Economic Dependence

DEPENDENCE, IN GENERAL, is defined as being in a state of support and/or subordination to someone or something needed or greatly desired. From the macro perspective, one can speak of one country's dependence on a specific raw material or commodity, such as oil, or more broadly it can refer to economic dependence, as when one country's economy is subordinated to the development of another country's economy.

The anticolonial struggle after the end of World War II was accompanied by the effort to improve the living conditions in the newly liberated colonies and developing countries. The initial measures, such as the assignments of international experts, the expansion of the Western-style education, and the building of infrastructure followed the developmental path of the industrial countries. However, the gap between developing countries and developed economies steadily widened, putting these developmental strategies in question.

In the early days of the Cold War the historical causes and the real nature of underdevelopment, a term that became widespread in the literature on economic development, were neglected, and the development paths of particular countries were assessed from the standpoint of the needs of their Western or socialist supporters, and not from the perspective of intrinsic developmental needs of the respective countries. In other words, the economies of developing countries became subordinated to the development of the industrialized countries, that is, they became economically dependent on the developed countries.

There are a great number of explanations for economic dependence and underdevelopment. The best known approaches are combined under the heading “dependencia theories.” These theories further develop the concept of imperialism, and assert that the state of economic dependence is directly responsible for the exploitation of developing countries. The theories emphasize that external dependencies are primary causes of internal structural deformations, a process that perpetuates the external dependency.

The external economic dependence is rooted in the political and military colonial domination that destroyed the indigenous lifestyle and culture, while the postcolonial development schemes forced integration into the international division of labor. The forced integration caused deep structural changes in the peripheral societies, and created an economy oriented toward the requirements and demand conditions of the industrial countries. The most propulsive sector of the economy of the developing countries, the export-oriented sector, was heavily sensitive to the economic conditions in the developed economies. Thus, the long-term development goals of the developing countries were ultimately dependent on cyclical movements in economies of the industrial countries.

In addition, the modern sector in developing countries mirrored that of industrialized countries, thus leading to further polarization within society. The economic growth did not lead to the reduction of poverty, but to the widening of the gap between the elite, which accepted the norms and values of the industrialized countries, and marginalized masses. The external dependence reproduced itself within developing countries. The economic sectors that served internal needs became dependent on the modern sector, which, in turn, was subordinated to the economic conditions in the industrialized countries.

Economic dependence, according to dependencia theories, is a direct consequence of capitalism. Dependencia theories, however, do not concentrate on strategies for development beyond the demand for structural changes, independence, and participation. The only way to avoid the vicious circle of underdevelopment and poverty is to embrace self-reliance and embark on a path of internal economic development.

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