significance. Others are nodes of sub-continental and even continental significance,
or have the potential to become such nodes in the future (Geyer, 1998). Just like their
counterparts in the North, these nodes in the South also attract large numbers of
international migrants, most of them usually unskilled and originating from the
region. Scores of migrants from Sub-Saharan Africa migrate to South Africa, many
of them ending up in the inner urban areas of the country’s mega cities. Similarly, a
sizable proportion of the people from Asia and the Pacific Rim migrate to cities such
as Singapore (Alden, 1996), and people in South America to the large urban
agglomerations in that region. Those that can compete for employment migrate to
countries in the North. These two migration streams are indicative of the process of
international differential urbanization (Geyer, 1998), i.e. higher qualified migrants
trying to find a new life in the North, while less qualified labourers who cannot make
it to the North migrate from more remote peripheral areas of the South to the most
vibrant cities in the region (Geyer, 2003).
Closely associated with the problem of global block formation and the role that
mega cities in the South play as migration and FDI destinations in their regions, is the
problem of choosing the most appropriate economic development approach.
DEVELOPMENT FRAMEWORKS OF THE PAST
Neo-liberalism
Opposing views on whether the emphasis in economic development should fall on
local or the export industry, are not new. Soon after the Second World War ended the
debate intensified on the potential of the ‘basic’ or ‘urban building’ versus the ‘non-
basic’ or ‘urban serving’ sector to bring about economic growth (Alexander, 1954;
North, 1955; Tiebout, 1963; Leven, 1966). Since then the intensity of the debate on
the development of the South has not diminished at all, only the focus has slightly
shifted. This is clearly demonstrated by the way in which the advantages and
disadvantages of neo-liberal economic development policies are still being debated in
the literature. As a result of the successes that were recorded by the newly
industrialized countries of the Pacific Rim over the past three decades in attracting
FDI and creating economic growth through industrial development, the established
global network of big business and international funding organizations still by and
large regards the main elements of neo-liberalism as the most appropriate way of
achieving economic development.
Proponents of neo-liberalism support the expansion of a social responsible free
market system and the stimulation of private initiative. First, they believe that the
reduction in financial control measures paves the way to foreign direct investments.
Protectionism, they argue, does not breed competitiveness and is not conducive to the
improvement in productivity levels in the local businesses sector. Indications are that
when markets are opened, the range of products broadens, the quality of products
tends to improve overall, and with it also labour productivity. Second, because not all
public services are always provided efficiently by the public sector, proponents of
neo-liberal economics believe that, ideally, the privatisation of most public services
would result in more effective management of public services and create a climate
that is conducive to growth of the private enterprise. When privatisation involves the
selling of public assets it also serves as a symbolic countermove against the growth of
government. However, due to high management costs to make assets sellable and the
usual capital market thinness that characterises developing economies, their payoff is