By Neo Michel Tchoumi
Abstract
Dependency theory is an economic model that describes how poorer countries rely on richer countries for development. It focuses on the relationship between periphery countries and center countries within the global economy. At times, dependency theory can be overly broad, and its structure could be changed for the better. A good start at this is a structure that Allen Sens describes. It uses four classifications instead of three, which helps describe the relationships between countries more fittingly. A review of three periphery countries (Nigeria, Haiti, and Qatar) helps us understand the realities of dependency theory. These periphery countries' dependency has been assessed in three ways: colonialism and imperialism, debt and political dependency or aid, and technology or industry.
Reassessing the Structure of Dependency Theory
Dependency theory is a concept in today's social sciences that looks to explain the lack of development that plagues certain countries. It originates from Latin America in the sixties; it then expanded to North America, Europe, and Africa. Regardless of its age, dependency theory is still relevant today. Dependency Theory answers the cause of underdevelopment and how to solve it. As noted in Dependency Theory Made Simple (the Geography Teacher, 2023), “According to this theory, poorer countries are kept in a state of underdevelopment and dependency because they are forced to rely on richer countries for resources and markets.” This cycle is sustained by the regular prioritization of the wants of rich nations and multinational corporations over those of less wealthy countries. Despite all this, dependency theory is occasionally unnecessarily general, and its framework should be ameliorated. To improve the breakdown of dependency theory, a system with five classifications provides an accurate description of each country and should be the norm in all debates on dependency theory. In other words, each country could fit perfectly into its respective classification. That is why the classifications of center-center (CC), periphery-center (PC), center-periphery (CP), middle-periphery (MP), and far-periphery (FP) would be effective.
According to most sources, the standard for discussing dependency theory uses categories of three sorts of countries: core countries, semi-peripheral countries, and peripheral countries. The first category is core countries, which are the most wealthy, powerful, and advanced countries in the world economy. Their economies are very developed, with high levels of industrialization. They are also the most productive countries in industries such as finance, technology, and communications. Core countries utilize peripheral and semi-peripheral countries for raw materials and cheap labor. They always reap the greatest benefits from development theory. The next category of countries is semi-peripheral countries. They possess some industrialization and development, but are not as advanced or dominant as the core countries. Semi-peripheral countries have characteristics of core countries and peripheral countries, as they are exploited by peripheral countries and exploit core countries. A very common exchange for semi-periphery countries is buying natural resources from peripheral countries and selling complete products to core countries. Peripheral countries often get exploited by core and semi-peripheral countries, who buy their raw materials for cheap and sell them as finished goods at high prices. A.R. Dweep Buch (2014) tells us that “the periphery countries (sometimes referred to as just the periphery) are those that are less developed than the semi-periphery and core countries. These countries usually receive a disproportionately small share of global wealth.” Periphery countries are frequently exploited by core and semi-peripheral countries, which purchase their raw materials for cheap and sell them as finished goods at high prices. This structure of development theory is alright, but it neglects numerous completely unique countries on the periphery. Allen Sens of the University of British Columbia, on the other hand, describes dependency theory as having four classifications: center-center countries (CC), periphery-center countries (PC), center-periphery countries (CP), and periphery-periphery countries (PP). The CC and PC countries are essentially the same as core and semi-peripheral countries, respectively, whereas the CP and PP countries are essentially the periphery countries (with CP being more developed, PP being least developed). This classification works more effectively because it divides an extremely large class into two categories.
As shown in the previous paragraph, Allen Sens had an incredibly ideal explanation of dependency theory, where its structure was made up of four classifications (CC, PC, CP, PP). But an ideal structure for dependency theory would have five classifications. It would have two core classifications, CC and PC. And would have three peripheral classifications: center-periphery (CP), middle-periphery (MP), and far-periphery (FP). To determine whether a peripheral country belongs to which ideal classification, three major instances of dependency will be observed. These are colonialism and imperialism, debt and aid, and technology or industry. Colonialism and imperialism by European powers gave rise to dependency theory; colonized territories were exploited in a manner similar to how core countries exploit peripheral countries now. Colonialism and imperialism created the cycle of exploitation and dependency that we see today. The accumulation of debt and aid by underdeveloped countries is caused by political dependency. African countries are the most prevalent examples of this. Developing countries' enormous amounts of debt prevents them from investing in their own money development. Finally, technology is an example of dependency because advanced technologies are primarily concentrated in developed countries. This means that they can charge less developed countries more because they lack advanced technologies, resulting in reliance on more developed countries.
The first peripheral classification is FP, or far-periphery. In this ideal classification, FP countries are the poorest and least developed class. The example country that I chose for this classification is Haiti, one of the poorest countries in the world. Haiti’s colonial and imperial history is elaborate, but the more modern occupation of the United States is the most relevant. William Mullen (1915) tells us that “upon withdrawal of U.S. troops in 1934, Haiti was left with no significant lasting institutions except the Haitian gendarmerie, which furnished the power base for the post-Occupation dictatorships. Haiti remains an unstable country in the twenty-first century, dependent upon foreign aid for survival.” This shows how Haiti's colonial and imperial past caused it to be incredibly dependent. As the poorest country in the Western Hemisphere, Haiti's industry is also abysmal. In fact, more than half of Haiti's population survives on subsistence agriculture and lives below the poverty line. The informal tertiary sector also accounts for the majority of the Haitian economy. However, the main reason for Haiti's dependence is its debt history. Haiti's public debt stood at $5 billion at the end of fiscal year 2021, accounting for nearly 30% of GDP. The United Nations even allocated more than $13 billion in humanitarian aid to Haiti between 2010 and 2020. However, Haiti's worst debt was the Independence Debt of 1825. From 1825 and beyond for the next century, Haiti paid the French ex-colonizers between $20 and $30 billion in today's dollars. It took Haiti 122 years to pay off its massive debt. All the statistics mentioned above indicate that Haiti belongs to the poorest category of the periphery: the far periphery.
The next classification is middle-periphery, which includes peripheral countries that are more developed than FP but less developed than CP. Nigeria serves as an excellent example of this. Their technology and industry are actually quite solid for an MP country, yet their debt, aid, colonialism, and imperialism are what have landed them in the MP category. Nigeria's economy is based solely on crude oil. Manufacturing growth is also slowing, with industrial capacity use remaining at less than 37%. There is also a lack of demand for manufactured goods as the population's purchasing power declines. Nigeria gained its independence from Britain in 1960. That is when the colonial rulers made the decisions that would burden Nigeria for years to come. However, before that, British colonists ruled Nigeria through colonialism. In addition, they subjugated the kingdoms that were merged in 1914 to form Nigeria. British colonial administrators seized the power of the coastal chiefs to begin exploiting natural resources and cheap labor in Nigeria for the British Empire. Lastly, the sector where Nigeria is the most dependent is their debts. Aminu Umaru, Ahmadu Aminu Hamidu, and Salihu Musa’s paper, External Debt and Domestic Debt Impact on the Growth of the Nigerian Economy (2016), points out that “Nigeria has not been able to avoid debt at all even though it is wealthy with oil.” Nigeria’s public debt stock in the second quarter of 2023 was $113.42 billion. Compared to the previous quarter, this is a growth rate of 75.27%. All of this evidence points to Nigeria falling into the middle-periphery category.
The final classification in this ideal structure is center-periphery (CP). Simply put, they are the most developed category of peripheral countries; this notably extends to all countries that are not developed or powerful enough to be considered core countries. Qatar is a wonderful example of a CP country. Most sources will tell you that it is a peripheral country, but it has some characteristics that are beginning to resemble those of a center country. Qatar's colonial and imperial history ends with the British withdrawal from its lands in 1971. While Britain looked to maintain as much influence as possible, although in an informal role, relations between the British and Qatar deteriorated significantly after 1971. This came as a result of British economic decline, competition from rivals, and Arab approaches. Qatar's industry and technological advancements are also ahead of most periphery countries. In Qatar, new technologies are revolutionizing traditional industry sectors and the world of work, how organizations function, and particularly where globally they want to locate operations to compete. Companies are focusing their efforts on technologies ranging from “artificial intelligence, robotics, drones, automotive technologies, cyber security, 3D Printing, Blockchain, Virtual reality, the Internet of Things (IoT), data analytics and computing power.” (Emerging Technologies - Qatar Free Zones, n.d.) And lastly, according to the research (Qatar Government Debt to GDP, n.d.), “Qatar recorded a Government Debt to GDP of 43.30 percent of the country's Gross Domestic Product in 2023. Government Debt to GDP in Qatar averaged 40.16 percent of GDP from 1990 until 2023.” As you can see, Qatar is an excellent example of a center-periphery country.
To summarize, dependency theory is an economic model that illustrates how the global system forces poorer countries to rely on wealthy countries for development. It highlights the relationship between peripheral and core countries in the global economy. Regardless of this, dependency theory could be improved by making a few changes to its classification. Because dependency theory concerns the entire world, it must include all countries. The five classifications I proposed offers an insightful narrative regarding each country. In other words, each country fits perfectly into its respective classification. That is why my five classifications—center-center (CC), periphery-center (PC), center-periphery (CP), middle-periphery (MP), and far-periphery (FP)—are so effective.
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