Why is there a Global North-South economic divide in world politics today? There have been and still are many problems in the world of politics today. The Global North-South economic divide is just one of them. In order for this essay to be answered, it needs to be split into several sections accordingly. Firstly a definition of what the 'North-South' divide will be offered, however there are many types of North-South divides (like digital divide, knowledge divide) but this essay will be looking at the economic divide.
Secondly and the pivotal part is the reasons as to why the divide still exists in world politics today with reasons such as colonialism and trade. Finally a conclusion will be given summarising the essay and also provide ways to bridge the 'gap' in the North-South economic divide as for many states the divide has more disadvantages than advantages. The North-South divide is the socio-economic and political division which exists between the wealthy developed countries, known collectively as "The North", and the poorer developing countries, as "The South".
Although most nations comprising the "North" are in fact located in the Northern Hemisphere, the divide is not primarily defined by geography. The term was coined to differentiate the cultural divide between East and West. As nations become economically developed, they may become part of the "North", regardless of geographical location, while any other nations which do not qualify for "developed" status are in effect deemed to be part of the "South". 1 For more than a generation, the North-South divide was central to the explanation of world inequality and poverty.
From the 1960's until the late 1980's, the image of a world split between the wealthy developed countries of the North and the poor developing countries of the South fuelled the activity of policy makers and scholars alike. 2 Through the 1950's and 1960's, countries regarded as developing nations were weighted down with unequal trade agreements, multinational pricing practices, debt burden, pre-capitalist appropriation of labour, capital flight, the looting of natural resources and local corruption.
As well, it was harder for the developing countries to compete and work in an economic system that favoured the northern countries. 3 The international financial institutions, the stock markets, the commodity cartels and the monopoly structure of global capitalism stacked the cards against the developing world, in favour of tilting the economic wheel of prosperity towards the North. As a result, the pillage of the third world continued, even after the colonizers departed and, supposedly, left free, open and independent societies.
In the process, however, the developing countries were left with depleted resources, a barren land, stagnate economies, financially ruined governments and impoverished people. 4 From the 1960's until the late 1980's, the world split between the wealthy developed countries of the North and the poor developing countries of the South fuelled the activity of policy makers and scholars alike. 5 One of the foremost reasons for why the north-south divide exists is because of colonialism.
For a long time many countries in the North held colonies in the South as assests and prevented them from developing so that their power was retained. A good example is Zambia, which only gained independence in 1954. Up until then, Zambia was suppresed since over 70% of profits from copper went overseas and only $60 million of capital flowed into the country each year. Therefore the colonial power acted as a block to development. This is not the case now but there is something of a concern which is linked to colonialism which is multinational power.
This is another reason why there is a global north-south economic divide today; multinationals like Nike and Coca Cola own many industries in the South. They exploit these countries through cheap land and labour as well as lax safety regulations. 6 In Taiwan, many Nike employees have their rights suppresed and are paid ridiculous wages; to give an example of how much they get paid it is said that they work 10-12 hours a day, mostly every day and if they did this for a year they would earn roughly just 1,500. 00.
This is what generally people in the UK earn in a month. Safety regulations in relation to Multinationals are also lax in many southern states; because Multinationals, through less regulation do not have to worry so much about safety regulations such as; safety for their workers like they would have in more developed countries, pollution controls and physical overload (amount of hours worked).
One of the major reasons that there is a North-South economic divide, is because the North have mostly cornered the market, thus causing it to developed while the South struggle. The South is trying to develop, but have the problem in trading with the North as they have more control over markets. The inability to trade is an important aspect as trade is an essential part to development since a favourable balance of payments can be achieved. 8 This leads to the next reason why the divide still exists; currency.
Although the recent introduction of the Euro across Europe has improved the economy is some areas at the very least, the South do not have this luxury. Different states in the South all have different currencies so thus the inability of the South to obtain foreign currency like the dollar or the pound is an important reason as to why the divide still exists today. The currencies in the South are unstable and therefore in order to trade they must obtain currencies used worldwide; like the dollar or the pound.
This is often achieved through international trade but this is blocked through lack of available markets and through the imposition of tariffs and quotas upon exports coming from the South. To give an example; one of the major constraints for South Africa in their supply of textiles and clothing has been inadequate foreign currency reserve causing them the inability to cover industry import needs. 9 Another concern brought about in regards to the deteriotation of exchange rates is that it increases the poorer countries debt problem.
In addition, when payments are made, precious national resources that could be spent on developing fair and sustainable economies and societies are channelled back to the rich North. In other words, the international status quo is impeding sustainable development, income generation and poverty eradication. 11 Another reason for the divide is resource dependancy. The reliance on one export can at first be successful and prosperous but then can lead to disaster. As already mentioned, Zambia had much reliance over their copper sales.
In 1997, Zambia was relying on copper to be its main seller as it was 75% of their export earnings in the mining industry; the vulnerability of Zambia's economy due to its reliance on copper mining has been exposed in the very recent past by the falling copper price and by falling production as a result of limited re-investment in the mining industry. 12 Another point to make in relation to resources is in regard to Africa and coffee beans. As it is well known the WTO (World Trade Organisation) allows tariff escalation; this means it is cheaper and easier for Africans to export coffee beans that it is to export processed coffee.
Therefore Africa does not develop beyond coffee growers. 13 It also allows for tariff peaks that are used to keep out goods where African countries have particular advantage like leather goods. So therefore, any move by Africans to develop manufacturing capabilities or to exploit comparative advantage to benefit meaningfully from their products meets with enormous obstacles and disincentives n Northern markets. These obstacles are legal and continue the colonial legacy of forbidding manufacturing in the colonies.