Development and Underdevelopment in the History of Economic Thought

Development Or Underdevelopment: Indonesia and Asian Development Bank (ADB) Co-operation or Re-colonization

Ingratubun Muhammad Amir, IPB University

The establishment of international development organizations (IDOs), including the ADB, was between the 1940s-1960s, about the same time World War 2 and decolonization ended and the birth of development economics subject. The controlling shares are owned by European-origin countries , most of them are former colonial power. Japan and the United States (US) of America combined, hold the controlling voting power. This is part of the strategy recommended by the Congress for the US bilateralism through the appearance of 'multilateral development’ to lessen domestic opposition by using other countries’ resources. Some authors refer to the US super-imperialism strategy. Using 5000 years of banking theories and practices, we argue that the formation of ADB under the guise of regional cooperation and/or integration is a disguised re-colonization which aim is to continue their dominance by keeping the former colonies underdeveloped. The mantras applied are 'development works and/or aid’. This was initiated by the Fabian Society known for their mission for instituting socialism, instead of communism, through ‘development’ propaganda and legislation. They speak of benefits for the people such as increased welfare, employment, and standard of living. They make poverty alleviation their motto that is achievable through GDP growth and trade promotion. They disdained communisms, and in this way, they planned to accomplish their objective without bloodshed and even without serious opposition. We reviewed the political ecology and economy of the IDOs and focused on Indonesia's loans from ADB since 1969, totaled over $33 billion (average 0.42% of GDP). As ADB is infamous for disbursement delays, we discovered that ADB’s control over the fund disbursement is part of the mechanism for exploitation of former colonies and slavery furtherance as demanded by the European financiers. This causes Indonesia to suffer a capital flight of more than $12 per $1 loan termed as unequal exchange.

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Keywords: Underdevelopment, re-colonization, imperialism, poverty, unequal exchange

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