Thursday, March 11, 2021 4:32 pm
By JGN Onyekpe
From the point of contact, trade relations between the developed and less developed countries have been unequal. At the point of coming together the two hemispheres, northern and southern, were at different levels of development, high or advanced and low or backward. Thus, they engaged each other from positions of strength and advantage versus position of weakness and disadvantage.
This was the situation in the era of free trade before colonialism.
Colonial rule meant that whatever was found in the colony belonged to the colonising power, by right of conquest.
What is trade between master and servant? Exploitation of the slave by master!
Note that unequal trade and exploitation are the logical end of loss of sovereignty.
Then the LDCs are assigned the role of primary production in the international economy.
Primary producers generate raw materials that have no local value, because of the absence of industries.
They must export all raw materials, regardless of the price regimes( favourable or unfavourable). Again, they must import all industrial commodities, goods, and technology regardless of the price regimes.
They are weak, hence they have no voice in the determination of terms of trade.
Their produce have substitutes in the DCs, hence they cannot call the bluff of their so-called trade partners.
Their trade partners are the creators and controllers of the so-called international institutions such as the World Bank, IMF, WTO, etc, where the rules of engagement and matrices are determined. Practically, these are instruments of economic, financial, and trade domination.
The exchange rate has never been favourable to the LDCs. ( Compare the real value of the US dollar or the British pound in the southern hemisphere with the real value of the Nigerian naira or the Togolese franc in the northern hemisphere : Whole farm vs three standard sized tins of milk!!!).
From time to time, the DCs and LDCs sign unequal free trade agreements which turn the LDCs to dumping ground for all sorts of products from the DCs, whereas the LDCs have nothing to export beyond their primary products. Yet, the DCs have primary production superior to that of the LDCs. ( Is Nigeria ahead of the US In agriculture? Is Chile ahead of the UK?)
Note that the DCs have regional organisations like the European Union and NAFTA which provide them with the platforms to hold their ground vis a vis the LDCs and their wretched regional bodies. ( Is ECOWAS not still crawling at age 45?).
The dependent nature and character of the LDCs have condemned them to a situation in which they pay more and more for imports and earn less and less from their exports. Their weakness is at the point of production, not exchange.
The point therefore is that, for the LDCs to get up, they must be structurally transformed economically. They must experience an industrial revolution!
-JGN Onyekpe, PhD, FHSN.