Understanding International Relations, Third Edition

The end of the South?
The full implications of the changes will be discussed in the next chapter,
but to end this chapter, the story of the South, structuralism and the NIEO
will be brought to a kind of conclusion. A few basic points will make clear
the impact of these changes. In classic Southern/structuralist thinking from
Prebisch onwards, the South is seen as a source of primary products for the
world economy, and this is deemed a source of problems; however, over the
past 20 years the South, or at least parts of the South, have become major
centres for manufacturing production, easily reaching the NIEO targets in
this respect without much assistance from the Northern states – indeed, the
expansion in the South has been to an extent at the expense of jobs in the
North. The significance of this can be underlined by examining classic writ-
ings of structuralists on industrialization in the South, where the possibility
of such shifts are simply ruled out. Some have attempted to undermine the
significance of these moves by, for example, describing Southern industrial-
ization as dependent development – but without explaining adequately
what independent development would look like.
Again, 20 years ago the MNC was regarded as an enemy of Southern
development, exploiting local raw materials or cheap labour and expatriating
profits; thus, in order to avoid allowing the giant oil companies to share in
the profits from exploiting its newly-viable oil-fields, Mexico borrowed
The Global Economy
159

---

from the banks to finance this development – forgetting that banks have to
be paid whether the investments they finance are profitable or not, while
MNCs actually share the risks associated with new ventures of this kind. In
any event, while MNCs continue to exploit their strengths, advanced
production techniques have limited the amounts of raw materials used in
production processes, and cut the proportion of the value of products which
represent labour costs to the bone. Nowadays, manufacturing MNCs are
concerned to find political stability, trained workers and access to global
markets before they will invest or franchise, and profits that are not invested
in R & D will be wasted. Today, in other words, Southern countries have to
engage in the same kind of triangular diplomacy between national and
international capital and the state that is characteristic of Northern
countries – albeit with slightly, but not greatly, different bargaining power.
Some Southern countries have done very well out of this; others have been
altogether ignored by the giant corporations.
Clearly, one of the features of the last 20 years has been stratification
within the South. Some countries have done very well, such as the NICs of
the Pacific Rim, and, to a lesser extent, Latin America, while others have
done very badly, particularly in sub-Saharan Africa. Still others have expe-
rienced some success, but from a very low base, and mixed with the contin-
uation of extremes of poverty, as is the case in India and the Philippines.
China is rapidly becoming one of the world’s leading industrial powers,
while Singapore is richer than many Northern industrial countries. Meanwhile,
living standards are actually falling in Bangladesh and Pakistan. There is no
longer a characteristic Southern economy – hence the rhetoric about the
‘end of the Third World’ alluded to in the heading of this section, which
dates back to the 1980s (Harris 1986).
It should be apparent that what is being suggested here is not that all is
well in the South and that oppression and injustice are coming to an end.
This is obviously not the case; poverty, malnutrition and hunger remain real
problems, perhaps of increasing significance, and, even in those areas where
industrialization is taking off, exploitation is rife. There is no difficulty
finding examples of workers (often young women) living on starvation
wages while assembling luxury goods for consumers in the advanced indus-
trial world. High-pollution industries abound and in many cases these
industries have been deliberately exported from the North. The point is that
this exploitation is rather different in kind from the exploitation described
and anticipated by the structuralists 30 years ago. Then the assumption was
that the South would be pushed down as a concomitant to the North con-
tinuing to rise – the world economy was described as a zero-sum game in
which the ‘winnings’ of the North matched the ‘losses’ of the South. Now,
things look rather different. Certainly the North has continued to grow
(albeit unevenly) and develop new products and industries, but the South
160