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Emerging Markets

The Future of International Development: South-South Cooperation

 5 min read / 

The majority of the world’s population lives in countries traditionally referred to as “developing,” and the current pace of global demographic change means that the future is becoming mainly a Southern and Eastern one. While the term “Global South” has largely replaced the term “developing,” perhaps a more fitting description would be “majority world.” There are dangers in lumping heterogeneous groups of people and countries together into inaccurate descriptors like “developing,” as both “developed” and “developing” regions of the world are characterised by the extremes of affluence and poverty.

The Western development system has largely been premised on the flow of knowledge and financing from the “Global North” to the “Global South” with the goal of assisting in driving economic development and poverty alleviation. Ironically, the expertise flowing from the “developed” world represents best practices from countries that have never been able to solve their own poverty. The global rate of change in economic multipolarisation and demographic growth is pointing to a future where development assistance is led by donors from the majority of the world meaning that the future of the international development industry is one of cooperation between countries of the “Global South” where terms are no longer dictated by Western powers.

From Emerging Powers to Emerging Donors

The international development industry is in a moment of transition and in many ways an identity crisis. The worlds of aid and development are rapidly changing due to geopolitical shifts and a changing international order that will be characterised by greater multipolarity. China and other emerging powers are at the forefront of these shifts, and the world’s most prominent site of changing power relations and future global order is the African continent. Though development partners such as China and India have longstanding relationships with African countries, involvement has significantly ramped up in recent years as emerging powers demonstrate the foresight that the future is an African one, a fact that is yet to be fully grasped by the West.

China is becoming the world’s most significant development finance provider and is the biggest non-traditional contributor of aid to African countries with more than half of Chinese aid going to the continent. Beyond the well-known and often controversial relations of China in Africa, other countries within the “Global South” are more quietly but just as surely ramping up involvement, including India, Brazil, South Korea, Turkey, Saudi Arabia, and the United Arab Emirates. As China has emerged the biggest player in the emerging donor space, the United Arab Emirates is also helping to reshape the development finance landscape as the second biggest spender behind China with a recently established Ministry of International Cooperation and Development.

Development Assistance beyond the Numbers

Though the top donors of official development assistance to Africa are largely Western powers, measurement and tracking of aid has become increasingly difficult to accurately evaluate, hence the labelling of China’s aid as “non-traditional.” China does not publicly release figures on its official financing, and such accounting of the spending of the Chinese state does not begin to take into account the more than 10,000 Chinese-owned firms operating throughout the continent. Though official statistics of Chinese official development assistance rank lower than the United States, China’s development assistance is characterised by other financial flows that are less concessional and more commercially oriented that form the bulk of China’s global finance portfolio.

Financial contribution certainly carries influence and Western donors are still major players in the global development landscape, but there is much to be said for the soft power of South-South cooperation in inspiring the hearts and minds of development partners. Many leaders of African countries look to China as a source of inspiration due to the country’s track record in poverty alleviation and rapid economic development. Thus though the numbers indicate that Western donors are still leaders within the global development space, this tracking of financial flows is too narrow to encompass the way emerging donors are driving forward new paradigms in the international political and economic order. It is estimated that emerging donors will account for over 20% of international aid by 2020, and this number is conservative regarding the development assistance of South-South cooperation that is not fully monitored and continues to scale.

Moving Towards a Future of South-South Cooperation

The current moment of change in the international development industry is driven by key trends including the rapid pace of technology and innovation; diversification of actors; economic multipolarisation; the shrinking of bilateral development assistance; and private sector mobilisation for development. Within this context, there is a changing distribution of global poverty in which the majority of the world’s poor live in countries classified as middle-income. Half of the world’s poor live in China and India, and a quarter live in other middle-income countries including Nigeria, Indonesia, and Pakistan. Thus emerging powers turned emerging donors are those countries in which the majority of the world’s poor reside, and partnerships between countries of the “Global South” promise a closeness of experience and lived realities that is largely absent from relations with traditional Western donors.

South-South cooperation is based on such principles as solidarity, cooperation, mutual learning, and respect, and embodies a spirit of horizontal partnership between two or more countries that share similar challenges. Unlike the flows of theory and development expertise from Western powers, South-South cooperation represents a partnership between two countries, though of very different contexts, that are similar in history and their present-day contexts, leading to more relevant and realistic knowledge exchange. With the majority of the world’s poor residing in the “majority” world and emerging powers at the forefront of economic multipolarisation in the context of a changing global development landscape, the future of the international development industry may well be one of South-South cooperation.

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