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p Lenin constantly reiterated his view that “economic ‘ annexation’ is fully ‘achievable’ without political annexation and is widely practised".  [212•1  This is precisely what is happening at the present stage of the national liberation revolution. Most of the young states of Asia, Africa and Latin America remain subordinate within the capitalist economic orbit, even after winning political sovereignty. They remain heavily dependent on world capitalist markets, which means the imperialist powers, because the latter are the principal importers of their products and the major exporters of goods which the developing countries need. But their economic dependence is apparent in other ways as well. Capitalist investment in most of the developing countries, after they cease to be colonies, goes on and has been increasing from year to year. Furthermore, most of the developing countries are industrially underdeveloped, so that in 1961 U.S. industrial output per head (including the extractive industry) was 30 times that of the developing countries’ average, 76 times greater than in South and South-East Asia, 90 times greater than in India, and almost 120 times greater than in Pakistan.

p The developing countries’ industrial lag gives imperialism the opportunity to intensify its economic exploitation, while providing the basis of mounting strife between the developing countries and the imperialists. The tendencies towards economic independence and towards greater dependence on the imperialists progressively conflict: this causes the developing countries to renew their anti-imperialist struggle to make themselves economically independent as well.

p Most developing countries are still very much bound to the industrially advanced capitalist states which take as much as three-quarters of their exports. Even exports between the developing countries themselves frequently go to firms belonging to the big capitalist powers.

p Capital exports have an equally important part to play. In the eight years between 1956 and 1963, the annual influx of private investment into the developing countries ( including reinvestment) amounted to $2,000-2,500 million, in 1964 213 to $3,200 million, and in 1965 to $3,900 million. The oil industry was the favourite target of investment. U.S. private investment in the developing countries’ oil industry amounted to $1,300 million in 1945,’and to $9,000 million by 1962.  [213•1  In 1965, aggregate private overseas investment in the developing countries was reckoned at more than $45,000 million, with more than $20,000 million in Latin America, some $14,000 million in Asia, and over $11,000 million in Africa.

p The U.S.A. became the biggest overseas investor after the last war. In the twenty years between 1946 and 1965, U.S. private and government investment in the developing countries grew 7-fold, from $6,000 million to $43,000 million, with special emphasis on Asia and Africa, where the increase was 16-fold—from $1,500 million to $25,000 million.

p U.S. government loans showed the biggest increase: they are, in fact, closely associated with political, military and strategic aims and designed to smooth the way for private capital. This goes mainly to countries (altogether some 10 or 15) where there is least danger of nationalisation of foreign assets and where there is either freedom to take profits out of the country or where profits are extremely high and ensure rapid recoupment of capital. Between 1950 and 1965, direct U.S. private investment in the developing countries increased virtually 2.5 times, from $5,500 million to $13,000 million. This investment yielded fantastic profits. The average cost of a barrel of oil extracted by the U.S. oil monopolies between 1951 and I960 amounted to $1.73 in the U.S.A., $0.43 in Venezuela, and only $0.16 in the Middle East.  [213•2 

p Latin America is an extremely rich hunting ground for the U.S. monopolies. The total U.S. investment there is some $10,000 million. Senator Homer E. Capehart said in a speech in the U.S. Senate in 1957 that U.S. investment in Latin America was extremely lucrative, yielding in one year almost as much profit as the U.S.A. had extended to Latin America by way of loans and subsidies over the previous twelve years.  [213•3  Between 1950 and 1961, Latin America had to repay 214 foreigners over $12,000 million in the form of profits and interest payments on loans.  [214•1  About one-third of Latin America’s manufacturing is under foreign control.

p Profits from U.S. investment in Africa also often cover initial investment in a matter of two or three years.  [214•2  In the mid-1950s the American financial expert Milton Friedman estimated that the U.S.A. had been extracting some $3,500 million a year in profits and dividends from the developing countries. By now it is close to $6,000 million.

p What capital remains, after the foreign monopolies have exacted their toll, is normally ploughed back into existing enterprises or new ones in the developing countries. In fact, more than one-half the growth in overseas investment comes from reinvested profits, and only a minor part is imported. Typically, even in recent years only about one-fifth of all overseas private investment has gone into manufacturing. The bulk of investment is directed to the extraction and production of minerals and agricultural raw materials, and semi-finished products.

p In 1955, the developing countries’ debt amounted to some $9,000 million, but 14 years later it had shot up to $50,000 million, calling for about $5,000 million worth in repayments every year. At the same time, U.N. experts estimate that their gross national product was growing at a much slower rate, so that from being 7 per cent of the G.N.P. in 1955, their debt had increased to 15 per cent in the following ten years.  [214•3  This increase, in fact, implies intensified exploitation of the peoples of Asia, Africa and Latin America, since their repayments of total interest on loans have risen.

p Between 1962 and 1964, the imperialist monopolies managed to depress the prices of goods exported by the developing countries by 12-15 per cent below the 1950-52 prices, while the prices of goods exported by the advanced capitalist states increased by 4-5 per cent. The price index of raw materials and food exported by the advanced capitalist states increased from 100 in 1958 to 108 in 1965, while the price index for raw materials and food exported by the developing countries fell to 94. The price gap has been growing.

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p This has greatly aggravated the position of the developing countries, since their export earnings are normally in excess of 20 per cent of the G.N.P., and for some countries, like the Congo (Kinshasa) and Liberia, as much as 50 per cent and over.

p Because of the price reductions on agricultural products and minerals, the major exports of the developing countries, the substitution for natural raw materials of synthetic and other materials, and new production techniques, the developing countries’ share in export to the capitalist world has recently sharply decreased, even while their volume has grown. Their share in total world exports dropped from 32 per cent in 1948 to 24 per cent in 1960 and to 18.5 per cent in 1967,  [215•1  of which the African share was 4 per cent, the Latin American some 6 per cent and the Asian 9 per cent.

p Some developing countries have tried to combat the extraction of an increasing part of their national income by decreeing restrictions on the export of profits, stipulating larger deductions in royalties and output to the state, increasing taxes on foreign firms and other measures. Although this has had some effect, foreign capital has, on the whole, continued to extract an annual income of some $15,000 million from the developing countries within its orbit. This includes super-profits, which the capitalist powers get from the higher prices on commodities imported by the developing countries and the lower prices on developing countries’ exports of raw materials, food, semi-finished and finished products, profits on direct and portfolio investments, earnings from marine and air transport and other means of communication providing services for the developing countries, earnings from high insurance premiums, banking operations, exorbitant salaries for consulting and expertise, etc.

p Further, the capitalist market employs yet another means of extracting capital from the developing countries, and this also makes a sizable contribution to the above-mentioned sum of $15,000 million. This is large remittances abroad by comprador and feudal elements, and also by the top crust of the national bourgeoisie, who prefer to keep their fortunes in American, Swiss, British or French banks. This funnel is frequently overlooked by economists, yet the amounts involved 216 are on the increase and, in future, remittances abroad are likely to be even greater. On the evidence of the U.S. press, the amount of money transfers from Brazil to U.S. banks had topped the $6,000 million mark by the early 1960s. The vast royalties paid bv the oil monopolies to some rulers of developing countries for oil concessions are often deposited in banks in the monopoly’s country. The ruler of Kuwait, for example, annually receives over $ 400 million in royalties from the British oil companies; he has become one of the world’s richest men, but his fortune is kept chiefly in British and other capitalist banks. By early 1958, he had bought up $750 million worth of British Government bonds, not counting other gilt-edged securities. After the assassination of the king in the Iraqi coup d’etat of 1958, his eightfigure fortune became the property of Swiss banks, since no one but the king knew the bank account numbers and could claim the money. The dictator of such a tiny country as the Dominican Republic was able to remit abroad, chiefly to Europe, some $150 million of the national wealth he had filched.  [216•1  Capitalist countries also hold most of the wealth accumulated by the U.S.-soonsored South Vietnamese and South Korean puppets, and various Indian and Pakistani tycoons.

p An even larger slice of the national income is being spent by some rulers on such non-productive items as personal luxuries, trips abroad and gay life in the playgrounds of the Western world. Landowners, feudal lords, usurers and speculators are reckoned to be currently squandering about onethird of the total earnings from African, Asian and Latin American agriculture.

p Given the capitalist world economy and its inherent and pullulating economic and political contradictions, the newly independent states are obliged to spend considerable resources on military needs. The total amount of military expenditure in Asia, Africa and Latin America was estimated in 1970 as $12.000 million, or about one-half the annual net investment in these countries.

p Clearly, then, every year a very large portion of the meagre resources owned by the developing countries is still being withdrawn from their production.

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p Figures on G.N.P. distribution give a clear picture of the consequences of the present situation in the relationships between the majority of the developing countries and the imperialist powers. The developing countries’ population is over two-thirds of that of the capitalist world, but their gross product is less than one-seventh while their industrial output is one-ninth of capitalist industrial output. In 1965, the developing countries held only 6.5 per cent of the gold reserve of the capitalist world. Wage differentials between them and the industrially advanced capitalist countries amount to as much as 1,000-1,500 per cent, while the economic gap keeps widening from year to year—national income per head has recently been increasing on the average by $60 in the advanced capitalist states and by under $2 in the developing countries.

p In attempting to justify this, many bourgeois economists, sociologists and politicians, even some people in the developing countries, try to show that the newly independent states find themselves caught up in a vicious circle of poverty from which there is no way out. Two American economists, Nurkse and Staley, for example, maintain that poverty in developing countries is due to short accumulation, and that is the cause of the lag of the productive forces, which causes poverty, while poverty, in turn, results in insufficient capital accumulation, and so on.  [217•1  Some bourgeois sociologists also contend that the high birth rate in the developing countries is a contributing factor, which demands too big a share of the national income for consumption, leaving too little for accumulation.  [217•2 

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p An American expert on African affairs, Albert J. Meyers, wrote: “To a traveller who has just crossed and recrossed Black Africa from east to west and north to south, it is clear that it will be a long time before any of these nations can stand on its own feet.” His pessimistic conclusion about the future is that “even with massive help, the new African countries won’t be transformed into thriving industrial nations. Tropical Africa’s future, for as far ahead as anyone can see, is to be mainly that of an agricultural area and a producer of raw materials. ... It is unlikely that a fully civilised society will be achieved in any large portion of tropical Africa in this century."  [218•1 

p To right the situation, some Western sociologists advocate not only a population standstill in Asia, Africa and Latin America, but a reduction by a quarter or a third, or even by as much as a half. Without promising any escape from the vicious circle of poverty, or even a shortening of the gap in economic levels between the U.S.A., Britain, West Germany, on the one hand, and India, Brazil, Nigeria and other developing countries, on the other, Western specialists have been bombarding the poor nations with advice on how to make slow and steady progress. The essence of this advice is to secure a more favourable climate for foreign business, i.e., to ensure conditions in which the monopolies could get a greater return on their capital, while exploiting the human and natural resources of the developing countries. This is said to be the only way to secure economic progress.

p Some bourgeois sociologists and economists, including a number working for the United Nations and its agencies, often recommend that the developing countries should foster a “balanced diversified economy”, promote industry, make wider use of natural resources, transform rural life by partial agrarian reforms, and try to modernise agriculture and make it more intensive. Many monopoly capitalists would certainly subscribe to this advice, since none of these measures get at the root of colonial economic exploitation. They remain assured that if the developing countries stay bound hand and foot economically and remain committed to the world capitalist market, and if the old social order puts a brake on the productive forces, the situation will basically 219 be the same. Indeed, it cannot alter appreciably because the cause of the low level of accumulation, slow rate of growth, poverty, backwardness and economic tutelage lies in the prevailing social structure, and the appropriation and export of a substantial part of the national income by foreign capitalists.

p The imperialists pin their hopes on the absence of local specialists who could contribute to swifter economic and cultural progress. According to U.N. figures on world social problems, more than 700 million people are totally illiterate, not counting the several hundred million children who have not even had a glimpse of primary school; 75 per cent of the world’s children today have no secondary education, and they mostly live in Asia, Africa and Latin America.

p The education and science programmes drawn up by capitalist experts for the developing countries are based on an extremely slow evolution, essentially on the perpetuation of backwardness. The programme adopted at the 1961 Addis Ababa conference, with UNESCO participation, estimated that African universities would budget for research $40 million in 1970 and $65 million in 1980.  [219•1  Admittedly, the programme said, it would be ideal but totally unrealistic, for the universities to be budgeting as much as $200-320 million. How ridiculously little this is will be seen from current research spending in the industrially advanced capitalist states. With a population smaller than that of Africa, the U.S.A., for example, spent over $20,000 million on research in 1965.

p A UNESCO report published at the end of 1963 recommended that because of the lack of resources no more universities be established in Africa until 1980, and that no expansion take place in the existing 32 universities. Only 31,000 students of all the countries of Central Africa ( excluding the Arab countries and South Africa) were receiving a higher education in 1962, including the 42 per cent who were studying abroad. The report proposed a ninefold increase in the student body by 1980, with 10 per cent studying abroad.  [219•2 

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p Seen in the light of the anticipated African population growth by 1980, this programme is patently inadequate and cannot secure a rapid growth of science and technology on the continent. Indeed, the figure of 270,000 students by 1980 is one-fifteenth of the number of Soviet students in 1966, yet the two populations are roughly equal. According to UNESCO data, the whole of Africa has no more than 10,000 scientists. Current plans envisage an increase to 65,000 by 1980. The extent of this deficiency may be gauged by the fact that in 1967 the U.S.S.R. had over 770,000 scientists,  [220•1  which js 11 times more than the 1980 target for Africa.

p UNESCO says that the Soviet Union has been allocating 4 per cent of its G.N.P. to research, the U.S.A. 2.8 per cent, France 1.5 per cent, India 0.2 per cent and Africa even less.  [220•2  Current programmes envisage an increase in the Indian share by 1971 to 0.4 per cent, and a slight increase in the African figure. But this sort of growth in research expenditure is wholly inadequate considering the relatively small G.N.P. in the developing countries.

p Some bourgeois politicians and specialists insist that there again the less developed countries find themselves caught up in a vicious circle. Panikkar writes: “In order to take advantage of the progress of science anywhere, a country must have a corps of scientists who are capable of exploiting and assimilating the results of the latest research. Most of the ‘new’ countries in Asia and Africa are in no position to do this. The transformation of their educational system for this purpose is itself a difficult process. Also . . . scientific work cannot progress in vacuum, that is without a background of modern industry, which in its turn is dependent on a high level of technology."  [220•3 

It is fair to surmise that the vicious-circle proponents turn a blind eye to the growing gap between the rich and the poor nations, and are motivated solely by the idea that the fundamental economic and social order within the world capitalist system should remain intact, even in the less developed countries. They will not even consider the proposition 221 that the circumstances of economic dependence on the world capitalist market and the existing social order in the less developed countries should be essentially changed.