While capitalism confines the Global South to raw extraction and cheap exports, democratic planning can break dependence, claim technological control, and turn resources into collective economic power.
Dear friends,
Warm greetings from the team at Tricontinental: Institute for Social Research.
For the last four decades, the Global South has been instructed that economic planning is misguided. The message urged states to scale back, reduce tariffs, privatize public enterprises, and rely on global investors who move capital instantly across borders. Development was expected through comparative advantage: countries would export what they naturally possess and import manufactured goods from others. The outcome is evident from Harare to Jakarta. Nations rich in resources, fertile soil, and young populations remain stuck at the low-value end of international supply chains, sending out raw materials and importing finished products. Ghana exports cocoa but imports chocolate, while Venezuela sends out crude oil but brings in refined fuels. This dynamic drains wealth from the Global South, deepening debt burdens, informal economies, and austerity pressures.
An effective industrial strategy for the Global South must reject this status quo. The economy is neither neutral nor inevitable; it reflects the legacy of colonialism, neocolonial restructurings, property ownership systems, and unequal access to technology and funds. Growth statistics matter, but the bigger concern is what is produced, who controls production, and how gains are shared. The true aim of development lies in enhancing human well-being, not growth alone.
The institutions that previously dismissed industrial policy in the Global South – the International Monetary Fund (IMF), the World Bank, and the Organisation for Economic Co-operation and Development (OECD) – have started revisiting their advice. For example, the OECD now admits that relying solely on markets cannot solve issues related to weak productivity, fragile supply chains, or sustainability transitions; businesses seldom invest in long-term ventures unless incentivized. The World Bank goes further, arguing that industrialisation depends on state-led investment, including infrastructure like industrial parks, transport networks, energy systems, and long-term finance. The IMF is more cautious – it acknowledges the need for subsidies and protection for young industries but warns against shielding non-competitive ones. Collectively, these organizations hint at the necessity of planning. We contend this planning must be democratic and aimed at the public interest. Popular power and state capacity should be strengthened to regulate capital and hold it accountable when it fails social objectives.
A striking double standard emerges regarding industrial policy. When affluent countries subsidize semiconductor manufacturing, electric vehicles, defense, or green tech, it is labeled as ‘innovation’ or ‘national security.’ However, when poorer nations attempt to add value to their minerals or safeguard emerging industries, warnings about ‘distortion,’ ‘inefficiency,’ ‘corruption,’ and ‘fiscal risk’ abound. In truth, global markets are already planned by dominant states, multinational corporations, patent systems, financial powers, and military interests. The crucial questions are: who dictates plans, in whose favor, and at what point in the production chain.
The UN Conference on Trade and Development (UNCTAD) highlights the need for unified state direction so that trade, energy, education, environmental, and foreign investment policies work cohesively. Without such harmonization, a government might pledge local processing initiatives while its central bank restricts industry credit, power outages undermine factories, and trade rules favor imports. Although UNCTAD’s insight is valuable, it overlooks a fundamental issue: capitalists prioritize profit over the public good.
An industrial policy that fails to regulate capital and guide it to serve society’s interests is bound to falter. Publicly owned enterprises are crucial for long-term investments in vital social sectors neglected by private capital. Instead of channeling public funds into private speculation, resources should support institutions managing markets, nurturing innovation, and developing socially valuable production capacities. Crucially, sustaining industrial policy demands reinstating some trade barriers and capital controls. Without these, governments face serious foreign exchange crises and fiscal strains, which in turn sap public finances and hinder industrial growth.
The erosion of industrial autonomy in the Global South was accelerated by the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This agreement restricted countries’ ability to imitate, adapt, and innovate technologies on their own terms. TRIPS has made it more difficult for nations to develop technology independently. It is now imperative for Global South states to reconsider unfettered intellectual property enforcement. Existing provisions like compulsory licensing facilitate production of essential medicines during crises. Similar mechanisms should extend to other key industrial sectors to enhance technology access, boost local production, and reduce reliance on multinational corporations.
Zimbabwe’s approach to lithium offers a noteworthy example of bold economic policymaking. In December 2022, Zimbabwe enacted Statutory Instrument 213 banning the export of lithium ores and unprocessed lithium except with ministerial approval. This policy challenged the colonial mindset that African nations should only extract and export raw materials. Zimbabwe leveraged control over this strategic resource to push mining companies toward investing in processing domestically, thereby increasing value addition, skills development, and tax revenues locally. While standard economics critiques such measures, this kind of assertive strategy is needed when the prevailing system deceptively promotes extraction as ‘efficient’ and manufacturing as ‘inefficient.’ Zimbabwe’s embargo altered mining capital’s incentives, encouraging investment in lithium concentration and, more recently, lithium-sulphate production – moving the country closer to producing battery components.
This policy must be supported critically, avoiding idealization. Refining ore into concentrate is not the same as controlling the entire battery supply chain. Foreign corporations still dominate production, holding sway over technology, financing, and market access. Local populations have expressed concerns regarding labor conditions, land and water rights, and regulatory shortcomings. An export ban alone cannot create engineers, reliable electricity, public research institutions, or domestic manufacturers. Zimbabwe’s future should involve a comprehensive mine-to-manufacturing strategy integrating geological expertise, public ownership stakes, development bank financing, vocational training, chemical processing, component manufacture, recycling, and regional demand coordination. Such a plan ought to grant institutional power to mining communities and workers and ensure that generated revenues support universal public goods instead of private profits.
Rather than counting processing plants, Zimbabwe’s progress should be judged by whether its lithium strategy fosters new public schools, hospitals, transport infrastructure, water access, energy systems, and other community assets.
The United Nations’ Fourth Industrial Development Decade for Africa (2026–2035) recognizes the pressing challenges we face. Nearly twelve million African youths join the workforce annually, while the African Continental Free Trade Area offers the scale to develop regional value chains. The UN rightly urges Africa to shift from exporting raw materials toward manufacturing higher-value goods. Yet, declarations and ‘bankable projects’ alone are insufficient. As Grieve Chelwa and I explain in our book, How the International Monetary Fund Strangles Africa (2026), Africa requires public development banks, continental infrastructure planning, coordinated mineral strategies, local-content requirements, protection for emerging industries, and relief from external debts that sap the fiscal capacity critical for industrialization.
Those opposed to industrial policy offer no genuine alternative. Leaving investments to multinational firms means accepting decisions made elsewhere: mines without local industry, farms without food processing, cities without decent jobs, and a green transition where Northern designs rely on minerals extracted in the South. Industrial policy doesn’t guarantee liberation but represents a contested arena where class power shapes control over investment, production, and wealth creation. The peoples of the Global South deserve to harness their own resources to craft their future.
Recent circumstances have opened dialogue about industrial policy, partly because the prolonged stagnation after the 2008 financial crisis has made orthodox approaches less viable. After years during which planning was sidelined and states weakened, the Global South must dare to envision alternatives beyond imposed arrangements. A Shona proverb from Zimbabwe serves as a fitting reminder: Chawawana batisisa mudzimu haupi kaviri – hold tight to what you have found, for the ancestors do not give it twice.
Warmly,
Vijay
Original article: Tricontinental: Institute for Social Research
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