The third panel at the conference Dilemmas of Humanity: Perspectives for Social Transformation, held in the city of São Paulo, discussed how the Global South can escape the role of mere supplier of raw materials to developed countries. What’s more, it debated how to think about industrial policy as a means of advancing social improvements.
Indian economist Surajit Mazumdar explains that the Global South is relegated to being a low-value-added producer, with little progress in Latin America, Africa and South Asia. “The global order does not lead to the formation of a large industrial base” in countries still in the process of industrialization.
He says that, in order for industrialization to take place in countries currently underdeveloped in this sector, “it is necessary to break with the current patterns of integration. We need to create conditions where these countries are able to use their internal markets and economic spaces for industrialization, rejecting the idea that a country can only industrialize if it exports to the Global North. We must promote the Global South market.”
The relationship with China, one of the rare cases of a country that has managed to rise to the position of global leader, must be rethought keeping in mind the prospects of the Global South. “There is a need for a change in the balance of forces because the ruling class and the rich are very entrenched in the processes and systems. They don’t want to abandon the global structure,” says Mazumdar.
“But with the possible change in the correlation of forces, there is room for these processes to begin.”
Brazil’s Minister for Management and Innovation in Public Services, Esther Dweck, took part in the panel and acknowledged that the commodities boom at the beginning of the 2000s increased production, but also contributed to “our difficulty in breaking out of this cycle”. “At the time, we basically had state-owned companies and multinationals. What follows [under the Temer government] is that state-owned companies are ‘sold’ and this process continues to this day. In Brazil, companies are bought to close down, not to industrialize,” she says.
The minister, however, points out that “the pandemic has played a role in the risks of low productive autonomy.”
Being near the US weakens Mexican industry
Mexican economist Josefina Morales said the World Bank promotes a model that traps countries as manufacturers of low-value-added products. She says that her country suffers from this system: Mexican industries assemble products with parts from the US and send them back to be sold by US companies to US consumers.
Morales explains that the model is replicated in many parts of the world, reinforced by free trade agreements. However, having such a powerful neighbor makes her country vulnerable. “After 2008, the industry of low-value-added vehicle parts grew, as in the 1980s”. “We need to look at the US economy’s performance to understand what is happening in the Mexican industry,” she says.
On how to develop local industries to improve the lives of their own populations, she says that “the challenge is to make countries more ‘productive’”, while at the same time stopping “Trump’s fascist offensive.”
Independence and openness
Closing the panel, Chinese economist Lyu Xinyu said that “China’s development path focuses on combining independence and openness to the outside world. Specifically, China’s development seeks to achieve industrialization and primitive accumulation while safeguarding its sovereign independence and facing the challenges posed by restrictions and sanctions on foreign trade.”
“Currently, China also facilitates infrastructure development through the ‘Belt and Road Initiative‘ to support industrialization in developing countries, helping them overcome difficulties in the process of primitive accumulation.”
“This situation is reminiscent of China’s experiences in the 1950s, when it overcame similar difficulties with the support of its socialist system and cooperation with the Soviet Union.”
Also on Wednesday, there was a panel on Sovereignty of the Global South over its resources, with the participation of Brazilian economist Marcio Pochman and Mexican Alonso Romero.
Last day
The conference ends on Thursday (10) with the New Financial Architecture panel, with the expected participation of Dilma Rousseff, president of the BRICS Bank. On the agenda will be the de-dollarization of the world financial system and other ways for the Global South to ensure sovereignty and economic development in a scenario in which the biggest economic power, the US, is increasingly hostile. Participants include Paulo Nogueira Batista Jr. (Brazil), Yaroslav Lisovolik (Russia), as well as the virtual presence of Aleksei Mozhin (Russia) and the former Brazilian president Dilma Rousseff. The moderator is Subin Dennis (India).
The conclusions of three days of debates will be presented at the end of the conference, on Thursday afternoon, by João Pedro Stedile (Landless Workers’ Movement) and Brazilian economist Juliane Furno. The conference is organized by the Landless Workers’ Movement (MST), the Tricontinental: Institute for Social Research and the International Peoples’ Assembly (IPA).
