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The New Worldre Order
An Opportunity to Build /Introduce Feminist Political Economy /Ideas
Devaki Jain*
June 2011
Working draft
For IAFFE
The contributions of Anandi Venkat, Naoko Otobe, Niha Masih, Nishtha Kochhar, Perce Bloomer, Y.V. Reddy, and Muchkund Dubey are gratefully acknowledged. The views and opinions expressed here are personal. Any remaining errors and omissions are the sole responsibility of the author.
Summary:
This paper suggests that the evolving shifts in economic “power” or “success” in the post crisis world provides/presents a new turbulence.It goes on to describe some of the features of this shift in economic energy. The paper argues that these evolving landscapes and negotiations, point to the need for the feminist agenda, especially the feminist economists’ agenda to clearly draw up a Southtethered perspective for their analysis and prescriptions.
While GDP growth rates, current account balances, trade volumes of many countries, called the re emerging economies [ I owe this change in language from emerging to re emerging, to a friend from the progressive anti colonial movements ] of the South are revealing vigour, there are many challenging issues facing these countries. Per capita incomes are still comparatively verylow, and poverty numbers still very high in these countries. The gaps between the least developed and the re-emerging economies are also large. Several of the international negotiating processes, such as Doha Round or the EU-India free trade agreements, have complex impact on employment, generally and women’s employment, specifically.
Yet the turbulence, and the un-chartered spaces it has opened, offers a value-loaded opportunity for feminist economistand activist lobbyists from the South to re-invoke their earlier history of engaging with the larger political economy debates. They could ensure that the configurations of the political economies of the South are built in a cooperative mode, in contrast to the competitive modes. They could engage in the rebuilding of national[1] responsibility, the State’s responsibility for the well being of its citizens.
Since these economies are to some extent reconstructing themselves,alongside their energy, to face many new challenges, this would be the time to use the collective strength of feminist scholar and activist associations and networks to provide alternative economic reasoning, and other strong ideas that have come out of our work such as to encourage support to the lower-end of production, both in terms of scale, e g small farms, small firms, as well as in terms of the kind of work arrangements that they entail – as this would particularly benefit women.
Such re ordering of priorities for the feminist economists agenda would entail shrugging off the current pre occupation with “crisis 2008-9”,impact. Crisis and bail outs might still be a situation in the North, but that is not the menu on the table in the South. It is also important to modify or reject the set agendas coming from the UN, and other international bodies such as the World Bank, which set goalssuch as gender equality, MDG. Important to Plunge into re-orienting the State and economic progress ideas while the spaces are yet open.
To buttress this view, the paper would mainly lay out the current scenario, the characteristics and politics of this turbulence, as a form of knowledge base, for building common cause.
This paper is organized in three sections:
Section 1draws attention to the shifts, the striking differences in various economic indicators between countries of the north, earlier known as advanced economies, and some of the earlier developing countries now known as “re-emerging economies”.
Section 2highlightssome of the initiatives that are emerging along with the challenges and doubtsaround them.
Section 3indicates some of the gendered aspects or issues that might emerge from the point of view, of women and their participation in the labour force and trading sectors.
It goes on to build an argument fora strong South-driven feminist economics program, which will engage with this new order: engage with legal spaces/ the regulatory mechanisms, as well as the regionaland inter regional economic configurations, and finally or most essentially with the national politicaleconomy spaces.
Section I
The ‘PHENOMENA’
This section presents some landscapes revealing the striking difference, post crisis, in various economic indicators between countries of the north known earlier as advanced, and some of the earlier “developing” countries now known as re emerging economies.
Information and data are pouring out of the many international and regional institutions revealing the shifts in rates of GDP growth, amongst countries. Post crisis, there has been a comparative slow down in GDP growth rates in Europe and other “advanced” countries whereas good upward movements, steady in many re-emerging economies especially China and India.
Many economists engaged in global think tanks are noting this change -“It is interesting to recall that for several decades, after Second World War, we had a bi-polar world with developing countries being described as ‘Third’ world. After the break-up of USSR, the world was broadly divided into developed and developing, with emerging market economies being treated as a sub-set of developing economies.Currently, the world appears to be moving in the direction of a spectrum where it will be increasingly difficult to draw a rigid line between developed and developing countries”.[2]
The tables below describe this phenomenon in various ways.
Figure 1:[3]
Figure 2:[4]
Figure 3:[5]
Figure 1, 2 and 3 show that post crisis, although the GDP growth rates declined across-the-board with even negative growth rates being recorded for the “advanced” nation economies, the combined GDP growth rates of the emerging market economies remained positive and recovery was relatively faster.
Another indicator of differing economic “power” is noted in figure 4 below, which presents the current account balances across regions and it can be seen that China and the rest of Developing Asia has done well duringand post crisis compared to the “advanced” economies.
Figure 4:[6]
The2010-11 issue of the Economic Survey of India[7] gives an inkling to the self perceptions of what are called the new emerging economies. The Survey provides an annexure called “the economic power index”which tracks changes in ranking of the various economies, making the point that many who were lower in ranking against the ranks of the “advanced “countries are moving up and even replacing some of those!
[8]
The debates and initiatives in India and perhaps in China are on how to keep their growth rates growing or at least at the current levels, apart from competing with each other! The debates within India are both, towards keeping the power place but also to respond to fact that many countries of the South are not yet on the upbeat ,so some attempts to re build their economies needs to be part of the goals of countries like India.
However, the race now is more a race to the top … and many of the new power clubs are not quite enabling of their poor cousins. On the contrary, they are moving their capital and expertise into these countries, in an expansionist mode, very similar to the early colonizers.
Such moves have led many scholars, for example in India, to reflect on this phenomenon as Reflections on Empire.[9]
Section II
The ‘IMPACT’ of the above ‘Phenomena’
This section presents some of the initiatives, challenges and doubts that emerge as a consequence of this shift.
As some of the countries of the former developing countries group emerge into global prominence as successful economies, there are increasing efforts to form economic cooperation pacts. Prominent examples would be ASEAN, then recent BRICS (Brazil, Russia, India and China and South Africa) and IBSA (India, Brazil, South Africa). “India pitches for greater IBSA and BRICS role, multi polar economy is giving rise to new geo politics.”[10]The possibility and opportunity of intra BRIC trade in local currencies[11] is also being considered[12].
Some new economic configurations
- BRICS
This alliance has come up as the new source of bargaining power for the developing nations. It has emerged as ‘the vanguard’ for the countries of the South, as is captured in a paper by Baumann[13],“It (BRICS) has become for several analysts not only ‘another developing economy’, but rather one of the candidates to play a major role in the international scenario in the near future.”
They have not only put the economic meltdown—which afflicted the entire global economy—quickly behind them, but their emergence as the new growth centre has also been spectacular. The newfound confidence of the BRICS has seen them build new partnerships with other developing and even least developed countries (LDCs). India, China and Brazil have been at the forefront, with a view to meeting long-term development needs of others as well as themselves. These South-South relationships are thus seeking to redefine the context and content of economic ties.[14]
From 2000 to 2008, the BRICS share of total world economic output rose from 16 to 22 percent. Together, they accounted for 30 percent of the increase in global output from 2000 to 2008.China alone comprised more than half of the BRIC contribution with rights to greater than 15 percent of the growth in world economic output. The figure below compares key economic and development indicators for the BRIC countries, including GDP level and growth, merchandise exports, and change in Human Development Index (HDI).
Figure 5:
China leads all the key indicators among all the members of the group. What is evident is the fact that China not only supports the largest population, her GDP is roughly three times that of Brazil, Russia and India.In addition, China leads the rate of growth in GDP averaged at 10.2% for the years 1990-2008, followed by India at 6.3%. Moreover, the improvement in China and India’s HDI over the past two decades has been remarkable at about 44% and 33%, respectively.
The countries are slowly alsoshowing solid fronts in political forums. Four of the five BRICS countries abstained from the UNSC vote on the resolution authorizing use of force in Libya. South Africa, the only country to have votedin favour of the resolution, is said to have nuanced its position later, which is seen as conscious distancing from the West.
However, there are as many critiques or doubts about the value and homogeneity and purpose of this formation as much as there is hope and exultation.
For example, there is a view that “All the forum’s members want to build a special relationship with the United States, and wish to use the forum as a leverage to expand their political space with Washington. That is part of political jockeying in a multi-polar world”.[15]
Another comment is that the BRICS forum is no more than a sack of potatoes, formless and without a specific strategic orientation.[16] Further comments are that they are self seeking, i.e. not in fact enabling other south countries.
- ASEAN
ASEAN is another regional economic structure. ASEAN (made up of Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam) has forged free trade pacts with a number of key regional economies, including China and India. [17]
For example, India and ASEAN are committed to achieving a trade target of $70 billion by 2012, up 40 per cent from $50 billion in 2010, Commerce and Industry Minister, Anand Sharma said at the first India-ASEAN business fair and conclave being held here by the Commerce Ministry and the Federation of Indian Chambers of Commerce and Industry (FICCI).
India and the 10-nation bloc also broadly agreed that the free trade agreement (FTA) to cover services and investment sectors would be in place by 2011-end.Movement of natural persons means professionals would be able to move more easily between India and ASEAN, once the pact comes into operation.
The new focus on ‘South-South’ Trade
How would the trade regimes change? Whether this internal to themselves trade, is competitive or cooperative? Would the re-emerging economies benefit by trading with each other.
The re emerging economies have increasingly begun to trade amongst themselves, especially over the past two decades. Figure6 shows that the percentage share of emerging economy trade with the advanced nations has decreased from about 65% in the 1980s to a little over 50% in 2000-08 whereas the intra-regional shares of the re-emerging economies trade has been on a rise.
Figure 6:
Figure7 displays the component-wise percentage share of emerging economies in the world tradewhich has been consistently rising since 1990 and this rise has been sharper post-2007.
Figure7:[18]
Figure 8:[19]
Figure 8 illustrates that the imports of the re-emerging economies among themselves have been ona decline since the onset of the crisis, thus, the key driver of theincrease in intra-regional trade among these economies is driven by exports.
Figure 9: [20]
The volume of trade has increased by quantum leaps within BRIC countries as mentioned in page6-7.Further, according to the latest data, Indian exports registered the highest-ever growth of 37.5 per cent at $ 245.9 billion during 2010-11, after the government diversified its exports, earlier destined to Western countries, to new markets like East Asia, Latin America and Africa. India aims to achieve $ 450 billion in exports by 2013-14. China’s overseas shipments were more than $ 1.5 trillion in 2010.
There is no clear signal whether this south south trade will be in the spirit of cooperation or in competition .Both approaches seem to be operating
A recent illustration of competition is illustrated by the following quote from a leading government economist in India[21]. He says, “In China’s XII Plan, exports do not hold the same place. Besides, the Chinese will be vacating the lower-end of the value spectrum like textiles and leather. So who will replace them? Are we going to step in or will it be Vietnam or Turkey or Indonesia,” [22]
On the other hand, at the recent Indo-Africa Summit[23], the officials made it clear that India’s engagement with the continent will not be imperialist in nature but rather would intend to boost employment, do value added types of cooperation rather than take the resources home.
However, countries like Indiaare alsosigning up many bilateral free trade agreements with other developing countries. Simultaneously also signing up one more, interestingly with EU!Hence, there is no set pattern, or combine of the south.
There are also suggestions that this shift in trading relations would augur new types of economic and political governance modes drawn from the diversity of cultures.
“…It is useful to note that a shift in economic importance that happened after the Second World War was from the UK and Europe to USA. There were significant common cultural traditions between the two regions. However, as economic activity shifts in future to developing countries, especially Asia, there will be a greater diversity in the social-cultural and, perhaps, political systems among these counties, and between Europe, UK, USA and these countries. In brief, over longer term, the world will have significant diversity in the set of countries with global economic significance.”[24]
This phenomenon is already showing itself, as we see the affirmation of national and regional independence from both the earlier rulers as well as from the influence of the former big powers inthe West Asian region also called the Arab region. The people-led uprisings against the traditional and long-standing leaders, also points to the collusion of these leaders with the western powers, for trade in oil and arms. As they negotiate liberation from those regimes, they also seem to want to be freefrom those trade arrangements, and those political partnerships, and cultural influences.
Fatema Mernissiclosely watching the various affirmations, from her vantage point in Rabat,Morocco, sees the beginnings of real emancipation[25], i.e. emancipation from the intellectual and cultural power of the west – reflecting the earlier analysis by Y V Reddy, that there will be new forms of governance and political economies.
- Financial Market Initiatives
Many other initiatives are also emerging, for example:
The announcement of the inauguration of the first Latin American office of the planned Bank of the South was one such initiative. The Bank of the South is a monetary fund and lending organization established in September 2009 by the Latin American countries: Argentina, Brazil, Paraguay, Uruguay, Ecuador, Bolivia and Venezuela.The intention of the bank is to “...strengthen regional integration; reduce asymmetries, poverty and social exclusion; promote employment and activate a virtuous cycle of sustainable development, fundamental for the economic, social and political transformation of the region”[26].The idea lies in promoting the market for development lending in the ‘South’, as endorsed by Joseph Stiglitz… "One of the advantages of having a Bank of the South is that it would reflect the perspectives of those in the south," and that "It is a good thing to have competition in most markets, including the market for development lending."[27]