One of the many research reports that demonstrate how the developed world discriminates against the poor world is the December 2022 document by the South Centre titled “Illicit Financial Flows and Stolen Asset Recovery: The Global North Must Act.” The study shows how illicit financial flows disproportionately harm poor nations and how stolen assets are frequently stashed away in developed nations. Data from the World Bank’s Stolen Asset Recovery database shows “almost all the stolen assets are parked in developed countries”, with developing countries in the Global South seeking the return of their assets from developed countries in the Global North. This injustice by the global north is one of the many reasons for the need for south-south cooperation to build a collective power to exert more influence on the global stage.
South-South cooperation is an approach that aims to promote mutual benefit and solidarity among countries in the global South as they work to address developmental challenges and transform the global order. It embodies the notion that underdeveloped nations can collaborate to help one another’s development. By working together more, developing nations can influence the global system to better take into account their shared interests and concerns. This strategy aims to enable the underprivileged to take charge of their own development and to advance a more just global system.
There is significant potential for collaboration in both increasing South-South trade and in creating a unified negotiating stance to push for reforms in the global economic system. Working together can allow developing countries to have a greater impact and influence in these areas. According to the United Nations Conference on Trade and Development (UNCTAD), the value of South-South trade reached $5.3 trillion in 2021. This implies a substantial rise over time. In fact, the volume of trade between developing countries is now higher than the volume of trade between developing and developed countries. This trend suggests that South-South cooperation is becoming increasingly important in the global economy.
Although developing nations are aware of the value of South-South collaboration, this relationship has not yet realized its full potential. One should read the report of the UN Conference on Technical Co-operation among the Developing Countries, held in Buenos Aires in 1978. While the report made several recommendations, most of them have not been implemented till today. The effectiveness of the south-south has been low because of several reasons. (1) Lack of well-defined national policies on south-south cooperation. (2) Information asymmetry on the successful south-south cooperation stories. (3) Resource scarcity also hampers south-south cooperation. There are only a few developing countries that can invest in other developing countries. (4) There are also unevenly shared benefits between the countries. Cooperation is not always win-win. At times it is a win-lose.
In some instances, the failure to achieve optimal South-South cooperation has been due to the actions of a few developing countries themselves. Debt trap diplomacy is one such example. Countries like Uganda, Maldives, Sri Lanka, and many others have been affected by the predatory lending practices of countries like China. Intentionally causing other countries to default on their loans goes against the principles of South-South cooperation and can be seen as predatory behavior.
These practices must be abandoned, and emerging nations must band together. India has been a champion of south-south cooperation. The Non-Aligned movement played a key role in south-south cooperation. It was also recognized in the Nairobi outcome document of the High-level United Nations Conference on South-South Cooperation, held in 2009. At the first meeting of the Non-Aligned Movement in Belgrade in 1961, explicit commitments were made to strengthen trade relations among developing countries. However, the process of cooperation among developing countries only began in 1968 with a trade agreement between Egypt, India, and Yugoslavia. In 1972, the Non-Aligned Movement approved a plan for economic cooperation among its member countries and with other developing nations.
More recently, making Covid-19 vaccinations available for the developing world is a testament to India’s efforts for south-south cooperation. Against this backdrop, India is organizing the “Voice of Global South Summit,” which is set to take place on January 12 and 13. It will bring together around 120 countries from the global South to discuss their perspectives and priorities on a shared platform. India is organizing this event with the goal of promoting collaboration and unity among countries in the global South.
This is the first opportunity for most of the world’s developing countries to come together and address the issues and challenges they have been facing since the pandemic’s beginning. It will be a platform to raise concerns and apprehensions about the developing world. As stated by India’s Prime Minister Narendra Modi, priorities for India’s G20 presidency will not only be shaped by the G20 countries. The concerns emanating from Voices of Global South Summit will surely find their way into the priorities of G20 this year.
South-South collaboration has become crucial in the post-pandemic world. South-South cooperation can assist national development policies and help break the cycle of poverty, instability, and development inequities as the world advance toward a post-pandemic reality and recovery. In its pursuit of both national development and south-south cooperation, India will unquestionably play a crucial role in making the views of the South heard.
Bibek Debroy is Chairman, the Economic Advisory Council to the Prime Minister of India (EAC-PM) & Aditya Sinha is Additional Private Secretary (Policy & Research), EAC-PM.