which is implicit
in the WTO's philosophy is fundamentally misguided in that it neglects and fails to take
into account the (negative) environmental effects of pursuit of this economic goal (e.g.
global warming).

2.‘ 
  

  


 - Criticism of WTO practices and/or structure
focus on the democratic or undemocratic nature of the organization. The points tend to
separate into two related arguments. First that the structure and personnel of the WTO is
undemocratic in various ways that lead to developed richer countries winning out over
less developed poorer countries. Second that while not actively biased or undemocratic
the WTO facilitates and permits powerful groups to dominate the others (these groups
being either the richer developed countries or e.g. TNCs - transnational corporations).
Apart from this, the other main criticism of WTO practices would be that it does not
implement its philosophy evenhandedly; in particular free trade arguments are used to
open up the markets of third world countries while the developed world retains all kind of
protectionist measures. In this view the WTO has just been a method of institutionalizing
the accumulated advantage of developed countries.
 £

r 


î 

The United States acts to advance U.S. foreign policy and national security goals and respond to
global development and humanitarian needs through its foreign assistance programs. Following
the September 2001 terrorist attacks, foreign aid gained importance as a ³vital cornerstone,´
along with diplomacy and defense, in U.S. national security strategy. The Administration¶s
FY2008 budget request for the East Asian countries that are covered in this report ($453 million)
represented a slight increase compared to FY2007 ($442 million). With the exception of
Indonesia and Vietnam, assistance to most East Asian countries is to decrease or remain about
the same in 2008 compared to 2007. The budget request for Indonesia included large increases in
Development Assistance (DA) and Foreign Military Financing (FMF). Global HIV/AIDS
Initiative funding for Vietnam is to grow by 36% in FY2008, from $63 million in FY2007 to $86
million. The FY2008 budget raised assistance to South Asian countries by 8% (from $900
million in FY2007 to $974 million). This reflected greater funding for Bangladesh (mostly
Development Assistance) and Pakistan (ESF). In addition, for FY2008, the Administration
requested new funding for law enforcement enhancement activities in Nepal and Sri Lanka.
Regional Development Mission Asia programs (an estimated $13.7 million in FY2008) support
public health efforts, improved water and sanitation services, trade, environmental preservation,
and investments in energy efficiency, renewable energy, and clean technologies in East and
South Asia. U.S. assistance also finances several EAP regional programs. Estimated funding for
such programs in FY2007 was $27 million, a slight decrease from that provided in FY2006.
Most of the funding ² approximately 75% ² supports economic growth efforts. In addition, the
United States contributes to the Developing Asian Institutions Fund as part of the establishment
of a Free Trade Area of the Asia- Pacific. The second largest regional aid objective is the
advancement of peace and security (nearly 20% of regional program funding), including the
following aid activities: counterterrorism, counternarcotics, fighting transnational crime,
nonproliferation, and maritime cooperation. The third largest aid area is democracy building.

In 2000, the United States signed an agreement with Bangladesh reducing the country¶s debt
payments to the United States by $10 million over 18 years. In return, Bangladesh is to set aside
$8.5 million to endow a Tropical Forest Fund to protect and conserve its mangrove forestsvii.

â  

Ikuya Fukuda (1998)viii, talked about the Aid and Trade of Japan to the third world countries. He
said that since 1954 Japan has given assistance to the Third World, in order to develop social and
economic infrastructure, through its Official Development Assistance (ODA). Between 1978 and
1980, Japan dramatically increased its ODA grants to international cooperation activities with
Third World countries, with the introduction of the ODA Medium±Term Plan. In 1998 Japan
was the biggest donor to the Third World, in terms of development assistance.
 è

The foreign aid program began in the 1960s out of the reparations payments Japan was obliged
to pay to other Asian countries for war damage. The program's budget remained quite low until
the late 1970s, when Japan came under increasing pressure from other industrial countries to
play a larger role. During the 1980s, Japan's foreign aid budget grew quickly, despite the budget
constraints imposed by the effort to reduce the fiscal deficit. From 1984 to 1991, the Official
Development Assistance (ODA) budget increased at an average annual rate of 22.5 percent,
reaching US$11.1 billion by 1991. Part of this rise was the result of exchange rate movements
(with given yen amounts committed in the budget becoming larger dollar amounts). During the
1980s, foreign aid rose at a lower, but still strong, rate of between 4 percent and 12 percent
annually in the government budget, with an average annual rate of growth from 1979 to 1988 of
8.6 percent.

Such assistance consisted of grants and loans and of support for multilateral aid organizations. In
1990 Japan allocated US$6.9 billion of its aid budget to bilateral assistance and US$2.3 billion to
multilateral agencies. Of the bilateral assistance, US$3.0 billion went for grants and US$3.9
billion for concessional loans.

Japan's foreign aid program has been criticized for better serving the interests of Japanese
corporations than those of developing countries. In the past, tied aid (grants or loans tied to the
purchase of merchandise from Japan) was high, but untied aid expanded rapidly in the 1980s,
reaching 71 percent of all aid by 1986. This share compared favorably with other Development
Assistance Committee countries and with the United States corresponding figure of 54 percent.
Nevertheless, complaints continued that even Japan's untied aid tended to be directed toward
purchases from Japan. Aid in the form of grants (the share of aid disbursed as grants rather than
as loans) was low relative to other Development Assistance Committee countries and remained
so late in the 1980s.

Bilateral assistance was concentrated in the developing countries of Asia, although modest
moves took place in the 1980s to expand the geographical scope of aid. In 1990 some 59.3
percent of bilateral development assistance was allocated to Asia, 11.4 percent to Africa, 10.2
percent to the Middle East, and 8.1 percent to Latin America. Asia's share was down somewhat,
from 75 percent in 1975 and 70 percent in 1980, but still accounted for by far the largest share of
bilateral aid. During the 1980s, increased aid went to Pakistan and Egypt, partly in response to
pressure from the United States to provide such aid for strategic purposes. Japan had little
involvement in Africa, but the severe drought of the 1980s brought an increase in the share of
development assistance for that continent.

The five largest recipients of Japanese ODA in 1990 were in Asiaix: Indonesia (US$1.1 billion),
China (US$832 million), Thailand (US$448.8 million), the Philippines (US$403.8 million), and
Bangladesh (US$370.6 million). Earlier in the 1980s, China had been the largest single recipient
for several successive years. These large aid amounts made Japan the largest single source of
development assistance for most Asian countries. For the Association of Southeast Asian
 c

Nations countries, for example, Japan supplied 55 percent of net ODA received in 1987,
compared with 11 percent from the United States and only 10 percent from the multilateral aid
agencies.

  

In comparison to major bilateral donors in the region, the People¶s Republic of China (PRC)
provides relatively little official development assistance (ODA). Furthermore, the PRC
government appears to lack a foreign aid system with a centralized organizational structure,
long-term development goals, open funding processes, and published data. Nonetheless, the PRC
administers a wide range of economic assistance to Southeast Asia that includes many forms of
aid that generally are not counted as ODA by established international aid agencies:
infrastructure and public works projects, trade and investment agreements, pledges of foreign
direct investment, and technical assistance. China is also a large source of loans. According to
some analysts, when these kinds of assistance are included, China is one of the largest bilateral
aid donors in Southeast Asia. The PRC has been described as the ³primary economic patron´ of
the region¶s least developed countries (Burma, Cambodia, and Laos).13 China also has provided
considerable foreign aid to Vietnam as well as other large and more developed countries
(Thailand, Indonesia, and the Philippines). Some analysts have criticized PRC assistance and
investments for being nontransparent, supporting urban ³trophy projects´ rather than sustainable
development, and lacking performance criteria and environmental safeguards. Others have
argued that the benefits of PRC assistance to these countries, particularly Cambodia and Laos,
have outweighed adverse effects, and that China has helped to address needs not met by Western
and Japanese aid. Many observers argue that the United States should bolster its aid programs,
trade activities, and diplomatic presence in the region in order to counteract China¶s growing
influence.

  î 

 

The fund, aid and trade that are exchanged with the Western countries by the third world
countries and poor countries are not equally expressed. After the second world and the fall Soviet
Union, the world is gone to the under control super power countries like USA, UK and other
fellow minded countries. Now the world is under the control of capitalist powerful Gods who
take the decision in the world in all the countries, it is necessary or not. No country is out of their
control, it may poor or rich. Trade and Aid are the main elements to ensure their control all over
the world. The World Bank, IMF or other so-called organizations who are working in many
purposes all over the world, they have a general identity that they are the flag, agent and
messenger of capitalist countries. After the finishing of Second World War, the capitalist
countries met in the conference of Bretton Woods in 1944 and thought about the economic
dimension in the coming world and took an impressive decision and this decision bore many
organizations who will work in favor of them. Among these organizations, WB, IMF, WTO and
others are most notable.
 cc

We know that after the independence of India in 1947 when the countries like USA and Russia
pressured England to free the colonies, they handed over power on such leaders who were most
follower of them and done in such way so that the market of the West remained safe and secured.
Maulana Abul Kalam Azad quoted in his famous book ³The Freedom of India´ that ³India wins
freedom, it¶s false and India begs freedom´. They chose the leader in such way that they might
be under control in India. In India, Jawhar Lal Nehru was the first prime minister and Lord
Mount Betten was the first governor in Indian history. After the independence if India, the
business rested to England as like as pre-independence. They took an unwritten commitment
from the eastern leaders that they must ensure the business of England and America. This way
England and America ensured their hundred percent bazaar/market in India. This way Blenders
Gild Bird, Imperial Tobacco, John and Hedges and other companies ensured their market in
India after independence.

Such conditions and events were available in Africa and Latin America. In all the colonial
countries, they ensured their business and dominance by establishing such a doll government
who will ensure their full business and dominance.

But gradually the form of that dominance has changed and turned to Aid and trade. It¶s the
period of global free trade economy and open market economy. By the imperialist these notions,
the poor countries¶ products fail to compete with the developed countries¶ products. For these,
the products of developed countries are taking control of the market of third world countries.
Now, if we see the market of third world countries we find that the products of USA, England,
Japan, China and other industrial countries are available and the local products are failing to
compete with the foreign products. For example, in Bangladesh, the foreign products are most
popular than the local products. The local markets are not capable to maintain the standards in
comparison with the foreign products. Now we are more habituated with Lux than local soup
Keya. There are thousands of examples where our local markets are failing in competition with
the foreign products and local products are losing the control of markets. Such scenario are
available in all the third world countries, are losing their local market. It is the vital aim of the
developed countered countries to establish their market all over the world. To make it smoother,
they have populated some acceptable notions like globalization, open market economy, and
international business and so on. But these term and philosophies are ensuring the markets of
developed countries in third world and the third worlds are losing their control from the markets.
These are making them dependent to the super power countries for help and aid and they are
giving aids and ensuring their exploitation

In the name of aid, many organizations are working in third world countries like WB, IMF and
so on. What are aims and purpose behind the providing loans and aid? This is the question that
needs to understand by introspecting the issues. We see when these organizations provide loan or
aid to any third world countries, they impose thousands conditions before taking loan and aid.
The third world countries are helpless in these conditions and finally they become compel to take
the loan and aid. For example, when WB or IMF provides loan or aid to any third world
 c-

countries, they first justify the benefits of self and later provide the loan in such way that benefits
go to them. It is also interesting that the conditions are not alike for all the third world countries.
It differs from country to country. Which is not for suitable for one, is applicable for another. For
example, when Bangladesh applied for loan to WB for jute cultivation and they did not
encouraged Bangladesh in jute cultivation but they provided loan for jute cultivation in India.
That means that they don¶t provide loan or aid, where they don¶t feel as beneficial. So we can
understand that the providing loan and aid are nothing but the tool of exploitation and
domination.


 
 î 

 

There are many thinkers who talked about the underdevelopment of third world countries.
Among them, the most prominent are:

î  
 

is one of the best thinker who described the aims and purposes of Aid and Trade by Metropolis.
He wanted to unfold the mystery of being underdeveloped of the third world countries. Frank
was a pro-Marxist thinker and stressed more attention on the ³Capitalism and Underdevelopment
in Latin America´ (1969). He said that the underdevelopment or development or being
dependent on the first world for help is the ultimate result of capitalism and it¶s the most
pervasive manifestation of the capitalist world system. The relation in the capitalist world
system, have thus resulted in the creation of developed and underdeveloped parts. He wanted to
say that the developed countries made the undeveloped countries dependent on them by the
capitalistic attitudes. He said that the relation between metropolis and satellite are exploitative
and the metropolis exploits the satellite by the lumpenbourgeoisie. The lumpenbourgeoisie make
a link with the international figures and exploit the countries and weakens the local cohesion.
The making weakness compels local government to become dependent on the global
organization for Aid and help. He also said that, the relation of development and
underdevelopment in different parts of the world system is to be found in exploitative which is
the result of one possible form of colonialism. He argued that the main instruments applied by
the metropolis to make the satellite dependent on them, is the institution of µmonoculture¶-
implying the reorganization of satellite economies in order to have theses produce only one or a
limited number mainly agricultural products and raw materials. The satellite economies grew
more and more dependent on exporting their primary products and importing other goods from
the metropolis.

Free trade is an instrument to prolong the relations of depending and exploitation in the context
of the world system. Frank uses the concept of exploitation to indicate that part of the ³surplus´
produced by the satellite economies is expropriate by the metropolitan countries. He argues that
the unavailability of potential economic surplus for the satellite economy is caused by the
µmonopoly structure¶ of the capitalist world system. He emphasizes the exploitation of the actual
 cå

economic surplus as the central element of exploitation. He talked about the several mechanisms
for exploitation which can be grouped into the broad categories of exploitation by means of trade
and exploitation by means of investment. He said that exchange is unequal because the prices of
satellites¶ products show a tendency to fall relative to those of the metropolis products. He also
said that, the exploitative element is to be found in the use of returns. Profits made on investment
in developing countries will usually not be re-invested here.

 î 

Samir Amin is an African thinker. He talked about the underdevelopment in the context of
Africa. He talked about the ³Accumulation on the world scale´ idea of value and ³unequal
exchange´ in the context of world system. He wanted to understand the relationship of
development and underdevelopment in the concept of µcenter¶ and µperiphery¶. He defined the
capitalism in terms of the mode of production. Capitalism can be understood as a system of
production for market. The fundamental difference between the capitalist and pre-capitalist mode
of production is to be found in the relative importance of economic and political factors. At
present, all societies form part of the so called capitalist world system, which has expanded
gradually over the last few centuries. As consequences of these developments, not a single
concrete socio-economic formation of over time can be understood except as part of this world
system. Amin said that to understand the present day ³Accumulation on a world scale´ is to used
for relation of developed and developing countries. He started for the idea that the center and
periphery play different, unequal roles in the capitalist world system. The center is dominant in
the exchange system the exchange of commodities between the center and the periphery turns
out to be unequal-favorable for the center and unfavorable for the periphery. The fundamental
mechanism for unequal exchange is to be found in the

1.‘ Structure of remuneration ob labor.

2.‘ Superabundance of labor power in the periphery countries is not a µnatural law¶.
3.‘ Ruling classes of the periphery, often allied to those of the center and there by benefiting
from the exploitation.
4.‘ Stimulate the creation of an unemployed proletariat.

He also talked about the transfer of value from the periphery to the center. This value is
accumulated in the form of capital goods, the acquisition of which in itself contributes to the
widening of the gap between opposite parts of the world system. The main loser in the capitalist
system is the periphery and especially its least privileged part, the proletariat. The ever
continuing tapping of resource from the periphery causes a situation of underdevelopment. In
Amin¶s view, underdevelopment is the first and foremost a situation of unbalance
underdevelopment does not in the first place manifest itself in the level of production per head,
but in the structural features of which Amin mentions three crucial ones

1.‘ Extreme unevenness: There is an uneven exchange between center and periphery.
 c‰

2.‘ The disarticulation or lack of linkages, between different productivity sectors, due to the
periphery¶s orientation to the center¶s needs.
3.‘ The economic domination of the periphery by the center, expressed in international
specialization and the dependence on foreign capital.

! 
 "#   

James Patras is one of the most notable thinkers who talked about the globalization and its
impact on the third world countries. He said it in his famous book ³Globalization unmasked´ and
said that globalization is the new phase of dependency. In 1990s there was an important change
in the history of culture and politics. The fall of Soviet Union and one sided politics of USA,
have given identity of new politics in the history of political world. With the development of
³Nation state´ whole over the world, the developed countries imposed a new phase in the world
named ³Globalization´. In the western world, the development of information technology and
communication has turned the world to the new form of exploitation. Once developing countries
were directly dominated by the developed countries and later they became independent. But in
reality, the newly independent countries got independent but not freedom. Because of they were
indirectly dominated and exploited by the developed countries.

After the revolution of new information and communication technologies, it becomes easier for
the developed countries to enlarge their dominance and exploitation. Now they have no direct
institutional government in the developing countries but the national governments are directed by
developed countries. The local markets are dominated by their products. In the name of
globalization and free trade, they opened up the world market. The products of developed
countries are taking control in the markets of third world. So, we see that, in a poorest country of
third world, the Coca Cola is more popular. This way, the Western products are spreading in the
remotest area of the third world. It¶s the phase of globalization and development in the
explanation of developed countries. International law, a useful European invention, recognizes
individual and corporate property rights across national boundaries, so that the big industrial
corporations and the major commercial banks could continue to regulate the ex-colonial
economies without military governments. The term´ neo-colonialism´ refers to this retention and
the further extension of economic control and influence by the ex-colonial powers after they had
surrendered political state power.

   $  Ê 



Colonial legacy is the sum total of the political structure, culture and general polity handed over
to the elite nationalist rulers or that which was left behind by the colonial administrators,
³neocolonial´ nationalist leadership, which affected post-independent nationalist countries and
still has an impact on contemporary nation states and politics. The colonial ruling style of
oppression of the colonial administration that was imposed on developing states was not based
on the choice, consent, will and purpose of the people. In other words, and considering the fact
 cº

that some post-independent rulers run their states as if it were their personal property, colonial
legacy is the inheritance of the state that belonged to the colonial administration from this
administration by the post-colonial rulers. The selfish and exploitative character of the master-
colony relationship that reigned in the colonialism time continued in different forms even after
colonialism was long gone, and continues to impact contemporary world politics. The colonial
impacts on post-colonial states are categorized in this section as colonial legacies. Some of these
legacies include: neo-patrimonialism and clientelism, neo-colonialism (continuity in continuation
of western control and dominance), authoritarianism, ethnic division and rivalry to name a few.
One of the major difficulties the states have had to deal with is the problem of ethnic divisions
and the state conflicts resulting from ethnic rivalry (Blanton et al. 2001). Ethnic division is one
of the leading legacies of colonialism which one always comes across when assessing the
colonial impacts on the continent. When scrutinizing problems and causes of ethnic conflicts in
developing countries for example, the conventional explanation relating to external factors
contributing to the ethnic conflicts, is that, the polarization of ethnic communities and the
outbreak of ethnic violence are a legacy of colonialism which ignored cultural differences during
the creation of artificial state borders (see for example Taras and Ganguly 2002: 3; Clapham,
1985: 57-58). According to Shillington (1989: 356), the colonial masters emphasized the
distinctions between the different ethnic groups, thereby strengthening tribal differences and
rivalries between these groups and preventing them from forming a united opposition against the
colonizers. Shillington continues, by expostulating that, these groups had always lived in the past
as a people despite some customary differences that might have existed between them like their
dressing, housing and religious practices.

Consequently, ethnic division and rivalry can be seen as a major trigger and cause of conflicts on
the continent. Ethnic groups who feel marginalized often develop feelings of revenge and hatred
against those who enjoy socio-economic well-being from the resources of their states because of
their affiliation to the ruler (the ³owner´ or ³controller´ of the national cake): based on clientelist
politicking. Since there are rarely any state guided structure and political arrangements or
functional governance procedures for rational and appropriate distribution of state resources and
power, there is usually a resort to conflict (Harris and Reilly 1998: 9). One of the worst examples
of colonialism founded ethnic rivalry and consequential conflicts is the 1994 Genocide in
Rwanda which was characterized by the attempted extermination of the Tutsi and moderate Hutu
races in the country (Scherrer 2001): The death toll of this genocide is estimated at 937,000
people (Asiimwe, 04/04/2004). The colonizers created and stressed the difference amongst
African people within the same nation even when these differences did not exist, only to
facilitate their domination and exploitation of a divided people. According to a BBC report of
April 2004 titled ³Rwanda: How the Genocide happened´, it is claimed that the Belgians created
differences between Tutsis and Hutus which did not exist before their arrival. These differences
went as far as creating identity cards for Tutsi minorities illustrating their superiority over Hutus
and giving them the leadership positions in the country. The result was hatred and the nurturing
 c[

of feelings of revenge by the Hutu¶s, which culminated in the 1994 genocide which saw the
slaughtering of over 800,000 Rwandans within a period of four months (BBC News,
18/12/2008). However, colonialism could not be completely blame for ³creating´ multi-ethnic
states in developing countries, but instead, for encouraging hatred based upon ethnic differences
and for forging differences amongst peoples and nations in order to facilitate its rule, thereby
destroying the foundation for potential state building in developing worlds (Nnoli 2000).
Unfortunately for people of these countries, post-colonial governments continued with the
manipulation and disintegration of ethnic identities and groups. This placed the ruling elites and
the state at the centre of the complexities and dimensions of the ethnic rivalry phenomenon on
the continent (Nnoli 2000).

Another legacy which impacted African politics is the administrative style of the colonizers. The
colonizers ruled without the consent of the people: they deposed and executed traditional rulers,
when the latter failed to implement the instructions of colonial administrators or failed to serve
the need of the colonial government (Shillington, 1989: Hochschild, 1998). Depending on the
home country of the colonizers, the administration practiced policies say of assimilation, as was
the case in French Africa, or indirect rule for British colonies on the continent. The ruling
structure, which was based on the control by a few, through oppression and the use of force, laid
a basis for patron-client rulership after colonialism. Neo-patrimonial leadership as practiced in
many developing countries is an extension of the kind of autocratic and alien tyrant rule that the
colonial master¶s had initiated. Following the disruption of the developing countries pre-colonial
leadership form and the corresponding political culture, colonialism can be said to have set up
structures and ruptured the dynamics and patterns which curtailed different and contradicting
interethnic relations and interests. According to John Lonsdale (1986: 145) the instrument of
political control and economic allocation in these states had been violently constructed by
outsiders, that is, the colonizers. Consequently, the new ³bandwagons´ of rulers, as Lonsdale
describe them, did not see the need for discipline and responsibility in the constitution of
political power but simply applied the principle of rewarding and absorbing the recruitment of
supporters and civil servants: neo-patrimonialism. Colonial rule wiped out the dependency of the
chief on his councilors, as was the case in pre-colonial rule, replacing this with autocracy and
replacing the rulers dependence on the people to elite rulership which depended upon colonial
superiors and later foreign powers (Nugent, 2004: 107-108). Colonial rule was thus a rulership
by force and oppression, that is, autocracy in its extreme. Ndirangu Mwaura (2005: 6) maintains
that nothing in developing countries changed after the colonizers left. According to Mwaura, the
only change that occurred was the replacement of colonial governors with colonial ambassadors.
The administrative structures were maintained as well as the economic structures to preserve the
flow of wealth from the continent to the West which began in the colonial time (Mwaura, 2005:
6). National leaders who took over after the colonizers left, Mwuara concludes, ³were traitors,
with a pretend and false patriotism´, who upheld a political network that exploited the people to
the benefit of the ruling elites and their western patrons.
 c

Another major problem in Africa which can be seen as a legacy of colonialism is the failure of
the rule of law institutions; that is: application and practice. The rule of law has gained
increasing meaning in the last decades and has become one of the major indicators for measuring
governance matters by various institutions concerned with issues of governance around the world
(World Bank Governance Indicators, Bertelsmann Transformation Index, and Freedom House).

The International Commission of Jurists in 1959 in New Delhi, drew up the ³declaration of
Delhi´ which stated that rule of law ³should be employed to safeguard and advance the civil and
political rights of the individual´ and create ³conditions under which his legitimate aspirations
and dignity may be realized´ (The Economist, 13/03/2008). The rule of law from this point of
view is inextricably linked to liberty and democracy: the thick definition. An extended definition
of rule of law does not focus on liberty and democracy but instead stresses property rights and
efficiency in the administration of justice. According to this definition ± thin definition ± the
laws must provide stability in the society/polity. The thin and thick definitions of rule of law are
indispensable for a just society for the preservation of the life, liberty, and property of its citizens
(The Economist, 13/03/2008). The colonial administrations neither implemented the thin nor
think version of the rule of law in their colonies. There was neither property nor citizens¶ rights
for the people and in many cases the people were not citizens but subjects (Shillington, 1989:
354). In addition to the absence of the rule of law, colonial laws were by themselves very
notorious and in many cases entitled, as colonial ³administrators to imprison any African 9

indefinitely and without charge or trial´ (Shillington, 1989: 355). The general use of native
chiefs, selected not in line with traditional legitimacy but according to loyalty to the European
administrator in what is described as indirect rule in British Africa, has been described by
Professor Mahmood Mamdani of Columbia University, USA as ³decentralized despotism´ (as
quoted by Easterly 2006: 273). In regions there were no chiefs, Europeans invented chiefs and
imposed them on the people, and always stressed tribal differences, thereby creating differences
amongst the people. Chiefs had to enforce forced labor, ensure compulsory crop cultivation,
recruit labor, collect taxes and fulfill other state requirements (Easterly, 2006: 275). These chiefs
were made to rule as if they were the law and the people were under their jurisdiction. The only
higher authority was the colonial authority who gave them instructions and command. The
conclusion is that, the method of rulership of the colonial administration, which took over the
decentralized system of the pre-colonial time but abolished its checks and balances, made
developing countries safe for autocracy (Easterly, 2006: 275). During the independence struggle,
people fought to recover their rights and the rule of law that ³disappeared´x with the advent of
colonialism.


 c£

   

There is an interesting philosophy of domination and exploitation in the world. It¶s mainly based
on the Lord and serf relationship of feudal society. Here we see that, the third world always wait
for the aid and exchange by trade but most of time they third world countries have to commit
such as conditions in trade and aid that are completely profitable for the donor countries. When
someone wants aid or exchange with mother countries, they have to face numerous conditions in
aid and unequal exchange in business. That means the super power or donor countries use the aid
and trade as the tool of dominance, exploitation and control. They have introduced some
concepts to make their way of exploitation smoother. For example, globalization, free trade, and
so on which are used to maximize their profits and control. So we can say that aid, trade,
globalization, free market economy and so on are nothing but the tool of exploitation, control
and dominance. This way the legacy of colonialism established.


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