Brave New Third World? Strategies for survival in the global economy

Walden Bello | 02.01.1989

By Walden Bello, February 1989, Development Report No. 5

In 1955, the third world came together for the first time at Bandung to express a vision of “friendly cooperation” that would “help bring about the common prosperity and well being of all.” Thirty-five years later, the question for most third world countries is not how to attain common prosperity but how to arrest their descent into a common misery.

Optimism is a rare commodity in the third world today, and at the root of the volatile mixture of anger, frustration, and hopelessness that one encounters everywhere is a world economic order that systematically ensures that, as Fidel Castro put it, “the price we pay as neo-colonies is much higher than the price we paid when we were colonies.”

The 1980s have been marked by a sharp increase in poverty and inequality throughout the third world. Accompanying this freefall in living standards has been the erosion of economic sovereignty. Increasing poverty and declining sovereignty are manifestations of a disturbing process at work globally: the relationship of significant areas of the third world to the international economy is being transformed from one of dependence or unequal integration to one of exclusion or marginalization.

This essay explores selected dimensions of this contemporary crisis of economic development in the third world, focusing on the vital intersection of internal policies and international economic trends.

Thirty-five years after Bandung, the question for most third world countries is not how to attain common prosperity but how to arrest their descent into a common misery.

We begin with an overview of the extent of the erosion of living standards throughout the South. Next we look at the sharp decline in national sovereignty that has accompanied this process of impoverishment, and discuss five factors that have greatly contributed to the erosion of sovereignty: the debt crisis, transnational corporations, the growing cost-effectiveness of labor-saving manufacturing processes, depressed commodity prices, and aggressive protectionist policies on the part of the United States and other advanced industrial states.

Chapter four takes a close look at recent attempts to break out of underdevelopment in the Philippines, Vietnam, South Korea, and Taiwan. Although these countries (or province, in the case of Taiwan) belong to the same region, each took a distinct path to development. The comparison underlines the decisive importance of the interaction of the domestic economic strategy and the international economy. It attempts to draw out both the unique consequences of each strategy and the common constraints or opportunities encountered by all, especially in their relation to the international economy.

The fifth chapter focuses on key dimensions of the collective struggle of third world countries to reshape the international economy over the last three decades via negotiation and confrontation with the Northern powers. It documents the failure of the South to alter the power equation with the North on almost all significant fronts. Also discussed is the impact of growing differentiation of interests among third world countries on this central confrontation.

The sixth chapter studies the implications for the third world of the emergence of protectionist “superblocs” in the North. The thrust of the analysis is that significant sections of the third world will see their status moving from dependency or unequal integration within a liberal international economic regime to marginalization or exclusion from an international economy characterized by superblocs.

The final chapter is devoted to sketching out the key elements of a strategy that might enable third world countries not only to ensure their survival as viable economic entities but also to embark on sustained development in the midst of a harsh international economic climate: the creation of regional blocs around particularly dynamic third world economies. Essential to the success of this enterprise, however, would be the setting aside of national rivalries, the promotion of cooperation in trade, investment, and technology, and the spread of democratic decision making in politics, in access to resources and in the process of production.