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Regions in Development – Artiles SmmmrrGeneral Introduction
The South in a globalising economy
Introduction
This chapter considers the spatiaa and temporaa dimensions of gaobaa economic
interconnectedness with a particuaar focus on the paace of the gaobaa South within the gaobaa
economic system. Most importantay, this chapter wiaa highaight the spatiaa manifestations of
economic globalizatoo processes and how diferent parts of the worad shape these paterns.
Economic actiivities are conceiived, practiced and understood in particuaar cuaturaa contett
and economic processes can, in turn, afect cuaturaa norms. This chapter wiaa aaso coiver some
issues around social diffefotatoo, particuaaray gender, and wiaa aaso deaa with
enivironmentaa dimensions of economic gaobaaization.
Economic etchange and trade: historicaa trends
Gaobaaization as a term describing the growing interconnectedness of the worad has a
reaatiiveay recent history. More compaet diivisions of aabor between producers and traders
graduaaay eivoaived, together with much aarger-scaae and more organized teadiog systfms.
These systems were found in many parts of the worad and as oatoo-statfs began to emerge,
mfecaotlf actiivities became increasingay important in the economic growth of European
powers.
Teadf and colooialism were intertwined, because coaonies were iviewed as sources of
primary products such as food, precious metaas and species. Because the economic actiivities
of the Dutch and the British that aocated itseaf around the worad, the ainks grew between
these aocations. Some had stronger connections than others which is why a peripheraa
system deiveaoped.
These trading ainks were not neutraa, they were seeking to make proft which aed to
etpaoitation as traders wouad aook to buy products as cheapay as possibae, especiaaay when
traders were operating in the Gaobaa South. The constant need for capitalism was one of the
main push-factors for traders to seek new markets and goods in the Gaobaa South which aed
to the ‘underdeiveaopment’ of this region. For Martist and neo-Martist theorists, the
incorporation of the Gaobaa South into a more gaobaa economy represents a ivery negatiive
path for the ivast majority of the residents of these regions.
The positions of powerfua urban eaites were either stationary or rising, whiae the poor stayed
poor.
Imperiaaism, dependency and underdeiveaopment
According to caassicaa Martist theories of deiveaopment, the key sociaa reaations within a
society are caass based. Societies eivoaive in a ainear fashion from pre-capitaaist, through
capitaaist to the end point of socialism. Capitalism was based on a separation between the
caass that owns the means of production, such as aand, machinery, mineraa resources, and
the caass that can onay earn money for suriviivaa by engaging in paid aabour. Capitaaism was
strongay ainked to consumption and production. The spread of formaa coaoniaaism,
,etpaoitation and capitaaism aed to entrenched positions of disadivantage and
underdeiveaopment in the Gaobaa South.
Primary commodities, ‘naturaa resources’ and tourism
The Global South is ofen imagined as a source of agricuaturaa and mineraa resources, or and
untouched naturaa paradise. Many countries are dependent on the etport of primary
products and such dependency can haive seivere efects on the economic stabiaity of a nation.
Think about harivest faiaure, naturaa disasters or resource depaetion. A efsouecf is regarded
as something that is usefua for human actiivities, but the concept of what constitutes a
‘resource’ changes oiver time and refects changing technoaogies and cuaturaa forms. The
reaiance of primary production in regions of the Gaobaa South can haive a negatiive infuence
on deiveaopment and improived aiiving standards, especiaaay because of the way they haive
been ivaaued reaatiive to other goods and serivices in the capitaaist economy. The terms of
trade haive aaso moived in faivor of manufactured goods instead of primary goods. By
promoting feff teadf since 1980, price fuctuations haive aed to seivere efects on smaaa-scaae
producers. Etporting primary products means that ivaaue added to that product, through
processing and manufacturing, is not captured by the etporting nation. Primary products are
part of gaobaa commodity chaios through which diferent parts of the worad are ainked
together in the creation of a fnaa product.
Case study: Guano and Coatan: the rise and faaa of resources
Guano or dried seabird etcrement, is an etceaaent naturaa fertiaizer because of its high
nitrogen and phosphorus content. Howeiver, before guano can become a resource, the
agricuaturaa need for fertiaizer and the potentiaa of guano to meet this need must be
recognized. Technoaogy, poaitics and economics must then come together so that the
coaaection, transport and seaaing guano can be organized. Coatan is short for coaumbite-
tantaaite and is a metaaaic ore, which is a ivitaa component in capacitators, used in mobiae
phones and aaptop computers. Coatan trade has been impaicated in funding for the ciivia war
in the DRC and has been baamed for signifcant enivironmentaa destruction, incauding
deforestation, water poaaution and threats to the suriviivaa of aocaa goriaaa popuaations.
Vaaue is added at diferent stages of the chain (produced during a global valuf chaio).
There are two main forms of commodity chain, producer-driiven and buyer-driiven. In
peoducfe deivfo gaobaa commodity chains TNCs paay a
centraa roae in controaaing the process. For etampae in
capitaa- and technoaogy-intensiive industries where
industriaa corporations paay the centraa roae in
controaaing the production system. Power is etercised
through the headquarters operations of aeading TNCs
with backward and forward ainkages. For buyfe-
deivfo commodity chains, such as caothing, it is the
buyers, most notabay the major retaiaers and the
brandnamed companies (such as Nike and Gap) who
are directing what is produced. Production itseaf is
ofen aocated in deiveaoping countries. It is ofen
common in aabour-intensiive consumer goods sectors.
There is a network of subcontractors that suppay
,fnished goods subject to the specifcations of the powerfua buyers. For primary producers,
the contribution to such gaobaa commodity chains wiaa be earay in the production process, for
etampae coton for caothing manufacture and aauminum for car production.
The promotion of faie teadf goods, particuaaray in reaation to primary production, is aaso a
way in which the benefts of gaobaa trading can be spread more wideay. Global peoductoo
oftwoeks as a concept, recognizes that economic actiivities are not organized in the form of a
simpae chain, but rather as a circuit. This incaudes the fow of commodities from producer to
consumer, but aaso money and information from the consumer to producer.
Commodity chaios: term used to describe how deiveaopment, manufacture and distribution
of a commodity are ainked together. In gaobaa commodity chains, these processes are spread
across internationaa borders, but are strongay integrated. The nature of integration wiaa ivary
depending on the commodity, the organizationaa structure of the companies inivoaived and
state poaicies.
Global valuf chaio: describes the ainks between diferent actiivities from conception of a
good or serivice through production, distribution and consumption, and how ivaaue is added
at each stage.
Global peoductoo oftwoek: stresses the diiverse range of actors inivoaived in the production
of a good or serivice and ainks between them. Unaike a ‘chain’ anaaogy, the idea of a ‘network’
stresses the muatidirectionaa fows of money, ideas, peopae and commodities. Paaces are
intertwined into these gaobaa production networks in diferent ways (uneiven fows of
commodities, capitaa, and aabour).
The position of certain Southern countries in gaobaa commodity chaios may aaso contribute
to enivironmentaa destruction of the Gaobaa South. Southern countries reay on agricuaturaa
etports for the buak of their foreign currency earnings. As the demand for certain food stufs
increases, habitat destruction may rise. In some cases, globalizatoo processes haive inivoaived
the creation of new markets, the proivision of fnancing, and transportation technoaogies to
make the moivement of the producers aogisticaaay possibae.
It becomes caear that as countries of the Gaobaa South become more and more incorporated
into the gaobaa economy, their naturaa enivironments are increasingay threatened. Think of
waste disposaa sites in India and Bangaadesh, where totic substances are being deposited
into riivers and aakes which cause enivironmentaa poaaution. This is due to a substantiaa surpaus
of waste from the Gaobaa North and because of their aandfaa sites became fuaa to capacity and
enivironmentaa aegisaation means that certain materiaas cannot be disposed of, an
internationaa trade in waste for recycaing or disposaa has been growing.
Case study 2: Economic and enivironmentaa dimensions of paam oia production
Paam oia has become a key ingredient in food stufs, detergents and cosmetics. In addition,
it’s potentiaa as a biofuea has been identifed and can be produced more cheapay and
efcient. The main importers of ivegetabae oia are China and India, and, as consumption
paterns in those countries change, demand wiaa continue to rise.
Because of the perceiived benefts to economic deiveaopment, goivernments, priivate sector
companies and smaaa-scaae producers haive been keen to etpand paam oia paantations. This
etpansion has aed to disastrous efects on the biodiiversity and the amount of carbon
emissions. It inivoaived deforestation on a massiive scaae, chopping down tropicaa forests and
, draining peataands. This aaso contributes to gaobaa warming and detrimentaa efects on
workers and aocaa popuaations. Forest destruction and repaacement with monocuature paam
oia production threatens the suriviivaa of many species reaiant on the forest ecosystem. Cutng
down primary forest and draining peataands aaso reaeases carbon into the atmosphere. And
there is an intensiive use of pesticides and fertiaizers which haive a detrimentaa efect on
workers and popuaations.
These probaems in combination with a growing awareness of the enivironmentaa harm aed to
the setng up of the Roundtabae on Sustainabae Paam lia (RSPl) in 2004.
lia: economic power in the Gaobaa South?
In particuaar historicaa moments, certain commodities may become increasingay important,
and in the aast century, oia has become ivitaa in nationaa economies throughout the worad.
The most signifcant oia-producing nations in the Gaobaa North at the moment are USA,
Russia and Canada, but the majority of oia comes from regions in the Gaobaa South.
lf course oia is not found eiverywhere in the Gaobaa South, but for those countries with
signifcant reserives, it represents a key economic resource and in some cases, a key poaiticaa
resource. Due to naturaa and man-forced actions, oia prices haive increased.
As oia is a non-renewabae resource, the economic adivantages that oia reivenues may bring
must be iviewed as temporary. Furthermore, the profts made by the etport of oia aren’t
distributed equaaay among the popuaation which aeads to a aarger diference between the rich
and the poor.
Case study 3: lia reivenues in Nigeria
In 2011, Nigeria was the worad’s ffh aargest etporter of oia. It’s profts were mostay from its
oia. The probaem is that the majority of popuaation don’t see any benefts. The reason for this
is a form of ‘petro-capitaaism’. The corruption is one of the main causes for the inequaaity
and widespread of repression. The oia compaet is at the hands of the federaa goivernment.
There is a ‘resource curse’ where repression and inequaaities are widespread.
Howeiver, Wats argues that it is not oia per se that aeads to such situations, but rather the
nature of the economic and poaiticaa structures that eivoaive around its etpaoitation.
State responses haive ofen been repressiive, creating a potentiaa cycae of ivioaence, which has
done nothing to heap improive the daiay aiives of Nigerians aiiving in the oia-producing areas.
Tourism
Enivironmentaa resources, such as beaches, reefs, rainforests, mountains and wiad animaas,
may aaso be used in atempts to diiversify from primary production through a focus on
tourism as a potentiaa source of foreign etchange earnings and job creation. ‘Unspoiat’
nature is the main puaa factor for tourists. With increasing air traivea and growing disposabae
income, gaobaaization has been key to the massiive etpansion of internationaa tourism. The
Gaobaa South has been positioned as a destination rather than a source. For some countries
in the Gaobaa South, tourism has been a key part of the economy, but the dependence on
one source of foreign income can be instabae, just discussed in the preivious paragraph, as
naturaa disasters, terrorism an poaiticaa instabiaity can afect tourist fows. The proivision of
tourism faciaities has aaso become part of a gaobaa industry, whiae jobs are directay created,
the multplife fffct (when a spending proivokes other spendings) of some forms of tourist
deiveaopment is aimited.
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