The Globalization of Exploitation: Threats Posed to Young States by the International Arena.

Note: This essay is littered with errors, and if I had the time and motivation to rewrite it I would many times over. Although it received a B, it is not up to my standards- keep this in mind.


The current international arena poses greater threats to developing states than at any other time in the past. The development of globalization brings an increased capacity for political and financial exploitation to developing nations in possession of natural resources. This threat is illustrated throughput recent history, originating with the United Fruit Company in South America, the Oil trade and U.S. influences on South American politics, and the recent American military industrial complex in the Middle East. The current global state displays a class divide reminiscent of Marx’s critiques of capitalism-- TNC’s further this divide circumventing any form of reprisal or obligation to exploit developing nations.

Early American transnational corporations (TNC’s) like The United Fruit Company (UFCO) held the capabilities to export vast quantities of fruit from South and Central America, and for a large profit . In the early 1900’s UFCO established plantations that were dominant throughout the developing nations that hosted their 3.5 million acres: Guatemala, Honduras, Costa Rica, Nicaragua, Panama, Cuba, Jamaica, the Dominican Republic, Colombia and Ecuador. In an attempt to distribute the nation’s wealth beyond UFCO’s fruit empire, Guatemalan president Jacobo Árbenz Guzmán attempted to implement agrarian land reform that would reassign 40% of UFCO’s Guatemalan plantations. UFCO responded by lobbying and influencing the 1954 Guatemalan coup d'état (Shoultz). Later, the U.S. Securities and Exchange Commission exposed a scheme by United Brands to bribe Honduran President Oswaldo López Arellano with $1.25 million, and the promise of another $1.25 million upon the reduction of certain export taxes. By establishing a monopoly on the South American fruit industry, UFCO effectively held the means to export the young nation’s natural resources , and used its Host country for the labor class. Thus depleting the countries resources, and expropriating the immense profit gained by their export. The UFCO initiated a trend of exploitation that would set the stage for today’s TNC’s and the fate of several developing countries.

Globalization has facilitated a TNC’s capacity to export the resources of developing nations at an alarming rate, and if unregulated could result in exploitation-- This is evident when considering the cases of Ecuador, Panama, and Venezuela whose history involve a systematic exploitation by TNC’s. In 1981, Ecuador’s president Jaime Roldos Aguilera presented a hydrocarbons law that would reform Ecuador’s relationship with oil companies, and return the resources to the citizens (Martz). In the same effort, Roldos forced SIL international (Christian missionary) out of the country for their violent attempts to relocate the Hauorani natives in the interest of U.S. oil corporations (Colby and Dennet, Statemaster.com). In the same year, Ecuador’s president was killed and replaced by Osvaldo Hurtado. Under the new administration, SIL international was allowed back into the country, and new contracts with Texaco were allowed them to drill for oil in the Amazon basin (Martz). While these contracts brought riches to a few, it was to the detriment of the majority. Ecuadorian administration accepted loans to invest in infrastructure far beyond their means to pay them back,
“Poverty level grew from 50 to 70 percent… unemployment increased from 15 to 70 percent, public debt increased from $240 million to $16 billion, and the share of national resources allocated to the poorest citizens declined from 20 to 6 percent. Today, Ecuador must devote nearly 50 percent of its national budget simply to paying off its debts- instead of helping the millions of its citizens who are officially classified as dangerously impoverished” (Jochnick).
Ecuador’s promise as a young developing nation was exploited by TNC’s, and is an example of the economic enslavement that modeled the fate of many young nations-- in the interest of TNC’s and the American government.
“The situation in Ecuador clearly demonstrates that this was not the result of a conspiracy; it was a process that had occurred during both Democratic and Republican administrations, a process that had involved all the major multinational banks, many corporations, and foreign aid missions from a multitude of countries. The United States played the lead role, but we had not acted alone” (Perkins)

The actions of TNC’s and the American government in South America illustrate a growing trend of entangled government and corporate interest, and the deliberate exploitation of developing nations.

After the September 11th terror attacks, the U.S.A would supplement its war in Iraq and Afghanistan by instating an unprecedented military industrial complex. For Afghanistan the war was marked by their liberation from the Taliban, but American interest didn’t end there. American companies like Bechtel received massive contracts to build infrastructure in Iraq that brought in massive amounts of money “$36.4 million… to $680 million” (Johnson). The American government will implement a plan to ensure Iraqi’s defend the American infrastructure from domestic threat, thus relieving some obligations for the deaths that will result defending Americas interest in the Middle East. America’s exploitation ensures its host countries will not develop in any sustainable manner, while this economic enslavement denies developing nations in the Middle East like Iraq the ability to profit from their development, and thus the resources to adequately govern their state. The current American military industrial complex in the Middle East signals a twist in the trend of exploitation. Now instead of government action following corporate interest, the actions and interests of the U.S. government are intertwined, and aligned with that of TNC’s. The existing international legal framework has no regulation that prevents TNC’s from expropriating the wealth of developing nations, especially when aided by political institutions like the American government. This effectively thwarts attempts at equity led sustainable growth for nations that are rich in natural resources.

Throughout recent history, the largest threat to developing nations is falling prey to economic enslavement from developed nations. The giants of the international arena have the capability to exploit a young nation’s natural resources so effectively that TNC’s can influence and compromise the political autonomy in young nations. The abundant presence of corporate, political, and military interests in the current international arena pose greater threats to developing states than at any other time in the past. This threat is illustrated throughput recent history: the trend originates with the United Fruit Company in South America, the Oil trade and U.S. influences on South American politics, and the recent American military industrial complex in the Middle East. Because of the advancements in globalization, capitalism has created an international class divide where developed capitalist nations hold the means of production, and developing nations’ resources are exported-- thus expropriating the wealth gained from value adding services. Until this trend is recognized for what it truly is, no authority will be able to effectively regulate the exploitation of developing nations.