The Global South quietly revising economic rules written by US, West

By Michelle Jamrisko and Iain Marlow
 

Let Trade Run Free. Tie your currency to the US dollar. Align your foreign policy with America’s. The US and its Western partners wrote these economic rules, a cornerstone of the world order prevailing since World War II. Now developing countries, often called the Global South, are quietly revising them.
 

The Global South sees a chance to chart its own future. Nirupama Menon Rao, a former Indian foreign secretary, points to her country’s spreading of digital payments to developing nations. “India’s outreach to countries in the Global South has been ­successful,” the onetime ambassador to the US told Bloomberg Television in June.

 

Developing nations are demanding control of their resources, reordering a relationship from colonial times, in part by insisting on factories in their own countries. Joining Namibia and Zimbabwe, Ghana is preparing to ban exports of lithium—essential for electric vehicles. Indonesia prohibited the export of nickel ores.

Argentina, Brazil, Chile and Indonesia are welcoming investments in EV battery plants from China rather than the US. “We can’t keep begging and begging from you,” Luhut Panjaitan, an Indonesian investment minister, said in May. “You may be angry at us for trading with other countries, but we have to survive.”

While visiting China in April, Brazilian President Luiz Inácio Lula da Silva asked “who decided that the dollar” should be all-­powerful. The Bank of Thailand is talking up fresh plans to diversify its basket of currencies, which it uses to establish the value of the baht, so it’s less tied to the dollar. Indonesia is shoring up local currency markets, as regional neighbors set up digital payment systems, reducing the need for the dollar in day-to-day purchases. Africa is discussing a common currency.

Adding a geopolitical component, countries are no longer picking sides in fights between the West and Russia or the US and China. Thirty-two countries abstained from a United Nations resolution in ­February demanding that Russia withdraw from Ukraine.

“The great powers’ behavior has soured many in the Global South”

Leaders such as Bangladeshi Prime Minister Sheikh Hasina and Philippine Finance Secretary Benjamin Diokno sound like they’re reading from a script when they explain their neutrality with variations of the words “we’re a friend to all.” In June, when a Chinese vessel antagonized an American warship in the Taiwan Strait, Asian defense ministers at a summit in Singapore just emphasized avoiding conflict.

South Africa is denying a US ambassador’s claim that it’s supplying arms to Russia for its war against Ukraine. Vietnam has kept quiet about Ukraine. The reason: its onetime security partnership with Russia, which dates to the Vietnam War. India is buying Russian oil in defiance of US-led sanctions. “Energy is not about altruism or philanthropy,” oil minister Hardeep Singh Puri told Bloomberg TV in February.

The great powers’ behavior has soured many in the Global South: the debt-ceiling debacle and further political disarray in the US, China’s saber-rattling and Brexit in the UK. Pew Research Center survey results show unfavorable views of China reaching historical highs. But the US has failed to capitalize on Chinese President Xi Jinping’s declining popularity. “Xi Jinping has been God’s gift to US alliance-building in Asia,” says Ashley Tellis, a former senior State Department official now at the Carnegie Endowment for International Peace.

The US has hardly offered a compelling alternative, according to former US Trade Representative Michael Froman. “They haven’t yet seen what our vision is for the future,” he told Bloomberg’s Stephanomics podcast in June. In response, the Global South has decided to come up with a vision of its own. —With Haslinda Amin and Claire Jiao