Return of the south

Print edition : January 24, 2014

The Poorer Nations: A Possible History of the Global South, By Vijay Prashad, LeftWord Books, New Delhi, 2013, Pages: 300, Price: Rs.600.

Prime Minister Jawaharlal Nehru and the Indonesian President Sukarno driving through the streets of Bandung in April 1955. The global financial crisis has opened a possibility of a rebirth of the Bandung spirit among southern nations. Photo: The Hindu Archives

The book is among the few that actually attempt to tell the story of neoliberalism from the perspective of those who struggle against it, both at the ground level and at the level of national liberation leaders trying to push against the tide.

THERE is a basic story about the postcolonial era which is told in some version around the world. It goes as follows:

“The end of colonialism did not mean the complete end of imperialist domination but it did mark a change in the nature of empire. While there are examples of violent neocolonial aggression—in Iraq, to give a recent case—by and large this new phase of imperialist domination involves a subjugation of the needs, interests and basic human rights of people to the interests of a powerful and wealthy few. The beneficiaries of this subjugation can be defined in class terms (the global 1 per cent), but they can also be defined in geographic terms—by and large these elites come from the United States, Europe and Japan. Tools that ensure the global economy serves the interests of those in power include control over international financial institutions, including the International Monetary Fund, the World Bank and the World Trade Organisation.”

This is in some ways a tidy storyline. Those reading this story hundreds of years from now might imagine a very clever Caesar who anticipated his own decline and put in place systems to ensure that, even though nationalist movements may achieve political success, the change in global power structures and in the living conditions of the poor would never materialise. Colonialism would be gone in name and its more primitive aspects disposed of, but the underlying economic structure would remain in place. The populations of Asia, Africa, Latin America and the entire global south are misguided fools in this story, led by corrupt indigenous elites who use the rhetoric of liberation and human rights to manipulate their own people into continued economic subjugation.

In The Poorer Nations, Vijay Prashad shows us that this story is far more complicated. The histories of struggle in the postcolonial age may not be as well known as those of the colonial era, but they are every bit as real. And in the subtitle of the book ( A Possible History of the Global South), Prashad gives us hope that the ending to the story has yet to be written.

Prashad’s version of the story should be understood both in terms of decades —which tend to correspond with certain global trends or at least domains of struggle—and in terms of milestones. The story that occurs between two of these milestones—the Asia-Africa Bandung conference of 1955 and the ongoing global financial crisis that began in 2007—is worthy of a George Lucas film.

Bandung and the backlash

Bandung is a logical starting point for the story. At the time of Bandung, while many of the Asian and North African countries had already completed the process of national liberation from colonialism, Ghana would be the first country in sub-Saharan Africa to attain independence and it did not happen until 1957. So, this was a moment between the colonial and postcolonial eras, where countries could come together and articulate a vision for development that was explicitly anti-colonial.

The Bandung declaration—not particularly radical for its time—reads like a manifesto today, especially to those of us who have waded through the mountains of insipid technocratic gobbledygook churned out by the modern development industrial complex. The basic ideas are pretty tame—in the postcolonial era we will assert our right to develop and will do so by helping each other out, with the bigger countries leading the smaller—but were dangerous enough to spark a backlash that has kept those ideas under wraps until today. For the purposes of clarity, let us call the ideology underlying the Bandung declaration “South-South Solidarity” (SSS).

In the 1970s, the backlash against SSS took two forms. The first was what Prashad terms “trans-Atlantic liberalism” (TAL) and the remnants of this ideology still comprise the bulk of development discourse today. Embodied by the Brandt Commission report of 1980, TAL posits that there is a great divide between northern countries and southern countries and that the northern countries must pay the southern countries a small amount (0.7 per cent of the gross domestic product to be precise) to help rectify the balance. In addition to this aid, northern countries should be willing to improve trade policies, forgive debts and so on, with the ultimate goal of ensuring that poor countries can at least provide a decent standard of living for their citizens. The thought of southern countries and northern countries ever having an equal say in global affairs does not even arise from the perspective of TAL, and the somewhat patronising nature of the discussion continues to colour global debates on aid and trade even today.

Ideology of RealPolitik

By the mid-1970s, a third force had entered the scene. This ideology—let us call it RealPolitik—saw SSS as no different from communism (and to be opposed at all costs) and saw TAL as a potential step in the same direction. The proponents of RealPolitik had to move quickly to avert these threats and had to find ways to strong-arm world leaders both north and south into playing a different game, a game in which the domination of the north over the south was being strengthened despite anyone’s sense of morality.

This ideology came with a twist—a personal incarnation. In the avatar of Henry Kissinger, the ideology of RealPolitik took life.

It was Kissinger and his followers who first brought together the Group of Five (G5), which would later become G7 and then G8. In one of the most memorable accounts of the book, Prashad describes the scene in 1975 at the first G7 meeting in the Chateau de Rambouillet in France, where a number of heads of state and high-ranking officials were stuffed into an undersized medieval castle. After setting the scene, Prashad reveals this shocker from the mouth of the West German Chancellor, Helmut Schmidt:

“I am a close friend of the chairman of the textile workers union in Germany. It is a union of shrinking industry. I would hope that this would not be repeated outside this room. Given the high level of wages in Europe, I cannot help but believe that in the long run textile industries here will have to vanish…. It is a pity because it is viable… but wages in East Asia are very low compared with ours.”

This quote (from 1975) pretty much sums up the nature of corporate capitalism in, say, 1995. Quite apart from any colonial question was the fact that conditions in Europe and the United States had changed as well. In these countries, labour was demanding a bigger piece of the pie both through wages and through the continued expansion of the welfare state. Elites had to find a weapon against what they described as “militant unionism” and they found it in the Third World. By incorporating developing countries into the global manufacturing system, they could undercut wages at home and build up an array of political and economic clients abroad. The result would be a company that had operations in many countries—each part would be manufactured wherever it was cheapest —but in which nearly all the profits returned to shareholders in the U.S. or Europe.

Though this shift was predicted (and perhaps planned) in the 1970s, it took decades to implement. A certain policy framework had to be in place in developing countries that would allow for the free movement of goods with little or no taxes, private (and transnational) control of what were often state resources, and assurances that the state would not raise wages or impose other burdens in terms of regulation. The answer for imposing this framework was the Washington Consensus.

The Washington Consensus and neoliberalism more generally are thought of as ideological positions —what Jeffrey Sachs describes as “free-market fundamentalism”. While that is not incorrect, Prashad argues that these policies also played a very important role in reshaping the global economy in the interests of transnational corporations and their owners. By making privatisation (so that international companies could own what were once state-owned enterprises), liberalisation (so that multinational companies could “trade” with themselves between national boundaries without worrying about regulation or tariffs) and budget cuts (so that countries would not be able to invest in meaningful development and thereby undercut the transnational model) a question of “how to do capitalism” as opposed to a question of “how to do capitalism to benefit the already rich”, the Washington Consensus served an ingenious role.

Implementing the vision that the German Chancellor laid out in 1975 occupies much of the book’s telling of the 1980s and 1990s. China’s emergence as the world’s chief global manufacturing hub is the main story of the 2000s. By 2007, largely as a result of all that reshaping that went on in the 1980s, the global economy could be characterised by a single word: imbalance. China relied too much on U.S. demand, which was driven by credit card debt; the U.S. demand relied too much on Chinese goods, which were kept artificially cheap because of low wages; and the rest of the world relied too much on Chinese production and U.S. consumption in general. When the housing bubbles that had inflated in many part of the U.S. and Europe collapsed, they risked bringing the whole thing to a stop.

Rebirth of ‘Bandung spirit’

It is at this point that the possibility of a rebirth of the “Bandung spirit” becomes possible. Formations of large developing countries —BRICS (a grouping of Brazil, Russia, India, China and South Africa) being perhaps the most important but others also playing a role—came together in the post-financial crisis world to demand two things. First, they wanted a greater share in the global governance structures—IMF voting rights, United Nations Security Council seats and so on. But second, they wanted to play a larger role in the economy, a process that had already begun but was now really taking off.

And it is here that we get to the “possible” in the “possible history”. Saying that the BRICS and other large developing country blocs want to play a bigger role in the global economy can mean two things. Either it can mean that instead of (or in addition to) companies such as Walmart (the U.S.), Shell (the United Kingdom/the Netherlands), and Apple (the U.S.), it should be companies such as Vale (Brazil), Sinopec (China) and Reliance (India) that play the largest role in the global economy. Or it can mean a change in the model, a new beginning, a chance for countries to develop strategies to meet the needs and interests of all their citizens, not just the global 1 per cent. It can mean the fulfilment of promises made over half a century ago at the very start of the postcolonial era.

Prashad would claim (and I would agree) that we do not yet know which of these answers will come to fruition. Signs are not encouraging and Africa has its share of Brazilian/Chinese/Indian-funded projects gone wrong. (Though, as yet, these projects cannot compare in number or scale with European/U.S-funded projects gone wrong.)

But history—even as it unfolds—is a contested space. The peoples of the south must take an active role in this debate, in shaping that history and in fulfilling the vision of a more just planet leaders such as India’s Jawaharlal Nehru, Indonesia’s Sukarno and Ghana’s Kwame Nkrumah laid out two generation ago.

History is also written by the winners. In producing such an articulate and well-documented tome, Prashad has done us an invaluable service. Whether or not one agrees with every word of the telling, this is one of the few books that actually attempt to tell the story of neoliberalism from the perspective of those who struggle against it, both at the ground level (the stories of the World Social Forum, the 50 Years Is Enough network, and other alter-globalisation movements are also included) and at the level of national liberation leaders trying to push against the tide (with significant attention paid to Julius Nyerere, among others).

If I have a complaint with the book it is that in trying to do justice to the overall narrative, Prashad ends up telling too many stories. While the first chapter (which I refer to as “Kissinger v. World”) pulls it off brilliantly, as the reader gets deeper into the book the strands become less coherent. It is a failing that I am willing to forgive, but the result is that if one is not already conversant with the language of these global power structures one is likely to get a bit lost. (Explain to me how the G15 is different from the G24 which is different than the G77 again?) Had I access to a book like The Poorer Nations 20 years ago I would have been a much better informed advocate and strategist on issues of global economic justice than I have been. Its many narratives are helping me and my colleagues to better shape our work on global development in general and in BRICS countries specifically. To those entering development work or just trying to be informed global citizens, it should be required reading.

Sameer Dossani serves as advocacy coordinator for ActionAid International and was formerly the director of 50 Years Is Enough: The U.S. Network for Global Economic Justice.

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