15.4.4 Global North and Global South

The reality for many people in Africa, Asia, and Latin America is a stark reminder of the wide gulf between what some refer to as the Global North and the Global South. These labels describe the rough geographic pattern evident in the global distribution of the world’s richest and poorest countries. Most of the richest countries, such as the United States, Canada, and the EU countries, are in the north, while poorer countries predominate in the south (Figure 15.34). However, there are also wealthy countries such as Australia, New Zealand, and Singapore in the southern hemisphere, so the terms actually reflect economic realities and not geography. Furthermore, while not all people living in Global South countries are poor, those that are earn only a fraction of what the average person in a Global North country earns. The world is complicated, and complexity resists simple categorizations.

Many of the economic problems in the Global South can be traced to imperial exploitation, sometimes going back centuries. Countries in the Global North, especially in Europe, tended to reap the benefits of this exploitation. The legacy of colonialism and imperialism in Sub-Saharan Africa, Latin America, and southern Asia continues to affect these countries in the form of high levels of government corruption, poorly developed industries, and borders drawn for the benefit of imperialist powers rather than by the groups living there. In Africa, borders charted to benefit imperialist powers often separated members of the same ethnic group into different countries while forcing hostile groups into the same country. Violent ethnic conflict has been a frequent result.

Even Global South countries that are resource-rich have struggled to develop their economies over the past few decades. Indeed, they often have more difficulty responding to their domestic needs than countries that are relatively resource-poor. This problem, sometimes dubbed the resource curse, a term coined by British economist Richard Auty in 1993, makes resource-rich countries prone to authoritarianism, high rates of conflict, and low rates of economic growth. Resource-poor countries typically use citizens’ taxes for the majority of government funding, resulting in greater public scrutiny over how that money is used and governments that are more responsive to public needs. In contrast, governments in resource-rich countries are able to tap into profit-producing extractive industries like oil production to fund public expenditures. Because that profit is often quite large, opportunities for government corruption abound. Efforts to capture more profit also contribute to conflict and sometimes authoritarian regimes, as politicians use money to reward political supporters and fund security forces that silence opponents and stamp out protest. There is also typically less public scrutiny of potential corruption.

The African country of Angola, rich in diamonds and oil, has struggled with the resource curse. In 2018, oil made up more than 92 percent of its exports, and the oil industry accounted for about a third of its GDP. Since achieving independence from Portugal in 1975, the country has experienced internal wars and massacres. For much of this period, until 2017, Angola was ruled by José Eduardo dos Santos, who was routinely criticized internationally for election fraud, corruption, and authoritarianism. Much of his power was derived from the oil rents paid to him by oil companies operating in Angola, which he used to oppress his opposition, maintain his hold on power, and shower his family and close contacts with favors and money. The oil rents were substantial, but relatively little of this money actually trickled down to the country’s largely impoverished people (Figure 15.35). Strife also weakened Angola’s ability to feed itself. Famine conditions prevailed in the 1980s and 1990s, and many educated and skilled workers left for opportunities abroad. In 2019, the percentage of the population below the national poverty line was 41 percent, 30 percent of adults had not completed primary schooling, and 53 percent of the country had no access to electricity.

While Angola is an extreme case, its problems are generally representative of those in many countries across the Global South, including those unaffected by the resource curse. As of 2015, approximately 85 percent of the world’s extreme poor (those living on less than $1.90 per day) lived in Sub-Saharan Africa and south Asia, and half of them lived in just five countries: India, Bangladesh, Nigeria, the Democratic Republic of the Congo, and Ethiopia. Many lack access to good-quality medical care, infrastructure, educational resources, and communication systems. They face high rates of famine, disease, and death from political instability. They also experience food instability. According to the United Nations, approximately 800 million people faced hunger in 2020, many in the Global South. They are also more vulnerable to natural disasters like hurricanes, earthquakes, tsunamis, and heat waves. Their countries are more likely to experience problems related to environmental and industrial pollution, as well as the many effects of climate change.

These difficulties have been at least partially alleviated by the efforts of international organizations like the World Bank and the International Monetary Fund (IMF). The World Bank has encouraged community-driven development by supporting government planning and investments that prioritize a bottom-up approach. It has helped countries manage the problem of persistent natural disasters, such as financing early warning systems for tsunamis in Southeast Asia. And it has provided funds to meet educational needs, to provide infrastructure for clean water, and to combat hunger by boosting agricultural production. Similarly, the IMF has provided a pool of monetary resources countries can access when they fall into financial difficulties.

While both organizations can point to their many achievements, they have occasionally made problems worse. Critics like the economist Joseph Stiglitz, for instance, point to the many conditions the IMF imposes on countries when it comes to help. These include increased privatization, elimination of protectionist policies, higher interest rates, and austerity measures that reduce government spending. Such conditions, Stiglitz and others have noted, tend to benefit foreign creditors from the Global North and hurt poor workers in the countries the IMF purports to be saving. Similar criticisms have been directed against the World Bank. Many have argued that the organization lacks representation from the Global South, so poor countries have relatively little influence within the organization and on its policies and actions.