Global North-South divide is growing ‘quite rapidly’, Salman tells World Economic Forum

The prime minister’s adviser speaks at a World Economic Forum session in Riyadh

The divide between the Global North and Global South is increasing at such a rate that a “very seriously divided world” is imminent, Salman F Rahman has told the World Economic Forum or WEF.

The prime minister’s adviser on private industry and investment spoke at a WEF session in Riyadh on ‘Investing amid Global Fracture’ on Tuesday.

The other speakers were Saadia Zahidi, managing director at the World Economic Forum; Laurence Fink, chairman and CEO of BlackRock; Lubna Olayan, chair of the Executive Committee of the Olayan Financing Company; and William Ford, chairman and CEO of General Atlantic.

At the beginning of the session, Zahidi asked Fink to shed light on potentially contradictory trends in the context of the session’s subject.

“If we are going to really try to make this a more fair and economic world, we're going to have to really seriously transform the role of these global development banks, because their role in terms of helping the global South and the emerging world has been inhibited quite a bit,” Fink said.

“And we need to really look at how we are going to be providing new capital to the emerging world. And that's one of the big problems that I think are facing the world today,” he added.

Zahidi then asked Salman how he sees some of these trends playing out, in particular from his perspective in Bangladesh. “The last few years and the next few years, what you're expecting,” she asked.

Salman said he agrees with Fink about the development banks.

“They have to be redesigned. I would go one step further. I think in the future we need to actually look at restructuring the global order, the global economic order, the socio-political order, in which we need this. Because at the moment, the divide between the North and South is increasing. And it is increasing quite rapidly,” he said.

“And if we don't put a stop to this, or if we don't take steps to address this issue, then I fear that in the future you are going to have a very, very seriously divided world, especially with the advent of technology.”

Salman said that in one of the sessions earlier in the morning, they were talking about Africa.

“We were talking about some of the things they are doing right. But at the same time, the point was raised that 50 percent of the population in Africa don't have electricity. So you have these kinds of extreme situations,” he said.

“In Bangladesh, we were doing everything right, say from 2010 onwards until the pandemic,” the prime minister’s adviser said.

“We were growing at around 6.5 to 7 percent annually. Women empowerment, digital infrastructure, food security, social safety net – all of these were done … Everybody said that we are a role model of development.

“And then the pandemic came up. And we suddenly realised that we won't get the vaccines. Other countries will get vaccines before we will.”

Salman said Prime Minister Sheikh Hasina was “very proactive there again”.

Bangladesh booked the vaccines in advance even before the World Health Organization gave its approval to AstraZeneca and the Serum Institute of India had a licence from the British-Swedish firm.

“We in fact vaccinated our people before even Canada and Australia were able to vaccinate,” Salman said.

After the pandemic, came the Russia-Ukraine war and that is when Bangladesh got “badly affected” as the US Federal Reserve increased the rates and the dollar became very strong.

“For the last 12 years, our currency had been extremely stable. All of a sudden, we faced over 20 percent devaluation overnight because of the strength of the dollar.”

“What I'm trying to say is that this was something nothing to do with us, absolutely nothing to do with us. But the impact of that was felt in the country,” the prime minister’s adviser remarked.

“So today, what I mean, I've got foreign exchange reserves issues. My inflation is high. I had below 4 percent inflation for 12 years.”

Salman said Bangladesh’s relations with others also took a hit from the global situation.

“We were doing well with everybody. But then again, with the global situation, the Americans don't like you. You talk to the Chinese, the Chinese don't like, the Indians don't like you.”

“We are suffering today because of no fault of ours.”

“So I think that's something which we need to address, that how this, this global ecosystem on socio-political, how that can be addressed so that countries like ours can be at least, I would say, indemnified or insured against global events.”

ARTIFICIAL INTELLIGENCE

Salman fears that artificial intelligence, or AI, may harm Bangladesh's huge but cheap workforce.

Repetitive works are done in the readymade garment industry, the largest exporting industry of Bangladesh, even with the help of robotics, but AI will be something different with its capacity to think, according to him.

“Recently, we have been seeing robotics coming in, and that's not affecting us. That's, in fact, increasing our productivity. And there's also not having job losses because of that, because somebody has to manage the robots also,” he said.

But with AI, what if Walmart, one of the biggest buyers of Bangladesh’s garments, starts producing in their parking lots to cut the lead time, Salman wondered.

“And then my entire industry gets wiped out. So that's the kind of issues which we will be facing in the future. So, you know, I'm not being pessimistic. I want to be a realist.”