The BRICs, the South and the International Economy, 1992 to 2007

Abstract

The last chapter argued that the rise of the South has less to do with the adoption of neoliberal policies than it does with ‘state capitalist’ policies based on guiding the market. However it was also argued that we cannot fully analyse the rise of the South without examining the international economy. This chapter’s focus is therefore on the South in the international economy from the early 1990s through to the eve of the Great Recession in 2007–08. It does so in three sections. First, the emerging markets boom and the globalization of the 1990s is outlined. This section examines the foreign investment boom in this period, alongside the rise of manufacturing, in the developing world. But it also investigates the darker side of the era, suggesting that the boom was exaggerated and that, albeit with some exceptions, it was also an era of relatively slow growth, and regular financial crisis. This latter point was most clear when the dot-com boom in the US came to an end in 2001, and the policy response to this in the US was central to the changes in the 2000s which gave rise to talk of convergence and the resurgence of the South. This is discussed in the second section, which examines the specific international conditions which facilitated the boom in the 2000s. The third, more analytical section, focuses on the reality of the boom, but also its limits, suggesting that the conditions that facilitated it are unlikely to be repeated, and also that these conditions were factors that led to the Great Recession in 2008–09, the subject of the next chapter.