World Economy

South-South Cooperation Key to Shared Prosperity

South-South Cooperation Key to Shared ProsperitySouth-South Cooperation Key to Shared Prosperity

Underscoring the importance of South-South cooperation, United Nations Deputy Secretary-General Amina Mohammed Tuesday urged sustained commitment to mutually beneficial approaches that will ensure shared prosperity and make sustainable development a reality.

“Solutions and strategies created in the South are delivering lasting results around the world,” she said at an event marking the United Nations Day for South-South Cooperation, held at the UN Headquarters in New York, reported.

 “Nearly every country in the global South is engaged in South-South cooperation,” she added, noting China’s Belt and Road Initiative, India’s concessional line of credit to Africa, the Asian Infrastructure Investment Bank, and the Strategic Association Agreement by Mexico and Chile as few examples.

The deputy UN chief, however, also cautioned that progress has been uneven and extreme poverty, deep inequality, unemployment, malnutrition and vulnerability to climate and weather-related shocks persist, and underscored the potential of South-South cooperation to tackle these challenges.

 Not a Substitute

Also in her remarks, she highlighted that the support of the North is crucial to advance sustainable development. “South-South cooperation should not be seen as a substitute for North-South cooperation but as complementary, and we invite all countries and organizations to engage in supporting triangular cooperation initiatives,” she said, urging all developed nations to fulfill their Official Development Assistance commitments.

She also urged strengthened collaboration to support the increasing momentum of South-South cooperation as the world implements the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change.

Further, noting the importance of the upcoming high-level UN Conference on South-South Cooperation, to be hosted by Argentina on the occasion of the fortieth anniversary of the adoption of the Buenos Aires Plan of Action, she said:

“It will enable us to coordinate our South-South efforts, build bridges, cement partnerships and establish sustainable strategies for scaling up impact together.”

To mark the importance of South-South cooperation, the UN General Assembly decided to observe this Day on September 12 annually, commemorating the adoption in 1978 of the Buenos Aires Plan of Action for Promoting and Implementing Technical Cooperation among Developing Countries.

“There are new challenges to all states: among them, the real threat to multilateralism. South-South and triangular cooperation can contribute to a new multilateralism and drive the revitalization of the global partnership for sustainable development,” Under-Secretary General for Economic and Social Affairs Liu Zhenmin said at the gathering.

 Global Trade

Commenting on the same subject, IPSNews said: Thanks to globalization and trade liberalization of commodities, services and goods, global trade has reached an unprecedented level. According to the United Nations Conference on Trade and Development, world trade in goods was valued at approximately $16 trillion.

North-North trade generates the highest trade volume at approximately $6 trillion; trade flows within and between countries of the Global South amounts to $4.6 trillion. Trade between the Global South and the Global North—approximately between 2.5 and 3 trillion—add up to less than the trade flows within the earth’s two main poles.

With a rapid population growth on the horizon, the potential to increase South-South trade and South-North trade is crucial to maintain economic growth and promote a sustainable and inclusive model of globalization. With more than 80% of the world population living in developing countries, South-South trade has the potential to increase in the years to come and to become a vector for economic growth and prosperity for a major world region whose potential has not been fully tapped during past decades.

The 2017 International Day for South-South Cooperation is an important opportunity to raise awareness about the importance of strengthening and enhancing economic cooperation between the world’s most populous regions.

But there are numerous obstacles to unleashing the full potential of South-South trade cooperation, notably in the Arab region. In 1997, 14 Arab countries took the initiative to establish the Greater Arab Free Trade Area–a pan-Arab free trade and economic union–to spur economic growth in the Middle East and North Africa. This initiative can still become a success story if Arab states agree to remove and to eliminate tariffs hindering trade liberalization from taking full effect.

The (Persian) Gulf Cooperation Council is a good starting point. But even within this grouping which is one of the most successful economic trade block, setbacks occur. In addition, the unprecedented rise of military conflicts in the Arab region has hindered trade and economic growth. Ideological and political differences are still dividing Arab states in different sub-camps. These obstacles are also rife in many other regions in the Global South.

Another fundamental problem impeding better South-South trade cooperation is the current structure of the trade system. Many countries in the Global South are raw material producers with a strong primary sector in which the economic backbone is built primarily on the export of raw materials and commodities. Commodity and raw material prices are subject to volatility spurring social instability, as witnessed during the 2007-2008 world food price crisis or in the recent drop in oil prices.

Countries in the Global South need to take further steps to move from a monoculture economy or one based on oil rent to an industrialized economy with a growing service sector as witnessed in the developed world.

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