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Dependency Theorists Views on East Asian Miracle

The approach represented by the World Bank and other main stream development analysts in analysing the East Asian model of development has been subject to criticism by Dependency theorists. The main concerns of the Dependency theorists in understanding the East Asian model are the functioning of the world capitalist economy, colonialism, imperialism, the role of state and class structure, all of which are neglected by the neo-classical approach.

Despite small differences regarding the explanation of intensity of trade nexus between developed and the Third World countries, Dependency theorists broadly agreed on the possibilities of development in periphery. But they argued that it may happen as “temporary experience, when the metropolises are under the crisis situation and furtherly weakening of unbalanced trade between metropolis and the periphery”.

In this context it is necessary to be informed about the world economic crisis in the 1970s. After the 1930s, the world witnessed another economic crisis in the seventies. This was affected not only the leading capitalist states but also the less developed countries and the contemporary Communist world. The causes for this crisis can be traced to “an extraordinary boom in production and trade in the early years of the 1970s”. This produced the overheating of the international economy and spiralling rises in the prices of key commodities whose supply was instructed by natural and political factors. Most notable among these was the increase in the prices of petroleum which multiplied by more than ten times in the course of the decade.

In the West and US, “this crisis resulted in the attack on Keynesian welfare state with the rise of monetarist solutions to the crisis suggested by Milton Freedman”. The recent neo-liberal interpretation of the crisis in underdeveloped countries also lies its origins during this period.

This world wide economic crisis and related changes in the world trade relations are the main source of the criticism for Dependency theorists. A.G.Frank argued that “the recent growth performance of East Asian economies was the result of the crisis in metropolis from the 1960s, and further momentarily weakening of ties with the metropolis by these economies”. Dismissing the possibilities of development in periphery under the relations with metropolis, Frank asserts that “the growth of export led manufacturing in East Asian countries and the concomitant exploitation and repression of labour force in any sense be called development”.

Samir Amin rejected even the typological classification of East Asian countries as ‘Newly Industrialised Countries (NICs)’ by the division of a part of the periphery. Amin emphasised that this classification is superficial, and negated the study of individual peripheral economies. Because “ they have no real conjectural phenomenon of their own, even transmitted from outside, because they are without any internal dynamism of their own”. Addressing the four NICs in particular, he opined that “these are exhibiting a new form of inequality , while the concentration of manufacturing activities in them, rules out the possibility of this being a development that could be extended to all the countries of the Third World”.

Instead of this, the recent crisis in East Asian economies also received different sets of responses. The crisis indications actually started from Mexico in 1995 and temporarily recovered by IMF adjustment programme. But in 1997 all economies of South East Asia started collapsing. In response to the latest crisis, the IMF and World Bank argue that “it is very temporary, ‘financial’ in nature, and with the adjustment packages by IMF it can be assumed that the things will recover. The radical argument expressed that the crisis in East Asia is another indication of the failure of economic growth model with the optimism of human development. For them, “the crisis is the product of sudden withdrawal of capital inflows by MNCs.

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