Chisholm

Alex Chisholm
Graduate Student
Question III
The Global Norths approach to Foreign aid Development and Migration flows

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Development is all about economic growth. This growth should lead to

surplus labor being absorbed because more jobs are created which increases
prosperity. This is what the Global North considers to be development. This is
a delusion. Development is actually about keeping The Global South
impoverished so that the Global North can exploit the South for its own migratory
and developmental gains. The true meaning of development is creating an
atmosphere of prosperity within the country. Development should work towards
eradicating disease, increasing life expectancy, raising the standard of living, and
creating urbanization within a post-colony country. Lifting the populations quality
of living and creating an atmosphere where countries are not heavily indebted to
the Global North is what development truly means. The Global North uses
Neoliberal policies and foreign aid to keep Global South countries dependent on
investment and goods and to keep labor cheap. This neoliberal approach by the
Global North to deregulate the markets for development dissolves the interest of
the developing world and champions the ideas of the developed world especially
within the realm of migration. The logic behind the Global Norths use of foreign
aid to stop unwanted migration is to increase the standard of living within the
Global South while also being able to use neoliberal policies to promote their own
goals within the country. The logic behind this argument is sound in that
neoliberal policies created in the North promote development while controlling
migration. The need for post-colonial countries to adopt neoliberalism subverts
their own nations ability for self-determination, giving greater control to foreign
aid. The Global South sees foreign aid as the only way to build their country and

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their economy for future generations. Foreign-aid agencies in the Global North
use development to stop unwanted migration by promoting a neoliberal agenda
that does not encourage the economic advancement of the average migrant.
Laissez-faire economics is key to understanding neoliberal policy and its
relationship to development. In a free market the opening up and deregulation of
economies allows for an unrestricted flow of goods and services. Neoliberalism
relies on the invisible hand of the market in all realms of economy and life. The
interests of the developed world always supersede the interests of developing
countries. Because of this, developing countries privatize and liquidate their
government programs in order to raise capital to pay back investments, losing
large amounts of money in the guise of development. The privatization of
services leads to a loss of state spending on social programs and growing
inequality between socioeconomic levels. This process makes countries poorer
and more reliant on developed countries interests within the economy. This
neoliberal approach of encouraging exports from the South to the North is a
strategy used by the developed world to influence the economies of the
developing world. State assets being liquidated because of neoliberal policy
results in a population that is perpetually in a state of poverty. This neoliberal
approach by the North to halt unwanted migration maintains access to cheap
goods going to the Global North one aspect of foreign aid.
Walt Rostow provides a model that explains the neoliberal process for aidbased development. Rostows model (Figure 1) is a blueprint that outlines the
process for developing countries to move themselves toward becoming an

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industrialized country. In this model, the developing world wants to rise up to

their standard of living so there is no need for unwanted migration. This is a
deceptively clever tactic by the developed world to force its own economic
interest within a developing country while simultaneously hindering migration to
the Global North. Rostows model came into prominence during the 1950s and
1960s as a way to develop the post-colonial world. The nature of Rostows
development influenced by neoliberal policies created an atmosphere valuing
foreign capital for development. Rostows approach for growth relies heavily on
labor staying or moving to lower wage areas, which correlates with the pressure
that developed countries put on developing countries to keep wages low. The
goal of Rostow was to turn the Global South into westernized countries so that
no one would want to migrate leave their newly developed country. While this
was occurring, the developed world kept its own interest paramount to that of the
developing countries. However, Rostow does not thoroughly look at how
developed countries extracted resources in Asia and Africa, taking from these
developing countries to build their own wealth and influence.
Baudet and J.H. Stuijvenberg (1963) the authors break down the growth
model, exploring its limitations. In the article, the authors state Culture is here
presented as the resultant of human attitudes and value-systems in which neither
religion nor myth plays any part. Rostow does not seem to bother about culture
at all. Nobody can rightly reproach Rostow with having failed to take human
factors into account. (Baudet, Stuijvenberg 1963,p.61). This illustrates Rostows
lack of understanding of the historical, human, and psychological effects that

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imperialism had on many colonies that were trying to modernize. Much of what
Rostow championed could be considered neo-colonization in that it kept
developing countries indebted through the need of the state to control the
markets creating inflation and a move towards neoliberal policies which
privatized state industry and which lead to a resource extraction economy.
Rostows model suggest that if countries give enough money for development
then they will eventually attain the same standard of living, offering a win-win
scenario for both the developed and developing countries. This logic is sound
until the point where developing countries cannot afford to pay back the
investment, after which free-fall of the market ensues leading to a depression in
the value of labor, resources, and standard of living.
The Washington Consensus helps one understand how the Global North
protected migration flows while concurrently championing their own interest
within developing countries. The Washington Consensus helped usher in a wave
of neoliberal development in the Global South, while providing a globalized view
of development and how globalization can promote economic mobility and
migration. This agreement created ten parameters for aid, which allowed for a
liberalization of foreign direct investment and an opening up of markets to the
developed world. (Pettinger, 2013) This deregulation of the market promoted
privatization within the countries and lowered the barrier for developmental aid
(Pettinger, 2013). The Washington Consensus also promoted the liberalization of
the market, which by in large created a competitive pressure on the Global South
to keep labor, wages and inflation low leading to more investment. This

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globalizing approach to development also created pressure for developing

countries to manipulate wages, creating a race to the bottom mentality forced
upon the developing world by the developed world (Pettinger,2013). This
neoliberal approach to economic development created few protections for
workers while degrading the people and land of the country. Tactics such as
these give a false sense of development within the developing world.
Westernized countries are the only ones who benefit from fewer barriers to trade.
They need this cheap access to labor and resources, and with this access their
development and migratory agenda is furthered. The Washington Consensus
further presents fewer avenues for countries to raise their standard of living and
payback aid that the developed world issued as a means development. This
creates a cycle of heavy indebtedness by the South to the North, in turn creating
a poorer, less migratory society under the guise of development. The North
creates policies that control migration within the developing world in the guise
foreign aid. Yes, foreign aid at its core does promote capitalism, which in turn
promotes migration, but this migration is heavily controlled by the Global North,
which uses development through the lens of neoliberal policy to stop unwanted
migration.
The International Monetary Fund (IMF) and the World Bank, created by
the Global North, are the main aid agencies. Within the developing world the
main goal of these agencies is to reduce government spending while creating an
atmosphere of growth and development. These agencies goals are to shrink
bureaucracy while creating development. With the aid given by the IMF,

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conditions are imposed on countries that create an atmosphere of liberalization

within the economy. These Structural Adjustment Policies (SAP) stipulated by
the IMF and World Bank place an undue burden on the poor and most vulnerable
within the developing world.
Policies implemented by the Global North through the IMF and World
Bank rely heavily on high interest rate loans that are nearly impossible to pay
back, as well as governmental regulations that privatize and deregulate
economies. Because of this, many countries are forced to switch to commodity
crops and resource extraction to pay loans. Commodity crops, vernacularly
known as cash crops, tie labor to the land. Much of the developing worlds
economy depends on the cultivation of these goods for survival in the global
market. With the dependence on a small number of crops and an over
abundance within the local markets, prices are artificially deflated. The lower
prices of goods leads to the Global North dictating the economies of the Global
South. This influence by the North leads to a catering to the extraction of
resources and a diminishment in the power of the individual farmer. The push for
cash crops leads to neo-colonialism as the Global North exploits the Global
South for goods. With the North controlling the economic sector, there is a
greater emphasis on less-skilled workers who command a lower wage.
Roger Waldinger and Michael Lichters book shows the need for labor to
be less skilled and cheaper in order to be competitive on a global scale. This
view of late twentieth century and twentieth-first century neoliberals is a way to
regulate economies and most importantly migration. The authors state the

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search for profits led the latter [the employer] to unceasing efforts to gain
command over the former [employee]. Capitalists pursued control through
mechanization, through the transference of knowledge from labor to capital and
its agents, and through ever more successful efforts at surveillance and
monitoring-all with the aim of greater control over the exercise of labor power
(Waldinger, Lichter, 2003, p.34). This quote speaks to the control that the Global
North has over labor markets and migration. Those that they do allow to migrate
are closely monitored and selected based on labor exploitation practices. At the
same time, artificially high barriers are erected to keep those that are unfit within
the Global South. Those that are deemed fit are placed in a market that exploits
them as a commodity that is easily replaced by cheaper, more willing labor
waiting for the opportunity. This leads to another important idea within the
migration sphere, which is the concept of subordination. The authors state,
subordinates are those who know their placegeneralization that holds with
particular force for the tasks and positions with which we are concerned
(Waldinger, Lichter, 2003, p.40). This casting of labor categorizes people within
the market, emphasizing a need for labor to be less skilled and for people who
already have a servile mentality and are on the edges of society. Therefore, it is
perfect for migrants entering a labor market with lower job prospects and
expectations. Even within its own boundaries the Global North is able to control
migrant labor, using migrant labor as a cheap commodity that they can dismiss
and get rid of at any point. This stops migrants from attaining social mobility and
puts them on the periphery.

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With the North protecting its own interest within the South, Northern
interests are further protected through the concept of brain drain. Brain drain is a
concern within developing countries. Not losing your best citizens allows for
economic growth and promotes social mobility within the country of origin. This
type of immigration is wanted by the North to promote its own economic growth.
Donald Lien and Yan Wangs article describes the effect brain drain has on a
country. Lien and Wang state that skilled emigration tends to lower the source
country employment level and this has negative welfare implications for the
source country (Lien, Wang, 2005, p.153). This indicates a process used by the
Global North to influence development, welcoming the wanted migrants for
sectors deemed too unfit for legal citizens in the country. This migration does
bring in less-skilled workers but only enough to fill certain voids in the economic
sector. Brain drain lowers the level of human capitol formation and in turn lowers
social welfare within the source countries. It also stops unwanted migration from
the epicenter, hindering those without adequate skills from entering the North. In
turn, this further exacerbates the problems of socioeconomic development within
the source country and builds a cycle of dependence on Northern intervention.
There are some who would argue that neoliberal policies have not
hindered migration flows. These theorists would point to remittance projects that
have brought money to their country of origin. Remittance is the act of sending
money back to the country of origin to build up sustainable development within
the country. Remittance acts as a pathway away from IMF and World Bank to
development. Remittance is seen as a way to help lift people out of poverty and

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move countries toward greater prosperity. This development aid is able to create
jobs while simultaneously lowering government bureaucracy. It also sends highly
skilled workers abroad as a way to demonstrate the growth of the country while
also promoting its own social and economic goals. Remittance allows for
barriers within poorer areas to be lowered for direct sustainable aid and in turn is
able to improve the livelihood of the individuals that receive the money. This
allows for a free flowing of capitol which neoliberals champion as a pillar of
development. With remittance, government aid wanes in the developing world.
However overwhelmingly developed countries get involved in periphery countries
in order to exploit them for their own political and economic interest and hinder
migration of unwanted migrants.
Neoliberal policies and agencies such as the IMF, World Bank and
Washington Consensus that were created in the Global North to develop the
Global South greatly influenced the way in which migration flowed within the two
areas. These polices created a system in which governmental control was given
to the developed world. With these practices, the economies and political
motives of developing countries were controlled by the developed world. This
demonstrates how economies and politics are directly linked. Politics, in truth, is
all about controlling the economy in favor of the developed, wealthy nations.
With this control, the developed world can place barriers on migration while
promoting its own interest within the country. Furthermore, these foreign-aid
agencies within the Global North use aid to control the economic and political
machines within the Global South, freeing up the flow of resources and

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commodities while promoting development as a way to protect its own migration
interest. Without an adequate counter-balance to neoliberal policies promoted in
the North we are doomed to continue to have neo-colonialism in the twenty-first
century. The Millennium Development Goals created in the beginning of the
twenty-first century by the Global North could be the first step in this counterbalance to development but greater steps to truly develop the Global South
need to implemented so that countries are not stuck in a continual cycle of
poverty and indebtedness.

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Work Cited

1. Rostow Model [Model]. (2014).

Http://www.researchgate.net/post/Are_Rostows_5_Stages_of_g
rowth_still_ideal_for_todays_economies_Must_an_economy_fo
llow_these_5_stages_to_achieve_sustainable_economic_growt
h. Figure 1
2. Baudet, H., & Stuijvenberg, J. (1963). Rostows Theory on
Growth. Weltwirtschafliches Archiv, 90, 57-78. Retrieved March
15, 2015, from Jstor.
3. Pettinger, T. (2013, April 25). Washington Consensus- Definition
and Criticisms. Retrieved March 14, 2015, from
http://www.economicshelp.org/blog/7387/economics/washingto
n-consensus-definition-and-criticism/
4. Waldinger, R., & Lichter, M. (2003). How the other half works:
Immigration and the social organization of labor. Berkeley,
Calif.: University of California Press.