The “Rise of the South” and post-communist Europe and Central Asia
Tall and glassy downtown of Astana, Kazakhstan – oil, gas and other natural resources are the key components of the country’s rising GDP. Photo: Shynar Jetpissova / World Bank
BRATISLAVA, Slovakia – 14 November, 2012 – At first blush, the “rise of the south” and development issues in the post-communist former Soviet republics and the Balkans seem largely unconnected. The “rise of the south” evokes a north-south OECD/G-77 paradigm that most governments of these regions have not fully (or even largely) bought into.
Development narratives are instead Euro- or Russo-centric, both figuratively and literally. In contrast to other developing countries, most governments in these regions have not sought to use climate change negotiations and other global fora to “get a better deal from the north”.
Emphasis has instead been on resetting their relationships with the European Union (in either an accession or neighbourhood context), or on striking the right balance between Russia, representatives of the “traditional north” (e.g., the United States, European Union)—which were largely absent in these regions before 1990—and in some cases an ascending China.
Countries with European world views in these regions have often sought to (re)join the north—as is apparent in the expansion of the European Union, NATO, and the OECD during the past two decades.
But governments from these regions for which this option is unavailable or unappealing (e.g., Russia, Belarus, Central Asia) have not adopted traditional “southern” views. It is telling that, at present, only Tajikistan, Turkmenistan, and Bosnia and Herzegovina are members of the G77.
However, arguments that the “global south” paradigm is irrelevant for transition and developing Europe and Central Asia may in important respects be wide of the mark. There are a number of ways in which this paradigm is already quite relevant—and this relevance could grow with time. This is apparent along four dimensions:
- Dynamics along the “north-south-east” triangle;
- Turkey’s emergence as a regional power;
- Common challenges for European and Central Asian developing and transition economies, and for developing economies from other regions, such as the “middle-income trap”; and
- Ways in which post-communist countries could replicate development successes from the south.
“North,” “south,” and “east”
“Rise of the south” narratives often take 1990 as a benchmark. However, the start of the post-communist transition is often also ascribed to 1990—the year of German (re)unification, in which radical market transformation programmes were introduced in Poland and (then) Czechoslovakia.
It was also a year in which the centrifugal forces of nationalism and collapse that led to the subsequent dissolution of the Soviet Union and the Warsaw Pact, as well as the socialist federation of Yugoslavia, underwent noticeable intensification.
This collapse of what used to be (patronizingly) referred to as the “second world” has in turn underpinned “dominant north” narratives, which argued that the “end of history” had proven the superiority and inevitability of “first world” North Atlantic market democracies.
By implication, the “third world” faced few options: “third roads” had proven illusory; the developing world had no choice but to “get with the programme”.
Resisting the inevitable meant missing out on the market access, investment flows, and technology transfer needed to make development happen. The perceived dominance of the “northern first world” vis-à-vis the “southern third world” was thus reinforced by the collapse of the “eastern second world”.
What a difference two decades makes. The US and European economies are today struggling to recover from the effects of the global financial crisis—the Eurozone dimensions of which seem likely to keep much of Europe in the throes of economic stagnation (or worse) for years to come.
Rather than being a beacon of development progress and inevitability, the “north” has become a source of global economic instability.
Fortunately, growing numbers of developing economies are benefitting from continued rapid growth in “emerging markets” like Brazil, China, India, and Russia—particularly in terms of new sources of export demand and capital inflows.
The growth momentum generated by emerging economies like China and India helped limit the impact of the global financial crisis in 2009—particularly for developing countries in Asia and Africa—even as the “north” fell into recession (see Chart).
Chart — Regional GDP growth rates before and after the global financial crisis
Source: IMF World Economic Outlook database.
* Former Soviet republics.
** Southeast European economies, new EU member states.
These trends, should they continue, could have profound effects on the erstwhile “second world”. Geography, economics, finance, politics, and culture seem to have driven the countries that joined the EU in 2004 and 2007 irrevocably into “Europe”.
Short of a total collapse of the European project, it is difficult to imagine these countries’ geopolitical reorientation or renunciation of the “north” that they have managed to re-enter. The same is probably true of the Western Balkan governments that are currently negotiating EU membership.
On the other hand, the soft power of EU market access and “European values” had proved wanting in Central Asia, Russia, and Belarus even before the advent of the global and then European financial crises.
The “north’s” influence in Central Asia has likewise been weakened by expansion of China’s political and commercial weight—after decades of arguing with Washington and Brussels, landlocked, low-income Tajikistan and Kyrgyzstan are increasingly turning to China, Russia, Iran, and the Asian Development Bank for the technology and financing needed for large transport and hydropower projects.
While these erstwhile “second world” countries may not be on course to join the G77, they are increasingly benefitting from cooperation with erstwhile “third world” countries. If this cooperation continues to deepen, how long will it be before “northern” and post-Soviet development narratives and strategies are replaced by “southern” institutions and characteristics?
The attraction to the “north” (chiefly Europe and the EU, but also NATO) is stronger in most of the rest of the former Soviet republics, which are covered by the European Neighbourhood Policy (ENP). However, interest in adapting European standards now seems to be weakening in some of the ENP countries where it had been strongest.
This is apparent in recent elections in Georgia—where pro-NATO President Mikheil Saakashvili’s Movement for a United Georgia lost the October 2012 parliamentary elections—and in Ukraine—where the parties and leaders associated with the pro-Western “orange” revolution of 2005 have undergone a succession of electoral defeats.
The European anchor has not been particularly strong in other former Soviet republics, like Azerbaijan and Belarus. Perhaps most importantly, Russia continues to offer a competing development narrative for its post-Soviet neighbours that is both of, and beyond, Europe and the “north”.
These countries are unlikely to become card-carrying members of the G77 anytime soon, of course. But in addition to reflecting a waning of Northern/European influences, these developments are also helping to deepen the heterogeneity in the developing world, in which old labels and camps are giving way to new constellations and new forms of cooperation.
This new pragmatism is perhaps best exemplified by Kazakhstan, whose “green bridge” sustainable development initiative seems to be finding traction outside (as well as within) the region.
This is the first part of an article on the "Rise of the South" and post-communist Europe and Central Asia. The next installment will look into the implications of Turkey's emergence and the European middle income trap.
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