The essence and ways of solving the problem "North-South"

In our time, as never before, problems have arisen sharply, without the solution of which the further progressive movement of mankind is simply impossible. The economy is only a part of human activity, however, it is mainly from its development in the 21st century that the preservation of peace, nature and people's habitat, as well as religious, philosophical and moral values depends. Especially the importance of global problems increased in the second half of the 20th century, when they began to significantly influence the structure of the world and national economy.

Territorial Section

Before delving into the essence of the North-South problem, let's talk about the formation of global economic ties. By the beginning of the 20th century, the world economy as a whole had already formed, as most countries of the world were involved in trade relations. The territorial section had ended by this time, and two poles had formed: the industrialized states and their colonies - raw materials and agrarian appendages. The latter were involved in the international division of labor long before national markets appeared in them. That is, participation in world economic relations in these countries was not a need for their own development, but a product of the expansion of states developed industrially. And even after the independence of the former colonies of independence, the world economy, thus formed, retained for a long time the relations between the periphery and the center. Hence the problem "North-South" originates from the current global contradictions.

Basic concepts

So, as you have already understood, the economic interaction of the developed countries with the developing ones was not built on an equal footing. The essence of the global problem "North-South" boils down to the fact that the backwardness of agrarian states is potentially dangerous both at the local, regional, interregional levels, and in general for the world economic system. Developing countries are an integral part of the world economy, therefore their political, economic and social difficulties will inevitably manifest themselves and already manifest themselves outside. Among the concrete evidence for this can be noted, for example, large-scale forced migration to industrialized countries, the spread of infectious diseases in the world, both new and those already considered defeated. That is why the global problem "North-South" today is considered one of the most significant.

In order to overcome the gap in the level of economic and social progress between developed and developing countries, the latter now demand the first possible concessions, including increased inflow of capital and knowledge (most often in the form of assistance), expanding access to their own markets for industrial countries, And so on.

International economic order

Over the solution of the North-South problem in the world, thought back in the second half of the sixties of the 20th century, when a broad wave of decolonization took place, the concept of a new international economic order was developed and the movements of developing countries began to establish it. The key ideas of the concept were as follows:

• First, to create a preferential regime for participation in international economic relations for backward countries;
• And secondly, to render assistance to developing States on a predictable, stable basis and in volumes that correspond to the scale of economic and social problems of these powers, and to alleviate their debt burden.

Thus, the agrarian countries expressed their dissatisfaction with the system of international trade, when the revenues from the export of processed goods were higher (because of the large added value in these goods) than the profit from the export of raw materials. Developing states interpreted this state of affairs as a manifestation of a nonequivalent exchange. They saw the solution to the problem of the North and the South in providing adequate assistance from developed countries, and this idea was linked directly to the economic and social consequences of the colonial period and moral responsibility for these consequences of the former metropolises.

The Fate of Motion

By the mid-eighties of the 20th century, the movement for the establishment of a new economic order had achieved some success. For example, the agrarian states approved their sovereignty over national natural resources and achieved that it was recognized officially, which in certain cases, for example, in the energy situation, contributed to the growth of export earnings in developing countries. As for the North-South problem as a whole, a number of positive results have been achieved. Thus, the severity of debt difficulties was weakened, the sources of international assistance for the development of states expanded, the principle of a differentiated approach to the regulation of external debt at the country level was adopted, depending on per capita GNI.

Causes of defeat

Despite all the positive moments, over time, the movement began to lose ground, and by the end of the eighties it actually ceased to exist. There are many reasons for this, but there are two main reasons:

• The first is a significant weakening of the unity of the backward states themselves in defending their demands, which was caused by their rapid differentiation and the allocation of such subgroups as the oil exporting countries and the newly industrialized countries.
• The second is the deterioration in the negotiating positions of developing countries: when the developed countries entered the postindustrial stage, the opportunity to apply the raw material factor as an argument on the way to solving the North-South problem was significantly reduced.

The movement for the establishment of a new economic order as a result was defeated, but global contradictions remained.

Solution of the problem "North-South"

Currently, there are three ways to overcome the imbalance in the economic relations of developing and developed countries. Let's talk about each of them in more detail.

1. The liberal approach

His supporters believe that the inability to establish a modern market mechanism in national economies is hindering the agrarian countries from overcoming backwardness and occupying an international division of labor. According to the liberals, developing countries should stick to the policy of liberalizing the economy, ensuring macroeconomic stability, and privatizing state property. This approach to the solution of the North-South problem in recent decades is quite clearly visible in multilateral negotiations on foreign economic issues in the positions of a large number of developed countries.

2. Anti-globalization approach

Its representatives hold the view that the system of international economic relations in the modern world is unequal, and the world economy is heavily under the control of international monopolies, which enables the North to actually exploit the South. Antiglobalists, arguing that developed states knowingly seek to reduce raw material prices, while at the same time overestimate the value of processed goods, require fundamentally to reconsider the whole system of world economic relations in a strong-willed way in favor of developing countries. In other words, in modern conditions they act as ultra-radical followers of the concept of a new international economic order.

3. Structuralist approach

His adherents agree that the current system of international economic relations creates serious difficulties for developing states. However, unlike the supporters of the anti-globalization approach, they recognize that it will not be possible to change the position of these countries in the international division of labor without structural transformations in the agrarian states themselves, increasing their competitiveness, ensuring the sectoral diversification of national economies. In their view, the current system of economic relations should be reformed, but in such a way that the changes made do not facilitate the implementation of reforms in developing countries.

At the talks, supporters of this approach insist that the global North-South problem can be solved if developed countries take into account the objective difficulties and peculiarities of the economic growth of developing countries and expand trade preferences for them. In modern realities, it is precisely such a balanced approach that is gaining increasing recognition, and it is with this that the prospects for solving the problem of relations between the North and the South are connected.