Articles / Rubric: Global

The Souths ascent is based on economic imperatives
July - August 2013 | Global

photo by Vadim Lavrusik

Gary Perlman, an expert on African economics and politics and the Executive Director of  Langham Capital (London), spoke to WEJ about why people should not be skeptical about "the South’s ascent" and how the rapid development of southern countries will change the global picture.

It seems that as it develops, the South needs the North less and less. Is this indeed the case?
The developing South needs the developed North significantly less going forward due to the inter connectivity in trade and technological transfers between the countries of the South in the main due to their extremely high growth rates and very rapid development of new infrastructure within the countries of the South.

It is estimated that in Brazil as an example the last 5 years has shown some 30 million people coming out of extreme poverty and rise into the ranks of the lower to middle income brackets of the middle class.

These people require services and products many of which are now imported from other countries of the South due to proximity and competitive pricing.

Likewise in Africa, growth rates of smaller economies such as Ghana, Uganda, Mozambique and Rwanda have come in at rate of over 10% per annum and this directly benefits the larger regional “powerhouse” economies of the South such as South Africa, Brazil and China who have the bulk of trade with these countries having supplanted the North over a decade ago.
This is at a time when the developed North has spent almost half a decade in recession and hence with negative growth rates.

Is it possible that the dominance of the North will be supplanted by the dominance of the South?
The dominance of the North is in permanent decline and as a result the next 50 years will see an unprecedented rise of the South which will marginalize the North even further.
On present statistics the South will gain permanent dominance over the North after 2020.

In what areas of cooperation is communication between the countries of the South and of the North manifested most clearly?
Depending on the region there is still strong interconnectivity in consumer goods, foodstuffs, technology, and in certain respects intellectual capital.

However with increased production of locally manufactured items and increasing agricultural output in the South along with strong education systems in certain countries where a new breed of technological savvy students is bubbling up, dependency on the North is in massive decline.

What consequences can be expected for developing countries of the South if the U.S. economy’s recovery stalls, and if Europe is unable to cope with its political and economic problems?
The South is increasingly able to take care of itself and the decline of the North has also led to many of the South’s diaspora to return back home with skills learnt in the North where they no longer have jobs, and with these skills they have been able to start new businesses or bring back knowledge of necessary products that could be manufactured in the South.

The pharmaceutical industry is a prime example, this industry is in decline in the North but home grown companies in the South are growing exponentially as their populations become upwardly mobile.

How will the South’s ascent change the relationship among countries?
The geopolitical situation in the world is changing daily as power shifts to the South. The North has to listen to the South and has to understand the needs of the South as opposed to imposing its will on its trading partners as it has historically done.

This has led to countries of the South developing interesting shifts in ideology and commerce with very large Chinese and Indian populations moving into Africa, Africans moving to Brazil, Brazilians moving into old Portuguese colonies and a massive internal African diaspora occurring with millions of Africans today to be found in countries not of their birth.

These populations are following money and commerce hence upsetting the previous rigid North/South patterns of trade.

Can we say that the South’s ascent is solely based on human development?
The rise of the South has occurred due to economic imperatives.

What is your forecast in regards to the specific global changes that will lead to the South’s ascent?
The changes that created the rise of the South and will continue to spur on further changes and massive growth are access to technology, mainly cell phones, access to media mainly  the internet, democratization of most of the South’s political landscapes, human needs and desires based on seeing what the North had and the South did not.

This is a march of humanity to a better life, a march into the consumer space, propelled by new media and technology.

Many experts believe that the South’s ascent means it is time to review the existing partnership models (domination of the West and the opposition of southern and northern economic power) and to create new models of governance and cooperation that correspond to the realities of a rapidly changing world. Tell us more about what those new models entail. Who is working on developing these models?
To speak of new models of engagement in today’s rapidly changing technological economic and political landscape is a failure to understand that the world has moved on from those post war rigid structures.

Whilst organisations like the WTO do still exert power based off the old models, the reality is that there is such a fast moving change in economic landscape and connectivity at present that no single model is able to contain the present paradigm shift in economic and technological change that occurs on a daily basis.

The politicians of today look like traffic policemen trying to control the flow of traffic that has passed them by.

Financial products, technological advancement, rapidly changing economic needs have rendered and will continue to render rigid models of engagement obsolete.

Governments can only now try and reign in on what has happened, they are unable to contain and manage the future as they once did.

Some analysts are skeptical about the high economic growth rates and the level of human development demonstrated by countries of the South. This attitude is based on the fact that these countries’ economies are export oriented. Do you think that there is a correlation between a country’s economic orientation and the pace of human development?
These analysts are wrong.

Even export dependent economies are working on more sound financial principles today and retaining income to assist with infrastructural and human development.

The vast amount of African economies are export dependent, whether it is minerals, agricultural products, or natural resources such as water or hydro electric power.

Earnings from these endeavours have come back into these economies with the result that a self sustaining infra structural boom has taken place in most of these economies which in turn has created a fully viable and growing internal and self generating economic engine in most of these countries.

If anything we are only still scratching the surface, the next 30 – 50 years will see growth in these economies of exponential magnitude.

As China, India and Brazil become increasingly middle class this in turn will create a whole different genre of growth in services for this high spending part of the population.

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