International Committee of the Fourth International
The World Capitalist Crisis and the Tasks of the Fourth International: Perspectives Resolution of the ICFI

The Impoverishment of the Backward Countries

The unspeakable poverty of the majority of the earth’s population constitutes the greatest historical indictment of capitalism. Capitalism was unable to significantly raise the standard of living for the masses of Asia, Africa and Latin America during the heyday of the postwar boom, and the social conditions have drastically deteriorated during the last 15 years. In the first flush of “decolonialization,” the national bourgeoisie promoted the illusion of prosperity through self-sufficiency and embarked upon the policy of “import substitution,” which would supposedly liberate the “newly independent” countries from the economic stranglehold of the imperialist powers. Attempts were even made to portray the policy of self-sufficiency as a form of socialism, or, what the Stalinist allies of the bourgeois nationalists cynically called the “non-capitalist road of development.” But now, nothing remains of these pretentious boasts and the illusions which they generated.

The massive borrowing undertaken by the backward countries during the 1970s with the encouragement of the imperialist banks has left a mountain of debt which cannot be repaid. While the banks have responded to the debt crisis by drastic reductions in lending, the fall in commodity prices to their lowest levels in the twentieth century, the stagnation in world trade, and the mounting pressure of protectionist policies have compelled these regimes to further slash domestic consumption in order to meet interest payments. At the behest of the World Bank and IMF, the backward countries have largely abandoned their import substitution policies and adopted the “export strategy,” which subordinates them even more completely to the dictates of imperialism.

This shift from import substitution to export is euphemistically referred to by the international bankers as “adjustment,” but as the World Bank recently admitted, “Adjustment ... has proven to be a longer road than had been originally envisaged for some countries, particularly in sub-Saharan Africa and those that are highly indebted. In the absence of needed resources on appropriate terms, these countries will find it difficult to maintain, let alone expand, education and health services, nutrition programs, and improved water facilities and shelter for the poor” World Bank Annual Report 1987, p. 15). In Latin America, the average worker consumes fewer calories daily than in 1975, when it was estimated that only one-third of the population ate a subsistence diet. Infant mortality has risen sharply. In 1986, per-capita income remained below the 1980 level. This is the price that the Latin American working class is paying for the betrayals and defeats of the 1970s.

The 1985 per-capita Gross National Product of the backward countries makes clear the implications of a further fall in the essential services, facilities and programs mentioned by the World Bank. The per-capita GNP of Burundi is $230, that of Ethiopia $110, Madagascar $240, Zaire $170, Somalia $280, Malawi $170, Burkina Faso $150, Guinea-Bissau $180, Bangladesh $150, Burma $190, and India $270. In relation to India, which has, under the regime of Rajiv Gandhi, become the most enthusiastic convert to the export strategy, its economic development provides the most striking verification of the parasitism and historical bankruptcy of imperialism. Between 1950 and 1985, the actual per-capita growth of the Net Domestic Product in agriculture was only 0.0074%! Surveying the development of the Indian economy, the Economic and Political Weekly, published in Bombay, concluded: “Growth is inadequate and much of it is neutralized by the growth of the population. Development by borrowing does not create sufficient funds to repay the loans and the burden of debt grows. Deficit financing generates inflationary pressures causing not only economic debility but also political instability. Sectoral and regional disparities grow and become politically untenable. These are difficult problems and there are no solutions in sight. Probably India will enter the 21st century with all these problems on her back” (January 2-9, 1988, p. 50).

The historical prognosis of Lenin has been vindicated in the terrible suffering of the masses of the backward countries: “It goes without saying that if capitalism could develop agriculture, which today lags behind industry everywhere, if it could raise the standard of living of the masses, who are everywhere still poverty-stricken and underfed, in spite of the amazing advance in technical knowledge, there could be no talk of a superabundance of capital. This ‘argument’ the petty-bourgeois critics of capitalism advance on every occasion. But if capitalism did these things it would not be capitalism; for uneven and wretched conditions of the masses are fundamental and inevitable conditions and premises of this mode of production. As long as capitalism remains what it is, surplus capital will never be utilized for raising the standard of living of the masses in a given country, for this would mean a decline in profits for the capitalists; it will be used for the purpose of increasing those profits by exporting capital abroad to the backward countries” (Imperialism). Thus, the only solution lies in the overthrow of imperialism through the socialist revolution, and it is to this conclusion that the masses of the backward countries are being inexorably driven.