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Chapter 6 | The Global Divide

“Where globalization means, as it so often does, that the rich and powerful now have new
means to further enrich and empower themselves at the cost of the poorer and weaker, we
have a responsibility to protest in the name of universal freedom.” –Nelson Mandela

LEARNING OBJECTIVES

At the end of this lesson, you should be able to:


1. discuss the dimensions of Global Divide;
2. differentiate Global North and Global South; and
3. explain the competing perspectives on Global Divide.
INTRODUCTION

The term "Global divide" connotes the disparities in income and


living conditions between the advanced industrialized states and
developing states (Quiñanola, & Fernandez, n.d.). This chapter discusses
the dimensions of Global divide which indicate the factors that worsen the
conditions of Global South. Also, it situates the historical emergence of the
term "Global South” and its antecedent forms like, “Third World” by looking
at how inequalities have been produced through political projects like
colonization and present-day neoliberalism globalization (Fernandez et al.,
2018). The last sections of the chapter explain the opposing theories that
described the emergence and relationship of Global North and Global
South.

ABSTRACTION

A. DIMENSIONS OF GLOBAL DIVIDE

While the world is getting smaller because of economic globalization and


advancements in modern technology, societies do not necessarily grow
closer to each other. Many states are drifting apart. The living standards in
rich, industrialized countries (the Global North) have improved profoundly,
while many poor, developing nations (the Global South) are left behind.
Even access to basic social services in many regions is a matter of privilege.
Many places remain stricken by underdevelopment, poverty, and inequality
(Quiñanola, & Fernandez, n.d.).

The concept of ‘global divide’ has been closely linked with the concept of
development.
• Whether a state belongs to the North or South largely depends on its
level of development. Oftentimes, development is equated with growth
of the economy over a certain period (Quiñanola, & Fernandez, n.d.).
• Economic growth is defined as an increase in the nation's capacity
to produce goods and services. One can get the economic growth of a
country by comparing its GDP at present with the GDP last year
(Fernandez et al., 2018).
• Increase in GDP is caused by increase in national productivity. It was
generally assumed that the growth of national wealth would trickle down
to the poorest segments of society. In other words, development, viewed
using the GDP per capita approach, was about following the path of the
rich industrialized states (Quiñanola, & Fernandez, n.d.).

However, to determine how many people benefit from economic growth, one
must look at the distribution of income. Income inequality is a measure of how
the wealth in the economy is distributed among the population (Quiñanola, &
Fernandez, n.d.).
• Income inequality is important in part because it tells about the
conditions in the society – the privileged wealthy lead luxurious lives
while some people live in poverty (Quiñanola, & Fernandez, n.d.).
• Income inequality is also a constraint on development. It means that
growth often comes from and benefits mostly the richer segment of
the economy and is less likely to translate into poverty reduction by
trickling down to the poor. Poverty is always eliminated more quickly
when GDP growth is combined with improvements (or greater
equality) in the distribution of income (Quiñanola, & Fernandez, n.d.).

Income inequality leads to another question on the proportion of poor people


in a given state. Poverty is defined as an extremely low level of income
(Quiñanola, & Fernandez, n.d.).
• The World Bank distinguishes between absolute poverty and
moderate poverty (Quiñanola, & Fernandez, n.d.):
1. Absolute poverty refers to income below the minimum level
required for physical survival. The World Bank defines this
level as 1 US dollar per day.
2. Moderate poverty is typically an income of 2 US dollars per
day, a level at which basic needs are barely met but survival is
not actually threatened.

The idea of development is more than economic growth or an increase in


income per person. It is not so easy to measure development as it is based
upon many parameters such as health, education, literacy levels, and life
expectancy and so on. Thus, it now embraced a multi-dimensional character
(Fernandez et al., 2018; Quiñanola, & Fernandez, n.d.).
One measure of development called the Human Development Index (HDI)
looks at three indicators income, education, and life expectancy. While
income is needed for development, there must likewise be enhancements in
living standards, indicated in improvements in literacy and mortality rates
(Quiñanola, & Fernandez, n.d.).

The Human Development Index (HDI) index measures countries'


achievements in terms of (Quiñanola, & Fernandez, n.d.):

1. a long and healthy life, measured by


life expectancy at birth;
2. knowledge, measured by adult
literacy rate and the combined
primary, secondary, and tertiary
gross enrollment ratio; and
3. a decent standard of living,
measured by GDP per capita in
purchasing power parity (PPP) (in
US dollars).

Source: http://hdr.undp.org/en/humandev PPP means purchasing power parity. This


compares what the same amount of money can
buy in different countries. It takes into
consideration different costs of living (e.g. a
dollar may buy more goods in Afghanistan than
it can in Switzerland (“Development”, n.d.).

The measures range from 0 to 1. An HDI between 0.8 and 1 is high and between 0.6 and 0.4 is low (“Development”, n.d).
B. THE GLOBAL NORTH AND GLOBAL SOUTH

The North-South Divide is a political and socio-economic division and is not


based on geography. It is a division between the wealthy nations and the rest
of the world. The developed nations are known as “the North” while the
rest of the nations are referred to as “the South”. Most of the nations in the
northern hemisphere are Global North but a few from the southern
hemisphere are also in the same category. However, as nations of the South
develop, they become eligible to enter the north (“Maps of World”, n.d.).

Some of the characteristics of the Global North include: it is much richer, has
surplus food and shelter, and a robust educational system. It has been
estimated that a majority of the manufacturing industries are located in the
North (“Maps of World”, n.d.). The “Global North" is constituted of countries
like, USA, Canada, Western Europe, developed parts of Asia, Australia, and
New Zealand which are wealthy, industrialized, and democratic capitalist
(Fernandez et al., 2018).

Meanwhile, some of the features of the South are political instability, lack of
advanced technology, food and shelter issues, and foreign exchange
earnings depending on primary product exports, to name a few (“Maps of
World”, n.d.). The Global South is constituted by regions in Asia, Africa,
Middle East and South, and Latin America which are all developing nations
(Fernandez et al., 2018).

Source: https://www.mapsofworld.com/answers/regions/division-global-north-global-south/#
DIFFERENCES BETWEEN DEVELOPED COUNTRIES AND DEVELOPING COUNTRIES
(adopted from Surbhi, 2015)

Basis for Comparison Developed Countries Developing Countries


Meaning A country having an effective Developing country is a country
rate of industrialization and which has a slow rate of
individual income is known as industrialization and low per
developed country. capita income.
Unemployment and Poverty Low High
Rates Infant mortality rate, death rate High infant mortality rate, death
and birth rate is low while the life rate and birth rate, along with
expectancy rate is high. low life expectancy rate.
Living Conditions Good Moderate
Revenue Generation Industrial sector Service sector
Growth High industrial growth They rely on the developed
countries for their growth.
Standard of Living High Low
Distribution of Income Equal Unequal
Factors of Production Effectively utilized Ineffectively utilized

C. CONTRASTS IN DEVELOPMENT

The types of jobs people do differ between countries. In more economically


developed countries (MEDCs) more people work in tertiary and quaternary
jobs. In less economically developed countries (LEDCs) more people
work in primary jobs such as farming and secondary jobs such as
manufacturing (“Development”, n.d.).

• The primary sector involves extracting raw


Primary
materials, rearing animals and growing crops.

• A type of industry where raw materials are made


Secondary
into something. It is often called 'manufacturing'.

• Providing services and includes retail, tourism,


Tertiary
education, health and banking.

• The section of employment that is knowledge-


Quaternary
based (e.g. ICT and research).

Source: https://www.bbc.co.uk/bitesize/guides/zvp39j6/revision/1
Generally, most more economically developed countries (MEDCs) are in the
northern hemisphere and most less economically developed countries
(LEDCs) are in the southern hemisphere. There are exceptions such as
Australia and New Zealand (“Development”, n.d.).

Source: Royal Geographical Society (n.d.).

The Brandt Line is an imaginary division that has


provided a rough way of dividing all of the countries
in the world in to the rich north and poor south. Many
countries in the poor south have become more
developed since the 1980s and so many people now Willy Brandt
(Former Chancellor of Federal
think that the Brandt line is no longer useful Republic of Germany)

(“Development”, n.d.).

For example, some countries that are considered to be 'developing' have


experienced rapid growth (especially in manufacturing and tertiary industries) in
recent years. We call these countries the newly industrialized countries (NICs)
such as China, Brazil, and Mexico, to name a few (“Development”, n.d.).
WHY HAVE NICs GROWN?
(adopted from “Development”, n.d.)
• Strong and stable government; •
A rapidly growing economy; • A
focus on exports and trade;
• Attracts multinational companies;
• Profits are invested in developing more
industries and buying home produced
goods - a multiplier effect;
• A switch from agricultural to manufacturing
and service jobs;
• Investments in manufacturing (secondary)
and technology (quaternary) industries;
• Over time the workforce becomes better
educated and more skilled; and
• A large workforce, reliable and initially
prepared to work for long hours for
little pay;

FACTORS AFFECTING DEVELOPMENT


(adopted from “Development”, n.d.)

Physical Factors Historical/Political Factors Social Factors

Trade - goods are traded on a


Climate - many of the poorest global scale but it is difficult for poor
countries are in the tropics countries to compete. Some believe
where it is hot, the land is less the rules of trade are unfair. Rich Discrimination - some
fertile, water is scarce, countries can raise tariff barriers to groups may have fewer
and diseases flourish. stop cheap imports undercutting opportunities and this can
their own goods. In the past some hold back overall deve-
countries made money by lopment.
colonising other countries and
using their raw materials to produce
manufactured goods.
Natural resources - some raw
materials are valuable and can
help a country develop if they
have the resources to collect
and process them (e.g. oil,
diamonds, forests and gold).
Population - overpopula-
Corruption/poor management -
countries need a strong, stable tion occurs where popula-
tion growth outstrips
and honest leaders to help them
resources.
develop.
Location - being near trade
routes and having access to
the sea (e.g. ports have been
important for trade).
Landlocked countries are at a
disadvantage.
There are lots of
reasons why some
countries are much
War - wars use up resources and less developed than
Natural Hazards - some make it difficult to produce goods
places are vulnerable others. The reasons
and trade.
to natural disasters (i.e. areas are complex and vary
prone to earthquakes and from place to place
hurricanes).
(“Development”, n.d.).
Globalization clearly remains a process led by a few states, mostly in North
America, Japan, and the European Union. It has been noted, however, that a
small number of Southern states have now become important economic
actors. According to the World Bank, three of these countries (China, Brazil,
and India) are now among the top ten economies of the world. But even so,
the leading states continue to play a dominant role in international forums
such as the United Nations or through multilateral agencies such as the
World Bank and the IMF. The powerful countries can also depend on their
own instruments of coordination. This situation has prompted a drive within
the Global South to challenge that hegemony (Quiñanola, & Fernandez, n.d.).

Until recently, China was quiet in its international dealings. In the Doha Round
negotiations, China sided with countries such as Brazil and India to oppose
an agreement that excessively favored Northern countries on issues such as
agricultural protectionism and liberalization in trade and services (Quiñanola,
& Fernandez, n.d.).

Furthermore, China and the other BRICS countries (Brazil, Russia, India,
China, and South Africa) want to renegotiate (not destroy) international
economic integration and trade. They want to reform agencies and processes
such as the World Trade Organization (WTO) so that Southern interests are
integrated into the mainstream. The opening of these still underdeveloped
economies needs to be done gradually. Their efforts are part of Southern
initiatives to make the global economic system sensitive and more responsive
to the needs of the Global South (Quiñanola, & Fernandez, n.d.).

D. GLOBAL SOUTH DUBBED AS THIRD WORLD COUNTRIES

The countries of the Global South are dubbed as less developing and struggling
economies. They can be described as products of the western colonization
and an offshoot of the western industrialization. It is believed that such
countries are the results of the opposing ideologies of the highly
developed (capitalism) and developed economies (communism) of the
world (Fernandez et al., 2018).

The history of the North-South divide dates back to the Cold War era. China
and the Soviet Union formed the East (communism) while the United States
and its allies were the West (capitalism) (“Maps of World”, n.d.). The highly
developed economies (capitalist) have the access of the productive factors
of the Global South (less developing nations). On the one hand, the
developed economies (communist) have the upper hand of the most of the
raw materials for manufacturing. Both are highly advanced in the
development of industrial resources, financial resources, the military, and
foreign political powers (Fernandez et al., 2018).

Highly Developed
Developed Economies
Economies
Communist
Capitalist
Communist Faction
Allied Faction
Second World
First World
Less developing

economies
Third World

Sauvy referred to the Allied faction (capitalist) as the


First World and the Communist faction (communist) as
the Second World. The term "Third World" was first
coined by French historian and anthropologist Alfred
Sauvy in 1952. The term “Third World” specifically Alfred Sauvy
(French Historian and Anthropologist)
referred to the countries which maintained a neutral
stance during the ongoing Cold War (Usman, 2017).

A large majority of Third World countries were poor or underdeveloped at the


time the term was first used. Over time, it has become synonymous with
developing countries because of the many similarities observed in the
underdeveloped economies (Usman, 2017).

After the fall of the Soviet Union in 1991, the term “Third World” lost its true
meaning as originally intended. When we refer to a country as part of the
Third World now, it automatically means that it faces some form of challenges
which place it in the tier of developing countries which may face a plethora of
problems hindering their development and placement into the higher tiers of
development. (Usman, 2017).

Over time, some Second World Countries became a part of the First World
and some became a part of the Third World. Thus, as per the new
classification, the First World was classified as North while the Third World as
South (“Maps of World”, n.d.).
The term "Global South" emerged in the 1950s but
Carl Oglesby became the first person to give it a
contemporary political use when he commented on
the US’s dominance over the Global South (Otieno,
Carl Preston Oglesby
2019). (American Writer and Political Activist)

The term Global South is a dynamic term that does not consider geographic
locations, meaning that, members of this grouping who reach a certain
development threshold may cross over to the Global North. Even in the
Global North, some regions within the developed countries live in conditions
that resemble the conditions of the Global South (Otieno, 2019).

Majority of actors in international relations favor the use of the term "Global
South" as compared to other terms like "Least Developed" or "Developing
Countries." This school of thought aims at correcting the negative impact of
contemporary global capitalism as well as colonial and neo-imperial histories
that, as most believe, led to some level of poverty and inequality in the Global
South (Otieno, 2019).

E. THE STRUGGLES OF GLOBAL SOUTH

The countries with low industrialization, unstable economic policies, poor


access to productive factors, and low human capital (education and health)
make it hard for them to develop (Fernandez et al., 2018).

The Global South countries became the haven for criminality, prostitution,
environmental degradations, graft and corruption, illegal drugs, and terrorism
cells. This phenomenon of economic stagnation creates influx of migration,
dependence to foreign aids, and ballooning foreign debts to those rich
countries that can offer them their remedy for economic development.
Likewise, the ownership and little access to capital makes the Global South
countries to cling to their former colonizers whom offers trades and
development at a lesser advantage (Fernandez et al., 2018).

Global capitalism may have succeeded in bringing about growth and prosperity in
many countries, but this is not true to all (Quiñanola, & Fernandez, n.d.). This
economic situation forces every Global South economy to do whatever it takes to
survive. The economic conditions led them to find means by migrating to other
rich countries even with low wage rates and a prevalence of human rights
abuses. These countries somehow, do resolve to make alliances, establish
military treaties, and even resort to borrowings at the expense of their raw
materials. Their economic conditions, political, social, and cultural being was
threatened by such conditionality (Fernandez et al., 2018).

The following are the major assumptions on the effects of Global South’s
economic dependence to the Global North (Fernandez et al., 2018):

1. Environmental pollution and degradation;

2. Poverty increased due to less jobs;

3. Product exploitation and consumerism;

4. Eradication of local producers;

5. High risks of invasion;

6. Capital flight and a tendency to become a servant to the foreign


investors; and
7. Poor collection of taxes due to tax holidays.

The following are suggested solutions for the Global South’s economic
growth mechanisms (Fernandez et al., 2018):

1. Government subsidies of infant factories and companies;

2. Efficient and effective collection of taxes, tariffs and revenues;

3. Increase the tariffs, and customs of foreign owned companies;

4. Minimize foreign direct investment;

5. The Central Bank should prioritize Filipino investors and


entrepreneurs access to credits and loans with less interest rates;

6. Abolition of foreign owned companies tax holidays;

7. Increase exports and minimize importation; and

8. Increase budget for research and development.


F. COMPETING PERSPECTIVES ON GLOBAL DIVIDE

The following are theories that explain the economic disparity between and
within states as discussed by Quiñanola and Fernandez (n.d.):

Modernization Dependency
Theory Theory

Competing Perspectives on
Global Divide

Neo-liberal World System


Theory Theory

1. Modernization Theory
• Proponents of this theory argue that societies undergo stages
of growth and move from being a traditional society to a
modern one. Poverty is the primordial condition of humanity.
All societies were once poor. But to overcome it, societies
must advance from traditionalism to modernization.
• Poor societies remain poor because they cling to traditional
attitudes, technologies, and institutions. In contrast, in modern
societies, the rise of industrial capitalism brings about modern
attitudes (such as the drive to experiment and achieve),
technologies (machinery and electronics), and institutions
(markets and governments) to manage all this.
• Given enough time, such modernization will occur everywhere.
Poor countries must follow the path of advanced countries to
development. Modernization scholar Rostow (1999) argues
that poor countries slowly proceed to build the basis for
modern economies. Once the key foundations of modernity are
in place, these countries "take off" toward prosperity and a
modern, high consumption consumer economy. Although this
process will take time to work in most traditional societies,
according to him, eventually global capitalism and its modern
corporations will carry these modern ideas, technological
innovations, and efficient institutions everywhere.
Walt Whitman Rostow
(American Economist)

Source: https://developmenthinking.wordpress.com/2013/08/16/critisms-of-rostows-five-stages-of-growth/

Source: https://www.cleanpng.com/png-rostows-stages-of-growth-development-theory-econom-6251421

2. Dependency Theory
• It argues that the root cause of poverty and underdevelopment
is imperialism as well as the dependency of poor nations on
the rich countries. It believed that poor societies are not born
but made. They are not "undeveloped" but "underdeveloped"
because of capitalist penetration.
• It is a counterargument to the modernization theory, which
prescribes that developing countries must follow the path of
the developed nations. According to dependency scholars,
industrial capitalism brings exploitation. They argue that there
is an unequal exchange in capitalism. The local economies are
distorted in that they serve mostly the needs of advanced
countries but not the needs of local populations.
• The theory is articulated by many Latin American thinkers. They
contend that the region remained poor because they export raw
materials at low prices to serve the needs of the global industry
and then had to import finished goods at hefty prices.
• But why have poor nations been unable to resist exploitation?
First, dependency scholars posit that these nations have been
dominated by rich nations through the neo-colonial practices
which include dependency on debt with the World Bank and
the IMF, the conditions on foreign aid, and the influence of
multinational corporations on the policies in the developing
countries.

It can be implied that the two aforementioned theories differ in their prescriptions:

Modernization scholars saw the problem as


Dependency scholars suggest that
largely internal to poor nations, which need to developing countries cannot follow the path of
change their ways. Their theory is criticized for developed countries. Instead, they contend
being ethnocentric, that is, as being highly based that development could be achieved through a
on the Western experience. It regards Western series of economic policy prescriptions that
society as a truly modern one and tends to argue would encourage domestic
that others are primitive or unevolved by industry. Some scholars advocate
comparison. That view sees non-modern protectionist economic policies that
societies as somewhat inferior and would allow internal markets to develop.
condescending to the West. Such policies include import substitution
industrialization which sought to replace
imports with domestic production. Many
Import substitution industrialization (ISI) is a trade developing countries indeed adopted this
and economic policy that advocates replacing foreign policy. This policy would achieve the goal,
imports with domestic production. It is based on the scholars argue, by adding heavy taxes to
premise that a country should attempt to reduce its
foreign dependency through the local production of
manufactured goods imported from the
industrialized products (“Import Substitution North, effectively subsidizing the domestic
Industrialization”, n.d.). industry.

3. Neo-liberal Theory
• The intellectual basis for neo-liberal theory comes from neo-
classical economics, which combines arguments supportive of
free-market with a scientifically inclined school of economics.
Arguments are premised on the assumptions that markets are
perfectly competitive and that they move towards equilibrium.
Neo-liberalism suggests a little role for the state in managing
the economy.
• This theory was the backbone of the US "Reaganomics" in
the 1980s and was the driving policy of Margaret Thatcher in
the United Kingdom.

Ronald Wilson Reagan Margaret Hilda Thatcher


(40th President of U.S.) (Former Prime Minister of U.K.)

Reaganomics refers to the economic policies promoted by U.S. President Ronald


Reagan during the 1980s (“Reaganomics”, n.d.). The four pillars of Reagan's
economic policy were to reduce the growth of government spending, reduce the
federal income tax and capital gains tax, reduce government regulation, and tighten
the money supply in order to reduce inflation (Niskanen, 1992).

• On the international level, the IMF and the World Bank


champion their own form of neo-classical economics through
the ideals of structural adjustment. Structural adjustment calls
on nations to reduce government spending and bureaucracy,
to encourage free markets, to export, and to encourage
entrepreneurship, as well as to entice foreign investment and
foreign technology.

4. World System Theory


• The argument of dependency thinkers
that the cause of underdevelopment
and poverty is external intervention
continues in world system theory,
Immanuel Maurice Wallerstein
developed by Immanuel Wallerstein. (American Sociologist and Economist)

• The idea that a world economic system exists in which wealthy


nations exploit poor ones to help generate their wealth. The
World system theory provides a framework for understanding
how the productivity of all nations is interconnected by an
economic network that is global. It argues that global inequality
results from structures that permit core countries to control and
exploit semi-periphery and periphery nations (“World-systems
Theory, n.d.).
• It is a wealthy, industrialized nation that controls and benefits from the global
economy. Core nations have complex infrastructures, strong governments,
cosmopolitan cities, and diverse economies.
• They control the global market and use it to their advantage by exploiting
Core Nation periphery nations for their cheap labor and natural resources. They also have
strong militaries and international partnerships.
• Core countries include the United States, Canada, the United Kingdom, much
of Western and Northern Europe, Australia, and Japan.

• It exhibits characteristics of both core and periphery nations. These nations are
generally industrializing and could be elevated to core nation status with
Semi- development.
periphery • Semi-periphery nations include China, India, Mexico, Brazil, South Africa, and
Nation Israel.

• It is a low-income nation that depends on and is exploited by wealthier nations.


Periphery nations have little global power. They have weak, decentralized
governments, poor infrastructure, and low education levels.
• Periphery nations often depend on a single industry or export to support their
Periphery economies and have large rural populations.
Nation • Periphery nations include much of sub-Saharan Africa, Southeast Asia, and
some nations in Central and South America.

Source: https://www.coursehero.com/sg/introduction-to-sociology/world-systems-theory/

Source: https://www.coursehero.com/sg/introduction-to-sociology/world-systems-theory/
The two aforementioned theories disagree on the effects of the key actors (e.g.
multinational corporations, international financial institutions, global media, and
technology and trade) in the modern world (Quiñanola and Fernandez, n.d.).

In the neo-liberal view, the success of East In the world system view, the core nations
Asian tigers suggests that export economies allowed these countries into the semi-
and free trade bring growth and prosperity. periphery to facilitate capitalist expansion
into a new peripheral market. Many view
the structural adjustment programs by the
IMF as examples of how aid is being used
for promoting the neo-liberal policies.
\

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