War and debt could bring South together again

December 25, 2019, 7:54 pm

The news from the West’s foremost financial institutions, the World Bank and the IMF, to the global South is of the most disheartening kind:’A wave of debt in emerging and developing nations has grown faster and larger than in any period of the last five decades and could end with another crisis.’

At first blush, this is totally unexpected news. After all, over the past few years the world was given to understand that some of the most vibrant growth centres of the globe are in the South. Are we to now understand that most of this growth is fuelled by loans, particularly by extortionate commercial credit? Is it the case that the South is living well beyond its means? These and many more queries should now comprise ‘talking points’ of the observers of Southern economics and politics.

‘The size, speed and breadth of the latest debt wave should concern us all, World Bank President David Malpass was quoted as saying by AFP recently. Expanding on this subject the IMF explained that ‘total global debt rose to $188 trillion at the end of 2018, equivalent to nearly 230 percent of the world’s economy.’ The WB adds with reference to the South that,’In just eight years since 2010, debt in these countries climbed to an all-time high of roughly 170 percent of GDP or about $55 trillion.’

We are left to conclude that the seeming Southern economic miracle is now without foundation. The South in particular is thriving on borrowed money and sooner rather later we would have among these countries a debt crisis of unheard of proportions. There is evolving in this hemisphere an economic crisis of the most ineffable kind, if the above comments by the WB and IMF are anything to go by.

It ought to be clear to the policy and decision makers of the South and the region’s think tanks that there is absolutely no validity in most of the solutions that have been tried out over the decades to the South’s economic problems. Clearly, sustained and equitable economic growth cannot be fuelled by external borrowings and economic assistance, including those being lavished on the South by the WB and the IMF. Apparently, these seeming panaceas have failed abjectly.

Nor is FDI of any notable effectiveness. The latter ‘panacea’ has been seen over the years as an essential condition for growth by influential Western quarters in particular but the financial crunch that will be soon upon the South should convince all concerned that the FDI approach to growth could be a veritable developmental dead-end. Apparently, the unquestioned expropriation of profits by external investors is proving a drain on many a Southern economy.

The lesson of history is that the political and economic future of the South is in its own hands. There is a need to get back to South-South cooperation to enable the finding of durable solutions to the hemisphere’s ills. However much wanting and limited such cooperation proved in the past, there was a measure of solidarity among Southern states in those times that facilitated the projecting of the voice of the South in world forums that mattered.

The Non-aligned Movement was one such Southern platform that enabled the case of the South to be heard in numerous issue areas. But there is no denying that NAM was an imperfect exercise. However, it does not follow that the Non-aligned path should be abandoned. Circumstances may compel the South to persist in South-South cooperation, although NAM in some important respects may be irrelevant. The emerging debt crunch could be the crucible in which South-South cooperation could be revamped and re-shaped.

The present situation in which the South finds itself will necessitate the coming together of the totality of the South, including its most powerful economies, such as China and India. But the lesser economies of the South would need to ensure that they do not barter dependence on the West for lopsided dependence on institutions, such as, the China-led Asian Infrastructure Investment Bank.

To the extent possible, the power relations within the South should be managed to enable the lesser economies of the South to be on par with the bigger economies. The major powers of the South should be compelled to relate to the lesser states on equal terms. An appropriate framework of cooperation would need to be forged to facilitate such equitable relations. The latter task should be considered as being of the first importance.

A grand coming together once again of the South is being rendered urgent by the mentioned deleterious economic trends in the South as well as by the wasting conflicts and wars of the South, which are today virtually forgotten by the world. Some such wars zones are Syria, Afghanistan and the Middle East.

Interestingly, big power military interventions in the war zones of the South are continuing unabated. The trend points to the fact that the issue of big power intrusions in the South is only aggravating, much to the detriment of the South. Syria is a case in point. Here, military intervention by the US as well as Russia has only worsened the situation of the ordinary Syrian citizenry. The number of civilian casualties of war in Syria and the number of civilians displaced by war in the same theatre, are proof of the unabated suffering of Syria. The rest of the world’s war zones reflect equally grim realities.

In a way, therefore, nothing much has changed for the South over the decades since the so-called era of de-colonization. We are, on the contrary, living in stifling and repressive neo-colonial times that are equally strangulating and dis-empowering as the colonial times of the past.

Clearly, the South has no choice but to take its future in its hands. It needs to work out strategies of collective economic survival by itself, while seeking to distance itself from the major powers of the world that are primarily guided by their narrow interests in the economic, strategic and political fields. Hopefully, the emerging world wide debt crisis would be a catalyst for South unity.