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Q&A: Forging New Paths to Sustainable South-South Cooperation

Mithre J. Sandrasagra interviews RICHARD KOZUL-WRIGHT of UNCTAD's South-South unit

NAIROBI, Nov 30 2009 (IPS) - Countries from the South are assuming leading roles in decisions on global issues ranging from economic recovery to food security, climate change and HIV/AIDS.

Complementing the new economic heft of the developing world is the rapid pace of South-South trade and investment.

South-South merchandise trade has grown by an average 13.4 percent per year since 1995, reaching 2.4 trillion dollars, or 20 percent of world trade, by 2007, according to the U.N., and exports from emerging market and developing countries have grown to about 40 percent of the overall world total.

During the same period, the South-South share of African exports grew by an average of seven percent a year, and combined annual African exports to India and China rose to about 40 billion dollars. Two new reports of the U.N. secretary-general highlight these current trends.

In an interview with IPS Editor at Large Mithre J. Sandrasagra on the sidelines of the High-level U.N. Conference on South-South Cooperation here, Richard Kozul-Wright, Officer-in-Charge of the Unit on Economic Cooperation and Integration Among Developing Countries at the United Nations Conference on Trade and Development (UNCTAD), said that “the resilience – particularly of the large emerging economies – to the recent financial shocks marks a new chapter in international relations”.

The conference “is a recognition of that resilience and an acknowledgement that new coalitions and mechanisms can help address longstanding development challenges”, Kozul-Wright stressed.

Excerpts of the interview follow.

IPS: As a result of the ongoing financial and economic crisis, Southern countries can no longer rely on Northern economies as primary trading and development partners. Is this challenge an incentive to build new forms of development cooperation that promote inclusive growth across the South? RICHARD KOZUL-WRIGHT: Very much so. South-South Cooperation builds around both the need to mitigate shocks and downside risks that derive from biases and asymmetries in North-South relations, and more positive growth and development impulses that derive from closer economic interdependence.

The financial crisis has served as a reminder of just how damaging those shocks can be and there has been renewed interest in new mechanisms of financial and monetary cooperation among developing countries, such as a South Bank and regional monetary funds.

On the positive side, the emergence of dynamic economies in the south has provided new opportunities to trade and invest with each other. However, it must also be recognised that the growth of South-South relations during the last few years has itself been driven, in part, by the debt-fuelled demand of Northern consumers.

The adjustments now underway in the North to correct household, financial and national imbalances will be prolonged. Particularly the larger Southern economies will need to make sure that the ties that have been building in recent years are extended to weaker economies in the South.

IPS: What are your expectations for the high-level conference? How can the Kenyan outcome build upon the commitments of the 1978 Buenos Aires Plan of Action for Technical Cooperation among Developing Countries (TCDC)? RKW: With hindsight, the Buenos Aires conference proved to be a high point of developing country efforts to establish a new international economic order. Those efforts ended with the debt crisis of the early 1980s.

The contemporary challenge is less about recovering what was lost over 30 years ago, as it is about responding to the new crises and opportunities that have emerged from a prolonged period of global deregulation. The last 30 years have been characterised by boom and bust economic cycles that have generated very uneven growth in the South, but from which have emerged a number of very dynamic economies.

Moreover, the resilience – particularly of the large emerging economies – to the recent financial shocks marks a new chapter in international relations. The conference is a recognition of that resilience and an acknowledgement that new coalitions and mechanisms can help address longstanding development challenges.

IPS: Does the U.N. have a role in assuring developing nations boost South-South trade and inter-regional investments? Are there opportunities to scale up existing initiatives? RKW: First and foremost, closer South-South economic ties should be managed among the countries themselves. But the U.N. can certainly provide policy support and advice.

In this respect, because the U.N. has consistently warned about the limits of the Washington Consensus, it is better placed than the Bretton Woods institutions to extend such advice. UNCTAD has been doing that with its work on trade agreements, notably GSTP [Global System of Trade Preferences Among Developing Countries], and investment agreements.

That work builds on a recognition that getting the most out of closer economic interdependence isn’t just about rapid liberalisation but about a more integrated policy approach, with requisite attention to the space policy makers need to manage a more sustainable growth path.

IPS: Can South-South Cooperation be viewed from a development angle rather than a political one? RKW: It has to be both. Solidarity and empathy are the normative backbone of South-South Cooperation, but that must be complemented by hard economic ties. The two have tended to move along separate lines in recent years. Now seems to be the right moment to walk on both legs, to borrow a Chinese aphorism.

IPS: One of the key elements of enhancing South-South Cooperation is the sharing of experiences and expertise. In this regard, could you highlight some specific successful South-South initiatives or triangular partnerships? RKW: There are many and U.N. Development Programme (UNDP) has been very diligent in promoting success stories.

UNCTAD is currently organising an expert group meeting later this month on the contribution of South-South and triangular cooperation in bolstering food security and there are many encouraging examples of such cooperation in the agricultural sector.

Agriculture has been a priority for China–Africa economic and technical cooperation, involving over 40 countries and over 200 cooperation projects. The recent summit Forum on China–Africa Cooperation in Egypt has made agriculture a priority in extending that cooperation in the next few years.

In terms of triangular cooperation, Japan partners with Brazil to transfer agricultural technology to other developing countries, including in Africa. The New Rice for Africa (NERICA) project resulted from the cooperation between several African countries and research centres, backed by donors – Japan, Food and Agriculture Organisation (FAO) and the African Development Bank (ADB). It led to the creation of new drought resistant and high-yield rice for Africa.

IPS: How can South-South Cooperation scale up developing countries efforts to meet targets set by the U.N.’s Millennium Development Goals (MDGs), including eradication of poverty and hunger, and the fight against HIV/AIDS? RKW: MDG 1 is the cornerstone of the whole MDG effort. It is also the most challenging. The international community can help by increasing and untying Official Development Assistance (ODA), reducing conditionalities and by establishing a more balanced global economy.

Responsibility in all these respects clearly lies with the developed countries. My personal inclination is to look again at the Marshall Plan which still represents a highpoint in development cooperation. In many respects, South- South Cooperation is close to the Marshal Plan ideals such as local ownership, partnership and the need for policy experimentation. These have to be the basis of any scaling up of effort. In this respect, traditional donors have much to learn from South-South Cooperation.