News 2010

UNCTAD 's Economic Development Report 2010 Summary

South-south Cooperation: Africa and the New Forms of Development Partnership - summary

The increasing role of large developing countries in global trade, finance, investment and governance, coupled with their rapid economic growth, has rekindled interest in South–South cooperation and stimulated debate on its implications for Africa’s development. South-South cooperation refers to, “the processes, institutions and arrangements designed to promote political, economic and technical cooperation among developing countries in pursuit of common development goals.”

 

The report discusses several topics under this theme, including the initiative, patterns, and challenges of Africa-South cooperation, Africa’s trade with developing countries, the trends, features, and challenges of Southern official flows to Africa, Southern foreign direct investment in Africa, and the main findings and policy recommendations needed to make South-south cooperation work for Africa.

The study shows emerging trends that there has been a significant increase in the number and type of Africa-South cooperation arrangements since 2000. The Forum on China-Africa Cooperation is the best-known of these. But there are also new institutions linking Africa with India, Brazil, the Republic of Korea, Turkey, etc. There are also new intercontinental strategic partnerships.
 

The report finds that trade, investment, and official flows are the three most significant dimensions of Africa´s partnership with developing countries.

                The report advocates for African nations to take "Africa-South" trends into account in their planning for long-term economic progress. It says these governments should be assertive when negotiating cooperation with other developing countries, so that domestic concerns are addressed. A proactive approach by African governments and a sharing of experiences with developing-country partners will accelerate mutual policy learning, which should enhance the effectiveness of interactions for all.

The overall aim, the study says, should be to build Africa´s "productive capacities" - that is, the abilities of the continent´s economies to produce a greater variety of goods, and more sophisticated goods.

Developing country partners can support this process by broadening the scope of engagement beyond extractive sectors and by enhancing technology transfer and learning. The availability of concessional loans from developing-country partners has increased access to finance for several countries in the region and should be welcomed, says the new UNCTAD report. But it recommends that African countries ensure that new borrowing from such partners is used to finance projects that enhance domestic capacities to repay.

 

The report also makes recommendations for all the players involved.

Recommendations for African countries include the adaptation of mainstream South-South cooperation into national development strategies, taking a proactive approach to the partnership process, ensuring that cooperation with developing countries complements existing partnerships with developed countries, involving more local stakeholders in partnerships with the South, strengthening efforts to develop productive capacities, playing a more active role in coordination of support from partners, avoiding the accumulation of unsustainable debt, and adopting a developmental approach in seeking foreign direct investment.

Recommendations for developing country partners include broadening the scope of engagement to include sectors other than the extractive industries, strengthening support for regional integration in Africa,enlarging country coverage to facilitate South-South trade and ensure that the gains are more evenly distributed across countries, providing more information on development activities in the region, ensuring that projects have positive impact on the environment, and addressing the transactions costs associated with the multiplicity of partnership initiatives.

Recommendations for developed country partners included providing more support for Africa-South cooperation and strengthening dialogue with Southern partners.

Recommendations for regional and multilateral institutions include coordinating the development of statistics and collection of information on Africa-South cooperation and establishing financing facilities for Africa-South cooperation.

 

Sources: http://www.unctad.org/en/docs/aldcafrica2010_en.pdf

Zala Žbogar

International Center for Promotion of Enterprises - ICPE
Dunajska 104, 1000 Ljubljana, Slovenia

Ph.: +386 1 568 23 31
Email: info at icpe.int