1. THE GLOBAL SOUTH

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

3. 5 CATEGORIES OF GS COUNTRIES Who is the Global South?

4. IPE Categories of GS Countries 1. Emerging Markets 2. Frontier Markets 3. CITs 4. LLDCs 5. HIPCs

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

6. 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 ¤

7. 5 Categories of GS Countries 3. Frontier markets  Investment category  Coined 1992  Below EEs  More risk ¤ http://www.investmentfrontier.com/2014/06/11/change-good-msci-fixes-frontier-market-indexes/

8. 5 Categories of GS Countries 4. Least Developed Countries (LLDCs)Least Developed Countries  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 http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita ¤ Map based on info from www.un.org/en/development/desa/policy/.../ldc_list.pdfwww.un.org/en/development/desa/policy/.../ldc_list.pdf

9. 5 Categories of GS Countries 5. Heavily Indebted Poor Countries (HIPCs)Heavily Indebted Poor Countries  Status initiated 1996 by IMF & WB  39 countries (2014 IMF identified HIPCs)  29 in sub-Saharan Africa  35 accepted relief ~$74 B  Reliance on cash crops  Cotton accounts for 46% of Mali’s export earnings ¤

10. Let’s Play Pit

11. 8 different commodities 8 players per deck Each player starts with 9 cards Goal is to “corner” market on one commodity Trade cards Need 9 cards of same commodity to win Ring bell

12. Let’s Play Pit Rules: Trade 1 to 4 cards at a time All cards must be of the same commodity Call out the number you wish to trade Trade with someone who wants to exchange the same # of cards All cards traded must be of the same commodity Don’t tell others what commodity you’re trading- only the #

13. Let’s Play Pit: Round 2 Rules: Trade 1 to 4 cards at a time Cards can be of any mix of commodities Call out the number you wish to trade May attempt to exchange an unequal # of cards  Must finish with 9 cards Don’t tell others what commodity you’re trading- only the #

14. Let’s Play Pit: Round 3 Pre-Round division Divide group of 8 into two groups: ‘A’ and ‘B’ Deal cards

15. Let’s Play Pit: Round 3 Rules for As: Trade 1 to 4 cards at a time Don’t tell others what commodity you’re trading- only the # Trade any mix of commodities Rules for Bs: Turn all cards face up for everyone to see Trade 1 to 4 cards at a time May reject trade with A If choose to trade with A, As can pick what they want ; give Bs unknown cards in retur

16. Pit Debriefing Which of the 3 versions of Pit most resembles how the international trading system works? Why do you think that is so? Which of the 3 versions of Pit do you think is the fairest way to trade? Why? How could you design a version of the game that would be fair? Is it possible to change the world trading system even if you want tot and regardless of what it looks like in reality? What would have happened if all of the Bs in game #3 decided to form a collective and trade only among each other and not with the As? If you’re a B country, what options do you have? How possible is it to break the global structure, or in the case of the game, challenge the rules? Does playing the game give you a better sense of  How trade in the world works  What affects trade relations  The difficulties of being a former colony  GS development hurdles

17. Development Hurdles

18. Development Hurdles: IMS Currency instability Dependence on primary goods Market isolation; lack of market integration  Need more trade liberalization Strains on public spending ¤

19. Development Hurdles: IMS Taxes in Africa Why has Burundi’s tax take almost doubled since 2101?  Get businesses to pay taxes  Less corruption ended inflated tax bills  Reduce department corruption  Recruited new staff based on entrance exam  Transparency  Autonomous agency ¤

20. Development Hurdles: IMS Taxes in AfricaTaxes in Africa (cont.)  Gov’t policies  Gov’t lowered taxes  Added VAT to broaden tax base  Tax office focuses audits for highest yield potential  Keeps gov’ts honest  Accountability to citizens ¤

21. Development Hurdles: II & IF Political stability Infrastructure & institutions

22. Development Hurdles: Gender Equality UN Gender-related Development Index (GDI)(GDI) CountryGDP p/c Women GDP p/c MenDev. Level Saudi Arabia$16,197$78,689Very High Norway$56,994$70,807Very High U.S.$41,792$63,163Very High China$9,288$13,512High Botswana$11,491$18,054Medium Pakistan$1,707$7,439Low

23. Development Hurdles: Gender Equality Gender inequality hinders development Less literacy  higher population Less education  more child labor Lower GDP p/c for women v. men in every country ¤ http://www.glpinc.org/Web_pages/Illiteracy_Globally.html

24. Income Inequality http://www.theatlantic.com/international/archive/2011/09/map-us-ranks-near-bottom-on-income-inequality/245315/http://www.theatlantic.com/international/archive/2011/09/map-us-ranks-near-bottom-on-income-inequality/245315/, 2011

25. Development Hurdles: Income Inequality Gini index- measures inequality  Gap bt. rich/poor Development  income equality  More developed  greater equality  Less developed  lesser equality  Stark exception is US  Brazil: 10% control 51% of wealth  Mexico & Argentina: 10% control 42% of wealth http://en.mercopress.com/2010/03/27/gap-between-rich-and-poor-in-latinamerica-is-largest-in-the-world-says-un ¤

26. Development Hurdles: Income Inequality More income equality = higher growth rates (IMF report)IMF Consequences of income inequality  Fewer people with resource access  Banking, formal sector credit  Social services  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 ¤

27. Development Hurdles: GN Reliance Conflicting interests with GN  Self-interested actors Reliance on GN  Foreign Aid  Technology  FDI  Employment ¤

28. Development Hurdles: ITS Promoting sustainable development  Sustainable development expectations  Environmental issues  Human security issues  Need to diversify  Cash crops taxes farmland; deforestation  Non-renewable resources Nigeria- 75% of GDP  petroleum ¤

29. Development Hurdles: ITS Resource exploitation- Conservation articleConservation Why is poaching such a huge problem in GS countries?  Lack of investment in local communities  Wildlife damage crops, livestock  Poverty  Lack of job opportunities  Corruption  Arable land designated as national parks  Need to address demand ¤

30. Development Hurdles: ITS Labor in BoliviaLabor in Bolivia article Why did Morales back a law to lower the minimum age for child labor?  Reflects the reality of the situation in Bolivia  42% families need kids’ earnings  Creates wider safety net for workers  They’re already working anyway- law mandates work permits, humane conditions, fair wages  Stay in school- can legally work  Kids actually pushed for the law  Keeps kids off the streets

31. Development Hurdles: ITS What are the criticisms of this policy?  Lack of enforcement  Kids working in adult-only more hazardous industries  Many just aren’t aware of the new law  Focus should be on sex education and birth control  Need to limit family sizes in rural areas to curb poverty  At same time, gov’t has under-population issue ¤

32. Development Hurdles: Corruption  Not limited to GS, but far more endemic  Correlation bt. corruption and parking tickets  Transparency Int’l Transparency Int’l  TI Index TI Index  Mo Ibrahim Foundation Mo Ibrahim Foundation  Est. 2007- but only 4 winners ¤

33. What similarities do the highlighted countries have that are tied to corruption?highlighted countries  Authoritarian rule built on some guiding principle  Surrounded by cronies  Regulate media  Firing challengers  Bribes  See as ‘merit-based’ reward for public service or to the state  Everyone else does it; if don’t, seen as untrustworthy  Claim to serve ‘their people’  Try to conceal corruption  Point fingers to accuse others =image of addressing issue  Apathy, tacit consent of public  Especially during economic growth  Distractions  Economic growth, nationalism, public shows of humility

34. Development Hurdles: Job Availability Lack of FDI Primary goods reliance Remittances China, India, Mexico, Philippines ¤

35. Development Hurdles: Job Availability How could migrants’ money be put to better use?migrants’ money Expensive money transfer services Migrants often lack formal financial services Fear of money laundering, financing terrorism Huge fees for transferring $ Don’t invest money- keep at home Lack financial infrastructure, literacy Hurdle of preferred informal channels ¤

36. Development Hurdles: Job Availability Need GN intervention Argument: Better development potential with improved system to remit $ G8 (now G7)- reduced fees Hurdle of preferred informal channels Why were banks willing to comply? ¤

37. INTERNAL & EXTERNAL POLICY STRATEGIES GS Development Tactics

38. Internal Policy Strategies  Import substitution  Nationalization of industries  Establishing cartels  Protectionism ¤

39. 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 ¤

40. Good News? Fewer people in extreme poverty Healthier people ¤ YearBillion People% Living on <$1.25/ day 19811.94 BP52% 20081.29 BP22% 20111.1 BP15% http://economy.money.cnn.com/2012/03/01/650-million-escape-extreme-poverty-thanks-china/http://economy.money.cnn.com/2012/03/01/650-million-escape-extreme-poverty-thanks-china/ ; http://www.un.org/News/Press/docs/2011/gaef3313.doc.htmhttp://www.un.org/News/Press/docs/2011/gaef3313.doc.htm

41. Recap

42. The Global South Who is the GS? Development Hurdles GS Economic Development Tactics

43. GS Development Tactics You’re the leader of an average income GS country. What development tactics might you implement to foster development? *Be sure to keep in mind the development hurdles*