which heralded the triumph of the capitalist economic model over that
of the planned economy, was the emblempar excellenceof this policy
shift. After a period of adjustment, undoubtedly painful but perfectly
natural given the dilapidation of their infrastructures and the absence
of any business culture, the countries of Eastern Europe slowly but
surely found their way back toward growth. Thanks to their me-
thodical and efficient adjustment policies, Bulgaria, the Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovenia, and
Slovakia even entered the European Union alongside some of the most
thriving economies in the world.
While the liberal consensus caused less of a shock in the South than
it did in the former socialist countries, the reforms introduced there
were nonetheless profound. Having experimented with various forms
of inward-looking development, poor countries finally understood
that the opening up of trade was a precondition for growth. Third
World governments manifested their new free-trade stance most
notably by joiningen massethe WTO, an international organization
whoseraison d’eˆtreis precisely the liberalization of trade. It should be
recalled that the GATT – the WTO’s predecessor – had always been
regarded as a club for rich countries. Today, however, the situation
has changed entirely, as 80 percent of WTO members are from the
South.
Since the early 1990s, developing countries have radically altered
their attitudes toward foreign investment and transnational corpo-
rations. Breaking with the distrust that colored their policies for so
long, they have adopted an array of financial liberalization measures
with a view to attracting private capital. This new approach goes a
long way to explaining why, as noted earlier, the South has recently
received much higher levels of foreign direct investment. It has also
allowed some emerging countries, like Brazil, South Korea, and
Mexico, to become major players in international capital markets,
and has fostered the unparalleled expansion of Third World trans-
national firms.
The prosperous countries of Asia and Latin America are not the
only ones to have felt the effects of the new liberal consensus that has
taken shape in the developing world. Since 2001, Africa, too, has
embarked on the road toward significant economic renewal through
the adoption of a vast development program, the New Partnership for
Africa’s Development (NEPAD), which draws on the principles of the
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