The Age of Crises: South: After The Great Financial Crisis [Part V]
By Farooque Chowdhury
03 October, 2010
The present financial crisis has increased the burden of the poor countries already overburdened with crises ranging from poor governance to consequences of immaturity and incapacity of the ruling segments/classes, poverty, and inequality. A report by the Institute of Development Studies (Voices from the South – the Impact of the Financial Crisis on Developing Countries, 2008) identified six main areas the financial crisis would make impact: decrease in exports (Bangladesh, the Philippines, and Kenya are already having the brunt), drop in portfolio and direct foreign investment (Ethiopia has already been affected), falls in exchange rates (India and the Philippines have already experienced), rise of interest rates for developing countries in global capital markets, decline in remittance from workers in crisis-torn rich countries (Ethiopia and the Philippines have started getting less), and less foreign aid (Ethiopia, Ghana, and Kenya are apprehending the trend). These will affect the “real economy” of the poor countries and reduce their growth.
Prices of a number of export products are falling (rubber, tea, coconuts, and garments from Sri Lanka) and there will be an intensification of competition. These will, on the one hand, increase the problems in the poor countries, and on the other hand, intensify conflict between the dominated and the dominant in the societies. The oppression, economic and political, on these countries is already, as Lenin told, “on a … historical foundation”, since “capital has outgrown the framework of national states” (collected works, vol. 21, p. 408). This reality takes a serious turn as the countries in the South are compelled to share the global crises in the areas of food and energy, and as there is the rise of imperialist adventures in the face of energy crisis.
[This is the 5th part of the introduction of The Age of Crisis by Farooque Chowdhury being serialized in Countercurrents.]