Opinion article by: David Ricardo Murcia*. (dmurcias@gmail.com )
*Political Sciences student at Universidad EAFIT, Colombia.
One crucial component of development paths in the 21st century has been the share of a country in the value given to a product during its process in a global value chain (GVC). Using the formers modes of production Transnational Corporations (TNC) distributes among various nations the process of production seeking lower costs according to the characteristics of the nations, id est: TNCs assemble each part of a final product in the state where it is cheaper. It, indeed, hazards developing countries because most of the value will be given to the economy that commercializes the final product. The remaining value splits in each hosting nations according to the step of the production in which it participates. According to the UNCTAD WIR for 2013, nations involved in the primary sector of the economy gain a little percentage of product profit that comes from their commodities.
A way to take advantage of the GVCs, and, therefore, dodging
the obstacle described above, is to canalize or specialize a nation’s economy
in a sector that gives a bigger share of the value added in the process. These
could be seen in the reason why Asian nations gain better revenue of the TNC
operations than the Latin-American or African countries, as for the first got
involved in high added sector such as technology or high profile services,
while the second are stuck in the extraction and production of commodities. One
should think that, it will be a simple problem to solve, but it is not like a
state could easily change its current economic activities, more, if it is taken
into account the political culture of each region.
Let’s take Singapore and Colombia to make the comparison.
Singapore took a clear highway to development since the independence from its
metropolis. In the head of Lee Kuan Yew, who governed during 25 years
(1965-1990), the nation torn itself into the most important merchant port of
the South-East Asia and therefore to a prosperous economy. After the Yew
Singapore government there has been just two political authorities: Goh Chok
Tong with 14 years in office (1990-2004), and Lee Hsien Loong since 2004, who
have nothing but continued the same path. This shows a scenario of a
politically stable country, although a soft-autocratic, nevertheless, a highly
competitive country in the global panorama.
By the other hand, there is Colombia. Since its independence
from the Spanish Empire, the Latin-American country has seen no continuity or
establishment of a state policy. Each president who climbs in office tries to
impose its own view to a very skeptical political class and its interests. That
makes every policy proposal a government policy; with no continuity in the
future administrations. The former instability turns into a non-specific
economy in land with high capabilities to exploit. That is why the various
sectors with growth potential can be easily weakened by the lack of
institutional support. There was, for sure, a big deal with coffee, minerals,
or oil, but there were no state policy giving a stable and endurable frame to
any sector to thrive. But that policy instability through history takes place
in what could be described as a democratic environment, where each class has,
successfully or not, fought for their rights.
The comparison should be extended, but the space is short.
In a gross résumé, the former analysis left bitterness in the mouths when
it suggests a question for how patience should a democratic society (like the
Colombian) be with democracy, if a soft-autocratic government has given such
good revenue to the Singaporeans. Or how should we arrange the political system
to give policy and economic stability so we could get a better deal out of the
TNCs and the current dynamics of GVCs..
References
Le Monde Diplomatique. (2012). El atlas geopolítico
2012. Valencia: UNED.
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