ECONOMICS OF IMPERIALISM 233 inputs utilized by the industrial sector.The first tal retains control over the most dynamic sectors consequence of this dependence is the need to of the economy and repatriates a high volume of preserve the traditional export sector,which lim- profit;consequently,capital accounts are highly its economically the development of the internal unfavorable to dependent countries.The data market by the conservation of backward relations show that the amount of capital leaving the coun- of production and signifies,politically,the try is much greater than the amount entering; maintenance of power by traditional decadent oli- this produces an enslaving deficit in capital ac- garchies.In the countries where these sectors are counts.To this must be added the deficit in cer- controlled by foreign capital,it signifies the re tain services which are virtually under total for- mittance abroad of high profits,and political de- eign control-such as freight transport,royalty pendence on those interests.Only in rare in- payments,technical aid,etc.Consequently,an im- stances does foreign capital not control at least portant deficit is produced in the total balance of the marketing of these products.In response to payments;thus limiting the possibility of impor- these limitations,dependent countries in the tation of inputs for industrialization. 1930's and 1940's developed a policy of exchange c)The result is that "foreign financing"be- restrictions and taxes on the national and foreign comes necessary,in two forms:to cover the ex- export sector;today they tend toward the grad- isting deficit,.and to“finance”development by ual nationalization of production and toward the means of loans for the stimulation of investments imposition of certain timid limitations on foreign control of the marketing of exported products. and to“supply”an internal economic surplus which was decapitalized to a large extent by the Furthermore,they seek,still somewhat timidly, remittance of part of the surplus generated do- to obtain better terms for the sale of their prod- mestically and sent abroad as profits. ucts.In recent decades,they have created mech- Foreign capital and foreign "aid"thus fill up anisms for international price agreements,and to- the holes that they themselves created.The real day UNCTAD and ECLA press to obtain more value of this aid,however,is doubtful.If over- favorable tariff conditions for these products on charges resulting from the restrictive terms of the the part of the hegemonic centers.It is important aid are subtracted from the total amount of the to point out that the industrial development of grants,the average net fow,according to calcula- these countries is dependent on the situation of tions of the Inter-American Economic and Social the export sector,the continued existence of Council,is approximately 54 percent of the gross which they are obliged to accept. ow[5]. 2.Industrial development is,then,strongly If we take account of certain further facts- conditioned by fuctuations in the balance of pay- that a high proportion of aid is paid in local cur- ments.This leads toward deficit due to the rela- rencies,that Latin American countries make con- tions of dependence themselves.The causes of tributions to international financial institutions, the deficit are three: and that credits are often“tied”-we find a“real a)Trade relations take place in a highly mo- component of foreign aid"of 42.2 percent on a nopolized international market,which tends to very favorable hypothesis and of 38.3 percent on lower the price of raw materials and to raise the a more realistic one [5,II-33].The gravity of prices of industrial products,particularly inputs. the situation becomes even clearer if we consider In the second place,there is a tendency in mod- that these credits are used in large part to finance ern technology to replace various primary prod- North American investments,to subsidize foreign ucts with synthetic raw materials.Consequently imports which compete with national products,to the balance of trade in these countries tends to be introduce technology not adapted to the needs of less favorable (even though they show a general underdeveloped countries,and to invest in low- surplus).The overall Latin American balance of priority sectors of the national economies.The trade from 1946 to 1968 shows a surplus for each hard truth is that the underdeveloped countries of those years.The same thing happens in almost have to pay for all of the "aid"they receive.This every underdeveloped country.However, the situation is generating an enormous protest move- losses due to deterioration of the terms of trade (on the basis of data from ECLA and the Inter- ment by Latin American governments seeking at least partial relief from such negative relations. national Monetary Fund),excluding Cuba,were 3.Finally,industrial development is strongly $26,383 million for the 1951-66 period,taking conditioned by the technological monopoly exer- 1950 prices as a base.If Cuba and Venezuela are cised by imperialist centers.We have seen that excluded,the total is $15,925 million. the underdeveloped countries depend on the im- B)For the reasons already given,foreign capi- portation of machinery and raw materials for the Copyright 2001 All Rights Reserved