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Socialist Economies Under Globalization-A Short Survey

Socialist Economies Under Globalization-A Short Survey

Ziad Shaker elJishi

May 19 2004

I think it is important to spend some time to understand the important changes taking place in socialist countries in the aftermath of the collapse of the Soviet Union in 1990.

No doubt this is a time of great strain on the economies of socialist nations especially with the collapse of the critical and important partnership of the Soviet Union, now gone.

A quick survey is in order to understand what state planned economies are doing at this critical and difficult time when globalization is making its full thrust forward, to not only destroy socialist economies but to control the world economic situation in whole.

Just this month the capitalists of the world spearheaded by the United States held the World Economic Forum in the heart of the Arab world in Jordan outside of the Dead Sea.

Conspiring and giving the world the impression that they are here to stay, moving forward with their plans despite greater opposition by the growing anti-globalization, anti-Bush, and anti-war movements internationally.

I will choose to survey four nations, two from the Arab world, and two from the international group.

I do this not as an economic expert but as a keen observer and student of socialism and the building of socialism in the Arab world and internationally.

I offer in this article my personal observations as well as impressions from visits to the some of the countries I have chosen to survey.

I have chosen Syria and Algeria from the Arab countries, and Cuba and the DPRK (North Korea) from the international group.

Of recent and under the directive of the capitalist countries, the United Arab Emirates and especially the affluent city of Dubai have instigated major liberalization moves to facilitate opening of their free market economy.

In the aftermath of the collapse of the Soviet Union the United States has marketed the idea of building the so called "global village".

What that entailed was not only the relaxing of trade barriers, but also the literal destruction of the national (ist) state.

The Arab (as well as other comprador) is directed to open borders for trade in the interest of the major capitalist nations.

Nations that pose an obstacle to this directive in the Arab world, are either destroyed and occupied (as what happened in Iraq) or are threatened by economic sanctions as what is going on in Syria, or forced to compromise as what took place with Libya, or are targeted as Iran for either supporting terrorism or for having weapons of mass destruction.

In the case of countries like China and the DPRK charges are made of "human rights" abuses.

Dubai as all the Arab Gulf states (to varying degrees), have been in the camp that obliged the directions of the United States capitalists-imperialists.

Not only that, but Arab Gulf countries like Qatar and Kuwait were forced to sustain US military forces on their territories and to provide logistical support including maintaining military bases on an ongoing basis.

Dubai has prospered financially as a result of this, although the social and environmental issues have been largely neglected with some token gestures but surely will become a large problem for the people of this country in the long run.

The reason Dubai has been able to sell this to its citizens and the Arab public at-large is that it proclaims this as a step towards "modernization" and "keeping up with the times".

It shows off its high rise buildings and modern highways and affords a lavish life-style to a select grouping of its citizens and ruling families as well as the thousands of technocrats it imports.

What is left out of this equation is the issue of labor.

Most of the labor intensive work done in the United Arab Emirates is done by the worst exploitation of Asian workers. Specifically through the exploitation of the imported Indian working class. This mention of human rights abuses is absent from US propaganda.

Algeria and Syria

It is interesting to examine both these nations at once.

Although, there are clearly differences, many will argue that Algeria and Syria are a socialist system in crises.

Many Algerians will tell you that Algeria the socialist is dead. That this is an example of a failed socialist experiment.

Those that propagate this view conveniently forget now how they benefited for decades of the free education, healthcare, jobs, housing, and healthcare given to them by the Algerian state and now want to announce socialism a failure.

Syria has faired better than Algeria in that regard. Though liberalizing its economy it is still in theory and some practice in accordance with its Ba'athist slogans of socialist construction.

The difference in socialist quality in Syria is obvious and we shall examine that later.

Readers would be surprised to find out that since China has decided to instill market style economic "reforms", Dubai has made a financial killing out of this.

Let us examine the textile industry for example. China with the vantage point of a state run economy has maintained a labor efficient cost of production.

What it was missing for the longest time was quality of goods.

Since 1990 this has changed.

In the aftermath of 1990 China has been producing goods at a quality comparable to that of the Western capitalist nations; although not exact it is done at a lower cost of production which means a larger margin of profit for the Chinese.

It has been in essence kicking the behind of capitalists in competition, even inside the United States itself.

The phenomena of Dollar stores (everything sells for a dollar) is making some immigrant families inside the United States quite wealthy.

These small shops cater for a growing poorer sector of society in the United States and most (if not all) of the products sold are made in China.

Because of geographic proximity and the liberalization of Dubai's globalized economy, Dubai has become a great facilitator of Chinese goods.

And to whom the reader may ask?

No where else but to nationalist state run economies like Algeria and Syria who still maintain state control over trade in imports and exports.

In essence the Arab comprador in Dubai is a middle man to Chinese goods to the state protected countries of the Arab world; and as a result of this it has made a financial killing to its small ruling classes and the upper sectors of its society by virtue of trickle down economics.

The black markets of Algeria are penetrated by Arab "suite-case" merchants who illegally transport Chinese clothes from Dubai to Algeria through bribery of government officials at the Algerian ports of entrance.

An unofficial figure quoted to me by an Arab merchant in Dubai tells of his sales in Dubai of Chinese clothing to run DH 1,000,000 a month (USD 274,000) mostly to Algerian underground "suite-case" smugglers.

Some Arabs may jump at this and say that the solution for Algeria then is to open up its economy in order to destroy its black markets and to prevent illegal trading.

We say no.

Instead what Algeria needs to do is strengthen its borders and its state run economy and persecute with full force illegal trade.

As a matter of fact because of the mass corruption of many of its state agencies and state employees not only is black market trade allowed but encouraged.

Socialism like anything else only works through the integrity and honesty of the commanding party and the involvement of the citizens.

We shall see later how this is true in the examples of Cuba and more so the DPRK.

What Algeria needs to do in order to protect its state run economy is to make its own clothing not open its markets. Its focus and effort should be to build its industry, to depend on itself, and to weed out state corruption.

We have evidence of this in Syria.

Not only does Syria make its own (decent quality) clothing but also exports it to neighboring states none-other than Algeria itself.

In essence socialism becomes very difficult to construct without the international dimension, without a block of socialist nations cooperatively working together especially when they must contend with the globalization efforts of capitalism.

With the absence of the Soviet Union as a vital partner of Algeria, Cuba, the DPRK, and Syria a new cooperation program between these nations is badly needed.

Further, it has been easy for US capitalism to besiege state-run economies, to starve their people, to practice terrorism against these nations, even to use military force threats, and then to call socialism a failure.

Syria has been able for the most part to maintain self-sufficiency and that is where it has done better than Algeria.

Its liberalization moves have focused of recent on foreign investment.

Particularly it has made a call to its immigrant Syrian capitalists living in the West. I am told this has been formulated as a new law in Syria called article 10.

It is appealing for immigrants to come back to Syria and invest to build the strangled (now even more by the US) Syrian economy.

Apparently, the issues of state bureaucracy and government corruption remain the main obstacles to facilitating this program from bearing results.

We also should warn here that this will allow a foothold for the Western style Syrian capitalists to gain a place in Syria.


Cuba in the Aftermath of 1990 has lost its major trading partner in the Soviet Union.

Its economy is also besieged by US economic sanctions for the last four decades, this as well as numerous US directed terrorist attacks against Cuba.

Cuba has made moves to liberalize certain sectors of its state-run economy.

Of particular interest has been the tourism industry.

Appealing to Western tourists the Communist Party of Cuba has invested in massive hotel projects and undergone a large tourism campaign to attract tourists to its country.

The social price for this on Cuba will not be small with the incoming tourists, Cuba has to be careful about social ailments like prostitution, the incoming drug threats, petty theft and security issues.

What makes Cuba vulnerable especially is its close proximity to the United States.

The US government is active in sponsoring terrorist anti-Cuban groups and facilitates their terrorist activities against the communist island nation.

Cuba is young and new in the tourism game and will gain experience as time passes. This period of time for Cuba will be crucial for it to overcome its economic woes left by the 1990 catastrophe, its resolve however is admirable.

In addition what is noticeable in Cuba is unlike Algeria and Syria the country has minimal corruption and the Communist party of Cuba has complete control over its borders and shows great integrity and determination. Its people support its leadership and support their country as led by the Communist party..


The DPRK's long standing Juche policy had sustained its state run economy the best among all the examples I have given.

It is generally self-sufficient but with difficulty.

The difficulty comes from it being isolated from other socialist countries, under economic besiegement of US capitalism, and at constant threat of attack by the United State imperialists.

Despite all these difficulties it has made big strides in advancing its building of its socialist state.

Of recent the DPRK has countered by turning to the South Koreans. The DPRK is trying to do this and undermining the sabotage moves of the colonialist work of the United States which opposes reunification of the divided nation.

The two Korean brothers are slowly moving closer to one another and especially on issues of economic cooperation and security.

The DPRK has now officially asked the South Koreans to bring to an end joint military cooperation with the US.

New security and border cooperation treaties as well as forecast economic cooperation treaties are in the making despite efforts by the US which continues to sabotage this.

The US is working hard to prevent Korean reunification efforts and the DPRK supported by a growing number of South Koreans has countered that by pushing for unity and cooperation with South Korea.

Another issue has been energy fuel shortages which easily could be satisfied by a new patriotic Iraq; the DPRK has had problems with its production of electricity to meet its citizens' needs.

This got worst after the United States backed off of promises made to the DPRK during the Clinton administration, over the building of light-water electricity generators.

In retaliation the DPRK has re-initiated its nuclear program.

Not only to supply electricity for its citizens but also to counter the possibility of US military attack against it.

The DPRK's core efforts have focused on a diplomatic solution to the nuclear issue, its demand has now been for a non-aggression treaty to be signed by the United States in favor of DPRK security.

The Juche idea of the DPRK had succeeded in producing a strong self-reliant and advanced form of socialism worthy of study by all socialists around the world.

The DPRK is now militarily and economically stronger and it needs not only active support in achieving its goals but also careful study.

Its biggest challenge now will be to fend off the threat of the US.

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DPRK is what? 20.May.2004 17:49

Comrade Anon

This article begs the question: How can the DPRK considered socialist? In Marx's terms socialism is a society which has abolished wage labor and commodity production. The DPRK has done neither. It's just a form of capitalism which is managed by the state.