The "Global South" refers to a diverse group of emerging economies, primarily outside the Western sphere, that seek greater influence in global affairs and often critique Western policies. However, the Global South lacks cohesive organization. Once characterized by non-alignment during the Cold War’s bipolar world, it now navigates a unipolar, neoliberal order. During the Cold War, nations unaffiliated with the US or Soviet blocs were labelled the "Third World." Today, leadership struggles within the Global South persist, with the United States maintaining significant influence while China emerges as a formidable contender. It is useful in this context to examine the competitive leadership dynamics within the Global South amidst evolving global connections, highlighting India’s strategic approach as a model for avoiding a Cold War-era trade mindset.
Contending Leadership
Global society is increasingly polarized, divided into camps defending established institutions or advocating for new ones. As political recourse falters without a shared framework for resolving differences, persuasion—sometimes coercive—becomes the default. The post-Cold War era, following the Soviet bloc’s collapse, ushered in globalization, privatization, free markets, regionalization, and democratization. These trends challenged the North-South divide and dependency theories, integrating peripheral economies into the global system rather than isolating them.
China’s rise has significantly contested US dominance, particularly in Asia and across the Global South. China seeks to reform international institutions, rules, and laws, framing global struggles not as "democracy vs. autocracy" but as development versus containment, and justice versus power politics. Its strategic influence-building includes infrastructure support and financing, notably through the Belt and Road Initiative (BRI). From 1992 to 2020, the number of countries where China held greater influence than the US nearly doubled, from 33 to 61. Between 2000 and 2021, China funded over 20,000 infrastructure projects across 165 countries, totalling $1.3 trillion in aid or credit.
Since Russia’s 2022 invasion of Ukraine, trade flows between US-aligned and China-aligned blocs have declined by approximately 12% more than intra-bloc trade. Foreign direct investment projects between blocs have dropped by about 20% compared to within blocs, signalling economic and statistical significance. While current fragmentation is modest, historical Cold War divisions suggest that escalating geopolitical tensions and restrictive trade policies could deepen this divide.
Two future scenarios for globalization emerge: fragmentation, shifting toward localized, bloc-based trade and unilateral policies, and re-globalization, reducing barriers for marginalized economies and workers to foster resilience, inclusivity, and sustainability through knowledge diffusion.
Trade Diversion and Cold War Mentality
Realist perspectives view nations as independent actors aligning strategically, often casting a Cold War-style bloc mentality over the Global South’s aspirations. Global trade and investment remain robust, partly due to redirection through neutral "connector" countries, which benefit from geo-economic fragmentation. However, the IMF warns that fragmentation could cost up to 7 per cent of global GDP long-term.
Trade diversion in bloc-based trading replaces efficient partners with less efficient ones, misallocating resources and undermining supply chains. This increases economic dependence on dominant bloc members and stifles geo-economic potential due to misaligned geopolitical interests. Unlike the Cold War’s early years, connector countries now mediate between blocs, adding resilience to global trade but failing to enhance diversification or reduce strategic dependencies.
Resisting fragmentation is critical, as it risks supply chain fragility and economic losses. Re-globalization offers a better path, integrating peripheral economies into deeper, less concentrated markets. Diversification mitigates interdependencies and trade diversion, a priority amid shocks like the COVID-19 pandemic, the Ukraine conflict, climate-related trade disruptions, and geopolitical tensions. Global trade’s constant evolution reflects an ongoing state of re-globalization, adapting to shifting relationships and circumstances.
Realism for the Global South
The Global South must navigate a world order balancing multipolarity with bipolar tendencies, where China challenges US dominance. Regional rivalries—India and China’s Himalayan border disputes, Ethiopia and Egypt’s Nile River conflicts, and Saudi Arabia and Iran’s competition in the Persian Gulf—underscore realism’s relevance. Principles of anarchy, self-help, and power balancing guide strategic decision-making.
In this complex landscape, the Global South has shifted from non-alignment to multi-alignment, prioritizing strategic flexibility. India exemplifies this approach, engaging in China-led alliances like BRICS, SCO, and AIIB, while participating in US-led initiatives like QUAD and partnerships with other powers. This multi-alignment grants India strategic latitude, avoiding Cold War-style constraints. It’s adept hosting of the G20 summit, bridging ideological divides, positions India as a mediator between rival blocs. India’s model offers a blueprint for Global South nations to balance influence and autonomy.
Conclusion
The leadership contest between major powers has intensified a bloc mentality within the Global South, fostering trade diversion and threatening global trade and GDP growth. This rivalry weakens supply chains and increases reliance on dominant nations, hindering geo-economic potential. Realist principles of anarchy, self-help, and power balancing remain essential for navigating these challenges. India’s multi-alignment strategy, skilfully balancing rival blocs while fostering mediation, provides a model for the Global South. By embracing re-globalization and diversification, these nations can resist fragmentation, strengthen resilience, and secure a more inclusive global economic future.
About the Authors
Dr Ajay Kumar Mishra, Assistant Professor, teaches International Political Economy at Lalit Narayan Mithila University, Bihar, India.
Dr Shraddha Rishi is an Assistant Professor, who teaches Government and Politics in South Asia at Magadh University, Bihar, India.
