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The European Union at 50
predecessor regimes in the region in the 1920s and 1930s and the countries of
the periphery today. Aggregate net transfers are understood as aggregate net
resource flows minus interest payments on long-term loans and remittance of all
profits. Aggregate net resource flows are the sum of net flows on long-term debt
(excluding use of IMF credit), plus official grants (excluding technical assistance)
and net foreign direct investment. That is to say, Poland (just as Hungary), in
reality, were de-capitalized by the world economy, when the new elites in
power would have needed Western support most urgently (World Bank,
WDR, 1994). As we will show below, the workings of the transnational economy
did probably contribute to the political cleavages and to the downfall of the
Solidarity government in 1993. The yearly de-capitalization amounted to 27
million $. The share of foreign investment per total GDP, i.e. the value of the
index, what Bornschier and Mueller (1988) call 'foreign property', is now 8.5%
for the overall Polish economy. In terms of the employment effects, one finds
that transnational capital now controls the most important modern, dynamic
consumer goods sectors; 2.7% of the total labor force and 6.8% of all workers
and employees in industry work for international firms. The private sector is
dominated to a still larger degree by foreign firms; 16% of the labor force in
private industry in fact works for foreign firms.
The fourth fallacy concerns the effects of 'dependent development' on the host
countries. The employment effects of transnational investments were
over- the socially polarizing effects of transnational investments
underestimated. Regional concentration of development increases, and with
that the political cleavages of a basically still semi-peripheral society. Even for
the case of China, the World Bank WDR 1996 states:
'FDI to China was $33.8 billion (i.e. thousand million) in 1994, second only to
flows to the United States. However, a substantial portion consisted of domestic
funds recycled as foreign investment to take advantage of fiscal concessions'
(World Bank, WDR, 1996: 136)
Entelequia. Revista Interdisciplinar · CAEI Arno Tausch / 121