To what extent is the west to blame for the failure of the global south to achieve economic growth?

International Relations A

Economic growth is something that every country throughout the globe aims to achieve to the highest of their capability. For some countries there are many problems that can occur from trying to get a high economic growth. The problem that has occurred for many years is that the whole globe isn’t as equal in terms of development with one another when it comes to how far they have economically grown. The issue being raised is the fact that the global south is far more under developed than the west. However the argument is, to what extent is the west to blame for the under development of the South’s economy, if any blame at all. In this essay I will look at all the relevant sections such as international trade, international finance, aid given to countries etc and determine how far the west is to blame for the poor development of the global south. During the essay I will refer to the western countries as the global North or just North at times.

When the issue of international trade arises, it is somewhat evident that the west seemingly takes advantage of the poor state in the global south. Many if not all products produced in the third world need to go to the Northern (Western) markets in order to make any substantial profit, which in turn means that they will not get as much profit as the western countries do, even though the labour and resources are from the countries themselves. Along with products, the third world countries also export raw materials to the west aswell. The fact that this occurs can be seen as the west using the south just for their own benefit to reduce costs and help the development of their own economies and leaving the south in the poor state that they are still in.

Also when it comes to agriculture the western markets will put up tariff barriers and subsidies will be given to domestic farmers with the EU being an example with (CAP). With regards to agriculture, there is a belief that the south could maybe compete with the north to some degree. “The existence of tariffs, administrative barriers, quota restrictions, etc on the imports of agricultural commodities, required as a consequence of subsidies and high prices granted to local farmers”. This gives us reason to believe that the western states know that the south could maybe compete with them with the agricultural aspect of the economy and therefore, the subsidies and tariffs are imposed to stop the poorer countries economy from stabilising and even growing.

So far with international trade it seems as though the south is getting some kind of rough deal from the west however this is not completely the case. The fact that the third world countries have connections and trade with the west enables the southern states to have a market that otherwise they might not have. Also “there are exceptions, where the poor countries command a strategic material or strategic bases, or where they effectively co-operate with each other; the oil producing countries are a recent example”. This gives evidence to suggest that the southern states are now trying to be somewhat more independent and also, some of the south or at least segments of them benefit from the current trade position.

International Finance is an issue that has sometimes come under scrutiny and has been pointed as the main reason for why the global south is so far behind in terms of development than the northern states. Banks can dominate Southern countries by removing investment and huge amounts can cripple the country. If the huge amounts of investment are taken back then sometimes the country will lose control of the economy and the economy could simply collapse. Therefore banks have a very big say in the global south countries economies and sometimes the economies in these countries are used for the ...

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Banks are also important when it comes to foreign debt, which is a huge factor when it comes to explaining a lack of economic growth in the south. .“Big US, European, Japanese and other (including Arab) banks, first, they lent far too much, too easily and thoughtlessly to the developing and Eastern European Countries, wantonly pressing loans on them even when they did not particularly want them…. In the world political economy this has become primarily a problem of third world debt”.

Many southern parts like Africa are still reeling from the effects of heavy loaning from the western countries like USA etc. They simply cannot afford to pay back the huge debts but the interest on these loans alone ensures that repayments are just out of the question.

Economic Aid is one of the aspects of how the West is to some extent trying to help the global south’s under developed economies as well as the crippling debt which many of these countries face. Without economic aid being given to many southern countries, some of the places would not be able to survive at all, many people would die, and many would be diseased. It does become a matter of life or death in the global south and the positive effects, which arise from the aid given by countries like the USA etc are massive. However although aid is given to these countries there are some negative aspects from the global south side.

Sometimes countries in the South can become extremely independent on the aid which is given to them from the west, who could blame them, as we have seen so far, the countries don’t seem to get a fair chance to trade fairly and don’t take as much of the profits as they should. The fact that countries do become independent on the aid they receive means that if it is taken away from them then the results would be devastating. Therefore this means that these countries have to do everything in their power and be non negotiable with terms which the countries giving aid have when it comes to taking the aid from them. “The North South terms of trade involves both aid itself and the tying of aid to purchases of exports from the donating developed countries”. One other fact is that the aid given to these southern, third world countries is outweighed by foreign debt repayments and, if things keep on going the same way then the likelihood of it is that the global south will never be able to prise itself from the downward spiral which is occurring and may never actually be able to survive without the help of the western countries, whether they like it or not.

The history between the Western Countries and the Global South explains to a certain extent the reason for the south being so under developed in comparison to the global North. There is a big gulf in economies in relation to North, South e.g. Britain’s

Economy in comparison to Africa’s economy. The reason I have used Britain as an example is because of historical relevance. When the British empire emerged in the eighteenth and nineteenth century and stayed until after the second world war, it caused many problems for a lot of the Southern states, which are still to this day feeling the effects from what happened many years ago. Britain along with many other imperial powers throughout Europe used countries in the south as sources of raw materials and as cheap labour. The fact hat this occurred gives evidence to suggest that the west are to blame for the underdevelopment in the global south due to the fact that with so much of the raw materials being taken away from the start, it left the western states with a high advantage and a head start in building a strong economy whereas the south now is still feeling the repercussions of it.

Decolonisation was also a problem that caused the global south to rely upon the help of the global west to run their economy to an extent. When decolonisation occurred through the global south, what this meant was that many countries from the North left countries in the global south with many problems which they found hard to deal with, e.g. when Britain left India it gave India the problem of dealing with the fact that huge numbers of raw resources were now gone and also, many of the benefits were not in India’s favour but were in Britain’s. This caused a problem as India didn’t have the best of starts and were not ready to run their own country and their problematic economy. This point therefore shows that the west were to blame for the global south’s problem as they left countries that had been decolonised in a poor state with countries not being able to restore their economies to a strong state.

Finally one of the last problems which enables people to believe that the west is to blame for the failure of economic growth in the global south is the fact that multinational companies are hugely influential in the north and south divide. The multinational companies use the global south in many ways to maximise their own profits to the highest extent. The global south is used by the multinational companies for the use of cheap, unskilled labour in the manufacturing industry. Places such as India are evidence, which show that many of the companies take their business abroad to get the products produced, quickly and cheaply and to maximise their own profits due to this. In India, due to the country being in a dire state in certain parts, people will work for the smallest amount of money just in order to try making a living, which is exploited by the big multinational companies. The multinational companies are able to do this even though they still come under scrutiny from business watchdogs, and they companies can get away with so much also due to the fact that in the global south, due to many of the countries not being economically stable, trade unions and general health checks are not of high importance.

What tends to happen is that the multinational company sends the products to be produced in the global south and then as this is being done cheaply, there are no safety regulations etc. There are also not many environmental policies throughout the global south, so overall the multinational companies gain a huge advantage from this as they can go about their business very cheaply and quickly which wouldn’t occur in Britain due there being so many regulations etc.

UNCTAD (The United Nations Conference on Trade and Development) was set up as an organisation to help the global south move forward and promote the development of poor countries. What UNCTAD did was give two global south countries the chance to express their views on international trade and see if they agreed with things being ok, if not how to go about solving a problem which they had with it. Although the organisation was set up with the intention of helping move the global south forward economically, UNCTAD has been somewhat of a failure, as it hasn’t really changed the situation at all, apart from act as a governor to the global south countries, it can do no more.

The International Monetary Fund (IMF) was also an organisation that tried to balance out the level of difference economically between the global north and south. IMF controls interest rates and balance of payments however the problem that occurred with this is that it was set up by the West and therefore its main interests was the west not the global south. Another example of the West building up and organisation which to some extent is there to help the global south develop economically, but looks after the West's interests first is the WTO.

The World Trade Organisation WTO was set up by the global north to help with the evident economic situation in the global south. The WTO mainly tries to promote free trade, mainly by removing importing tariffs to help the global south, however it also deals with trade disputes. Although the organisation has been set up by the west, to help the global south gain more economic growth, what has been disputed, as early as up to 1999 is the fact that, a proposed reduction in tariffs could have major constraints as it would harm the developing of economic growth in the south. Riots occurred due to this proposition and it is easy to see why as, a reduction in tariffs was more likely to benefit the global north to a greater degree than that of the global south. People did not agree with this, as all that would happen is that a reduction in tariffs would lead to an increase in the difference, which is already there economically for north and south.

Although it is somewhat clear that the West does not help the global south in the ways that it should, the fact that the global south is hugely underdeveloped cannot be seen as the west’s fault entirely. The global south have also contributed to their lack of success economically.

The fact that the global south seems as though it just wants to let the west get them out of the mess that they (the south) are in indicates that they are to blame aswell, as they are not doing enough. The fact that they rely on the West’s involvement in paying a cheap price for raw goods and giving the country some very small and short lived prosperity with some employment via multination companies, the global south doesn’t show on enough occasions that it wants to get out of the economic deprivation which it is suffering

Also although much of the global South is plagued by violence and terror with large organisations trying to overthrow the government etc, surely to help themselves everyone should try to pull in the same direction. Can someone be helped if they don’t help themselves?

Overall in conclusion to the question, to what extent is the West to blame for the failure of the South to achieve economic growth? I would have to say that I believe that blame can be emphasised on both sides. Wallerstein believes that the core states use the periphery, the south for cheap raw materials and cheap labour. Therefore it is evident that a reason that the South is so economically underdeveloped is because of the way the system works today. It is clear that the west take advantage of the south in order to further their prosperity and economy however, still nothing is done about it in the way of new stricter laws etc.

However although the West is to blame for taking advantage of the global South's underdevelopment, the south has not helped itself in fighting back or trying to create a better economy for itself. Lack of innovation due to the reliance of western products has not helped the south but has just left them stuck with the same problem. Therefore to sum it all up, the west to a large extent is to blame for the failure of the south to achieve economic growth but the south is to blame too.