Question #1 continued The consequences of all of this are reflected in capital 2. What is the relationship between private overseas direct investment and emigration? Does this relationship say anything about the potential impact of external development assistance on emigration? ANSWER: In so This relationship between private overseas direct investment In terms of the "potential impact of external assistance Question #2 continued 3. the host country in determining needs and kinds of external Most external assistance programs tend to have certain struc- How does the potential for a higher rate of profit for foreign capital in the source countries compare with the potential in non-source countries? ANSWER: At the broadest level the potential for a higher rate of factors. It is assumed that investment of capital takes place in order to yield profit to investors; that the tendency of investors is to invest the capital at their disposal where opportunities for a higher return are available, ceteris paribus; and that capital seeks a political climate in which these opportunities can be exploited. Question #3 continued As far as source countries are concerned, we make the follow- On the other hand, in the non-source countries it can be said As a result, the potential for the export of profits is higher Question #3 continued 4. the latter countries. This should not be taken to mean that there is a higher level of foreign investment in non-source countries because capital operates on an international scale. The level of investment and the rate of exploitation relative to the level of the development of the productives forces are two different though related processes. It has also been argued that non-source countries receive less in exchange for production and exportation for production of equal productivity: hence, the theory of unequal exchange and unequal development. On page fourteen, you indicate that U.S. capital as private overseas direct investment contributes to the reproduction of economic extraversion and the "blockage of transition." Would you explain that sentence? ANSWER: Specific reference to U.S. private overseas direct investment (PODI) is the result of the dominant position of U.S. capital in these countries (see tables 4-5, pp 12-13). Otherwise my argument could apply to PODI from other source countries. "Economic extraversion" refers to the condition associated with openness of these economies resulting from the dominant position of PODI in their economic processes; their dependence on foreign trade; the high rate of imports to exports in their external position; the importance of primary production specialization; their susceptibility to the dictates and actions of international financial institutions (public and private), and to fluctuations in international commodity and capital flows; their structure of external indebtedness; and its impact on the allocation of foreign reserves between paying debts, remaining solvent and promoting development. The question of "blockage of transition" has to do with the problem of breaking out of so-called underdevelopment into a sustained process of autocentric development. The idea is that openness should be reduced and/or eliminated. It has been argued that the internal market must become the motor and regulator of growth. This would call for a more aggressive policy toward PODI such as may lead to a higher retention of surplus; a redefinition of development priorities in quantitative and qualitative terms. This question of eliminating the "blockage of transition" requires a new conceptualization of international interdependence: one that derives from a need for and the ability to foster equality rather than one which proceeds from the accepted legitimacy of the invisible ideology and structure of the prevailing international division of labor. APPENDIX 12 ARTICLE FROM LOS ANGELES TIMES, JUNE 6, 1978, ENTITLED, “COLBY CALLS MEXICO BIGGER THREAT THAN RUSSIA TO U.S." WRITTEN BY ROBERT SCHEER Former CIA Director William E. Colby said Monday that the main threat against the United States is from the "have not" nations of the world, such as Mexico, rather than from the Soviet Union. "The greatest danger of violence and difficulty in the world is between the "haves" and the "have nots" them against us, Colby said in an interview with The Times. He said that "one of the most serious problems we have to face" is the doubling of the population of Mexico by the end of the century, which, Colby said, would drive an additional 20 million illegal aliens across the border into the United States. "You cannot stop the (population) growth at this point," he said. "The women are alive today who are going to bear those children. So you can have all the birth control you want between now and the end of the century. It isn't going to change those figures in real terms. "So what's going to happen to that extra 60-odd million Mexicans? Twenty (million) of them are going to be right here." Colby said the United States did not have the means to stop the illegal migration of millions of jobless Mexicans. "You're not going to be able to mount a wall there; you're being immensely unsuccessful doing that today," he said. "You're not going to be more brutal about it. The only way to keep them out.. is to develop some light industry base and agriculture in Mexico, to give them something to do." He said, however, that Mexico resisted aid from the United States and was "tense" about being a satellite of this country. "Yet what they are doing is exporting their unemployed to the United States," the former CIA director said. The migration of the Mexicans "is exactly what we did with black rural poor of the South in the 20's," he said. "We sent them all to the central cities. It was a better life for them but the social costs for our country have been fantastic. We've managed to ruin our public school system and created ghettos." Colby, who was CIA director from 1973 to 1976, stressed what he said was the continuing danger of Soviet influence in Africa but said he believed that the United States should not allow the problems in Africa to interfere with progress toward a strategic arms limitation treaty with the Soviet Union. |