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Editorial
Third World the next superpower?
Sunday, November 14, 2010
South-South economic interaction was dismissed as a romantic delusion of Mr Michael Manley and the 1970s advocates of the New International Economic Order (NIEO).
Two of the tenets of the NIEO were a North to South flow of aid which has now become the Millennium Development Goals and South-South trade and co-operation to reduce dependence on the North and its multinational corporations.
Thirty years later, both have happened and there is a new global economy in which the centre of gravity has shifted to the East, minus the rhetoric of the past.
The International Monetary Fund's (IMF's) World Economic Outlook of October 2010 documents the steady economic growth in Asia and Latin America throughout the global economic crisis which began in 2008. The report forecasts continued growth in these developing countries while the economic recovery in the United States and Europe is expected to be anaemic.
It is no longer a struggle in the periphery because what used to be disparaged as the Third World is now the engine of global economic growth. The economic recovery of the world economy will depend on the continued and sustained economic growth of emerging economies and the developing countries.
This, we believe, is a radical change from the days of imperial hubris when these economies were seen as mendicants and a nuisance to the rich industrialised countries.
The break with tradition is evident when we witness the developed countries rushing to court trade with China, Brazil and India. President Barack Obama was in India assuring his new best friend (to the chagrin of Pakistan) in the troubled nuclear armed region of US support and announcing trade deals.
Previously, prime ministers of India went to Washington, DC as a supplicant to be deterred from developing nuclear weapons. Looking for a counterweight to China, the US expressed to Mr Manmohan Singh their support for India's aspiration to have a seat on the Security Council of the United Nations.
The new global economics has changed international politics. Emblematic of the new realities is Prime Minister David Cameron's recent visit to China in search of export opportunities, while conveniently soft-pedalling democracy and human rights issues.
Long gone are the days when a British aircraft carrier moved freely offshore the prosperous British colony of Hong Kong. Similarly, the countries descended from the former Roman Empire, Greek Civilisation and Spanish Empire contemplate a European Union (EU) which could include Turkey, an enemy since the Crusades. Meanwhile, Japan has to be deferential to China in territorial disputes and resist any Samurai posture.
Few will disagree that governance of the global economy has changed. The G-20 has replaced the G-8 as the most important economic forum. After 2012, the EU will have two less seats on the board of the IMF in a reallocation of voting power. China will become the third largest member with increases going also to Brazil, Russia and India. It has also been agreed that the tradition of the US and the EU heading the World Bank and IMF will be discontinued.
Governments in developing countries have grasped the new dynamics. When they need development aid, they go to Beijing where no questions are asked about capital punishment, and if they have oil, minerals or food to sell, it is the Chinese, not the "Old World", that they look to for sales.
Fortunately, the Government of Jamaica has understood these new global developments and Prime Minister Golding has spent more time in Beijing and Brasilia than in Washington and Brussels. Next stop is New Delhi.
Third World the next superpower?
Sunday, November 14, 2010
South-South economic interaction was dismissed as a romantic delusion of Mr Michael Manley and the 1970s advocates of the New International Economic Order (NIEO).
Two of the tenets of the NIEO were a North to South flow of aid which has now become the Millennium Development Goals and South-South trade and co-operation to reduce dependence on the North and its multinational corporations.
Thirty years later, both have happened and there is a new global economy in which the centre of gravity has shifted to the East, minus the rhetoric of the past.
The International Monetary Fund's (IMF's) World Economic Outlook of October 2010 documents the steady economic growth in Asia and Latin America throughout the global economic crisis which began in 2008. The report forecasts continued growth in these developing countries while the economic recovery in the United States and Europe is expected to be anaemic.
It is no longer a struggle in the periphery because what used to be disparaged as the Third World is now the engine of global economic growth. The economic recovery of the world economy will depend on the continued and sustained economic growth of emerging economies and the developing countries.
This, we believe, is a radical change from the days of imperial hubris when these economies were seen as mendicants and a nuisance to the rich industrialised countries.
The break with tradition is evident when we witness the developed countries rushing to court trade with China, Brazil and India. President Barack Obama was in India assuring his new best friend (to the chagrin of Pakistan) in the troubled nuclear armed region of US support and announcing trade deals.
Previously, prime ministers of India went to Washington, DC as a supplicant to be deterred from developing nuclear weapons. Looking for a counterweight to China, the US expressed to Mr Manmohan Singh their support for India's aspiration to have a seat on the Security Council of the United Nations.
The new global economics has changed international politics. Emblematic of the new realities is Prime Minister David Cameron's recent visit to China in search of export opportunities, while conveniently soft-pedalling democracy and human rights issues.
Long gone are the days when a British aircraft carrier moved freely offshore the prosperous British colony of Hong Kong. Similarly, the countries descended from the former Roman Empire, Greek Civilisation and Spanish Empire contemplate a European Union (EU) which could include Turkey, an enemy since the Crusades. Meanwhile, Japan has to be deferential to China in territorial disputes and resist any Samurai posture.
Few will disagree that governance of the global economy has changed. The G-20 has replaced the G-8 as the most important economic forum. After 2012, the EU will have two less seats on the board of the IMF in a reallocation of voting power. China will become the third largest member with increases going also to Brazil, Russia and India. It has also been agreed that the tradition of the US and the EU heading the World Bank and IMF will be discontinued.
Governments in developing countries have grasped the new dynamics. When they need development aid, they go to Beijing where no questions are asked about capital punishment, and if they have oil, minerals or food to sell, it is the Chinese, not the "Old World", that they look to for sales.
Fortunately, the Government of Jamaica has understood these new global developments and Prime Minister Golding has spent more time in Beijing and Brasilia than in Washington and Brussels. Next stop is New Delhi.
