Meeting in recent days in Havana, the group of 77, which now includes 134 countries, wants a new global redistribution of wealth. A redistribution that would be less unfair for them. In fact, the Group of 77 recites the old refrain of the “new international economic order.”
The group’s leaders brought up the old theses from the 1960s about unequal exchange. These theories have some merit. They argue that developing countries are systematically disadvantaged in international trade.
Basically, this disadvantage would come largely from the difference between wages paid in rich countries and those paid in poor countries. Wages in poor countries would not allow workers in these regions to easily acquire goods produced in rich countries.
The poor became richer
Except that since then, several countries that were previously very poor, such as Singapore, South Korea, Japan or certain regions of China, have managed to become richer and even pay higher wages than in the United States or Europe.
Why have some countries become richer while others have stagnated or even become poorer? Part of the answer lies in the competition and corruption of the elites of these countries. Another part of the answer lies in the resources available to countries, as well as the nature of the regimes in place.
It is easier for liberal democracies to fight incompetence and corruption than for authoritarian regimes with communist tendencies.
Blame America
But the real reasons for the imbalances in the distribution of wealth between countries do not matter. The incompetent and corrupt elites of many countries still prefer to blame evil Western capitalists rather than themselves.
Chinese leaders understand this blame dynamic perfectly.
Therefore, they have taken the lead in the ’77 movement and promise the world to the countries that will follow them.
Yes, but the new international order is already here. In this new order, China is the richest country. In purchasing power parity, it is worth $26 trillion, while the United States comes in second place, with a GDP of $21 trillion.
China is also the largest trading partner of most countries. It is the first producer of patents.
Isn’t it curious that in an economic order that is supposed to put poor countries at such a disadvantage, China has risen to first place?
The Havana summit is actually a great farce that seeks to isolate the United States and its allies in international institutions.
If unequal trade persists in the world, China has become the main source.
