Alex Lo
SCMP Columnist
My Take
by Alex Lo
My Take
by Alex Lo

As always, the deafening silenced suffering of poor countries

  • Mainstream economics, liberal politics and news media have long colluded to silence and ignore poor nations. The West’s weaponisation of the world economy against Russia and its devastating collateral fallouts on the global south is just the latest example

– “I leave aside the deeper concern that the primary role of mainstream economics in our society is to provide an apologetics for a criminally oppressive, unsustainable, and unjust social order.”

– “Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?).”

Jeremy B. Rudd, (US) Federal Reserve Board, September 23, 2021

That is from footnote No 2 of his paper. And Rudd makes it clear that his opinions do not necessarily reflect those of the US Fed. In fact, I am absolutely sure they do not, at least when it comes to the “apologetics” of neoliberal or neoclassical – read “mainstream” – economics.

But Rudd is exactly right. And it is not just “mainstream economics” but also mainstream liberal politics and the mainstream news media. The poor and poor countries generally do not matter, and that has long been the case with mainstream Western political and economic discourses that continue in their “criminally oppressive” way today.

In a 2020 paper, International Monetary Fund researchers found that only 1.4 per cent of papers published in the top 10 economics journals focused on poverty in the previous 10 years. In other words, the world’s most prestigious and influential economists don’t give a hoot about poverty and the poor. And that is a statistical conclusion. They may personally care, of course, but it would not advance their career and reputation to write about it.

That is also why the global south rarely factors in the dominant public discourse of today so far as the war in Ukraine is concerned, even though the lives, not just livelihoods, of tens of millions are being affected directly by the global economic fallout of the war.

(On the three-century history of this destructively self-serving way of thinking of classical economics, enlightenment philosophy and British-inspired liberal free-trade rationalisation, see Jag Bhalla’s new brilliant essay, “Free market genocides: the real history of trade”, in “One reason this hushed-up history matters is that even today economic ‘rationality’ and plunder often remain partners in crime,” he wrote.)

Poor countries don’t matter

Why should they matter when the liberty of Ukraine and security of the West are at stake, however those sacred-sounding words are to be defined or understood? Or as Humpty Dumpty said imperiously: “When I use a word, it means just what I choose it to mean – neither more nor less.”

Here is a typically arrogant specimen from the latest edition of that august publication, The Economist: “Peddling Putin’s piffle – How Russia is trying to win over the global south. Its propaganda is deceptive, multilingual and well-funded.”

Really, seriously? Developing countries in the global south do not need Russian propaganda to realise that the longer the war drags on, the more suffering and privations they can expect. Whatever they may think about the rights and wrongs of the war itself, why should they want to suffer just so the war can last until the West gets the results it wants?

As early as April, the United Nations had already warned: “The fallout from the war in Ukraine could dramatically worsen the economic outlook for developing countries already grappling with debt financing related to the Covid-19 pandemic.”

Soaring US dollar sends Asian currencies reeling – but not Singapore’s

The warnings became all too real by June. In a follow-up report, the UN Global Crisis Response Group said the war “has exacerbated a global cost-of-living crisis unseen in at least a generation”.

Since Russia’s invasion of Ukraine on February 24, the UN group found that 60 per cent of workers had lower real incomes globally today than before the pandemic, and 60 per cent of the poorest countries were in debt distress or at high risk of it.

The report identifies three main “transmission channels [that] generate these effects “on developing countries”: rising food prices, rising energy prices and tightening financial conditions.

That is because unlike rich or developed countries, poor and middle-income ones cannot borrow at cheap rates and must use large chunks of their GDP for recurrent debt financing. The rising US dollar under tightening monetary policy also causes their currencies to depreciate quickly, while most of their debts are usually priced in the greenback.

Antonio Guterres, the UN chief who chairs the group, said that “the war’s impact on food security, energy and finance is systemic, severe and speeding up”.

He said the war “is threatening to unleash an unprecedented wave of hunger and destitution, leaving social and economic chaos in its wake”.

In yet another depressing report in July, the UN Development Programme estimated 71 million people worldwide were experiencing poverty because of soaring food and energy prices driven by the conflict.

More than two-thirds of the 166.8 percent increase in natural gas over the 12-month period ending on May 31, 2022, has been recorded since the start of the war, that is, over just three months. Among countries most exposed are: Armenia and Uzbekistan in the Caspian Basin; Burkina Faso, Ghana, Kenya, Rwanda and Sudan in Africa; Haiti in Latin America; and Pakistan and Sri Lanka in South Asia.

World food crisis could get even worse as India restricts rice exports

Unsurprisingly, many of those countries also experience violent protests and political instabilities, which the US and the Anglo-American media invariably offer moral or even material support as fights for democracy and freedom, thereby contributing further to the unrest and death tolls.

Despite the initial votes on UN resolution against the Russian invasion, the majority of the world’s nations do not support, or take part in, the West’s proxy war against Russia from the supply of weapons to unprecedented sanctions that target the entire Russian population.

You know what guarantees to prolong a war or civil war? Powerful outside military backers with virtually unlimited funds and weapon supplies. But why should economically devastated and politically unstable developing countries support the West just so the war can drag on longer and longer? For justice? Whose justice?

You can support continuing the war for Ukraine, the United States and the European Union all you want. Just don’t dismiss others who don’t share your moral certitude as knaves, morons or ideologues. They may not be as uncritical and “brainwashed” as you think; and they may not have your economic and physical security to have the luxury to be the war’s cheerleaders.

Rather, they may, with very good reason, think that you are the type of “bad Samaritans” who are happy to prolong their suffering while taking the moral high ground.