By Ts Dr. Hj Ramli Amir, former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice-President of CILT International for Southeast Asia
KOTA KINABALU: For decades, Western economic powerhouses have maintained their global dominance through a complex web of financial institutions, corporate influence, and geopolitical interventions. John Perkins, in Confessions of an Economic Hit Man and The Secret History of the American Empire, lays bare the mechanics of this system, exposing how Western nations, particularly the United States, have used financial coercion to exert control over developing countries.
The process is methodical and calculated, leveraging loans, economic dependency, and political influence to secure access to resources and maintain a global economic order that primarily benefits Western interests.
The role of economic hit men (EHMs), as Perkins describes them, is to entice or coerce leaders of developing nations into accepting massive loans for infrastructure projects that primarily benefit multinational corporations rather than local economies.
These projects, often backed by the World Bank and the International Monetary Fund (IMF), come with promises of economic growth and modernization. In reality, they create unsustainable debt burdens that leave nations vulnerable to external manipulation.
Once indebted, these countries are forced to accept Western economic policies, privatization mandates, and trade agreements that disadvantage local industries and prioritize foreign corporate interests.
If a leader resists, more direct methods, including regime change operations and political destabilization, are employed to ensure compliance.
This economic hegemony operates under the guise of aid and development but often leaves countries worse off. Many nations in Latin America, Africa, and Asia have experienced cycles of debt crises, austerity measures, and the hollowing out of public services due to structural adjustment programs imposed by the IMF and the World Bank.
These institutions, while presenting themselves as neutral financial entities, function as enforcers of Western economic interests, ensuring that global capital flows remain concentrated in Western financial centers.
The Political and Economic Consequences of Western Intervention
The long-term consequences of this economic model are evident in numerous case studies. Countries like Ecuador, Indonesia, and Iraq have all suffered from the aftershocks of economic interventions that prioritized Western corporate profits over national well-being.
In Ecuador, Perkins recounts how leaders who refused to comply with Western financial dictates met suspicious ends, their replacements more amenable to foreign interests.
In Iraq, the pretext of weapons of mass destruction masked a broader strategy to secure oil reserves and restructure the economy to benefit Western firms. Indonesia, under Suharto’s dictatorship, was molded into a pro-Western economically, with policies that opened the country’s vast resources to multinational corporations at the expense of its people.
This system of economic coercion ensures that even as developing nations grow, their growth remains subordinate to Western interests. Resources flow outward, wealth accumulates in Western financial institutions, and the cycle of dependency continues. Attempts to break free from this model—whether through nationalization, alternative economic alliances, or policies prioritizing local industries—are met with swift opposition, often in the form of economic sanctions, political pressure, or, in extreme cases, military intervention.
China’s Belt and Road Initiative: A Different Path or a New Form of Economic Influence?
In contrast to the Western model of economic dominance, China has emerged as a major player in global development through its Belt and Road Initiative (BRI). Launched in 2013, the BRI aims to develop infrastructure projects across Asia, Africa, and Europe, creating a vast network of trade routes and economic partnerships. Unlike Western financial institutions, which impose strict conditionalities, China presents its loans as development-driven, with fewer overt political strings attached.
At first glance, the BRI appears to offer a more equitable alternative.
China’s approach emphasizes physical infrastructure—railways, highways, ports, and energy facilities—rather than financial restructuring. Developing nations that have long struggled with inadequate infrastructure see the BRI as an opportunity to modernize and integrate into global markets.
Unlike Western financial institutions that require sweeping economic reforms in exchange for aid, China’s model allows countries to retain a greater degree of sovereignty over their internal policies.
However, the BRI is not without its critics. Accusations of debt-trap diplomacy have surfaced, with claims that China extends large loans knowing that recipient nations may struggle with repayments.
Sri Lanka’s Hambantota Port is frequently cited as a cautionary example, where financial difficulties led to a 99-year lease agreement that gave China significant control over the port’s operations. Similar concerns have arisen in Africa and Southeast Asia, where Chinese-funded infrastructure projects have raised questions about financial sustainability and long-term economic dependencies.
Unlike Western economic coercion, which often operates through multinational corporations and financial institutions, China’s strategy is more state-centric. Chinese state-owned enterprises execute the projects, financing is provided by Chinese banks, and strategic assets are sometimes leveraged as collateral.
This structure allows China to exert influence over critical infrastructure while maintaining the image of a development partner rather than an imperialist force.
The Key Differences: Intent, Method, and Impact
The fundamental difference between Western economic imperialism and China’s BRI lies in their intent and methodology.
The Western model, as described by Perkins, is profit-driven and extractive, designed to maintain economic control through debt, corporate influence, and political coercion. It ensures that wealth flows toward Western financial centers, leaving developing nations in perpetual cycles of dependency.
China’s approach, while still strategic, focuses on physical infrastructure and trade connectivity, providing tangible assets that, in theory, contribute to economic development.
Western economic intervention often comes with explicit policy demands—trade liberalization, privatization, and austerity measures—that reshape economies to favor Western businesses. China’s BRI, on the other hand, does not impose political conditions in the same way. Countries receiving Chinese loans are not required to adopt structural adjustment policies or align their economies with Western economic principles.
This has made the BRI particularly appealing to nations that have grown wary of Western financial institutions and their demands.
However, while China does not enforce neoliberal economic policies, its projects often result in long-term financial dependencies.
The large-scale nature of BRI infrastructure investments means that recipient countries accumulate significant debt to China, raising concerns about sovereignty over key national assets.
Unlike Western debt models, where financial institutions dictate economic policy, China’s influence is more indirect rooted in ownership, infrastructure control, and long-term financial commitments.
The Future of Global Economic Power
As Western economic dominance faces growing scepticism, China’s BRI presents a competing vision for global development. While both models have their drawbacks, China’s approach challenges the long-standing narrative that development must come at the cost of economic sovereignty. Developing nations are no longer beholden to a single economic paradigm but must navigate the competing influences of Western financial institutions and China’s infrastructure-driven investment strategy.
The challenge for recipient countries is to balance these influences to maximize development while minimizing dependency. Unlike the Western model, which often locks nations into debt through policy mandates, China’s BRI offers infrastructure with fewer immediate political conditions. However, the long-term consequences of financial obligations to China remain uncertain, with concerns that strategic assets could become leverage points for geopolitical influence.
In an era where economic power is increasingly fragmented, nations must adopt a pragmatic approach—leveraging the benefits of both models while safeguarding their own economic sovereignty. The lessons from Perkins’ accounts of Western economic coercion should serve as a warning against blind acceptance of financial aid, regardless of the source. Whether engaging with Western financial institutions or China’s BRI, developing nations must ensure that their economic futures remain in their own hands.
As the battle for global economic influence continues, one thing remains clear: the days of unquestioned Western financial supremacy are fading.
The rise of alternative economic models like China’s BRI signals a shift in the balance of power, one that offers both opportunities and risks. The key for developing nations lies not in choosing one model over the other but in crafting independent strategies that serve their long-term interests. Only then can they escape the cycles of dependency that have defined global economics for far too long.
