Question

An undercurrent of the world’s major problems is the conflict of interest between developed and developing nations, such as in economic development and the politics of the global environment. Give specific examples of how this conflict is embodied in world politics and economics. How is this tension likely to shape the future of the world?

Answer 1

1. The world economy has been witnessing a conflict of interest for a very long period of time, the examples of how such conflicts are embedded in world politics and economic relations may include the following-

A. The globalisation wave of the twentieth century benefited the developed western world more than developing countries. This has made the developing countries complain that they have been a net loser in the globalisation. Moreover, in recent past when the developing countries such as China and India started gaining from the globalization, the western world started retreating to protectionism. This has created a conflict of interest in the global order.

B. The western European countries and USA favoured rule based trading regime and multilateral institutions in the post world war-II era, however, developing countries complain that the multilateral institutions such as IMF have not been fair to them due to unequal say in decision making. They also complain that developed countries impede the functioning of institutions such as WTO which has equal voting power for each member. Thus, the functioning of the multilateral institutions such as WTO and IMF have been affected by divergent interests.

C. Technology and capital are the foundations of the developed western world, the developing countries have been insisting on transfer of technology to advance their industrial development, however, the developed world has not shown much interest in this area, in turn it has become an area where there is a conflict of interest.

D. Natural Resources such as hydrocarbons and natural gas have been found in various countries of south America and Middle East, the developed countries have desired the prices of fossil fuels and natural gas to be low to ease mobility in their countries. On the other hand, developing states of South America and Middle East have tried to maximize prices through formation of cartels. This has resulted in a conflict of interest.

E. Since 1980s there has been a global discussion on finding solutions to the problem of global warming and associated challenges to ecosystems. The developed world have been advocating for a common and equal responsibility. However, the developing countries argue that it is a common responsibility but with differentiated liabilities. Their main reasoning is that developed countries have polluted the environment through establishing industries since the mid of the eighteenth century and hence they should bear more responsibility and provide finance to them to mitigate the effects of global warming. This has apparently caused a conflict of interest.

2. These tensions are inter alia, likely to result in the following outcomes-

A. Increasing trade wars and protectionism such as the one going on between USA and China.

B. Diminishing role of the multilateral institutions such as WTO and IMF.

C. Increased fight for protection of intellectual property rights and which is likely to affect diffusion of technology.

D. Deterioration of natural environment due to increased global warming.