Promoting South South Development Cooperation: Role of India

  • Geethanjali Nataraj

In the recently inked sustainable development goals (SDG's) which identify international cooperation priorities and set the paradigm for global cooperation, India would be a key contributor laying emphasis on south-south development cooperation as an important pillar of the SDG's post 2015.

In recent years, there has been a slackening of donor enthusiasm in developed countries, leading to increases in South South Cooperation. Every year, September 12 is celebrated as the South South Cooperation Day to commemorate the adoption in 1978 of the Buenos Aires Plan of Action for Promoting and Implementing Technical Cooperation among Developing Countries which lies at the heart of south south cooperation. This year was no exception.

South South Cooperation in its entirety refers to collaboration among countries of the South in all domains including economic, political, cultural, environmental and technical. However, in recent times, the focus of south south cooperation has taken the form of increased volume of south-south trade, south-south flows of foreign direct investment, regional integration initiatives, technology transfers and sharing of expertise in all domains and other forms of exchange. Infact, with the slowdown in the developed world post the global financial crisis of 2008, south south cooperation has played a key role in helping the global economy deal with the global financial crisis and also laid a road map to deal with such crisis in future. For instance G20 which has several emerging economies in it played a key role in responding to the global financial crisis of 2008-09. Its decisive and coordinated actions boosted consumer and business confidence and supported the first stages of economic recovery. Hence, organizations like G20, IBSA, BRICS etc. have been key promoters of south south cooperation. A major plus point of this south south development cooperation is the fact that it is a voluntary and horizontal partnership between the countries of the south with no strings attached unlike the vertical north-south cooperation which was more of a historical responsibility.

India’s Role

In the last decade or so, the range and quantum of South-South cooperation has expanded significantly. And India being a growing emerging economy has contributed in various ways towards strengthening south south cooperation and has been an active player in development cooperation efforts with low income countries in Asia and Africa.

With impressive growth and greater openness in recent years, India has become a key player in the global economy. Despite still only accounting for only 1.7 share in world exports in 2015, India’s trade and investment polices increasingly affect global growth and development prospects, be it through export bans of key commodities, supply of generic medicines to African countries or the expansion of trade and investment, including access to markets in India. Infact, the Foreign Trade Policy 2015-2020 aims at increasing India’s merchandise and services exports to US$ 900 billion by FY 2020.

India’s growing economic power is changing the dynamics of global economic governance. Within the WTO, India’s profile and influence has risen dramatically over the last decade. India positions itself as the voice of developing countries in global trade talks. Domestically however, India’s embrace of globalization is not uniform and related debates and policies on trade and investment issues are largely shaped by its national development needs.

India embraces its increasing trade and investment ties with LDCs, particularly in African countries with much élan. Trade and investment is at the heart of India’s dialogue on South-South Cooperation. Trade and investment flows to meet the demands in a growing Indian economy, available economic opportunities in other economies and a thriving private sector have all contributed towards India’s emergence as a key player in global markets.

Further, India’s south south cooperation and development cooperation efforts have also largely been through its duty free trade preference scheme facilitating low income countries exports to India, India’s overseas investment especially in South Asia and Africa.

Moreover, India’s economic footprint is extended through the activities undertaken by its government institutions. Through its lines of credit (LoC) programme, the Indian government helps facilitate economic flows to other countries. LoCs enable Indian exporters, including Small and Medium Enterprises (SMEs), to export a variety of products (industrial manufactures, consumer durables and capital and engineering goods) to importers in sub-Saharan Africa and South Asia without repayment risk. The Ministry of Finance and the EXIM Bank are the two institutions responsible for the execution of the LOC programme.

India’s technical support, training and institutional support through its ITEC (India Technical and Economic Cooperation) programme and through technology transfer are much valued by low-income countries. Thus, while India’s resources do not match resources invested by other countries competing for resources and markets, such as China, its positioning as a strong ‘knowledge partner’ adds significant value to its relationships with other developing countries. Infact over the years, India has consistently expanded its development cooperation portfolio through grant assistance to Afghanistan, Bangladesh, Bhutan, Maldives, Myanmar, Nepal and Sri Lanka for projects in infrastructure, hydroelectricity, power transmission, and other sectors identified by the host government as priority areas for their development.

Way forward

In the recently inked sustainable development goals (SDG’s) which identify international cooperation priorities and set the paradigm for global cooperation, India would be a key contributor laying emphasis on south south development cooperation as an important pillar of the SDG’s post 2015. In fact, beyond 2015 South South Cooperation will have to increase and continue to support developing countries, with a special emphasis on poor and low income countries in Asia and Africa facing sustainable development challenges. South South cooperation is only expected to strengthen in the future and so it is here to stay.

(The writer is a Senior Fellow at Observer Research Foundation, Delhi)

The views expressed above belong to the author(s).

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