The power of words
In 2012, James Sidaway asked an important question in a short article in the journal Professional Geographer. He opined, ‘Today, how useful is it to talk about the geography of development or of developing countries? What are and what remains of the geography of development and of the Third World?’ Words, and in particular place-based labels, continue to matter but do so in a variety and at times bewildering manner. A generation of political and development geographers, often inspired by postcolonial and critical geopolitical theorising, continue to examine and interrogate the implications of terms such as Third World, middle- and low-income countries, majority world, southern periphery, two-thirds world, and/or rising
11 Emerging markets and rising powers
powers with particular reference to countries such as Brazil, China and India (Slater 1993, Sidaway 2012).
In the midst of the cold war, the term ‘Third World’ was coined to signify a new geopo- litical imagination based on a geography of global politics divided into three camps – the United States and its allies, the Soviet Union and the Communist world and a ‘Third World’ of postcolonial states in Africa, Asia and Latin America. Underpinned by an investment in technology and an ideological faith in free markets and enterprise, this tripartite division ref lected American hegemony in a post-war financial and political international system US administrations helped to construct.
This chapter seeks to remind readers of this period characterised by cold war and super- power competition and consider how the fate of the Third World has changed over the last six decades. With the ending of the cold war, it was widely hoped that questions pertaining to development, poverty reduction and debt cancellation would enjoy a greater political profile. This has been achieved but not led to the profound changes hoped by many activists, campaigners and governments in the Third World and beyond. While the 2000s were dom- inated, in part, by the US-led War on Terror the most profound change has come with the emergence of China as a world economic power. Since reforms in 1978, China’s ascent remains breathtaking in scale and scope. It is estimated that by 2020 China is likely to be the largest economy in the world, and thus anyone authoring an introductory chapter such as this will be concentrating, I suspect, increasingly on Chinese narratives about world politics and specifically development agendas (for a readable account of China’s economic transformation see Fenby 2012).
The invention of the Third World
In the aftermath of the Korean conf lict (1950–1953 and arguably ongoing), a new geopolitical imagination began to emerge as the conf lict between the Soviet Union and the United States spread across the globe. Key geographical designations such as ‘First World’ and ‘Third World’ were deployed by Western social scientists in an attempt to highlight the profound differences between the United States and the Soviet Union. Newly decolonised countries in South Asia, Africa and Asia were seen as providing opportunities for both sides to project inf luence, extend trading opportunities and recruit for the purpose of defending particular parts of the earth’s surface from the inf luence of the ideologies of either communism (in the case of the Soviets) or liberal democracy and capitalism (in the case of the United States). Billions of dollars and roubles were spent over the next fifty years in pursuit of that geopolitical objective. Both sides used the existence of this cold war to plan and implement development programmes, aid assistance, volunteer groups, trade stimulation, academic exchanges and/or arms sales.
During the cold war, the experiences of the Third World were never uniform as some countries and regions received greater attention than others (Westad 2005). In the case of Latin America, for instance, American administrations were adamant following the 1959 Cuban Revolution in particular that they would not tolerate any further socialist governments in the hemisphere. President Johnson ordered 20,000 US Marines to overthrow the govern- ment of the Dominican Republic in 1965 and President Nixon approved the overthrow of the socialist President of Chile, Salvador Allende, on 11 September 1973. During the 1960s, countless efforts were made either to assassinate or overthrow Cuba’s Fidel Castro, especially in the aftermath of the Bay of Pigs fiasco, which witnessed US-backed anti-Castro forces being routed by the armed forces loyal to the socialist leader. When the United States was
Nature of development and development studies
not attempting to promote revolution and/or turmoil, it was content to support violent anti- communist military regimes in Argentina, Brazil, Chile and Uruguay. In other parts of the world, regional allies such as Israel, Pakistan, South Korea and Taiwan received substantial financial and military forms of assistance because they were judged to be significant in the wider struggle to prevent the Soviet Union from extending its global inf luence.
While certainly not unique to the United States, the Soviets were also engaged in a pro- gramme of aid, development and intervention in an attempt to project a global communist revolution. Some Third World states welcomed Soviet largesse – India was one such benefi- ciary and many of its citizens were subsequently trained in Soviet universities and institu- tions. Soviet allies such as Cuba also assisted in this global mission – Cubans were based in Angola and played a vital role in buttressing the national security capability of the country in the 1970s when it faced South African forces who used South West Africa (Namibia) to launch covert raids against the country, which was consumed by civil war for much of its postcolonial existence. Elsewhere, the Soviet Union provided support for revolutionary movements in Central America, South East Asia and sub-Saharan Africa for much of the cold war period.
Not surprisingly, many members of the expanding Third World did not welcome the intensification of the cold war. In 1961, the Non-Aligned Movement (NAM) was created after an earlier Afro-Asian conference in Indonesia. NAM was important in so far as it sig- nalled a resistance to the bipolar strictures of the cold war. Recently decolonised states resented and resisted pressures from the superpowers to align with one side or another. The purpose of NAM was to find a ‘third way’, one which avoided the plutocratic structures of the West and party-based authoritarianism of the East. It also sought to promote a different vision of development based on fairness, information and technological exchange and a reformed international political system. By the early 1970s, NAM was joined by the so-called ‘Group of 77’ in the United Nations and advocates of a New International Economic Order (NIEO). The NIEO was, alongside the term ‘Third World’, an expression of resistance against historic and contemporary forms of colonialism and oppression. Unfortunately for those campaigners, the early 1970s were turbulent years as rich countries such as the United States were rattled by oil shortages, the Vietnam debacle and the Watergate crisis.
It was evident by the latter stages of the cold war that the ‘Third World’ was a highly diverse group of countries that had enjoyed very different colonial-development trajectories. The political-economic condition of oil-producing states such as Nigeria, Saudi Arabia and Venezuela differed markedly from South East Asian states such as Singapore and Taiwan. sub-Saharan Africa and Central America probably contained some of the poorest states in the world, which were also immersed in damaging civil wars and/or damaged by corrupt and vio- lent dictatorships and military regimes. The cold war provided an opportunity for these schisms and uncertainties to be exploited by the rich countries as they sought to extend ideological and economic inf luence. Tragically, millions perished as basic needs such as access to clean drinking water proved less politically attractive than expenditure on the latest tank, ship and/or missile. This meant, ultimately, that the potency associated with the NIEO/Third World movements dissipated and new terms such as ‘the global South’ found favour (Prashad 2007).
The global South
Amidst a general feeling of despair and pessimism amongst many development advocates and Third World academics, the United Nations-sponsored Brandt Commission reported on the state of the world in 1980 and 1983. Significantly, the Commission depicted a world divided
13 Emerging markets and rising powers
between North and South and not a First, Second and Third World. In other words, what- ever the ideological differences between the Soviet Union and the United States and their respective allies, the world was really divided between the rich North and poor South. The Commission called for the North in particular to recognise that the world was more interde- pendent than ever before (globalisation had not been coined as a term at that stage) and to promote a more equitable form of global political economy. The message of the two reports, although hard-hitting and significant, was a victim of geopolitical timing.
With the Soviet invasion of Afghanistan in 1979, the cold war appeared to have entered a new and more dangerous phase. A new US president, Ronald Reagan, was committed to confronting what he described as the ‘evil empire’. American and Soviet military spending increased and American financial assistance was used to fund anti-Soviet forces in Afghanistan and anti-communist movements in places such as Nicaragua. The decision to fund anti- Soviet forces in Central Asia was particularly significant and arguably contributed to the emergence of the Al-Qaeda terror network in the 1980s and 1990s ( Johnson 2000). What all this meant for the South was fairly straight forward – American and Soviet energies were directed towards this global struggle and any thought of reconstructing the world-economy and global development strategies was an irrelevance.
By the late 1980s, the Soviet Union was bankrupt and regimes in Eastern and Central Europe were crumbling. In 1989, Germans on both sides of the divide tore down the Berlin Wall, the most practical and symbolic illustration of a divided Europe. The so-called Velvet Revolution led to the undoing of all those former communist governments including the more brutal ones in Romania and East Germany. Elsewhere, military regimes in Latin America were crumbling and democratic governments emerged. The ending of the cold war was apparently completed when the Soviet Union folded in 1991. Some analysts such as Francis Fukuyama were swift to declare ‘the end of history’ in so far as it signalled the triumph of liberal democracy and market-based capitalism over state socialism and global communism (Fukuyama 1989). Whether or not that claim was justifiable, the ending of the cold war did begin to bring to an end a confrontation that had claimed millions of lives through proxy wars, government intervention and/or bombings. Democratic change in the 1990s was widespread and owed as much to the ending of the cold war as it did to a host of circum- stances specific to particular places and regions.
Emerging markets and rising powers
Notwithstanding expressions of optimism regarding a global democratic revolution, the 1990s brought to the fore a stark realisation – the world remained highly divided despite all the attempts of governments and policy advocates to promote development. Endeavours to promote poverty reduction and/or inequalities were modest in scope and extent. Over the last twenty years, far more attention has been devoted towards inequalities and mal-development but the results have been mixed. On the one hand, international organisations such as the International Monetary Fund (IMF) have promoted structural adjustment and good govern- ance in return for economic assistance and aid spending. The 1996 initiative designed to promote debt relief for a select number of Highly Indebted Poor Countries (HIPC) was criticised for demanding a range of measures such as privatisation in return for modest debt cancellation. This has led to accusations that these agencies are exercising a neo-colonial inf luence on countries in the global South. On the other hand, interest has grown in what was initially described as ‘emerging markets’ and later rising powers with particular emphasis on Brazil, Russia, India and China (the so-called BRICs).
Nature of development and development studies
‘Emerging markets’ was first used by the World Bank in the 1990s and later embraced by investment banks and fund managers. A decade later, the term once applied to countries such as Brazil and China transmogrified to another generic category ‘rising powers’ and then more specifically BRICs highlighting a small group of countries either possessing substantial resources such as oil and gas and/or demanding ever-greater resources as part of their national development trajectories. In the case of China, an export-led economic strategy also contributed to an ever-greater accumulation of foreign earnings and sponsor of foreign direct investment in Asia and Africa. China’s investment in Africa has grown markedly – in 2010 trade was worth US$127 billion and Chinese investment valued at $40 billion (Fenby 2012: 256). In return for access to natural resources, China invests in infrastructural projects and lends money, unlike the World Bank, with minimal conditions and without having to take respon- sibility for the colonial and cold war legacies bequeathed by the United States and European countries such as Britain.
While it is possible to overstate China’s economic power in the world, there is a sense, however, that the BRICs are beginning to make their presence felt not only in places like Africa but also in the very institutional architecture created by the United States in the late 1940s. It is now common to speak of G20 meetings rather than the G7 or G8. In July 2009, the first BRIC summit was held in Russia and in March 2012 the parties gathered again in India to discuss areas of common concern. One such area will be the dollar-centred mone- tary and financial international regime. If anything, the ongoing financial slowdown (2008 onwards) in North American and European economies stands in stark contrast to the eco- nomic performance of countries such as Brazil and China in particular.
What is noteworthy about the BRICs is their willingness to put forward alternative visions for the international economic order in the future. New words, new labels and new narratives are circulating with ever-greater force. In March 2009, for example, the governor of the People’s Bank of China proposed that the US dollar should be replaced by a common currency created and managed by member countries. The intent was to help promote a more productive investment regime and stimulate economic growth more widely. While North American and European economies continue to grapple with financial slowdown and invest- ment paralysis, the BRICs are becoming ever-more confident in their reformist agenda to the point that officials attached to the World Bank have warned that it will have to be taken very seriously indeed. The ‘Third World’, or at least part of it, has struck back. So-called ‘emerging markets’ such as Brazil and China are very much ‘emerged’ now.
Conclusions
There is a great deal more to be said on this topic and this short chapter has only touched on the cold war origins of development and the subsequent connections between North and South including contemporary interest in rising powers, BRICs and emerging markets (Power 2003). The ending of the cold war did not bring the profound changes that many campaigners hoped for in respect of substantial reforms in the terms and conditions of international trade and generous debt reduction. Anti-globalisation campaigners, along- side others such as Make Poverty History and the Jubilee Campaign, have helped to cap- ture global media attention and pressurise Northern governments into making concessions on debt, trade and aid spending. However, these concessions are often modest and then often cancelled out by the terms and conditions attached to aid and debt cancellation. But this is only one part of the story regarding terms such as ‘Third World’ and more recent incarnations.
15 Emerging markets and rising powers
Coinciding with the financial crisis affecting North America and Europe (2008 onwards), there has been the most profound change involving countries such as Brazil, China and India. While terms such as ‘emerging markets’ and BRICs have been used in the last two decades to chart and classify their rising economic and political profile, their presence in the world is clearly being felt in terms of investment, production and consumption. These countries, with their own developmental strategies, are creating new patterns of engagement with the ‘Third World’ and with what was once thought to be the ‘First World’. Moreover, it is striking to note how Chinese military and intelligence gathering Western defence analysts, in a manner reminiscent of the Soviet Union, are now tracking capabilities increasingly carefully in the 1970s and 1980s.
Let me conclude by introducing yet more labels, but these are my current favourites when it comes to making sense of a changing geopolitical landscape. The Bulgarian writer, Tzvetan Todorov, describes what he terms ‘appetite’ states such as China and ‘anxiety’ states such as the United States (Todorov 2010). This captures well, from a Western perspective at least, some of the ongoing concern about what these rapacious states might yet do in terms of con- suming non-renewable resources such as oil and gas as well as changing the basic terms and conditions of the international financial and political order. All of this helps to remind us, especially those of us who have grown up in the shadow of American geopolitical power and the primacy of the English-speaking world, that there are other ways of knowing and mak- ing sense of the world around us.
References
Fenby, J. (2012) Tiger Head, Snake Tails. New York: Simon Schuster.
Fukuyama, F. (1989) ‘The end of history’. National Interest. Available online at www.wesjones.com/ eoh.htm
Johnson, C. (2000) Blowback: The Costs and Consequences of American Empire. New York: Henry Holt.
Power, M. (2003) Rethinking Development Geographies. London: Routledge.
Prashad, V. (2007) The Darker Nations: A People’s History of the Third World. New York: New Press. Sidaway, J. (2012) ‘Geographies of development: New maps, new visions’. Professional Geographer 64:
49–62.
Slater, D. (1993) ‘The geopolitical imagination and the enframing of development theory’. Transactions of the Institute of British Geographers 18: 419–437.
Todorov, T. (2010) The Fear of the Barbarians. Cambridge: Polity.
Westad, O. (2005) The Global Cold War. Cambridge: Cambridge University Press.
Further reading
Jacques, M. (2009) When China Rules the World. London: Verso. On the impact of China and its presence in the world.
Power, M. (2003) Rethinking Development Geographies. London: Routledge. For an insightful guide to development geographies and the contested geopolitics of neoliberalism.
Westad, O. (2005) The Global Cold War. Cambridge: Cambridge University Press. An excellent account of the impact of the cold war on the Third World.
Websites
G8: www.g8.co.uk
Make Poverty History: www.makepovertyhistory.org World Trade Organisation: www.wto.org
Nature of development and development studies