[Published in South Bulletin 57]

-- Conference on Global Economic and Development Issues organised by the South Centre and the Ministry of Foreign Affairs, Philippines in Makati City, 2 August 2011

Below is the presentation made by H.E. BENJAMIN MKAPA, Chairman of the Board of the South Centre, at the session 2 on Emerging Asia, the Philippines's role and South-South Cooperation.

The South Centre is an embodiment of the idea of South-South cooperation at the multilateral level, and was born as a result of a conscious understanding by our Member States that developing countries need to have their own independent multilateral intergovernmental think-tank. The South Centre was created out of our Member States’ recognition of the need for enhanced South-South co-operation and to meet the need for analysis of development problems and experience, as well as to provide intellectual and policy support required by developing countries for collective and individual action, particularly in the international arena. In short, the South Centre is, like the Non-Aligned Movement and its brother the Group of 77, a multilateral institution of the South, for the South, and by the South. As such, we believe in both the promise and reality of South-South cooperation, in the ability of developing countries to play their rightful role in crafting a better world for all.

Developing countries today face multiple interlinked crises – the financial, climate, and development crises. These are crises that, in large part, affect developing countries and their peoples more harshly than they do the countries and peoples of the developed world. As the development gap between rich and poor countries grow, as inequality deepens, never before has South-South cooperation at all levels— political, economic, technical—been more essential nor, indeed, does it come at a more opportune time in respect of developing countries’ full, effective and sustained engagement with their partners in developed countries in achieving their development objectives.

On the three key crises pointed out above, cooperation among developing countries at all levels and in all fields of international and domestic endeavour is more needed than ever as we seek, individually and collectively, to meet the challenges of our times together with our developed country partners. In the midst of the currents of multiple crises that buffet our global community lie the seeds for the rearrangement of international affairs into more equitable forms.

To address the climate change crisis in ways that promote the sustainable development of developing countries, the South looks to its developed country partners to:

cut deeply, rapidly and early their greenhouse gas emissions down to levels that reflect their historical and current responsibility for such emissions so as to provide developing countries with their fair share of the global atmospheric space and carbon budget; and

comply effectively with their existing treaty obligations to provide the new and additional financing and technology transfer to developing countries that will be needed to enable developing countries to continue to sustainably develop.

At the same time, developing countries must take on the challenge of using all appropriate means, including the financing and technology that may be provided to them, to develop in ways that are environmentally sustainable, economically and socially equitable, and adapted to the new ecological limits that climate change now confronts them with. In this regard, South-South cooperation is essential, especially at the negotiating table, in order to ensure that the South’s development perspectives are heard and reflected in the shaping of new arrangements designed to enhance the implementation of the UN Climate Convention.

The financial crisis which originated with the over-leveraging, inappropriate regulation (or rather deregulation) and speculative activities in the United States and some other developed countries is now affecting developing countries more deeply and harshly than developed countries. The cost is in the arrested growth and development of developing countries, whose decline in average growth rate is much sharper than that of developed countries on average. To address this crisis and to prevent future ones, developing countries should work with each other and with their partners in the North on:

• Establishing an international system that fosters financial stability for developing countries;
• Having access to adequate and stable financial resources, as private flows and exports decline;
• Avoidance of financial and debt crises and proper management of crises if they occur;
• Full access to markets for developing countries’ exports;
• Avoiding collateral damage from policies taken by developed countries in response to the crisis; and
• Being able to maintain and expand “policy space” to implement appropriate policies for economic recovery and development.

We continue to have a development crisis in that the income gap continues to widen and grow between developed and developing countries. While income levels rose steadily in developed countries over the past half-century, most developing countries have not seen the same steady increase in income levels especially over the past twenty-five years. While some developing countries have made impressive development gains, largely as a result of their strategic economic policy choices that did not generally conform to the development policies often prescribed by developed countries and the World Bank and the IMF, global income inequality has overall increased over the past sixty years with African, Latin American, and some Asian and Eastern European GDP per capita actually falling relative to developed country per capita GDP. Income convergence between developed and developing countries generally has not taken place. Global incomes continue to be highly concentrated in developed countries. To address this challenge, fundamental changes to the global economic policy and architecture must be made, including:

• fundamental reforms of the World Bank and IMF with respect to their governance, policies, conditionalities, and relationship with the United Nations;
• restoring the United Nations to its proper role as the central focus for multilateral economic policymaking by strengthening the UN’s various bodies and agencies that deal with economic and development issues;
• effecting real changes in how development cooperation is undertaken in order to ensure that aid dependence will be ended rather than perpetuated.

Such changes will, once again, require the full range of South-South cooperation at all levels to ensure that developing country voices are heard and their perspectives reflected in such changes in the global economic architecture.

The most important prerequisite for developing countries to be able to effect real changes in global rules and relations is for them to work with each other – to really put South-South cooperation at all levels, on all issues, and in all forums, into practice, and to promote their common development concerns and interests at the forefront of multilateral economic policy discussions.

Lastly, South-South regional integration carries with it a great potential for genuine development and freedom as developing countries learn from each other and work with each other in attaining their common development. In this regard, developing countries need to engage more deeply in ensuring that their regional integration efforts are intensified and become the main framework for their respective development processes. These regional integration efforts then need to be supported fully by bilateral, multilateral and cross-regional South-South cooperation – be it in the areas of finance such as the Chiang Mai Initiative and the Bank of the South, trade such as the Global System of Trade Preferences Among Developing Countries, technology transfer, skills and capacity building, institution building, cultural interaction, investment, and others.

Achieving sustainable development in developing countries in the face of climate change, the financial crisis, the food and energy crisis, will require global North-South engagement at an unprecedented level. An essential prerequisite to this engagement is full and effective South-South political cooperation at the multilateral level. South-South political and institutional cooperation through Southern multilateral institutions such as the NAM and the G77 and their regional institutions such as the Association of Southeast Asian Nations (ASEAN), to which our host the Philippines belongs, the Union of South American Nations, the Andean Community, the Caribbean Community, the African Union, the South Asian Association for Regional Cooperation, would be essential in ensuring that the South is able to participate fully and effectively, on an equal footing with the North, in shaping a new global development partnership.

To conclude, the South must together grasp this moment of history and make it its own if we are to provide to our peoples of the South sustainable, decent and dignified standards of living despite the various development challenges that we face.