Economic Growth on Trial: How the Global South Is Trapped in the Ecological Crises
Erin D John & Alvira Khan
The 18th-century Industrial Revolution sparked a pivotal moment in human history, as mechanised production and resource exploitation surged across the UK and US. However, this revolution resulted in widespread environmental pollution: human-induced degradation of water, air and land, which compromised the natural ecosystem and life itself (Hussain, 1998). The astonishing amount of wealth that resulted from industries was concentrated in the hands of the US, UK and Europe. The repercussions of the manufacturing industries were deteriorating the quality of life, and the people were not silent about it. The concerns of the people were echoed by the governments, and various measures were taken to protect the environment by implementing laws.
As these laws proved expensive for corporations, a dumping ground strategy was designed, giving rise to “offshoring”. Entire manufacturing industries were shifted to countries with potential for infrastructure, lax environmental regulations and cheap labour. As many industries shifted towards less developed countries, there was hope from the latter about the influx of wealth that this growth would bring.
Initially, employment opportunities increased, household income started increasing, and by the onset of the 2000s, many underdeveloped countries came under the umbrella of developing nations. However, the West did not find a sustainable solution for the environmental concerns of industrialisation; they simply offshored it. In recent times, the countries that accept industrial growth from the West are bearing the brunt of its ecological implications.
The above graphs represent the dichotomy of the situation. Carbon emissions are taken as a proxy for the extent of industrialisation that is happening, and the Global North has surpassed most of the Global South. Given the theoretical basis and in an ideal world, the second graph, which shows air quality, should have the Global North in a disadvantaged situation.
However, that is not the case here, and an almost life-threatening situation in the Global South is apparent when it comes to air quality. This environmental hypocrisy is mainly because of the cleaner methods of manufacturing that are practised in the West and the traditional methods that are still being used in the developing nations. So, the long-held wish that one day economic gaps will be bridged is, as of now, hanging in the balance of an environmental crisis.
A Rigged Game: Why the Global South Remains Behind Even in The Age of Industrialisation
Following the Industrial Revolution and decolonisation, the Global South’s dream of catching up was merely a fantasy, as developments in international law empowered a few Global North states to maintain control. This time, instead of political or military domination, they chose economic governance. In the late 1960s, formerly colonised nations started borrowing (mainly from the colonial powers) to strengthen their economy. However, the global recession in the 1980s left many countries with huge external debts, decreased export earnings (as commodity prices fell), and higher interest payments (after the US rate hikes). To navigate this global uncertainty, Global South nations sought assistance from the IMF and the World Bank. The Structural Adjustment Programs (SAPs) were designed to aid these countries at a cost. In a nutshell, the package required privatisation, austerity and trade liberalisation, resulting in a weakened domestic industry, restricted government control and increased poverty. The other factors limiting the development of the Global South nations are discussed below:
1. Bilateral Investment Treaties (BITs) and Investor-State Dispute Settlement (ISDS)
Investment treaties proliferated in the 1990s to attract foreign direct investment, with the attached Investor-State Dispute Settlement mechanism, which further restricted the environmental progress of the Global South states. For instance, the ISDS mechanism protected investors from the risks associated with investing in host countries – specifically against expropriation without compensation, discriminatory practices, denial of justice and breach of legitimate expectations – enabling corporations with direct access to sue nations in international arbitration tribunals over policies that may threaten their future profits. However, this mechanism resulted in 81% of lawsuits filed by Global North investors, while Global South states were the respondents in approximately 62% of cases related to energy, mining or environmental protection. By 2024, the average ISDS award reached $385 million, triggering fear of costly lawsuits and resulting in developing states going through a “regulatory chill”.
2. Trade Regime
Today’s trade restrictions continue to mirror the colonial-era patterns, with 85% of least-developed countries relying on raw commodity exports compared to just 13% of advanced economies (UNCTAD, 2025). Developing countries are still experiencing tariff escalation (wealthier nations imposing zero or low tariffs on raw materials but higher tariffs on processed goods), preventing domestic value addition and economic development. According to UNCTAD (2023), exporters of developing nations are still facing higher tariffs on processed agricultural products compared to raw products, as shown in the graph below.
For instance, exporters in West Africa are unable to export processed cocoa due to higher tariffs (0% on raw cocoa, 7.7% on cocoa powder, and 15% on chocolate) Additionally, they pay a “tax on sustainability” due to mass production causing overexploitation of natural resources (loss of 360,000 hectares of forests in Côte d’Ivoire) and environmental degradation. This is just the tip of the iceberg; many more countries are facing similar problems and are stuck in a development deadlock.
3. Global Governance
The systemic issue lies in the marginalisation of Global South states within major institutions like the International Monetary Fund (IMF). At the IMF, 55 climate-vulnerable countries only hold 5.3% of IMF votes, despite of representing 16.6% of the global population. The imbalance illustrates how global financial regulations and loan conditionalities are not designed as crisis response tools but reflect the priorities of the wealthy, which may not even align with the needs of the Global South or support its sustainable growth. Similarly, limited representation is also apparent in forums such as the G7 and the UN Security Council, where major decisions on debt relief and climate finance are governed by wealthier nations.
Conclusion
These structures together have created a vicious cycle for the Global South, and the resulting environmental damage has reached such an impossible height that it is merely a side dish served at this table of power. The implications are such that human life is being compartmentalised into unbearable conditions. It is thus imperative to push for a restructured international legal order which not only respects development autonomy but provides equitable representation. However, to reshape the global system, Global South states must come together by strengthening their economic cooperation and building legal solidarity; not merely to participate in it, but to create a sustainable global future.
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