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The Global South

The Global South. The Global South. Who is the GS? Global Institutions & the GS Development Hurdles GS Economic Development Tactics ¤. Who is the Global South?. 5 categories Of GS countries. 5 Categories of GS Countries. 1. Emerging Markets Who are they? Growth

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The Global South

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  1. The Global South

  2. The Global South Who is the GS? Global Institutions & the GS Development Hurdles GS Economic Development Tactics ¤

  3. Who is the Global South? 5 categories Of GS countries

  4. 5 Categories of GS Countries 1. Emerging Markets • Who are they? • Growth • Greater % of people =middle class (>$10/day) • Investment ¤ http://qz.com/172953/whose-fault-is-the-emerging-market-sell-off/

  5. 5 Categories of GS Countries 2. Countries in Transition (CITs) • Central and Eastern European (East bloc Soviet satellites) • Former Soviet Republics (FSRs) • Growth rates differ ¤

  6. 5 Categories of GS Countries 3. Frontier markets • Investment category • Coined 1992 • Below EEs • More risk ¤ http://blogs.reuters.com/globalinvesting/2013/06/03/cheer-up-morocco-frontier-markets-are-hot/

  7. 5 Categories of GS Countries 4. Least Developed Countries (LLDCs) • US (GDP per capita=ranks 10th) at ~$51,700 • Average GDP per capita of LLDCs at $750 • Burundi , Congo, Somalia at $200 GDP per capital • http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita ¤

  8. 5 Categories of GS Countries 5. Heavily Indebted Poor Countries (HIPCs) • 2012 IMF-WB identified HIPCs • 39countries • 29in sub-Saharan Africa • Debt relief- HIPCs qualify • 36 accepted full or partial relief ~$72 B • 4 in process • Reliance on single cash crops • Cotton accounts for 46% of Mali’s exports ¤

  9. Global Institutions & the GS

  10. Global Institutions & the GS • MNCs • IGOs • IMF • WB • GATT WTO • OECD • G7, then G8, now G7 again now G20 • NGOs • Representation by GS • Representation on behalf of GS ¤

  11. GS Development Tactics Internal & External Policy Strategies

  12. GS Development Tactics Internal Policy Strategies • Import substitution • Nationalization of industries • Establishing cartels • Protectionism ¤

  13. GS Development Tactics External Policy Strategies • Regional IGOs • ASEAN, Mercosur, SADC, SAARC, etc. • International IGOs • Group of 77 (132), NAM, UNCTAD, etc. • International pressure • Monetary reforms • Trade reforms • Development • Economic sovereignty • Economic aid ¤

  14. Development Hurdles

  15. Historical Disadvantages • Colonization; Neocolonialism • Primary v. manufactured goods • Cash crops • Natural resources • Price volatility • Lack of national unity • Institutions favor GN • Accrued debts in 1960s and 1970s • Lack autonomy over debt management ¤

  16. Debt Creation

  17. Development Hurdles • Political stability • Institutions • Infrastructure • Market isolation • Conflicting interests with GN • Self-interested actors • Sustainable development expectations • Corruption ¤

  18. Development Hurdles How does corruption affect China? • Politics • Accusations • Vote-buying • Who controls what • Land, licensing, title-selling • Passing/ enforcing laws • FDI ¤

  19. Development Hurdles http://theactivistwriter.com/tag/corruption-statistics/Based on 2011 statistics from Transparency Int’l2011

  20. Development Hurdles (cont.) • Currency instability • Lack banking / credit access • 41% in GS- mostly EEs- have bank accounts • Sub-Saharan Africa- 27% men; 22 % women • 7 % in GS have credit cards • http://www.economist.com/blogs/feastandfamine/2012/04/banking-developing-world • Gender equity ¤

  21. Women’s Development http://www.glpinc.org/Web_pages/Illiteracy_Globally.html

  22. Development Hurdles (cont.) • Income inequality • Development income equality • More developed greater equality • Less developed lesser equality • Map on next slide

  23. Income Inequality http://en.wikipedia.org/wiki/File:Gini_Coefficient_World_CIA_Report_2009.png

  24. Development Hurdles • Income inequality (cont.) • Stark exception is US • 1% control 36% of wealth • Top 10% control 75% • China: 5% control 23% of wealth • Bottom 5% control .1% • Brazil: 10% control 51% of wealth • Mexico & Argentina: 10% control 42% of wealth • Data fromhttp://www.nytimes.com/2013/07/20/world/asia/survey-in-china-shows-wide-income-gap.html?_r=0 http://en.mercopress.com/2010/03/27/gap-between-rich-and-poor-in-latinamerica-is-largest-in-the-world-says-unhttp://money.howstuffworks.com/one-percent-control-third-of-wealth.htm ¤

  25. Development Hurdles • Income inequality (cont.) • Lower income inequality = higher growth rates • http://www.imf.org/external/pubs/ft/sdn/2011/sdn1108.pdf • Consequences of income inequality • Fewer people with resource access • Economic opportunities tied to political stability • More susceptible to corruption • Limited tax base to support government • http://www.worldbank.org/depweb/english/beyond/global/chapter5.html ¤

  26. Development Hurdles (cont.) • Reliance on GN • Foreign Aid • Technology • FDI • Employment • Formal v. informal sector • Remittances ¤

  27. Remittances What are remittances? Who uses them? • >½ to Asia • Transfers are expensive • 40% of money transferred goes to rural areas • Lower fees- potentially better than both aid , FDI • Bank concerns • Rely on informal systems • G8 pushed to lower fees • =$30 B for migrants ¤

  28. Recap

  29. Good News? • Fewer people in extreme poverty • Healthier people ¤

  30. The Global South Who is the GS? Global Institutions & the GS Development Hurdles GS Economic Development Tactics

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