Courtesy Reuters

The dramatic events in Iran and Afghanistan during the past year would seem to assure that East-West relations will remain the central concern of U.S. foreign policy as well as a heavily influential factor in all other arenas of U.S. foreign relations. The Carter Administration's return to an East-West security rationale for the foreign assistance programs which were sent to Congress in February is highly suggestive of future trends.

However, despite the all too obvious East-West implications of events in the "arc of crisis," these same events raise equally important questions about what we now call North-South relations; that is, relations between the wealthy, industrialized countries of the non-communist world (the "North") and the countries of the so-called developing world (the "South"). The ever-growing potential for the interplay of these two axes in world politics has been clearly demonstrated in recent months. From the September 1979 Havana Conference of the Nonaligned Movement to the November and January 1980 votes on Iran and Afghanistan within the United Nations and the January 1980 Islamabad Conference, it has become clearer than ever before that the nations of the South-as a whole and in various constituent groups-represent a diplomatic entity capable of independent actions which can significantly influence an ever-broadening range of U.S. foreign policy objectives.

Properly analyzed, the recent events in the Middle East should lead to a serious reconsideration of the present strained and tenuous relationship between the United States and the developing world. Yet the record of the past decade leaves no room for optimism, and the assertion of Realpolitik priorities in the Middle East may well add further impediments to a fundamental reexamination of North-South relations.1

The complete absence of such a reevaluation throughout the 1970s helps to account for much of the conflict between the countries of the Organization for Economic Cooperation and Development (OECD) and the developing countries during that decade. Notwithstanding all the talk of a shift in the North from a policy of "confrontation" to one of "negotiation," Northern responses to Southern initiatives in the dialogue of the late 1970s remained fundamentally negative. Led by the United States, the North continued to reject almost all Southern proposals without engaging in serious negotiation, and seldom, if ever, presented alternative proposals on its own initiative.

In short, U.S. policies toward the South have been inappropriate and, as recent events suggest, would be even more inappropriate as guidelines for future policy. Continued postponement of a significant reorientation of U.S. foreign policy toward the South is becoming costlier with each passing year.

II

It is increasingly misleading to equate North and South with rich and poor countries, industrialized and nonindustrialized countries, developed and underdeveloped countries. Each grouping contains states of enormous diversity by all economic measures. Some of the world's richest countries in per capita income terms are now "Southern," and many countries which continue to identify themselves with the South now contain very sophisticated industrial sectors with rapidly growing competitive export capacity. Indeed, the economic "gaps" growing most dramatically in the past decade have not been between the North and the South, but rather within the South itself-between the oil-rich and the industrially developed countries and the vast majority of their predominantly poor and significantly less industrialized diplomatic partners.

North-South problems often reflect the economic issues most dramatically catalogued by the South in its call for a New International Economic Order (NIEO) at the Sixth Special Session of the United Nations General Assembly in 1974. However, while economic issues remain a central ingredient, they are only one of several fundamental elements in the North-South conflict. Like "the North," "the South" is a label given meaning not by the degree to which those countries share economic characteristics but by the decision of those countries to act as a diplomatic unit coordinating a large measure of their international activity. Properly used, the label "South" applies to a readily observable process in today's international politics, and not to an analytical categorization of countries based on relative levels of economic development. And it is this bloc diplomatic behavior, even more than the related but distinct issue of economic development, which has become the fundamental challenge to effective U.S. foreign policy formulation in the coming decade.

The process of Southern policy coordination over a broad range of diplomatic activities increased rapidly during the 1970s, in large part reflecting the strengthened institutional capabilities of the two organizations that represent Southern countries when they act as a unit in international relations (and create the aggregate North-South conflict), namely the so-called Group of 77 (G-77) and the Nonaligned Movement (NAM). The former organization's membership now includes close to 120 countries, while the latter embraces 93. Both are increasingly heterogeneous, with many tensions and the potential for disintegration always present. But these are held in check by a shared perspective on present North-South relations and by shared goals in the global arena which have very deep historical roots generally overlooked by Northern policymakers.2

The two most relevant shared perspectives are (1) that present international institutional structures (e.g., the General Agreement on Trade and Tariffs [GATT] and the International Monetary Fund [IMF]) and the political/economic processes governed by them are deeply biased against developing countries in their global distribution of income and influence; and (2) that major trends in international political and economic relationships are steadily increasing the relative strength of Southern countries, enhancing their bargaining power in international relations. The shared goal, basically "revisionist," is an increased capacity on the part of Southern states to achieve higher levels of political influence and economic welfare in international relations.

The most prominent Southern goals, to be found in the G-77's demands presented at the Sixth and Seventh Special Sessions of the U.N. General Assembly and at all recent United Nations Conference on Trade and Development (UNCTAD) meetings, have come to be called "structural reforms." They represent a blend of political, economic and institutional objectives. Some reforms would change the operation of the international economic system, as in proposals for an "Integrated Programme for Commodities" to raise and stabilize commodity prices; for Northern commitments to lower barriers to Southern exports; for international monetary reforms which would automatically provide Southern countries with expanding international financial reserves; for a new international set of rules on debt rescheduling; and for a code of conduct on the transfer of technology which would lower the cost to the South of acquiring Northern technology.

The second, and perhaps more important, element in the Southern demand for structural reforms is institutional. The Southern goal is to increase its influence in the shaping of international economic and political evolution by broadening the jurisdiction of those international organizations in which the South has a strong voice, and creating new international organizations which will increase the South's influence in specific arenas of international activity. Leading examples include recent Southern efforts to expand the jurisdiction of U.N. institutions which operate on a one-country/one-vote principle (e.g., the U.N. General Assembly and the UNGA's new Committee of the Whole) and to establish new institutions such as a Deep Seabed Authority (to manage deep seabed mining) and a Common Fund (to help finance the Integrated Programme for Commodities).

The constant Southern emphasis on the structural reform theme is fundamental to all Southern bloc diplomatic activity for several reasons. It reflects the deeply shared Southern perception of the inequity of the present international system and its illegitimate origins (i.e., that its institutions and rules were developed while most Southern states were still colonized by the North). It allows the South to unite in support of a set of institutional and economic objectives at a time when unity is both necessary for international bargaining power and difficult because of the growing heterogeneity among Southern countries. And it emphasizes the international impediments to developing country growth, again strengthening Southern unity. Any theme which emphasized impediments to growth of a domestic rather than an international nature would sacrifice this unifying effect.

In the face of the growing economic differences among Southern countries, they will almost certainly find increasing difficulty in agreeing on the substantive content of specific reforms. But the continuing emphasis on the shared goal of greater Southern influence within restructured international institutions makes it highly probable that the South will retain a sufficient degree of unity in the coming decade to continue as a serious diplomatic unit in global politics. Indeed, the obvious intra-Southern tensions (notably those between oil-exporting and oil-importing countries) are likely to make the South even more vigorous in pursuit of its structural goals.

III

An equally brief summary of Northern (i.e., OECD countries') perspectives, goals and means relevant to North-South relations in the coming decade begins to reveal the depth of the policy-making dilemmas facing the United States and other Northern countries in the 1980s.3 If the predominant Southern perspective emphasizes a perceived inequity in the present structure of North-South relations, the Northern counterpart rejects any such interpretation. From the Northern perspective, present international institutional structures and processes are generally argued to be as equitable as the realities of international politics allow.

While the Northern view leaves room for incremental adjustments when systemic deficiencies are identified, it cannot presently accommodate Southern calls for significantly enhanced equity or influence. It cannot accommodate the equity demand in its economic manifestations because it rejects the notion that the fundamental economic problems of the developing countries are caused by the operation of the present international economic system. Rather, it generally locates them in the domestic setting of Southern countries. And it forestalls accommodation of Southern calls for greater political influence through a Northern emphasis on the concept of "order." ("Without order in international relations, there can be no equity.") Following from the primacy of order, "responsibility" or "influence" are seen as stemming from "power," and having little relationship to abstract concepts such as "equity." Any distribution of influence among countries which varies significantly from the distribution of power is thought to be one that invites not equity, but disorder and greater inequity.

One direct and potentially significant Northern response to the equity theme developed in the late 1970s: the sharp rhetorical focus upon the problems of "absolute poverty" afflicting the world's poorest billion inhabitants (located predominantly in South Asia, sub-Saharan Africa and the Caribbean region). As will be noted, the growing Northern emphasis on this "basic human needs" approach to problems of economic development is at best totally irrelevant to the Southern perception of the issue of equity in North-South relations. The enormous potential for conflict between these two distinct perceptions-if and when viewed as mutually exclusive policy guidelines-is already being realized.

While Northern states vary considerably over the degrees of accommodation they are willing to consider regarding specific issues on the North-South bargaining table, the general orientation of their policies clearly emphasizes continuity rather than change. Incremental reforms constitute the preferred means to strengthen the evolving post-Bretton Woods international institutional order and the economic and political relationships governed by that order.

In looking toward the coming decade, two implications of present Northern perspectives and objectives can be predicted. First, as with the Southern bloc, there would seem to exist the minimum necessary degree of cohesion to contain the pressures for fragmentation which are present within the OECD countries as they unite in reaction to Southern reform demands. The pattern of the 1970s suggests that intra-Northern conflicts over goals and priorities are not yet significant enough to fragment Northern bloc behavior in confrontations with the South.

The second implication to be drawn from Northern behavior in the past decade is that Northern efforts to strengthen and stabilize the evolving post-Bretton Woods economic system will continue to produce significant initiatives to "co-opt" or "integrate" some of the South's strongest member-states. The rationale for such initiatives was concisely set forth in a report of the Trilateral Commission written in 1976:

History has often shown that the greatest dangers to international stability often arise from those nations whose real power is inadequately reflected in both real involvement in the relevant sets of international arrangements and symbols of status therein. Such nations can challenge the legitimacy of the system with actions as well as rhetoric. Much of the current call for a new international economic order flows directly from such concerns. Indeed, only through integration into the management of international arrangements are such countries likely to acquire the systemic interests necessary for the constructive formulation of their own foreign economic policies.4

The report paid particular attention to Iran, Brazil, Mexico and Saudi Arabia, suggesting that it "might be desirable" to invite the first three to join the OECD and to invite Saudi Arabia "which now has the second largest monetary reserves in the world . . . to meetings of the Group of Ten, which will doubtlessly continue to act as an informal steering group on some international monetary issues."5 Much of the increased U.S. attention and quite specific policy guidelines relating to the problems and opportunities created by the emergence of what are presently called the "advanced developing countries" or "the new regional influentials" reflects thought processes similar to those underlying the Trilateral Commission's analysis.6

By the end of the 1970s these clashing perceptions, objectives, strategies and tactics had produced a fundamental stalemate in the "North-South dialogue" presumably begun in 1975 at the Conference on International Economic Cooperation (CIEC). In terms of substantive results that conference dissolved in total failure in 1977; in 1979 the fifth session of UNCTAD was equally unproductive. And as planning sessions began that year to design the International Development Strategy for the U.N.'s Third Development Decade, the divisions between North and South seemed to be as great as they had been at any period during the past ten years.

To make matters more discordant than they already were, many Northern countries began to press their own version of the equity theme-basic human needs-in a manner which suggested to the South that the North meant to substitute its version of the global equity problem for the Southern structural reform version developed in all international economic conferences since 1973. Thus by the end of 1979 planning within the United Nations for the International Development Strategy for the Third Development Decade was in a state of deadlock, in great part reflecting-at least at the tactical level-clashing North-South views of the equity issue. Furthermore, the degree of distrust attending the conflict allowed each side to caricature the goals implicit in the equity issue as propounded by the other. The South ridiculed the Northern basic human needs emphasis as an attempt to interfere with developing country sovereignty, to limit the process of Southern industrialization by stressing such goals as rural development, basic education and preventive medicine and to dismiss further consideration of the need for the broader structural reforms desired by the South. In turn, the North caricatured the Southern stress on structural reform as nothing but an attempt to rig markets and mechanisms-e.g., in the fields of trade, finance and technology transfers-in order to redistribute income from the North to wealthy Southern political and economic elites. As a result, what might have developed into a serious North-South dialogue on issues which had deadlocked them throughout the 1970s stagnated at very low bureaucratic levels.

IV

If the present stalemate is to be overcome, a U.S. strategy for North-South relations in the 1980s which, like the recently published report by an international commission chaired by Willy Brandt,7 attempts to blend and balance these two elements of the equity problem is obviously worthy of careful consideration. The following issues would seem to be the most important for U.S. foreign policy in the coming decade:

(1) What are the likely costs and benefits involved in a continued emphasis on the strategy of co-optation noted in the preceding section?

(2) What are the likely costs and benefits of continued U.S. resistance to the notion of structural reforms, a resistance which contributes significantly to the continuation of the present stalemate?

(3) Can one conceptualize an altered U.S. approach and an altered set of U.S. policies which may promise significantly greater benefits than those presently being followed?

The strategy of co-optation has had the avowed aims of stabilizing and strengthening present international institutions and codes of behavior from which the United States was assumed to benefit; and of imposing strict limitations on North-South conflicts. The adherence "to the system" by those Southern countries possessing any form of power which could effectively challenge it would have severely undermined the Southern bloc's bargaining position; even if other Southern states continued united and engaged in confrontational actions, they would be very much weaker and represent no short- or medium-term threat to U.S. global interests.

Closely analyzed, the potential limitations inherent in a strategy of co-optation in managing North-South relations always outweighed its potential benefits by a considerable margin. The difficulties can be understood by briefly examining several significant dilemmas which the strategy constantly confronts.

First, is there any assurance that those Southern countries invited to play more significant roles in the present international system and its institutions will reciprocate by accepting the objectives and norms of that system? Will seats at OECD councils, G-10 meetings and greater emphasis on bilateral consultations produce the system-strengthening behavior on the part of Southern regional powers assumed by proponents of the co-optation strategy? Who will become the prisoner of whose interests?

Brief reflection upon recent Northern relations with such Southern countries as Iran, Saudi Arabia, Brazil, Mexico and Nigeria raises serious doubts that the extension of "club membership" by the North will be balanced by the observance of "club rules" on the part of new members. Indeed, both logic and empirical evidence suggest that increased Northern reliance on such countries to strengthen the various facets of the present international system of concern to the North-particularly in the economic realm-are more likely to lead to greater demands on the part of those countries for special treatment of a type which will further undermine the systemic goals and norms they are asked to support.

The complexities of reciprocity are compounded by the second problem: regime stability within many Southern countries which are candidates for co-optee roles. While the Shah's regime in Iran offers the classic case of U.S. reliance on a house of straw, few if any of those Southern countries generally identified as candidates for co-optation would appear to be governed by regimes free from the prospects of serious domestic challenges during the 1980s. And the very perception of closer, more intimate ties between regimes in such countries and the OECD states will make those regimes more vulnerable targets for nationalist/leftist opposition groups. If only for this reason, club membership of any formal kind, if offered by the North, is likely to be declined from the very outset. Northern governmental circles in general and U.S. policymakers in particular have thus far demonstrated little comprehension that, for reasons of domestic politics, a measure of tacit cooperation camouflaged for domestic political purposes by occasional outbursts of rhetorical abuse may represent the maximum attainable in the 1980s.

Third, the co-optation strategy gives excessive weight to economics, and too little to political and security factors. The concept suffers from the fact that it originated with economic policy makers who were concentrating on some very specific needs of the international economic system in the mid-1970s. Considering economic issues alone, they could reason that an enhanced role for Saudi Arabia would produce close Saudi cooperation with the North in support of the global financial system in particular (given the growth of dollar-denominated Saudi assets) and the economic system in general (e.g., moderation in oil-pricing policies and assistance in petrodollar recycling efforts). Likewise, projecting the rise of potential mercantilist conflicts with the rapidly industrializing Southern states, economic policy makers could envision a resolution of the problem by bringing a Brazil and a Mexico into the OECD and the GATT, developing reformed trade norms which would attempt to satisfy both the Southern exporters of manufactures and their Northern importers, and defusing the growing North-South trade conflict in the process.

Within the context of the international economic system alone, the logic is understandable if still fundamentally flawed.8 But the economists' conception of the Southern states' "graduation" into Northern policymaking circles should never have been developed in isolation. To propound such strategies on the basis of economic considerations alone was to overlook the linkages between economic issues, security issues, and a broad range of political issues. Would these linkages strengthen or weaken the prospects for successful integration of major Southern countries in the economic arena? Further, what would be the implications of successful economic integration for U.S. goals in other areas of foreign policy? A few examples underscore the complexities.

In the case of Iran under the Shah, the inevitable inconsistencies of co-optation were quickly revealed. Since the United States had tapped Iran as a Southern power that would support crucial U.S. security interests, it was in a very weak position to moderate Iran's aggressive oil-pricing policies. Furthermore, it became very difficult for the United States to influence the policies of the Shah in the broad political arena, e.g., in the area of human rights. The point is not whether the United States should attempt to influence such policies, but rather that the strategy of "graduating" and "integrating" regional influential into patterns of much closer cooperation and policy coordination with Northern countries is highly unlikely to lead to any generalized increase in Northern influence over a significant range of policies within such countries. Indeed, it seems far easier to present a logical case for the opposite result. The more the West reached out to the Shah, the less he needed, or heeded, the West's advice.

In the case of Saudi Arabia all notions about the overlapping set of U.S.-Saudi common interests (in the economic and security fields) have underestimated the implications of the Arab-Israeli conflict for Saudi cooperation. Even if the current Saudi regime desired to give priority to economic cooperation with the North-a moot point for present purposes-vulnerability to domestic political reactions and the pressures of its Arab neighbors clearly place severe limits on its capacity to work closely with the OECD countries in general and the United States in particular. Once again, limited degrees of tacit cooperation would seem to be the most that can be expected; for either side to attempt any more in present circumstances at the bilateral level would represent a very high-risk initiative.

Finally, U.S. relations with Brazil illustrate further the inconsistencies, ambiguities and limited results likely to accompany all attempts to press further with isolated strategies of graduation and co-optation. In the case of Brazil, some limited progress has been made in the economic arena with the apparent Brazilian acceptance of the new GATT code on export subsidies. But the conflicts and failures which accompanied U.S. attempts to influence Brazilian nuclear and human rights policies underline the distinct limits to be expected from the graduation strategy. In sum, the set of policies covered by the often interchangeable terms co-optation, graduation and integration contains severe limitations vis-à-vis its specific targets, i.e., those Southern countries that can challenge the legitimacy of the present international system with actions as well as rhetoric.

V

Apart from its pursuit of the co-optation strategy, the United States approached developing country proposals in the 1970s on a case-by-case basis, and grudgingly at that. This policy of economic incrementalism implicitly assumed that there were no serious reforms in international activity that merited joint North-South consideration and negotiation. The United States ignored obvious opportunities to put forward its own agenda, either in terms of specific actions or structural changes, and remained passive and reactive throughout the past decade of North-South discussions, equating success in the "dialogue" with blockage of-or minimal change in response to-Southern proposals.

It is hardly surprising that this gradualist approach has further poisoned the atmosphere of North-South relations and bargaining efforts. Even in the eyes of moderate Southern representatives, U.S. strategy seemed designed "to talk them [the South] to death."9 Two years of discussion at CIEC led to literally no constructive results. Four years of discussion leading to UNCTAD IV in Nairobi (1976) produced nothing but ambiguity in the U.S. position regarding the establishment of a Common Fund to support international commodity agreements-the South's priority economic objective. In the following three years the slowly changing U.S. position led to agreement on fragments of the original proposal, but with such limitations on the Fund's resources and activities that its future remains uncertain at best. Finally, one should note the five-year U.S. effort to limit all reform of the United Nations-proposed by the South and accepted by the North as a legitimate issue for analysis and consideration during the course of the 1975 Special Session of the General Assembly.

In addition to the sterile debate on economic reforms, recent adverse economic trends in the North have added a new set of strains to the relationship. Growing pressures for trade protectionism produced policies restricting Southern access to Northern markets for a broad variety of Southern manufactured goods (e.g., textiles, shoes, television sets, chemicals and steel). Northern fiscal dilemmas produced substantial shortfalls from publicly pledged increases in official development assistance. And the beneficial results for the developing countries of the recently concluded Tokyo Round of GATT negotiations fell far short of Southern expectations-expectations encouraged by Northerners throughout the course of the negotiations.

But the fundamental weakness of U.S. policy, and of Northern policy in general, is the failure to develop a positive agenda of its own. Two areas where serious action should have been possible and where North-South policy coordination would clearly have been in the long-term economic interest of the United States itself illustrate this failure.

The first of these concerns food production and distribution. Ever since the World Food Conference of 1974 much international discussion has been devoted to three linked problems in the food production field: (1) emergency shortage problems; (2) major price fluctuation problems; and (3) the longer term problem of increasing the capacity of the developing countries to feed themselves through greatly expanded domestic production. Nonetheless, no serious action has been taken, mainly because of the sharp differences between the United States and the European Community on the rules that should govern the working of a grain-reserve system.

What thus far continues to be generally ignored is the demonstrated need for the developing countries to double their own food production by the end of the century.10 Widely accepted projections suggest that most developing country food importers will be increasingly unable to earn enough foreign exchange to meet domestic food demand by the end of the decade. Over the coming 20 years the demand for food grains will increase in the developed countries by one-third (the equivalent of total annual U.S. output today) and in the South by 100 percent (or 150 percent of present U.S. annual output). Quite simply, if developing countries continue their past production trends, their import needs would more than double before the end of the 1980s; and given the rapidly rising per-unit production costs for additional output, the extra demand upon U.S. supply capacity would greatly increase food costs for all the world's consumers, North and South.11 For all these reasons there is a growing consensus among both agricultural and developmental specialists that the only sensible approach to the medium- and long-term global food production problem is to work as swiftly as possible to increase the capacity for food production in the developing countries themselves.

From the U.S. point of view, a combination of domestic and international regulations and, where needed, institutions designed to address the objectives of short-term famine prevention, price stabilization, and the longer term major increase in developing country food production would be eminently sensible policy objectives. Given the political strains that would accompany widespread food shortages, the benefits of long-term aid for agricultural development are evident; regarding the two short-term goals of famine prevention and price stabilization, recent econometric studies suggest that global reduction in grain price fluctuations would create gains for Northern consumers in terms of stable prices that exceed the probable cost of related grain-reserve programs by over 100 percent.

A second illustration of lost opportunities to discuss "structural reform" of considerable concern to the United States can be found in the arena of international trade in manufactured goods-in regard to both trade liberalization and "industrial policy" issues. As a part of its proposals for structural reform, the South has been requesting increasing liberalization in international trade, particularly in those areas of manufactured products where Southern production is now highly competitive internationally. In this instance, Southern objectives and U.S. rhetorical commitments form a near-perfect fit, as the United States has led all major international efforts to liberalize international trade ever since the 1930s. It also represents the classical "positive-sum" bargaining situation where all parties may be presumed to gain from the lowering of tariff and non-tariff barriers to international trade.

However, at just the moment when a substantial number of Southern countries have restructured their development strategies in order to expand their participation in international trade in manufactured products, countries of the North have begun to reconsider the essential wisdom of sustaining present levels of trade liberalization, let alone lowering existing barriers any further. Given the commitment within most Northern states to a host of social and economic goals which are broadly encompassed by the phrase "the welfare state," holding the line against protectionism in a decade of potentially slow growth may prove to be an unachievable objective.

In fact, all Northern states-particularly those of the European Community-are increasingly intervening, directly and indirectly, to affect the structure of industry in their countries. All these interventions can be labeled industrial policy; what makes the issue so salient at the present time are rapid changes in international comparative advantage and the growth of domestic political pressures for such interventions. A new international framework to resolve the potentially dangerous economic conflicts bound to accompany unilateral, uncodified and unpoliced intervention of this type is fundamental to avoiding further growth in North-South conflict. But such a framework is also clearly in the long-term Northern economic interest.

Most defensive industrial policies which seek to preserve existing employment and production patterns in a particular sector of industry have a negative impact on economic efficiency and trade flows. On the other hand, policies designed to stimulate new patterns of investment, production and employment are likely to have a positive impact on economic efficiency and trade flows. The United States and other Northern countries will benefit as much as the developing countries should the rapidly evolving-if still generally ad hoc-set of Northern industrial policies leans strongly toward what a Trilateral Commission report labels the "positive" end of the spectrum, i.e., toward those policies which accept changing international comparative advantage as a guideline and use industrial policies in a coherent way to adapt domestic industrial structures to those international changes. Yet such an outcome is highly unlikely unless an international framework is established to develop and support appropriate guidelines and surveillance mechanisms for industrial policies. In the first place, the easier domestic political route is to adopt defensive, protectionist industrial policies; and second, Northern cooperation alone would still tilt defensively in those industrial sectors where international comparative advantage has swung rather decisively to the South. Thus OECD (or "Trilateral") coordination alone is not enough;12 serious North-South negotiations are required to resist neo-mercantilist pressures.

VI

Turning to the political consequences of the U.S. approach, the inevitable result of the U.S. tactical response to Southern proposals which first emerged in Henry Kissinger's speech at the 1975 U.N. Special Session-often characterized as "the move from confrontation to negotiation"-has been to embitter the North-South dialogue. For that speech and most U.S. public statements since 1975 have suggested both a desire and a willingness to respond constructively to Southern proposals; yet no response which could be so perceived by the South has ever been forthcoming. As we have seen, initially inflated rhetorical promises of constructive responses were eventually coupled with actions that were quite the opposite, and the result is a widespread Southern perception that the much-heralded Northern rhetorical switch from confrontation to negotiation has represented nothing but diplomatic dissembling.

In analyzing the political aspects of North-South relations, one tends to focus upon the issue of generalized influence-in this case, the capacity of the United States to influence member-states of the diplomatic unit called the South. Does the United States, for example, have enough influence with enough Southern countries to bargain successfully for an acceptable outcome in the Third Law of the Sea Conference (LOS III)? In the recent International Nuclear Fuel Cycle Evaluation (INFCE), could the United States develop a working coalition in support of its objectives (e.g., a slower, much safer and much more safeguarded approach to the use of nuclear power as a source of commercial energy) which had to include the support of some crucial Southern states? In trying to develop domestic and international support for its one potentially significant initiative in the present circumscribed North-South economic debate-the basic human needs approach to limit and eventually overcome the absolute poverty problem-is the United States able to appeal successfully to a significant element within the present Southern coalition?

All these current issues serve as measures of U.S. political influence; all suggest that the United States at present exhibits very little capacity to influence the Southern bloc over a broad range of issues important to U.S. foreign policy. They cannot be used to prove that a less defensive U.S. role in the North-South dialogue of the past five years would have increased Southern support for U.S. foreign policy interests in differing venues (LOS III, the U.N. Preparatory Committee for the Third Development Decade, etc.). On the basis of existing evidence, however, one can at a minimum suggest that the U.S. approach-which combined efforts (1) to fragment the Southern bloc (as in the Kissinger strategy and tactics prior to the Seventh Special Session of the UNGA); (2) to co-opt specific Southern regional powers into Northern diplomatic networks and institutions (i.e., the Carter/Brzezinski strategy begun in late 1977); and (3) to oppose almost all Southern proposals for the consideration of significant structural reforms-is in good part responsible for the present North-South stalemate which leaves the United States with such limited influence in Southern diplomatic circles.

In an era of linkage politics and strong Southern bloc institutionalization, the Group of 77 will often attempt to accomplish in one setting what it is unable to accomplish in another. Thus, for example, many NIEO issues have been transferred from the main settings of the North-South economic dialogue to the Law of the Sea Conference. All pleas that functionally specific issues be resolved in functionally specific forums notwithstanding, the most plausible projections into the 1980s strongly suggest that the international system will not work that way. It will not because the degree of international consensus required to "depoliticize functional issues" disappeared by the end of the 1960s. If and when the necessary degree of international consensus returns, the delinked, issue-specific, technical approach to many aspects of international bargaining may once again be appropriate. But that degree of consensus is not likely to return for some years, if at all-and certainly as long as Northern and Southern perceptions of the legitimacy of present global political, economic and institutional arrangements continue to clash to the extent that they do today. U.S. policymakers may not like this present reality, but it is essential that they understand it.

One might add a final word about certain strategic implications of present U.S. policies in the North-South arena. For the achievement of general strategic as well as political objectives, the capacity of the United States to influence Southern actions can be crucial. The United States has specific security interests (e.g., transit through straits and limited territorial seas) in the LOS III setting; it clearly had strategic interests at stake in the INFCE exercise.

More diffuse but perhaps no less important, given the existence of a relatively cohesive and coherent Southern diplomatic bloc which finds itself constantly at odds with the United States over the economic agenda, the North-South stalemate may affect the capacity of the United States to project influence and presence in security-related situations within the South (i.e., situations such as Iran and Afghanistan, with serious implications for East-West relations). If the more radical countries within the Nonaligned Movement are able to tilt the fundamental orientation of that group toward closer accommodation with the Soviet Union-as they did at the 1979 Havana Conference of the Nonaligned Movement-at the expense of nonalignment as defined in the first decade of the movement, then U.S. access to, and influence upon, a broad range of regional conflicts will be increasingly limited. A priori, Eastern forms of intervention in many areas of the South would seem to be easier to accomplish than Western forms because Soviet-allied countries within the Nonaligned Movement would be strengthened in their position as arbiters of legitimacy concerning various forms of intervention in inter-Southern and intra-Southern conflicts.

In sum, the United States is paying a high political/strategic price for following those policies which have done so much to create the present stalemate situation in North-South relations. These costs are generally ignored by those who focus narrowly on economic aspects of the relationship. The United States no longer retains the necessary surplus of usable power or influence vis-à-vis the South to warrant continued indifference to these issues.

VII

For several reasons, it is difficult to outline succinctly the essential ingredients of a more appropriate U.S. strategy toward the developing world in the 1980s. First, one is talking about a set of diplomatic relations affecting a broad array of U.S. foreign and domestic policy objectives, some primarily economic, others primarily political, some short term in nature, and others quite long term. Second, one is talking about a relationship which on many occasions is extremely bloc-oriented (as when "North" meets "South" in UNCTAD, CIEC, or the U.N.'s Committee of the Whole, and the developing countries speak and negotiate as a unit through the G-77 mechanism) but on others (as when the United States negotiates with Brazil on a subsidies code or nuclear energy facilities, or when it discusses political instability in Central America with the Andean Pact countries) is primarily bilateral or perhaps regional. Yet, as noted above, links between the various issues and levels of discussion are established from the outset by the atmosphere of the aggregate North-South relationship. Hostility and stalemate at the North-South bloc level on balance limit U.S. influence and bargaining power at the other levels. Finally, U.S. relations with the South as a unit will be strongly influenced by the balance of forces-radical to moderate-within the Southern coalition at any time; and U.S. influence at the bilateral level will depend upon the issue being discussed and the country (e.g., Libya, Brazil or Sri Lanka) with which it is being discussed.

Against this background, it is difficult to specify U.S. foreign policy objectives in the North-South arena beyond these two most general and fundamental ones: first, to break out of the present pattern of stalemate at the bloc level (which affects all other levels); and second, to enhance U.S. capacity to work constructively with the South (as a bloc, as groups of Southern countries or as individual countries) for the achievement of a broad range of U.S. policy goals. What concrete elements in a new U.S. strategy might move us toward the achievement of these objectives?

First, it will be necessary to grant a distinctively higher priority to overcoming the present stalemate. Since the emergence of the NIEO in the early 1970s, no administration has paid more than marginal attention to this arena of U.S. foreign policy. All major North-South efforts at negotiation have failed in good measure because of U.S. unwillingness to engage in a dialogue which the South could perceive as constructive. In part this unwillingness simply reflects a lack of comprehension of Southern perspectives; in part it reflects an enduring belief that the North should determine the modalities of the dialogue because we still retain the expertise to devise technocratic solutions to a set of economic problems which are, in fact, eminently political. Just so the Carter Administration, often with the best of intentions, has failed to develop a constructive set of North-South relations because it has failed to understand the relationship in broader historical-political terms. Unlike previous administrations, it has paid lip service to Southern desires for enhanced influence and autonomy in international affairs; but like previous administrations it has failed to develop a strategy to accommodate those desires in a manner consonant with long-term U.S. objectives. And lacking any such strategy, it has fallen back on a combination of co-optation, piecemeal, incremental responses and "basic human needs" rhetoric which simply compound old misperceptions and create new ones.

Of all the issues presently souring North-South relations, none is more debilitating than the present conflict over the linked issues of equity and structural reform. Southern perceptions of global inequities are substantiated, for example, by differences in aggregate per capita incomes on the order of ten to one, the fact that 90 per cent of the world's manufactured goods are produced in the North, and the overwhelming voting power held by the North in such important international institutions as the GATT and the IMF. In sum, their perception is of various forms of inequality among states, and their call for remedial international structural reforms follows logically from that perception. Northerners, vigorously led by the United States, focus not on interstate but on interpersonal measures of inequality, arguing for domestic development strategies within the South that aim to eliminate the absolute poverty problem through the "basic human needs" policy mix, and dismiss with varying degrees of diplomatic tact the issue of structural reform. Analyzing Northern responsibility alone, it is clear that this major hurdle has arisen for two reasons. The first concerns the premature Northern rejection of the concept of structural reforms; the second concerns the manner in which the North, again led by the United States, has introduced the basic human needs concept into the present dialogue.

Regarding the first point, the United States, choosing to interpret the structural reform issue raised by the South as a zero-sum game and a root-and-branch attack upon many fundamental aspects of the present international economic system and its institutions, has responded with a general defense of the entire system; thus the grudging incrementalism which has characterized Northern bargaining over all issues on the economic agenda. A strange reaction indeed given Northern willingness to consider and accept major reforms "within the club" in the international monetary and trade arenas during the past decade because major institutional elements and norms of the Bretton Woods system were on the verge of collapse.13

For the 1980s, areas of international economic policy where reforms-many highlighted in the Brandt commission report-could demonstrably benefit all parties include food policy, industrial policy, more general trade policy issues, energy policy and the issue of developing country access to long-term development financing. In each area the North can respond to Southern demands for structural reforms with major policy initiatives. In the trade and industrial policy area, for example, the need for a strong set of rules governing the use of trade-restricting "safeguard" mechanisms to protect troubled industries, and the need for a new organization with broad membership to enforce those rules is compelling. Equally compelling is the need for new institutional arrangements relating to "automatic resource transfers," i.e., funding for Southern development purposes collected and allocated outside Northern legislative processes and independent of existing international financial organizations. Potential sources of such automatic funding will grow throughout the decade as new rules and institutions governing such "global commons" as the oceans and their sources of wealth (e.g., minerals, fisheries) are constructed.

Apart from the stonewalling on structural reforms, Northern (and particularly U.S.) heavy-handedness in introducing the basic human needs theme into the North-South dialogue has been equally unproductive. Many Southerners demonstrate considerable receptivity to the concept before Southern audiences and forums, but do not do so in North-South negotiating settings. They are constrained by the legitimate concern that Northern support for the idea may represent no more than a tactic to switch emphasis from international to domestic development issues. This concern has been heightened over the past several years for several reasons. First, the North has emphasized the basic human needs theme almost to the exclusion of all others in the current economic debate.14 Second, this rhetorical embrace is unaccompanied by any serious assessment of the conceptual issues, feasibility problems, and financial aspects of "overcoming absolute poverty." And third, the North has never attempted to make the case that a strategy targeted on overcoming the absolute poverty problem can be constructed on policies which support the aggregate growth and industrialization processes within developing countries.

All three problems must be overcome by a more detailed and balanced Northern exposition of what it means by a basic human needs strategy and what it is prepared to do to support such a strategy. First, the North must demonstrate in programmatic terms that it does not intend to concentrate on this strategy to the exclusion of other basic structural reforms in such fields as international trade, industrial policy and commodity policy. Second, the North must address the issue of financing basic human needs programs. Most recent attempts to estimate the cost of "overcoming absolute poverty" in the next two decades suggest necessary expenditures of about $20 billion per year over a 20-year period.15 Since most of the funds will be needed in the poorest countries least able to increase and redirect domestic governmental revenues, substantial international assistance must be pledged if Southern countries are to undertake the serious shift in economic development policies required to achieve the objective of overcoming absolute poverty. Northern governments presently spend about $15 billion per year in Official Development Assistance, but the vast bulk of these funds, allocated with political and security purposes in mind, are not directed to the countries or the types of programs which would reflect a genuine commitment to meeting basic human needs. Needless to say, this point is not missed by Southerners assessing Northern intentions. Unless and until the North presents a serious proposal for international discussion-for example, during the new "Global Negotiation on Economic Cooperation" tentatively scheduled to begin in January 1981-which includes explicit indicators of financial commitment to this objective, present levels of Southern skepticism will understandably impede any progress in this area.

Finally, the Northern case for an added basic human needs emphasis in Southern economic development strategies must demonstrate that an approach targeted on overcoming absolute poverty can be constructed upon policies which support aggregate economic growth and industrialization in the South. Because so little technical study has been devoted to this issue, the present Southern perception is that an increased emphasis on basic human needs objectives of minimum levels of food, nutrition, education, and health care for the poorest in their societies will slow aggregate growth rates of gross national product (GNP) and industrialization. And since most Southern states-correctly or not-equate rapid industrialization with their fundamental foreign policy goals of enhanced international autonomy and influence, they are wary of embracing a new objective which may slow the process of industrial growth and diversification. What will be needed to overcome this Southern concern is convincing analytical demonstration that basic human needs policies can be implemented in ways which actually support rather than penalize the processes of industrialization and GNP growth.

For both normative and prudential reasons a coherent approach to overcoming the absolute poverty problem is very deserving of significant Northern attention and financial support. And, as recent history clearly demonstrates, it is also the item in the present North-South dialogue most likely to serve as a catalyst in building Northern legislative support for continued North-South resource transfers in almost all Northern countries. Ever since 1973, for example, the U.S. Congress has become increasingly assertive in insisting that ever-growing percentages of U.S. foreign aid be allocated to projects demonstrably linked to "overcoming abject poverty." In looking to the 1980s major challenges for U.S. diplomacy will be to refine this concept in ways which can overcome present Southern concern and objections, and to generate the substantial Northern financial commitment which will be required to launch a serious international effort in support of the basic human needs concept.

Finally, it is crucial to the development of a new U.S. strategy that the range of officials in the present bureaucratic game be broadened to include political officers from the State and Defense Departments, as well as the National Security Council. The short-sightedness which has characterized the shaping of negotiating tactics in the North-South dialogue of the 1970s is attributable in great part to the fact that the issue was left almost exclusively in the hands of economic officials who were also consumed by "line" responsibilities. Given the traditional concerns of such officials, short-term problems of a distinctly economic nature quite naturally took precedence over any longer term consideration of the political implications of North-South relations or even of longer term economic issues and relationships.

This serious flaw in U.S. foreign policy machinery reflects its growing inability to keep pace with the rapidly expanding range of actors and issues in the international system. The Economic Bureau within the State Department still views the non-communist world as part of one system governed by one set of rules, including those few exceptions that apply to developing countries. The Southern diplomatic bloc challenges the Bureau's system; the Bureau-together with line officers in the Treasury Department-resists the Southern challenge. Neither the Treasury Department nor the State Department's regional bureaus give more than fleeting consideration to the Southern bloc; the occasional exception is most likely to come in the cart-before-the-horse question, "How might Latin American activity in the G-77 or the NAM affect U.S. relations with Latin America?"

The more relevant question is "How does Southern bloc diplomatic activity affect the capacity of the United States to achieve a wide range of political, economic and security goals from the bilateral, single-issue type (e.g., relating to Saudi oil-pricing policy) to the broadest, most systemic kind (e.g., winning Southern support in the condemnation of recent events in Iran and Afghanistan)?" It seems certain that if the latter question were being analyzed against the backdrop of international problems challenging U.S. foreign policy in the 1980s-and not by those holding line economic responsibilities in the State and Treasury Departments-the strategic guidelines and policy options resulting from the analysis would bear little resemblance to those of the 1970s.

VIII

The outline of a new U.S. strategy to manage North-South relations in the 1980s suggests the major hurdles to be overcome in its development. Three are worthy of final reiteration. First of all, unless a higher priority is given to the management of the North-South relationship, no new strategy is likely to emerge, let alone overcome the inertia of present policies and the decision-making machinery which produced them.16 Such a priority will emerge only if policymakers realize that a much more constructive working relationship with the South is required in order to achieve a broad range of domestic and foreign policy goals, and that such a relationship can quite conceivably be established through an altered process of active mutual-interest bargaining.

The second hurdle lies in the antipathy to experimenting with altered forms of bargaining and system reform. Change will obviously prove somewhat uncomfortable to live with; and strong advocates of the old approach will continue to advise against accepting its risks. Because the old, issue-by-issue approach in specialized institutions dominated by Northern voting power is unacceptable to the South, however, it will fail. Thus a new approach, less predictable and less controlled by the United States, must be tried.

Finally, the hurdle of implementation remains even if the first two are cleared. Can a new strategy be given a convincing coherence? Can its relevance for U.S. national interest be made clear enough to overcome entrenched domestic opposition? And can it respond to Southern interests sufficiently to overcome the present distrust and suspicion long enough to attempt an altered process of North-South diplomatic interaction?

The possibilities of failure are obvious. But so too are the growing costs to the United States of not making the effort. The Havana Conference of the Nonaligned Movement closed the decade of the 1970s with ringing denunciations of the United States and the rest of the North, elegant words of praise for the Soviet Union and the socialist countries, unanimous cries for radical change and no public criticism of oil price increases. If such meetings and manifestos have no impact on international relations, there is no lesson for U.S. foreign policy to be drawn from these events. But if they do, one must ask why a distinct minority element within the NAM appeared to emerge victorious by the end of the 1970s.17 A significant part of the answer is to be found in a decade of failures in U.S. diplomacy. To overstate the case only slightly, U.S. policies had the cumulative effect of undermining the influence of Southern moderates, constraining rather than enhancing Southern pressures on the OPEC countries to limit oil-price increases, and eventually permitting Southern radicals to seize leadership within major Southern institutions. Despite the recent Soviet assist in weakening that leadership, only altered U.S. policies relating to the South and its constituent units can ensure the transition to a more constructive, flexible and potentially complementary range of diplomatic relationships between the United States and the developing regions of the world.

2 It is the shared perception of global inequity that can link over 120 "developing countries" with per capita incomes ranging from $200 to $10,000. Built on the historical evolution of North-South relations in both pre- and post-colonial periods, this perception provides the cement that binds the otherwise disparate and potentially discordant membership of the Southern bloc. It has been the most significant driving force behind the activities of both the Group of 77 and the Nonaligned Movement since the inception of these groups close to 20 years ago. While the Nonaligned Movement was initially inspired by the idea of avoiding involvement in the cold war, it soon became the preeminent international platform for attacks on colonialism, apartheid, "neocolonialism" and all other forms of Northern or white domination, real or imagined. Failure to comprehend the depth of this widely shared Southern perception was primarily responsible for endless, inaccurate Northern predictions throughout the 1970s that an inevitable appreciation of divergent national interests would quickly dissolve any developing country effort to institutionalize "Southern unity."

3 Industrialized communist states of the North are not included for the simple reason that the present North-South conflict evolves from developing country efforts to restructure present international institutions and economic structures and processes which are dominated by the OECD countries. The "systems" of particular concern to the South are those of trade, finance and technology transfer; key institutions are the IMF and the GATT. "Eastern" countries continue to play at best a peripheral role in these systems and institutions. This accounts for their low profile in the "North-South" arena of present-day international relations.

4 C. Fred Bergsten et al., The Reform of International Institutions, New York: The Trilateral Commission, 1976, p. 9.

5 Ibid., p. 25.

6 Superficially, the U.S. strategy of co-optation might be perceived as responding to Southern desires for more political influence in the present global structure of international organizations and rule-making. But it is certainly not thus perceived by Southern states, which correctly view it as a policy designed to detach the South's most powerful states (in terms of natural resources, international monetary reserves, strategic geopolitical positioning, etc.) from the G-77 and the Nonaligned Movement and "integrate" them into such Northern "clubs" as the OECD and the Group of Ten in general support of present global economic and institutional rules and codes of behavior.

7 Given its overwhelming attention to the theme of global structural reform, however, it is questionable whether or not the report achieves an appropriate balance. Even more questionable are the aggregate balance of commitments to reforms called for in the report (largely from the North rather than the South) and the likely efficacy of the reforms in assisting the development process. Nevertheless, serious international discussion of these proposals would surely raise the intellectual level of the present "dialogue." North-South: A Program for Survival: The Report of the Independent Commission on International Development Issues under the Chairmanship of Willy Brandt, Cambridge: MIT Press, 1980.

8 U.S. economic policy makers, pressing for what came to be labeled policies of "graduation," assumed that key Southern countries would in effect pay for the privilege of "graduating" into Northern policymaking circles. The major Southern dollar-holders would follow policies supportive of the international financial system (e.g., adjusting their oil export and pricing policies for the-unspecified but assumed-"common good"); major Southern exporters of manufactures would abolish export subsidies and slow the rates of production for export to "stabilize" the international trading regime. U.S. assumptions were clearly not grounded in a systematic analysis of the policy objectives and the relative bargaining strengths of those Southern countries whose cooperation was being sought.

9 Jahangir Amuzegar, "A Requiem for the North-South Conference," Foreign Affairs, October 1977, p. 155.

10 See National Research Council, World Food and Nutrition Study, Washington, D.C.: National Academy of Sciences, 1977.

11 Global markets for U.S. agricultural output will continue to grow rapidly despite increased food production capacity in the South. What the latter trend would ease would be explosive agricultural price increases and the literal inability of many Southern countries to pay for the food imports needed to avoid widespread starvation.

12 This line of argumentation is presented in detail in John Finder et al, Industrial Policy and the International Economy, New York: The Trilateral Commission, 1979.

13 One has only to note the continuing monetary reforms which began in 1971, and the recently completed Tokyo Round of GATT negotiations which resulted in major new codes covering state behavior in the trade field.

14 A classic recent example of this approach is "America's Commitment to Third World Development," a major North-South speech delivered by Secretary of State Cyrus Vance at the Northwest Regional Conference on the Emerging International Order, Seattle, Washington, March 30, 1979.

15 See Roger D. Hansen, Beyond the North-South Stalemate, New York: McGraw-Hill, for the Council on Foreign Relations, 1979, chapter 8.

16 It is indeed ironic that so many constructive critics of the Carter Administration condemn it for having given too much priority to North-South issues. See Robert W. Tucker, op. cit. for a classic example. The source of their error may lie in the gap between the Administration's rhetoric on the subject and the reality of its actions.

17 The appearance was somewhat deceptive, as all who follow NAM infighting well know. In this instance the tenuousness of the radicals' "victory" was underlined by Castro's conciliatory appeals to NAM moderates in his U.N. speech in October 1979, and by the January 1980 U.N. speeches and votes of these same countries opposing Soviet intervention in Afghanistan.

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  • Roger D. Hansen is the Jacob Blaustein Professor of International Organization at the Johns Hopkins School of Advanced International Studies, and has been a senior staff member of the National Security Council. He is the author of Beyond the North-South Stalemate and other works.
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