THE THIRD WORLD DEBT CRISIS IN THE 1980s AND 1990s/85domestic market. It also meant abandoning projects aimed at
exporting high value-added products that could compete with those
manufactured in the North. The loans also sought to induce each
country of the South to specialise in the production of a few export
products. The least advanced Third World countries were the most
vulnerable; they specialised the most, thereby further heightening
their dependence. This was also the case for more developed countries
like Algeria, which was in the midst of a genuine industrial take-off.
It was driven to concentrate in large measure on oil and gas
extraction.
By steering the countries of the South to focus on the export of raw
materials and basic manufactured goods, the North put them in
competition with one another. This could only lead to a short-term
drop in the price of the products being exported. The only possible
consequence was a drop in export earnings and, above all, a deterio
ration in the terms of trade (see Chapter 8).
CORRUPTERS AND THE CORRUPTED
It is difficult to determine how large a share of these loans went
towards the personal enrichment of people holding public posts in the
South. Norel and Saint-Alary ask, 'How many bankers so much as
batted an eyelid when they saw that loans destined for Mexican or
Filipino state firms were actually deposited directly into the Boston
and Geneva accounts of highly placed government officials?' (Norel
and Saint-Alary, 1988). There is no shortage of examples of such
practices. By the time he was toppled after 20 years in power, the
Filipino dictator Ferdinand Marcos had accumulated a personal
fortune of some S10 billion. Yet his beginnings were relatively
modest. For their part, post-Marcos governments and the Filipino
people have inherited an external debt in the order of S30 billion.
The Mobutu dictatorship is another textbook case. In 1960,
Mobutu earned the salary of the army corporal that he was. Thirty
years later, his personal fortune totalled some S8 billion (estimates
vary since banks from South Africa and the North have refused to
reveal the extent of Mobutu's holdings). When the dictator was
toppled in May 1997, the new Congolese government and the
Congolese people owed external debts totalling nearly S13 billion.
These are not isolated cases. Such practices are part of the 'system'
and are now considered to be normal and legal.