unctad.org | Multi-year expert meeting on international cooperation: South–South cooperation and regional integration
Statement by Mr. Petko Draganov, Deputy Secretary-General of UNCTAD
Multi-year expert meeting on international cooperation: South–South cooperation and regional integration
Geneva
23 Feb 2011

Excellencies,
Colleagues,
Ladies and gentlemen,

On behalf of the Secretary General of UNCTAD I would like to welcome you all to the third multi year expert group meeting on International Cooperation: South- South Cooperation and Regional Integration.

This meeting comes at a very opportune moment as we are now preparing for UNCTAD XIII. The Secretary General has, in that context, introduced the idea of "Development-led globalization" and South-South cooperation is certainly a vital part of its agenda.

The economic crisis beginning in 2008 and the subsequent slowdown in growth in advanced economies, is forcing many developing countries to rethink their development strategies. A critical challenge facing the South, especially LDCs, is to build productive capacities in countries that need to catch-up, and promote inclusive and cumulative growth. This requires a reexamination of sectoral policies, particularly industrial policies, along with necessary complementary policies in macroeconomics, finance and trade, that together encourage productivity growth and structural transformation in favour of diversified production structures.

To arrive at the right mix of national policies is not easy for any country, especially in today´s globalized world where growth of one country will influence and will be influenced by growth in other countries due to freer trade, technological advancements and greater mobility of capital. Since growth and structural transformation in any given country does not proceed in isolation from what is happening in other countries, what is now required is to coordinate policies across countries in the South in a way that it becomes possible for all to shift to higher growth trajectories. South-South cooperation aims at cooperation and coordination at all levels, be it trade, technology, investments, finance and industrial and related policies so as to have cumulative and inclusive growth. The emergence of some of the countries in the South as global players has added new dimensions to South-South cooperation. The first session of today´s meeting will focus on some of these issues and discuss the way forward towards new and more inclusive development paths.

As we all know, increasing productivity growth has been one of the most difficult goals to achieve in many countries of the South. The traditional North-South arrangements have not yielded the desired results. It is now important to deliberate on what can be done differently in South-South arrangements. Do the emerging economies in the South have the capacity to effectively transfer technologies to other developing countries and help in building their productive capacities? This is an important question to ask. The second session of this meeting will deliberate on the issue of South-South technology transfer and discuss the industrial and complementary policies with respect to trade and investments that are required to make the South-South cooperation in technology sharing more successful. We hope that by the end of the first day, the proceedings of the meeting will help us all to have better understanding of these very complex issues.

The emergence of new growth poles in the South has revived interest in regional arrangements and possibilities of sharing successful policy experiences with respect to industrial development. There is considerable scope for all developing economies to benefit from advantages of geographical and cultural proximity when seeking to develop their industries and upgrade their production. Financial and monetary cooperation within the region can substantially lower the risk associated with capital flows. Regional development banks and sub-regional banks have an important role to play in South-South cooperation. They are particularly valuable for financing of small and medium enterprises, which are in majority in the developing countries, and can help them to go global. We are very fortunate to have experts from regional and sub-regional development banks participating in this meeting and we look forward to their views on South-South cooperation in the area of finance. Experts will also share some of the successful examples of policy implementations within regional dimensions.

Dependence on the primary sector has remained an unresolved issue for many countries in the South, especially LDCs. However, this can provide a window for growth and development if appropriate policies are put in place. South-South cooperation can play an important role in this. The existence of rising demand as well as supply for commodities within the South increases the scope for successful South-South cooperation. The meeting will deliberate on making this cooperation more effective so that gains from participation in commodity economy rises, placing these countries on a higher growth trajectory.

South-South ties based on trade, investments or any other forms, to be viable in the long run requires not just coordination of policies amongst countries but also the choice to adapt the policies to incorporate domestic realities. Within the South, countries differ in terms of their socio, economic and political realities. They are on different development paths and although the problems of poverty, illiteracy or employment generation, may be similar, their magnitude and dimensions differ.

For any coordination of policies to be successful, it is important that all the countries involved have policy space and can formulate policies which are aligned with their domestic realities. Efforts to expand South-South trade through collaborative efforts like the GSTP process have to take into consideration this fact. Deliberations by the experts on how to expand policy space in the South-South agenda will be discussed in the concluding session of this meeting.

We are very appreciative of the experts that have come to the meeting to present their work be it as panelists or with contributions from the floor. We see this as an opportunity to learn and strengthen UNCTAD´s work on South-South cooperation which is carried out by the new unit on economic cooperation and integration among developing countries set up from the resources given to us as part of the agreement by the General Assembly to strengthen the UN`s Development Pillar.

It is also an opportunity for experts from different regions to hear from each other. I hope that the resulting discussion will be open and forthright. I also hope that concrete recommendations on how South South and triangular cooperation can make a real difference to the lives of people will emerge from the discussions.

I wish you a productive three days of deliberation.



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