Cold War and the Third World

1. Cold War and the Third World • Lecture: objectives • 1) Outline the key factors that shaped the rise of development theories and practices in the 1945-1979 globalization phase. • 2) Highlight the influence of colonial legacies on post-1945 development agenda.

2. THE RISE OF DEVELOPMENT: HISTORICAL CONTEXT What were historical roots of development theories and practice? Or what was development theorists and policy makers responding to?

3. A: Crisis of global capital, 1920s and 1930s Collapse of Global Capitalism – the Great Depression • But also World War II • Responses: • Nation-state level: Rethinking the role of the state in economic development. • Keynesian economic model (creation of welfare states in Europe, Canada and in the US New Deal Policies) • Global Level: Creation of international institutions.

4. The Bretton Woods Conference • 1944 Conference to construct post-war international economic system. • The Bretton Woods Agreement • Creation of a liberal international economic order-finance and trade-key feature: endorsement of capital controls--giving nation-state power to control movement of capital. • U.S. Treasury Secretary Henry Morgenthau “to drive moneylenders from the temple of international finance.” • John Maynard Keynes: “Not merely as a feature of the transition but as a permanent arrangement, the plan accords every member government the explicit right to control all capital movements. What used to be heresy is now endorsed as orthodoxy!.”

5. Agreement on post war reconstruction of Europe (Marshall Plan). • Created three international organizations ‘The Bretton Woods Trio’ • International Bank for Reconstruction and Development (World Bank) • International Monetary Fund (IMF) • General Agreement on Tariffs and Trade (GATT)

6. B: Bi-Polar World • Bi-polar world (the Allied victory). • U.S and U.S.S.R emerge as superpowers • West- capitalist (U.S, Western Europe, Canada and Japan) • East-centrally planned economies (Soviet bloc).

7. C: Decolonization • Post-1945 (rise of nationalist struggles in the colonies leading to independence). • West and East competition over Third World development. • Challenges of national building and economic development

8. Third World responses: Bi-Polar World • What is the Third World (underdeveloped) • French economist and demographer Alfred Sauvy, 1952. • "The Third World has, like the Third Estate ("Tiers Etat" of the French Revolution-the class of commoners), been ignored.

9. Responses: • Examples: • Bandung Conference (1955). • A conference of Asian and African states at Bandung in Java, Indonesia. • Organized by the Non-Aligned Movement.

10. Non-aligned bloc opposed to colonialism and the 'imperialism' of the superpowers. • Non-aggression. • Respect for sovereignty. • Non-interference in internal affairs. • Equality. • Peaceful co-existence were adopted. • Alliance: West or East

11. Colonial legacy and post-1945 development framework. • Limits of post-1945 development framework (as envisioned by modernization theorists). • Colonialism: (structural limits-global division of labor). • countries in Latin America, Africa, and Asia still gain two fifths or more of export earnings from one or two agricultural or mineral products

12. Colonial political arrangement: authoritarian states. • Colonialism: formational of New Identities (class, ethnicity, nationalism--influence development process)