The Global South represents as many as 134-plus post-colonial or emerging economies. They include biggies and minnows, in terms of land area or size of the economy. The group includes some very large economies, including the world's second largest, China. The Global South plays a significant role in the international trade, commerce and geopolitical developments.
The fact remains that many smaller economies in Asia, Africa, Latin America and Oceania have been struggling hard to remain afloat, economically. Even mid-sized ones often face troubles. All these countries are in dire need of resources necessary for their development as well as other requirements. The resource gap the Global South has been facing is estimated at $4.0 trillion a year. This huge gap remains a major hurdle to achieving the all-important Sustainable Development Goals (SDGs) by 2030 by a large number of both least developed and developing members of the Global South.
The developed nations have an obligation to meet 0.7 per cent of their Gross National Income (GNI) as overseas developed assistance (ODA) targets annually, but they have been faltering in this respect for long. The ascendancy of Donald Trump to the top job of the US administration for the second time has made the situation even worse. The USA for decades had been a leading provider of loans and grants to the poor developing countries. Trump this time has slashed the US assistance substantially. Other Western donors have also reduced their bilateral development assistance. As if to punish the poor members of the Global South, the multilateral lenders have also become more tight-fisted in matters of making available bailouts in time of need. The recipient countries find it hard to fulfil the strings attached to aid offered by Bretton Woods institutions in particular.
In such a difficult financing scenario, developing and emerging economies of the Global South should make a two-pronged move. Firstly, they should make coordinated efforts at all international platforms to press home the demand for bigger volume of development, climate and budgetary assistances from the OECD countries. Secondly, the Global South members should help themselves more than any time in the past. The large and relatively affluent economies in the South, naturally, will have to be major contributors to the funds necessary for implementing development activities and meet budgetary requirements of the lesser ones in the Group.
China is the largest and the most important development financier among the countries in Global South. Other big economies, including India, are not doing enough. In fact, South-South cooperation is yet to make any impactful progress though volumes have been said about the necessity and potential. Many countries in the South are experiencing severe debt distress. Private investment and foreign capital flows are negligible in these countries because of perceived risk and low credit ratings.
The poor state of overall financing by many Global South nations is, to a large extent, their own doing. Weak domestic governance, widespread corruption, non-transparent and inefficient fiscal management are largely responsible for this. Despite having potentials these countries have been failing to mobilise enough revenues.
Revenue leakage and laundering of funds abroad by the influential people continue to trouble many nations, fiscally. For instance, more than $234 billion, equivalent to half of its GDP, was taken out of Bangladesh between 2009 and 2023 by the people in power and their lackeys.
The need for increased cooperation among the Global South cannot be overstated. To help meet that objective, China will have to play a much more assertive role. Equally important will be to ensure an efficient and prudent internal economic governance by every country in the South. The Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB), two multilateral institutions, primarily floated by Global South nations need to play a proactive role in meeting the development financing needs of the poor emerging economies.
The Global South Financiers' Forum held in Beijing in 2025 called for greater efforts to improve the competence of Global South countries in financial regulation and market operations, bridge the financial development gap between the North and the South and advocate for a new financial order that is more just, equal-footed and inclusive. A similar event now in progress in Beijing, hopefully, should make an assessment of the progress made towards meeting those objectives during the past one year.
