Growing thrust of challenges on Third World countries and our individual and collective responses

It is my great pleasure to be addressing the international conference on Business Strategy and Social Sciences organised by the Asian Economic and Social Society (AESS), here in this great city Kuala Lumpur. I would like to thank the AESS, particularly its President Qazi Adnan Hye for inviting me to deliver the keynote address and for his hospitality here in Malaysia. We feel so proud to see how developed Malaysia is, and has reached where many countries could not, due to their own follies or the machinations of world powers, or both.
Today I am going to deliberate upon the growing thrust of challenges faced by the Less Developed Countries (LDCs) emanating from globalisation and the militarisation that has engulfed the world post 9/11. I will try to draw your attention to the threats these challenges are posing to our countries and how we can face up to them both individually and collectively. What are our responsibilities as individual citizens, students, researchers, governments and regional powers. We all will have to play our roles if we want to save our countries, civilisations, established order and our future generations.
Challenges from Globalisation
Starting with the challenges associated with globalisation first.
While some countries have certainly benefitted from globalisation, the most spectacular example is that of China of course. China has used liberalisation very cleverly and effectively to become a global power. There are other examples such as Malaysia, Singapore and Indonesia that have brought development to their countries. Their remarkable development reflects what a difference honest and sincere leadership can make to a country.
But the vast majority of countries in the Third World have not been able to turn things around for the better. This is particularly true about countries that have been borrowing from the international financial institutions for budgetary support. Piasecki and Wolnicki (2004) state that only 20-25 percent of the global population directly benefits from globalisation, while for the remaining the benefits are either marginal or nonexistent. And out of total world population of six billion only 1.8 billion can afford goods and services available on the world market. While de Rivero (2001) states that only half of these have access to the banking system.
Ukpere and Slabbert (2009) state that there is overwhelming evidence for a positive correlation between globalisation, internationalisation and unemployment. They states that global unemployment has increased the rate of global inequality, while Haines (2001) states that the gap between the "global rich" and the "global poor" continues to grow. According to the UNDP Report (1999) income disparities between one fifth of the global population in the richest countries and their counterpart one fifth in the poorest countries was 30:1 in 1960, but increased to 74:1 in 1997. And that 42 percent of the world population which comes to 2.5 billion people are the world's poorest and have a collective income equal to the wealth of the world's richest 225 billionaires {see also Karliner, (1999); Ukpere and Slabbert, 2007)}. And the richest 20 per cent of the world population enjoyed 86 per cent of the world GDP, while the poorest 20 per cent had only one per cent. Therborn (2001) cited in Amin (2004) stated that the income of the richest one tenth of the households is more than 80 times the purchasing power of the poorest one tenth of the population as a result of the rich becoming richer and the poor becoming poorer, with the majority of these poor populations living in Sub-Saharan Africa, East and South Asia and Latin America. And this poverty manifests itself in the form of disease, hunger, malnutrition infant and child mortality, prostitution, child labour, violence, breakdown of established order, environmental degradation, conflict and war.
Ukpere and Slabbert stated that as a result of increase in global inequality global poverty has increased. While Salvatore (2004) stated that increases in income inequality and poverty in poorest developing countries can be attributed to globalisation. While the majority of the poor live in South Asia, Sub-Saharan Africa, East Asia also had a large number of the chronically poor people with a large majority of them living in China. Ukpere and Slabbert (2007) stated that :
"Most of the incidents increasing the rate of poverty around the world today cannot be attributed to nature, but to man and the selfish capitalist institutions created by man".
They state that about "half of the 6 billion people in the world are poor; 8 million people die each year because they are too poor to stay alive, while 1 billion lives are in danger because they lack food, whilst living in a world of abundance. "
Trainer (2002) summarises it well when he says:
"Third World development is increasingly being seen as a process of vast, systematic, institutionalised and legitimised plunder. ----- Third World countries have been developed into a condition in which their productive capacity, their land, labour, forests, and fisheries now produce mostly for the benefit of a relatively few rich people elsewhere."
Trainer says as a result, Transnational Corporations (TNCs), instead of Third World governments are dictating Third World development, with the latter unable to direct foreign investment towards the needs of their citizens and prevent actions that hurt their national interest. An example of this is the tremendous increase in Genetically Modified crops acreage in the LDCs which according to the FAO has surpassed their acreage in the DCs. According to Wizarat (2013a) most of the food retailers in Karachi reported that they import lentils and fruits from Australia, Canada, India, etc, where there is widespread use of GM seeds. What is even more disturbing, is that many DCs such as Canada have given large tracts of land to their farmers to grow GM crops for export and aid to LDCs only. These crops are not allowed to be sold in the domestic market till such time that their effects on health in LDCs have been studied. On the contrary, many western NGOs such as the WWF have got vast tracts of land in Pakistan where they are growing organic foods for western consumers whose health matters!
Developed countries exporting GM food to developing counties have very strict laws about the consumption of these food products in their own countries. In most of these countries their consumption is strictly forbidden. They export these to countries like Pakistan where it is not mandatory to declare whether these are GM, and consumers are therefore totally unaware of the hazards from the foods they are consuming. In Pakistan GM seeds are used by corn and cotton growers, with 85 percent of cotton textile industry consuming Bt cotton (GM), while the vast majority of crops are still using natural seeds. TNCs producing GM seeds have kept up their pressure on federal and provincial governments in Pakistan to bring about amendments in the Seed Act and pass the Plant Breeders Protection bill. Previous Prime Minister Shaukat Aziz and the present Khyber Pukhtoonkhwa (KPK) parliament recently tried to pass these Acts, but their efforts were thwarted by the vigilance of civil society.
French scientists at the University of Caen in Normandy have reported a tremendous increase in cancer in rats that were fed with NK603 (GM corn variety) . While the World Health Organisation has reported that increase in cancer has has been of an epidemic nature all over the world. The same is corroborated by available data on the increase in the incidence of the disease in Pakistan. Cancer wards of leading Pakistani hospitals have witnessed a tremendous increase in the number of patients in recent years. Thus, greedy TNCs, DC governments and callous and corrupt LDC governments are turning their citizens into guinea pigs! Citizens in countries like Malaysia, Indonesia, Singapore, etc are better off, as retailers identify which foods are organic and consumers therefore have the knowledge to choose between GM and organic foods.
Challenges from Militarisation and Conflict
The second major challenge facing LDCs is the widespread and endemic conflict which has enveloped these countries. Countries across Asia, Africa, Middle East, etc are engaged in sectarian, ethnic and ideological conflicts. A common feature of these conflicts is that populations are polarised systematically into ethnic, sectarian and ideological groups with intensities varying in different countries. Some countries are in the fore front, others are somewhere in the middle, where conflict is brewing up, but has yet to result in open warfare. And some are on the back burner where seeds for polarisation are now being sown. For countries that are front runners these divisions have led to clashes and wars, leading to fragmentations, civil strife, instability and break down of established order as has happened in Afghanistan, Iraq, Libya, Sudan, Somalia, etc Wizarat (2014a) found that one percent increase in world conflict increases DC GDP by 7.7 per percent, while resulting in decline in LDC GDP by 3.8 percent. The diverse impacts of conflicts on growth in the two groups of countries is understandable as post World War II all the conflicts have been exported to the LDCs. This results in instability, flight of capital, death and destruction in these countries, with negative impact on investment, employment and growth. While the peace and harmony in the DCs is conducive to growth, which gets a further boost due to export of armaments from the armaments producing countries in this group.
Wizarat (2013b) stated that an important factor triggering conflicts are the mineral and fuel resources in the LDCs, which can be gauged from their large and highly significant coefficients estimated at 1.258376 and 1.418989 respectively. These empirical findings are corroborated from information coming from countries under occupation like Afghanistan and Iraq. In Afghanistan, behind the smookscreen of finding Al Quaida and making the world a safe place, the US is looting lithium which is abundantly found in that country and can be used in the manufacture of hydrogen bombs in addition to other uses. Moreover, US has stored oil reservoirs along the sea shore from San Francisco to Los Angeles that it has looted from Iraq. So the pursuit of Al Quaida and other radical muslims is really a smoke screen that is taking Nato and rich western countries every where where there is fuel, coal, gas and minerals owned by people who do not have the brute force to defend their natural resources. The DCs are thus the major beneficiaries of conflict that is enveloping the world today on account of increase in the output of the industrial military complex and enabling the DCs to take control of natural resources from natural resource rich LDCs that do not have the means to protect these.
Challenges on Account of Limits to Growth Theory
We live in a world order designed and implemented by major world powers, which post 9/11 means a sole super power, aided and abetted by its surrogates in the European Union. In order to understand the present world situation it is important to have information about concerns and problems to these powers. In these countries there are strong network s between academics, think tanks and policy makers. Policy recommendations derived from studies are used to formulate policies not only for the countries, but since these countries happen to formulate international world order, they are used for that purpose as well.
Jeffry Sachs (2007) is a leading US economist with links to policy makers in Washington. Sachs explores whether global development is sustainable if the developed countries continue to grow at their long-term per capita rate of 1.6% per year, while countries in Asia and other other parts of the world grow at their spectacular rates resulting in four to six- fold increase in world GNP. He says as world energy supplies are already stressed out with very alarming consequences on climates and the environment. Sachs says that the world will run out of oil and gas and might have to switch to coal. He says Australia, United States, China, India, etc have enough coal reserves and energy is not likely to limit growth in the present century at least. But such large scale consumption of coal will destroy the climate and the ecosystems.
A keynote address by Professor Dr Shahida Wizarat, Director Research, Chief Editor Pakistan Business Review and HOD Economics, IOBM, Karachi, Pakistan at International Conference on Business Strategy and Social Sciences, Asian Economic and Social Society (AESS), 16-17 August 2014, Pearl International Hotel, Kuala Lumpur, Malaysia.