South-South cooperation: Towards a new paradigm?


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India's Vice President Mohammad Hamid Ansari shakes hands with his Botswana counterpart Mompati S. Merafhe during a ceremony in Gaborone in 2010

The idea of south-south cooperation evokes a positive image of solidarity between developing countries through the exchange of goods, resources, technology, and knowledge. It is an attractive proposition, intended to shift the international balance of power and help developing nations break away from aid dependence and achieve true emancipation from former colonial powers.

The surge South-South economic cooperation over the past two decades – including trade, investment, development assistance and other financial flows - is therefore generally seen as a positive development. For example, Brazil’s trade with Africa increased between 2000 and 2012 from US$4 bn to US$28 bn. Partly as a consequence, Brazil has now 37 embassies on the African continent, more than the United Kingdom, and China is Africa’s most important trading partner. China has also become Brazil’s, South Africa and India’s most important trading partner over the past years, growing at higher rates than North-South trade. Trade between Africa and the BRICS has grown so fast that it now even exceeds intra-BRICS trade. The value of exports from developing countries to other developing countries (“South-South” trade) now exceeds exports from poor countries to rich ones (“South-North” trade). China, India and Brazil are also increasingly active as so-called ‘emerging donors’, both in Africa and in their respective neighborhoods.

As a consequence, there is now increased enthusiasm for South-South cooperation, leading to its inclusion on many countries’ foreign policy agendas, in the strategic planning of various organizations, and in the research agendas of some scholars.

As Aileen Kwa of the South Center in Geneva says, in World Trade Organisation
(WTO) circles and discussions, South-South trade is viewed as a sacred cow— not to be disturbed and certainly to be enhanced. Any measure that might lessen the flow of South-South trade is viewed negatively, almost to be avoided at all costs.

Yet an important unanswered question is how South-South cooperation fundamentally differs from South-North cooperation, as is often suggested. Many analyses of South-South cooperation are based on the implicit assumption that trade between Southern states would be less exploitative than that between the South and the North; and, the belief that economic interactions between states of the South would be more responsive to the development needs of the South. Due to the lack of norms and rules established by actors in the Global South, coming up with hard evidence to support these claims is difficult an often remains anecdotal.

Critics of the assumption that South-South cooperation is somehow superior have pointed to what they call the BRICS’ “Scramble for Africa”, indicating that South-South cooperation is increasingly similar to North-South trade as emerging power such as Brazil, India and China are increasingly transforming themselves into major poles of the global economy. In Brazil, strong trade ties with China are often seen not as an opportunity, but as a threat.

This question is not new. Prior to the 2nd BRIC Summit in Brasília, in 2010, Rathin Roy, head of IPC-IG, a joint project between UNDP and the Brazilian government to promote South-South Cooperation, asked:

Will the rise of the emerging economies portend just a broadening of the “great game”, the only result being a little more elbow room for developing countries in their engagement with the G-20 economies? Or will the global South seize this opportunity to forge a new and more inclusive paradigm that secures faster and more sustainable development for all citizens? (…) Can we look forward to exciting paradigm shifts in the discourses on global trade, aid, development cooperation and the rhetoric of best practice? Will emergent regional and global plurilateral groupings afford new avenues for effective development cooperation?

Since South-South cooperation has grown so much, the importance of this question has grown considerably. Promoters of stronger ties among the Global South in Brasília, Beijing and New Delhi regularly argue that South-South cooperation is qualitatively different from North-South Cooperation - for example, loans are said to have fewer strings attached, to be less invasive and less paternalistic. Since donors in the Global South are still fighting poverty themselves, many argue, they are set to be more effective operators in recipient countries. At a recent conference organized by UNDP in Moscow on the BRICS' role in Africa, "win-win situation" was the most frequently used term by far, yet often in a rather fuzzy manner.

And indeed, South-South cooperation is to be welcomed, as I have frequently argued in previous articles. The unprecedented growth of South-South cooperation over the past two decades has undoubtedly helped lift millions in the Global South out of poverty. (Yet this may be the case not only because South-South trade is qualitatively different, but because it generated prosperity at a time when the West was embroiled in a profound financial crisis, affecting trade and cooperation with the Global South.) Still, strengthening ties of all sorts between actors in the Global South democratizes the global conversation and reduces a fundamental imbalance in the global system towards the Global North. Initiatives such as the BRICS, BASIC, IBSA, ASA and ASPA groupings are extremely important because they reduce developing countries’ distrust of one another, making it increasingly difficult for the United States and Europe to  split them with bilateral deals (although it still happens, as seen during the selection process of the last World Brank President in 2012).

Yet while praising South-South cooperation unconditionally may work for now, it may also backfire at some point. This is particularly the case in Africa, where growing ties with the Global South are at times seen as a panacea of many problems, and a welcome alternative to North-South cooperation. Systematically holding South-South cooperation to higher standards than North-South cooperation is bound to lead to disappointment among Africans, particularly as long as many areas of South-South cooperation remain largely noninstitutionalized, nontransparent and unregulated. This is particularly the case with development and humanitarian aid as well as lending practices. The BRICS Development Bank is an important step in the right direction, as it will force the leading actors in the Global South to develop rules and norms that will substantiate their claims about the mutual benefits of South-South cooperation.

In the future, the BRICS grouping could be a useful platform to discuss development and humanitarian aid strategies and norms, and perhaps one day turn into an OECD-type organization. That would be an important step towards both institutionalization, and towards assuring that South-South cooperation remains as popular as it is today.

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Photo credit: Press Trust of India