VERT cause and cure By CHEDDI JAGAN Although the United Nations Conference on Trade and De- -velopment is concerned with trade and development; the em- phasis generally seems to be on trade, especially as there was dis- illusionment with conditional aid — “aid with strings’’ — and the gap in living standards between developed and developing coun- tries continued to widen. ‘‘Trade not aid’’ become the panacea for underdevelopment. Clearly, poor countries lose a great deal from unequal interna- tional trade — almost perpetually buying dear and selling cheap. But unequal trade is not the most important single factor in underdevelopment. Better prices for raw materials will not au- tomatically bring about real de- velopment. It can permit the foreign companies, which own most of the mines and planata- tions in “‘third world’’ countries, to siphon off greater profits over seas in one way or another as is now happening i in the key sugar industry in Guyana. And even if a substantial part of the increased prices is collected by the government in export levies or other forms of taxation, it can be squandered on a huge bureaucratic-administraive and police-military elite (personal emoluments in Guyana have jumped from G$ 27-million in 1964 to G$ 130-million in 1976), in infrastructure, show pieces and even foreign investment. (1 Guyanes dollar = .4323 Can. — Ed.) It is therefore necessary to iso- late the root cause of ‘under- development and poverty; name- ly, foreign ownership of the means of production, distribution and exchange, and an imposed pro-imperialist economic plan- ning strategy. - In the immediate post-war period, ‘‘third world’’ countries particularly in Latin America were ‘‘sold’’ the Puerto Rican model based on the false idea that foreign capital was indispensable for economic and social de- velopment; and since capital was scarce, an investment climate. must be created with all kinds of concessions — tax holidays, duty-free imports of equipment and materials, subsidized service, repatriation of capital and profits, _ Weak trade unions and anti-labor measures. But by 1960, the position wor- sened. And the United Nations -established the first UN De- velopment Decade to stem the widening gap in living standards between the “‘third world’’ and the imperialist states. For Latin America, the UN Economic Commission for Latin America (ECLA) proposed a ° planning strategy based onimport — substitution, import-substituting industrialisation, land reform, re- gional integration and foreign cap- ital. Import substitution was to bring an end to financial losses from buying dear and selling cheap; land reform would provide the food, the raw materials for the industries and the income in the. hands of the peasants to purchase the locally-produced manufac- tured goods from the import- substituting industries; foreign a aid (capital) was necessary'to pay compensation for land and to es- tablish factories; regional integra- tion would ensure mass produc- tion and cheap commmodities — such was the rationale behind the ECLA model. But by the end of the First De- velopment Decade, ‘the position was. worse than at the beginning. The ECLA model, like the refor- British wage deal disgraceful : The general council of Britain’s Trades Union Congress agreed May 5 to abide by a wage limit _““deal’’ originally proposed by the Labor Party government of that country. . The ‘‘deal’’ was introduced to Britons by Dennis Healey, chan- cellor of the exchequer, when he presented the néw budget last What the new agreement means to British workers is strict and brutal controls on wages, with no promise of any sort of effective price controls and a re- fusal by the government to insti- tute any form of restraints on profits. The plan sets maximum wage increase ceilings such that lowest paid eammers receive the lowest increases — those earning under £50 a week can get a maximum of £2.50 a week raise. From £50 to £80 a week, pay raises are limited to 5%. Over £80 a week, maximum increases are £4. , The millions of workers earn- ing under £50 a week, (where the majority are non-union, with no collective bargaining rights), will be forced to scrape by on a raise of £2.50 if they are able to get it out of their employers: Even bourgeois press and economists admit the controls mean a drop in the real living standards of British workers by at least 2%. The controls ‘adversely affect women fighting for equal pay to an even greater extent than other workers. As for the labor government’s side of this ‘‘deal’’, tax conces- ‘sions to workers have been calcu- lated to mean a £3.16 rise in weekly income for a married per- son with two children who earns - £30 before deductions, £3.45 for £60 a week before taxes and £6.98 | for a £300 a week earner. Thus the tax concessions are also regres- sive, of greatest benefit to higher income earners. British unions last year agreed to a program of wage restraints limiting increases to £13 a week. The government has used the logic that this restraint was not great enough incentive for private industry to expand and invest in the British economy. Labor Prime Minister James Callaghan was quoted as saying in the House of Commons that: ‘‘You can lead a horse to water but you cannot make it drink. You have to apply . the. incentives necessary to com- ’ pel it to drink.” iy ek ea so pa Pee SE whe While the British worker has been singled out as the cause of inflation, and is being forced to provide big business ‘‘incen- tives” by taking a cut in living standards, the government has - made no promises concerning re- straints for industry. There were no agreements on price controls made during negotiations with union leaders, nor have any concessions been made with regard to savage cut- backs in social service spending announced in the budget. _ In the House of Commons May 5, Prime Minister Callaghan as- sured Tory MPs that ‘‘the first thing to concentrate on is to en- sure that there is sufficient incen- tive to provide a proper level of investment’’ by big business. He | said it has always been the Labor government’s policy to see that businesses got ‘‘an adequate yield’’ to encourage more invest- ment, and that this policy would continue. | The TUC general council deci- sion to accept the wage control plan was called ‘‘disgraceful capitulation to Healey’s blackmail and the engineered run on the British pound by interna- tional speculators’’ by the British Communist Party industrial or- ganizer. Bert Ramelson said the “‘deal’’ meant real wages will be cut by at least 5%, and this only if estimates that inflation will be cut in half are realized. Ramelson called on workers to Show their opposition to the wage “‘deal”’ to government and trade union leaders. ix | 2 (Im Hi | was introduced as a counter Castroism, ended in failure. Th transnational companies and th local oligarchies — latifundi and ‘compradore capitalists bled the countries and peo greater than ever. Capité outflows in the early 1970’s in thé form of profits, dividends, debh 7 payments, interest, monetary trade losses far exceeded cap inflows into Latin America. Meanwhile, ‘‘third world’ countries, which were fo with tied aid to concentrate on if frastructure -schemes (Abou three-quarters of the G$-300 ion Guyana Development Plan 1966-72 was devoted to i structure) were crushed by growing debt burden (debt p ments in Guyana increased fi G$ 10-million in 1964 to G$-10 million in 1976, nearly one- of the current budgetary expe ture). Under these conditions, people’s conditions worsen! and the situation became mort explosive. It is necessary, therefore, take a revolutionary and int rated approach to the probl underdevelopment. This means firstly bringing end to foreign economic domin tion by nationalisation of t “commanding heights’’. of economy; and secondly, corre ing an unbalanced, disto economy with negligible or 4 formed industrialisation by plé ned proportional. develophentil of the economy with emphas simultaneously on industry af* agriculture, expansion partic¥ larly of the public and coope sectors, a radical land reform, a shift in trade and other relatio from the capitalist to the ‘‘thi and socialist worlds. The Soviet Union, particu in its Central-Asian territo and Cuba, have demonst that it is possible to banish pové ty, hunger, illiteracy and b wardness. ‘‘Third world’’ co tries would do well to mak thorough study of the model political-economy of these cou! tries.