Development of low pressure (13)

DEPENDENCY THEORY
Abstract:
There are many types of theories have been put forward relation to the development of the
countries. Among these theories, dependency theories are identifies as having possible
elements which are describing under development of third world countries. Such dependency
theories pay more attention on this category. He concentrates on external factors to explain
the under development of the third world. This paper examines that, do the theories have the
practically possible factors to explain the under development of the third world countries in
current affairs? Methodology frame work has been adopted for this research, historically and
contemporary perspectives of current world user as primary sources and existing literature
reviews as secondary sources. Although the theory classified according to the subject as
classical theory, it is become more suit itself to the current world. Despite it is proposed to
criticize, this is the theory which was examined it first of that era. Many modern theories in
relation to development of the third world countries are undertaken based on his theory and
also, it gives productive concepts for development field since now.

Historical Development of Theory:
Economic development theorists have developed several models for explaining the
“undeveloped-ness” of countries in the third world. These theories are not sufficient to
explain about the setbacks on

development and predicament that many poor countries face.

However, it is remarkable of the concepts of the dependency theories in the contemporary
period that gave a frame work to assess the universal development and Undevelopment. To
formulate the dependency theory, many concept explanations and the international economic
events were the basis.
We first need to place the model in historical context by examining its origins. Dependency
theory emerges in the late 1940’s against the development theory of modernization. In 1960,
the two types of ideology the modernization of the development and the Latin American
structuralism presented the explanation on development, Specially the concept of
modernization is that ‘the traditional society changes its social , culture and economic
system’. That is to say, ‘the economic firms, the thoughts and the pattern of life style of the
people in the traditional society adapt the modern systems dropping the traditional way of
life’([ CITATION San10 \l 1033 ]. The theory stems from classical (Darwinian) evolutionary
1

theory and is based off of the premise that developed nations are developed because of their
undergoing of socio-political and economic evolution. The economist Rostrow published a
book on the view of modernization, ‘the stage of Development: A non – communist
proclamation’. His ideas explained the experience of developed countries related to the

development.[ CITATION San10 \l 1033 ] So. The ideas of the modernization schools
explained the distindiviely strained functions of developed capitalistic countries such as
North American, European countries ect. They did not explain about their historical events.
And also they did not guide to understand the problems related to the development of the
third world countries.[ CITATION Alv11 \l 1033 ]
During this period, The Latin American structuralism opposed idea related to the
development theory of the modernization, and presented the protesting ideas against it. This
theory presented the internal explanation for development.
The Liberal reformers Raul Prebisch and his collages did international trade theories based
off of empirical research done on developing countries. Countries’ terms of trade from the
19th century until World War II. According to their findings the economic activities of
developed countries often lead to the serious economic problems of poor countries. The
explanations that they submitted, explained the phenomenon of the third world countries,
straight forwardly. The poor countries export their primary commodities to wealthy countries.
In return, the wealthy countries export their manufactured products to poor countries on value
added system. In this transaction, the cost of manufactured products was always higher than
the raw materials. These were the raw materials that were used to produce the manufactured
articles. However, the costs of manufactured products are high. Because of this, the poor
countries never able to get neither higher income for their importing items/ things; as such
they presented the results of their research. They also presented a straight forward solution for

this problem. The poor countries must embark a scheme of substitution for their imports.
These countries need not to purchase the manufactured products from the wealthy countries.
Similarly, they need not to sell their raw materials in the world market. This is because; the
foreign exchange reserves of the poor countries cannot be utilized to purchase their
manufactured products. [ CITATION Alv11 \l 1033 ]
Neo- Marxist theory explains the development it explores the economic deprivation of the
third world countries. That, ‘the process of world capitalist integration under the control of
monopoly capital’ [ CITATION Yeh89 \l 1033 ]
The victory of China and Cuba revolution was create new blended Marxist thoughts. Mainly
these were developed the universities of Latin America and similarly the socialist revolution
2

was developed in the core way of China and Cuba. Neo – Marxist focus the imperialism on
the point of peripheral view. It indicated and explained the imperial activities on the
development of the third world countries. Wanner explains the above concept on his book
named ‘Imperialism: Pioneer of Capitalism’. The book had included revolution concept such
as capitalist are the tools of imperialism, there for the local groups should lead the
developmental revolution and the other hand this book explores it massive resistance on
eradicating the imperialism shall only possible through the way of peasants
The other group of neo- Marxist argues that imperialism never brings any developments but it

causes deprivations and underdevelopment. Particularly, the book of Walter Rodney ‘How
Europe underdeveloped Africa’. Stimulated the dependency school to think the concept of
‘Development’ in creatively and historically.
The capitalism had controlled the colonized countries to depend on the countries which
colonized them until nineteen century. The social and political structure of the colonized
countries had to perform the economic activities of the imperialistic countries. This situation
prevailed until 19th century. As a result of this, the poor countries such as Brazil, Argentina,
Chile, Colombia and Mexico had the experience of beings in the backward position
continuously. (2010, May 1)
There for these countries tried to implement several action programmes in order to reform
themselves. In this back ground, the dependency school focuses the social, economic and
political relationships of the poor countries and presented the explanations. And also further
opinions were too presented as such the causes for social unrest in the poor countries are the
political investment, the international economic strength and weak economic positions. In
this situation, the dependency school tried to find the explanation positively, for the persistent
poverty of the poor countries.
In this manner, Ander Gunder Frank published a book ‘Capitalism and Underdevelopment in
Latin America’ in 1967. This book was a turning point in the dependency school’s thought.
This book gave a model for the dependency ideologist. The dependency theory speaks
presenting two concepts namely Core and Periphery to explain generally the structure of the

universal capitalism. The core changes the periphery as a tool for exploitation. This matter
given priority. So, Many dependency theorists have presented their views .Mainly Andre
Gunder Frank (Development and Underdevelopment), Samir Amin (World system theory)
and Wallerstain (World system theory). These authors focused their attention on Latin
America.
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These three classical theorists give the practical explanations related to development and
underdevelopment of the third world countries. In order to explain the setback of the
developing countries, each theory focused in different view, whatever their differences, they
all shared the view that underdevelopment was original or traditional.
“Standard” dependency theory differs from Marxism, this theory arguing against
internationalism and any hope of progress in less developed nations towards industrialization
and liberating revolutions. Theonio dos Santos explained a ‘new dependency’, which focused
on both the internal and external relations of less – developed countries of the periphery,
derived from a Marxian analysis.(2010, May 1) Later, dependency theorist focused in different
ways of the third world countries’ underdevelopment situations. Later, world systems theory
expanded on dependency arguments. It postulates a third category of countries, the semiperiphery, intermediate between the core and periphery. In this model, the semi-periphery is
industrialized, but with less sophistication of technology than in the core; and it does not
control finances. The rise of one group of semi-peripheries tends to be at the cost of another

group, but the unequal structure of the world economy based on unequal exchange tends to
remain stable (2010, May 1)
A debt crisis appeared in the third world countries in 1980. In this situation affected the
efforts related to development in Latin America, African and Asian countries in 1990. At the
same time, another theory related to ‘dependent development’ was presented. Especially in
1995 – 2000, Fernando Henrique Cardoso presented his ideas which derived from his theory
of ‘Dependency and Development in Latin America’. Vernengo (2004) suggest his idea that
the financial markets (Currency) strength and the International Monetary reservations among
the core and periphery countries influence on the development and the dependency
[ CITATION San10 \l 1033 ]
As such the ideas, formulation and the growth of the dependency theory, exist as an analyzing
practical theory of the matters related to ‘development’ in the poor countries until now.

Definition of all related concept:
4

In order to explain the development and underdevelopment of the countries, many types of
dependency

theories

were

presented

by

many

theorists.

Particularly,

liberal

reformers( Prebisch), Neo – Marxists( Andre Gunder Frank) , Wallenstein ( World System
theory), Samir Amin , Theonio dos Santos,

Fernando Henrique Cardoso and Tausch.

Theories of these thinkers have been caught a vigorous place, as well as they are quit
challenging. They present their theories on different views. Although the dependency theory
is not have same ideas. They all shared the common view. It’s to find out the answer for the
question, ‘Why the poor countries of the third world are poor?’ There are still pints of serious
disagreements among the various strain of dependency theorist and it is a mistake to think
there is only one unified theory of dependency. Nonetheless, there are some core propositions
which seem to underline the analyzes of most dependency theorist.( Ferraro, 1996)
It defines the external and internal explanations for the economic developments of the
countries. It defines about the factors of politics, economics and culture influence the national
development policy. Dependency can be defined as an explanation of the economic
development of a state in terms of the external influences political, economy and cultural…
on national development polices. [ CITATION Osv69 \l 1033 ]
Theotonio Dos Santos emphasizes the historical dimension of the dependency in his
definition: [Dependency is] ….an historical condition which shapes a certain structure of
the world economy such that it favors some countries to the detriment of others and limits the
development possibilities of the subordinate economics...a situation in which the economy of
a certain group of countries is conditioned by the development and expansion of another
economy, to which their own is subjected.[ CITATION KTF711 \l 1033 ]
The dependency theorist most probably presents the definitions of three types of eminent
theory.

1. Dependency characterizes the international system as a comprised of two sets of
states. They particularly define the explanations in the corner of Dominant –
Dependent, Center – Periphery, Metropolis – satellite. Among these theories,
advanced industrial nations in the organization of economic cooperation are the
considered as dominant states. The law per capita GNP countries such as Latin
America, Asia and Africa and also some other countries which heavily rely on getting
revenue through forging exchange and by exporting their trade products are
considered as dependent states.
5

2. Bath definitions have in common assumption that external forces are of particular
importance to the economic activities within the dependent sates. The multinational
co-operations, International trade markets, foreign assistance, communication and
also all other matters of the developed countries which activate by represent ting on
the basis of economic willingness on other countries are included in this definitions.
3. The definitions of dependency all indicate that the relations between dominant and
dependent states are dynamic in nature and increased interactions between the two not
only reinforce but also intensify the unequal and exploitative patterns. Dependency is
an ongoing process that finds its roots in the internationalization of capitalism and
hence, it has its own history behind it... This is because; the dependency exists on the

deep historical roots and researches the root and the shapes of the capitalism that has
been made in universal. Dependency is an ongoing process:
Susan Bodenheimer says, “Latin America is today, and has been since the sixteenth century,
part of an international system dominated by the now – developed nations….. Latin
underdevelopment is the outcome of a particular series of relationships to the international
systems. [ CITATION Hod \l 1033 ] Hence, the international capitalism is the widely
deprecated as the force behind dependency relationships by most, if not all, dependency
theorists. Andre Gunder Frank, one of the pioneers of dependency theory, he makes a clear
point in his widely discussed article “The Development of Underdevelopment”.
“...historical research demonstrates that contemporary underdevelopment is in large part the
historical product of past and continuing economic and other relations between the satellite
underdeveloped and the now developed metropolitan countries. Furthermore, these relations
are an essential part of the capitalist system on a world scale as a whole”. [ CITATION
And72 \l 1033 ]According to this view, the capitalist system has enforced a rigid international
division of labor which is responsible for the underdevelopment of many areas of the world.
The dependent states supply cheap minerals, agricultural commodities, and cheap labor, and
also serve as the repositories of surplus capital, obsolescent technologies, and manufactured
goods. These functions orient the economies of the dependent states toward the outside:
money, goods, and services do flow into dependent states, but the allocation of these
resources is determined by the economic interests of the dominant states, and not by the

economic interests of the dependent state. This division of labor is ultimately the explanation
for poverty and there is little question but that capitalism regards the division of labor as a
6

necessary condition for the efficient allocation of resources. The most explicit manifestation
of this characteristic is in the doctrine of comparative advantage.
Moreover, to a large extent the dependency models rest upon the assumption that economic
and political power are heavily concentrated and centralized in the industrialized countries,
an assumption shared with Marxist theories of imperialism. If this assumption is valid, then
any distinction between economic and political power is spurious: governments will take
whatever steps are necessary to protect private economic interests, such as those held by
multinational corporations.
Not all dependency theorists, however, are Marxist and one should clearly distinguish
between dependency and a theory of imperialism. The Marxist theory of imperialism explains
dominant state expansion while the dependency theory explains underdevelopment. Stated
another way, Marxist theories explain the reasons why imperialism occurs, while dependency
theories explain the consequences of imperialism. The difference is significant. In many
respects, imperialism is, for a Marxist, part of the process by which the world is transformed
and is therefore a process which accelerates the communist revolution. Marx spoke
approvingly of British colonialism in India:
England has to fulfill a double mission in India: one destructive, the other regenerating--the
annihilation of old Asiatic society, and the laying of the material foundations of Western
society in Asia [ CITATION San10 \l 1033 ]
For the dependency theorists, underdevelopment is a wholly negative condition which offers
no possibility of sustained and autonomous economic activity in a dependent state.
Additionally, the Marxist theory of imperialism is self-liquidating, while the dependent
relationship is self-perpetuating. The end of imperialism in the Leninist framework comes
about as the dominant powers go to war over a rapidly shrinking number of exploitable
opportunities. World War I was, for Lenin, the classic proof of this proposition. After the war
was over, Britain and France took over the former German colonies. A dependency theorist
rejects this proposition. A dependent relationship exists irrespective of the specific identity of
the dominant state. That the dominant states may fight over the disposition of dependent
territories is not in and of itself a pertinent bit of information (except that periods of fighting
among dominant states afford opportunities for the dependent states to break their dependent
7

relationships). To a dependency theorist, the central characteristic of the global economy is
the persistence of poverty throughout the entire modern period in virtually the same areas of
the world, regardless of what state was in control.
Finally, there are some dependency theorists who do not identify capitalism as the motor
force behind a dependent relationship. The relationship is maintained by a system of power
first and it does not seem as if power is only supported by capitalism. For example, the
relationship between the former dependent states in the socialist bloc (the Eastern European
states and Cuba, for example) closely paralleled the relationships between poor states and the
advanced capitalist states. The possibility that dependency is more closely linked to
disparities of power rather than to the particular characteristics of a given economic system is
intriguing and consistent with the more traditional analyses of international relations, such as
realism.

Theoretical Arguments
The concept of modernization presented the explanation related to the development on the
basis of higher population, traditional thoughts, culture, small investment, less motivation
8

concentrating the internal factors of the poor countries. But Andre Gunder Frank’s concept
presents an alternative idea.
Andre Gunder Frank is one of the most prominent writers of the dependency theory, his
approached is a specialized offshoot of the Marxian theory of capitalism the concept of Frank
presents the external explanation related to the subject of development of the third world
countries. In order to explain the under development of the third world countries, he present
his explanations focusing historical root of those countries.
He remarks, that third world countries cannot reach the development through following the
modern path of the western countries. Because, the western countries had never got the
experience of colonization as the third world countries had got. The third world countries had
been a colony over hundred years. The foreign domination changed the structure of those
countries to fit according to their fit. And also they drastically altered their path of
development. “The now developed countries were never underdeveloped, though they may
have been undeveloped . . . Contemporary underdevelopment is in large part the historical
product of past and continuing economic and other relations between the satellite
underdeveloped and the now developed metropolitan countries.” [ CITATION And72 \l
1033 ]
Further the third world countries were wrongly characterized as ‘primitive’, ‘feudal ‘or
‘traditional’. But when we look for the historic events, China and India were quite advanced
before they become as colonized countries. The time period before the sixteenth century was
as underdevelopment, as such he says.
Also he says that the prevailed situation in the third world countries from sixteenth century to
twentieth was as ‘underdevelopment’. The concept of ‘underdevelopment’ is the main
contribution of Frank. “Underdevelopment means the results of the capitalistic development.”
[ CITATION And72 \l 1033 ] So, the history of the third world countries is the development
of underdevelopment. The colonization and the foreign dominance pushed back word the
development of the third world. Historically occurred these colonization and foreign
dominance historically functioned on three dimensions. This situation prevails continuity
with changes. The structure of the world economy was unequal at all times.
1. Trade capitalism (1600 B.C- 1770 B.C)
2. Industrial capitalism ( 1770 B.C – 1830 B.C)
3. Imperialism (1870 B.C – 1930 B.C)
Frank focused the prevailed economic relationship between the wealthy countries
(Metropolis) and the poor countries (satellite) on the basis of ‘the production for the
9

trade market relation’ in these three times periods. In these three time periods,
exporting of economic surplus (substance) and importing of commodity goods were
done between the wealthy and poor countries. These functions were collected by the
depending countries through exploitation, as such he says. So underdevelopment and
development are the two side of a coin. This is the result of the contradiction of the
world capitalism. ‘Under development is not a natural condition but an artifact created
by the long history of colonial domination in the third world countries.’ [ CITATION
Gun661 \l 1033 ]
In an addition, Frank has formulate a “metropolis – satellite “model to explain how
the mechanism of underdevelopment

are at work on countries, that they becoming

undedeveloping countries.
The Model: Understanding the Metropolis- Satellite Relationship
The colonizing countries carried out exploitation in the third world countries and made them
into dependency. Exploitation comes from dependence. That’s why the western countries
established new cities in their dominant countries during the colonizing period in order to
facilitate their economic surplus. These national cites carried out exploitation locally. The
western countries exploited the resources that the national cities exploited. The national cities
function as satellite and the western countries function as metropolis.
According to Frank, Metropolis connects satellite with regions. It’s forced to send the
produced natural resources, raw materials, minerals, commodities and profits ect in the outer
region to the centers. The national wide cities function as central place for the exploitations. It
is not the financial outcome of the exploitation. Because, the national governments function
as satellite voluntarily.
The settles supply their commodities to wealthy countries in cheap price. The wealthy
countries produce manufactured products using those commodities and send them back to
satellite as value added goods. The highest purpose of there is to get profit only and not for
anything.
So, metropolis – satellite relationship here means that the western countries develop
themselves and flourish their governing power through the profit they get from the poor
countries. The interest of the metropolis which take advantage of this global, national and
local level structure to motivate their own development and the enrichment of their ruling
10

classes. It is Gunder Frank’s belief that this metropolis- satellite relationship is only in
existence to serve the “interests of the metropolis which take advantage of this global,
national, and local structure to promote their own development and the enrichment of their
ruling classes.” [ CITATION And72 \l 1033 ] In order to create a permanent development in
the wealthy countries, the satellite (poor countries) have disconnected from the real world. As
a result of this, those countries have fallen in to underdevelopment. This is what Gunder
Frank means by the “development of underdevelopment”.

These countries are not

undeveloped because of their lack of technological advancement, or disconnect from the real
world. The case is, however, quite the contrary. Because of the exploitative relationship
through the metropolis-satellite model, whole regions develop a state of “underdevelopedness” that is witness to the massive upheaval of its capital resources and the transference of
said recourses to the metropolis.
We must conclude, in short, that underdevelopment is not due to the survival of
archaic institutions and the existence of capital shortage in regions that have remained
isolated from the stream of world history. On the contrary, underdevelopment was and
still is generated by the very same historical process that also generated economic
development: the development of capitalism itself. [ CITATION And72 \l 1033 ]
Frank shows an example for this situation with the experience of development in Brazil.
Brazil functions as a satellite of Washington . In Brazil itself, Rio de Genera, Sava polo and
other cities function as metropolis and satellites. The profit is smuggled to the cities in top
passing many steps mentioned as above to the western countries.
Social structure was created in the countries to suit for the exploitation. Therefore, the
dependency is the result of planned activities of metropolis. According to Gunder Frank. One
of his hypotheses in developing this theoretical model states, “Satellites experience their
greatest economic development and especially their most classically capitalist industrial
development if and when their ties to their metropolis are weakest.”
Another safe haven from the exploitative metropolis was being isolated from the world
economy. The weak connection, as satellites, that certain countries were fortunate enough to
have, saved them for a time, from their eventual underdevelopment (e.g. Gunder Frank
mentions cities likes Tucuman, Asuncion, Mendoza, and Rosario as places that fit this
description). [ CITATION And72 \l 1033 ]
The national government is found the third world countries. The metropolis – satellite
11

network functions as the shape of a pyramid. Sometimes satellite functions as a metropolis
and exploits. We can the above mentioned subject in a diagram.

It’s the laborers and peasants are in the urban of the third world countries are subjected to
exploitation. The members of the developed countries exalt their life state. Similarly national
elite in the satellite too gain most advantage.
The economics of the dependency countries has been constructed to depend always on the
capitalist countries. By obtaining an excellent outstanding quality in producing a thing, a
dependency country is made into depend on that economics. Similarly the capitalist countries
paid attention to produce manufactured goods, heavy machineries for industry. There for it
cannot be made a split in the bond between the metropolis (core) and the satellite (periphery).
The exploitation and its outcomes are the foundation of the structure of the world. This is the
reason for the dependency in the third world. “The flow economic surplus in the world
economy is from the satellite to the metropolis and the world economy is organized to make
this happened. The under development nations there for have become and remain under
developed because they are economically dominated by the capitalist nations that have
continually been extracting wealth from them.” [ CITATION And72 \l 1033 ]

De- linking
There for, if the poor countries in the third world want to reach the development they should
de – linking their relationship with the world capitalism. Then the dependency countries can
12

reach the development. The imperialism that remains continuously and long means, the
situation of depending on that country and the dependency too will increase. He says that the
poor countries should disconnect their economic relationship with the developed countries.

Comparative Frank’s theory with present situations of the third world
This last, and most important work in this paper is bridging the gap, and looking at a
comparative theoretical examination of Frank’s dependency theory in third world to prove its
relevance fifty years later.
The theory of Frank points out the external factors for the under development of third world
countries. The metropolis that he has forwarded explains about how the model
underdevelopment is used for networking. Likewise most of the literature views say at
present also all his theories seems to have the similarity. Emeh defines this as “Andre Gunder
Frank’s contribution to the theory of development and underdevelopment are tremendous but
the most glaring is the dependency theory. His theory tries to explain underdevelopment
situation in the third world which Nigeria is a part of “[ CITATION Eme121 \l 1033 ]
At this present world, the view about the development of under development is used in the
countries like Africa, Latin America, Caribbean Island, Thailand, Bangladesh and Indonesia.
When comparing and by doing research of the theory of Frank with the history of the
countries in the third world, Specially Sri Lanka, Japan, USSR, Africa and Cuba, we can
come to know about the growth of the under development . Under development means the
effect of the imperialism. Here the third world countries are included.
Sri Lanka:
Sri Lanka has been under ruled by portages, Holland and British for about more than 300
years. In the history of Sri Lanka, it is said Sri Lanka more farm lands. Through which we
can understand about the quite development of the country. After 1825 Sri lank has export
large amount of tea and coffee. Especially during the ruling time of the British, Sri Lanka had
imported tea and coffee. In more amount. Mainly during the British rule, Carbon, spices, tea
coffee and coconuts were imported from 1820 to 1940 to Europe and American countries.
[ CITATION Kum091 \l 1033 ] Betrowiskey has explained that how was the capital run and
hoe it utilized labor force under the colonism in Sri Lanka. [ CITATION Kum091 \l 1033 ]
By the way of his consideration, we can understand that, the primary commodities imported
to western countries in cheap price in the way of exploitation.
13

According to Frank, indicates we can understand that Colombo was functioned as satellite,
colonized countries as metropolis and other small urban areas were like the satellite and
metropolis for this exploitation.
In Sri Lanka due to the Arrack lease, plantations, commerce and graphite mining led to the
growth of capitalism, and Sri Lanka has invested in the plantation field specially, for coffee
and tea. Coffee and tea was planted and expropriated in the land of people. On the mean time,
the farmers to work on this land were taken from the country itself. 1/3, ¼ amounts of peasant
coffee that was exported from Sri Lank was grown in the house lands itself. [ CITATION
Kum091 \l 1033 ] The national elites buy this in the cheapest price from the farmers and sell
it to the cities of the highest price and gain profit on it. And it was sent to the centrals. The
east company of the British which was in Colombo which had the two authorities and had the
power to decide the price. This situation was continued until 1930. Likewise, these employers
in Sri Lanka were function as intermediaries and as agent. But they were not given the
authority in the international market to invest or to get loan. The banking system in Sri Lanka
was under ruled by the banks of British. This gave opportunities only for the European
investors for loan as well as the shares for the business. [ CITATION Kum091 \l 1033 ]
The things were imported without any blocks. All those things were manufactured products
from the developed countries. The goal of the colonist rulers was to gain profit from the poor
country. Likewise the problems to get loans did not give place for the growth of industry in
Sri Lanka. Later, industries were created and that was belonging to the Europeans. This
industry was brought up rapidly and the volunteers were developed. Oil distillation factory,
Timber mills, workshops were brought up to make furniture’s, to build building and to make
wood box for packing. [ CITATION Kum091 \l 1033 ] So, even in the history, there were
barrios for the industrial development of Sri Lanka.
Often the people were exploited by the plantation industry. Likewise, the graphite mines
were exported after 1900s. Only the village people (labors) worked in these mines. The
arrack lease built their taverns where the mines were. These the village farmers were
exploited by the plantation and industrial field , like wise working in the cities were exploited
in least labor charge. [ CITATION Kum091 \l 1033 ] Pongusan explains this in 1903s, that
what was happened in the working apartments of Colombo stores. “Thousands of poor
worked here. These works were to fulfill the basic needs of food, clothing of these swadeshie.
In addition, the store owners granted works for the business man, sailors and much more
people.” [ CITATION Kum091 \l 1033 ]
14

So, in history, Sri Lanka had not gained any profits during the colonism period and also even
today. We can understand that it gained only under development instead of development. The
modern plantation economy during the colonies period, the business embracing it, and the
people and the farmers did not get any profit from the economy developed by above
mentioned streams. [ CITATION Bal09 \l 1033 ]
The economic activities followed by the independence of Sri Lanka, had a shape of the
content of colonism. The country was depended on the product import. The foreign business,
business company, the financial distribution companies, and the other activities of economic
were put in a one box called’ International business communication’. We can explain this by
the export and import report of Sri Lanka.
Table -1
Productions

1948

1960

1970

2000

2010

2013

Agricultural

98.6

94.4

91.7

18.2

24.6

24.8

production
Tea
Industrial production
Mineral Production

63.1
-

59.8
-

55.0
2.0
0.9

12.7
77.6
2.5

14.4
75.4
0.1

14.8
74.6
0.1

Sources: Central bank Report (several years)
Table -2

15

Table - 3

The chart represents that Sri Lanka still exports the raw materials. Obviously, those materials
are mostly exports to developed countries. (Table-2) Sri Lanka engages traditional plantation
production and garments production. However, the countries those porches these productions
are still being a powerful tool for determination of exported materials are rapidly increase.
There for, Sri Lanka is being forced to the pathetic situation to contest and get sold the raw
materials in the international market. Along with this phenomena what interesting thing is a
country like Sri Lanka which exports raw materials is happen to contest the countries who are
ranked as under developed as them. This is a well planned commercial exploitation. This is
called a model of neo colonization.
Currently, the World Bank, IMF, WTO who are giving a big assistance for economical
strength, when the countries get harmful effect from fluctuation. That loan money to the
needy countries. When a country come by a debt form such institutions, they complain that
those institutions pushing the countries into more economical burden, control the local
economy and economically oppressing such of them.[ CITATION Pro09 \l 1033 ]
Later on, in 1980’s, 1990’s operation of foreign investments imports of duty free machineries
16

are developing new means of exploitation and enriching neo colonies. Particularly
metropolises (developed country) imports heavy machineries, fertilizers and pesticides to Sri
Lanka under the guise of ‘Green revolution’. Green revolution originally means third world’s
farmers are being used to fulfill the food needs of the developed countries in law wages.
Metropolises distribute fertilizers, seeds, machineries at high rats and import the agricultural
products in law rates from the satellites (3rd world country). This situation is continuing in the
global market. This is how Sri Lanka is being exploiting.
The developing countries always to depend on developed countries. So, this countries stored
the raw materials to vend them in a great price increase of satisfied the fundamental needs ,
they wait for hiked up the raw materials, the people who produce the raw materials are burnt
to death. As a result of famine, starvation and hunger. The famine in India and Bengal are
good example of it. Amerthiya Sen. refers according to this, ‘the famine was not because of
the food but because of the disorder on providing land’[ CITATION Rbe03 \l 1033 ]
Today, global trade organizations are the base for the commercial activates which is work for
in the metropolis in globalizes world system. While the organizations are giving prize
guarantees to the developed countries, they exploit the under develop countries and work as a
tool of driving the countries slave.
No along in the globalized world TNC’s (Trans National Cooperation) exploiting the people
of Asia and Latin America Ethiopia Si lank, Thailand, Indonesia and Philippines in an
integrated link and imply modern means of metropolis – satellite system and all. All these
TNC’s in the world are belongs to developed countries. They offer the goods and services to
under developed countries. Especially, these countries ranked top in the world trade and they
established agents to imply these in local. Local capitalist who are the agents; they exploit the
raw materials and send them all. TNC’s import them as manufactured products in return, for
instant, Nestle company get ¼ of Coco form Ethiopia and gives the manufactured food to the
country in higher debt. The coco company established its co operations in under developed
countries and exploiting the poor and the environment. [ CITATION Rbe03 \l 1033 ]
The companies like Shell, Nike are dismantling and destroying the indigenous inhabitants,
developing deforestation, and establishing mines in the Amazon forest. [ CITATION Rbe03 \l
1033 ] Free Trade Zone utilizes the people if Sri Lanka, Thailand and Bangladesh in means of
duty free production. Developed countries never directly involve the above circumstances.
They only earn the profit. The local agent of the third world are exploiting and sharing all
these via perfect network. [ CITATION Bal09 \l 1033 ]
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Metropolis firmly established their satellite system at the under developed countries to make
them deepen on selling the raw materials and in return the manufactured goods. This is how
metropolis intervention in under developed countries.1/3 of lands is still ruling by the
national capitalist in Latin America. Today, village people are strolling to reserve their lands
and recourses. It is remaining in Chili, Guatemala, Uruguwe, Paraguay, Colombia, Brazil and
Maxico. In Chili, 25% of lands has allocated for the mine mining companies. They exploit
mineral resources and import those to developed countries. Such countries states are
institutionalized to maintaining the system. (Meenilancl, N. ,2015)
Likewise MNC’s (Multi National Co-operations) produce agro a food import services. The
MNC’s lease the land of third world countries and produce agro fuels and bio- tech foods.
They utilize the local farmer in low wages for this production. Government complicit for
these operations. MNC’s has controlled the states under their influences. Some of developing
countries are being ruled by the military forces according to such causes. Afghanistan, Cuba,
Egypt are the best example. Still now developed countries conducting mechanism in African
continent by creating internal conflict beyond the countries and developing exploitation as
indirect attack. [ CITATION Eme121 \l 1033 ]
The current globalized economy is Knowledge based economy. Education based industrial
development drives education based economical development. The question is, the human
capital called Educational economy, where does move? Form where to? Who are being
applied it? In the third world countries, highly skilled and qualified people working for the
developed countries. Brain drain is commercialized under the guise of’ Knowledge based
economy’ developed countries gain them in lower amount.
Poverty and wealth are still remaining as two poles due to this. Uneven world system. The
main consequence for this system is exploitation. It causes development and under
development in direct contradiction. Frank explains this as two sides of the same coin.
Metropolis using the third world countries as satellites in multiple ways and patterns for the
changing world.
Frank has presented his ideas saying that the third world countries should disconnected their
bond with the developed countries in order to get rid off from the situation of
underdevelopment. When we clarify this idea with the situation of the third world countries,
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it seems to be a suitable thought for the development. This is because, Japan has reached to
the development as it didn’t get the experience of colonization, similarly when we look at
china and India, they had the experience of colonization, their nature of under dependency
and the restricted schemes on local import and export helped them for development in the
later part of time. Similarly, an alternative scheme of production for import was carried out
in Sri Lanka in 1960’s. This scheme moved forwarded a large number of local private
sectors and the government towards the industrial. As this scheme was concentrated on dual
economy, it went to a setback. [ CITATION Pro09 \l 1033 ]
Similarly, the planning of the country influenced the economic in 1992’s. Earlier the Soviet
Union was a country of strong economics. Because, USSR did not allow the other forge in
ownership. However, it had to bear up some private ownership in the later part of time. This
is situation was to one reason for the breaking up of the economics. North Korea and Cuba
operate their economic structure with the central economic planning systems. China functions
on staying central planning systems and creates the integrated economics on open markets.
These are the reasons that changed India and china as the countries of high ststnded in world
market. China is in the second place, India is as a capacity of universal supplier of products
and services. (Smith, T.,1979).

Similarly, countries like Singe poor, Taiwan, and Malaysia completely got rid off from
primary products and introduced the new technical usages in the world market. As a result of
this, it was possible for them to reach the growth in the short period of time. But Sri Lanka
still depends on the exporting of primary products and also depends on developed countries
for consumer goods, minerals and other intermediate goods. This depending situation makes
the countries to travel in under development. From the colonized period to still, Srilanka have
been getting a very negative balance of trade we can understand this situation following table.

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If we look at the growing countries in a short period of time like Qatar, Dubai they did not
make them to depend on developed countries. That’s why growth was possible there.
When we look at the experience of Africa, this country too was under the dominance of
colonization for long time. It still depends on exporting primary products. So, it is still unable
to reach the development position. Today, the neo- colonies exploits the countries. In order to
keep the exploitation continuously, the Trans National Cooperation’s have created internal
conflicts. As a result of this, more human deaths occur due to security and starvation.
Countries like Somalia, Sub Saharan region, Burundi, Rwanda have been under neo
colonization. In the last twenty years the continent has experienced several ethnic hostilities,
civil war, political chaos, and massive government corruption.(castil) Today Africa export
iron, still and gems and import weapons. By this Africa depends more and more. The basic
purpose of the developed country is exploiting the resources. That Nigeria is today;
overwhelmed by poverty and underdevelopment can easily be attributed to poor, visionless,
inept and selfish leadership. The reason of this that it still depends on foreign economic and
political relations. [ CITATION Eme121 \l 1033 ]
The country Cuba is the best example for the de- linking of Frank’s idea. how did cause
development in that country. Cuba could not reach its development easily after the socialistic
revolution. America made ban on Cuba and hindered ifs development. As a result, Cuba had
to lose the resources that could be fulfilling the basic needs of its people. Then Russia helped
Cuba to import many things. Cuba exported sugarcane to Russia and imported petroleum,
industrial apparatus, agrochemicals. It got 80% of goods from Russia. Russia had to stop its
exports and imports with Cuba due to the collapse it faced. Then Cuba fell into very bad
condition. Social tension started in Cubain1992’s. Many factories were closed. The internal
output was 17%. This situation pushed Cuba backward for 30 years. At this juncture, Castro
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brought a self- reliant system. This system stimulated the people to engage self employment;
enterprises produced handicraft goods for people. So that their country could be able to fulfill
their basic needs. So, Cuba boosted of unique social strutting, a highly educated population
that worked with state regulation and planning to figure out an amazing alternative a model
“green the socialist revolution.”[ CITATION Ros00 \l 1033 ]
Cuba did set up new schemes in agriculture. It motivated private sectors to engage in
production in commerce and trade using the local handicraft resources. It also focused on
tourism. All these were planned according to the local integration and implemented. So,
Cuba ruined as a country of exporting wheat, dairy products, meat and industrial machines to
Spain and Canada, nickel oxide and raw sugar to North America and the mine resources to
Canada. We can see the development of Cuba is further progressed under its Cuban Liberty
and solidarity Act -1996. [ CITATION Ros00 \l 1033 ] The fact that Cuba has had a lot of
economic problems in the 1990s but “de-linking” as the only option proposed by the radical
dependency theories has been proved useful and possible by Cuba and it has shown that with
the development of alternate model and an effective practice of it, There for we can say that
the idea of Frank is, it will be possible to create development in third world countries if we
de- linked the relationship with the developed countries.

Criticism
The theory of Frank related to development and under development is appropriate for the
present day’s situations .However, Marxist and Neo- Marxist thinkers of development,
presented their ideas saying that there is a need to absorb some changes and when looking at
the time situations there are some sufficiency in it. The Marxist thinkers criticize the
metropolis – satellite relationship .Frank tries to show that the social relations of production
are spatial relations. It is criticized that without explain the structure of the world capitalism
on the basis of exchange relations.
Similarly, Enrich Laclau [ CITATION Hal08 \l 1033 ] explains that Frank has failed to look it
as such following matters on his theory; Frank looks feudalism and capitalism as a social
system. He didn’t see it as production relations. If it is seem so only, it can be found out the
class who engaged in productions, and those who don’t engaged in productions, what are the
relations of these classes of persons? And the methods of productions on its nature of the
structure. When look it as above it can be understood that, how the feudalism transmitted as
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capitalism. His can be accepted. However, the reasons for Frank has failed to pay attention
related to the methods of production are that his research was primarily on external relations.
His main purpose was to proof that the link of capital countries is with the under developed
countries. There for he may not have paid deep attention on internal relations. Frank has
explained the vertical relations that internally were in the metropolis- satellite relations.
Similarly if he had the horizontal relations prevailed there, his research would have presented
many other new ideas.
The research of Norman long explains the relation between metropolis- satellites in Latin
America along with some oth