Impact of Independence on Global South

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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.

 

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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.

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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.

 

 

 

 

 

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

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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.

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Can Football Unite Global South?

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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.

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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.

 

Phani Bhushan

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.]

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Political Instability in Bangladesh, Lessons for Global South Neighbours

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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.

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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.]

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ASEAN- Africa Pioneering Spirit of Global South

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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.

ASEAN Map

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.

 

 

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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.

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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.

 

 

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What Bangladeshi Trade Experts say about Trade after Hasina?

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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 »

Mapping the Global South: Latitude to Legacy

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The term “Global South” has often been tossed around in power corridors over the decades, but it’s not yet a heavyweight consortium or a prime power block. The reluctance of many African, Asian, and Latin American countries to support NATO in the Ukraine conflict has spotlighted the Global South. Encompassing around 88 percent of the world’s population, the Global South operates in the major geography of the world, gaining its clarity and cohesion as the world shifts towards a multipolar system.

Seen as the habit of the world’s “have-nots,” the block Global South  is often associated with scarce resources, food insecurity, and a slew of health challenges. Despite its struggles, the Global South is proving to be a formidable player, replete with resilience and emerging influence that defy stereotypes and standards, set by the mighty nations of the West.

Writing in Chatham House, acclaimed  Singapore based expert Kishore Mahbubani has drawn a compelling comparison between two distinct blocs: the Global South and the Western elite’s G7.  His analysis underscores the shifting dynamics in global influence, contrasting the growing assertiveness of the Global South with the established power of the G7.

Global South
Global South Map

Writing in Chatham House, acclaimed Singapore based expert Kishore Mahbubani has drawn a compelling comparison between two distinct blocs: the Global South and the Western elite’s G7.  His analysis underscores the shifting dynamics in global influence, contrasting the growing assertiveness of the Global South with the established power of the G7.

 

“In 1980, the G7 accounted for about 50 per cent of the world’s GDP in purchasing power parity terms, while the BRICS countries – excluding Russia, then part of the Soviet Union – accounted for about 11 per cent.

Today, the G7 accounts for 30 per cent of the world’s GDP, while the BRICS countries account match it at around 30 per cent. Equally importantly, the membership of BRICS is growing dramatically, while the G7’s is stagnant,” Mahbubani compares.

The Global South, often perceived through a lens of neglect, is not merely overlooked but systematically exploited by the colonial powers. This exploitation manifests in various forms—economic dependency, uneven trade practices, and political manipulation—which perpetuate a cycle of subordination and vulnerability. Far from being a passive recipient of global neglect, the Global South has historically been subject to active exploitation, with its resources, labor, and markets frequently exploited for the benefit of the wealthier nations.

Etymology and Origin of Global South

The term Global South is believed to be coined by American Polical Acvisit Carl Oglesby in his  After Vietnam, What?, published in  Commonweal, March 21, 1969.

The phrase “Global South” acts as a shorthand for the political and economic struggles of nations that have historically been sidelined  by the wealthier or imperialist nations of the Global North.  Oglesby’s term drew from an intellectual tradition that had been critiquing global power imbalances long before he christened it. This lineage includes Antonio Gramsci, who in his 1926 essay The Southern Question, argued that northern Italian capitalists had effectively colonized and exploited the southern regions of Italy, creating a form of internal dependency and inequality.

Tough Hurdles and Unity

Several Global South countries in Africa and Asia are severely affected or rather burdened by debt traps, where international loans come with high-interest rates and stringent conditions that stifle their economic development. The promise of aid and investment often comes with strings attached, designed to favor the interests of donor countries rather than addressing the developmental needs of the recipient nations. This relationship creates a dependency that hampers the ability of Global South countries to build sustainable, autonomous economies. Hence the co-operation and fraternity are essential within the Global South nations, industries and institutions.

Ascendancy of Global South

While some might think the Global South is too far to influence global trends and developments, ideas from the global south across geographies proves them wrong. For instance, China is an outlier among many leading economies and distinguishes itself further by achieving an exceptional rate of GDP growth, averaging just over 9 percent annually since 1990 and even once exceeding 14 percent, a pace significantly faster than its upper-middle-income peers and the global average. Brazil, China, India, the Philippines, Vietnam, Indonesia and South Africa all these fastest growing economies are in the Global South.

Global South is a trendsetter in science, innovation and popular culture. India’s space agency, ISRO, has managed to send satellite to the moon for less than the cost of a blockbuster Hollywood movie production. During the COVID, India has been busy shipping homegrown vaccines worldwide.  Reggae from Jamaica, Bollywood films from India, and Afrobeat from Nigeria have transcended borders, becoming global sensations that shape pop culture. These are creating tidal waves in the world of music and film. All these are widely celebrated and appreciated across the globe including in the West.

With the formation of the block Global South, the developing nations across continents seek to address the shared challenges – while amplifying its voice in global affairs.  The primary goal of the Global South is economic transformation and societal upliftment, rather than engaging in power struggles. Leaders from the Global South are vocally pushing for a reconfiguration of the global order towards multipolarity. The Global South, once defined merely by its geographical latitude, is now making a powerful legacy and asserting a significant role in the realm of geoeconomics.

Mapping the Global South: Latitude to Legacy Read Post »

Vietnam PM’s India Visit Sparks Synergies for Global South

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Photo Credit: ICWA and Ministry of External Affiars, India.

Vietnamese Prime Minister Pham Minh Chinh’s maiden state visit to India from July 30 to August 1, 2024, perfectly coincided with India’s preparations to host the third Global South Summit on August  17. Amidst the whirlwind of negotiations and deal-making,  PM  Pham Minh Chinh, along his Indian counterpart Narendra Modi put a spotlight on the Global South’s significance.

India’s Ministry of External Affairs, or South Block, applauded  Vietnam’s spirited support and commitment to strengthening the Global South’s standing. 

Answering a question on Vietnam’s interest on the Global South, Jaideep Mazumdar, Secretary (East), of the  Ministry of External Affairs stated, “Prime Minister appreciated the fact that Vietnam has been very supportive of the Global South and has attended both the events that we had last year, and hoped that Vietnam would participate in our future activities with regard to the Global South. And the Vietnamese Prime Minister assured that Vietnam would be a very willing and happy participant in all our initiatives in the Global South. As I mentioned, he indicated that Vietnam is fully supportive of India’s role in world affairs and all the initiatives that we take.”

Special Briefing on the State Visit of Prime Minister of Vietnam to India (August 01, 2024) (youtube.com)

In an interview with COGGS, Dr. Sripathi Narayan, a New Delhi based ASEAN observer elucidated that Global South is often regarded as a conceptual framework rather than a concrete entity. “Within this framework, all eyes are on India due to its vast diversity and the myriad challenges it shares with other developing nations.”

Dr. Narayan pointed out that the Global South could provide Vietnam with a valuable avenue for exploring potential solutions to its own challenges.  Dr. Narayan further  noted,  “while the issues faced by the Global South align closely with those addressed by the Global Commons, the specific concerns of the Global South are not fully encompassed by the Global Commons’ agenda.

Photo Credit: MEA

Vietnam- India Ties on Upward Trajectory

From the heartland of  Southeast Asia— Vietnam is emerging as key architects in shaping the economic trajectory as well as political strength of the region and the Global South.

In recent years, the incumbent-level party-to-party contacts between India and Vietnam have grown. India-Vietnam bilateral trade has skyrocketed by over 85%, and the connection between the two nations is now so robust that 56 flights are constantly shuttling back and forth.  The bilateral cooperation between two aspiring nations  isn’t just taking off; it’s soaring across key sectors like energy, technology, and  in defense and security, their collaboration is gaining momentum.

Since establishing Comprehensive Strategic Partnership in 2016, trade between Vietnam and India has surged, reaching approximately $15 billion. However, this impressive growth still pales in comparison to Vietnam’s trade with China, which totaled $171.2 billion in 2023, and with the US, which stood at about $125 billion. New Delhi and Hanoi have a desire to achieve $20 billion in bilateral trade by 2030 and to double the value of their investments.

While in New Delhi,  PM Pham Minh Chinh, along with PM Modi  virtually inaugurated the Army Software Park in the Telecommunications University in Nha Trang in Vietnam, financed by India. Vietnamese PM has welcomed India’s Global Bio-fuel Alliance initiative and both nations have agreed to enhance collaboration in oceanography, marine sciences, and the blue economy. It’s clear that New Delhi and Hanoi also have plan to strengthen their cooperation in oil and gas exploration and production, particularly in Vietnam’s continental shelf.

Vietnam-India Defence Co-operation

The joint naval engagements, including port visits by Indian ships and the gifting of the INS Kirpan corvette, exemplify the practical and symbolic dimensions of the partnership between India and Vietnam. Moreover, their participation in multilateral and bilateral military exercises not only strengthens their defense collaboration but also signals a unified stance on regional security challenges.  Such exercises enhance their operational synergy and reflect a broader  alignment within the Global South. During the Prime Minister’s visit, India extended a set of two lines of credit worth $300 million for procuring two types of patrol boats.

India has the ability to be the key arms supplier for Vietnam, with recent interest of Hanoi on acquiring India’s Akash surface-to-air missile system and Indo-Russian BrahMos supersonic cruise missile.

Back in June 2022, Indian Defense Minister Rajnath Singh and Vietnamese Defense Minister Gen. Phan Van Giang signed a “Joint Vision Statement on

 India-Vietnam Defense Partnership Towards 2030″ and a Memorandum of Understanding on Mutual Logistics Support, marking Vietnam’s first such major agreement  with another nation.

The blossoming partnership between Vietnam and India is a prime example of how the Global South nations are banding together to boost their collective clout. In the vibrant atmosphere of the Global South, they have got a better space for scripting their own chapter—showcasing their bravura, addressing  their challenges, and sharing their unique experiences with their fellow members of the fraternity.

As both countries champion the causes of the Global South, their collaboration is bound to play a significant role in shaping global policies. By focusing on enhancing bilateral and regional ties, India and Vietnam are not only bridging trade gaps but also reinforcing their strategic collaboration. This deepening alliance between the two economies is set to be a cornerstone for a more influential, cohesive and economically viable Global South.

References

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Primary Sector Paradox of the Global South: Economic Drivers and Challenges

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The economies of many countries in the Global South are heavily dependent on the primary sector, which includes agriculture, mining, and resource extraction. These sectors often form the backbone of their export earnings and GDP. The Global South, comprising developing countries in Africa, Asia, and Latin America, has traditionally relied heavily on the primary sector for economic growth and development.

According to World Bank data, agriculture alone accounts for over 25% of GDP in many low-income countries, particularly sub-Saharan Africa (World Bank, 2022). The United Nations Conference on Trade and Development (UNCTAD) reports that in 2020, agricultural raw materials and food comprised around 10% of total merchandise exports from developing countries. Mining and fuel exports are also significant, making up over 20% of the same year’s merchandise exports from developing countries (UNCTAD, 2021).

Several factors have contributed to the primary sector focus in the Global South. Many developing countries have a comparative advantage in primary commodities due to abundant natural resources and low labour costs. The Heckscher-Ohlin model of international trade suggests that countries will export goods that intensively use their relatively abundant factors of production (Krugman et al., 2018). Additionally, colonial legacies and unequal terms of trade have often locked developing countries into primary commodity dependence (Frank, 1966).

However, reliance on the primary sector has also posed significant challenges for the Global South. Primary commodity prices are notoriously volatile, leading to boom-bust cycles and macroeconomic instability. The Prebisch-Singer hypothesis argues that the terms of trade for primary commodities tend to deteriorate over time relative to manufactured goods, leading to a transfer of wealth from the periphery to the core (Prebisch, 1950; Singer, 1950). Moreover, the primary sector often has weak forward and backward linkages to the rest of the economy, limiting its potential for job creation and technological spillovers (Hirschman, 1958).

The environmental and social costs of primary sector dependence can also be high. Extractive industries like mining and oil drilling are associated with pollution, deforestation, and the displacement of local communities (Bebbington et al., 2008). Agricultural expansion, particularly for cash crops, has also led to deforestation and biodiversity loss in many regions.

Despite these challenges, the primary sector remains vital to many Global South economies. However, there is growing recognition of the need for economic diversification and value addition. The United Nations’ 2030 Agenda for Sustainable Development emphasises sustainable agriculture, responsible resource management, and inclusive growth (United Nations, 2015).

Successful primary sector-led development will require strategic policies and investments. Strengthening linkages between the primary sector and the rest of the economy through local content requirements and processing industries can help create jobs and foster industrialisation. Investing in agricultural research and extension, rural infrastructure, and smallholder support can boost productivity and food security. Implementing environmental and social safeguards can help mitigate the negative impacts of extractive industries.

In conclusion, while the primary sector has been a key driver of growth for many countries in the Global South, it has also posed significant challenges and limitations. Moving forward, a more diversified and sustainable approach is needed to harness the potential of the primary sector while promoting industrialisation, value addition, and inclusive development. With the right policies and investments, countries in the Global South can build more resilient and prosperous economies for the future.

References

  • Bebbington, A., et al. (2008). Development and Change, 39(6), 887–914.
  • Frank, A. G. (1966). Monthly Review, 18(4), 17–31.
  • Hirschman, A. O. (1958). The Strategy of Economic Development. Yale University Press.
  • Krugman, P. R., et al. (2018). International Economics: Theory and Policy (11th ed.). Pearson.
  • Prebisch, R. (1950). The Economic Development of Latin America and Its Principal Problems. United Nations.
  • Singer, H. W. (1950). American Economic Review, 40(2), 473-485.
  • United Nations. (2015). Transforming our World: The 2030 Agenda for Sustainable Development.
  • UNCTAD. (2021). Merchandise trade matrix in thousands United States dollars, annual.
  • World Bank. (2022). Agriculture, forestry, and fishing, value added (% of GDP).

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Supply-Side Economics in the Global South: Promises, Challenges, and the Quest for Inclusive Growth

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Supply-side economics has played a significant role in the global South, contributing to economic growth and uneven benefits. To build on this foundation, a more comprehensive strategy is necessary, one that leverages market dynamics and incentives while prioritising broad-based development, poverty reduction, and long-term productivity growth. By implementing the right balance of policies, countries in the global South can work towards achieving a more inclusive and sustainable development path.

Many countries in the Global South have embraced supply-side economics, often as part of structural adjustment programs. Supply-side economics has been a significant driver of economic policy in the Global South in recent decades. It emphasises increasing economic growth and productivity through policies encouraging production, investment, and innovation. These policies usually involve lowering tax rates, reducing regulations, privatising state-owned enterprises, liberalising trade, and attracting foreign investment (Bauer, 2000). The rationale is that by improving the business environment and incentives on the supply side, economies can expand their productive capacity and efficiency, leading to sustained growth and development.

Many countries in the global South have embraced supply-side economics, often as part of structural adjustment programs mandated by international financial institutions like the International Monetary Fund (IMF) and World Bank. In Latin America, countries like Chile, Mexico, and Brazil undertook extensive market reforms and liberalisation starting in the 1980s (Williamson, 1990). Chile, in particular, became known for its aggressive, free-market policies under the guidance of the “Chicago Boys” economists. As a result, Chile’s economy grew by an average of 7% per year between 1985 and 1997 (Kurtz, 2001).

In Asia, India launched major economic reforms in 1991 to open up to global trade and investment, deregulate industries, and reduce the state’s economic role. These reforms have been credited with unleashing India’s entrepreneurial potential and enabling the country to achieve an average GDP growth rate of around 7% since the mid-1990s (Ahluwalia, 2002). China’s economic miracle has also been underpinned by supply-side policies like creating special economic zones, liberalisation of agriculture, and massive infrastructure investments. Between 1978 and 2010, China achieved an average annual GDP growth rate of 10% (Morrison, 2014).

However, the impact of supply-side economics in the global South has been mixed. While some countries have seen significant economic growth and poverty reduction, the gains have often been uneven. In many cases, the benefits of growth have accrued disproportionately to urban elites and the owners of capital, while large segments of the population remain stuck in poverty. Income inequality has risen in many countries pursuing supply-side policies. For example, despite China’s impressive growth, income inequality, as measured by the Gini coefficient, has increased from 0.30 in 1980 to 0.55 in 2012 (World Bank, 2014). In 2022, China reached a score of 46.7 (0.467) points. (Textor, 2024)

Moreover, the focus on export-led growth and foreign investment has left many countries vulnerable to global economic shocks. The 2008 financial crisis, for instance, had a severe impact on export-dependent economies in the global South. In Mexico, GDP contracted 6.5% in 2009 as demand for its manufacturing exports plummeted (Villarreal, 2010). Supply-side policies have also often failed to create enough jobs to keep pace with the rapid growth of the labour force in developing countries. For example, the economy has struggled to generate sufficient employment in India, with the labour force participation rate declining from 58% in 2004 to 53% in 2012 (Mehrotra et al., 2014). In 2023, the labour force participation rate (LFPR) in urban areas increased to 50.4 per cent (Rathore, M. 2024).

Critics argue that supply-side economics neglect the importance of domestic demand and human capital development. Policies that suppress wages and fail to invest adequately in education and health may boost short-term competitiveness but undermine long-term productivity and innovation (Stiglitz, 2002). A study by Barro (2001) found that human capital, as measured by years of schooling and health indicators, was a significant determinant of long-term economic growth.

To achieve more inclusive and sustainable development, countries in the global South may need to adopt a more balanced approach that combines supply-side reforms with demand-side policies and investments in human capital. Progressive taxation and social safety nets can help reduce inequality and expand domestic markets. Industrial policy and government support for research and development can foster innovation and technological upgrading. Investing in quality education and healthcare can build the skilled and healthy workforce to move up the value chain.

References

  • Ahluwalia, M. S. (2002). Economic Reforms in India Since 1991: Has Gradualism Worked? Journal of Economic Perspectives, 16(3), 67-88.
  • Barro, R. J. (2001). Human Capital and Growth. American Economic Review, 91(2), 12–17.
  • Bauer, P. T. (2000). From Subsistence to Exchange and Other Essays. Princeton University Press.
  • Kurtz, M. J. (2001). State Developmentalism Without a Developmental State: The Public Foundations of the “Free Market Miracle” in Chile. Latin American Politics and Society, 43(2), 1–25.
  • Mehrotra, S., Gandhi, A., & Sahoo, B. K. (2014). Is India’s Long-Term Trend of Low-Quality Employment Growth Reversing? Economic & Political Weekly, 49(7), 83-91.
  • Morrison, W. M. (2014). China’s Economic Rise: History, Trends, Challenges, and Implications for the United States. Congressional Research Service.
  • Rathore, M. (2024). Rate of labour participation across India 2023
  • Stiglitz, J. E. (2002). Globalisation and Its Discontents. W. W. Norton & Company.
  • Textor, C. (2024). Gini index: inequality of income distribution in China 2012-2022
  • Villarreal, M. A. (2010). The Mexican Economy After the Global Financial Crisis. Congressional Research Service.
  • Williamson, J. (1990). What Washington Means by Policy Reform. In J. Williamson (Ed.), Latin American Adjustment: How Much Has Happened? (pp. 7–20). Institute for International Economics.
  • World Bank. (2014). World Development Indicators. Retrieved from http://data.worldbank.org/indicator

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China Leads BRICS in Challenging Financial Inequality in the Global South

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Mohammed Saqib​

Center of Geoeconomics for the Global South (COGGS), UAE

As the world grapples with the lingering effects of the COVID-19 pandemic and ongoing economic instability, the need for a more equitable global financial system has become increasingly urgent. The Global South, in particular, has long been trapped in a cycle of financial dependency and exploitation, with Western-dominated institutions perpetuating a form of financial slavery that hampers the development and sovereignty of nations.

The Global South is keen to reduce its dependence on traditional financial institutions dominated by developed countries and establish a more equitable and inclusive global financial system. China and the BRICS nations are working together to challenge this status quo and address developing countries’ financial disparities.

One of the most significant and tangible initiatives of BRICS to combat financial slavery is the establishment of the New Development Bank (NDB), formerly known as the BRICS Development Bank. Founded in 2014, the NDB has a subscribed capital of $50 billion and an initial authorised capital of $100 billion. The NDB aims to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies. It has approved over 96 projects worth $33 billion in sectors like renewable energy, transportation, and water management. The NDB provides alternative financing options to reduce dependency on institutions like the World Bank and IMF, which are criticised for imposing stringent conditions and perpetuating economic inequalities.

China has been leading the BRICS nations in actively promoting the use of local currencies in international trade and financial transactions. According to data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the share of the US dollar in global payments has declined from 44.1% in 2015 to 38.4% in 2020, while the share of the Chinese yuan has increased from 2.0% to 4.5% during the same period (SWIFT, 2021). BRICS established the Contingent Reserve Arrangement (CRA) with $100 billion to provide emergency funds during balance of payments difficulties. The CRA has helped member countries cope with financial crises, including supporting them during the COVID-19 pandemic (BRICS, 2021).

Apart from leading the initiatives of BRICS, China’s Belt and Road Initiative (BRI), launched in 2013, is another significant effort to address financial slavery in the Global South. The BRI aims to create a vast network of infrastructure projects connecting Asia, Africa, and Europe, promoting economic integration and development. According to estimates based on transactional data, the value of China’s investment and construction projects in 147 BRI countries totalled around 67.8 billion U.S. dollars in 2022. By 2027, total global BRI spending is estimated to reach $1.3 trillion. Other economic forecasts predict more than 2,600 projects worldwide valued at $3.7 trillion. With investments in transportation, energy, and telecommunications infrastructure. The BRI has also facilitated trade and investment between China and the Global South, with China becoming the largest trading partner for many developing countries.

China has been a key player in establishing and running the Asian Infrastructure Investment Bank (AIIB) alongside the Belt and Road Initiative (BRI). Founded in 2016, the AIIB is a multilateral development bank aimed at supporting infrastructure development in Asia and beyond. As of December 2022, the AIIB had approved over 233 projects worth more than $45 billion. The AIIB provides alternative financing options, reducing developing countries’ reliance on institutions like the World Bank and the International Monetary Fund (IMF).

China has been a pivotal lender in Africa, extending loans exceeding US$170 billion to 49 African countries and regional institutions between 2000 and 2022. It is also one of the major financiers of infrastructure projects in sub-Saharan Africa, with a total investment of $155 billion over the past two decades (Nikki Asia, March 2023).

China, along with BRICS countries, has been involved in debt relief and restructuring initiatives to help alleviate the financial burdens of the Global South. China has participated in the G20 Debt Service Suspension Initiative (DSSI), which provides temporary debt relief to eligible low-income countries during the COVID-19 pandemic.

China has restructured or cancelled debts for several African countries. According to Johns Hopkins University’s China Africa Research Initiative (CARI), China wrote off at least $3.4 billion of debt between 2000 and 2019, almost all interest-free loans to African countries. As of 2022, China has forgiven 23 interest-free loans in 23 countries.

Furthermore, China has been a strong advocate for reforms in global financial governance. The country has called for greater representation and voting rights for developing countries in international financial institutions.  The voting shares of BRICS nations in the IMF and the World Bank are significantly lower than their share of global GDP. For example, as of 2021, the combined voting share of BRICS nations in the IMF is approximately 14.7%, while their share of global GDP in nominal terms is around 26%. China’s own voting share in the IMF and the World Bank is significantly lower than its share in global GDP. Its share voting share in IMF is approximately 6.4%, while its share of global GDP is around 19%. By challenging the existing power structures and pushing for a more democratic and inclusive decision-making process, China aims to create a more balanced and equitable global financial system.

China’s efforts to empower the Global South and challenge financial inequality The BRI and AIIB have provided much-needed financing for critical infrastructure projects in developing countries, helping to stimulate economic growth and reduce poverty. Promoting the RMB and trade in local currencies have helped diversify the global financial system and reduce dependency on major currencies.

Despite the criticism of China’s initiatives, like the BRI, China and the BRICS countries are working together to challenge the Western bias and address financial challenges in the Global South through initiatives such as the New Development Bank, AIIB, and debt relief and restructuring, which have shown positive results. This collaboration offers a promising alternative to traditional approaches, providing the Global South with greater autonomy and opportunities for growth. China’s role in shaping a fairer financial future for the Global South will remain significant.

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