From the West to the "Rest" PDF - Economic History 2024/2025

From the West to the “Rest” Amatori-Colli, ch. 16, part of ch. 18 Economic history cl. 15 Ay 2024/2025 Sonia Schifano In this episode Decolonisation The post-colonial divergence A.Y. 2024/2025 30076 - cl. 15 2 A.Y. 2024/2025 300...

From the West to the “Rest” Amatori-Colli, ch. 16, part of ch. 18 Economic history cl. 15 Ay 2024/2025 Sonia Schifano In this episode Decolonisation The post-colonial divergence A.Y. 2024/2025 30076 - cl. 15 2 A.Y. 2024/2025 30076 - cl. 15 3 A.Y. 2024/2025 30076 - cl. 15 4 A.Y. 2024/2025 30076 - cl. 15 5 A.Y. 2024/2025 30076 - cl. 15 6 Golden Age but…not for everyone Western Countries grew at an average of 4% rate Internal disparities occurred (e.g. south vs north of Italy) In the 1950-1973 In Africa growth rate was about 1,8% In Latin America growth rate was 2,4% In Asia (excluding Japan) growth rate of 2,6% A.Y. 2024/2025 30076 - cl. 15 7 Golden Age but…not for everyone Does a common growth path exist? Is underdevelopment a consequence of the success of more advanced countries? Thus of the relations between rich and poor countries Economic Dependence The role of the World Bank  aid to developed countries represents an obstacle for less developed economies On the other hand, we can mention some competitive advantages of underdevelopment Social and ethical costs A.Y. 2024/2025 30076 - cl. 15 8 Decolonisation 1945 Sovereign countries represented at the UN were 51 among them the Asian ones were 9 and the African 3 1960 Sovereign Member States at the UN = 120  70 representig African or Asian countries  changing balance of power within the UN https://www.un.org/en/global-issues/decolonization A.Y. 2024/2025 30076 - cl. 15 9 Decolonisation The use of a single word - decolonisation - to refer to the transfer of sovereignty from the imperial powers to their former colonies after 1945 may suggest a uniform process with a common set of causes. This suggestion is, unfortunately, largely erroneous: decolonisation in the Middle East, South and South-East Asia and Africa followed different chronologies, sprang from a variety of causes and took various forms. The British empire in India, Ceylon, and Burma was dissolving in the later 1940s The French and Dutch were fighting to restore their authority in Indo-China and the East Indies European colonialism was having a new lease of life in Africa. A.Y. 2024/2025 30076 - cl. 15 10 Decolonisation In Asia colonial economic and political structures were gravely weakened by the Second World War, while in Africa they were strengthened. The British, emerged from the war, resolved to regroup their colonial empire around African territories where economic compensation could be found for the loss of India, Burma and Ceylon. Like the French and the Belgians, they regarded their African colonies as indispensable assets in the task of national economic reconstruction. The late 1940s (and the 1950s) witnessed “the second colonial occupation”. A.Y. 2024/2025 30076 - cl. 15 11 Decolonisation 1946-51 1956-63 Asia, Philippines, Indonesia, Myanmar, Mainly Africa Laos, Vietnam, Cambodia, Malesia, ecc. A.Y. 2024/2025 30076 - cl. 15 12 Decolonisation The process of decolonization is not always peaceful. The conflicts to achieve independence are often intense: France sought to regain control over Indochina but was defeated in 1954 by Vietnam. In 1962, a 7-year war between France and Algeria came to an end. Among the reasons behind decolonization are: The spread of anti-colonial/independence movements in the years between the two wars. Weakening/impoverishment of European powers at the end of the conflict. Negative stance of the USA towards colonial empires (leading to the choice to grant independence to colonies. Other options not pursued: gradual decentralization; maintaining the status quo). Spread of communist ideology in independence movements. A.Y. 2024/2025 30076 - cl. 15 13 The legacies of the past Behind a common colonial past, there are different paths. Countries with subsistence agriculture (except for export productions) and without significant manufacturing experiences. Countries that, in the 1930s, had initiated significant experiences in the industrial field, facilitated by flows of emigrants from Europe (human capital): Argentina, Brazil, Chile, Mexico. In Asia, the skills necessary for the start of industrial activities are formed through migratory flows, thanks to the colonial legacy (European and Japanese) and the presence of American multinational companies. With decolonization, the countries that succeed in meeting the challenge of development are those able to seize the opportunity to acquire technologies and develop their own development strategy, generally with state support. A.Y. 2024/2025 30076 - cl. 15 14 Decolonisation Three perspectives on decolonisation: “Balance sheets” of the European colonial powers: private investments leave the colonies well before political power. Resources leave countries Colonial unintentional transfer of power: as expatriates leave the colonies, they leave gaps in many economic activities that they previously monopolised. Local entrepreneurs can take over and take a slice of the economy.  The know how has been affected Interdependence and integration of Western European economies: as European economic integration proceeded and a large continental market was created, the colonies were progressively marginalised until they became a vestigial part of many states. A.Y. 2024/2025 30076 - cl. 15 15 The post-colonial divergence On the one hand the economic miracles of the 1950s brought prosperity and wealth to many countries in the West. But on the other hand, they increased the gap between rich and poor countries. Why couldn't the former colonies keep up with the old motherlands? economic structure still strongly dominated by the primary sector high birth rate (after WWII it rose from 0.8% to 2% per year, while in the West it stopped at 1.3%)  different stages in the demographic transition Growing demographic pressure accompanied by low per-capita income further condemned developing countries to poverty. A.Y. 2024/2025 30076 - cl. 15 16  Source: Maddison project database A.Y. 2024/2025 30076 - cl. 15 17 The political instability of former colonies Independence does not erase the dramatic problems of underdevelopment poverty, illiteracy, dependence on international trade... Fragility of the new ruling classes and the role of the military Dictatorial regimes often emerge, supported by the military. Bipolar world (USA-USSR) and the search for autonomous positioning Bandung Conference 1955 A.Y. 2024/2025 30076 - cl. 15 18 Recipes for growth In developing countries, the prevailing idea is that to industrialize and modernize, it is appropriate to go through autarchic and protectionist policies. Latin American countries, as well as Asia and Africa, once they achieve independence, embark on the path of economic nationalism: Industrialization is perceived as the fastest way to modernize economic and social structures. Rarely, however, were they able to narrow the gap with developed countries and 'break' the mechanism of subordination to the mechanisms of international markets or the aid that could come from superpowers Import substitution industrialization (ISI) A.Y. 2024/2025 30076 - cl. 15 19 Import substitution industrialization (ISI) Thanks to the protection of high tariff barriers on imported products, developing countries should initiate a process of industrialization by replacing imported goods with domestic products : First phase: simple consumer goods Second phase: more sophisticated products The primary objective is to achieve: Greater national industrial diversification Less dependence on exports. The ultimate goal is then to be able to export their products once they have become competitive in terms of quality and price. A.Y. 2024/2025 30076 - cl. 15 20 The historical experience of ISI This policy has, in many cases, achieved the set goal, allowing different states to become complete industrial economies, following the example of more advanced countries. However, this has not always translated into a corresponding increase in well-being and per capita income. The main problems: Strong penalization of the primary sector. States often indiscriminately protected all industrial sectors, including the most inefficient ones. In other cases, the creation of powerful lobbies prevented the removal of protection once the industry became competitive. Instances of corruption have been frequent. The occurrence of social conflicts, as this policy has often resulted in the strengthening of certain classes of workers at the expense of others A.Y. 2024/2025 30076 - cl. 15 21  Fragile States Index Heat Map, 2022 Source: Fund for Peace annual report 2022 A.Y. 2024/2025 30076 - cl. 15 22 The post-colonial divergence It should be emphasised that poverty was not a common condition for all former colonies: for some states, the abundance of natural resources demanded by Western countries caused per capita income to rise significantly. The most classic example is the Gulf economies, which prospered rapidly thanks to oil. But what about humanitarian aid? Absurdly, in many cases, it made the situation worse: it increased people's life expectancy without giving them higher incomes A.Y. 2024/2025 30076 - cl. 15 23 The post-colonial divergence Despite the difficulties of many of the former colonies in developing their economies, it should not be assumed that growth rates were negative. On the contrary, although modest compared to the West, compared to the colonial period they often recorded a high GDP growth  this growth did not everywhere bring prosperity, but often it brought political and social instability. The newly created wealth was not fairly redistributed among the population and the already fragile political architecture was further weakened. A.Y. 2024/2025 30076 - cl. 15 24 A.Y. 2024/2025 30076 - cl. 15 25