Abstract
In the first decade of the twenty-first century, developing countries experienced higher growth and greater geopolitical and geo-economic prominence than developed countries. The economic slowdown during the next decade started to undo at least partially, both the characteristics of decoupling and the South geopolitical strategy. This chapter is an attempt to examine the evolution of the economic, geo-economic, and geopolitical paths followed by the countries of the South in the New Millennium and the geopolitical and geo-economic response of the United States to these more assertive strategies. It also aims to articulate the study of the economic evolution with both internal and external power relations.
The author thanks CNPq for financial support.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
- 2.
In Latin America, public companies were common, with also a strong presence of transnational firms, whereas in Asia national conglomerates were dominant.
- 3.
The import substitution strategy followed by developing countries, mainly in Latin America, was successful, at least partially. For a study of some of the main weaknesses of the import substitution strategy, see Tavares (1964).
- 4.
Or a passive strategy according with Lall (2000).
- 5.
Author’s translation.
- 6.
- 7.
For a discussion of this problem see Fiori (2011).
- 8.
Historically no country that entered in modern industrialization had a population size similar to China and India (Kuznets 1973).
- 9.
For the new developmentalists (Bresser-Pereira 2010; Frenkel and Rapetti 2011), these changes generated a chronic overvaluation of the currency of each country. In our view, they prevented the periodic tendency to currency crisis and devaluation that historically took place in peripheral currencies (Serrano 2013).
- 10.
For a discussion of this topic, see Chap. 8.
- 11.
In Latin America, the main exceptions to this phenomenon were Argentina and Venezuela.
- 12.
The share of developing countries’ merchandise exports to other economies of the “rest” rose from 42% in 1995 to 46% in 2005 and 58.5% in 2013 and the share of South-South imports increased from 37.9% in 1995 to 52.4% in 2005 and 59.6% in 2013 (UN Comtrade 2017).
- 13.
The so called BRICS are formed by Brazil, Russia, India, China, and South Africa.
- 14.
China alone accounts for over 30% of the developing world’s share in GVCs’ trade (Medeiros and Trebat 2017).
- 15.
The “demand effect” induced by the rising exports increases if the macroeconomic policy is more expansive and if income distribution improves.
- 16.
For a discussion of this aspect, see Chap. 7.
- 17.
These governments range from the “Bolivarian” left (Venezuela with Hugo Chavez (1999), Bolivia with Evo Morales (2006), Ecuador with Rafael Correa (2007)) to the less radical and more liberal center-left of the other countries (Lula in Brazil (2003), Néstor Kirchner in Argentina (2003), Tabaré Vazquez in Uruguay (2005), Michelle Bachelet in Chile (2006), Fernando Lugo in Paraguay (2008), Ollanta Humala in Peru (2011)). See analysis of the “pink tide” in Chap. 1 (Introduction).
- 18.
For a discussion of this aspect, see Petras and Veltmeyer (2016, 96).
- 19.
If the objective of the strategy was merely to secure US supplies, it would be difficult, for example, to understand its strong military presence in the Middle East, since the United States could in principle be able to source itself fully from the Americas (Canada, Mexico, Venezuela…).
- 20.
These transformations are currently in a process of change with Trump’s administration. There is a shift from multilateral agreements to bilateral arrangements and growing nationalist pressures (see Section “Continuity and Change in the Economic Performance and the Geopolitical and Geo-Economic Insertion of the Periphery in the Two-Thousand and Tens”).
- 21.
See also Chap. 7.
- 22.
“It is precisely because the system works to America’s advantage that U.S. policy makers have all the more incentive to hold up as neutral the disciplines of trade, investment, and finance that together comprise rules-based order, vesting them with the authority of Rawlsian impartiality, blind to the national interests of any one country over any other” (Blackwill and Harris 2016, 189).
- 23.
One remarkable example discussed by Panitch and Gindin (2012) was the extension to the NAFTA agreement of the US “regulatory takings”, a US jurisprudence that protects American investors from expropriation.
- 24.
As we argue in the next sections, the new government will reinforce theses interests in bilateral investment treaties.
- 25.
The use of the law as power politics appears in the concept of “lawfare”, a term originally developed in the context of war by Charles Dunlap, a former American general who is now the Executive Director of Duke Law School’s Center on Law, Ethics and National Security. In his words, lawfare means “the strategy of using—or misusing—law as a substitute for traditional military means to achieve an operational objective”.
- 26.
Putin settled the last territorial disputes with China in 2004, on the Eastern border.
- 27.
SCO permanent members are China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan since 2001, being joined by India and Pakistan in 2017.
- 28.
The autonomous economic strategy followed by many peripheral countries included a more assertive geopolitical positioning. Investment in new weapons has grown and many countries in the South have modernized their armed forces. Initiatives to develop industrial-military complexes have emerged (in particular in the case of China—see Medeiros and Trebat (2014)). In the case of the BRICS countries, there were increasing growth rates of military expenditures, mainly in China, but also in India and Russia. The average growth rate of real military expenditures between 2000 and 2016 was 9.5% in the Russian Federation, 10.8% in China, and 4.6% in India (author’s calculation based on SIPRI (2017)).
- 29.
The US established bilateral free trade agreements with Chile (2004), Peru (2007), and Colombia (2011). Colombia, Peru, and Chile built a regionalism centered on free trade and the Pacific Alliance, but, unlike Mexico, they did not really change their productive and institutions after the integration. They remain close to the economic cycle of the other South American countries.
- 30.
The Bank of South was established in 2009 by Argentina, Bolivia, Brazil, Ecuador, Paraguay, and Venezuela as an investment bank and a monetary fund, to finance development and social projects. As of 2017, it has not been funded.
- 31.
The SUCRE is the regional currency of the ALBA, first used in 2010.
- 32.
For example, the devaluation that occurred in the Brazilian exchange rate crisis of 1998 had a strongly negative impact on Argentina, which maintained a fixed and appreciated exchange rate up to 2002.
- 33.
Colombia, Peru together and Chile built free trade agreements with the US and a regionalism centered on free trade, the Pacific Alliance, but unlike Mexico, they have little changed their productive structures and institutions and are close to the economic cycle of other countries of South America as well as relations with MERCOSUR.
- 34.
US-Bolivia relations have been actually very tense since the election of Evo Morales in 2005 (Weisbrot 2015, 198–199).
- 35.
In the case of Brazil, the adoption by Dilma Roussef of more conservative fiscal policies led to lower economic growth (Serrano and Summa 2015) and created political opportunities for big business and other internal and external group of interests, discontent with the previous social and distributive evolution led by the centre-left coalition, to destabilize the PT (Worker’s Party) government.
- 36.
In Brazil, for example, the sectors that were most strongly opposed to the nationalization during the presidency of Geisel (1974–1979) are precisely the industrial groups that were promoted by heavy industrialization.
- 37.
As Petras and Veltmeyer (2016) put, the commodity exporters perceived an opportunity to rid from their connections with nationalist states and participate in more lucrative arrangements in a low tax and low wage economy.
- 38.
- 39.
The AIIB aims at funding the construction of infrastructure in the Asia-Pacific region.
- 40.
Formerly known as “New Silk Road” or “One Belt, One Road” (Li 2017), the BRI has two pillars: the Silk Road Economic Belt (SREB) and the “Maritime Silk Road” (MSR).
- 41.
“The Obama administration has pushed ahead with doubling-down and further entrenching the neoliberal policy box. This is most visible in its approach to globalization. In 2010, free trade agreements modelled after NAFTA were signed with South Korea, Colombia and Panama. The Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP), two mega-agreements negotiated in secrecy and apparently bearing similar hallmarks to prior trade agreements, are also being pushed by the Obama administration” (Palley 2015, 24–25).
- 42.
For example, Trump’s administration wants to impose on Mexico restrictions on exports to the United States to reduce the bilateral trade deficit between the two countries. Other target is to force Mexico to replace imported components from China by others made in America, especially for Mexican exports to American market (Office of the United States Trade Representative 2017). In this way, US strategy is more than ever committed to the use of “economic tools” to achieve its goals (President of the United States 2017, 34).
- 43.
- 44.
China has signed agreements on the purchase of ore and oil and Chinese companies have bought strategic assets in the infrastructure and energy sectors of many Latin American countries (Cui 2016).
- 45.
“In this context of US-Latin American relations, countries in the region can be placed into three categories: (1) Chile, Peru, Colombia-Mexico—aligned with the US; (2) Venezuela—to some extent Bolivia, Ecuador, Argentina, Brazil, even Honduras and Nicaragua—in the US’s backyard as it were—pursuing a path of relative autonomy and alternative integration; (3) other countries lie somewhere in between—relatively autonomy but commercially competitive—not an ally to be counted on, yet still very much ‘client states’ ” (Petras and Veltmeyer 2016, 97).
- 46.
Through resources from USAID, National Endowment for Democracy, Freedom House, and other conservative organizations, the United States gave support to opposition groups in economies led by nationalist governments in Venezuela, Paraguay, Argentina, and Brazil, the leader of UNASUL, all of them great trade partners of China that became great investor as well (Moniz Bandeira 2016).
- 47.
“The economic downturn in some of the post-neoliberal economies, namely Brazil, Argentina and Venezuela, and the rightward moving political spectrum, has opened a window of opportunity for US economic imperialism to work in tandem with the rising neoliberal political opposition” (Petras and Veltmeyer 2016, 110).
- 48.
“In the sphere of military influence and political intervention, collaborators of the US suffered major setbacks in their attempted coups in Venezuela (2002, 2003) and Bolivia (2008), and in Ecuador with the closing of the military base in Manta; but they were successful in Honduras (2009). The US secured a military base agreement with Colombia, a major potential military ally against Venezuela, in 2009” (Petras and Veltmeyer 2016, 33).
References
Akyüz, Yylmaz. 2012. The Boom in Capital Flows to Developing Countries: Will It Go Bust Again? Ekonomi-tek, 1: 63-96.
Amsden, Alice. 2001. The Rise of “the Rest”: Challenges to the West from Late-Industrializing Economies. Oxford: Oxford University Press.
Bastos, Pedro Paulo Zaluth, and Célio Hiratuka. 2017. A política econômica externa do governo Dilma Rousseff: comércio, cooperação e dependência. Textos para Discussão, Instituto de Economia, UNICAMP, n° 306.
Blackwill, Robert D., and Jennifer M. Harris. 2016. War by Other Means? Geoeconomics and Statecraft. Cambridge, MA: The Belknap Press of Harvard University Press.
Boron, Atilio. 2013. América Latina en la geopolítica del imperialismo. Buenos Aires: Ediciones Luxemburg.
Bracarense, Natália M. 2012. Development Theory and the Cold War: The influence of Politics in Latin American Structuralism. Review of Political Economy 24 (3): 375–398.
Bresser-Pereira, Luiz Carlos. 2010. Globalização e Competição. Rio de Janeiro: Campus.
Cardoso, Fernando Henrique, and Enzo Faletto. 1979. Dependency and Development in Latin America. Berkeley: University of California Press.
Chang, Ha-Joon. 2006. The East Asian Development Experience, the Miracle, the Crisis and the Future. London: Zed Books.
Cui, Shoujoun. 2016. China’s New Commitments to LAC and Its Geopolitical Implications. In China and Latin America in Transition. Policy Dynamics, Economic Commitments, and Social Impacts, ed. Shoujoun Cui and Manuel Pérez García, 15–34. New York: Palgrave Macmillan.
De Coning, Cedric, Thomas Mandrup, and Liselotte Odgaard. 2015. The BRICS and Coexistence: An Alternative Vision of World Order. London: Routledge.
De Ville, Ferdi, and Gabriel Siles-Brügge. 2015. TTIP: The Truth About the Transatlantic Trade and Investment Partnership. Cambridge, UK: Polity.
Fiori, José Luis. 2004. O poder dos Estados Unidos: formação, expansão e limites. In O poder americano, Fiori (Org.). Petrópolis: Editora Vozes.
———. 2011. Estado e desenvolvimento, na América Latina. Notas para um novo ‘programa de pesquisa’. (mimeo).
Freitas, Fábio, Carlos Aguiar de Medeiros, and Franklin Serrano. 2016. Regimes de política econômica e o descolamento da tendência de crescimento dos países em desenvolvimento nos anos 2000. In Dimensões estratégicas do desenvolvimento brasileiro. Continuidade e mudança no cenário global: desafios à inserção do Brasil, ed. CGEE, 17–46. Brasília, DF: Centro de Gestão e Estudos Estratégicos (CGEE).
Frenkel, Roberto, and Martín Rapetti. 2011. Fragilidad externa o desindustrialización: ¿Cuál es la principal amenaza para América Latina en la próxima década? Serie macroeconomía del desarrollo, CEPAL, no. 116, November.
Furtado, Celso. 1978. Criatividade e dependência na civilização industrial. Rio de Janeiro: Paz e Terra.
———. 2000. Teoria e política do desenvolvimento econômico. Rio de Janeiro: Paz e Terra.
———. 2007. The Oral History Interview, January 7th 2000. In The Complete Oral History Transcripts from UN Voices, CD-ROM. New York: United Nations Intellectual History Project.
Hossein-Zadeh, Ismael. 2007. The Political Economy of U.S. Militarism. New York: Palgrave Macmillan.
———. 2014. Beyond Mainstream Explanations of the Financial Crisis. New York: Routledge.
Kalecki, Michal. 1943 [1990]. Political Aspects of Full Employment. In Collected Works of Michal Kalecki, ed. Jerzy Osiatynski, vol. I, 347–356. Oxford: Clarendon Press.
Kaplinsky, Raphael, and Dirk Messmer. 2008. Introduction: The Impact of Asian Drivers on the Developing World. World Development 36 (2): 197–209.
Klinger, Bailey. 2009. Is South-South Trade a Testing Ground for Structural Transformation? Policy Issues in International Trade and Commodities Study Series, no. 40, United Nations.
Kuznets, Simon. 1973. Modern Economic Growth: Findings and Reflections. The American Economic Review 63 (3): 247–258.
Lall, Sanjaya. 2000. The Technological Structure and Performance of Developing Country Manufactured Exports, 1985–98. Oxford Development Studies 28 (3): 337–369.
Lall, Sanjaya, John Weiss, and Hiroshi Oikawa. 2005. China’s Competitive Threat to Latin America: An Analysis for 1990–2002. Oxford Development Studies 33 (2): 163–194.
Leão, Rodrigo Pimentel Ferreira, Aline Regina Alves Martins, and William Vella Nozaki. 2011. A ascenção chinesa e a nova geopolítica e geoeconomia das relações sino-russas. In China na nova configuração global: impactos políticos e econômicos, ed. Luciana Acioly, Rodrigo Pimentel Ferreira Leão, and Eduardo Costa Pinto, 195–234. Brasília: Ipea.
Li, Yuan. 2017. Belt and Road: A Logic Behind the Myth. In China’s Belt and Road: A Game Changer? ed. Alessia Amighini, 13–34. Milan: ISPI.
Lo, Bobo. 2008. Axis of Convenience. Moscow, Beijing and the New Geopolitics. London: Chatham House and Washington: Brookings Institution Press.
Mazat, Numa, and Franklin Serrano. 2012. A Geopolítica da Federação Russa em Relação aos Estados Unidos e à Europa. In O Renascimento de uma potência? A Rússia no século XXI, ed. André Gustavo de Miranda Pineli Alves, 9–50. Brasília: IPEA.
Medeiros, Carlos Aguiar de. 2004. O desenvolvimento tecnológico americano no pós-guerra como um empreendimento militar. In O poder americano, ed. José Luis Fiori, 225–252. Petrópolis: Editora Vozes.
———. 2011. The Political Economy of Institutional Change and Economic Development in Latin American Economies. Journal of Economic Issues 45 (2): 289–300.
———. 2013a. The Political Economy of the Rise and Decline of Developmental States. In Sraffa and the Reconstruction of Economic Theory. Volume Two: Aggregate Demand, Policy Analysis and Growth, ed. Sergio Levrero, Antonella Palumbo, and Antonella Stirati. London: Palgrave Macmillan.
———. 2013b. Recursos Naturais, Nacionalismo e Estratégias de Desenvolvimento. Oikos 12 (2): 146–167.
Medeiros, Carlos Aguiar de, and Maria Rita Vital Paganini Cintra. 2015. Impacto da Ascenção Chinesa sobre os Paises Latino-Americanos. Revista de Economia Política 35 (1): 28–42.
Medeiros, Carlos Aguiar de, and Franklin Serrano. 1999. Padrões monetários internacionais e crescimento. In Estados e moedas no desenvolvimento das nações, ed. José Luis Fiori, 119–151. Petrópolis: Vozes.
Medeiros, Carlos Aguiar de, and Nicholas Trebat. 2014. Military Modernization in Chinese Technical Progress and Industrial Innovation. Review of Political Economy 26 (2): 303–324.
———. 2017. Finance, Trade, and Income Distribution in Global Value Chains: Implications for Developing Economies and Latin America. Instituto de Economia, UFRJ, Discussion Paper, 002/2017: Rio de Janeiro.
Milberg, William, and Deborah Winkler. 2013. Outsourcing Economics: Global Value Chains in Capitalist Development. Cambridge: Cambridge University Press.
Moniz Bandeira, Luiz Alberto. 2016. A Desordem Mundial. Rio de Janeiro: Civilização Brasileira.
Nayyar, Deepak. 2008. Trade and Globalization. New Delhi: Oxford University Press.
Office of the United States Trade Representative (Executive Office of the President). 2017. Summary of Objectives for the NAFTA Renegotiation. Monday, July 17, 2017. Accessed https://ustr.gov/sites/default/files/files/Press/Releases/NAFTAObjectives.pdf.
Palley, Thomas. 2015. The US Economy: Explaining Stagnation and Why It Will Persist. Accessed http://www.thomaspalley.com/docs/research/Interpretations%20of%20the%20Crisis%20-%20WEBSITE.pdf.
Panitch, Leo. 2015. BRICS, the G20 and the American Empire. In BRICS. An Anti-Capitalist Critique, ed. Patrick Bond and Ana Garcia. London: Pluto Press.
Panitch, Leo, and Sam Gindin. 2012. The Making of Global Capitalism. The Political Economy of American Empire. London: Verso.
Petras, James, and Henry Veltmeyer. 2016. Power and Resistance, US Imperialism in Latin America. Boston, Leiden: Brill.
Prebisch, Raúl. 1949a [2000]. O Desenvolvimento Econômico da América Latina e alguns de seus principais problemas. In Cinquenta Anos de Pensamento da Cepal, ed. Ricardo Bielschowsky, 69–136. Rio de Janeiro: Record/CEPAL.
———. 1949b [1993]. Teoría Dinámica de la Economía (con Especial Aplicación a las Economías Latinoamericanas). In Raúl Prebisch. Obras 1919–1948, Vol. IV. Buenos Aires: Fundación Raúl Prebisch.
President of the United States. 2017. National Security Strategy of the United States of America. Accessed https://www.whitehouse.gov/wpcontent/uploads/2017/12/NSS-Final-12-18-2017-0905.pdf.
Rodriguez, Octavio. 2006. El Estructuralismo Latinoamericano. México, D.F: Siglo XXI/CEPAL.
Ruttan, Vernon W. 2006. Is War Necessary for Economic Growth? Military Procurement and Technology Development. New York: Oxford University Press.
Ryner, Magnus, and Alan Cafuny. 2017. The European Union and Global Capitalism: Origins, Development and Crisis. London: Palgrave.
Sakwa, Richard. 2015. Frontline Ukraine: Crisis in the Borderlands. London: I.B. Tauris.
Serrano, Franklin. 2003. From ‘Static’ Gold to the Floating Dollar. Contributions to Political Economy 22 (1): 87–102.
———. 2013. Continuity and Change in the International Economic Order: Towards a Sraffian Interpretation of the Change in the Trend of ‘Commodity’ Prices in the 2000s. In Sraffa and the Reconstruction of Economic Theory. Volume Two: Aggregate Demand, Policy Analysis and Growth, ed. Sergio Levrero, Antonella Palumbo, and Antonella Stirati. London: Palgrave Macmillan.
Serrano, Franklin, and Ricardo Summa. 2015. Aggregate Demand and the Slowdown of Brazilian Economic Growth from 2011–2014. Washington: CEPR.
Sunkel, Osvaldo. 1970 [2000]. Desenvolvimento, Subdesenvolvimento, Dependência, Marginalização e Desigualdades Espaciais: Por um enfoque totalizante. In Cinquenta Anos de Pensamento da Cepal, ed. Ricardo Bielschowsky, 521–566. Rio de Janeiro: Record/CEPAL.
Tavares, Maria da Conceição. 1964. Da Substituição de Importações ao Capitalismo Financeiro. Ensaios sobre Economia Brasileira. Zahar: Rio de Janeiro.
Tellis, Ashley J. 2014. Balancing Without Containment: An American Strategy for Managing China. Washington: Carnegie Endowment for International Peace.
Wallerstein, Immanuel. 1979. The Capitalist World-Economy. Cambridge: Cambridge University Press.
Weisbrot, Mark. 2015. Failed. What the ‘Experts’ Got Wrong About the Global Economy. Oxford: Oxford University Press.
———. 2016. The Brazilian Coup and Washington “Rollback” in Latin America. Washington: CEPR.
Data Bases
IMF (International Monetary Fund). 2017. International Financial Statistics. Available at: http://data.imf.org/?sk=5DABAFF2-C5AD-4D27-A175-1253419C02D1&ss=1409151240976.
SIPRI. 2017. Military Expenditure Database. Available at: http://www.sipri.org/research/armaments/milex/milex_database.
UNCTAD. 2017. UNCTADstat. Available at: http://unctadstat.unctad.org/EN/.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 The Author(s)
About this chapter
Cite this chapter
de Medeiros, C.A., Mazat, N. (2019). Geopolitics, Geoeconomics, and Development Strategies in the New Millennium. In: Fernández, V., Brondino, G. (eds) Development in Latin America. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-92183-9_5
Download citation
DOI: https://doi.org/10.1007/978-3-319-92183-9_5
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-92182-2
Online ISBN: 978-3-319-92183-9
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)