Development in the Global South

The development of countries across the world has been uneven due to the varied resource endowment and diverse development policies. The incapacity of the third world countries to meet the needs of their citizens particularly through making significant milestones has resulted in their seeking for intervention from the developed countries. Although such aid has been critical in spurring development in various sectors, its quality is highly debatable. In the center of the controversial financial aids given by first world economies and international financial institutions are women who have been targeted as the instigators of development. The neoliberal policies adopted by the IFIs results in detrimental effects on the economic status of the poor and working women primarily because they maim the government-led development.

How IFIs and neo-Liberal Economic Coordination Negatively Impact on Poor and Working Women in the Global South

Countries in the Global South are subjected to the regulations laid down by the international financial institutions as a result of their inability to meet part of the bargain after incurring debts. These policies have had various implications on women who are the main targets of development. First, IFS look at women ass the agents of development if given adequate resources (Knutson, 2004). Therefore, the international monetary institutions emphasize on the projects that can be implemented by women. This is also supported by the United nations that see women as the gateway to local development. However, through the neoliberal practices that allow room for free markets, imported products flood the market, and the little that the women produce cannot compete for the market. Therefore, most of the projects have turned out to be ineffective, and they do not last long.

Secondly, the IFIs imposed the free market on the Global South countries in the 1980s. This made the state-led development impossible. This subjected the countries to numerous Structural Adjustment Programs in the guise that they would spur industrial development. However, it is noteworthy that the Global South countries rely on agriculture and genuine gradual industrial development. Therefore, according to Knutson (2004), the SAPs do not have any qualitative effect on the local development and the citizens become poorer. Women are on the receiving end of this impact because there are dependent the subsistence production, mainly in agriculture.

Since their activities do not contribute immensely to exports, the SAPs do not favor them, and the little support that they receive from the government is terminated. It is noteworthy that state-led development is critical because the local authorities are aware of the input required in the different sectors that can improve the lives of the citizens (Eisenstein, 2009). For instance, Korea, through a state-led development structure was in a position to trigger players in the different sectors to become productive through subsidies and protectionism. The neo-liberal practices have not given room to the Global South to pursue such development.

In addition, the IFIs emphasize on structural adjustment programs that can bring profits into a given country. However, this is done at the cost of the poor and low-class citizens, especially women. For instance, the government activities that do not have any economic benefits experience reduced funding with some of them being scrapped off. This is done to increase a number of exports from the countries in the Global South (Knutson, 2004). Therefore, the government funded programs that are social in nature are at the risk of being continued. These include education, health, and water supply. Improving women’s status and health cannot be achieved by overlooking such services. For instance, it is noteworthy women, due to their reproductive functions, need to access health services more than men do.

Therefore, when such programs are discontinued, the development that the IFIs claim to trigger, turn out to be a privilege of the selected few. A good example is the case of the countries in the sub-Saharan Africa whereby, after the introduction of the SAPS the cases of communicable disease such as Malaria, Cholera among others have been on the rise. Women are the most affected population because if they are not the direct victims, they have to take care of the family members affected by the condition (Eisenstein, 2009).

IFIs also influence the monetary policies in the country. Therefore, they devalue the currency to discourage the purchasing of imports. Although this is done to control the balance of payment, it has a detrimental effect on women living in the global south. According to Eisenstein (2009), with a devalued currency, the women’s purchasing power is negatively affected. It is noteworthy that the middle class and poor women in the third world countries do not participate in exporting and importing products. They are involved in the subsistence consumption, and they buy their goods locally. Therefore, lacerating their purchasing power affects their ability to meet the basic needs.

How Liberal Programs of Amelioration have failed in Addressing Poverty and Destitution in the Global South

Liberal development programs are thought to be the recipe for a spurred economic development in countries in the global south. There are various programs, particularly the ones enforced by the international financial institutions and non-governmental organizations. Liberal policies are associated with the developed countries that have interests in the third world countries. The development policies that have been applied in first world countries are thought to result in similar outcomes when applied in the Global South (Davis, 2013). However, the different levels of development in the two regions result in the suppression of the local companies since they can compete for prices. This can be observed in various ways.

First, liberal programs allow the movement of goods into the Global South that are still struggling with the value addition of the local products. This was triggered by the World Bank and the International Monetary Fund in the 1980s after some of the countries in the Global South failed to repay the debts that owed the financial institutions. According to Davis (2013), the liberal policies push the government to the edge of losing control over the development process. Consequently, the subsidies and protection that the government offers to the local industries are eliminated. Therefore, the cheap commodities from foreign markets and which have been produced at low cost leads to the collapse of the local industries.

However, the governments do not have a choice because it is not viable to revive the industries with the market being flooded by cheap imports. For instance, in Kenya, one of the developing countries in the sub-Saharan Africa, the introduction of cheap clothing from the developed countries led to the closure of dozen of textile industries that had enjoyed government support and protection. This trickles down to the producers of the raw materials who are left without a source of living.

Secondly, liberal policies are aimed at helping the countries in the Global South to achieve higher standards of living. However, this has not resulted in any measurable quality development, and it has resulted in further deterioration of the economic conditions of the citizens. This is mostly doen by non-governmental organizations that are funded by the West and the international financial institutions (Eisenstein, 2009). It is noteworthy that NGOs rarely support governments in the local niches and they are mostly with the support of the anti-statists who are known to oppose the government. The rationale for the bad blood between the institutions and the government is that they offer alternative forms of development for those who fall out with the government.

This has a direct impact on the reduced economic performance of the country through various ways. According to Eisenstein (2009), the NGOs do not offer lasting solutions that can enable the citizens to gain financial independence. They target groups in the rural areas and slums and offer them micro-credits directed towards defined economic activities (Petras, 1999). With the influx of cheap materials from the developed countries, the locally produced items by the groups fail to fetch a competitive price. This explains why most of the projects turn into white elephants and re-invented repeated to trigger continued funding.

It is also noteworthy that the NGOs are in support of the liberal programs and they are, therefore, supported by the members forming to the cream of the import business. Therefore, although the balance of payment may turn favorable with time, the effects do not trickle down to the disenfranchised citizens. These factors vindicate the liberal policies are not favorable for developing countries because they do not give the local governments an opportunity to invest in the sectors that have the capacity to improve the economic standards of the majority of the citizens rather than focusing on the selected few rich people.

The Washington Consensus and IFIs are Primarily Responsible for Poverty in the Global South

The Washington Consensus and the policies adopted by the IFIs and imposed on the Global South are responsible for the continued destitution and slow economic growth. The financial liberalization that began in the 1990s and championed by the World Bank and the International Monetary Fund led to the conception of the Washington Consensus. The First Consensus was focused on the policies to establish stabilization and structural reforms in the global south. The second consensus was based on creating capital accounts in the developing countries to attract foreign investment and savings to spur economic growth. However, this resulted in continued poverty rather than the projected development.

In the Caribbean nd Latin America, the countries that were targeted by investors taking advantage of the foreign policy experiences a reversed economic growth. The IFIs imposed various measures to the region which were found to have potential economic benefits. For instance, the countries were required to reduce budget deficits, scale down the public expenditure, promotes exports, privatize ineffective public corporations, and let the interests be determined by the markets. In Latin America, for instance, the economic growth before the application of the Second Washington Consensus averaged at 3.7%. In 2001, this had gone down to 0.4% (Woo, 2004). This was way below the international growth rate. The investment in the countries did not spur the expected economic growth.

In addition, the capital accumulation that was the main target of the Second Washington did not have plans to address the problem of bad governance in the global south. It is noteworthy that the economically disenfranchised countries have the highest levels of corruption. The rationale for this that good governance and management of the resources requires finances. Bad governance was the main cause of delayed infrastructural development in communication, roads, and public amenities. These are imperative in attracting investors. However, as Woo (2004) observes since the countries could not offer such an environment, a significant number of the companies that had been established in the countries do not operate profitably, and this did not solve the problem of destitution.

On the same note, the companies established in the Global South offer high salaries that the ones offered in the private sector. The disparity in the wages spurs corruption. The rationale for this is that individuals performing the same roles in government institutions feel underpaid, and they look for ways to seal the gap in payment. Corruption thrives in the Global South because the governments do not have the required capacity and goodwill to eradicate it (Woo, 2004). The misuse of public resources leads to channeling of funds to individual accounts, and this leaves the poor citizens without the basic needs. Although the monetary institutions have been fast to point out the corruption in the developing countries, they do not trace it back to the creation of capital accounts without the contextualization of the policies in different countries whereby the companies compete with the states in offering desirable prices.

Lastly, IFIs and the Washington consensus use a development approach that does not focus on laying the framework for development. According to Roy (2010), in the global south, imported blueprints cannot work effectively due to the underlying issues that affect the locals. For instance, before offering microfinance to self-help groups in women living in sub-Saharan Africa, the institutions do not adequately address the issue of the recipients’ capacity to utilize the funds effectively. Therefore, most of the self-help projects do not live to break. This intensifies poverty because, in addition to distracting people from their subsistence activities, it leaves some of them with loans to repay to the micro-finance institutions.

In conclusion, development in the Global South is impeded by the policies adopted by the international monetary institutions and neo-liberal policies. The liberalization of the markets suppresses the local companies through price competition. The reduced production of the industries trickles down to the farmers who provide the raw materials. Moreover, the policies have not addressed destitution in the countries especially due to the imposition of the structural adjustment programs that reduce funding for non-profitable activities. This triggers the government to cut spending on basic services. Finally, the policies imposed by IFIs and the Second Washington Consensus have resulted in high rates of poverty since they do not address the underlying issues of poverty.

References

Knutson, A. (2004). Hitian women in the new world order by April Ane Knutson Amherst, NY: Humanity Books.

Davis, M. (2013). Planet of slums. New Perspectives Quarterly , 30 (4), 11-12.

Eisenstein, H. (2009). In the Global South, “Women” replace development. Feminism Seduced: How Global Elites Use Women’s Labor and Ideas to Exploit the World .

Petras, J. (1999). NGOs: In the service of imperialism. Journal of Contemporary Asia , 29 (4), 429-440.

Roy, A. (2010). Poverty capital: Microfinance and the making of development . Routledge.

Woo, W. T. (2004). Serious inadequacies of the Washington Consensus: misunderstanding the poor by the brightest. Diversity in Development: Reconsidering the Washington Consensus, FONDAD, The Hague .

Petras, J. (1999). NGOs: In the service of imperialism. Journal of Contemporary Asia , 29 (4), 429-440.