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Africa: Rise of the Global South
AfricaFocus Bulletin
May 13, 2013 (130513)
(Reposted from sources cited below)
Editor's Note
"Although most developing countries have done well, a
large number of countries have done particularly well --
what can be called the 'rise of the South'. Some of the
largest countries have made rapid advances, notably
Brazil, China, India, Indonesia, Mexico, South Africa and
Turkey. But there has also been substantial progress in
smaller economies, such as Bangladesh, Chile, Ghana,
Mauritius, Rwanda and Tunisia. ... For the first time in
150 years, the combined output of the developing world's
three leading economies -- Brazil, China and India -- is
about equal to the combined GDP of the longstanding
industrial powers of the North -- Canada, France,
Germany, Italy, United Kingdom and the United States." -
UNDP Human Development Report, 2013
There has been much attention focused on the rise of
China as an economic world power and its impact on Africa. The
BRICS grouping, including Brazil, India, Russia, and
South Africa, as well as China, also often appears in the
media. But, notes this year's Human Development Report from the
United Nations Development Program Programme, the focus
only on specific countries understates the importance and
pervasive impact of the advance of a wide range of
developing countries on both economic and social measures
of development.
For this trend to continue and to be expanded to other
countries still falling behind, in a world of great
inequality, development policies must be adapted to build
on the multiple components for success and avoid a narrow
focus on economic growth alone.
This AfricaFocus Bulletin contains excerpts from the
summary of the report. The full report, press releases,
statistical tables, and other background documents, are
available on the UNDP website at http://hdr.undp.org/en/
One of the research papers prepared for this Human
Development Report focuses particularly on equity and
inequality, both within countries and at the global
level. See "Equity, Inequality and Human Development in a
Post-2015 Framework," by Claire Melamed and Emma Samman,
ODI, UNDP Research Paper, February 2013
http://tinyurl.com/c2ndpdn
For previous AfricaFocus bulletins on economic issues,
visit http://www.africafocus.org/econexp.php
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The Rise of the South: Human Progress in a Diverse World
Human Development Report 2013
[Excerpts from the report Summary - Full report available
at http://hdr.undp.org/en/]
Summary
When developed economies stopped growing during the
2008-2009 financial crisis but developing economies kept
on growing, the world took notice. The rise of the South,
seen within the developing world as an overdue global
rebalancing, has been much commented on since. This
discussion has typically focused narrowly on GDP and
trade growth in a few large countries. yet there are
broader dynamics at play, involving many more countries
and deeper trends, with potentially far-reaching
implications for people's lives, for social equity and
for democratic governance at the local and global levels.
As this Report shows, the rise of the South is both the
result of continual human development investments and
achievements and an opportunity for still greater human
progress for the world as a whole. Making that progress a
reality will require informed and enlightened global and
national policymaking, drawing on the policy lessons
analysed in this Report.
The rise of the South
The rise of the South is unprecedented in its speed and
scale. It must be understood in broad human development
terms as the story of a dramatic expansion of individual
capabilities and sustained human development progress in
the countries that are home to the vast majority of the
world's people. When dozens of countries and billions of
people move up the development ladder, as they are doing
today, it has a direct impact on wealth creation and
broader human progress in all countries and regions of
the world. There are new opportunities for catch-up for
less developed countries and for creative policy
initiatives that could benefit the most advanced
economies as well.
Although most developing countries have done well, a
large number of countries have done particularly well --
what can be called the "rise of the South". Some of the
largest countries have made rapid advances, notably
Brazil, China, India, Indonesia, Mexico, South Africa and
Turkey. But there has also been substantial progress in
smaller economies, such as Bangladesh, Chile, Ghana,
Mauritius, Rwanda, and Tunisia.
While focusing on the rise of the South and its
implications for human development, the 2013 Human
Development Report is also about this changing world,
driven in large measure by the rise of the South. It
examines the progress being made, the challenges arising
(some as a result of that very success) and the
opportunities emerging for representative global and
regional governance.
For the first time in 150 years, the combined output of
the developing world's three leading economies -- Brazil,
China and India -- is about equal to the combined GDP of
the longstanding industrial powers of the North --
Canada, France, Germany, Italy, United Kingdom and the
United States. This represents a dramatic rebalancing of
global economic power: In 1950, Brazil, China and India
together represented only 10% of the world economy, while
the six traditional economic leaders of the North
accounted for more than half. According to projections in
the Report, by 2050, Brazil, China and India will
together account for 40% of global output (figure 2), far
surpassing the projected combined production of today's
Group of Seven bloc.
The middle class in the South is growing rapidly in size,
income and expectations (figure 3). The sheer number of
people in the South -- the billions of consumers and
citizens -- multiplies the global human development
consequences of actions by governments, companies and
international institutions in the South. The South is now
emerging alongside the North as a breeding ground for
technical innovation and creative entrepreneurship. In
North-South trade, the newly industrializing economies
have built capabilities to efficiently manufacture
complex products for developed country markets. But
South-South interactions have enabled companies in the
South to adapt and innovate with products and processes
that are better suited to local needs.
The state of human development
The Human Development Index (HDI) in 2012 reveals much
progress. Over the past decades, countries across the
world have been converging towards higher levels of human
development. The pace of HDI progress has been fastest in
countries in the low and medium human development
categories. This is good news. Yet progress requires more
than average improvement in the HDI. It will be neither
desirable nor sustainable if increases in the HDI are
accompanied by rising inequalities in income,
unsustainable patterns of consumption, high military
spending and low social cohesion.
An essential part of human development is equity. Every
person has the right to live a fulfilling life according
to his or her own values and aspirations. No one should
be doomed to a short life or a miserable one because he
or she happens to be from the "wrong" class or country,
the "wrong" ethnic group or race or the "wrong" sex.
Inequality reduces the pace of human development and in
some cases may even prevent it entirely. Globally, there
have been much greater reductions in inequality in health
and education in the last two decades than in income.
Virtually all studies agree that global income inequality
is high, though there is no consensus on recent trends.
A more global South
Global production is rebalancing in ways not seen for 150
years. Growth in the cross-border movement of goods,
services, people and ideas has been remarkable. By 2011,
trade accounted for nearly 60% of global output.
Developing countries have played a big part in this (box
2): between 1980 and 2010, they increased their share of
world merchandise trade from 25% to 47% and their share
of world output from 33% to 45%. Developing regions have
also been strengthening links with each other: between
1980 and 2011, South-South trade as a share of world
merchandise trade rose from 8.1% to 26.7% (figure 5).
All developing countries are not yet participating fully
in the rise of the South. The pace of change is slower,
for instance, in most of the 49 least developed
countries, especially those that are landlocked or
distant from world markets. Nevertheless, many of these
countries have also begun to benefit from South-South
trade, investment, finance and technology transfer. There
have, for example, been positive growth spillovers from
China to other developing countries, particularly close
trading partners. These benefits have to some extent
offset slackening demand from the developed countries.
Growth in low-income countries would have been an
estimated 0.3-1.1 percentage points lower in 2007-2010
had growth fallen at the same rate in China and India as
in developed economies.
Many countries have also benefited from spillovers into
sectors that contribute to human development, especially
health. Indian firms, for example, are supplying
affordable medicines, medical equipment, and information
and communications technology products and services to
countries in Africa. Brazilian and South African
companies are doing the same in their regional markets.
Nevertheless, exports from larger countries can also have
disadvantages. Large countries generate competitive
pressures in smaller countries that can stifle economic
diversification and industrialization. But there are also
instances where competitive jolts have been followed by
industrial revival. A competitive role today may easily
turn into a complementary role tomorrow. Moving from
competition to cooperation seems to depend on policies
for dealing with new challenges.
Drivers of development transformation
Many countries have made substantial progress over the
past two decades: the rise of the South has been fairly
broad-based. Nevertheless, several high achievers have
not only boosted national income, but have also had
better than average performance on social indicators such
as health and education.
How have so many countries in the South transformed their
human development prospects? Across most of these
countries, there have been three notable drivers of development: a
proactive developmental state, tapping of global markets
and determined social policy and innovation. These drivers are not derived from
abstract conceptions of how development should work;
rather, they are demonstrated by the transformational
development experiences of many countries in the South.
Indeed, they challenge preconceived and prescriptive
approaches: on the one hand, they set aside a number of
collectivist, centrally managed precepts; on the other
hand, they diverge from the unfettered liberalization
espoused by the Washington Consensus.
Driver 1: a proactive developmental state
A strong, proactive and responsible state develops
policies for both public and private sectors -- based on
a long-term vision and leadership, shared norms and
values, and rules and institutions that build trust and
cohesion. Achieving enduring transformation requires
countries to chart a consistent and balanced approach to
development. Countries that have succeeded in igniting
sustained growth in income and human development have
not, however, followed one simple recipe. Faced with
different challenges, they have adopted varying on market
regulation, export promotion, industrial development and
technological adaptation and progress. Priorities need to
be people-centred, promoting opportunities while
protecting people against downside risks. Governments can
nurture industries that would not otherwise emerge due to
incomplete markets. Although this poses some political
risks of rent seeking and cronyism, it has enabled
several countries of the South to turn industries
previously derided as inefficient into early drivers of
export success once their economies became more open.
In large and complex societies, the outcome of any
particular policy is inevitably uncertain. Developmental
states need to be pragmatic and test a range of different
approaches. Some features stand out: for instance,
people-friendly developmental states have expanded basic
social services. Investing in people's capabilities --
through health, education and other public services -- is
not an appendage of the growth process but an integral
part of it. Rapid expansion of quality jobs is a critical
feature of growth that promotes human development.
Driver 2: tapping of global markets
Global markets have played an important role in advancing
progress. All newly industrializing countries have
pursued a strategy of "importing what the rest of the
world knows and exporting what it wants". But even more
important is the terms of engagement with these markets.
Without investment in people, returns from global markets
are likely to be limited. Success is more likely to be
the result not of a sudden opening but of gradual and
sequenced integration with the world economy, according
to national circumstances, and accompanied by investment
in people, institutions and infrastructure. Smaller
economies have successfully focused on niche products,
the choice of which is often the result of years of state
support built on existing competencies or the creation of
new ones.
Driver 3: determined social policy innovation
Few countries have sustained rapid growth without
impressive levels of public investment -- not just in
infrastructure, but also in health and education. The aim
should be to create virtuous cycles in which growth and
social policies reinforce each other. Growth has
frequently been much more effective at reducing poverty
in countries with low income inequality than in countries
with high income inequality. Promoting equality,
particularly among different religious, ethnic or racial
groups, also helps reduce social conflict.
Education, health care, social protections, legal
empowerment and social organization all enable poor
people to participate in growth. Sectoral balance --
especially paying attention to the rural sector -- and
the nature and pace of employment expansion are critical
in determining how far growth spreads incomes. But even
these basic policy instruments may not empower
disenfranchised groups. Poor people on the fringes of
society struggle to voice their concerns, and governments
do not always evaluate whether services intended to reach
everyone actually do. Social policy has to promote
inclusion -- ensuring nondiscrimination and equal
treatment is critical for political and social stability
-- and provide basic social services, which can underpin
long-term economic growth by supporting the emergence of
a healthy, educated labour force. Not all such services
need be provided publically. But the state should ensure
that all citizens have secure access to the basic
requirements of human development.
An agenda for development transformation that promotes
human development is thus multifaceted. It expands
people's assets by universalizing access to basic
services. It improves the functioning of state and social
institutions to promote equitable growth where the
benefits are widespread. It reduces bureaucratic and
social constraints on economic action and social
mobility. And it holds leadership accountable.
Sustaining momentum
Many countries of the South have demonstrated much
success. But even in higher achieving countries, future
success is not guaranteed. How can countries in the South
continue their pace of progress in human development, and
how can the progress be extended to other countries? The
Report suggests four important areas to facilitate this:
enhancing equity, enabling voice and participation,
confronting environmental pressures and managing
demographic change. The Report points to the high cost of
policy inaction and argues for greater policy ambition.
Enhancing equity
Greater equity, including between men and women and
across groups, is not only valuable in itself, but also
essential for promoting human development. One of the
most powerful instruments for this purpose is education,
which boosts people's self-confidence and makes it easier
for them to find better jobs, engage in public debate and
make demands on government for health care, social
security and other entitlements.
Education also has striking benefits for health and
mortality. Research for the report find that mother's
education is more important to child survival than
household income or wealth is and that policy
interventions have a greater impact where education
outcomes are initially weaker. This has profound policy
implications, potentially shifting emphasis from efforts
to boost household income to measures to improve girls'
education.
The Report makes a strong case for policy ambition. An
accelerated progress scenario suggests that low HDI
countries can converge towards the levels of human
development achieved by high and very high HDI countries.
By 2050, aggregate HDI could rise 52% in Sub-Saharan
Africa (from 0.402 to 0.612) and 36% in South Asia (from
0.527 to 0.714). Policy interventions under this scenario
will also have a positive impact on the fight against
poverty. By contrast, the costs of inaction will be
increasingly higher, especially in low HDI countries,
which are more vulnerable. For instance, failing to
implement ambitious universal education policies will
adversely affect many essential pillars of human
development for future generations.
Enabling voice and participation
Unless people can participate meaningfully in the events
and processes that shape their lives, national human
development paths will be neither desirable nor
sustainable. People should be able to influence
policymaking and results, and young people in particular
should be able to look forward to greater economic
opportunities and political participation and
accountability.
Dissatisfaction is on the rise in the North and the South
as people call for more opportunities to voice their
concerns and influence policy, especially on basic social
protection. Among the most active protesters are youth,
in part a response to job shortages and limited
employment opportunities for educated young people.
History is replete with popular rebellions against
unresponsive governments. This can derail human
development as unrest impedes investment and growth and
autocratic governments divert resources to maintaining
law and order.
It is hard to predict when societies will reach a tipping
point. Mass protests, especially by educated people, tend
to erupt when bleak prospects for economic opportunities
lower the opportunity cost of engaging in political
activity. These "effort-intensive forms of political
participation" are then easily coordinated through new
forms of mass communication.
Confronting environmental challenges
While environmental threats such as climate change,
deforestation, air and water pollution, and natural
disasters affect everyone, they hurt poor countries and
poor communities most. Climate change is already
exacerbating chronic environmental threats, and ecosystem
losses are constraining livelihood opportunities,
especially for poor people.
Although low HDI countries contribute the least to global
climate change, they are likely to experience the
greatest loss in annual rainfall and the sharpest
increases in its variability, with dire implications for
agricultural production and livelihoods. The magnitude of
such losses highlights the urgency of adopting coping
measures to increase people's resilience to climate
change.
The cost of inaction will likely be high. The longer
action is delayed, the higher the cost will be. To ensure
sustainable economies and societies, new policies and
structural changes are needed that align human
development and climate change goals in low-emission,
climate- resilient strategies and innovative publicprivate
financing mechanisms.
Managing demographic change
Between 1970 and 2011, world population swelled from 3.6
billion to 7 billion. As that population becomes more
educated, its growth rate will decrease. Development
prospects are influenced by the age structure of the
population, as well as its size. An increasingly critical
concern is the dependency ratio -- that is, the number of
younger and older people divided by the working-age
population ages 15-64.
Some poorer countries will benefit from a "demographic
dividend" as the share of the population in the workforce
rises, but only if there is strong policy action. Girls'
education, for instance, is a critical vehicle of a
possible demographic dividend. Educated women tend to
have fewer, healthier and better educated children; in
many countries educated women also enjoy higher salaries
than uneducated workers.
The richer regions of the South, by contrast, will
confront a very different problem, as their population
age, reducing the share of the working-age population.
The rate of population ageing matters because developing
countries will struggle to meet the needs of an older
population if they are still poor. Many developing
countries now have only a short window of opportunity to
reap the full benefits of the demographic dividend.
Demographic trends are not deterministic, however. They
can be altered, at least indirectly, by education
policies. The Report presents two scenarios for
2010-2050: the base case scenario, in which enrolment
ratios remain constant at each level of education, and a
fast track scenario, in which the countries with the
lowest initial education levels embrace ambitious
education targets. The decline in the dependency ratio
for low HDI countries under the fast track scenario is
more than twice that under the base case scenario.
Ambitious education policies can enable medium and high
HDI countries to curb projected increases in their
dependency ratios, in order to make their demographic
transition towards an ageing population less difficult.
Addressing these demographic challenges will require
raising educational attainment levels while expanding
productive employment opportunities -- by reducing
unemployment, promoting labour productivity and
increasing labour force participation, particularly among
women and older workers.
Governance and partnerships for a new era
The new arrangements promoted by the South and the
resulting pluralism are challenging existing institutions
and processes in the traditional domains of
multilateralism -- finance, trade, investment and health
-- sometimes directly and sometimes indirectly through
alternative regional and subregional systems. Global and
regional governance is becoming a multifaceted
combination of new arrangements and old structures that
need collective nurturing in multiple ways. Reforms in
global institutions must be complemented by stronger
cooperation with regional institutions -- and in some
cases broader mandates for those regional institutions.
The accountability of organizations must be extended to a
wider group of countries, as well as to a wider group of
stakeholders.
Many of the current institutions and principles for
international governance were designed for a world order
that does not match contemporary reality. One consequence
is that these institutions greatly underrepresent the
South. If they are to survive, international institutions
need to be more representative, transparent and
accountable. Indeed, some intergovernmental processes
would be invigorated by greater participation from the
South, which can bring substantial financial,
technological and human resources.
In all of this, governments are understandably concerned
with preserving national sovereignty. Overly strict
adherence to the primacy of national sovereignty can
encourage zero-sum thinking. A better strategy is
responsible sovereignty, whereby countries engage in
fair, rule-based and accountable international
cooperation, joining in collective endeavours that
enhance global welfare. Responsible sovereignty also
requires that states ensure the human rights security and
safety of their citizens. According to this view,
sovereignty is seen not just as a right but as a
responsibility.
This changing world has profound implications for the
provision of public goods. Areas of global international
concern meriting urgent attention and cooperation include
trade, migration and climate change. In some cases,
public goods can be delivered by regional institutions,
which can avoid the polarization that slows progress in
larger, multilateral forums. Increasing regional
cooperation may, however, have disadvantages -- adding to
a complex, multilevel and fragmented tapestry of
institutions. The challenge therefore is to ensure
"coherent pluralism" -- so that institutions at all
levels work in a broadly coordinated fashion.
International governance institutions can be held to
account not just by member states, but also by global
civil society. Civil society organizations have already
influenced global transparency and rule setting on aid,
debt, human rights, health and climate change. Civil
society networks can now take advantage of new media and
new communications technologies. Yet civil society
organizations also face questions about their legitimacy
and accountability and may take undesirable forms.
Nevertheless, the future legitimacy of international
governance will depend on the capabilities of
institutions to engage with citizen networks and
communities.
AfricaFocus Bulletin is an independent electronic
publication providing reposted commentary and analysis on
African issues, with a particular focus on U.S. and
international policies. AfricaFocus Bulletin is edited by
William Minter.
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