Chapter 80 Chapter Fourteen Twenty Years of Crisis 4

4 In large swaths of the Third World (including those areas that are now industrializing), there are no general terms that can fully describe it.All the phenomena that can be explored from the perspective of the whole have been explained in the seventh and tenth chapters.The impact of the two decades of crisis on Third World regions, as we have seen before, has taken on very different aspects in one place and one place.How can we compare South Korea, a country where TV ownership jumped from 6.4% of the population to 99.1% between 1970 and 1980 (Jon, 1993), with a country like Peru where half the population lives below the poverty line? -- more than in 1972 -- and on par with countries where average consumption levels have plummeted (Anuario, 1989)?Not to mention those devastated African countries south of the Sahara desert?The stress that surfaced on the Indian subcontinent was originally a phenomenon of a developing economy and a society in transition, but in places like Somalia, Angola, and Liberia, the tensions belonged to a world on the brink of destruction, a world that few people believed in. A chaotic continent that is optimistic about its future.

Only one general narrative is appropriate for the Third World, which is more or less the same: that almost all of these countries are deeply indebted. In 1990, their huge debts started from the three giants of international debtor countries: Brazil, Mexico and Argentina (ranging from 60 billion to 110 billion US dollars), to 28 countries that owed tens of billions of dollars each, and even owed one Two billion "little ones".Of the 96 "middle" and "low" income economies monitored by the World Bank, only 7 are listed as having a foreign debt significantly below $1 billion (Word Bank's mandate, so be sure to ask about this) .The list of seven countries includes countries such as Lesotho and Chad. In fact, even their foreign debts are many times higher than decades ago. In 1970, there were only 12 countries with foreign debts of more than US$1 billion, and no country with more than US$10 billion.But by 1980, in real terms, six countries owed debts as high as their gross national products, or more.By 1990, 24 countries "owed" more than they "produced", including all of sub-Saharan Africa.The countries with the highest relative indebtedness, usually in Africa—Mozambique, Tanzania, Somalia, Zambia, Congo, Ivory Coast—not surprisingly, some have been ravaged by war, others have been affected by falling export prices. Harmful.But the places that bear the heaviest burden of this huge debt, that is, the countries with foreign debts that amount to a quarter or more of their total exports, are not just in Africa, but in every other continent.In fact, from a global perspective, the external debt-to-export ratio of the sub-Saharan African continent is not as bad as mentioned above. Compared with South Asia, Latin America and the Caribbean, and the Middle East, it can be considered much better .

This is a staggeringly large sum, virtually none of which will be repaid, but as long as the banks continue to earn interest—the average annual interest rate in 1982 was 9.6% (UNCTAD, 1989)—they don't care whether they get their money back gold. In the early 1980s, there was indeed a panic in the international financial circle, because starting from Mexico, several major debtor countries in Latin America were poor and unable to pay interest.The Western banking system is almost on the verge of collapse, and several major banks that lent money recklessly in the 1970s (when the flood of oil revenues were rushing to find places to invest) have now failed to pay interest, and are technically bankrupt.Fortunately, the giant debtor countries in Latin America never acted together, and the economies of the rich countries survived the catastrophe, and through individual arrangements, rescheduled debt repayments.With the support of various governments and international organizations, the banks have also breathed a sigh of relief, and have gradually written off bad debts from their books, technically maintaining their solvency.Although the debt crisis is not over, at least it is no longer fatal.At that time, it was probably the most critical moment facing the capitalist world economy since 1929.The story on this page is actually not over yet.

Debt is skyrocketing, and the assets, or potential assets, of these poor countries have not increased.In the crisis years, the capitalist world economy, which is absolutely dominated by profits or possible profits, has obviously decided to completely wipe a large part of the third world from the investment map. In 1970, out of 42 "low-income economy" regions, 19 countries had zero net foreign investment.By 1990, 26 countries had completely lost their attractiveness for foreign direct investment.In fact, among almost 100 "low" and "middle" income countries outside Europe, only 14 countries have foreign investment of more than 500 million US dollars, and only 8 countries have more than 1 billion US dollars of foreign investment, of which 4 countries are in East Asia and Southeast Asia Belt (China, Thailand, Malaysia, Indonesia), 3 countries in Latin America (Arabia, Mexico, Pakistan).However, the world economy, which is increasingly moving towards transnational integration, has not completely ignored those overseas places. Some areas with smaller areas and more beautiful scenery have the potential to become tourist attractions and overseas paradises that avoid government jurisdiction.In addition, if there are suddenly found resources that can be used in places that were previously lacking in interest, the situation will be greatly improved.On the whole, however, a very large part of the world has completely withdrawn from the ranks of the world economy; after the collapse of the Soviet bloc, a vast area from Trieste to Vladivostok seems to have also withdrawn from the ranks of the world economy. Join the ranks of this "outsider". In 1990, the only socialist countries in Eastern Europe that attracted any net foreign investment were Poland and Czechoslovakia (UN World Development, 1992, Tables 21, 23, 24).As for the vast territory of the former Soviet Union, there are obviously certain resource-rich regions or republics that have attracted decent real investment.At the same time, there are still some unlucky areas who can only struggle on their own.But no matter what the fate is, most countries in the former second world are now "aligning" step by step to the status of the third world.

The main effect of the two decades of crisis has thus been the widening of the gulf between rich and poor countries.In sub-Saharan Africa, its average real gross domestic product in 1960 was only 14% of that of industrial countries, and by 1987 it had dropped to 8%.The situation of those "least developed" (including African and non-African countries) is even worse, dropping from the original 9% to 5% (UNHuman Development, 1991, Tavle 6).