Gadani shipbreaking yard , near Karachi (image by Michael Foley)
Gadani shipbreaking yard , near Karachi (image by Michael Foley)

We had a wonderful lecture in class last night from the CEO of the US Studies Centre, Prof Geoffrey Garrett. The topic was “Why study the United States”, and Prof. Garrett chose to frame his answer to the question in the financial crisis, and what it indicated about the role of the US in the world.  One of the things he spoke about is how the last wave on the financial crisis will be the developing world.

He specifically mentioned this article by Niall Ferguson (whom I am fairly certain I’ve watched on Bloggingheads a few times).  In it, he outlines the dangerous combination of factors that often lead to political upheaval, and how all three are present in abundance around the globe right now.

Prof. Garrett said “If you were worried before [about political unrest around the globe], you really need to be worried today.”  He explained that others have predicted a 90% reduction in investment in the developing world.

That’s right.  90% reduction.

You can imagine the consequences of this.  Already unstable governments will be faced with even greater levels of poverty, and declining opportunity.

The effects of this crisis on the first world are fairly clear.  The trajectory may be debatable, but we have some notion of how it might be.

But the developing world?

He gave the case of Pakistan.  Their economy is plummeting (his word, not mine), and they are on the brink of Civil war, if not already.

Regimes that were being held together by thin threads risk coming apart entirely.

This is pretty much just scary.  There’s not much we can do, except buy, buy, buy, especially imported goods, and hope others around the globe do the same.  And even that may not be enough.

5 Responses

  1. I disagree with this:
    “There’s not much we can do, except buy, buy, buy, especially imported goods, and hope others around the globe do the same. And even that may not be enough”

    What you are suggesting MIGHT be the right thing to do if one wants to maintain the current economic system, which devalues human life, the environment and social elements. It holds the GDP as the epitome of all that is right.

    However perhaps the only way things can change is through upheavel. The collapse of governments and civil war seem to be one of few successful methods of changing the economic system.

    So while I agree that what is happening, and what is most likely inevitable, is horrifying and scary and will deeply affect us all, I don’t think buying is the solution.

    Incidentally, I read in New Scientist today that a 4 degree temperature increase will most likely result in the human population reducing to around one billion. I am sure that the economic crisis will be assisting that figure.

    1. I think our divergence on the value of human life is long-established, LOL. My primary interest in environmental reform et al is the very great risk climate change poses to people across the globe. I’m all in favour of negative population growth, but I would prefer to see it done through cultural change, which, granted, may take longer than we have.

      I also have no problem with globalization. I think it’s inevitable, and rather than fighting it, we should work to have global laws governing labour, the environment and banking- among other things. Not global governance, but some set of standards across locally-enforced laws around the globe.

      I agree buying isn’t the solution- I was attempting to be facetious (though I don’t think my tone really conveyed that). Direct investment in the developing world would be good (yay for Kiva), and not enforcing protectionist policies in economic stimulus would also help. Those of us in the west may suffer, but are unlikely to starve or die as a direct result of the crisis. You can’t say the same of those in the developing world, and we should take that into account before enacting protectionist policies.

  2. Again, I disagree :p People shouldn’t live where nature can’t support them, protectionism partially conveys this (in an awful modern way). I think that populations will stabilise at the natural capacity of the land – unfortunately for a lot of people in hostile environments, which tend to be developing countries. I’m fairly sure the correlation isn’t a conincidence.

    1. I could deal with that, as long as western countries opened their borders to significantly greater immigrations while enacting protectionist policies. Not the way I’d like to do it, but if you’re going to shut down your borders economically, you shouldn’t lock those in the developing world into permanent poverty.

  3. Oh if it makes you feel any better, the only ‘western’ country which will be inhabitable in a 4 degree warmer future is NZ. Oh and Canada. More likely ‘westerners’ will get closed out of countries they have treated badly for many years. Like Russia, China, South America …

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