On the Monday after the Easter Weekend in 1984, citizens of the Dominican Republic woke to find that the cost of basic food items, such as rice, had doubled over night. This was the result of “structural adjustments” which had been implemented because of an agreement reached between the Dominican government and the International Monetary Fund [IMF]. The government knew the price hikes weren’t going to be popular, but they really didn’t have any option. They were broke and the only source they could go to in order to borrow the money they needed to continue operating was the IMF. The situation was so bad that they would have had to have agreed to just about any conditions the IMF imposed in order to obtain that loan.
The impact of the price hikes on low-income Dominicans, however, was immediate and profound. Many found they could no longer afford to provide their families even a modest diet. The poor of Santo Domingo took to the streets, and police responded with force. Seventy-two hours after the protests began, 112 persons—including children—were dead; hundreds more were wounded; and approximately 5000 were imprisoned by security forces.
Similar confrontations were taking place throughout the developing world. In 1986, food riots broke out in Zambia when the price of maize went up. In 1988, Nigerians rioted over increases in fuel costs. In 1989, protests in Venezuela over rising food costs resulted in a police action that left 1000 persons dead and another 2000 injured or in jail. That same year hyper-inflation in Argentina resulted in public violence and looting.
In spite of decades of international development assistance and literally trillions of dollars in aid transfers, the people of the so-called Third World were by and large worse off by the 1980s than they’d been before those aid programs had begun. If the 1970s had been a time of promise for developing nations, the 80s was clearly the decade of reversal.
So far in this series of reflections, I have identified several characteristics which many developing countries have in common. For example, most had been—at one time or another—colonies or occupied territories. As such their resources had been developed not to meet the needs of their own populations but rather those of the colonizing power; thus, their economies tended to be based on commodity production–on producing the raw materials or food products which the colonizers wanted.
It has also been demonstrated that in the late 1960s and early 1970s, conditions in many of these countries appeared to be improving. Several developing nations–including the Dominican Republic–seemed on the brink of significant economic development.
That promise was never realized however. Instead, by the mid-1980s most developing nations shared yet another characteristic in common: enormous and virtually unpayable external debt loads. In 1984, the year of the protests in the Dominican Republic, the collective debt of developing countries was so large that the total amount of foreign aid these nations received that year was $31 billion less than they paid in the interest on their debt. In others words, in net terms, during 1984 more money–$31 billion dollars more–went from poor countries to rich countries rather than the other way around. By 1992, that figure had risen to $100 billion. $100 billion more a year went from poor countries to rich countries rather than the other way around.
International aid, of course, is supposed to help poorer countries. That is why it’s provided. And yet ironically, some of the factors that contributed to the massive debt which developing countries incurred in the 1980s can be traced back to the assumptions on which international development assistance had been based.
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