Ever increasing North-South divide



March 19, 2022

Ever increasing North-South divide


M Ali Siddiqi describes a gap that is increasing by the day

Ever increasing North-South divide Inequality amongst people belonging to the entire global matrix has been a perennial and persistent issue mostly causing problems hampering the harmony with the human race. Traditionally such equality was attributed to the uneven forces of nature and mostly people accepted their position with fatalistic resignation. They convinced themselves to learn to live with the uneven circumstances they had the ill fortune to exist within. However, with the passage of time it was revealed that it is not essentially the natural causes dictating human inequality but their depredation were basically man-made. Successive human generations thereafter tried to close the gap between the haves and the have-nots duly realising that uplifting them from unsatisfactory state of affairs was doable and should be done. This awareness though provided enough fillip to changing the status quo but the problem proved to be so intricate that it was not found possible to achieve a satisfactory prosperity levels of life uniformly throughout the world. It was however quite obvious that the wide differences in standards of living were so deep-rooted that it would take some extra efforts to address and finally handle them adequately.
The first step towards the final resolution in this respect was to analyse one of the most intractable problems in international relations pertaining to the polarisation between the Advanced Industrial Countries (AICs) of the Global North and the poverty-stricken Global South Less Developed Countries (LDCs). The typical developed state of the Global North is one where there is self-sustained economic growth in all industrial sectors – primary, secondary, and tertiary. LDCs are, in contrast, characterised by low GDP, low per capita GDP, low per capita growth and low life expectancy combined with high population growth rates. A third group, the Newly Industrialising Countries (NICs) of which key examples are South Korea, Taiwan, Singapore, and Hong Kong, have sometimes been termed the ‘Tiger’ economies because of their swift industrial expansions and their success in achieving export-led economic growth. There are clearly some special factors which explain the rise of the NICs in Asia. They have managed to exploit the advantages of having lower labour costs than the AICs and they combine this with a highly competitive liberal economic system. In contrast they tend to have authoritarian political systems but this does not appear to impede their economic development.
NICs have also been able to gain great advantage from their enthusiastic readiness to accept foreign investment and from the natural business skills that appear to be available within their populations. The success of the ‘Tiger’ economies is borne out by the economic statistics for 2006 which show, for example, Hong Kong with a higher per capita GDP than Germany, Canada, Belgium, and France; and Singapore with a higher per capita GDP than Australia and Italy. Hong Kong, Singapore, and Taiwan are in the top 20 per cent of countries with the highest purchasing power. Even more striking is the fact that Hong Kong and Singapore come first and second respectively in the economic freedom index calculated on the basis of ten indicators of how government intervention can restrict the economic relations between individuals. Singapore, Malaysia, South Korea, and Taiwan were all in the top 10 per cent of countries with the highest economic growth, 1991–2001.
In stark contrast, the poorest of the Least Developed Countries appear to be caught in a permanent state of turmoil. No less than 16 of the 20 countries with the lowest GDP per head are in Africa. Many LDCs have negative annual growth rates of per capita income. Demographers estimate that the world population will grow from its current total of over six billion to between 10 and 12 billion in 2050, depending on whether world fertility will continue to decline. Whatever the final future, most experts are certain that the world population will continue to grow during this century and well into the 22nd. There is also wide agreement that the most rapid growth will be in the Global South. This is because, in addition to high birth rates and falling death rates, the Global South is going to experience population momentum.
But the problem is that roughly 70 per cent of those infected with AIDS live in Africa as compared with South and South-East Asia where, it is estimated, around six million are infected with AIDS. The economic effects of the AIDS pandemic have been nothing less than calamitous. The medical services in the worst affected African countries are simply unable to cope and, because the majority of victims are young or middle aged, the effect on economic performance is devastating as families can no longer support themselves, produce food, or care for their relatives.
The third major factor threatening the very survival of the civilian population of many areas in the Global South is the effect of conflict. For example, in Africa, over 30 per cent of countries have experienced particularly lethal wars which have driven people out of their farms and villages. Last but not least, the plight of the Global South countries has been made infinitely worse by environmental disasters such as drought, desertification, and deforestation. Even many other geographical locations are not immune to these vicissitudes and face difficult situations. These issues require very high level of attention imbued with genuine considerations for welfare of the human race. Conflicts and natural tendency to keep on recurring and it is certainly not easy to get to grips with all such eventualities.
The process of globalisation which enables financial and investment markets to operate internationally, mainly as a result of deregulation and improved communications, and which allows
companies to expand and operate internationally, have not had the result of narrowing the gap between the AICs of the Global North and the LDCs of the Global South. On the contrary, the main effect has been to make the Global North states richer, because when they do choose to locate manufacturing plants in LDCs, the profit from these enterprises mainly benefits the Global North. Some commentators choose to stress the alleged advantages of ‘interdependence’ to the LDCs. In reality only those LDCs which produce commodities which are in high demand in the AICs, such as oil and natural gas, are likely to become beneficiaries of globalisation. The rest of the LDCs have become more and more dependent on aid because if they were to rely solely on the production of a simple agricultural produce, such as coffee or bananas, they would simply remain in the poverty trap forever.
Moreover, if the LDCs are dependent on exports of agricultural produce to the Global North they will find that they are confronted with protectionist trade measures of the rich states, such as tariff barriers and quotas. It was hoped that the World Trade Organisation talks would find ways of considerably reducing these obstacles, which in effect prevent LDCs from benefiting from the world trade system, but at the time of writing there was no significant breakthrough in sight. The Gleneagles 2005 Agreement of the G8 Ministers to write off very large amounts of LDC debt is certainly a welcome relief. However it is required to be recognised that this generous gesture is not going to address the fundamental causes of underdevelopment inherent in the international system. TW

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M Ali Siddiqi is a writer who contributes to leading periodicals


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