A Global History of State-Enterprises in Developing Countries, 1950 to present

A Global History of State-Enterprises in Developing Countries, 1950 to present

Marie Huber, Institut für Geschichtswissenschaften, Humboldt-Universität zu Berlin
digital (Berlin)
Vom - Bis
26.11.2020 - 27.11.2020
Url der Konferenzwebsite
Eva Haaser / Jonathan Krautter, Institut für Geschichtswissenschaften, Humboldt-Universität zu Berlin

„Global History of State-Enterprises in Developing Countries” was a digital workshop bringing together empirical case studies from the fields of business, economic and development history. So far, business histories of the Global South have rarely been studied in these fields. Yet, turning the spotlight on them is essential not only to fully grasp the global phenomenon of state-enterprises as they rose to prominence beginning in the mid-20th century but also to gain a better understanding of state-led industrialization in the developing world. Employing a global and comparative approach, the workshop aimed at generating new insights and scrutinizing traditional analytical concepts.

Three common topics highlighted the importance of detailed historical case studies and of a focus on individual actors:

First, the discussions addressed the ubiquity of dichotomies (success/failure, foreign/national, state/private, etc.) in research on state-enterprises and demonstrated that they often lose their analytical potential upon closer inspection. Dichotomies of this kind, albeit frequently employed in common research designs, severely restrict the range of issues that are investigated. ANNETTE SKOVSTED HANSEN (Aarhus), for example, pointed out that a strict distinction between success and failure in the case of the Ghanaian Black Star shipping line, where business failure is commonly ascribed to domestic mismanagement, obscures the relative success enjoyed by the company in the 1960s. This relative success was thwarted not so much by errors on part of its management, but rather by the competition of powerful global shipping lines such as Maersk cornering the market in the 1970s. Further investigating dichotomies such as this in an interdisciplinary setting would therefore push the boundaries established by disciplinary research and might enable us to overcome them. To accomplish this, the participants stressed the need for an approach focusing on the expectations and actions of individual actors embedded in a multitude of processes as well as national and transnational networks.

This is necessary, as GRIETJIE VERHOEF (Johannesburg) observed, because the highly dynamic social and economic developments during the post-independence period made specific phenomena appear dichotomous at some times while they appeared much less dichotomous at other times. FRANK GERITS’ (Utrecht) contribution on the African Development Bank exemplified this: Scholars of neoliberal aid programmes directed at countries of the Global South during the 1970s and 1980s frequently based their analyzes on conceptual approaches which link neoliberalism, as the ideology of free markets, to the Global North, while they viewed the policymakers of developing countries as adherents to ideologies of state-led development fundamentally opposing the market. As such, they are said to have accepted neoliberal aid only begrudgingly due to economic necessity. Gerits, however, argued that while this might have been true for the 1950s and early 1960s, African decision makers were reshaping their ideological outlook and actively developed indigenous variations of neoliberalism in support of their economic goals starting from the mid-1960s.

Second, the contributors discussed the multiple and varying roles of the state in trying to direct the industrial evolution of developing countries. States throughout the developing world stepped into the breach were underdeveloped markets prevented the creation of domestic industries; they provided protection against powerful foreign multinationals and governments; and they also provided their economies with organizational models to promote efficient operation of enterprises. In many cases, state-enterprises were the tools they relied on to achieve these goals: STEFAN TETZLAFF (Berlin), for example, explicated how the Indian government of the 1950s and 1960s used state-enterprises not only to train “model employees” that were supposed to embody values the government aimed to instil in workers throughout the economy but also used them as “model employers” that were to function as role models for how to deal with industrial relations in private firms, too.

However, apart from these more economic functions of the state, they also emphasized the considerable importance of the representative and political functions of state-enterprises in post-colonial developing countries and addressed the complexity and multidimensionality of their global history. According to CYRUS SCHAYEGH (Geneva), for example, the people in many development countries harboured strong suspicions as to whether political independence also meant economic independence. The governments of these countries were thus disposed toward using state-enterprises in certain important sectors of the economy not only to promote industrial development but also to demonstrate their willingness to put these important sectors under national, and by extension, popular control. MALAK LABIB (Cairo) showed this with the example of Egypt where the government reacted to demands of political, technical, and intellectual elites when it decided to create a domestically owned steel industry. It viewed the steel industry as a tool to promote import substitution and to help the country to update its industrial structure from simple consumer goods to capital goods. In this and other ways, it was found that state-enterprises are embedded in nationalist and ideological semantics surrounding ideas of industrialization, redistribution, and national self-sustenance. For this reason, state-enterprises offer a theoretical lens through which the ideological underpinnings of national development projects and their relation to the geographic, social, and political realities at the time of their implementation can be studied.

Third, the participants highlighted the importance of continuities in development planning. Decisions in favour of a particular location, technology, or institution at one point in time often significantly reduced the options available to decision makers when revising old or designing new plans, strategies, or policies later. AYESHA OMER (New York) provided an illustrative example of a geographic path-dependency in the case of the Pakistani region of Gilgit-Baltistan. In the 2010s, the governments of Pakistan and China began working on the construction of a fibre optic cable line connecting the north of Pakistan bordering China with the region surrounding the capital farther south, the bulk of which was supposed to run through Gilgit-Baltistan. This cable line is part of the Chinese Belt and Road Initiative and was conceived to provide a stable and secure data infrastructure. When plans for this line were made, it was decided to install it right along an older Pakistani Chinese joint project, the Karakoram Highway built in the 1960s and 1970s. Due to the dangerous terrain of the Karakoram Mountain range, its construction had to rely on the knowledge of locals who knew the shortest and safest routes. Thus, the highway already provided a secure path through the mountains. ZHAOJIN ZENG (Kunshan), moreover, pointed to the importance of institutional continuities at the local level. In his book about the history of the Baojin coal mine and iron factory from its beginnings in late Imperial China to the immediate post-Mao era, he challenges traditional narratives of China’s industrial development proposing sharp breaks coinciding with changing political regimes. By changing the perspective to focus on a single locale, he found that local entrepreneurial and business networks as well as infrastructures remained relatively stable and thus exerted considerable influence on how the various governments’ policies affected the Baojin factory. This stability continued despite, for example, the factory’s nationalization under the Socialist regime in 1949. Therefore, state-enterprises and their local, national, and transnational connections lend themselves to the study of the geographic, institutional, and technological continuities governments had to deal with in their industrialization efforts.

Closely related to the three main topics is the overarching finding of the workshop that a rethinking of the permanently changing terminology is necessary to analyze case studies more precisely. Throughout the discussions, no clear definition of state-enterprises was employed. Depending on the context of each case, these terms change their meaning. Ownership, for instance, takes different forms in different regional contexts and is not necessarily restricted to the proprietorship of shares in a company, nor does owning shares necessarily grant controlling power. NEVEEN ABDELREHIM (Newcastle), for example, pointed out that despite the nationalization of the Iranian petroleum industry and the foundation of the National Iranian Oil Company in 1951, the Iranian government was unable to exercise control over the oil industry until 1979. The reasons were that the Iranian government stood under constant economic and diplomatic pressure by British and American oil interests and that its employees lacked the skills necessary to successfully operate a major oil business. Together with the coup-d’état in 1953, these factors prompted the Iranian government to agree to a contract between the National Iranian Oil Company and a consortium of eight foreign oil companies. With this contract, factual control was transferred to the consortium until the situation changed again when the Islamic Revolution of 1979 occurred. Hence, the exertion of power over a business might lead to de-facto control even in the absence of legal ownership. Therefore, ownership as a formality offers no insight into the character of the business and a multifaceted approach is necessary to systematize forms of economic engagement through the state.

The following main questions were raised through the identification and problematisation of dichotomies, the multiplicity of state roles, continuities, and ambiguous terminology:

What was the rationale of developing countries in selecting which sectors required state-owned enterprises? Which motives were dominant – strategic, political, or economic ones?

Which global connections existed and determined economic decision making and how did they change?

Do conventional economic theories of development economics sufficiently explain the situation in developing countries? Which paradigms were economically or politically decisive (socialism, state capitalism, liberalism, developmentalism, pan-Africanism) and why?

The workshop was successful in identifying the major issues faced by researchers on the history of state-enterprises in developing countries and raised promising questions for future research. However, further historical analysis on a micro level is necessary to disentangle the multiple layers of economic decision making, ideological embeddedness and agency in relation to state-enterprises.

Conference overview:

Panel 1: Laissez-faire or state-control?

Alexander Nützenadel (Berlin) : Discussant

Grietjie Verhoef (Johannesburg): State-owned enterprises: Africa’s market, the state and economic performance in the post-independence

Frank Gerits (Utrecht): Neoliberalism in the Global South: the African Development Bank and changing ideas about development

Cyrus Schayegh (Geneva): State enterprises in the Middle East: three global dimensions

Zhaojin Zeng (Kunshan): Between socialist impact and imperial legacies: The transnational making of state enterprises in twentieth-century China

Panel 2: Infrastructure, Raw Materials & Beyond

Carles Brasó Broggi (Barcelona): Discussant

Marie Huber (Berlin): Summary Discussant

Malak Labib (Cairo): Manufacturing development: A case-study of the Egyptian iron and steel company (1945-1965)

Nathalia Capellini de Oliviera (Paris): Private-public relations in the Brazilian electric sector during the military dictatorship (1964-1985)

Joanne Tomkinson (London): Rewriting Ethiopia’s place in the world: the Ethiopian aviation industrial complex

Neveen Abdelrehim (Newcastle) / Shakila Yacob (Kuala Lumpur) / Simon Mollan (York): Economic independence and the responses of national oil companies during decolonisation: The case of Malaysia and Iran

Ayesha Omer (New York): The history of Chinese infrastructure in Pakistan

Panel 3: Methods and Sources

Alexander Keese (Geneva): Discussant

Marie Huber (Berlin): Why a site-specific history of state-enterprises matters

Sarah Kunkel (Berlin) : Farming and nation-building: Nkrumah’s state farms and decolonization

Stefan Tetzlaff (Berlin): Private origins of the public sector: West German businesses, state enterprises and development planning in India and Nigeria, ca. 1954-1985

Mariusz Lukasiewicz (Leipzig): From Decolonisation to Financial Globalisation: Towards a Modern History of Stock Exchanges in Africa, 1960-1994

Panel 4: Connections, Contexts and Networks

Eric Burton (Innsbruck): Discussant

Glenda Sluga (Florence): Summary Discussant

Andrea Franc (Basel): Changing concepts of fair trade (ca. 1950 to 1980)

Luca Puddu (Naples): Development for whom? The struggle for control of the Development Bank of Ethiopia, 1950-1955

Annette Skovsted Hansen (Aarhus): Global History of the Ghanaian Black Star Shipping Line, 1957-1997

Amit Das Gupta (Munich): Capitalist countries enforcing planned economies in the developing world. The cases of India, Pakistan and Turkey