By
Abbati Bako,psc,bsis Kent-alumni,UK Political Strategy and Communication Consultant——-
Why did the current Globalization Policy create economic competition as one of the key elements and principles of global economic direction and can the BRICS Nations change the global economic imbalance and direction?
*The imbalance of global economy—
Political economy experts assert that there is no doubt that there exists the imbalance of the global economy which may be the rationale behind the existence of the current global economic direction. The huge difference between the South South Nations and the Northern part of the World can’t be compared in terms of economic security and interplay. Hence, how can it be possible to compete with those countries that depend on debts and begging and those countries that dominated the world based on innovation in science and technology? If the world plunges into massive use of AI and robotics services between 2030 and beyond Africa and other South-South Nations of the World will be inhabitable Continents due to economic insecurity.
For example, it has been estimated there are 8.2 billion human beings on the planet earth, but 80 to 90% do not have a viable economy; whether as individuals or collectively as nations or Continents especially the Southern Part of the globe. Are there any laws which insist that world development and a stronger economy has to come from the northern part of the world to the southern part of the world? Or is there any gravitational pull that insists that development has to come from the northern (only) part to the southern part of the world? The huge difference and imbalance has to be looked into especially that there are 85% global population in the Southern Part of the World and only 15% are there in the North.
For example, 80% of world economies belong to G20 nations with only 58% of the world population and 25% of the world economy belong to EU Nations too. Then the rest of the 20% belong to about 200+ nations and Oceanian territories.
The estimated capital of $90 trillion or 60 trillion pounds (Barack Obama, USA/Gordon Brown, UK, 2008) or $360 trillion “derivatives or repackage securities and other financial assets play an important role in international finance and they have contributed to the complexity and the instability of international finance. It is obvious that international finance has a profound impact on the global economy (R.Gilpin, 2001). It is estimated, for example, that Africa south of the Sahara accounted for only about 1 percent of total world trade in the early 1990s.
Second example is the FDI that has been in existence among nations of the world for hundreds of years; but in the early 1990s Singapore benefited more from FDI than the entire African continent. “it should be mentioned here that the share of FDI flowing into Africa has not been even in all countries. Egypt and Nigeria have received a lion’s share of FDI flowing into the region in terms of absolute size. The share has however declined from more than 67% in 1983-87 to 54 percent in 1988-1992 and 38 percent in 1993-1997. Looking into the figure for FDI inflow into Africa as a whole it is clear that its global share is by all standards very low. This share needs to be increased given the potential positive roles that FDI can play in the continent’s development” (Tatah Mentan, 2007).
The third example is the replica of the total amount of daily trade’s world-over. It has been estimated that the sum of $1.08 trillion of shares has been traded every day globally. But one may ask; how much does the developing nations (especially nations of the southern part of the world) are contributing and benefiting and how can they participate in competition?
George Friedman remarked that “Americans constitute about 4 percent of the world’s population but produce about 26 percent of all goods and services. In 2007 U.S gross domestic product was about $14 trillion, compared to the world’s GDP of $54 trillion-about 26 percent of the world economic activity takes place in the United States. The American economy is so huge that it is larger than the economies of the next four countries combined: Japan, Germany, China and the United Kingdom.” Although three countries has been mentioned to be industrial nations in Africa before the end of the 21s century: Algeria, Nigeria and South Africa. Can that be enough to solve the economic problem of the African Continent which will consist of about 40% of the world population before the end of the 21 Century as projected by the United Nations?
At this point those African leaders and indeed all leaders of South-South world should take measures that will ensure the transfer of technology to the southern part of the world (as it was resolved in G77+ in Havana Cuba) especially Africa where the economic imbalance is too huge due to lack of manufacturing industries that will produce sophisticated-scientific and technological products that has the capacity of boosting the economy of the region. Otherwise, Africa can’t compete.
On the other hand, the world economic power should rethink investment in Africa and other South-South Nations. This writing subscribed to the view of political economy Professor of the Oxford University, London, (Paul Collier 2009) on the four key issues that restricted the African continent to develop: “bad governance, conflict, trap resources and landlocked”. Hence, solutions must be found if the African Continent needs to be hospitable and bearable.
In view of that, the world economic policy makers (WB/IMF) have to re-consider the economic prescriptions of South-South nations, particularly the “Washington Consensus”. Former British Prime Minister Gordon Brown once said in 2008 that “Globalization Policy is gone”. Sincerely the Globalization Policy still exists and the Northern part of the world has done with it but the South South Nations are still struggling with the system.
This writing understands that even last week in Nigeria, Sudan, Palatine people were queuing to get maize/rice to feed their families and talk-less of technological and scientific advancement or economic viability. Poverty still exists in Africa and it seems there is no solution on the way.
The world economic imbalance has been the root cause of terrorism, conflict, war, criminality, corruption and bad leadership in Africa and all other South-South Nations of the world. Can BRICS NATIONS give solutions to the current global economic direction and favor the South South Nations of the world? Can Nigeria afford to join the BRICS Nations as a solution to the current economic precarity in the country?
Peoplesmind