Solidarity and The South: New Directions in Long-Term Development Finance

The world of long-term development finance created a new centre of gravity in recent years, based in the south and oriented to the south. This new, Southern-led landscape of development finance is potentially one of the most significant trends in decades.

In part, it is a response to the economic crisis of 2007-2008, which provoked many developing countries to seek resilience and a bulwark against economic vulnerability in an uncertain and unbalanced world. It is also a response to long-held frustrations with the limitations of the existing international financial architecture, that failed to provide sustainable long-term finance to many parts of the world and to essential activities, infrastructure.

This compendium presents some of the key elements of this trend, focusing on south-south banks, funds and other forms of regional financial integration. It shows a recognition of the power that comes when countries collaborate and stand together, melding national development objectives with those of their region.

Alongside this trend towards regionalism, there has also been a significant change in attitude towards development banks, recognizing they fill an essential purpose that commercial banks cannot fulfil.

The selection of papers and discussion in this volume is unusual in that it brings together first-hand experiences of lenders, borrowers and practitioners from Development Banks and funds (including the founder members of the new Southern-based bank), alongside the views of academics and policy makers. The aim is not simply to documents trends but rather to share experiences and expertise, in order that countries can be better prepared for the exciting new opportunities that south=south financial integration is creating, and the challenges that still need to be addressed.