High-level Forum of Directors-General for Development Cooperation, as part of the Global South-South Development Expo 2013
31 October 2013
Mr. Moderator,
Distinguished Panellists,
Excellencies,
Ladies and Gentlemen,
It is a great pleasure for me to attend this High-Level Forum of Directors-General for Development Cooperation, and to share with you some of UNCTAD's thinking on the role of South-South cooperation in the post-2015 development agenda.
As all of you are aware, the post-2015 development agenda is very much a work in progress. But if the reality lives up to the rhetoric, it will represent a seismic shift in the global context for development. Similarly, South-South cooperation is work in progress too, and again, if the reality lives up to the rhetoric, then a big change in the governance of the global economy is under way. Bringing these two formative movements together poses new challenges, but it also offers real opportunities for the entire international community.
One of the main themes of the post-2015 discussions to date is that we should finish the job that was begun under the Millennium Development Goals. There seems to be almost universal support for a target of eradicating the most extreme poverty, as defined by the $1.25-a-day poverty line, by 2030. But there is, at the same time, a recognition that we must also move beyond the Millennium Development Goals to address new challenges, such as environmental sustainability, and in particular, limiting global warming to an increase of two degrees above pre-industrial levels, as well as achieving a more peaceful and secure world.
These are ambitious goals - and quite rightly so. Together, we have the resources, the know-how and the technologies to make the vision of a more inclusive, stable and secure world a reality for all. These goals are attainable, but achieving them will take a great deal of commitment from across the entire international community.
We must make this commitment. But, in doing so, we must also understand the fundamental nature of the changes that will be required if we are to have any chance of achieving them in just 15 years. Business as usual will not do it. Palliative measures and add-ons will not do it, either. The only way we can eradicate extreme poverty is through sustainable economic development, and a much more effective and inclusive process of development than we have seen - even in the emerging market economies - in recent decades.
Allow me to give just one example to illustrate the magnitude of the challenge: Today, nearly 50 per cent of the population in sub-Saharan Africa is living below the $1.25-a-day mark. That is about the same proportion as in China in 1993. In just seventeen years - by 2010 - extreme poverty in China had fallen to 11 per cent. This is a unique and truly extraordinary achievement. But the goal of poverty eradication means reducing poverty in sub-Saharan Africa even more - not just to 11 per cent, but to zero - and in a shorter time.
This will require major changes, at the national level and globally. And South-South cooperation can make an important contribution to bringing this transformation about. Ensuring that it plays this role takes us, of course, to the idea of a new partnership for development, which is very much part of the debate surrounding a post-2015 agenda. There can be no doubt that development assistance will need to be scaled up to meet the ambitions of the new agenda. But bold and innovative thinking will be needed too, including of the kind you have been discussing at this Expo.
It is important to insist, at the outset, that South-South cooperation, including development assistance, is not - and cannot be - a substitute for traditional North-South development cooperation. But even if donors fulfil their long-standing commitments on the level of aid and on aid effectiveness, in keeping with the ambition of the development goals they are proposing, more resources will be needed. Mobilizing those additional resources, including through innovative financing mechanisms, will be among the biggest challenges for the post-2015 agenda.
But we will still need to maximize the contribution of South-South cooperation as well. However, it would seem unrealistic to expect emerging markets to redouble their efforts in the area of development assistance as long as the great majority of advanced countries continue to fall so far short of the commitments they have made.
In ensuring the complementarity of South-South and North-South cooperation, and maximizing their combined effectiveness to support inclusive and sustainable development, we should pay due regard to the comparative advantages of Southern and Northern partners in development cooperation.
Even with the growth of emerging economies in recent decades, and in the wake of the financial crisis, the resources available to Northern partners for development assistance remain much greater than those available to Southern partners - all the more so as the ambition behind the sustainable development goals (SDGs) will require even the emerging economies to increase domestic social spending. So the bulk of the additional financial resources required to meet the SDGs will need to come from Northern partners, in line with their existing commitments. The scale of the resources required will of course depend on the goals set, the growth performance of developing countries themselves, and other factors. But it is already clear that the resources required will be a multiple of the estimates for meeting the Millennium Development Goals.
And while the likely costs are daunting, they are not impossible to mobilize. For example, the amount of funds mobilized in the aftermath of the financial crisis, to bail out banks in the United States alone, was truly impressive. According to some estimates, the overall amounts mobilized go into the trillions of dollars, which would exceed the cost of major undertakings such as the Marshall Plan, the Louisiana Purchase, or the total cost of NASA including the moon landings combined! I cannot vouch for these estimates, but they serve as a reminder that, if the political will is present, the international community can mobilize immense resources not only to overcome crises but also to advance a more progressive agenda of change and transformation.
If our Northern partners' comparative advantage lies in their differences from recipient countries, particularly in the availability of resources, the advantage of Southern partners lies rather in the similarities between them. The emerging markets have themselves passed through a similar development process to the one that low-income and least developed countries are now undergoing. They have successfully confronted similar challenges in the global trade and financial systems. They have faced the same economic challenges in developing their infrastructure and human resources, in developing and diversifying their productive potential, and in achieving the structural transformation that is now needed in other developing countries.
They have the invaluable assets of experience and empathy. It is that direct experience of the development process that makes Southern development solutions so pertinent. Of course, every country is unique. There is no Southern one-size-fits-all solution. But the solutions that emerge from the South have the merit of being grounded in the reality of development in the contemporary world. Because they are formed in a similar context, they can more readily be adapted to the needs and circumstances of other developing countries. Hence, South-South cooperation provides the means, in the words of the Marrakech Declaration on South-South Cooperation, "to conduct its own analysis and design and implement its own policies to address the challenges of the world economy".
With this in mind, one idea that UNCTAD has been exploring is to establish a network of policymakers across the South to support the exchange of experiences around issues where the international community has fallen short, such as industrial policy and debt management.
But development assistance and technical assistance do not exhaust the possibilities of South-South cooperation. Taken as a whole, the developing world is becoming increasingly important in the global economy, and this trend seems likely to continue. In a system of global governance where influence, in practice, remains proportional to economic weight, there is also a resulting significant southward shift in the global balance of power.
However - and as I will discuss further in my remarks at tomorrow's closing ceremony - we shouldn't exaggerate this trend. We are still a very long way away from seeing developing countries de-link from trends and shocks that emanate from the developed countries, let alone seeing them become engines of global growth. However, the dominance of the North in global decision-making is beginning to wane, and the burdensome conditionalities and hortatory tones that have too often accompanied development cooperation are beginning to be replaced by a greater appreciation of collective but differentiated actions.
Still, with growing economic importance come increasing responsibilities, and it is encouraging to see how emerging economies have increased their development cooperation efforts in recent years. China, for example, has recently bolstered the China-Africa Development Fund by $1 billion (bringing it to $5 billion), and has cancelled debt owed by highly indebted countries with which China has diplomatic relations. At the same time, India has set up the Development Partnership Administration - an equivalent to the U.S. Agency for International Development (USAID) or the United Kingdom's Department for International Development (DFID). Brazil, which is also looking to establish its own aid agency, gives up to $4 billion a year of assistance. Overall, according to the non-governmental organization Global Humanitarian Assistance, aid (conservatively defined) from non-Development Assistance Committee countries rose by 143 per cent in 2005-2008, to $11.2 billion, before falling during the financial crisis. Extending those initiatives will be critically important to the attainment of the ambitious goals envisaged for the post-2015 agenda.
Ladies and Gentlemen,
It is a long road from a world struggling to cast off the burden of the greatest financial crisis in history, to a world in which extreme poverty no longer exists. That is a different kind of world; and it needs a different kind of global economy. However, these two challenges can no longer be seen as distinct or separate. We need to shift away from the finance-led globalization process, which gave rise to the conditions that created the crisis through the inequalities and instability that it generates, and towards a process of development-led globalization, based on a new modality of inclusive, cooperative and South-centred development.
South-South cooperation is a central part of this - encompassing increased South-South integration and the expansion of regional infrastructure, the building of more equal South-South trading relationships and the fostering of a progressive increase in the sophistication of production, greater regional policy coordination, and the recycling of Southern balance-of-payments surpluses within the South, for example through regional and national development banks. All these elements and more would be central to a truly development-led globalization.
South-South cooperation needs to move beyond economic and social solidarity, to political leadership and solidarity. As the Marrakech Declaration on South-South Cooperation observes, "collectively, [developing] countries can play a more effective role in achieving development objectives and in shaping international relations". So the undertaking "to display the highest degree of unity and solidarity in global issues towards a greater articulation of [developing countries'] concerns and interests" is as pertinent as ever.
As when the Marrakech Declaration was signed ten years ago, it is still a key aim of South-South cooperation to strengthen and widen bridges across the South to "influence the processes that shape the new economic relations of the 21st century". We still need "efforts to increase the participation of developing countries in global economic governance", and "a better representation of the developing country's interests in the international trading system and great solidarity amongst [developing] countries to achieve this goal".
As 2015 approaches, we are coming to a turning point. The international community seems ready - at last - to commit to confronting the greatest challenges that face humanity: extreme poverty, avoidable child mortality, climate change, and environmental sustainability. If we do so successfully, this will truly be a different world, and a much better one in 2030 than it is today.
But setting ourselves ambitious goals is the easy part. The real test is whether we can translate these great and worthy aspirations into reality - whether we are prepared to take the action required to achieve those goals. I genuinely believe that we can do so. And I truly believe that South-South cooperation and solidarity can be instrumental, not only in the economic and social spheres but politically, in establishing the development-led globalization process that will be central to their attainment.
Thank you very much.
