Challenges and possibilities for industrial sovereignty in the Global South

The third day of the IV Dilemmas of Humanity Conference began with reflections on the reality still marked by the profound asymmetries of the international division of labor inherited from colonialism and reflection on the urgency of repositioning industrial policy, a strategic axis for the sovereign development of the nations of the Global South.

To address these challenges, the morning's debate featured Esther Dweck, Minister of Management and Innovation in Public Services in Brazil; Surajit Mazumdar, professor at India’s Jawaharlal Nehru University; Josefina Morales, researcher at UNAM; and Lyu Xinyu, president of the International Communication Research Institute at East China Normal University. Moderated by Facundo Barrera Insua (Argentina), a researcher at the University of La Plata, the panel discussed how to break the dependence on raw material exportation without reproducing predatory models, and how to transform industrial policy into an effective instrument of technological and social sovereignty for the nations of the Global South.

Industrial policy in Brazil

The panel began with an analysis by Esther Dweck, who gave a brief presentation on industrial policy and highlighted the current context, marked by protectionist measures such as Trump's taxes. According to her, the moment represents an opportunity for developing countries, as the dispute for global hegemony opens up space for building new economic relationships in the face of the break with the liberal agenda.

“At a time when a world power is clearly saying that we can no longer live in a totally liberal world, this gives more space to developing countries, allowing them more freedom to discuss. And, obviously, that doesn't mean it's easy to do, but it's a good space for reflection on how to use this opportunity in a more strategic way, including strategic alliances to make new leaps,” she says.

Dweck also highlights the industrial heterogeneity in the Global South and the challenges facing the countries, with their different industrial trajectories. “While we, as Latin America, are losing a lot of ground in industrialization, East Asia is accelerating its productive capacity.” In the case of Brazil, she also recalls that the country reached its industrial peak in the 1970s, followed by a purposeful stagnation, which prioritized the maintenance of a consumer market for imported machinery to the detriment of autonomous technological development.

The minister also reflects on the causes of Brazilian deindustrialization and its legacies, from the conditioning factors of the foreign debt crisis in the 1980s - with its macroeconomic policies of high interest rates and an appreciated exchange rate - to the commodities boom of the 2000s, which deepened dependence on primary resources, as well as criticizing the dismantling of the national productive park, where “companies are bought to close down, not to industrialize”.

“Today, we work a lot with the risks of developing countries being left behind in this process, since their capacity to deal with these changes is very uneven... When Trump resorts to tariff measures, he clearly does so with the aim of changing the tone and getting countries to negotiate bilaterally, completely breaking with multilateralism. But what we're seeing is the countries shifting in this correlation of forces, for broader policies.”

Unevenness in the Global South

Surajit Mazumdar (India) contributed to the debate by explaining how industrialization has been both the engine of capitalist development and the vector of profound global inequalities. Like the others in the discussion, he reflected on the historical process that has created an international division of labor, concentrating manufacturing in Western countries and Japan, while the rest of the world remains a supplier of commodities.

According to him, this disparity only began to change after the Second World War, with the process of decolonization and the emergence of the socialist camp. “The rapid industrialization of the First World means that its supremacy is maintained until the end of the 20th century.... This is one of the pitfalls of globalization: on the one hand, the balance of class forces shifts, even in favor of capital, but on the other, you have the emergence of a historical interconnection with the intensification of the exploitation of workers in the Third World,” he says.

According to Mazumdar, this transition is still taking place unevenly - concentrated mainly in East and Southeast Asia, with China being an emblematic case. Meanwhile, Latin America, Africa and even South Asia (with the relative exception of India due to its size) maintain a marginal share in global manufacturing value added, revealing how historical asymmetries persist even in this new scenario.

“There is a distinct geographical concentration even in this shift towards the Global South in the reordering of world manufacturing. If you look at trade, you'll see that Latin America and Africa can't break away from the traditional location of international trade. What is changing is that the destination of these exports (of primary commodities) is shifting less towards the US and more towards Asia, where manufacturing is growing.”

Mazumdar reinforces the idea that only a portion of Asia - specifically the East and Southeast Asian regions - has managed to integrate itself competitively into the new global productive architecture, generating trade surpluses and breaking away from its traditional peripheral role, and this transformation contrasts radically with the situation in the rest of the Global South, where countries remain stuck in historical patterns of international insertion based on the export of commodities and with limited added value.

At the end, the professor reflects on the case of China, whose industrial success is due to specific historical conditions, but warns that even China does not completely break with the unequal structures of the global system, having inserted itself in specific (and still subordinate) positions in transnational value chains."This analysis reveals how the current productive reordering, far from democratizing industrial development, reproduces and deepens regional asymmetries within the Global South itself.”

Chinese history and dichotomies

In her intervention, Xinyu Lu began by presenting the different interpretations of the history of Chinese industrial policy and development, which oscillate between characterizing the country as an “exceptional case of socialism” or reducing it to “nationalist capitalism”. Lu argues that these dichotomies can be seen as an extension of Cold War ideology in the politics of the 1990s, subtly incorporated into theories of globalization and modernity.

“When China is labeled as “authoritarian” by mainstream Western media, politicians, and scholars, and is portrayed in a binary narrative of good/evil, light/dark in contrast to Western ‘liberal democracy,’ it signifies that the global ideological struggle has not disappeared with the end of the Cold War but continues to the present day.”

In this context, there is also a need to analyze the agrarian question and rural transformations within the framework of China's revolutionary history and its project of “modernization with Chinese characteristics”. Lu concluded by arguing that China's development path emphasizes a combination of independence and openness to the outside world, seeking to achieve industrialization and primitive accumulation while protecting its sovereign independence and facing the challenges posed by foreign trade restrictions and sanctions.

Today, China is also facilitating infrastructure development through the “Belt and Road Initiative” to support industrialization in developing countries, helping them overcome difficulties in the process of primitive accumulation. This situation is reminiscent of China’s own experiences in the 1950s, when it overcame analogous difficulties with the support of its socialist system and cooperation with the Soviet Union.”

The maquiladora system

In the last talk of the morning, Josefina Morales (Mexico) closed with an overview of the industrial revolutions and how they have meant a reorganization of world economies. “In the 60s and 70s, the processes fragmented and dispersed around the world. One of these fragments, the weakest, is labor that generates little added value, the maquiladora.”

This model of industrial production involves the processing or assembly of products in a country, characteristic of developing countries, where companies assemble products from imported components. The maquiladoras, or parts for export factories, are often associated with global value chains and, in the case of Mexico, they have emerged as a way of integrating the Mexican economy into the US market, being strongly promoted by the World Bank.

“Since the 1990s we've seen maquiladoras in Vietnam, the Philippines, Bangladesh, among others. This process does not respond to our industrialization processes, but is part of the US economy. Later, this idea was strengthened with the free trade agreements (FTAs), which were summarized in the maquiladora of the year 2000,” says Morales. 

The author mentions that the majority of the workforce in the maquiladoras, especially in the beginning, is made up of women, but that this workforce becomes more balanced between men and women, especially with the rise of maquilas for automotive parts. The uneven pattern of Mexican industrial development is also a point made by Morales, who highlights the deep crises and a productive reconversion dependent on US economic cycles. 

Although the maquiladoras only represent a sixth or tenth of Mexico's industrial process, their extractive model conditions the country's entire industrial dynamic. This model, according to the expert, reveals a paradoxical “industrialized deindustrialization”: Mexico is advancing in production volume, but regressing in technological training and job quality, consolidating itself as a cheap labour platform for the global chains run by the US.

Finally, Morales says that the question today is how to develop an alternative form of industrial development with a national perspective. Under the administration of López Obrador, there has been an increase in the minimum wage, while the administration of Claudia Sheinbaum, the current president of Mexico, advocates the creation of industrial centers that promote well-being, despite the fact that these territories are under the strong control of capital. For Morales, the challenge lies, on the one hand, in internal aspects, which are more structural and productive, and, on the other, in how to confront the offensive of former President Trump, which is fascist in nature.

“The construction of an industrial development alternative is part of a larger perspective that must include total and integral national development, the construction of a policy of industrial complementarity with Our America, a global diversification of our foreign trade and the participation of other capitals, apart from the US, in economic activity, particularly in the manufacturing industry.”