‘Emerging markets’ outshine ‘global south’


President Vladimir Putin (left) and China President Xi Jinping like “Global South” for a reason. — Bloomberg

AT a recent conference, I was politely told off for using the term “emerging markets.” These days, I was informed, “we prefer” the “global south.” I complied with the advice but, on subsequent reflection, wished that I had pushed back.

For this is another in a lengthening list of linguistic innovations that seem innocuous at first, even polite, but in fact contain much mischief.

My interlocutor was certainly right that the term “global south” is supplanting the old term “emerging markets.” A simple Google search shows the first surging and the second falling off a cliff. A term that was once confined to non-governmental organisations (NGOs) and the critical studies departments of universities is now becoming ubiquitous.

The 134 developing nations that belong to the Group of 77 regularly refer to themselves as “the global south.” President Joe Biden, Secretary of State Antony Blinken and National Security Adviser Jake Sullivan have also used it, as have the heads of the United Nations (UN), the World Bank and the International Monetary Fund.

So why my nervousness about the term? Surely, we should allow the citizens of the “global south” to decide on what they want to be called, particularly as they were forced for decades to live with condescending terms, invented by their former colonisers, “third world” and “undeveloped.”

And surely the concept of the “emerging world” has passed its sell-by date? The concept implies that there is only one model of development, the Western model celebrated in the Washington Consensus, reducing the role of the state and privatising assets.

But the spectacular rise of China has created a second model of state-sponsored development, and even in the West the neo-liberal model is coming in for growing criticism.

My nervousness starts with the imprecision of the term. The term is not only a geographical nonsense: the global south’s two largest countries, India and China, lie within the northern hemisphere while Australia and New Zealand are located well south of the equator.

It also lumps very different countries into a supposedly coherent group. India is the world’s largest democracy while China is an authoritarian regime. Malaysia’s per capita gross domestic product was US$32,410 in 2022 (measured in purchasing power parity or PPP) while Zambia’s was US$1,453 (PPP).

Nigeria is a “drill baby, drill” petrostate while Costa Rica is an environmental crusader.

Africa is worried about producing too many people while China is worrying about producing too few. You can pick holes in all sorts of collective terms: The “West” includes decidedly eastern Japan.

But David Lubin of the foreign policy think tank Chatham House puts his finger on the deeper reason why we should be nervous about replacing “emerging markets” with “global south.”

“Emerging markets” is an economic term that is designed to draw global attention to market opportunities. “Global south,” by contrast, is a political term that is designed to draw attention to the supposed unfairness of the US-dominated global order and summon up memories of imperial injustices.

The first term encourages countries to prioritise private sector investment and economic growth. The second encourages countries to prioritise lobbying – complaining about past injustices and bamboozling richer countries into providing aid.

The “global south” is in a better position than it has been for decades to engage in such bamboozling because the democratic states and the authoritarian states are engaged in a battle for global influence.

But in the end, there is only so much you can benefit from external gifts rather than from your own efforts.

The concept of the “global south” is bad for the world as a whole because it diverts attention from trade and promotes fragmentation, dividing the south against the north as a way of helping the east against the west.

It is particularly bad for developing countries because it encourages poorer countries to wallow in past injustices rather than seeking market opportunities.

Consider the contrasting careers of the two men who coined the terms. “Global south” was invented in 1969 by the anti-war activist Carl Oglesby who wrote that the war in Vietnam was the culmination of a history of northern dominance over the global south.

Oglesby spent much of his life as a political agitator, though, as time went by, he flirted with libertarian ideas and became preoccupied by John F. Kennedy’s assassination.

“Emerging markets” was invented in 1981 by a banker, Antoine van Agtmael, who wanted to change investors’ attitude to less developed countries. “Third world” or “underdeveloped countries” made bankers think of a bottomless pit, he worried; “emerging markets” made them think of pots of gold.

Van Agtmael went on to create a multi-billion-dollar investment fund called Emerging Markets Management.

“Global south” is also being vigorously encouraged by China and Russia to stoke anti-imperial resentment against the West, weaken the West’s influence in global institutions and, in the longer term, divide the world into various competing “civilisational centres.”

The senior Chinese diplomat Wang Yi repeatedly declares that “China was, is and will be part of the global south” and that Beijing wants to create a shining “south moment” in global governance. (Translation: China wants poorer countries to vote with China rather than the West in the UN.)

Russian propagandists remind carefully chosen developing-world politicians of the Soviet Union’s role in promoting regional development. In February 2024, for example, Moscow hosted the “For the Freedom of Nations” forum, with 400 delegates from 60 countries, in a bid to rally the Global South against “Western neocolonialism.”

China and Russia have already succeeded in transforming the BRICS group of countries from an investment category invented by Goldman Sachs economist Jim O’Neill into a political grouping that is increasingly a thorn in the side of the West.

BRICS is an intergovernmental organisation comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia and the United Arab Emirates.

Now they are trying to do the same thing on a bigger scale with what used to be called “emerging markets.”

The Russians also have another term up their sleeve to add to “global south”: “world majority” or “global majority,” a coinage that some Western NGOs are already using in preference to “ethnic minorities” but which now has the imprimatur of Russia’s foreign minister, Sergei Lavrov.

Many Western leaders are tempted to beat the Russians and Chinese at their own game by borrowing the term “global south” and giving it a pro-Western spin.

The use of the term has increased sharply in official circles in the aftermath of the UN vote on Russia’s invasion of Ukraine that saw so many developing countries abstaining rather than voting with the West.

This is a miscalculation. The West’s best weapon in the battle with the world’s authoritarian power is the better chance of economic progress that it offers. And the promise embodied in “emerging markets” is once more reviving after a decade in the doldrums.

The 2010s were a dismal period for emerging-market investment after the boom years of the 2000s (the MSCI Emerging Markets Index posted annualised returns of 0.9% from 2011 to 2023 compared with 15.9% from 2001 to 2010).

But a benign combination of more recent developments, from India’s rapid growth to surging demand for commodities, suggests that emerging markets outside China and Russia may be entering another golden era.

To help that era unfold, the West should re-embrace the optimistic term “emerging markets” and abandon the deceptive and divisive term “global south.” — Bloomberg

Adrian Wooldridge is a Bloomberg Opinion columnist. The views expressed here are the writer’s own.

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