The Global South
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Transcript of The Global South
THE GLOBAL SOUTH
The Global South
Who is the GS?Global Institutions & the GSDevelopment HurdlesGS Economic Development Tactics¤
5 CATEGORIES OF
GS COUNTRIES
Who is the Global South?
5 Categories of GS Countries
1. Emerging Markets Who are they? Growth Greater % of people =middle class
(>$10/day) Investment
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http://qz.com/172953/whose-fault-is-the-emerging-market-sell-off/
5 Categories of GS Countries
2. Countries in Transition (CITs) Central and Eastern European (East bloc
Soviet satellites) Former Soviet Republics (FSRs) Growth rates differ
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5 Categories of GS Countries
3. Frontier markets Investment category
Coined 1992 Below EEs More risk
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http://blogs.reuters.com/globalinvesting/2013/06/03/cheer-up-morocco-frontier-markets-are-hot/
5 Categories of GS Countries
4. Least Developed Countries (LLDCs) US (GDP per capita=ranks 10th) at
~$51,700 Average GDP per capita of LLDCs at $750
Burundi , Congo, Somalia at $200 GDP per capital
• http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita
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5 Categories of GS Countries
5. Heavily Indebted Poor Countries (HIPCs) 2012 IMF-WB identified HIPCs 39 countries
29 in sub-Saharan Africa Debt relief- HIPCs qualify
36 accepted full or partial relief ~$72 B 4 in process
Reliance on single cash crops Cotton accounts for 46% of Mali’s exports
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Global Institutions & the GS
Global Institutions & the GS
MNCsIGOs
IMF WB GATT WTO OECD G7, then G8, now G7 again now G20
NGOs Representation by GS Representation on behalf of GS
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INTERNAL & EXTERNAL POLICY STRATEGIES
GS Development Tactics
GS Development Tactics
Internal Policy StrategiesImport substitutionNationalization of industriesEstablishing cartelsProtectionism¤
GS Development Tactics
External Policy StrategiesRegional IGOs
ASEAN, Mercosur, SADC, SAARC, etc.International IGOs
Group of 77 (132), NAM, UNCTAD, etc.International pressure
Monetary reforms Trade reforms Development Economic sovereignty Economic aid
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Development Hurdles
Historical Disadvantages
Colonization; Neocolonialism Primary v. manufactured goods
Cash crops Natural resources
Price volatility Lack of national unity
Institutions favor GN Accrued debts in 1960s and 1970s
Lack autonomy over debt management¤
Debt Creation
Oil-rich countries
Western banks
Developing
countries
Development Hurdles
Political stability Institutions Infrastructure
Market isolationConflicting interests with GN
Self-interested actorsSustainable development expectationsCorruption ¤
Development Hurdles
How does corruption affect China? Politics
Accusations Vote-buying
Who controls what Land, licensing, title-selling Passing/ enforcing laws
FDI¤
Development Hurdles
http://theactivistwriter.com/tag/corruption-statistics/ Based on 2011 statistics from Transparency Int’l2011
Development Hurdles (cont.)
Currency instability Lack banking / credit access
41% in GS- mostly EEs- have bank accountsSub-Saharan Africa- 27% men; 22 %
women 7 % in GS have credit cards
http://www.economist.com/blogs/feastandfamine/2012/04/banking-developing-world
Gender equity¤
Women’s Development
http://www.glpinc.org/Web_pages/Illiteracy_Globally.html
Development Hurdles (cont.)
Income inequality Development income equality
More developed greater equality Less developed lesser equality Map on next slide
Income Inequality
http://en.wikipedia.org/wiki/File:Gini_Coefficient_World_CIA_Report_2009.png
Development HurdlesIncome inequality (cont.)
Stark exception is US 1% control 36% of wealth Top 10% control 75%
China: 5% control 23% of wealth Bottom 5% control .1%
Brazil: 10% control 51% of wealth Mexico & Argentina: 10% control 42% of
wealth Data from http://www.nytimes.com/2013/07/20/world/asia/survey-in-china-shows-wide-income-gap.html?_r=0 http
://en.mercopress.com/2010/03/27/gap-between-rich-and-poor-in-latinamerica-is-largest-in-the-world-says-un http://money.howstuffworks.com/one-percent-control-third-of-wealth.htm
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Development HurdlesIncome inequality (cont.)
Lower income inequality = higher growth rates http://www.imf.org/external/pubs/ft/sdn/2011/sdn1108.pdf
Consequences of income inequality Fewer people with resource access Economic opportunities tied to political
stability More susceptible to corruption Limited tax base to support government
http://www.worldbank.org/depweb/english/beyond/global/chapter5.html
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Development Hurdles (cont.)
Reliance on GN Foreign Aid Technology FDI
EmploymentFormal v. informal sectorRemittances
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Remittances
What are remittances? Who uses them?>½ to AsiaTransfers are expensive
40% of money transferred goes to rural areas Lower fees- potentially better than both aid ,
FDI Bank concerns Rely on informal systems
G8 pushed to lower fees =$30 B for migrants
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Recap
Good News?Fewer people in extreme poverty
Healthier people¤
Year Billion People % Living on <$1.25/ day1981 1.94 BP 52%2008 1.29 BP 22%2011 1.1 BP 15%http://economy.money.cnn.com/2012/03/01/650-million-escape-extreme-poverty-thanks-china/ ; http://www.un.org/News/Press/docs/2011/gaef3313.doc.htm ; http://www.worldbank.org/en/topic/poverty/overview
The Global South
Who is the GS?Global Institutions & the GSDevelopment HurdlesGS Economic Development Tactics