CHED GE Learning Outcomes - Compliant

Module 6.
Global Divides: The Global North and the Global South

At the end of the discussions in this module, the students are expected to:
1. Define the terms “global north and global south”;
2. Differentiate the two in terms of economic wealth and socio-economic mobility;
3. Compare and contrast the global south and the third world; and
4. Analyze how a new conception of global relations emerged from the experiences of
Latin American countries.

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Introduction
When we ask students to give other names or labels for rich nations, some responses
could be anyone of these descriptions: the developed world; the western world; the first
world; the minority world; the influential world; the mother countries; the conquerors; the
imperialists, etc.. Conversely, when we ask our students to describe poor countries,
responses could be anyone of these: the less-developed world; the majority world; the non-
western world; the underpriviledge world; the third world; the undeveloped world, the
conquered, etc.. All of these are correct descriptions, especially when the primary gauge of
describing is anchored on the economic wealth of a nation and its ability to cater to the
needs of the people.
None would be talking or giving answers about the global north for the rich nations
or the global south to refer to poor nations (except of course those who are wide readers, or
those whose fields of disciplines are international relations, economics, foreign relations,
and or political science)
And yet in this module, we use the terms global north or global south. Why? Perhaps
it is best to do a brief terminological historical journey.

Classifying Countries
Rigg (n.d) who wrote an article titled, “The Global South”, which was published in
the Global South Studies Center, University of Cologne, Germany shared the following:

“In 2007, I wrote a book with the title: An everyday geography of the
Global South. If I had written a book in the 1970s or 1980s, I might well
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have titled it: An everyday geography of the Third World. Strictly speaking,
at least as it was initially formulated, the Third World was the non-aligned
World, distinct from the First (capitialist), and Second (socialist/communist)
Worlds. But pretty quickly the Third World became a quick-and-easy
referent for the poor world. There are many great books with “Third World”
in the titles; most were published before the 1990s, and in large part they
used “Third World” to denote the Poor World.”

The 1980s, however, not only saw the fragmentation of the First / Second World
dualism with the collapse of the former Soviet Union at the end of the decade, but also – and
perhaps more importantly – the embracing of market reforms by most command economies
(China in 1978, Vietnam and Laos in 1986, and the Soviet Union in 1987, for example),
which in the process became so-called “transition” economies. The Third World was always
non-aligned more in word than in deed, and to add to this, much of the Second World was
embracing capitalism with eagerness, notwithstanding some governments continuing to pay
lip service to the rhetoric of socialism. As Deng Xiao-ping, the architect of China’s reforms,
is said to have remarked, “it doesn’t matter whether a cat is white or black, so long as it
catches mice.” Pragmatism rather than ideology became the order of the day.
Compounding this geo-political complications, in the later years of the 80s, and early
years of the 1990s, tiger economies in Asia like Malaysia, Singapore, Philippines, Taiwan,
South Korea, and Thailand to name but a few, were labeled as “developing countries” – in
the western parlance – somewhere that is found in between, a not so rich but not so poor
countries.
Another interesting description was shared by Eriksen (n.d), who wrote an article
published in the same Center and titled: What’s wrong with the global north and the global
south? To wit:

“As a young schoolboy in the 1970s, I learned that there were two
kinds of countries in the world: The industrialized countries and the
developing countries. As a slightly older schoolboy, I would discover that
there were progressive people who had read up on the latest literature, and
who distinguished between the First, the Second and the Third Worlds; the
industrialized, Western countries; the Communist bloc; and the poor,
underdeveloped or developing countries (make your choice). Some made it
more complicated and added the Fourth World, that of stateless indigenous

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peoples. I had one teacher – this was in Nairobi in the midseventies – who
even differentiated between the Third, the Fourth and the Fifth Worlds
within the general subcategory of the Third: The Third World countries
were those that were well on their way to becoming rich and “developed” (I
think he mentioned Malaysia and possibly Algeria); the Fourth were those
that struggled but had potential (Kenya was, generously, included); and the
Fifth World was chanceless and mired in perennial poverty.”

Accordingly, the idea that there were three “worlds” originates, in the Anglophone
world, with the anthropologist and sociologist Peter Worsley (The Third World, 1964; and
The Three Worlds, 1984). However, the notion of the Third World is older, coined by the
demographer Alfred Sauvy in 1952, and his reference to le tiers monde did not presuppose
the existence of a First or Second World. Rather, when speaking of the poor countries and
colonies, he explicitly drew a parallel with the third estate, le tiers état, at the time of the
French revolution; that is, everyone who did not belong to the clergy or the nobility. He
spoke of those that had potential – those who would eventually rise and claim their share.
Again in later years, these terms have become increasingly unfit. This definitely has
something to do with the collapse of the communist bloc almost 30 years ago (1987).

And so what is the fuss about this terminological history? Eriksen (n.d.) argued
that any conceptual investigation of these classifications must inevitably lead to
ambivalence. Global diversity is simply such that it cannot meaningfully be subsumed under
a few, let alone two, concepts. It is true that at a very general level, the Global North is
associated with stable state organization, an economy largely under (state) control and –
accordingly – a dominant formal sector. The recipients of foreign aid, needless to say,
belong to the Global South.
One attempt to produce an objective classification uses the UNDP's Human
Development Index to differentiate. In brief, the Global North consists of those 64 countries
which have a high HDI (most of which are located north of the 30th northern parallel), while
the remaining 133 countries belong to the Global South.
The terms have become fashionable very recently. In a bibliographic study by a
group of German scholars, the first recorded use of global north and global south was in
1996. In 2004, the term The Global South appeared in just 19 publications in the humanities

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and social sciences, but by 2013, the number had grown to 248. The scholars who use it
associate it largely with some of the ills of globalization. While the countries of the Global
North not only have stable states but also a strong public sector, the Global South is, to a far
greater extent, subject to the forces of global neoliberalism, rather than enacting the very
same forces.
Seen from this perspective, the neologisms make sense. The post - cold war world is
not mainly divided into societies that follow different political ideologies such as socialism
or liberalism, but by degrees of benefits in a globalized neoliberal capitalist economy. This
is why the prefix “Global” may be appropriate, as it signals the integration of the entire
planet (well, nearly) into a single economic system – that which Tom Friedman (in)
famously described as “a flat world” (in The World is Flat, 2005). So far, so good. The
Global South and the Global North represent an updated perspective on the post - 1991
world, which distinguishes not between political systems or degrees of poverty, but between
the victims and the benefactors of global capitalism (Eriksen, n.d).

Activity: In an essay form, defend or negate the idea: (15 points)

The Global North and the Global

South are terms that do not
denote any political system or
degrees of poverty, but between
nations or countries that are either
the victims and the benefactors of
global capitalism...

The Global North / South Divides

Despite very significant development gains globally which have raised many
millions of people out of absolute poverty, there is substantial evidence that inequality
between the world’s richest and poorest countries is widening. In 1820 western Europe's per
capita income was three times bigger than Africa’s but by 2000 it was thirteen times as big.

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In addition, in 2013, Oxfam reported that the richest 85 people in the world owned the same
amount of wealth as the poorest half of the world’s population.
In the 1980s, the Brandt Line was developed as a way of showing how the world
was geographically split into relatively richer and poorer nations. According to this model:
Richer countries are almost all located in the Northern Hemisphere, with the exception of
Australia and New Zealand. Poorer countries are mostly located in tropical regions and in
the Southern Hemisphere (Global Learning, n.d).

rich countries

poor countries

The Brandth Line

Today the world is much more complex than the Brandt Line depicts as many poorer
countries have experienced significant economic and social development. However,
inequality within countries has also been growing and some commentators now talk of a
“Global North” and a “Global South” referring respectively to richer or poorer communities
which are found both within and between countries. For example, whilst India is still home
to the largest concentration of poor people in a single nation it also has a very sizable middle
class and a very rich elite.
There are many causes for these inequalities including the availability of natural
resources; different levels of health and education; the nature of a country’s economy and its
industrial sectors; international trading policies and access to markets; how countries are

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governed and international relationships between countries; conflict within and between
countries; and a country’s vulnerability to natural hazards and climate change (Global
Learning, n.d).
However over time it was realised that this view was too simplistic. Countries such
as Argentina, Malaysia and Botswana all have above global average GDP (PPP) per capita,
yet still appear in the “Global South”. Conversely, countries such as Ukraine appear to be
now amongst a poorer set of countries by the same measure.

Countries with a GDP (PPP) per capita <US$10,700 (shaded)

Development Gap
Guttal (2016) articulated the following ideas on the developmental gap between the
global north and global south:
The Global North-South divide has been conceptualized in economic, political and
developmental terms, where geographic locations of nations are broadly identified with
levels of industrialization, economic progress, science and technology, standards of living
and political-economic power in the global arena. The world has changed considerably since
the time when the North-South relationship was articulated, although the terms continue to
be used today as they were then.
A few decades ago, the South was associated with:
(a) Starvation;

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(b) Malnutrition;
(c) Poverty;
(d) Epidemics;
(e) low educational levels;
(f) political authoritarianism; and
(g) dictatorships.

Today, although hunger and poverty continue to exist in many South countries, the
numbers of wealthy and extremely wealthy people are rising ra
pidly. Many South countries - especially in Latin America and Asia - contribute large
numbers of well-educated, competent professionals to the global workforce.
Possibly the most important developments in the past three decades are:
1. the advance of global capitalism through economic and financial globalization;
2. the adoption of capitalism in part or full by almost all nations;
3. financial markets and financialisation have linked countries and people in far deeper
ways than the globalization of production.

However, national boundaries, historical wrongs and historical iniquities still remain.
Despite improvements in social-economic indicators, and increases in wealth accumulation
and capital and investment flows among many countries of the South, there continue to be
significant differences between North and South countries in living conditions, consumption
levels and patterns, social and economic structures, access to services and resources, and
political power in supranational global governance. Some visible manifestation of inequality
include:
1. Systems and institutions of global economic and financial governance continue to be
dominated by the North despite attempts by developing countries to secure greater
power;
2. Inequality and inequity remain inherent and almost foundational characteristics of
the North South divide.

Inequality is not a surface phenomenon that can be rectified by diverting cash here
and there, but a deep structural defect that diminishes individual and collective potential for
many, and shapes power relations within and among societies. It exists as a differentiating
set of factors both, across and within the countries of the North and South, prompting many

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to refer to conditions of wealth, power, poverty and inequality as a South in the North and a
North in the South.
While such theorizing may seek to challenge the traditional global North-South
divide, it still uses the labels of North and South to denote more or less the same conditions
as in the original conceptualisation. Two key questions are whether the changes in the world
are adequately reflected in the core characteristics of the North-South divide, and what type
of conceptualisation would most accurately express the present day balance of global
economic and political power (Guttal, 2016).

Differences and Commonalities

The North-South divide has also been conceptualised as the development gap
between wealthy and poor nations that could be closed through the transfer of capital,
technology and know-how to build modern systems and institutions for material
advancement. For over sixty years, mainstream development has defined acceptable and
unacceptable standards of life for the world’s peoples, based largely on Northern values and
consumption, and led by experts and institutions from the North. The dominant image of the
post World-War II era of development was one of social and economic transformation
through the application of economic, technological, scientific, intellectual and institutional
expertise. Development interventions have touched all aspects of social, cultural, economic
and political life, and have been instrumental in the integration of local and national
economies into the global economy.
Certainly, advancements have been made in many areas:
a. medical and other sciences;
b. public health;
c. education;
d. industry;
e. communication and digital technologies; and
f. information and knowledge systems, etc.

However, development has not resulted in positive social and economic change for
the majority, or even significantly reduced hunger and poverty. On the contrary, it has
spawned the following:
(a) The world’s wealth and assets have become concentrated in the hands of wealthy
elites and Transnational Corporations (TNCs);

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(b) workers’ wages remain low and unemployment persists in most countries;
(c) runway climate change is imminent;
(d) environmental pollution and destruction are accelerating;
(e) recurring economic and financial crises are the “new normal;”
(f) old pathogens and diseases are making a comeback and new viruses multiplying in
over crowded, polluted urban environments;
(g) millions of people are being dislocated from traditional lands, environments and
territories because of capitalist investment; and
(h) land and water grabbing, natural disasters and wars still persist.

The above have been accompanied by a corresponding increase in wars, social/ethnic

conflicts and violence, and decreased democratic and political space for many.
Contemporary economic relationships are mediated through capitalist free trade and
investment agreements in which, the benefits sought by TNCs bear a striking resemblance to
colonial arrangements of resource extraction and profit repatriation. With increased
expansion of TNC activities have come more private security companies to provide them
with protection.
From the North-South perspective, an important change over the last two decades
has been the rise of countries such as China, India, Brazil, South Africa, Turkey, Vietnam
and the Asian Tigers as economic powers with increasing numbers of middle and upper
class consumers. Private corporations and state enterprises from these countries are
investing and acquiring assets in other countries of the South, competing with transnational
investors from the North and changing the geographies of global investment flows.
The UNCTAD World Investment Report 2015 notes that, “Investments by
developing-country multinational enterprises (MNEs) also reached a record level:
developing Asia now invests abroad more than any other region. Nine of the 20 largest
investor countries were from developing or transition economies. These MNEs continued to
acquire developed-country foreign affiliates in the developing world (World Investment
Report, 2015).”
Today, development is described and planned in the language of free markets, free
trade agreements, private (often corporate) investment, private sector expansion and
business plans. Recurrent financial crises have shrunk the Official Development Aid (ODA)
budgets of bilateral donors - most of which are countries of the North. India, China,
Thailand, Malaysia and Vietnam provide development assistance to other countries linked
with trade-investment privileges.

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At the same time, philanthrocapitalism has expanded by leaps and bounds, and dollar
billionaires have jumped into the development fray forming consortia with other
foundations, companies, governments, United Nations (UN) Agencies and civil society
organisations (CSOs). TNCs are also in the development game on their own steam, blazing
trails of corporate social responsibility and eluding national laws (Guttal, 2016).
In Asia, development is characterized by an obsession with economic growth,
operationalized through privatization, trade and investment liberalization, and market and
corporate friendly regulation. Human rights, the environment and justice are easily
sacrificed to keep investments flowing in and markets functioning. In many countries, the
public sector is being gutted of financing even as governments underwrite private sector
provision of essential services such as water, healthcare, education and transportation.
An important cause of inequality and poverty is the capture of land, water and
natural wealth by rich elites, politically powerful actors, businesses and corporations for
speculation, real estate/property development, industrial agriculture, energy, extractive
industry, etc. Land, water and nature based investments are resulting in dispossession and
environmental destruction on a massive scale, which are purposive acts aimed at
consolidating and concentrating wealth, resources and power in the hands of an elite
minority. Such captures are legal, and regulations and laws are being reformulated to
advance the interests of private (often foreign) investors, many of whom are in economic
partnership with state enterprises, making them doubly powerful (Guttal, 2016).

Inequality
It is widely accepted and without doubt that inequality - in class, race, gender,
power, wealth, opportunity, consumption, etc. - is one of the most enduring challenges that
the world is facing. However, most calculations tend to concentrate on income and assets,
without sufficient attention to issues such as access, justice, governance, etc. The metrics of
inequality and inequity need to be looked at afresh in order to bring in the nuances necessary
to help us understand the relationships between the different dimensions of inequality, and
move us towards more relevant contemporary articulations of the concepts that North and
South encapsulate (Guttal, 2016).
Over the past decade many reports have enumerated the obscenities of extreme
wealth and extreme poverty both, globally as well as within countries. The 2015 Global
Wealth Report by Credit Suisse estimates that less than 1 % of adults worldwide own 45 %
of the total wealth in the world, while 71 % of the adults account for only 3 %.ii Among

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these, 46 % of the dollar millionaires are in the USA, followed by 7 % in the UK, 6 % in
Japan, and 5 % each in Germany and France (Global Wealth Report, 2015).
The report points out that the global distribution of wealth is skewed towards the
wealthy. For example, the share of wealth owned by High Net Worth Individuals (HNWI)
has continued to rise since 2002, even if the number of HNWI fell for the first time since
2008. Although North America and Europe contain only 18% of the adult population,
together they account for 67% of total household wealth. In all the other regions, the share
of wealth fails to match the population share and the disparity between population and
wealth is apparent.
Even China - which has a high share of HNWI - accounts for 21% of the adult
population of the world, but only 9% of global wealth. The picture is worst for Africa and
India, where the population share exceeds the wealth share by a factor of more than ten
(Global Wealth Report, 2015).
A 2014 report by the Asian Development Bank notes that despite increasing
economic growth (GDP) and reductions in overall poverty over the past 25 years, inequality
in a large part of the Asia Pacific region has increased tremendously. Inequality is
manifested in several ways, including in incomes, ownership of property and economic
assets, opportunity and access to services essential for human wellbeing. The report’s editors
argue that while addressing inequality should be a priority in and of itself (from the
perspective of values and justice), inequality also undermines economic growth and poverty
reduction (Global Wealth Report, 2015).
The numbers describing the extent of inequality and concentration of wealth are
shocking, but they do not convey the depth of immiseration caused by such concentration.
There are wide gaps between macroeconomic indicators of economic growth, incomes, GDP
and employment on the one hand, and microlevel conditions of wellbeing and poverty on the
other hand. Even if macro figures show an increase in GDP growth and incomes, at the
micro level, we still see increasing unemployment, worsening work conditions, the
impoverishment of small farmers and producers, distress migration, and growing
feminization of poverty.
Many wealthy individuals and inherited-wealth elites in the South are part of the top
10-20 percent of the world’s wealthy, just as poor people in the South are part of the world’s
poor. This does not correct or render irrelevant the wealth inequalities between North and
South countries. Wealth is not an equalizer. Without just redistributive measures, the
creation of wealth will create poverty. Wealth concentration in one class or country entails
draining it from other classes and countries. In many Asian countries and globally, we are

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witnessing a net transfer of wealth, public assets and control over natural resources to
already wealthy elites, upper classes and private corporations through a variety of legal
mechanisms and illegal practices.
Those most negatively affected by the above are workers, peasants, fisherfolk and
other subsistence producers in both rural and urban areas.
1. Their wages, earnings and savings do not increase, nor their access to goods and
services improve;
2. They often end up paying more for food, energy, water, rent and daily life compared
to middle and upper classes;
3. Women, children and youth are particularly affected: harder lives translate to heavier
workloads for women, less time and fewer resources to transform their lives;
4. Children and youth are unable to access opportunities that would contribute to
significant changes in their futures.

The winners are those at the top of the economy, who continue to get richer because
our economic and legal systems - nationally and internationally - are set up in their favour.
They legally pay far less tax than they should, can paying taxes altogether, and easily siphon
their wealth into holdings in different parts of the world where they will not be assessed for
tax.
An important commonality between global and national inequality is inequality in
opportunity, which arises not only from income disparities, but also from social, cultural,
racial, religious and gender discrimination. Persisting inequality of opportunity is a
structural problem that denies people the potential for crossing class and power divides.
Within countries of the South, these include the poor, workers, those evicted and displaced
by investment, those facing wars and natural disasters, etc. They are more vulnerable to
illnesses, epidemics, economic shocks and abuses of power.
Inequalities in opportunity also exist at broader levels, between societies in the South
and North: societies in the North generally have better social security and services, public
infrastructure and resources to respond to natural disasters, epidemics, etc. than those in the
South. World Bank - IMF led Structural Adjustment Programmes (SAPs) dismantled public
institutions and social services infrastructure in developing countries to free up money for
debt servicing and enable privatization. What SAPs were not able to destroy were attacked
by the Asian financial crisis and continue to be attacked by trade and investment agreements
such as those in the World Trade Organisation (WTO) and the Trans-Pacific Partnership
(TPP). Few relatively wealthy countries of the South - for example: Thailand and Malaysia

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have succeeded in building and retaining robust, good quality public services and
infrastructure side-by-side with allowing private sector expansion (Guttal, 2016).

Guttal (2016) concludes that until the hegemonic structures and systems that enabled
the North to build their economic and political power are not dismantled, the North-South
divide will continue to exist. Structural differences in living conditions, human and societal
capabilities and economic and political power, are still prevalent between the North and
South. At the same time, North and South are constructs and it is probably more strategic to
focus attention on some actors within these constructs rather fussing about the overall
conceptualization. For example, International Financial Institutions, the World Bank,
International Monetary Fund, the World Trade Organisation and Bank of International
Settlements are some of the most powerful institutions of Northern hegemony and have been
instrumental in cementing inequality and inequity between North and South countries.
Tackling global capitalism, the power of TNCs, persisting /entrenched inequality,
climate change and migration are absolute priorities for global peace and justice. In so
doing, Northern domination will have to be checked, as will the refusal of North countries to
act on their historical responsibilities have to be challenged. But equally important is
critically monitoring and challenging the expansion, use and abuse of power and privilege
in, among and by South countries (Guttal, 2016).

A Global South in the Global North?

To conclude this module, we go back and reflect on the idea forwarded by Eriksen
(n.d) on describing and locating the global north and the global south as the uneven
distribution of the benefits and disadvantages of globalization among nations or certain
spatial areas that are either the victims and or benefactors of global capitalism.
In line with the above, is it justifiable to ask: Is there a global south in the global
north?

Before we respond to this issue, let us take two cases: (1) one that shows a truly
dividing line between the global north and the global south; and (2) a case that shows that
there indeed exists a global south in the global north.

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Case 1.

Consider the following ideas from Lizandro E. Claudio, a contributor to the SAGE
Handbook of Globalization in his article titled: Locating the Global South:

“The Starbucks and the Shanty”

“Where does one see globalization? Geographers, anthropologists

and sociologists – those who study the phenomenon from the bottom up –
tell us that global interconnectedness is woven into the fabric of everyday
life. It is visible to those who observe.
One does not need to look far to see markers of global
interconnectedness, even global modernity. There are Starbucks branches in
Melbourne and Manila, New York and New Delhi. All these branches looks
more or less the same, and they have similar menus of espresso – based
drinks. This sameness represents the cultural homogenization that many
critics have associated with globalization.
Yet despite the common aesthetic of those cafes, the world outside
them can be very different. In Manila or New Delhi, there is a good chance
that, upon leaving the cafe, you will find a child beggar in tattered clothes
and worndown slippers. Walk a block or two, and with your latte still hot,
you may found a shantytown, where houses are built from discarded
plywood and galvanized iron sheets. These shanties have poor sanitation;
many of its residents are employed in the informal economic sector, its
children some of whom are child laborers, can not afford to go to school.
There is also a good chance that the shanties’ residents are under threat of
being evicted or having their homes demolished to make way for a large
commercial development, which will service the city’s middle class. Given
their lack of political influence within the state, the residents of the shanty
have very few avenues for redress. They live in so-called, “weak states”,
where governments are too poor, weak, corrupt, and unstable to supply its
citizens with basic needs.
You are unlikely to find New Delhi - type shanties in New York,
despite it also having large scale injustice. Harlem may be poor but it does
not have many child laborers. There is something more confronting about
poverty in the global south, and the north/south divide is as visible as the

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processes of globalization that engender it. The divide thus reminds us that
globalization creates undersides.”

Activity: Seatwork: Critical Thinking Test (20 points)

1. Do you agree on the

author’s ideas? Why?
2. Discuss at least three
examples of “undersides”
that the author is trying
to impart about some
banes of globalization?

Case 2. “Slums in Global Cities”

“There are slums in New York City just as there are in any major US city or
other global cities of the world. Some areas in NYC that immediately come to mind
are parts of Harlem, East New York, Brownsville, some parts of Bushwick, and there
are probably many more that one either not aware of or not thinking of right now.
Why slums exist is a more difficult question. Not all jobs pay the high wages
required to live in the nicest parts of the city, therefore, there is income disparity
between the wealthy, the middle-class, and the poor. Whether or not this is fair or right
is a completely another side of the issue.
It’s no secret that New York is an expensive place to live. Luxury condos
proliferate, but affordable housing does not. More than half the renters in the city are
considered rent-burdened, meaning paying more than a third of their monthly wages
just for housing.
That means for the city’s poorest residents, rental housing situations can get a
little…creative. And not in a good way. “A lesser-known consequence of the
affordability crisis is an informal rental market that has illegally adapted, subdivided,
and converted existing apartment buildings, townhouses, and high-rises to
accommodate the lowest-paid populations.”

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