Global South’s rising economic clout and socialism’s relevance

A cleaner wipes the sidewalk outside a shopping mall in Beijing on June 17, 2015. AFP
However, it is important that the economic performance of these countries of the South is referred to as ‘growth’ and not ‘development’. But these terms are not interchangeable; they do not refer to identical realities. Generally, growth refers to the quantum of goods and services produced by a country annually while development denotes economic equity and redistributive justice, along with growth, within a national economy. In fact, ‘development’ currently also implies environmental sustainability.
However, it is important that the economic performance of these countries of the South is referred to as ‘growth’ and not ‘development’. But these terms are not interchangeable; they do not refer to identical realities. Generally, growth refers to the quantum of goods and services produced by a country annually while development denotes economic equity and redistributive justice, along with growth, within a national economy. In fact, ‘development’ currently also implies environmental sustainability.
In a world that has come to believe that it is some time since the ‘epitaph’ to socialism has been written, it would seem highly incongruous to broach the issue of its contemporary relevance. Yet, it could be argued that it would be quite premature to write-off socialism as entirely inapplicable to the material ills of our times. These dilemmas present us with the challenge of thinking analytically rather than superficially and for those who take up this challenge the ‘socialist alternative’ offers itself as a continuing viable development option.
It is a truism that the global economic power balance has shifted to the South or the developing world from the North or the First World, consisting of mainly the Western industrialized powers. In fact, economic growth in the South, over the past 30 or so years, has been phenomenal. The BRICS, for example, or Brazil, Russia, India, China and South Africa, are seen as being in the forefront of global economic advancement or growth. For instance, in 2007, BRICS’ contribution to global economic growth outstripped that of the US for the first time, 30% to 20%. Interestingly, BRICS represent those regions of the world which were referred to as the Third World or the developing countries in the Cold War years. Apparently, the South seems to have turned tables on the North, in economic terms at least.
However, it is important that the economic performance of these countries of the South is referred to as ‘growth’ and not ‘development’. But these terms are not interchangeable; they do not refer to identical realities. Generally, growth refers to the quantum of goods and services produced by a country annually while development denotes economic equity and redistributive justice, along with growth, within a national economy. In fact, ‘development’ currently also implies environmental sustainability.
Accordingly, a country could be said to be experiencing ‘growth’ but not ‘development’. There is an important distinction here which should not be glossed over by both the’ expert’ as well as the layman. Confusing these core concepts could lead to a distortion of reality.
However, in terms of economic growth and output, the present and the future undoubtedly belong to the South. It is estimated that by 2050, Brazil, China and India combined would account for 40 percent of the world output in purchasing power parity terms. The UNDP assessed that between 1980 and 2010, developing countries had increased their share of world merchandise trade from 25 per cent to 47 per cent and their share of world output from 33 per cent to 45 per cent. The Free Trade Area of China and ASEAN set up in 2002, is reportedly the world’s largest with a population of 1.7 billion and GDP of USD 2 trillion.
While these somewhat randomly selected data establish the growing economic strength of the South, it is of considerable importance that global growth is powered, in the main, by almost the totality of what is considered the developing world. For example, besides the more well known BRICS, there are formations such as, IBSA, or India, Brazil and South Africa, CIVETS, comprising Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa and MIST, consisting of Mexico, Indonesia, South Korea and Turkey, which are at the heart of growth. Besides being a wide cross section of the ‘Third World’ of yesteryear, these groups are the proof of how effectively developing countries are integrating their economies with each other, diversity of geographical location and physical distance notwithstanding. The trade to output ratio of most of these countries is high and this is evidence that these states not only engage with each other but do so also with the international economy to a considerable degree. That is, economic liberalization or market openness has stood these countries in good stead, from the growth viewpoint.
The UNDP’s Human Development Report for 2013 points out that the countries referred to above are also notable from the Human Development standpoint. That is, these countries are spending considerably on the development and empowerment of their human resources. Foreign trade and Human Development are found to advance together.
The above is adequate evidence that the states concerned are proactively engaged in the development process to a degree because their concern with their polities is not confined to the generation of economic growth only. There is a measure of concern for the well being of the people as well.
But how much concern is sufficient concern in the Human Development context? In the churning out of billionaires China is said to be second to only the US. India, which has just pipped China as the fastest- growing ‘BRIC’ has a phenomenal number of the world’s poor within its borders. How equitably, and at what pace, is wealth being distributed among the 'ordinary people' in these countries, their economic output or growth notwithstanding?
This is just one poser of crucial importance that very many fast-growing Southern economies raise. While there is growth here of exhilarating proportions, the same could not be said of redistributive justice, which is central to social peace.
It is these vast wealth and income disparities that raise the continuing importance of socialist planning. The latter process, however, is not synonymous with a state’s mechanical disbursement of welfare measures among the people. There need to be well thought out state programmes which envisage the continuous employment of the people in development projects, for example, which would prove beneficial to the people as well as the country. In other words, a degree of active state involvement in running the economy cannot be avoided. However, a balance must be struck between state intervention in the economy and the latter’s liberalization.
The growth process, it must be noted, does not automatically, as it were, lead to the people’s empowerment. This task must be undertaken by governments which should evolve the relevant mechanisms for the continuous employment of the people and their gradual empowerment. Southern governments may be doing some work in this direction but these efforts do not seem to be sufficient. Strong measures need to be in place to ensure that excessive wealth earned by the ‘super rich’ is taxed and used for the benefit of the people. Besides, stringent measures need to be in place to guard against corruption in public life and the accumulation of ill-gotten wealth. These are urgent tasks for the South. The socialist vision just cannot be written off.









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