Responses to Globalisation from Developing Societies and the Global South

There is no single developing-country experience of globalisation, and the variation is itself the analysis. Some poor countries transformed themselves while others fell further behind under broadly similar prescriptions. What separated them was not how much they opened but whether the state retained the capacity to choose what to open, when, and on what terms.

Unequal Entry: The Terms on Which the South Joined the World Economy

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• Most developing countries entered the world economy as colonial economies with the colonial structure intact — political independence arrived decades before any change in what they produced and sold.
  • Colonial specialisation left them exporting a narrow range of primary commodities and importing manufactures, a pattern designed to serve a metropolitan economy rather than a domestic one.
  • Transport, ports and railways ran from the interior to the coast, not between neighbouring economies, which is why African and Latin American states still trade more easily with Europe than with each other.
  • Thin domestic capital markets meant that any investment beyond subsistence required foreign capital, on terms set abroad.
  • Technological dependence was structural: the machinery, the patents and the research capacity all sat in the industrialised world.
• The rules of the post-1945 economic order were written before most of the South was independent. Forty-four states met at Bretton Woods in July 1944; almost all of Asia and Africa was still colonised.
  • The International Monetary Fund and the World Bank were designed for exchange-rate stability and European reconstruction, not for structural transformation in agrarian economies.
  • Voting is quota-weighted: the United States holds roughly 16.5% of IMF votes, and major decisions need an 85% majority, which makes that share a standing veto.
  • The convention that the IMF’s Managing Director is European and the Bank’s President American has survived every reform round, and is read in the South as the clearest available proof of whose institution it is.
  • The General Agreement on Tariffs and Trade (1947) liberalised the manufactures the North exported while leaving agriculture and textiles riddled with exceptions — precisely the sectors in which the South had an advantage.
• Ramesh Thakur and Jorge Heine put the resulting asymmetry more sharply than the standard literature does: globalisation is not an uncontrolled process but a selectively controlled one.

“Globalisation is not uncontrolled. The movement of people remains tightly restricted. The flow of capital is highly asymmetrical.” — Ramesh Thakur and Jorge Heine

• Their second point is the one usually missed: industrialised countries are mutually interdependent, while developing countries are largely independent of one another and highly dependent on the industrialised world.
  • Brazil, China and India have begun to change that equation, which is what makes contemporary South–South arrangements different in kind from those of the 1970s rather than merely louder.

• The South’s complaint has therefore never been that globalisation is too extensive, but that it is asymmetric by design — liberalising what the North exports and restricting what the South has in abundance.

The Intellectual Revolt: From Terms of Trade to World-Systems

Structuralist and dependency thinking began not as an academic exercise but as an attempt to explain why countries that exported what they were good at kept getting poorer relative to those that bought from them — and it was carried straight into diplomatic practice.

Prebisch, Singer and the Case Against Comparative Advantage

• Raúl Prebisch and Hans Singer, working separately, arrived at the same finding: the terms of trade for primary commodities decline secularly against manufactures. A tonne of coffee or copper buys fewer machines each decade.
  • The mechanism on the demand side is low income elasticity of demand for food and raw materials — as people grow richer they do not eat proportionately more, but they do buy proportionately more manufactures and services.
  • On the supply side, productivity gains in the North were captured by organised labour and oligopolistic firms, while gains in the South were competed away into lower prices.
  • The implication is severe: specialisation according to static comparative advantage locks a country into a declining share of world income even when it does everything the theory recommends.
• Prebisch built this into an institutional programme through the UN Economic Commission for Latin America (ECLAC) and later as the first Secretary-General of UNCTAD, established in 1964.
  • The policy conclusion was import-substituting industrialisation (ISI) — tariff protection, an overvalued exchange rate to cheapen capital-goods imports, state enterprise in heavy industry, and directed credit.
  • ISI produced real industrial capacity in Brazil, Mexico, Argentina and India and then hit a wall: small protected markets, no export discipline, chronic balance-of-payments deficits and rent-seeking behind permanent tariff walls.

Dependency: Underdevelopment as a Product, Not a Stage

• Andre Gunder Frank rejected the idea that poor countries were simply at an earlier stage of the same road. He argued for the “development of underdevelopment” — the periphery’s condition is actively produced by its integration into the world economy.
• Fernando Henrique Cardoso and Enzo Faletto produced the subtler version: associated-dependent development. Growth in the periphery is possible, but it is dependent growth, shaped by the interests of foreign capital allied to a domestic bourgeoisie and a technocratic state.
  • The outcome is industrialisation that is real but disarticulated — a modern export enclave that does not pull the rest of the economy up with it.
• Samir Amin made the argument global and prescriptive. Capitalism is unequal development by nature, and the periphery’s only escape is delinking — not autarky, but subordinating external relations to a domestically defined logic of development rather than the reverse.
• Arghiri Emmanuel‘s unequal exchange supplied the mechanism at the level of prices: because wages differ enormously while capital moves to equalise profit rates, trade at free-market prices transfers value from low-wage to high-wage economies even when entirely voluntary.

Wallerstein and the Function of the Middle

• Immanuel Wallerstein‘s world-systems theory treats the unit of analysis as the capitalist world-economy, not the state — a single division of labour spanning many political units.
  • The core monopolises high-profit, capital-intensive, high-technology production; the periphery supplies raw materials and low-wage labour; states are instruments, not independent actors.
  • The semi-periphery is the theoretically distinctive category. It exploits the periphery while being exploited by the core, and its real function is political: it prevents the system’s losers from forming a united bloc.

Chang and the Ladder

• Ha-Joon Chang‘s “kicking away the ladder” — a phrase he takes from the nineteenth-century economist Friedrich List — is the historical version of the same argument, and the most usable in contemporary disputes.
  • Britain built its industry behind the Navigation Acts and prohibitive tariffs on Indian textiles; the United States averaged tariffs of 35–50% through its industrialising century; Germany, Japan and Korea used subsidies, directed credit and state banks.
  • Nineteenth-century Switzerland and the Netherlands granted no patents at all for long stretches while they absorbed foreign technology; Germany and the United States were prolific and unapologetic copiers.
  • The charge is therefore not hypocrisy in the abstract but the prohibition of specific tools: tariffs, subsidies, performance requirements and weak intellectual-property protection built the rich world, and the current rules forbid exactly those instruments to the countries now trying.

What the Critique Got Wrong

• Dependency theory made a falsifiable prediction — that genuine industrialisation in the periphery was structurally impossible — and East Asia falsified it.
  • South Korea and Taiwan moved from periphery to core within a generation, and China has done so at a scale no theory of blocked development survives intact.
  • The error was treating external structure as fully determining and the state as a passive instrument; East Asia showed that a competent state facing the same structure can extract very different outcomes from it.
• The critique nonetheless retains its force where it was strongest — on commodity dependence, on the pricing of technology, on the asymmetry of the rules, and on the fact that the escapees remain few relative to the aspirants.

The South’s case was never that trade is bad, but that the rules were written by the winners of the last round and forbid the instruments those winners used.

The New International Economic Order and the Collapse of Southern Leverage

The Southern critique became a diplomatic programme in the 1970s, and for about five years it looked as though it might succeed. Why it did not shapes every later North–South negotiation: the South has never since assembled the same combination of numbers, leverage and venue.

Building the Coalition

• The Group of 77, formed in 1964 at the first session of UNCTAD, gave the developing world a standing negotiating bloc; it now has over 130 members and still negotiates as “the G-77 and China”.
• The Non-Aligned Movement, political in origin, acquired an increasingly economic agenda through the 1960s and 1970s, culminating in the Algiers summit of 1973 that drafted the NIEO demand.
• The oil price shock of 1973 transformed the arithmetic. OPEC demonstrated that a producer cartel could move the terms of trade by political action, and every other commodity exporter drew the obvious inference.

The Demands of 1974

• The Declaration on the Establishment of a New International Economic Order was adopted by the UN General Assembly on 1 May 1974, with a Programme of Action, followed in December by the Charter of Economic Rights and Duties of States.
• The agenda was a coherent attempt to rewrite the economic constitution of the world, not a list of grievances:
  • Commodity price stabilisation through an Integrated Programme for Commodities and a Common Fund, indexing raw-material prices to manufactured-goods prices.
  • Permanent sovereignty over natural resources, including an explicit right to nationalise foreign holdings with compensation determined by domestic law — the provision the industrialised states fought hardest.
  • A binding code of conduct for transnational corporations, covering transfer pricing, profit repatriation and interference in host politics.
  • Technology transfer on preferential terms, and revision of the international patent system in favour of late developers.
  • Non-reciprocal trade preferences, greater voice in the IMF and World Bank, and a link between Special Drawing Rights allocation and development finance.
  • Sovereign equality and non-interference, with South–South cooperation as a deliberate counterweight — captured in the UNCTAD slogan “trade not aid”.

Why It Collapsed

• The commodity leverage evaporated. Oil was exceptional; no other commodity had OPEC’s concentration, inelastic demand and absent substitutes, and the attempt to generalise the model failed almost immediately.
• The second oil shock of 1979 split the coalition rather than strengthening it. It enriched a dozen oil exporters and devastated the oil-importing majority of the South, which is where the debt crisis was incubated.
• The Volcker interest-rate shock at the US Federal Reserve from 1979 turned cheap recycled petrodollar loans into unpayable obligations, and by 1982 the South’s negotiators were supplicants in a debt renegotiation rather than claimants in a constitutional one.
• The venue changed, and that was decisive. The NIEO was fought in the UN General Assembly, where the South had a permanent numerical majority and one state meant one vote.
  • The industrialised states declined to be bound by resolutions they had voted against and moved the substance to the IMF, the World Bank and the GATT, where weighted voting, consensus practice and conditionality all ran the other way.
  • The South arrived at those forums individually, in balance-of-payments distress, negotiating loan by loan. A bloc in one room becomes a queue in another.

The South did not lose the NIEO argument on the merits. It lost the room in which the argument was being held.

Debt, Conditionality and the Lost Decades

The Sequence of 1982

• Mexico’s default announcement in August 1982 opened a crisis that eventually engulfed most of Latin America and much of Africa, and it followed a recognisable four-step sequence.
  • Petrodollar recycling in the 1970s pushed cheap, floating-rate syndicated bank loans at governments that had no capacity to assess them.
  • US interest rates rose sharply from 1979 to break domestic inflation, multiplying the servicing cost of floating-rate debt overnight.
  • Commodity prices fell, cutting the export earnings out of which the debt had to be serviced.
  • Lending stopped abruptly, converting a liquidity problem into insolvency and forcing debtors to the IMF as the only remaining creditor.
• Crucially, the debt was renegotiated country by country, never collectively. A proposal for a debtors’ cartel was floated at Cartagena in 1984 and never materialised, and the creditors’ committee structure ensured that each debtor faced a united bloc alone.

The Standard Package and Its Logic

• Conditionality — the attachment of policy requirements to a loan — was the mechanism by which the crisis became a programme of structural transformation.
• The structural adjustment programme was broadly uniform across very different economies, which is the heart of the complaint against it.

• The critique from inside the system carried most weight. UNICEF‘s Adjustment with a Human Face, associated with Richard Jolly and Giovanni Andrea Cornia, showed measurable costs in child nutrition, school enrolment and infant mortality — and argued that these were avoidable design choices, not necessary consequences.
• Latin America’s “lost decade” saw income per head fall over the 1980s and poverty rise; sub-Saharan Africa’s was longer, running into the mid-1990s and leaving several countries poorer per head in 2000 than at independence.

1997–98: The Demonstration Effect

• The Asian financial crisis began with the flotation of the Thai baht in July 1997 and spread to Indonesia, Malaysia, South Korea and beyond within months.
• These were not the usual suspects. Fiscal deficits were small, savings rates high, inflation low, growth rapid — the crisis therefore could not be explained as the punishment of bad macroeconomic behaviour.
  • The mechanism was short-term foreign-currency borrowing intermediated by weakly supervised domestic banks into long-term domestic-currency assets: a currency mismatch and a maturity mismatch simultaneously.
  • When confidence turned, the outflow was self-fulfilling — a sudden stop, in which solvent borrowers fail because refinancing disappears.
• The lesson drawn across the developing world was precise: capital-account liberalisation ahead of deep domestic financial institutions and supervision is not a reform but an exposure.
• Joseph Stiglitz, then the World Bank’s chief economist, argued that the IMF’s response deepened the crisis — raising interest rates and demanding fiscal contraction into a collapse of private demand, the opposite of what industrialised countries are advised in similar circumstances.

The Consequence That Shaped the Next Twenty Years

• Developing countries concluded that the system had no lender of last resort they could rely on, and responded by accumulating foreign exchange reserves on an unprecedented scale as self-insurance.
  • China alone held about $3.4 trillion in reserves in mid-2026, and emerging economies collectively hold several trillion more.
  • This is expensive insurance: reserves are typically held in low-yielding developed-country government securities, so a capital-scarce economy lends cheaply to a capital-abundant one to protect itself against that economy’s financial system.

What Globalisation Delivered, Stated Specifically

• Poverty reduction on a historically unprecedented scale is the strongest item in the case for globalisation, and it is overwhelmingly an East and South Asian achievement rather than a general one.
  • Hundreds of millions left extreme poverty between 1990 and 2015, with China accounting for the largest single share and Vietnam, Indonesia, Bangladesh and India for much of the rest.
  • The record since has deteriorated. The World Bank raised the international poverty line to $3.00 a day (2021 PPP) in June 2025, on which about 847 million people — 10.4% of the world’s population — were in extreme poverty in 2024; progress has stalled globally and reversed in parts of Africa.
• Global value chains lowered the threshold for entry into manufacturing. A country no longer had to build a whole industry to participate; it could specialise in a stage — assembly, a component, a process — and acquire the rest by import.
• Access to capital and technology arrived through foreign direct investment, licensing and supplier relationships that transmitted process knowledge as a by-product of the commercial contract.
  • UNCTAD’s World Investment Report 2026 puts global FDI at $1.6 trillion in 2025, of which developing economies received $901 billion — Asia $644 billion, Latin America and the Caribbean $188 billion, Africa about $70 billion.
  • The distribution is the caveat: developing-economy inflows rose only 2% against 11% for developed economies, and the top 20 host economies took over 80% of global flows.
• Services offshoring created an entirely new development path, one unavailable to any earlier generation of late developers because it depends on telecommunications rather than ports.
  • India is the leading case — software services, business process management, and now global capability centres performing research, design and analytics for foreign parents.
• Remittances have become the largest and most stable external inflow for the developing world, reaching about $685 billion to low- and middle-income countries in 2024 — larger than foreign direct investment and official development assistance combined.
  • They go directly to households, bypassing both conditionality and domestic capture, and India is the world’s largest recipient, at about $137 billion on the United Nations’ 2026 estimates.
• Access to knowledge, medicine and research expanded materially — generic pharmaceuticals, vaccine platforms, open scientific literature, and educational access that no domestic system alone could have supplied.

The Costs, Equally Specific

Volatility, Deindustrialisation and the Value-Added Trap

• Openness raises exposure to shocks, and the poor bear the largest share of the downside: lacking savings and safety nets, they lose more in contractions than they gain in expansions.
• Premature deindustrialisation is Dani Rodrik‘s finding, and it is the single most important structural cost.
  • Developing countries are now losing manufacturing employment share at income levels far below those at which the early industrialisers began to deindustrialise — peaking as manufacturing economies while still poor.
  • The cause is partly technological — manufacturing has become capital- and skill-intensive, so it absorbs less labour per unit of output than it did for Britain, Germany or Korea — and partly the import competition that liberalisation brought.
• The smile curve, associated with Stan Shih, describes where value sits along a value chain: high at the two ends — design, branding, intellectual property, after-sales services — and low in the middle, at fabrication and assembly.
  • Most developing-country entrants join in the middle, where value added per worker is lowest and competition among suppliers is fiercest.
  • Bangladesh’s garment sector is the standing illustration: about four million jobs, overwhelmingly for women, real poverty reduction, and thirty years later still concentrated at the cut-and-sew stage.
• Commodity dependence persists across much of Africa and parts of Latin America, and with it the volatility and Dutch-disease effects the structuralists identified in the 1950s.

Inequality, Labour and the Environment

• Inequality within countries rose even where poverty fell, and this is now the sharper political problem.
  • Standard trade theory predicted the opposite. The Stolper–Samuelson logic implies that a labour-abundant economy opening to trade should see unskilled wages rise and inequality narrow.
  • It did not happen across much of Latin America and Africa, for two reasons: new technology is skill-biased, raising demand for educated labour; and the simultaneous entry of China and India into world markets expanded the global supply of unskilled labour enormously.
  • Oxfam reports for January 2026 that the top 1% hold 43.8% of global wealth against 0.52% for the poorest half, and the World Inequality Report 2026 finds the top 10% earning more than the remaining 90% combined.
• The race to the bottom operates through the credible threat of relocation rather than through any explicit agreement.
  • Governments competing for mobile investment become reluctant to enforce labour standards or environmental rules, and the competition is between developing countries as much as against the North.
  • The Rana Plaza collapse in April 2013, which killed over 1,100 garment workers in Bangladesh, remains the standing case — a building known to be unsafe, in a sector whose competitive position depended on cost.
• Environmental costs are externalised onto weaker economies — polluting production relocated, extraction intensified, waste exported — while responsibility for accumulated emissions sits elsewhere.

Factor Mobility, Technology and Policy Space

• The asymmetry of factor mobility is the structural unfairness at the heart of the system. Capital and skilled labour move; unskilled labour does not.
  • Skilled professionals migrate from developing to developed countries, taking with them public investment in their education that the sending state never recovers — the classic brain drain, only partly offset by remittances and diaspora networks.
  • Capital flees to developed countries during crises, precisely when the developing economy needs it most.
• The technology divide widened rather than closed. Research and development is concentrated in the North and responds to Northern factor endowments, so new technology arrives labour-saving and skill-biased in economies whose comparative advantage is labour.
  • The privatisation of research is the sharper point. The Green Revolution was developed in publicly funded international institutes and its varieties were freely available; the biotechnology revolution is privately owned, patented and licensed.
• The erosion of policy space is the cost that connects the economics to the politics.
  • WTO commitments removed quantitative restrictions, capped tariffs, prohibited most export subsidies and, through TRIMs, banned local-content and trade-balancing requirements — the standard toolkit of earlier industrialisation.
  • Roughly 2,200 bilateral investment treaties remain in force worldwide, most containing investor-state dispute settlement (ISDS), under which a private firm can sue a state before an international tribunal for regulatory changes affecting its expected profits.
  • The effect is regulatory chill: measures on tobacco, mining, water and environmental protection have been challenged, and the risk of a large award deters legislation before it is drafted.
  • Domestic policy is also disciplined by credit-rating agencies and portfolio investors whose judgements are formed abroad and whose exit is instantaneous, which narrows the range of options a government can put before its own electorate.

The problem was never openness as such. It was opening in an order the state could not choose, to instruments it could not later withdraw.

Three Regional Patterns and the Variable That Explains Them

The common error is to look for a single verdict. There is none: three broadly different strategies produced three broadly different outcomes, and the variable that separates them is state capacity to integrate selectively.

East Asia: Integration on Its Own Terms

• The East Asian states were open on the export side and protected on the import and capital sides, which is a very different thing from being open.
  • Protection was granted, but withdrawn from firms that failed to export — a discipline import substitution never imposed.
  • Finance stayed under national control, with directed credit through state or state-influenced banks, and the capital account was opened late and slowly.
  • High domestic savings meant growth was financed largely at home, so foreign capital was a supplement rather than a dependency.
  • Land reform in Korea and Taiwan created relatively equal starting distributions, which made the growth that followed both faster and politically sustainable.
• The developmental-state literature explains how a state could do this without being captured.
  • Chalmers Johnson described the plan-rational state in Japan, organised around economic transformation with an elite pilot agency insulated from short-term political pressure.
  • Alice Amsden, on Korea, showed that late industrialisation proceeds by learning and borrowing rather than innovating, with subsidies made reciprocal — granted against measurable performance.
  • Robert Wade‘s governed market thesis argued that these states did not merely correct market failures but led the market into sectors it would not have chosen.
  • Peter Evans‘s embedded autonomy identifies the necessary combination: a bureaucracy coherent enough to resist capture, yet connected enough to business to know what to ask for.
• The qualifications belong here too: these were mostly authoritarian states in their high-growth phase, they enjoyed Cold War access to American markets and tolerance for their protection, and the model has not been reproduced at will elsewhere.

China’s Separate Path

• China integrated gradually and on conditions it set, which is why its case is the most difficult for both sides of the globalisation argument.
  • Special economic zones from 1980 — Shenzhen, Zhuhai, Shantou, Xiamen — made liberalisation geographically bounded and reversible, an experiment rather than a commitment.
  • Reform was sequenced: agriculture first, then township and village enterprises, then export manufacturing, with state ownership of banking and the commanding heights retained throughout.
  • The capital account was never fully opened, and the exchange rate was managed, which is why China passed through 1997 and 2008 with far less damage than more open economies.
  • WTO accession in December 2001 locked in external market access on terms China had negotiated hard, including a long transition and a non-market-economy designation it accepted in exchange for entry.
• The decisive point for the wider South is that China integrated economically without accepting political conditionality, which severed the link between market reform and political liberalisation that the 1990s consensus had assumed was automatic.

Latin America: Adjustment, the Pink Tide and the Commodity Cycle

• Latin America went furthest fastest in liberalising and got the least for it, which is why the region generated both the sharpest critique and the most institutional experimentation.
  • The 1980s were lost to debt and adjustment; the 1990s brought rapid privatisation, tariff reduction and capital-account opening, with disappointing growth and rising inequality.
  • Argentina’s collapse in 2001–02, after a decade as the model reformer, did more to discredit the orthodox package in the region than any argument.
• The Pink Tide from 1998 — Chávez in Venezuela, then Lula in Brazil, Kirchner in Argentina, Morales in Bolivia, Correa in Ecuador — was the political response.
  • It was redistributive rather than autarkic: conditional cash transfers, minimum-wage increases, expanded pensions and health coverage, financed largely by a commodity boom driven by Chinese demand.
  • Poverty and inequality fell substantially across the region in the 2000s, which is the strongest evidence that distributional outcomes are a matter of domestic policy rather than of external structure alone.
  • The weakness was the financing. When commodity prices fell after 2014, the fiscal basis of the model disappeared, and the region returned to volatility, deficits and political instability.
• The pendulum has swung again since, and the political cycle rather than the economic argument now drives the region’s international posture.
  • Argentina under Milei from 2023, Bolivia’s election of Rodrigo Paz in October 2025 ending two decades of leftist rule, and Chile’s choice of José Antonio Kast in December 2025 mark a decisive turn away from the left.
    • Colombia’s election of Abelardo de la Espriella in June 2026 extended it; Brazil and Mexico remain on the other side.

Africa: Conditionality Without Industrialisation

• Africa received the fullest dose of conditionality and the smallest share of the manufacturing that was supposed to justify it.
  • Structural adjustment arrived from the early 1980s, in states whose administrative capacity was thinnest and whose commodity exposure was greatest.
  • Manufacturing integration was minimal: the continent’s participation in global value chains remained concentrated in raw materials, and its share of world manufacturing value added stayed marginal.
  • Africa received about $70 billion of FDI in 2025, against $644 billion for Asia — the clearest single measure of the continent’s position in the global investment map.
• The most important contemporary counter-move is regional rather than global. The African Continental Free Trade Area, whose trading arrangements became operational in January 2021, is an attempt to build the market that colonial trade structures denied the continent.
  • 49 of the African Union’s 55 members have ratified it, creating a market of 1.4 billion people, with a Guided Trade Initiative running commercial shipments under the agreement since October 2022.
  • The problem it exists to solve is stated in one figure: intra-African trade has run at roughly 15–21% of the continent’s total trade, against comparable intra-regional shares far higher in Europe and Asia.

What separated the winners from the losers was not the degree of opening but whether the state could choose the sequence.

Latin America’s Counter-Institutions and the Limits of Regional Sovereignty

The Pink Tide governments did not merely redistribute at home. They attempted to build a parallel regional architecture based on regional sovereignty, economic integration and an alternative conception of development, and the honest verdict on it runs through the institutional detail rather than around it.

• ALBA, the Bolivarian Alliance for the Peoples of Our America, was founded in 2004 by Venezuela and Cuba as an explicit counter-proposal to the US-sponsored hemispheric free-trade project.
  • It later created the SUCRE, a virtual regional unit of account launched in 2010 for settling intra-bloc trade without using the dollar. It handled a meaningful volume briefly and then collapsed with Venezuela’s economy.
• UNASUR, the Union of South American Nations, was established by treaty in 2008 and briefly did the work it was built for.
  • It mediated the Bolivian crisis of 2008 and the Colombia–Venezuela tensions of 2010 without US involvement, which was the point: a South American body resolving South American disputes.
  • It then fragmented as governments changed — six members suspended participation in 2018, several formally withdrew, and a partial revival from 2023 has not restored it.
  • Its failure is the clearest evidence of the structural weakness: an organisation built on ideological alignment cannot survive an election.
• CELAC, the Community of Latin American and Caribbean States, was created in 2011 and is the most durable of the group.
  • It includes all 33 states of the Americas except the United States and Canada, which makes it the deliberate counterpoint to the Organization of American States, where Washington has always been present.
  • Its most consequential external function has been the China–CELAC Forum, whose fourth ministerial met in Beijing in May 2025 with a Chinese credit line of about $9.2 billion for the region.
• Mercosur, founded by the Treaty of Asunción in 1991, predates the Pink Tide and represents the more conventional integrationist strand.
  • Its customs-union ambition has never been completed: the common external tariff is riddled with exceptions and members have repeatedly negotiated outside the bloc.
  • The EU–Mercosur agreement is the test of its external weight: negotiated for over two decades, politically concluded in December 2024, signed on 17 January 2026, and provisionally applied through its interim trade agreement since 1 May 2026, with parliamentary consent and national ratifications still outstanding.
• The Bank of the South is the case that most clearly defines the limits of the whole project, and it should be stated plainly.
  • Its founding act was signed in December 2007 and the constitutive agreement in September 2009, by seven states, with a headline capitalisation figure of up to $20 billion.
  • It was intended to finance regional development without IMF or World Bank conditionality — the institutional core of the demand for autonomy.
  • It never received its first deposits and never began operations. It exists on paper and has done nothing else.
• China became the alternative creditor that the Bank of the South was meant to be, which is the outcome nobody in 2007 was arguing for.
  • Lending through the China Development Bank and the Export-Import Bank of China ran into the hundreds of billions across the region, concentrated in Venezuela, Ecuador, Brazil and Argentina, and was unconditional in policy terms though frequently secured against oil.
  • Latin America–China trade passed $500 billion in 2024, and several states have joined the Belt and Road Initiative, with Colombia signing in 2025.
• Exit from investor-state arbitration was the legal expression of the same impulse. Bolivia denounced the ICSID Convention in 2007, Ecuador in 2009 and Venezuela in 2012, and several states terminated bilateral investment treaties.
  • The reversal is instructive: Ecuador re-ratified ICSID in 2021 under a different government, which is the pattern the whole section illustrates.
• Resource nationalism ran alongside it. Bolivia’s nationalisation of hydrocarbons in May 2006 transformed state revenues and financed the redistribution of the following decade.
  • In the lithium triangle the three states took visibly different routes: Bolivia’s state monopoly through YLB, which has produced very little; Chile’s national lithium strategy from 2023, requiring state participation; and Argentina’s open provincial-concession model.
  • Divergence within a single resource, region and decade is a compact demonstration of how far state capacity, rather than structure, decides the outcome.

What They Were Countering, and the Balanced Verdict

• The architecture they were countering was concrete, not abstract.
  • The Washington Consensus as the template for conditionality; NAFTA (1994) and its successor USMCA (2020); and dollarisation, adopted outright by Ecuador in 2000 and El Salvador in 2001.
  • Above all the Free Trade Area of the Americas, defeated at the Mar del Plata summit of November 2005 — the high point of the counter-movement.
• Moderate success is the right description, and the qualifier matters in both directions.
  • What was achieved: real diplomatic autonomy, shown at Mar del Plata and in UNASUR’s mediation; an alternative development discourse that reshaped the region’s politics for two decades; diversification away from a single creditor and a single market; and social outcomes better than the 1990s produced.
  • What was not: they were tied to the electoral cycle of individual governments rather than to durable state interests; they were financed by a commodity boom that ended; and they never acquired institutional depth — no secretariat with real authority, no binding dispute settlement, no capitalised bank.
• The deeper lesson is the one the region itself now demonstrates: institutions that depend on who is in power are not institutions, and autonomy that rests on a commodity cycle is autonomy on loan.

The WTO Seen From the South

• Agriculture is the founding grievance. The Uruguay Round required developing countries to bind and cut tariffs while allowing the industrialised world to keep its support largely intact by reclassifying it.
  • The Agreement on Agriculture disciplines trade-distorting support in the Amber Box, exempts production-limiting payments in the Blue Box, and exempts “minimally distorting” support in the Green Box without any ceiling at all.
  • Rich countries shifted their support from Amber to Green — from price support to direct payments — and their total transfers to farmers barely fell.
  • The de minimis allowance is 10% of production value for developing countries and 5% for developed ones, but the Aggregate Measurement of Support is calculated against fixed 1986–88 reference prices, so inflation alone pushes developing countries towards breaching it.
• Public stockholding for food security is where that arithmetic became a live dispute for India.
  • Buying grain from farmers at an administered price to hold public stocks is counted as trade-distorting support against the 1986–88 reference price, so a food-security programme can be scored as an illegal subsidy.
  • The Bali Ministerial in December 2013 produced a “peace clause” — a commitment not to challenge such programmes pending a permanent solution — made indefinite in 2014.
  • The permanent solution remains unagreed, and India pressed for it again at MC14 in Yaoundé in March 2026, which closed without a ministerial declaration.
• TRIPS and access to medicines is the second front, and the one with the clearest life-and-death stakes.
  • TRIPS (1995) globalised twenty-year product patents, ending the process-patent regimes under which India had built the world’s largest generic industry.
  • The Doha Declaration on TRIPS and Public Health (November 2001) affirmed that the agreement must not prevent members protecting public health, and confirmed the right to grant compulsory licences on grounds each member determines.
  • India and South Africa proposed a broad TRIPS waiver in October 2020 covering vaccines, therapeutics and diagnostics; MC12 in June 2022 agreed a narrow, time-limited waiver on vaccine patents alone — too little and too late to affect supply.
• Special and differential treatment is nominally the South’s protection and practically its weakest instrument.
  • It mostly takes the form of longer transition periods and best-endeavour language rather than substantive exemption — a slower path to the same obligations.
  • Developing-country status at the WTO is self-designated, and the United States in particular has pressed for it to be restricted, which would remove flexibilities from large emerging economies including India and China.
• The single undertaking — nothing is agreed until everything is agreed — was presented as protecting the weak from being picked off, and did the opposite.
  • It required every member to accept every agreement, so a country with a two-person Geneva mission had to negotiate simultaneously across goods, services, intellectual property, investment and dispute rules against delegations of dozens.
• Doha, launched in 2001 as a development round, is effectively dead, and its surviving products are only two.
  • The Trade Facilitation Agreement, in force February 2017, on customs procedure rather than market access.
  • The Fisheries Subsidies Agreement, adopted in 2022 and in force since 15 September 2025 — the WTO’s first agreement centred on environmental sustainability, and only its second since 1995. India insisted throughout on protection for artisanal fishers.
  • Nairobi (MC10, December 2015), the first ministerial held in Africa, delivered the abolition of agricultural export subsidies — the round’s one substantial development outcome — but its declaration recorded openly that members no longer shared a commitment to the Doha mandate.
  • Buenos Aires (MC11, December 2017) ended with no ministerial declaration at all, and nothing on fisheries subsidies or public stockholding.
    • Its lasting product was the launch of Joint Statement Initiatives on e-commerce, investment facilitation and small enterprises — plurilateral negotiation begun inside the WTO by members who could not obtain consensus, and the direct ancestor of the plurilateral e-commerce agreement of 2026.
• The Appellate Body’s paralysis reads differently from the South. It has been unable to hear appeals since December 2019 because the United States has blocked appointments.
  • For a small economy, binding dispute settlement was the one forum in which it could defeat a large one and have the ruling enforced — Antigua against the United States, Brazil on cotton, and India against United States countervailing duties on carbon steel.
  • The stopgap, the Multi-Party Interim Appeal Arbitration Arrangement, had 61 participants covering roughly 60% of world trade by 2026 — useful, but a club rather than a court, and the United States is not in it.

Is the “Global South” Still a Usable Category?

• The vocabulary has changed four times, and each change carried an argument.
  • “Third World” came from Alfred Sauvy in 1952, by analogy with the third estate of pre-revolutionary France — the excluded majority, positioned against a capitalist first and a communist second world. The second world’s disappearance in 1991 left it stranded.
  • “North” and “South” entered general use through the Brandt Report of 1980, which drew a line across the world map. It was always geographically approximate — Australia is south, Mongolia is north.
  • “Developing” and “developed” built a teleology into the description: everyone is on one road, at different points along it.
  • “Global South” is the current term precisely because it is relational rather than geographic — a shared position in the world economy and a shared history of subordination, not a place.
• The case that the categories have broken down is strong.
  • Divergence within the South is now larger than the gap it was invented to describe. China’s economy is well over a thousand times Chad’s; Singapore and South Korea are richer than most of Europe; the gulf states are among the world’s wealthiest.
  • Middle powers — India, Brazil, Indonesia, Turkey, South Africa, Mexico, Nigeria — behave as systemic actors with their own defensive interests, not as a bloc of claimants.
  • South–South flows have become substantial: China is the largest bilateral creditor to the developing world, Gulf funds are major investors in Africa and Asia, and India runs its own development-cooperation programme.
  • Inequality is now as much within countries as between them. Branko Milanovic‘s work on the global distribution shows the fastest-growing incomes of the era belonging to the emerging middle of Asia while the lower-middle of the rich world stagnated — a pattern that cuts across the North–South line.
• The case that they still hold is equally strong, and it is about structure rather than income.
  • Voice in the international financial institutions is essentially unchanged. The IMF’s 16th General Review agreed an equiproportional quota increase that raised resources without altering relative shares — more money, the same votes.
  • Climate finance and historical responsibility remain a North–South axis: who caused the accumulated stock of emissions, who pays for adaptation, who bears loss and damage. The EU’s Carbon Border Adjustment Mechanism, in its definitive phase from January 2026, is read across the South as green protectionism.
  • Migration barriers still run one way. Capital and skilled professionals move; unskilled labour does not.
  • The technology and vaccine divides were visible in 2020–22, and the TRIPS waiver fight showed the old alignment intact.
• The reasonable conclusion is that “Global South” survives as a bargaining identity even as it fails as an economic description — which is why the term is used more, not less, now that its members have less in common economically than in 1974.

Domestic Compulsion or External Crisis?

• The two explanations are usually posed as alternatives; the record shows them interacting, with the external shock supplying the opening and the domestic coalition determining what came through it.
  • External crises created the political space: 2008 destroyed the intellectual authority of the deregulated model, COVID-19 exposed supply-chain concentration and vaccine nationalism, and the tariff turn from 2018 showed that the rule-writers would abandon their own rules.
  • Domestic compulsion supplied the direction: demographic pressure, employment demands, the political economy of subsidies, and the electoral coalitions that formed around each.
• The interaction is clearest in the timing of reform: India liberalised in 1991 under acute external pressure, but the content came from a domestic debate a decade old — which is why the reform survived the crisis that triggered it.

South–South Cooperation and the Content of the Reform Demand

• The institutional line runs continuously from Bandung in 1955 — twenty-nine Asian and African states asserting sovereign equality and economic cooperation — through NAM’s economic agenda and the G-77 to the present arrangements.
• IBSA, founded in 2003 by India, Brazil and South Africa, is the smallest and most coherent: three large democracies on three continents, with a modest IBSA Fund financing development projects in other Southern states.
• BRICS is the most consequential and most internally divided. It has eleven full members — the original five plus Egypt, Ethiopia, Iran and the UAE from 2024, Indonesia from January 2025, and Saudi Arabia, which the official listing includes though Riyadh has not confirmed accession.
  • The bloc is usually given at about 41% of world GDP in purchasing-power terms against the G7’s 28% — a PPP comparison that reverses at market exchange rates, and should be cited as such.
  • The New Development Bank, agreed in 2014 and operating from Shanghai since 2015, has approved projects worth tens of billions and lends without policy conditionality, but remains small beside the World Bank and depends on dollar funding.
  • The Contingent Reserve Arrangement is a $100 billion swap facility, of which most tranches are linked to an existing IMF programme — the alternative to the Fund still routes through it.
  • The standing criticism is that BRICS aggregates grievances more successfully than interests: intra-BRICS trade is a small share of members’ external trade, the India–China relationship is adversarial, and the enlarged membership includes several pairs of regional rivals.
• The de-dollarisation demand should be stated accurately, because it is routinely overstated.
  • The stated aim is settlement of trade in local currencies, not a common BRICS currency; the practical instruments are bilateral swap lines, local-currency invoicing and alternative messaging systems.
  • Progress is slow and structurally constrained: the dollar remains about 57% of allocated global reserves against the euro’s 20%, and no candidate offers comparable depth, convertibility and legal predictability.
  • The demand is best read as insurance against financial coercion rather than as a serious near-term challenge to dollar centrality.
• Voice reform is the concrete institutional demand, and it has one clear success and several failures.
  • The African Union became a permanent member of the G20 at the New Delhi summit in September 2023 — the most significant enlargement of a major forum in decades.
  • India has convened the Voice of the Global South Summit since January 2023 as a consultation mechanism outside Western-chaired forums.
  • The G20 Common Framework for debt treatment has performed poorly: only Chad, Ethiopia, Ghana and Zambia applied, restructurings took years, and total relief has been small against the distressed stock — which is why other distressed borrowers have avoided applying at all.
• S. Jaishankar has argued that the case for a “Global South-sensitive” model of globalisation grows stronger as the costs of over-centralisation accumulate.

What a Global South-Sensitive Model Would Actually Require

• The word to build the demand around is over-centralisation — rule-making concentrated in a handful of capitals, currencies, institutions and firms, so that a decision taken in one place propagates everywhere without any corresponding accountability to those it reaches.
  • This is the practical form of a structural problem: there is no central global authority, only powerful states setting the agenda, so “global rules” in practice mean the preferences of those able to enforce them.
  • The answer is therefore polycentric, not autarkic — more centres of decision, more redundancy, more exits — rather than a retreat from integration.

• The constructive point is that none of this is a demand to reverse globalisation. It is a demand that the terms of participation be negotiable by those who participate, which is what a rules-based order was supposed to mean.
• C. Raja Mohan cautions against building a Southern bloc against the developed North, arguing that India’s interest lies in offering sustainable economic cooperation to the Global South through national, regional and global institutions rather than in confrontation.

India’s Own Response

• The pre-1991 model ran out rather than failed outright. Import substitution, industrial licensing, public-sector dominance and quantitative import restrictions had built an industrial base and a diversified economy that grew slowly and consumed foreign exchange faster than it earned it.
  • By 1990 the constraints were binding: low export competitiveness, chronic current-account deficits, fiscal expansion financed by borrowing, and reserves covering only a few weeks of imports as the Gulf War raised oil prices and remittances fell.
• The 1991 reform is best understood as a choice about sequencing rather than a conversion.
  • What was opened quickly: industrial licensing abolished for most sectors, the rupee devalued and moved to a market-determined rate, tariffs cut sharply from peaks above 200%, FDI permitted automatically in most industries.
  • What was not: the capital account, agriculture, labour law, small-scale reservations and the public-sector banks, all of which were reformed slowly or not at all.
• Caution on capital-account convertibility was the most consequential single decision.
  • The Tarapore Committee of 1997 set out a roadmap conditional on fiscal consolidation, low inflation and a cleaned-up banking system; the second committee in 2006 repeated the exercise; neither roadmap was fully implemented.
  • The Asian crisis broke weeks after the first report, and India’s insulation from it — like its relative insulation in 2008 — is the standing argument for gradualism in the Indian debate.
• The services path was different in kind from the East Asian manufacturing path, and it explains most of what is distinctive about India’s position.
  • Software services, business-process management and now global capability centres grew from an English-speaking technical labour force, favourable time zones and telecommunications, largely outside the regulatory attention that constrained manufacturing.
  • Services growth is skill-intensive and employment-thin relative to manufacturing, which is why rapid aggregate growth has coexisted with weak formal job creation.
  • The manufacturing gap has persisted despite Make in India (2014) and production-linked incentive schemes across fourteen sectors — manufacturing’s share of output has remained close to where it was rather than rising towards the 25% target.
• The RCEP decision of November 2019 revealed India’s calculation: it left the world’s largest regional trade agreement over import-surge protection, unresolved services access, rules of origin permitting Chinese goods to route through members, and a dairy sector it would not expose.
• The bilateral turn since has been unusually rapid, and marks a shift from FTA scepticism to selective, deep agreements with partners whose competitive threat is limited.
  • India–UAE CEPA and India–Australia ECTA (2022) in force; India–EFTA TEPA, signed March 2024, in force from October 2025, carrying a $100 billion investment commitment — the first time India has secured an investment target in a trade treaty.
  • India–UK CETA, signed July 2025, in force from 15 July 2026; the India–EU FTA concluded on 27 January 2026 and in ratification; India–Oman CEPA signed December 2025 and India–New Zealand in April 2026.
• India’s WTO positions follow from its domestic structure: a permanent solution on public stockholding, protection for artisanal fishers, coalition work through the G-33 and with South Africa on TRIPS, and resistance to binding rules on e-commerce and investment facilitation.
• The tension in India’s position is worth stating rather than smoothing over. India presents itself as a voice of the Global South while being a large economy with substantial defensive interests of its own.
  • It seeks special and differential treatment while being among the world’s largest economies; it demands technology transfer while building its own intellectual-property enforcement; it champions Southern trade interests while running significant protection.

The Indian Debate

• Deepak Nayyar argues that globalisation’s benefits accrued to a small number of countries and, within them, to a small share of the population, and that the resulting inequality is politically unsustainable rather than merely unjust.
• Prabhat Patnaik reads liberalisation as the subordination of national development to globalised finance, which disciplines the state and forecloses redistribution.
• Amit Bhaduri argues that growth driven by asset markets and elite consumption is structurally incapable of generating employment at the scale India requires.
• Utsa Patnaik locates the damage in agriculture, where trade liberalisation and the shift to export crops compressed food availability and rural incomes.
• Against them, Jagdish Bhagwati and Arvind Panagariya argue that liberalisation raised growth, that growth reduced poverty, and that India’s failures are of under-reform — in labour law, land and infrastructure — rather than of openness.
• Amartya Sen offers the position most useful for judging the record: globalisation is neither new nor peculiarly Western nor a curse, but its benefits are distributed unfairly — and that distribution, not the process, is what has to be fixed, through domestic public action and international reform alike.

Conclusion

Globalisation was neither an engine nor a trap but an environment whose returns depended on state capacity and on sequencing. The states that chose what to open, and when, generally did well; those that opened on external instruction generally did not. That is why the developed world’s own return to industrial policy after 2020 reads, from the South, as a belated concession of the argument.