August, 2024

Aligning Power Streams: Southeast Asia’s Ingenious Route to Global South

thegeoeconomics.com | August 31, 2024

Simran Walia

The term “Global South” gained prominence in the 1970s and 1980s as a more neutral alternative to “Third World,” distinguishing non-aligned developing countries from the democracies of the “First World” and the now-defunct communist bloc of the “Second World.” Proponents of the Global South advocate for a multipolar global system that challenges Western liberal norms and privileges. Recent shifts in global power—from the transatlantic to the Indo-Pacific, the rise of non-Western nations like China and India, and the relative decline of the West—have accentuated these differing viewpoints. However, the intrinsic diversity of the concept is underscored by the fact that China and India, the two self-declared leaders of the Global South, struggle to forge Asian unity due to their own territorial disputes and nationalist ambitions.

The Global South is often associated with certain characteristics. Its positioning in the Group of 77 (G77) versus the Organization for Economic Cooperation and Development (OECD), or G7, highlights the economic disparities between developing and industrialized nations. The Global South contends that the inequalities of the post-World War II international order, which favor Western nations, stem from colonial legacies and are perpetuated by global capitalism.

Historically, the normative solidarity of Global South nations has encompassed opposition to colonialism and neocolonialism, resistance to hegemony, and support for a multipolar world. They have persistently advocated for more equitable access to markets, technologies, and financing, underscored the importance of national sovereignty, and challenged Western-centric approaches to human rights and democracy. They have also called for reforms in global governance. The term “Global South” serves not merely as a metaphor for underdevelopment but as a reference to a lengthy history of colonialism, neo-imperialism, and uneven economic and social development, which has perpetuated stark disparities in resource access, life expectancy, and living standards.

The China Factor

China’s strategic objectives are served by its investments in the Global South despite growing isolation from the West and competition with the United States. China may challenge Western supremacy and increase its influence in forming the global order by aligning with the Global South. This makes a lot of economic sense as well, since developing nations are becoming important markets for Chinese investments, products, and financing. China is intensifying its economic shift towards the developing world in response to growing protectionism from the United States and its allies.

Growing geopolitical rivalry between the US and China has brought back bipolar dynamics akin to those of the Cold War, when a large portion of the world was used as pawns in a fight between superpowers. The pressure on developing countries to choose between the democratic West and authoritarian China and Russia has increased as a result of Moscow’s aggression against Ukraine, but many of them are resisting this option. A series of systemic shocks, however, have brought attention to the glaring disparities at the center of the global economy and the susceptibility of lower- and middle-income countries to political, economic, and ecological crises that are not of their own making. These shocks include the COVID pandemic, the economic fallout from Ukraine, and the growing climate emergency.

Simplistic narratives cannot capture the diversity found throughout the Global South. Southeast Asian countries, for example, defy the stereotype of the “developing world” because of their diverse range of development stages, security issues, and economic links. These nations make foreign policy decisions mostly based on their national interests rather than strictly adhering to the rhetoric of the Global South, despite the fact that they face some shared issues.

Is Singapore in Global South?

There are around 670 million people living in the ten ASEAN member nations combined. Singapore, with a per capita GDP of over $73,000, nearly twice that of Japan, and Myanmar, with a per capita GDP of $1,000, are at extreme opposite ends of the ASEAN spectrum. It is difficult to include Singapore in the Global South. Indeed, Singapore has incorporated itself into the economic restrictions imposed on Russia. Despite being largely included in the Global South, Southeast Asia shows a great deal of variation in terms of its degree of development. With gross domestic product per capita levels above the OECD average and human development indices on par with or even higher than those of OECD nations, Singapore and Brunei stand out as anomalies. The per capita GDP of the remaining Southeast Asian countries, on the other hand, ranges from US$1,000 to US$12,000, well below the OECD average.

The ASEAN and Global South

By their UN voting habits, Southeast Asian nations have shown that they share norms with the Global South, which includes China. In opposition to the “hegemony of liberal democracy,” they have argued for “Asian values” and have consistently backed resolutions that reflect the views of the Global South on democracy and human rights. Furthermore, the South China Sea dispute illustrates how countries in Southeast Asia, and the Global South in general, have prioritized their own interests over defending international law against more powerful nations like China.

Malaysia’s Prime Minister Anwar Ibrahim visited New Delhi, following which both Malaysia and India committed to enhancing their ties through a Comprehensive Strategic Partnership. This unprecedented level of collaboration will focus on shared goals such as public goods delivery, green development, sustainable economic growth, connectivity, and technological advancement. Prime Minister Anwar discussed at length the strategic significance of Malaysia-India relations within the framework of the Global South. He emphasized the importance of air connectivity between the two countries and the potential for further integration in the semiconductor industry.

China has demonstrated skill in using terminology from the “Global South” to critique the West and advance its own agenda, arguing that “true multilateralism” and “universally beneficial” globalization are essential. Indian Prime Minister Narendra Modi has urged ASEAN leaders to “elevate the Global South for the common interest of all.” Japan has also made efforts to serve as a bridge between the North and the Global South.

ASEAN as a whole is China’s largest commercial partner, followed by South Korea, Japan, and the EU, with the US and India in fourth place. Southeast Asia’s integration into global supply chains and its production of goods primarily for the Global North’s market have contributed significantly to its wealth. This success is partly due to Southeast Asia’s access to capital and technology from the Global North.

The economic reality of Southeast Asian nations shows that, rather than being mere victims or passive recipients, they have been active participants and beneficiaries of the contemporary economic system. In fact, they have strategically shaped regulations to serve their interests by establishing a network of regional free-trade agreements with key trading partners through ASEAN and other minilateral approaches. Although there are complaints, particularly regarding trade restrictions imposed by wealthy countries for political or environmental reasons, these do not, contrary to the rhetoric from the Global South, reflect a general dissatisfaction with the system.

[Simran Walia is an Associate Fellow at the Centre for Air Power Studies, New Delhi, pursuing a PhD in Japanese Studies from Jawaharlal Nehru University, Delhi. ]

The opinions expressed do not reflect the stance of COGGS.

Aligning Power Streams: Southeast Asia’s Ingenious Route to Global South Read Post »

Margaritas and Markets: Mexico’s Economic Moves in a Shifting Global Stage

thegeoeconomics.com | August 30, 2024

– Juan Roberto Reyes Solís

The calender year 2024 is marked by significant global political change due to elections in nearly 70 countries. Additionally, political uncertainty and ongoing international conflicts are compelling business leaders to carefully plan their strategies across various economic, commercial, and financial projects. In all these current facts of political continuity and change, Mexico’s productive performance is exposed to a set of challenges and opportunities. According to the International Monetary Fund, Mexico has emerged as the tenth largest recipient of foreign investments globally over the past two years.. Conversely, the World Bank highlights that Mexico has become the twelfth largest economy globally and is also one of the world’s top fifteen exporters.

This achievement is due to the relative strengthening of the U.S. economy, which has sustained demand for Mexican-manufactured products..This is particularly due to the U.S.-China rivalry and other factors that have led to the transfer of industries to Mexico, thereby triggering potential growth in nearshoring. Thus there is much more to report, including the visit of foreign tourists.

As a result of these dynamics, Mexico has recently positioned itself as the main trading partner of the United States after China. At the same time, in the Latin American area it maintains an excellent profile attracting foreign investment and performance in the regional trade. In terms of tourism, Mexico is today the ninth country that generates foreign currency for this activity in the world.

According to the Ministry of Economy, the best sectors for business are energy, general consumer products, technologies, medical services, drones, electrical vehicles, robots, electronic manufacturing and infrastructure.

The current challenge for Mexico must focus on strengthening external perception to improve the image towards international markets and create a scenario that more vigorously promotes the full potential of the nation. In short, the positive reputation must be intensified and the perception of those others that are palpable as unfavorable must be reduced, especially the situation of insecurity.

However, a trend that has favored the economic scenario is found in another very attractive factor. The rising of nearshoring has gained momentum to engage production centers to geographic areas that favor the greatest use of resources and facilitate the operation and efficiency of the distribution chains of goods and services to destination markets. For Mexico, with a strong interaction in market and economy of the United States economy, the need for intermediate goods, as well as the supply of these to different industries, led to considering the vision of rethinking the logistics of numerous companies. This is how the idea of nearshoring was gradually outlined, by reconstituting production networks with resources from the regions, and relocating industries and suppliers of goods and services in the national geography.

Some of the potential benefits could be seen in the possibility of increase in foreign investments, derived from the transfer of production plants to the country and their eventual location in the different industrial parks. This circumstance could strengthen the size of industrial clusters and their business environment, leading to create new infrastructure, connectivity, service offerings and other activities associated with regional economic growth and development. In this regard, various companies located in the national territory have the opportunity to announce their expansion plans, which will trigger new projects that are associated with the relocation of productive activities. In this case, it should be highlighted that the panorama of foreign investments in the state environment is favored by a strategy of attracting and engaging industries that are integrated into the productive chains within the different clusters of the region.

These circumstances stimulate the possibility of having more specialized personnel in different productive branches, that is, a growth in the workforce derived from the location of new industries that require employees for the areas in which they participate in.

There is also a great capacity in the use of regional resources and the territorial advantages as the connection among regions inside the country. By connecting the Pacific and Atlantic Oceans through maritime ports, Mexico facilitates the movement of goods from Eastern countries to various locations within the country. It is the same case for imports and exports that are moved by train and transportation services from Central America to the U.S. market.

Finally, potential growth of exports, especially to the United States market. For numerous industries, the export potential or, where applicable, opens a door that would lead to participation in that market, establishing, in the process, an opportunity for international experience, development and deepening of business for the companies involved in this expectation. While Mexico could leverage these opportunities on a large scale, the upcoming U.S. presidential election will be crucial in determining the future economic conditions and prospects for Mexico. [COGGS]

*Author is Professor and Researcher, Universidad Anáhuac Querétaro, Mexico.

[The views expressed herein are those of the author and do not necessarily reflect the official position or endorsement of COGGS. For submission queries, pls write us to ayan@thegeoeconomics.com ]

Margaritas and Markets: Mexico’s Economic Moves in a Shifting Global Stage Read Post »

The Brandt Line and Global South

thegeoeconomics.com | August 28, 2024

The Brandt Line, introduced by former German Chancellor Willy Brandt in the 1980s, remains a significant conceptual framework for understanding global economic disparities. Featured in the Brandt Commission’s seminal 1980 report, North-South: A Programme for Survival, this line visually distinguishes between the economically developed “Global North” and the less developed “Global South.” While the Brandt Line offers a broad depiction of global economic inequalities, it also emphasizes the complex nature of development and wealth distribution across different regions.

The Brandt Line: An Overview

The Brandt Line is not a precise geographical boundary but rather a marker that highlights global economic disparities. The line runs from the northern part of Mexico, across the top of Africa, the Middle East, and India, before curving around China and descending through East Asia. This line effectively demarcates wealthier regions in the Northern Hemisphere from poorer areas primarily in the Southern Hemisphere. Countries like the United States, Canada, and Western European nations lie north of this line, while much of Africa, parts of Latin America, and several Asian countries fall south of it.

The line was introduced as part of the Brandt Commission’s efforts to address and highlight the economic and developmental gaps between the world’s richer and poorer countries. It sought to draw attention to the urgent need for international cooperation and development aid to address these disparities .

The Global South: Economic and Historical Context

The Global South concept remains instrumental in identifying and addressing the persistent challenges faced by developing nations. The term “Global South” encompasses countries that are generally less economically developed and often face higher levels of poverty and inequality. This designation includes many nations in Africa, Latin America, and parts of Asia. Historically, these countries have been subject to colonial exploitation and have struggled with political instability and economic challenges that continue to impact their development

Contrastingly, the “Global North” includes countries with advanced economies, higher standards of living, and significant global influence. This region comprises the United States, Canada, Western Europe, Japan, Australia, and New Zealand. Despite being in the southern hemisphere, Australia and New Zealand are part of the Global North due to their high levels of economic development and prosperity.

While the Brandt Line provides a useful historical snapshot of global economic disparities, it has been critiqued for its oversimplification of complex global issues. The line does not account for significant economic changes that have occurred since its introduction.

Contemporary analyses of global development often use more nuanced metrics, such as the Human Development Index (HDI) and varying economic indicators, to assess and understand global inequalities. These modern tools provide a more dynamic view of development that can better capture shifts in economic conditions and growth

The Brandt Line offers a foundational perspective on global economic disparities, effectively highlighting the divide between developed and developing regions. While it remains a significant historical reference, the evolving nature of global economics calls for more refined and dynamic analyses.

The Brandt Line and Global South Read Post »

What Heads of State Remarked at India-Africa Business Conclave

thegeoeconomics.com | August 25, 2024

The three-day long 19th CII India-Africa Business Conclave, held on August 19-21 in New Delhi, has set a new standard in the evolving economic ties between India and Africa. At the heart of the discussions was Africa’s rise as one of the world’s most dynamic economic regions, marked by an impressive$ 6.7 trillion in consumer and business spending. As Africa’s third-largest trading partner, India has witnessed its trade with the continent grow from USD 68.5 billion in 2011-12 to USD 83.34 billion in 2023-24, reflecting the deepening and expanding nature of warm relationship.

The 19th CII India-Africa Business Conclave, convened by Confederation of Indian Industry underscored the vital role of the India-Africa growth partnership within the broader context of the Global South alliance. The conclave, a collaboration between the CII, India’s Ministry of External Affairs, and Ministry of Commerce & Industry, highlighted strategic areas for accelerating economic integration between the two regions.

Prosper Bazombanza, Vice President of Burundi, emphasized the potential for Indian investors to significantly contribute to Burundi’s economic development. By leveraging Burundi’s rich natural resources, Indian businesses could play a crucial role in enhancing the country’s growth trajectory through creating a more cooperative environment.

In a similar vein, Muhammad B.S. Jallow, Vice President of Gambia, noted the strategic discussions facilitated by the conclave. Key sectors such as energy, infrastructure development, affordable housing, and healthcare were identified as focal points for collaboration with Indian enterprises.

India’s Minister of Commerce and Industry Piyush Goyal emphasized that the India-Africa partnership should be driven by a clear, actionable agenda with specific, achievable goals across short, medium, and long-term plans, aiming to produce tangible outcomes and measurable results.

While addressing in the business conclave, Jeremiah Kpan Koung, Vice President of Liberia, invited Indian firms to explore investment opportunities within Liberia’s agricultural sector. Liberia’s substantial land resources and favorable climatic conditions present significant opportunities for growth. Additionally, the country is open to various forms of investment, including private-private and public-private partnerships.

Marie Cyril Eddy Boisse´zon, Vice President of Mauritius, highlighted the deep-seated civilizational ties between India and Africa. He advocated for sustained and focused efforts to extract tangible benefits from the cooperation in sectors such as digitalization, healthcare, space development, pharmaceuticals, infrastructure, and power. This underscores the need for a strategic approach to leveraging shared values and mutual interests.

Dr. C.G.D.N. Chiwenga, Vice President of Zimbabwe, pinpointed agriculture, mining, health, energy, and infrastructure as critical areas for collaborative growth. Zimbabwe’s openness to partnership with India aims to drive progress across these sectors, emphasizing the mutual benefits of such cooperation.

The 19th CII India Africa Business Conclave has thus reinforced the imperative for deepened economic integration between India and Africa. By focusing on sector-specific collaborations and harnessing shared resources and values, both regions stand to gain from enhanced mutual growth and development.

Rui Miguens de Oliveira, Minister of Industry & Commerce of Angola invited Indian companies to explore investment opportunities in Angola in agriculture and agro-processing, manufacturing, financial services, healthcare etc. Serge Gnaniodem Poda, Minister of Industrial Development, Commerce, Handicrafts and Small and Medium Enterprises, Burkina Faso, remarked the country seeks major investments from India in sectors such as agriculture, agri-business, IT & ICT services, pharmaceuticals, renewable energy and healthcare.

Chad’s Minister of Trade and Industry, Guibolo Fanga Mathieu, said the country offers significant business opportunities in sectors like agriculture, animal husbandry and crops like cotton. IT and ICT.

Sosten Gwengwe, Minister of Trade and Industry of Malawi, highlighted Malawi’s ATM (Agriculture, Tourism and Mining) strategy that opens us new investment opportunities for Indian companies.

Seydou Asman, Minister of Trade & Industry of Niger, urged Indian companies to increase their involvement in Niger, highlighting the country’s mineral wealth, extensive coastline, efficient transport infrastructure, and potential for renewable energy. Meanwhile, Omar Said Shaaban, Minister for Trade and Industrial Development in Zanzibar, Tanzania, described India as a key, reliable partner and encouraged Indian businesses to explore opportunities in Tanzania’s agri-business, tourism, and blue economy sectors, where the country holds a competitive edge.

What Heads of State Remarked at India-Africa Business Conclave Read Post »

Will India’s Values Illuminate the Path for Global South?

thegeoeconomics.com | August 21, 2024

– Prof. Rajesh Kharat, South Asian Studies, JNU, New Delhi

Although the Indian subcontinent is known for its distinct regional identity, its culture has been intertwined with India’s historical and cultural roots since ancient times. In modern times, the ‘South Asia’ region preserves the legacy of Indian tradition and civilization while maintaining unity through diversity.

Cultural identity, especially in Southeast Asian countries, is often associated with Indian traditions and culture. For example, in Indonesia, people use the term ‘Tathastu’ when greeting each other, and many names for boys and girls are similar to Indian names, such as Bhaskara, Yudhishthira, Shankar, and Hanuman. Despite being a constitutionally Islamic state, Indonesia has been linked to the Buddhist and Hindu traditions of India for hundreds of years. The same is true for the countries bordering India in the subcontinent, including Bhutan, Nepal, Bangladesh, Maldives, Pakistan, and Sri Lanka.

Prof. Rajesh Kharat, South Asian Studies, JNU, New Delhi

August 15, 1947, is an important day not only for India but also for other nations of the Global South, as India’s freedom struggle was central to the independence movements across the region. The influence of the Indian political system is evident in the political cultures of these countries. Some of them have embraced democratic values, written constitutions, and pantheism.

Over time, nations began fighting for democratic principles such as freedom, equality, and fraternity, and after gaining independence, they initially adopted democracy. However, many could not sustain this system, which is unfortunate. Compared to India, democracy has not taken root in several nations. Rulers in many of these countries have abandoned democratic values and principles in their quest to retain power. Consequently, the process of nation-building in these countries has faced setbacks.

India’s policy towards sovereign and independent countries is also appreciated by Global South partners. Although newly independent nations from the Indian subcontinent since 1947 have cited Indian political culture as an inspiration and guide, its influence is not always evident in these countries.

Instability in Afghanistan, Bangladesh, the Maldives, Myanmar, Nepal, and Sri Lanka has been detrimental to economic development and social integration. In these countries, elections have rarely been used to effect a change of power.

In Bangladesh, Bangabandhu Sheikh Mujib-ur Rehman, who founded independent Bangladesh, was assassinated. However, India sheltered ousted Prime Minister Sheikh Hasina, reflecting its political culture of support for neighbors in distress. Since the 1950s, India has maintained a tradition of assisting neighboring countries in difficult situations, including the Dalai Lama and political leaders from Iran, Iraq, and Afghanistan. Political uprisings in the Maldives have been addressed by India several times.

For instance, India intervened to save then-President Abdul Gayoom in 1988 and recently protected former President Mohammad Nasheed from insurgents. The 1987 India-Sri Lanka agreement helped Sri Lanka combat Tamil terrorists. In 1996 and 2006, India was ready to assist Nepal against Maoists. In 2006, when ULFA killed Bhutanese businessmen traveling across the border in Bhutan, India, alongside the Bhutanese army, destroyed the bases of these outfits.

Political assassinations have occurred throughout the Indian subcontinent. The assassinations of Pakistan’s then-President Zia-ul-Haq and former Prime Minister Benazir Bhutto, as well as the plight of Nawaz Sharif and Pervez Musharraf, highlight the political turmoil in Pakistan. Similar attempts to abolish the monarchy occurred in Nepal, and killings have also taken place in Sri Lanka.

Bhutanese Prime Minister Jigme Paldan Dorji was assassinated in 1964. Political assassinations in India, including those of Mahatma Gandhi, Smt. Indira Gandhi, and Rajiv Gandhi, are notorious, but they do not reflect India’s political culture.

The pattern of frequent constitutional changes in South Asian countries, often driven by coups, has eroded their political stability. Countries like Nepal have altered their constitutions multiple times. In contrast, the Indian Constitution remains robust, supported by an aware citizenry. This stability is not viewed with envy but rather with admiration by many countries in the Global South.

Recently, there have been concerns about undesirable changes in the region’s political culture. The symbols and monuments of the freedom struggle and the incidents that shock the values are taking place. If this is to be recovered, all the Global South countries must pay attention to implementing democracy.

Will India’s Values Illuminate the Path for Global South? Read Post »

From Diplomatic Trenches: What Experts Say About Voice of Global South Summit

thegeoeconomics.com | August 21, 2024

[“Realities of the 21st century cannot be confronted by the 20th century Victor and Vanquished mindset”– Amb Anil Trigunayat]

On August 17, 2024, India hosted the third “Voice of the Global South Summit,” which saw participation from 123 nations. The summit concluded with several significant announcements.

In a recent commentary for India News Network, Ambassador Anil Trigunayat, a member of the Advisory Council of COGGS and Former Indian Envoy, talks about the shifting dynamics of global influence and the significance of collective action. Trigunayat argues that individual voices of the Global South are increasingly ineffectual in the contemporary geopolitics, where collective stances of Global South cannot be dismissed by those who traditionally shape and enforce international order.

Amb Anil Trigunayat. Advisory Council Member, COGGS

Amb Trigunayat emphasizes that the realities of the 21st century require a departure from the outdated “Victor and Vanquished” mentality of the previous century. This antiquated approach, which is rooted in historical conflicts and power imbalances, fails to address the complexities of today’s global challenges. Instead, the emerging global order demands a more nuanced and cooperative approach to international relations.

Referring to the Global South, Amb Husain Haqqani and Aparna Pande of Hudson Institute in their opinion piece, writes, “In some ways, it is the latest incarnation of India’s leadership role in the Non-Aligned Movement (NAM), which at its height during the Cold War comprised 120 countries.”

Former Indian Ambassador Dr. Mohan Kumar’s observations on the Global South underscore significant themes discussed at the Voice of the Global South Summit, particularly regarding climate change as well as energy transitions. Writing in Financial Express, Dr. Kumar suggests that the summit’s focus on a sustainable future emphasizes the pressing need for adequate climate finance and accessible technology to ensure that countries in the Global South can effectively address climate challenges.

In his opinion piece, Kumar points out that the Global South faces significant vulnerabilities to climate change, which threatens their development prospects and environmental stability. For these nations, the transition to sustainable energy and the broader fight against climate change are not just environmental issues but existential threats. Without substantial support in the form of climate finance and technology, these countries may struggle to mitigate and adapt to the impacts of climate change.

Looking ahead to the upcoming Conference of Parties (COP) in Azerbaijan this November, Amb Kumar suggests that the nations in the Global South summit might consider presenting a unified position. This joint submission could strengthen their collective voice in advocating for necessary financial and technological support from the global community. He asserts that the responsibility to address climate change extends beyond moral considerations to legal obligations, particularly for the world’s top CO2 emitters.

The Global South, with its diverse and vulnerable human as well as other resources, is becoming a focal point in geopolitical competition. Trigunayat notes that Global South is increasingly central to global power struggles, as various international actors vie for influence and alliances. The vulnerabilities of the Global South are not only a critical concern for these nations but also a key strategic interest for global powers seeking to expand their influence.

From Diplomatic Trenches: What Experts Say About Voice of Global South Summit Read Post »

Global South’s Consumer Surge: Redefining Markets, Attracting Investment

thegeoeconomics.com | August 20, 2024

Investors worldwide are tuning into a new economic symphony: ascending Global South is splurging more than ever. The once-muted hum of emerging markets has crescendoed into a loud roar, drawing the attention of global deep pockets who are eagerly charting this vibrant spending spree. As wallets in the Global South grow heavier and spending soars, the investors from China to Middle East are keenly aware that Global South, the fast rising consumer power is rewriting the rules of global commerce.

Nations in the Global South, including countries from South Asia, South East Asia and Latin America, are undergoing substantial consumer-driven economic changes. With a combined population of over 6 billion and a youthful median age of around 25, the Global South is witnessing a steady rise in middle-class consumers that is transforming local economies. As the middle class base expands, there is a notable surge in consumer demand, which is driving growth across various sectors, including retail, automotive, and e-commerce. This growing consumer base is not only reshaping local markets but also drawing substantial global investment.

Africa is emerging as one of the world’s fastest-growing consumer markets, outpacing even its impressive GDP growth in recent years. Consumer expenditure in Africa is projected to reach $2.1 trillion by 2025 and soar to $2.5 trillion by 2030 (Brookings). This explosive growth will be driven by several key markets. Nigeria, Egypt, and South Africa are expected to become some of the largest consumer markets globally by 2030. However, the potential isn’t limited to these major economies. The other geographies such as Algeria, Angola, Ethiopia, Ghana, Kenya, Morocco, Sudan, Tunisia, and Tanzania also present tremendous opportunities for investors and businesses. Each of these nations is experiencing its own wave of consumer growth, fueled by increasing urbanization, technological advancements, and improving economic conditions.

In Latin America, for example, Mexico’s economic scenario is shifting as its middle class grows. The increase in disposable income is driving demand for a variety of consumer goods, from electronics to healthcare products. This change has attracted international companies like Walmart and Unilever, which are expanding their operations in Mexico to tap into this rising economy.

In Brazil, a significant rise in consumer spending has been observed. The growth of the middle class has bolstered sectors such as retail and automotive, with companies like Fiat and Carrefour enhancing their market presence. The trend towards urbanization in metros like Sao Paulo and Rio de Janeiro has further accelerated consumer demand for modern amenities and services. In Argentina, the expansion of e-commerce has been a notable trend. Companies like Mercado Libre have capitalized on the increasing internet penetration and rising consumer spending, becoming major players in the regional online retail market.

The economic ties between South Asia and Middle Eastern economies is also growing because of the rise of consumer markets in Southeast and South Asia.

Overall, the economic dynamism in these Global South countries highlights how a growing middle class and increasing consumer spending are driving economic transformation and attracting global investment, contributing to a more vibrant and interconnected global economy.

Transnational corporations are increasingly targeting these emerging markets due to their potential for high returns and expanding consumer opportunities. The influx of foreign investment, in turn, enhances economic connectivity and integration with the global economy. The interaction between domestic economic growth and international investment is shaping a more dynamic and interconnected global economic environment. As countries in the Global South experience robust economic growth driven by an expanding middle class and rising consumer spending, they become increasingly attractive to international investors. A massive flow of investment is coming from China and Middle East. This influx of foreign investment helps to further strengthen local economies, create jobs, and improve social infrastructure. At the same time, the integration of these emerging markets into the global economy enhances their economic link as well as influence.

Global South’s Consumer Surge: Redefining Markets, Attracting Investment Read Post »

Is Regional Collaboration the Global South’s Secret to Triumph?

thegeoeconomics.com | August 19, 2024

Mohammed Saqib, COGGS

[ Synopsis: The Global South shares common challenges related to economic development, social inequality, and geopolitical positioning. Regional cooperation among the Global South countries has been recognised as a crucial strategy for addressing these shared challenges and promoting sustainable development. However, cooperation among the countries of the Global South faces numerous obstacles.]

Over the years, successful regional initiatives have achieved remarkable gains in economic, political, and sustainable development. Consequently, regional cooperation has emerged as a crucial strategy for the Global South nations to tackle common challenges, harness their collective strengths, and accelerate socio-economic progress. This approach has gained momentum in recent years owing to the growing global realisation that global issues are interconnected and cooperative action can generate mutual benefits. The developing countries are increasingly looking towards regional partnerships to address complex challenges and exploit growth opportunities in the context of rapid globalisation, climate change, and economic interdependence.

It is a departure from traditional development models emphasising North-South cooperation and bilateral aid relationships. Instead, it focuses on South-South cooperation through collective action among nations facing similar developmental obstacles. These could range from formal economic integration/trade agreements to shared infrastructure projects, including joint resource management or harmonised policy responses to transnational issues within a region. These initiatives include agriculture, energy, education, health care, and environmental protection. By combining resources, expertise, and political willpower, countries in the Global South can achieve economies of scale, thus enhancing their bargaining power at the global level and devising more effective ways of dealing with common problems.

In addition to ensuring economic growth and social progress, it also enhances stability and security at regional levels due to increased interdependency or shared prosperity among states involved. It further serves as a platform for knowledge exchange whereby countries learn from each other’s experiences and best practices (Foster et al., 2018). In some cases, solutions that work in developed economies may not be suitable for developing ones directly.

Advantages of Regional Cooperation

The positive outcomes of this form of partnership include enhanced trade conditions between regions, leading to greater economic stability and political sovereignty, as well as improved prospects for achieving ecological sustainability (OAU/AU).

Economic Attractiveness

One key economic advantage of regional cooperation is the possibility of increasing intra-regional trade. According to the United Nations Conference on Trade and Development (UNCTAD), intra-regional exports among developing countries increased from 42% in 2006 to 52% in 2018 (UNCTAD, 2019). This shows that South-South trade is becoming more critical. When ASEAN implemented the ASEAN Free Trade Area (AFTA) in 1992, there has been a remarkable increase in intra-ASEAN trade. Between 1993 and 2020, the ASEAN Secretariat put its total trade at $2.8 trillion, increasing from $123.1 billion in intra-ASEAN trade.

Regional cooperation can also increase the appeal of member states for foreign direct investment (FDI). It is observed that the larger markets and harmonising regulations attract more FDI into regional blocs. In Latin America, for example, ECLAC notes that “regional integration efforts” have influenced FDI inflows, as the region received $160.7 billion in FDI inflows in 2019 (ECLAC, 2020).

Cooperation can also boost the economy to protect it from external shocks. Regional integration is another important factor in helping African economies cope with global financial crises (AfDB, 2019). For example, African countries with closer regional ties had less severe economic contractions during the 2008 global financial crisis (AfDB, 2019).

Political Stability and Security

Regional organisations often provide mechanisms for peaceful conflict resolution among member states. One of these frameworks is the African Peace and Security Architecture (APSA) developed by the African Union (AU), which includes conflict prevention, management, and resolution mechanisms. As a result of APSA’s contribution, there has been a reduction in interstate conflicts across Africa, from 16 armed conflicts in 2002 to only seven in 2019 (SIPRI, 2020).

Democratic norms and good governance are often enforced through regional bodies. For instance, the Organization of American States (OAS) has played a crucial role in supporting democratic processes all over Latin America. In developing countries, participation within such organisations increases the chances of democratic transition and consolidation, according to Pevehouse’s study cited by Brooks et al. (2005:727).

The collective security capabilities are enhanced by regional cooperation. Terrorism and drug trafficking have forced several Central Asian countries’ governments into joint military exercises as well as intelligence sharing through the Shanghai Cooperation Organisation (SIPRI). UNODC (2019) has reported that such collaboration led to a 17% increase in drug seizures between the years 2014-18.

Sustainable Development

Regional cooperation is required to tackle cross-border environmental issues. The Association of Southeast Asian Nations (ASEAN) has implemented the ASEAN Agreement on Transboundary Haze Pollution against forest fires and haze since its establishment in 2003, leading to a 36% decline in hotspots regionally, according to the ASEAN Secretariat (2020).

Climate change responses could be better managed at the regional level. A good example is the Caribbean Community Climate Change Centre (CCCCC), which has played a significant role in devising climate change strategies for the region. In the Caribbean, coordinated regional action can reduce costs of climate adaptation by up to 25% compared to country approaches, according to the World Bank (2018).

Cooperation makes it possible to manage shared natural resources efficiently. This river basin organisation has coordinated sustainable development and management of the Mekong River Basin, including several Southeast Asian countries, such as Lao PDR, Cambodia, Vietnam, and Thailand. As a result of these efforts, fish stocks increased by 12% and water quality improved by about 15% between 2010 and 20 (MRC, 2021).

Regional power pools and energy cooperation can ensure energy security and promote renewable energy uptake. For instance, the Southern African Power Pool (SAPP), which facilitated electricity trading among southern African countries, increased the region’s renewable energy capacity by 22% from 2015 to 2020 (International Renewable Energy Agency, 2021).

Obstacles to Regional Collaboration and Solutions

Economic Inequalities

One of the major hurdles in regional cooperation is economic inequalities among member countries that may stall cooperation. Rich countries might be hesitant to share their resources with others or open up their markets because they fear economic losses. For example, within the East African Community (EAC), Kenya’s GDP per capita is almost twice as much as Tanzania’s and four times higher than it is for Burundi’s (World Bank, 2022), which puts trade discussions into tension.

A possible way to subvert this inequality problem in regional cooperation is to implement asymmetric integration strategies that allow less developed countries more time to adapt to regional policies. The ASEAN-minus-X formula, which gives space for some members to temporarily opt out of certain economic initiatives, has been useful in managing disparities (Asian Development Bank, 2019).

Political Stability and Conflicts

Political instability or conflicts at the country level can derail regional efforts to promote cooperation. An ongoing conflict in South Sudan, for instance, has impeded the progress of the Intergovernmental Authority on Development (IGAD) in eastern Africa.

Strengthening regional capacities for resolving conflicts and their peacekeeping abilities will mean greater gains. Economic Community of West African States (ECOWAS) successfully intervened in several conflicts, such as The Gambia’s 2017 case, thus showcasing how regional bodies can ensure stability (International Crisis Group, 2019).

Weak Organisational Capacity

Numerous organisations in the global south regions lack sufficient institutional frameworks and means to enforce these. South Asian Association for Regional Cooperation (SAARC) has not succeeded due to poor institutions implementing most of its initiatives. Enhancing institutional capacity requires investment in capacity-building activities targeting regional institutions while creating clear rules that can be implemented and enforced at all times. The African Union’s reform process, which commenced in 2016, seeks to increase the organisation’s effectiveness and efficiency (African Union, 2020).

Sovereignty Concerns

Countries might feel challenged to surrender their decision-making powers to regional bodies because of fears about loss of sovereignty. For instance, Mercosur has faced a problem deepening its integration among South American countries due to the member states’ unwillingness to give up their economic policy autonomy.

A practical solution involves adopting a flexible approach to integration that respects national sovereignty while promoting cooperation. The Pacific Alliance has been successfully pragmatic and business-oriented, thus making strides in areas like trade and investment without compromising members’ autonomy (Inter-American Development Bank, 2018).

External Influence

Global South regional cooperation must take into account external influences. For example, individual agreements between China and some ASEAN countries sometimes complicate ASEAN’s collective bargaining position. It is important to formulate joint strategies for dealing with outside powers to solve this. The African Continental Free Trade Area (AfCFTA) is a good step towards strengthening Africa’s collective bargaining power in global trade negotiations (United Nations Economic Commission for Africa, 2021).

Infrastructure and Connectivity Gaps

Poor physical and digital infrastructure can significantly hinder the actualisation of regional cooperation initiatives. For instance, inadequate transport linkages in Central Asia have significantly limited the potential for intra-regional trade within the Central Asia Regional Economic Cooperation (CAREC) Program. Regional infrastructure projects must be prioritised while multilateral development banks’ funding capacities are tapped. To bridge the continent’s infrastructure gap, the African Development Bank supported the Programme for Infrastructure Development in Africa (PIDA) (African Development Bank, 2020).

Public Support Inadequacy

Limited public awareness and support for regional integration sometimes impede the political will to collaborate. For example, the low voter turnout in East African Legislative Assembly elections shows little public engagement with EAC. To address this, it is crucial to increase the level of education and public outreach about the benefits of regional cooperation. This program has helped create a regional identity through student exchanges that could be replicated in other regions (European Commission, 2019).

These challenges underscore how complicated regional cooperation can be in the Global South; however, potential solutions show that these hurdles can be crossed given political willingness, innovative approaches, and sustained efforts. Successful regional cooperation must be multidimensional since it covers economic, political, and social aspects while still being flexible enough to accommodate the specificities of different regions.

Conclusion

Regional cooperation in the Global South has proven to be a powerful catalyst for development, ensuring economic growth, political stability, and sustainable progress. The benefits of this collaborative approach are manifold, including increased intra-regional trade, improved foreign direct investment attractiveness, enhanced conflict resolution mechanisms, and more efficient management of shared natural resources. However, various obstacles persist, such as economic inequalities, political instability, weak institutional capacity, sovereignty concerns, external influence, infrastructure gaps, and insufficient public support.

Several recommendations can be made to overcome these challenges and fully harness the potential of regional cooperation. Firstly, implementing asymmetric integration strategies can help mitigate economic disparities among member countries. Secondly, strengthening regional conflict resolution and peacekeeping capacities is essential for maintaining political stability. Thirdly, investing in the institutional capacity of regional organisations can improve their effectiveness and efficiency. Fourthly, adopting a flexible approach to integration that respects national sovereignty can alleviate concerns about the loss of decision-making power.

Moreover, formulating joint strategies for dealing with external powers can help safeguard the interests of regional blocs. Prioritising regional infrastructure projects and tapping into multilateral development banks’ funding capacities can help bridge infrastructure gaps. Finally, enhancing public education and outreach regarding the benefits of regional cooperation can cultivate stronger public support and greater engagement with these initiatives.

Regional cooperation does not solve all the development challenges. However, in an increasingly interconnected world, regional cooperation is a vital strategy for countries in the Global South to address common challenges and leverage their collective strengths. To more effectively pursue their development objectives and establish their positions within the global economy, countries need to pool resources, harmonize policies, and present united fronts. Therefore, leaders in the Global South should build upon existing achievements, learn from past mistakes, and deepen their commitment to regional integration for the benefit of their people and the global community.

[Annexure]

Successful Regional Cooperation Initiatives

The examples below demonstrate successful regional cooperation in the Global South. They underscore the importance of political will, practical approaches, and institutional frameworks in realising the success of regional cooperation initiatives. Although challenges persist, these initiatives offer valuable insights to advance regional integration efforts worldwide.

1. ASEAN Economic Community (AEC) Launched in 2015, the AEC aims to create a single market and production base within Southeast Asia.

Key Achievements:

Intra-ASEAN trade increased from $498 billion in 2015 to $598 billion in 2019 (ASEAN Secretariat, 2020).
Tariffs on 98.6% of intra-ASEAN trade items have been eliminated (ASEAN Secretariat, 2021).

Success Factors:

a) Gradual, phased approach to integration

b) Flexible consensus-based decision-making (“ASEAN Way”)

c) Strong institutional framework with regular high-level meetings

d) Focus on practical, achievable goals

African Continental Free Trade Area (AfCFTA) Operational since January 2021, AfCFTA aims to create a single continental market for goods and services.

Key Achievements:

Potential to increase intra-African trade by 52.3% (UNECA, 2021).
Expected to lift 30 million people from extreme poverty (World Bank, 2020).

Success Factors:

a) Strong political will and leadership from the African Union

b) Inclusive negotiation process involving all African countries

c) Comprehensive scope covering goods, services, and digital trade

d) Built-in mechanisms for dispute resolution and monitoring

Mercosur (Southern Common Market) Established in 1991, Mercosur is an economic and political bloc in South America.

Key Achievements:

Intra-bloc trade increased from $4 billion in 1990 to $42 billion in 2019 (IADB, 2020).
Successfully negotiated trade agreements with the EU and EFTA.

Success Factors:

a) Shared historical and cultural ties among member states

b) Initial focus on trade liberalisation before expanding to other areas

c) Establishment of dispute resolution mechanisms

d) Creation of Mercosur Parliament to enhance political integration

Caribbean Community (CARICOM) Single Market and Economy: Launched in 2006, CARICOM aims to integrate the economies of its member states.

Key Achievements:

Intra-regional trade in goods increased by 13% between 2006 and 2016 (CARICOM Secretariat, 2018).
Successful implementation of free movement for certain categories of skilled workers.

Success Factors:

a) Strong focus on capacity building for member states

b) Development of regional institutions like the Caribbean Court of Justice

c) Emphasis on functional cooperation in areas like health and education

d) Regular engagement with the Caribbean diaspora

Greater Mekong Subregion (GMS) Economic Cooperation Program

Initiated in 1992 by the Asian Development Bank, the GMS program focuses on infrastructure development and economic corridors.

Key Achievements:

Completion of over 100 infrastructure projects worth $27 billion (ADB, 2021).
Cross-border power trade increased from 2,493 GWh in 2010 to 75,738 GWh in 2020 (ADB, 2021).

Success Factors:

a) Clear focus on infrastructure and connectivity

b) Strong support from multilateral institutions (especially ADB)

c) Pragmatic, project-based approach

d) Regular high-level meetings to maintain political momentum

Pacific Alliance: Formed in 2011, the Pacific Alliance aims to promote free trade and economic integration among its Latin American members.

Key Achievements:

Elimination of 92% of tariffs among member countries (Pacific Alliance, 2020).
Creation of the Integrated Latin American Market (MILA), merging the stock exchanges of member countries.

Success Factors:

a) Shared commitment to open markets and free trade

b) Focus on practical, business-oriented initiatives

c) Outward-looking approach, seeking engagement with Asia-Pacific

d) Streamlined decision-making process

[Mohammed Saqib is an Economist and Convenor, COGGS]

Is Regional Collaboration the Global South’s Secret to Triumph? Read Post »

Finance to Fraternity: Insights from 3rd Voice of Global South Summit

thegeoeconomics.com | August 18, 2024

In the midst of geopolitical turmoil, and prolonged conflicts, India convened the third edition of the Voice of Global South Summit on August 17, 2024, engaging 123 nations from the Global South. Muhammad Yunus, Chief Advisor to the interim government of Bangladesh advocated for a complete overhaul of the financial system in the Global South to ensure equitable wealth distribution. The nobel laureate Yunus asserted that integrating entrepreneurship with social business has the potential to transform the Global South.

In his address, Prime Minister Narendra Modi articulated a compelling vision that addresses critical global priorities, including health, food, and energy security, while also emphasizing the need for enhanced global governance and financial inclusion.

3rd Voice of Global South Summit (courtesy: Dr. S Jaishankar on X)

The assembly of 123 nations reflect a strategic framework for channeling cooperation and advancing the collective aspirations of the Global South in these challenging times. The theme of the 3^rd edition of the summit was “An Empowered Global South for a Sustainable Future. ” The leaders of Bangladesh, Belarus, Bhutan, Chile, El Salvador, Ethiopia, Fiji, Grenada, Guyana, Lao PDR, Marshall Islands, Mauritius, Mongolia, Nepal, Oman, Sri Lanka, Suriname, Tajikistan, Timor Leste, Uruguay and Vietnam attended the Leaders session. Thirty-four foreign ministers and 118 ministers joined the ministerial sessions of the summit.

$2.5 million fund for Promotion of Trade

India outlined the objectives of the “Global Development Compact,” emphasizing a multi-faceted approach for development. The initiative, that was announced in the summit will prioritize trade for development, capacity building, technology sharing, and project-specific concessional finance and grants. To enhance trade promotion further among the Global South, India will establish a special $2.5 million fund and separately provide $1 million for training in trade policy and negotiation. The Global Development Compact will promote trade, technology sharing, and concessional financing, drawing on India’s growth experience and aligning with the priorities of developing countries.

Trade and sustainable development were key priorities in the summit, emphasizing the necessity of fair trade practices and sustainable development goals. India highlighted women-led development as a crucial component of this agenda, recognizing the role of women in driving economic growth and innovation.

In the virtual summit, it was announced that India is contributing to the SDG Stimulus leaders group to address financial stress and development needs in the Global South. The initiative is ideated to make affordable generic medicines accessible, supporting the training of drug regulators, and sharing technology and experiences in ‘natural farming’ to advance agricultural practices.

During the leaders’ session of the summit, advancement of digital infrastructure was portrayed as revolutionary, with India championing the Unified Payment Interface (UPI) as a model for financial inclusion. This digital payment not only simplifies transactions but also connects Global South nations in a unified financial network, facilitating easier cross-border transactions and economic integration.

While addressing, Prime Minister Modi emphasized that the upcoming UN Summit of the Future represents a vital platform for Global South nations to present their concerns and influence global governance. The Indian Prime Minister, who anchored the summit, highlighted the summit as a key opportunity for these countries to advocate for a more inclusive system at the global level. UN Summit of the Future is expected to offer the Global South nations ensure their priorities and perspectives are adequately represented in shaping future global policies.

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Impact of Independence on Global South

thegeoeconomics.com | August 16, 2024

Nationalism and the quest for independence have shaped the trajectory of developing nations in the Global South. Emerging from the grip of imperialism, the countries of Africa and Asia have undergone significant transformations driven by their desire for self-determination, national identity, socio-economic development, and ultimately, autonomy.

The rise of nations like India, Nigeria and Vietnam as global economic powers has notably impacted their own nations as well as their Global South partners. In both the continents Asia and Africa, nationalism emerged as a powerful force against imperialist powers. The late 19th and early 20th centuries saw a growing awareness among people of their shared identity and right to self-governance, fueled by cultural revival and global anti-colonial movements.

In Vietnam, leaders like Ho Chi Minh ignited the spirit of nationalism through their resistance against French colonial rule and later American intervention. The struggle for independence, marked by intense conflict, culminated in the establishment of the Democratic Republic of Vietnam in 1945.

Indian nationalism was propelled by figures such as Mahatma Gandhi, who championed non-violent resistance and self-rule. The Indian National Congress, initially a forum for moderate reform, evolved into a major political force demanding complete independence. The success of the Indian independence movement in 1947 set a precedent for other Asian nations.

Kwame Nkrumah, a prominent figure in Ghana’s independence movement, advocated for pan-Africanism and self-governance. Ghana’s independence from British rule in 1957 was a significant milestone, symbolizing the end of colonial rule on the continent and inspiring other African nations. The Algerian War of Independence (1954-1962) was a severe conflict against French colonial rule, with leaders like Ahmed Ben Bella and the National Liberation Front (FLN) playing crucial roles in securing Algeria’s independence, demonstrating the fierce resistance against colonial powers.

Upon gaining independence, Asian and African nations faced numerous socio-economic and political challenges in the process of nation-building. This involved establishing political structures, economic systems, and national identities from the remnants of colonial rule. After independence, India, under the leadership of its first Prime Minister Jawaharlal Nehru, established a framework for democratic governance and planned economic development. Similarly, Nigeria, after gaining independence in 1960, encountered challenges related to ethnic diversity and regional disparities. The Biafra conflict (1967-1970) underscored the difficulties of managing a multi-ethnic state. Kenya’s post-independence development efforts included agricultural modernization and infrastructure projects. In South Africa, the end of apartheid in 1994 marked a new era and the incident emphasizing racial reconciliation and economic reform. Nelson Mandela’s presidency symbolized a commitment to democratic governance and social justice. Many newly independent nations of the Global South faced significant challenges, including political instability, corruption, and conflict. These issues often emerged from the power structures imposed by colonial rule.

Despite these challenges, the Global South nations sought to leverage their newfound independence to engage in global diplomacy and economic cooperation. From the struggles for independence to the challenges of nation-building, the Global South nations during the post-colonial era have explored tough paths toward political and economic stability. The spirit of nationalism and the drive for independence continue to influence their ongoing development and global roles. As the nations of Global South continue to evolve, their experiences offer significant lessons on resilience, cooperation, and the pursuit of a rules-based and equitable global order.

Impact of Independence on Global South Read Post »

Voice of the Global South Summit 2024: What’s on the Global Agenda?

thegeoeconomics.com | August 15, 2024

India’s convening of the 3rd Voice of the Global South Summit virtually on August 17, 2024, reflects its ascendance at the global stage and reaffirms its dedication to extend collaboration among the Global South nations. The summit is a testament to India’s conviction in the collective potential of the Global South to adress shared challenges and explore opportunities. By positioning itself as a champion of the interests of developing countries, India aims to expand its diplomatic influence and build stronger partnerships with the partners of the Global South.

India convened the inaugural edition of Voice of Global South Summit (VOGSS) on January 12-13, 2023, followed by the second edition on November 17, 2023, both held in a virtual format. The past two editions saw the participation of over 100 countries from the Global South.

The Voice of Global South Summit is all set to convene 10 Ministerial sessions that address the Global South’s position in the existing international order and its aspirations for a more equitable system. Sessions like “Charting a Unique Paradigm for Global South” and “Global South and Global Governance” suggest a focus on developing a new framework for international cooperation that reflects the interests and priorities of developing nations.

The summit also places significant emphasis on social issues, with sessions dedicated to health, youth engagement, finance, and sustainable energy. The “One World-One Health” theme acknowledges the interconnectedness of global health challenges, while the “Youth Engagement for a Better Future” session highlights the importance of empowering young people as agents of change. The “People-Centric Approach to Global Finance” session suggests a focus on reforming financial institutions to better serve the needs of developing countries. Finally, the “Sustainable Energy Solutions for a Sustainable Future” session underscores the urgency of addressing climate change while ensuring energy security.

Overall, the ministerial session themes at the summit reflect a comprehensive agenda that seeks to address the multifaceted challenges and opportunities facing the Global South. The focus on global governance, social development, and sustainability suggests a commitment to building a more just and equitable future for the developing nations.

The ministerial sessions host a clear understanding of the interconnectedness of the challenges faced by Global South nations. For instance, the Health Ministers’ session on “One World-One Health” will directly influence the Foreign Ministers’ sessions by highlighting the transnational nature of health crises and the need for global cooperation. Similarly, the Youth Ministers’ session can inform the Education Ministers’ session by providing insights into the aspirations and priorities of the next generation. The Commerce/Trade, Information & Technology, and Finance Ministers’ sessions are intrinsically linked, as they will collectively address the economic issues of the Global South. These interdependencies among the Global South nations underscore the importance of a holistic approach to address global challenges.

The success of the Voice of Global South Summit will hinge on the ability to translate the outcomes of these ministerial sessions into coherent and implementable policies. For instance, the goals outlined in the Environment Ministers’ session will require substantial financial resources, which can be addressed in the Finance Ministers’ session. Likewise, the Information & Technology Ministers’ session will have implications for digital infrastructure, education, finance and healthcare sectors. Ensuring policy coherence across different ministries will be crucial for effective implementation and achieving the desired outcomes of the Global South nations.

Voice of the Global South Summit 2024: What’s on the Global Agenda? Read Post »

Can Football Unite Global South?

thegeoeconomics.com | August 12, 2024

Phani Bhushan

In a world, where sports often transcend the mere act of play, football stands out for its extraordinary ability to unite, inspire, and drive social change. As the founder of India Khelo Football (IKF), I have personally witnessed firsthand the power of football to not only foster individual talent but also to bring communities and nations together. This is particularly evident in the Global South, where football is not just a game, but a narrative of hope and a tool for development.

In the Global South, Football is much more than a popular sport. It is a unifier—a common language spoken across the geographical and cultural divides of the Global South. The essence of football lies in its simplicity and inclusivity, allowing it to be accessible to everyone, regardless of socioeconomic background. This accessibility makes it a powerful platform for social integration and community building.

In the Global South region, organizations like Fútbol Con Corazón in Colombia are pioneering the use of football as a transformative tool. By organizing youth football projects, they empower young people to change their world, demonstrating football’s ability to foster cooperation and prevent violence ( sportanddev). Similarly, the Football Academies for Social Impact (FASI) across Africa emphasize the sport’s educational potential, providing scholarships and nurturing talent both on and off the field. The potential for football to bring the nations of the Global South together is immense. Joint initiatives can be pivotal, such as regional tournaments, development programs, and collaborative youth engagement strategies. These efforts not only elevate the sport within the nations within Global South but also strengthen ties between them, promoting a sense of solidarity and collective identity. By sharing knowledge, resources, and infrastructures, the Global South nations can accelerate not only the development of football but also contribute to mutual advancements in social and economic arenas.

However, while FIFA, as the governing body of world football, plays a significant role in the global promotion of football, its efforts alone may not suffice to harness the full potential of football in the Global South. There is a need for a more tailored approach that addresses the unique challenges and harnesses the specific opportunities within these diverse regions. Initiatives should not only aim at developing the sport but also at leveraging it to tackle social issues such as education, gender equality, and community development.

Therefore, I advocate for a more decentralized approach where local bodies and organizations have significant autonomy to design and implement football programs that cater to the specific needs of their communities. This could be further supported by a consortium of Global South nations, working collaboratively to shape policies and direct investments in ways that are most beneficial to their collective footballing and socio-economic growth.

Football has the power to unite and uplift the Global South. As a beacon of hope and a catalyst for change, it can break down barriers. Through collaborative efforts, strategic planning, and inclusive policies, we can transform football’s passion into a powerful movement for social and economic progress, paving the way for a brighter, more connected world. By harnessing football’s potential, we can create meaningful change and advance development across the Global South.

[Phani Bhusan is founder of India Khelo Football, a serial entrepreneur and an Indian Institute of Technology alumnus.]

Can Football Unite Global South? Read Post »

Political Instability in Bangladesh, Lessons for Global South Neighbours

thegeoeconomics.com | August 10, 2024

Prof. Rajesh Kharat

During her uninterrupted 15-year tenure, Sheikh Hasina became one of the most popular leaders in the South Asian nations, after Shrimati Sirimao Bandarnayke, Shrimati Indira Gandhi and Shrimati Benazir Bhutto. Bangladesh emerged economically stronger than any other South Asian state, a nation culturally akin to the immediate neighbourhood. It served as a model for the aspiring economies of the Global South. Regrettably, despite being a popular prime minister, Hasina failed to adhere to the mandate given to her party, Awami League. Undoubtedly, she disrespected the opposition leaders and put them in jail for their alleged political conspiracies, including former prime minister Begum Khalida Zia. She mercilessly punished those who were involved in the assassination of her father, Bangabandhu Sheikh Mujibur Rahman. All judicial decisions in this matter appeared as political decisions to settle the personal vendetta. Moreover, the nexus for corrupt practices between a few political leaders of the Awami League and the government officials has also stained her political regime. For instance, the appointment of then Army Chief General Aziz Ahmed, to whom she gave a free hand, was reportedly involved in corrupt practices, including defence procurements, which also became one of the reasons for anguish among Bangladeshi people. Curbing the social media and internet, which critized her administration. As a result, her tenure practically became dictatorial, and no one could challenge her decisions.

At the same time, when the issue of unemployment was burning among the youth, an announcement of a 30 percent reservation in employment for those with relatives involved in the liberation movement. The political gimmick she employed attracted only those sympathetic to her and her father’s legacy. However, it has triggered unrest among the job-seeking students, who constitute most of Bangladesh’s population. They feared that they would be outcasts and denied opportunities from the nation’s mainstream as their forefathers were not associated with the Bangladesh Liberation Movement.

This outburst among students was fueled by radical Islamic forces, who constantly monitored them and also instigated by political forces who engaged in spreading anti-Indian sentiments for her political proximities with India. The eruption of the present political unrest is not a surprise or a sudden. It has been hatched since her victory in the 2018 elections, in which she came with a ruling majority without the existence of a real opposition party, the Bangladesh National Party. So, the protests against the reservation or quota system in employment are symbolic rather than substantive. Thus, students’ protests became a catalyst for removing Sheikh Hasina from the political scene of Bangladesh, as it was the only motive.

Bangladesh’s geostrategic location in the Indian Ocean compelled the US and China to monitor and observe the political developments, as they both have economic and strategic stakes in Bangladesh. The US expressed serious concerns about the state of democracy in Bangladesh and the conduct of recent general elections. At the same time, China followed the wait-and-watch policy as it has maximum economic and financial stakes in Bangladesh. Under the Belt and Road Initiative, China invested considerably in infrastructure development and is one of Bangladesh’s largest trading partners. In addition to this, the political violence in Bangladesh being an Islamic nation is also a concern for the US as well as China. However, none of the countries have expressed openly about it yet, but they are observing the developments in the region.

Concerns for India:

In recent times, except for Bhutan, India’s neighbourhood has been going through political upheavals that disturb the peace and tranquility of the region. For instance, Myanmar’s Military Junta government is worried and keeps itself ready to counter Rohingyas who may attempt to return there after the ousting of Sheikh Hasina. In the Maldives, ministers openly criticised India for India’s military presence.

Nepal has also seen political shifts, with hardliner Mr. K P Oli Sharma returning to power and advocating an ‘India-Out’ slogan. His return to power in Nepal is also a concern for India. Pakistan too is facing economic and political turmoil. The establishment in Pakistan is not losing any opportunity to diminish India in South Asia and incite anti-India sentiments among the people of neighbouring states Bangladesh, Maldives and Nepal. They share immediate borders with India, so it will directly impact India. Given this hostile environment, India must remain vigilant, monitor regional political developments, and respond accordingly.

It appears that the constant violence in Bangladesh, which began a few weeks before to remove Sheikh Hasina from political power, has now deviated from its motive. The rioters, who are anti-Awami League, combined with radical Islamic forces, are on the verge of erasing the historical legacies, cultural symbols, and memories of the Liberation movement. It is a grave concern that the youth of a nation wants to do away with the legacies of the freedom struggle and sacrifices of their freedom fighters and set new narratives which may be probably based on monolithic idea. Though the interim government in Bangladesh is under the supervision of Nobel Laureate Prof Muhammad Yunus, the uncertainty of backlash still hangs over the head. Especially the minorities, party workers and bureaucrats, closely associated with the Awami League, are the targets of the protesters. Consequently, the victims may try to cross the Indian borders for refuge and safe sanctuary. The burden of these refugees will affect the economy, society, demography and the political structure of border states like Assam, Tripura, and West Bengal. Therefore, extra efforts must be made to keep a strict vigil on the borders to avoid illegal border-crossings. The burning of the Indira Gandhi Cultural Centre in Dhaka signalled that the cultural proximities of Bengali nationalism with India are under challenge and may not work as a cementing factor between India and Bangladesh as it did with the previous government.

The ongoing political crisis in Bangladesh may be an eye-opener to the rest of the South Asian countries as one of the youngest nations in the region has been constantly going through political violence since its independence and the removal of the Head of the State/Government by the uprisings. A feeling of exclusion provoked the youth to be in a rebellious mood against their own country. This serves as a crucial lesson for other South Asian and neighboring Global South nations: they must not overlook the aspirations of their youth or take them for granted. They are principal stakeholders in the Global South’s development in the coming years.

[Rajesh Kharat is Professor and former Chairperson, South Asian Studies, JNU, New Delhi. The opinions expressed in this piece are those of the author and do not necessarily reflect the stance of COGGS.]

Political Instability in Bangladesh, Lessons for Global South Neighbours Read Post »

ASEAN- Africa Pioneering Spirit of Global South

thegeoeconomics.com | August 9, 2024

The Association of Southeast Asian Nations (ASEAN) stands as an economic and political powerhouse within the Global South, comprising Brunei Darussalam, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Each of these ten member states contributes its unique economic flavor, making ASEAN a melting pot of economic prowess and developmental diversity. From high-flying achievers to rapidly developing nations, ASEAN is keenly interested in engaging with the emerging markets of Africa.

Africa, with a population of 1.5 billion and a GDP of approximately $3 trillion, is a vibrant market. ASEAN’s population is approximately 660 million, where rising income levels are creating a burgeoning consumer market. The continent’s rapid urbanization and economic development are the main reasons of emerging demand across various sectors. The partnership between ASEAN and Africa is marked by mutual benefits; ASEAN countries can tap into Africa’s burgeoning markets, characterized by a growing middle class and increasing purchasing power. Conversely, African nations can leverage ASEAN’s established trade networks and technological advancements to enhance their economic sectors and partnership.

In Africa, the African Continental Free Trade Area (AfCFTA) is initiated to create a single continental market for goods as well as services. The AfCFTA is expected to enhance intra-African trade, facilitate investment flows, and drive economic growth across the continent. As Africa’s consumer market expands, it presents a tremendous business opportunity for trade, including those from ASEAN, to tap into new markets and capitalize on emerging economic trends.

Both ASEAN and Africa are embracing digital transformation for economic progress and prosperity. ASEAN’s advanced technological infrastructure and innovation-driven economy provide a solid foundation for collaboration in areas such as e-commerce, energy, fintech, and digital services. There lies a great scope in collaboration for renewable energy, agritech, and smart cities. Collaborative efforts in research and development can lead to the creation of cutting-edge solutions tailored to both regions’ needs.

As the largest country in Southeast Asia by both area and population, Indonesia commands a prominent position in ASEAN’s economy. The nation is known for its innovation and constant appetite for scaling newer height. For Kenya, Nigeria, South Africa, and other developing African economies, aligning trade policies with ASEAN’s economic strategies can facilitate a more conducive environment for export promotion. By harmonizing trade regulations and reducing tariff barriers, the African can enhance their competitiveness in ASEAN markets.

For instance, Kenya’s impressive horticultural sector could benefit from improved access to ASEAN’s large consumer base, while Nigeria’s oil and gas industry could find new markets for its exports. Collaboration between ASEAN and African nations in transport infrastructure, such as roads, railways, and ports, can significantly reduce the time and cost of moving cargos. For example, the development of improved logistics networks in Kenya can enhance its connectivity with ASEAN markets, making it easier to export goods like coffee.

As global trade increasingly tilts towards Asia, ASEAN is flexing its economic muscles, positioning itself as a major trendsetter in the global marketplace. When coupled with Africa, the partnership empowers Africa’s and ASEAN’s influence, across the Global South. The synergy not only boosts trade between the two regions but also balances and strengthens the global economic stage. By blending their distinct strengths, tackling shared challenges, ASEAN and Africa are charting a bold new path to economic prosperity in the Global South. Their fast-growing partnership is exptected to spark a wave of growth and innovation.

ASEAN- Africa Pioneering Spirit of Global South Read Post »

What Bangladeshi Trade Experts say about Trade after Hasina?

thegeoeconomics.com | August 7, 2024

The sudden fall out of Sheikh Hasina’s government has undoubtedly thrown Bangladesh into a period of chaos; however, trade and commerce with India, China and traditional partners will remain unaffected, speaking to COGGS Bangladeshi economists and trade experts remarked.

Amid ongoing discussions on Comprehensive Economic Partnership Agreements (CEPAs), and following the finalization of infrastructure projects such as the establishment of several new railway lines, bus services and connectivity projects, India and Bangladesh now face an unexpected challenge due to political turmoil in Bangladesh.

In an interview with COGGS, Dr. Fahmida Khatun, Executive Director of Centre for Policy Dialogue, opined, “With change of government there is no risk of trade relations. Because, trade happens among countries based on comparative advantage. So, I do not see any reason for any change in trade relations with our trading partners.”

Parvez Karim Abbasi, Assistant Professor at the Department of Economics of Dhaka based East West University opined, “If Delhi truly values friendship or it really has strategic interests, it should not limit its relations to just one political party. The primary source of anti-Indian sentiment stems from India’s support of the Awami League in the 2014, 2018, and 2023 elections. The Hasina government largely ignored the economic struggles and sentiments of the Bangladeshi people.

According to the experts, the export from India, China and several other countries are halted for the time being but supply of vegetables, electricity and other essentials from India as well as traditional partners will not be hampered.

In an interview on August 7, Abbasi further stated, “India remains “the country of choice for Bangladeshis” for several reasons from culture to tourism to business. India should consider public opinion in Bangladesh and respect their choice of leadership.”

According to the economist, informal trade volume makes the trade figure higher than estimated bilateral trade (about $12-15 billion), with smuggling occurring.

Lag Period Effect

Trade, after all, is driven by fundamental needs and requirements, rather than the nature of government-to-government relations, Sajjadur Rahman, Deputy Editor of Bangladeshi financial daily The Business Standard remarked.

Surrounded almost entirely by India, the delta nation benefits from a network of efficient connectivity that serves as the backbone of its economic progress. This intricate web of transportation and communication infrastructure between districts of Bangladesh and states of India is meticulously designed to facilitate trade, ensuring that economic flows remain steady.

On a typical day, around 4,500 twenty-foot cargo containers would flow through the ports of Bangladesh. Today, however, only 500 containers sit idle at the ports, Rahman said. This dramatic drop in daily cargo shipment is due to security situation as there is no police presence on the road following recent agitation in the country.

The lag period will have effects of up to one to two months, Abbasi remarked. Europe and North America account for about 60-70 percent of Bangladesh’s total exports, whereas India and China are the largest sources of imports.

India-Bangladesh Trade After Hasina

The well-established connectivity between Bangladesh and India is not merely a convenience but a critical element of Bangladesh’s economic strategy. Without such a comprehensive and strategically placed network, the nation’s ability to meet its economic objectives would be significantly hampered, Rahman remarked.

In the views of Abbasi, despite widespread claims of economic progress, banks were looted, many people were experiencing minimal income growth. The government was highlighting a rise in per capita income, but this figure often masked the true economic conditions faced by the people. This disparity between reported income growth and actual earnings suggested that the reported statistics might not fully reflect the economic hardships of the common. Furthermore, the country’s GDP-Tax ratio was among the lowest in the world. But as Bangladesh will be exploring opportunities of boosting trade, still there are chances of signing Comprehensive Economic Partnership Agreement with India.

In the views of Dr. Khatun, “the so called economic growth projected by the Hasina government was not inclusive and did not benefit the majority of the population as the nexus among corrupt politicians, bureaucrats and businessmen have weakened the economic fundamentals and increased inequality in the country.”

“All major economic indicators are on a downward fall and macroeconomic stability is broken. So, the interim government has a lot of challenges on economic fronts. But hopefully, with correct policies and enabling environment the economy will turnaround,” she added.

In recent years, Bangladesh has developed several facilities and mega projects, despite economic challenges. According to Asst. Prof. Abbasi, massive corruption, capital flight, and non-performing loans have significantly impacted the economy. Financial institutions ceased reporting the inflation rate monthly and instead began reporting it quarterly. Additionally, some of the formerly high-performing banks, such as Islami Bank and Sonali Bank, have seen a notable decline in their operations.

Bangladesh annually receives formal remittances amounting to approximately $25 to $26 billion as Asst. Prof. Abbasi said. Informal remittances are estimated to contribute an additional $10 to $12 billion each year in Bangladesh.

What Bangladeshi Trade Experts say about Trade after Hasina? Read Post »

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