From the New International Economic Order to the G20: how the ‘global South’ is restructuring world capitalism from within

Abstract

In the early 1970s the G77 and the Non Aligned Movement ( nam ) challenged the material and intellectual pillars of the postwar liberal capitalist system through collective action at the UN to establish a New International Economic Order ( nieo ). The aim was to complete the ‘emancipation’ of the ‘global South’ by creating binding institutional frameworks, legal regimes and redistributive mechanisms correcting historically constructed core–periphery disparities. That ambitious effort failed in the face of ‘Northern’ resistance and national segmentation within the nam . Today re-emerging states of the global South are engaged in a more successful effort to gain voice and alter international hierarchy by claiming a central place in the world capitalist system and restructuring it from within. The vertical late-modern world system centred in the Atlantic and ordered by the ‘West’ is thus gradually giving way to a polycentric international structure in which new regional and transnational ‘South–South’ linkages are being formed. This paper critically reviews the transformation and argues that, while it is creating long sought-for conditions of relative international equality, it has also dampened the emancipatory promise of the anti-colonial struggle.

Notes

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2 J Goody, The East in the West, Cambridge: Cambridge University Press, 1996. Initially in this paper I use quotation marks for ‘West’ and ‘East’, ‘North’ and ‘South’ to highlight what Edward Said called their lack of ‘ontological stability’. As Said argues, these concepts are ‘supreme fictions’ of the orientalist gaze, constructs that generate otherness rather than knowledge. For like reasons, I emphasise the concept of re-emergence rather than emergence, since many if not most of the postcolonial countries currently involved in systemic transformation had ‘emerged’ before they were submerged during the ‘great divergence’ in the 19th century.

3 imf, World Economic Outlook, Washington, DC: imf, 2011.

4 See the discussion in the special issue of Third World Quarterly, ‘After the Third World?’ Third World Quarterly, 25(1), 2004.

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8 United Nations General Assembly, Sixth Special Session, 3201 (S-VI), Declaration on the Establishment of a New International Economic Order, New York, 1 May 1974.

9 R Cox, ‘Ideologies and the New International Economic Order: reflections on some recent literature’, International Organization, 33(2), 1979, pp 258–259.

10 S Krasner, Structural Conflict: The Third World against Global Liberalism, Los Angeles: University of California Press, 1985.

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12 R Cooper, K Kaiser & M Kosada, Towards a Renovated International System, Task Force Report 14, Washington, DC: Trilateral Commission, 1977.

13 Z Brzezinski, ‘Recognizing the crisis’, Foreign Policy, 17, 1974–75, pp 63–74.

14 See DE Spiro, The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets, Ithaca, NY: Cornell University Press, 1999.

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16 G Arrighi, ‘The social and political economy of global turbulence’, New Left Review, 20, March-April 2003, p 54.

17 Krasner, Structural Conflict, p 4.

18 H Milner & R Keohane (eds), Internationalisation and Domestic Politics, New York: Cambridge University Press, 1996, p 24.

19 For a more thorough discussion of the ‘Asian crisis’ and its interpretations, see P Golub, Power, Profit and Prestige: A History of American Imperial Expansion, London: Pluto Press, 2010.

20 G Arrighi, The Long Twentieth Century, London: Verso, 1994. Arrighi identified Japan rather than China as the hegemonic contender, but it is the general logic of his argument regarding systemic transitions that interests us here.

21 B Cumings, ‘The origins and development of the Northeast Asian political economy: industrial sectors, product cycles, and political consequences’, International Organization, 38(1), 1984, pp 1–33; and Cumings, Parallax Visions: Making Sense of American–East Asian Relations at the End of the Century, Durham, NC: Duke University Press, 1999. For an excellent theoretical overview of the debate on developmental states, see M Woo-Cumings (ed), The Developmental State, Ithaca, NY: Cornell University Press, 1999.

22 See M Woo-Cumings, ‘East Asia’s America problem’, in M Woo-Cumings & M Loriaux (eds), The Past as Prelude: History in the Making of a New World Order, Boulder, CO: Westview Press, 1993.

23 D Harvey, The New Imperialism, Oxford: Oxford University Press, 2003; and S Sassen ‘A savage sorting of winners and losers: contemporary versions of primitive accumulation’, Globalizations, 7(1–2), 2010, pp 23–50. See also W Hui, China’s New Order: Society, Politics, and Economy in Transition, Cambridge, MA: Harvard University Press, 2003.

24 J Yue, ‘Dilemma of national development in globalization—the politics behind China’s accession to the wto’, PhD thesis, London School of Economics, 2010 (to be published by IB Tauris).

25 The scale of urbanisation in China is historically unprecedented: nearly half the population lives in urban areas today, against 10% in 1900 and less than 35% in the early years of the capitalist transformation. By 2030 the UN expects that 70% of China’s population, or 950 million people, will be living in urban agglomerations.

26 See Golub, Power, Profit and Prestige.

27 See http://aric.adb.org/indicator.php. Statistics vary from one international institution to another. The imf gives lower estimates than the Asian Development Bank (51.9%) but highlights the same general phenomenon. imf , Regional Economic Outlook Asia Pacific, Washington, DC: imf, October 2007. Although a significant share of regional trade is in intermediate goods for final destination export to the USA, Europe and Japan, it has allowed for technology transfers and has stimulated endogenous growth factors in East Asia.

28 H Dieter & R Higgott, ‘Exploring alternative theories of economic regionalism: from trade to finance in Asian co-operation’, csgr Working Paper 89/02, Centre for the Study of Globalisation and Regionalisation, University of Warwick, January 2002, p 10.

29 ‘The Future of Asia’ conference held in Tokyo in June 2003 demonstrated convergence around this objective. The then Thai Prime Minister, Thaksin Shinawatra, declared: ‘Funds held by Asian countries, which account for about half of the world’s foreign currency reserves, used to be invested mainly in the US and Europe. Now funds should head toward Asia thanks to the birth of an Asian Bond Market... Although the Asia Bond Fund will start out in US dollars, we hope to shift to Asian currencies in the future’. The then Malaysian Prime Minister Mohamad Mahatir asserted: ‘We will all benefit from the Asia Bond Market because it is Asian and is in our own interest, not a device for somebody else somewhere and imposed on us. Initially the bonds should be denominated in the US dollar but we should move away from the US dollar in the future’. The former Japanese prime minister Ryutaro Hashimoto seemed to be thinking along parallel lines: ‘The lessons learned from the Asian currency crisis are producing good results’. See ‘The Future of Asia 2003’, Nikkei Weekly, 21 June 2003.

30 ‘Asian finance ministers seek common currency’, New York Times, 5 May 2006. ‘The Asian Development Bank has been pushing the idea of an Asian currency unit, or acu, during 2012. The unit’s value would be set by an index of participating currencies. The idea has gained popularity among several Asian finance ministers as a step toward harmonising regional monetary policies. The bank’s Japanese president, Haruhiko Kuroda, a supporter of an Asian monetary union, had pledged to propose the creation of an acu at the meeting in Hyderabad, but reportedly held back in light of opposition from Washington.’

31 B Naughton, ‘China: domestic restructuring and a new role in Asia’, in T Pempel (ed), The Politics of the Asian Crisis, Ithaca, NY: Cornell University Press, 1999.

32 L Cui, ‘China’s growing external dependence’, Finance and Development, 44(3), Washington, DC: imf, September 2007.

33 ‘Further reciprocal cooperation to build a harmonious East Asia’, speech by Vice Minister of Commerce, Yi Xiaozhun, 26 May 2008, reported by the People’s Daily, at www.english.peopledaily.com.cn/90002/93687/93689/6418402.html

34 K Takahashi, ‘Japan, China bypass US in currency trade’, AsiaTimes Online, 2 June 2012, at http://www.atimes.com/atimes/Japan/NF02Dh01.html

35 International Monetary Fund, World Economic Outlook 2012, at http://www.imf.org; World Trade Organisation (WTO), International Trade Statistics 2012, at http://www.wto.org/english/res_e/statis_e/its2012_e/its12_toc_e.htm

36 See H Angang, Five Major Scale Effects of China’s Rise on the World, Discussion Paper 19, Nottingham: China Policy Institute, University of Nottingham, April 2007.

37 A Escobar, ‘Latin America at a cross roads’, Cultural Studies, 24(1), 2010, pp 1–65.

38 A Escobar, ‘Beyond the Third World: imperial globality, global coloniality and anti-globalisation social movements’, Third World Quarterly, 25(1), 2004, pp 207–230.