A Message From the Global South

Saskia Sassen (Ralph Lewis Professor of Sociology, University of Chicago)

Her book "The Global City" has just appeared in a new edition with Princeton University Press.

The attack on the World Trade Center and the Pentagon brings home the fact that we cannot hide behind our peace and prosperity. The evidence has been growing but our leaders did not want to see it. The horrors of wars and deaths far away in the global south do not register. But missile shields cannot protect us. Powerful states cannot fully escape bricolage terrorism, nail bombs, elementary nuclear devices, and homemade biological weapons.

The growth of debt and unemployment, and the decline of traditional economic sectors, has fed an illegal trade in people directed at the rich countries. The diseases and pests of the global south are now in the global north as well: TB is back in the US and the UK, the encephalitis-producing Nile mosquito has arrived for the first time in the north. As governments become poorer they depend more on the remittances of immigrants in the north and have little interest in managing emigration and illegal trafficking. The pressures to be competitive make governments in poor countries cut their health, education and social budgets, further delaying development and stimulating emigration.

The rising debt, poverty, and disease in the south are beginning to reach deep into rich countries in the north. We can no longer turn our backs on this misery. If we dislike humanitarian reasons for addressing these issues, we should at least be motivated by self-interest.

We must now accept that markets cannot take care of everything. Governments will have to govern more. But we cannot return to the old system of countries surrounding themselves with protective walls. It will take genuine multilateralism and internationalism; radical innovations and new forms of collaboration with civil society and supranational institutions. The violence of hunger and poverty; the destruction of once fertile lands; the oppression of weaker states by highly militarised ones; persecution - all these feed a complex, slow but relentless movement towards the north. The north creates much of the damage and the north has the resources to redress some of it.

Part of the challenge is actually to recognise the interconnectedness of forms of violence that we do not view as being connected or even as forms of violence. We are suffering from a translation problem. The language of poverty and misery is unclear and uncomfortable. The language of yesterday's attacks is clear.

There are two problems in particular that must be addressed: the debt trap and immigration. The debt trap is far more significant than many in the north understand. The focus is always on the amounts of the debts, which are a small fraction of the overall global capital market, now estimated at about 83 trillion dollars. But the debt trap will eventually ensnare the rich countries through the increase in illegal trafficking in people, in drugs, in arms, through the re-emergence of diseases we had thought were under control and through the further devastation of our fragile eco-system. The debt trap is now entangling more countries and it has reached middle income countries.

There are now about 50 countries that are hyper-indebted and unable to redress the situation. It is no longer a matter of loan repayment but a fundamental new structural condition.What is often overlooked or even unknown is that many of those debts are far more extreme than those that were considered as unmanageable levels of debt in the Latin American crisis of the 80s. Debt to GNP ratios are especially high in Africa, where they stood at 123%, compared with 42% in Latin America and 28% in Asia.

The IMF asks HIPCs to pay 20-25% of their export earnings toward debt service. In contrast, in 1953 the Allies cancelled 80% of Germany's war debt and only insisted on 3-5% of export earnings debt service. These are the terms asked from Central Europe after Communism.

What can be done to pull these countries out of the trap? Poor countries need to import goods and the West will only accept payment in dollars or other high value currencies. This produces a trap that reproduces itself endlessly. One of the few solutions to neutralise the trap is to allow countries to pay in their own currencies, which would enable them to import needed goods for development and, importantly, eventually strengthen their currencies.

Few poor countries can avoid trade deficits - of 93 low and moderate income countries, only 11 had trade surpluses in the year 2000. These countries would like to export more, as is shown by the recent setting up of a new African Trade Insurance Agency supporting exports to, from and within Africa. Such specialised and focused efforts are promising. Most countries in the south are heavily dependent on imports of oil, food, and manufactured goods. They need loans, and once they have debts, interest payments and other debt servicing costs escalate rapidly and their currencies are likely to devalue further. Borrowing in the leading foreign currencies is a trap.

The government debts of poor countries, and increasingly of middle-income countries as well, need to be taken out of the global capital markets and placed in the domain of the interstate system. J M Keynes proposed this in the 40s when the IMF was created. And the IMF went in this direction with its plan to provide early financing before a crisis, rather than bailing out rich countries' investors.

The second great problem in immigration and illegal trafficking in people. The growth of debt and its attendant economic griefs have created whole new migrations. As the rich economies become richer, they become more desirable places to be and have to raise their walls to keep immigrants and refugees out. So they actually encourage the illegal trade in people.

We may think that the debt and growing poverty in the south have nothing to do with the violence in New York and Washington. But they do.

The attacks are a language of last resort: the oppressed and persecuted have used many languages to reach us so far, but we seem unable to translate the meaning. So a few have taken the personal responsibility to speak in a language that needs no translation.

(posted with permission from the author and The Guardian, where this article appeared on September 12th)