Development & Aid, Economy & Trade, Global, Global Geopolitics, Global Governance, Headlines, Poverty & SDGs

DEVELOPMENT: Quantum Leap in South-South Investments and Trade

Thalif Deen

UNITED NATIONS, Jan 15 2008 (IPS) - The world’s emerging economies – including China, India, Brazil, South Africa, Malaysia and Thailand – have made a quantum leap in their investments in the global South and in trade with developing nations.

“Clearly, today there is growing economic complementarity and capacity for developing countries to advance their development through mutual cooperation,” says Ambassador Munir Akram of Pakistan, the outgoing chairman of the 130-member Group of 77 developing nations.

He says this is already happening through regional economic integration in Asia, Africa, and Latin America and the Caribbean.

“Many developing countries are investing their surpluses in other developing countries and many are engaged in extensive development cooperation,” Akram told a meeting of the Group of 77 last week.

In a report on “The State of South-South Cooperation” released last month, the United Nations provides specific examples of the growing cooperation among developing nations, specifically in trade, investments and development aid.

The Malaysian government, through its “prosper-thy-neighbour” policy, invested over 4.8 billion dollars in other developing countries in 2006, and also signed 56 investment guarantee agreements with the global South, according to the study.

Since 2004, India has extended a total of 1.4 billion dollars in concessional lines of credit to developing nations, primarily for infrastructure development, agricultural equipment, pharmaceuticals and other development projects.

And under the Indian Technical and Economic Cooperation Programme, the government in New Delhi has provided over 3.0 billion dollars in technical assistance to 156 developing nations.

Moreover, India has pledged about 100 million dollars for poverty alleviation among countries of the South Asian Association for Regional Cooperation (SAARC), including Sri Lanka, Pakistan, Bangladesh, Nepal, Bhutan, the Maldives and Afghanistan.

India has also earmarked about 200 million dollars for the New Partnership for Africa’s Development (NEPAD); 500 million dollars for West African countries; and a 250-million-dollar line of credit for the investment bank of the Economic Community of West African States (ECOWAS), according to the U.N. study.

China has been described as one of “the world’s largest and fastest-growing manufacturing centres and a major hub for South-South cooperation.”

The Chinese government has pledged to double aid to Africa by 2009, to approximately 1.0 billion dollars; establish a 5.0-billion-dollar China-Africa Development Fund to encourage Chinese companies to invest in Africa; and provide 3.0 billion dollars in preferential loans and 2.0 billion dollars in preferential buyer’s credits to African countries.

China has also cancelled all debt stemming from Chinese interest-free government loans that matured by the end of 2005 for the 31 heavily indebted and least developed countries in Africa (and that have diplomatic relations with China).

Brazil, which has been expanding treatment for people with HIV/AIDS, has donated locally produced anti-retroviral drugs to at least 11 other developing nations: Bolivia, Burkina Faso, Cape Verde, Colombia, East Timor, El Salvador, Guinea-Bissau, Mozambique, Nicaragua, Paraguay and Sao Tome and Principe.

According to the U.N. study, Brazil also coordinates an international technical cooperation network on HIV/AIDS. The network, which facilitates technology transfer for anti-retroviral production, includes Argentina, China, Cuba, Nigeria, Russia, Thailand and Ukraine.

Cuba, which has provided a steady supply of medical doctors and medical experts to many developing nations, has assisted Nigeria with ethanol production.

South Africa has created its own International Development Agency aimed at expanding the country’s official development assistance (ODA). The current proposal is to increase the level of assistance to between 0.2 and 0.5 percent of gross national income.

Thailand, on the other hand, provides assistance at a rate comparable to that provided by the world’s richer nations: 0.13 percent of its gross national income.

Under its Mekong Economic Cooperation Strategy, Thailand has participated in 40 multi-country common projects and over 200 bilateral projects involving Cambodia, Laos, Myanmar and Vietnam.

Turkey allocates over 50 million dollars annually for South-South programmes through the Turkish International Cooperation and Development Agency, which has 22 field offices in developing countries. The Agency has overseen over 930 projects in 90 developing nations.

“The robust economic growth of a number of countries in the South – such as Brazil, China, India and the Russian Federation, as well as that of a number of other developing countries, including Chile, Egypt, Ghana, Malaysia, Qatar, Singapore, South Africa, Thailand and Turkey – has had a significant impact on the development prospects of other countries in the South,” says Secretary-General Ban Ki-moon.