Development & Aid, Economy & Trade, Global Governance, Headlines, Latin America & the Caribbean

Latin America Urges More South-South Cooperation

Milagros Salazar

BRASILIA, Jun 1 2010 (IPS) - The governments of Latin America and the Caribbean asked ECLAC Tuesday to come up with a new set of criteria so middle-income countries are not excluded from official development assistance. They also called for greater South-South cooperation.

“The concept of ‘middle-income’ glosses over differences between countries and their needs in specific areas like climate change, which is hitting the nations of the Caribbean and parts of Latin America especially hard,” Marcelo Suárez, an Argentine Foreign Ministry adviser, told IPS.

Suárez and other representatives of countries classified as middle-income drew up a draft resolution at the 33rd session of ECLAC (the United Nations Economic Commission for Latin America and the Caribbean), which ended Tuesday in Brasilia.

In the proposal submitted for debate at the two-day session, the countries urged the regional U.N. agency to work with other international and regional organisations to analyse new ways to increase funds to finance development in Latin America.

They also called for the design of a broader set of indicators that would reflect the specific reality and needs of each country, so that middle-income countries are no longer excluded from development aid.

ECLAC Deputy Executive Secretary Antonio Prado said at the meeting in the Brazilian capital that “it is necessary to come up with something more elaborate. Latin America is losing development aid; the concept of ‘middle-income’ should be reformulated.”

Africa and Asia continue to receive the bulk of official development assistance, while Latin America’s share went down from nine percent in 1990 to seven percent in 2008, according to ECLAC.

But the call issued by the countries of Latin America did not only refer to traditional development aid from rich countries to the developing world, but to South-South cooperation as well, among Latin America, Asia and Africa.

Several delegates said the region had stopped being a priority for the industrialised North in the midst of the global crisis.

But the idea of increased cooperation among developing nations presents challenges. Gert Rosenthal, Guatemala’s permanent representative to the United Nations, pointed to problems of technical capacity and a lack of links between countries of the South.

Offers of South-South aid “have grown exponentially,” he told IPS. “But there is a lack of capacity, and countries are more used to working with the North, and in the case of my country, for example, we are losing opportunities of aid from Brazil.”

Rosenthal also believes countries in the region fail to take sufficient advantage of support from India, for instance, perhaps because it is so distant, in both geographical and cultural terms.

Although it is an emerging power, Brazil earmarks just 35 million dollars to annual development assistance to Africa — mainly Portuguese-speaking nations — and to Latin America.

Of that aid, the biggest beneficiaries in the region have been Paraguay, the recipient of nearly eight million dollars for agricultural, educational and health programmes, and Haiti, which has received 15 million dollars in support, said Marco Farani, director of the Brazilian Cooperation Agency (ABC).

Farani told IPS that Brazil hopes to increase its development aid and to boost “triangular” cooperation, in which two countries form a partnership to lend assistance to a third, less developed, country.

The director of Ecuador’s International Cooperation Agency, Gabriela Rosero, said support should not only focus on the transfer of funds, but also on capacity sharing, “with respect for the sovereignty” of the beneficiary nations.

Suárez commented to IPS that triangular cooperation can help ensure that middle-income countries that receive international development funds respect the viewpoints of poor third countries when it comes to implementing development programmes.

ECLAC backs innovative new financing mechanisms to assist least developed countries, such as a green tax on air travel or a tax on carbon emissions.

Advocates of the two taxes say they could raise between 60 and 130 million dollars a year.

The ECLAC session also discussed challenges in South-South trade relations and the need for greater integration in Latin America and the Caribbean, especially in the face of China’s tremendous growth.

ECLAC Executive Secretary Alicia Bárcena said the region’s biggest problem is that it continues exporting commodities, without diversifying or increasing the sharing of know-how and technological innovation. “The opening up of trade should not be unconditional, but should take value added into account,” she said.

“In Latin American countries, exports to China are concentrated in just two or three products,” Osvaldo Rosales, the director of ECLAC’s International Trade and Integration Division, told IPS. “In the case of Peru and Chile that means copper. We have an outdated structure that does not generate a production chain.”

Chile has the strongest trade ties with China, selling it 13 percent of its total exports. It is followed by Peru (11 percent), Argentina (nine percent), and Costa Rica and Brazil (seven percent each).

To confront practices like dumping — the export of products at prices deemed artificially low — and weak respect for labour and environmental rights on the part of China, the region should negotiate as a bloc, said Rosales, who added that it would be a difficult task requiring political will.