Prebisch Theory Of Imperialism

Introduction

In the period of decolonization in the 1950’s and 1960’s a large number of newly independent states entered into political arena with mostly Third World countries who had two main agendas gravitated toward an economic agenda that had two underlying thrusts: rapid development and a global redistribution of wealth. While the more radical expression of this agenda in the shape of the Leninist theory of imperialism drew much attention and, needless to say, condemnation in some quarters, it was the more moderate version that was most influential in drawing otherwise politically diverse Third World governments into a common front. This was the vision, analysis, and program of action forged by Raul Prebisch, an Argentine economist

Moreover, the trading relationship was likely to get worse since Northern producers were developing substitutes for raw materials from the South, and Northern consumers, according to Engels’ Law, would spend a decreasing proportion of their income on agricultural products from the South.1 Known in development circles as “structuralism,” Prebisch’s theory of “bloodless but inexorable exploitation,” as one writer described it,2 served as the inspiration for Third World organizations, formations, and programs which sprang up in the 1960’s and 1970’s, including the Non-Aligned Movement, Group of 77, Organization of Petroleum Exporting Countries (OPEC), and the New International Economic Order (NIEO). It was also central to the establishment of the UN Conference on Trade and Development (UNCTAD) in 1964, which became over the next decade the principal vehicle used by the Third World countries in their effort to restructure the world

UNCTAD became the focal point within the UN system for tackling LDC-related economic development issues.

Phase 2: The 1980s

• In the 1980s, UNCTAD was faced with a changing economic and political environment: o There was a significant transformation in economic thinking. Development strategies became more market-oriented, focusing on trade liberalization and privatization of state enterprises. o A number of developing countries were plunged into severe debt crises. Despite structural adjustment programs by the World Bank and the International Monetary Fund, most developing countries affected were not able to recover quickly. In many cases, they experienced negative growth and high rates of inflation. For this reason, the 1980s become known as the "lost decade", particularly in Latin America. o Economic interdependence in the world increased greatly.

• In the light of these developments, UNCTAD multiplied efforts aimed at: o Strengthening the analytical content of its intergovernmental debate, particularly regarding macroeconomic management and international financial and monetary