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NATURAL RESOURCES
Debt and Environment
In the 1950s and 60s, after the war was over and Europe could rebuild itself, when many countries in Africa and Asia finally gained independence and could start thinking about autonomous development, optimism ruled the world. Optimism and the United States of America.
The country that had survived the war with the least damage needed trading partners to let its economy boom, and therefore implemented the Marshall Plan for the reconstruction of Europe. At the same time, it put pressure on the colonial powers of the old continent to move out of their colonies to let those nations develop into independent, mature partners. For this purpose, a number of 'specialized' agencies were created in the United Nations system, most importantly: the Food and Agriculture Organization (FAO) and the International Bank for Reconstruction and Development, also known as the World Bank. Within a few decades, the world would all be like America.
The newly independent countries started ambitious so-called 'development' programmes , encouraged by 'soft' loans and gifts from Northern governments and such institutions as the FAO and the World Bank. The latter two were particularly interested in 'modernizing' agriculture in the Third World by introducing fertilizers, pesticides, 'miracle seeds', irrigation schemes, tractors and other machines... Industrialization projects were usually directed at substituting imports of manufactured goods for locally-made products. A third important sector was of course infra-structural works: roads, harbours, electrical facilities, and the like.
All of this drastically changed lifestyles in those Southern countries, particularly of the urban well-to-do. It involved them more and more in the global economy, made them increasingly dependent on importations, and hence on exports.
In the beginning, natural resources were the only export product of most countries. Until the 1970s, a number of countries had succeeded in diversifying their exports by concentrating on export-oriented, labour-intensive industries like textiles, toys and microelectronics. The success of such a strategy depended on many different factors. A strong state, which often meant an authoritarian state, was crucial.
Yet the world market for such products is limited. The majority of Third World countries remained very much dependent on their traditional exports. Even today, of the exports of Latin American countries 70% consist of unprocessed natural resources. For Africa this number is still close to 100%. The participation fee for entrance into the world economy is literally paid 'in natura'. Moreover, as the prices of commodities decrease relative to the prices of Third World countries imports, the entrance fee increases.
In the 1970s, people were still generally optimistic about the possibilities for countries to diversify their exports. in the years after the oil crisis, it was very easy to borrow money against low interest rates on the international capital market, as the OPEC countries were suddenly earning a lot of money and did not know what to do with it. More than ever, the Third World countries were encouraged to take loans for their 'economic development'. Many Third World countries, or rather the elites of those countries, could not resist the temptation. By borrowing large sums of money, they took up more and more financial obligations, often without investing the money productively. A lot was used for prestige projects, for expensive nuclear reactors, for private consumption, to bribe government officials...
In August 1982, economic collapse began. Because the United States had also started to borrow a lot of money, the interest rate skyrocketed to 20%. And many countries needed to borrow new money to be able to repay old loans, or even the interest on those loans. Mexico was the first country that had to apologize: it simply did not have the cash to meet its immediate obligations.
For a moment, the financial world panicked. But it did not take them long to negotiate a new repayment schedule with the Mexican government. The International Monetary Fund (the world's financial policeman and most important institutional lender) and the commercial banks realized that they had overestimated the capacities of most Third World economies to generate foreign exchange, and that they had to change their policies drastically. From then on, new loans were only granted as part of a restructuring of debris.
One country after another developed similar financial problems to Mexico's and had to negotiate a rescheduling of their debts. This rescheduling was made contingent upon the willingness of governments to submit their countries to IMF-designed Structural Adjustment Programmes. Instead of making those countries more independent and more self-reliant, SAPs involve them even more in world economy.
As a result, in many indebted countries the exploitation of nature has increased. New exploitation-exportation sectors are even being developed. In Tanzania, for example, while the government is promoting LPG instead of charcoal for household use, at the same time it is producing charcoal for export.
On the island of Negros in the Philippines, 25,000 gallons of potable water per minute are pumped into prawn ponds. The prawns do generate some foreign exchange, but at high social and ecological costs: farmers and fisher people living in the area see their fresh water wells drying up and their soils salinizing.
In many Sahel countries, where people are starving, the best land is used to grow peanuts, vegetables and other products for Western markets.
It is obvious that such countries lack the resources to develop environmental policies. It is also clear that they cannot be considered sovereign and autonomous countries as long as institutions like the IMF have so much influence on their policies.
An absolutely necessary step on the road to sustainable development is therefore debt relief.