The overseas development assistance (ODA) was reduced by 12 per cent in 2014 and increased future flows are uncertain to Bangladesh. In fact, it hardly could match its 2008 ODA figure in last seven years.
Therefore, our experts are coming up with innovative ways of financing and they are arguing for (1) increasing domestic resource mobilisation, (2) reducing cost of remittance transfer and cost of mobility, (3) increasing trade and foreign direct investment (FDI), (4) technology transfer, (5) bringing back illegal money housed in the banks of development partners, (6) taking advantage of reduction in oil prices, (7) philanthropic contributions and more importantly, (8) increasing public-private partnership (PPP) and (9) intensifying the South-South Cooperation (SSC). In addition, experts are cautioning governments to use resources more effectively and efficiently as misuse of tax-money may encourage taxpayers to stop payment. Â
There are over $400 trillion money floating around in the business world and another $23 trillion savings lying in the banks each year. Unfortunately, we don't know how to catch it. Therefore, in the light of so much discussions, in collaboration with UNDP and the UN Office of South-South Cooperation (SSC), Bangladesh government arranged a high-level meeting of the South-South and Triangular Cooperation and Technology Transfer with a view to have brainstorming sessions to articulate issues of mobilising resources in the context of post-2015 development agenda and to share our lessons learned. Let's examine some ground reality in context of South-South Cooperation:
* The strong economic performance and other successes of many countries in the South in recent years have proved that South is now poised to play its due role in the transformative agenda. Let me flag some achievements made in the South, by the South:
* In 2012, the countries of the South accounted for half of world's gross domestic product (GDP) which is projected to reach over 60 per cent by 2030. And by 2025, the South is likely to account for 600 million households earning more than $20,000 per annum and an overall annual consumption of $30 trillion.
* South-South trade has grown to unprecedented levels, not only exceeding trade with the North, but also moving towards trade baskets with more technologically sophisticated products. Statistics show that from 1990 to 2008, the volume of exports from developing countries grew consistently faster than exports from developed countries or the world as a whole. While volume of exports between 2000 and 2008 basically almost doubled in the South, it increased merely 50 per cent for the world.
* Financial sector in the South is also coming up rapidly. The South provides more than a third of global investments and the developing world is projected to account for more than half of total capital stock by 2030.
* The global South produces half of the world's economic output, hold $6.0 trillion in reserves and accounts for 47 per cent of global trade. Additionally, several countries of the global South have become economic powerhouses wielding significant influence.
* The South is maturing technological capacity at affordable prices marked by new information and communications technologies which are transforming traditional deficiencies into unprecedented new opportunities for development.
We also know that in contrast, while the Overseas Development Assistance or ODA from the traditional partner countries are reducing, the average is now around 0.29 per cent against promised 0.7 per cent of their GNI, nevertheless, their defence expenditure is still going up leaving them with very little for ODA. Â
For example, as per Stockholm International Peace Research Institute (SIPRI), in year 2013 alone the global community spent $1,747b only for defence expenditure that possibly enhanced insecurity and risks. Therefore, money is available. However, it needs political commitment and will power. If the political leadership is sincere and they are committed for a better world for all, the human ingenuity and innovativeness will surely come up with solutions that we all can be proud of.
Bad news is, in recent years, we observed some slowdown in the South owing to reduction of demand for goods and services in traditional centres of global economy. However, in contrast, while global FDI inflows fell by 16 per cent to $1.23 trillion in 2014, its flows to developing economies reached their highest level ever, at $681b, representing a 2.0 per cent increase. South-South economies thus extended their lead in global inflows, with China becoming the world's largest recipient of FDI. Developing economies also account for more than one third of global FDI outflows, up from 13 per cent in 2007. Outward FDI stock from developing economies to other developing economies grew by two-thirds, from $1.7 trillion in 2009 to $2.9 trillion in 2013, nearly 70 per cent with East Asia and Southeast Asia the largest recipient developing regions. Â
In the wake of these global trends, the countries of the South are moving towards more formalised and institutionalised forms of South-South Cooperation. Two notable efforts in this regard are the launching of the $100-billion New Development Bank in July 2015 followed by the ongoing establishment of the Asian Infrastructure Investment Bank (AIIB); both institutions present new opportunities to finance investments for sustainable development. Now it is time to set up the proposed South-South Finance and Development Ministers Forum under the UN.
UN IS ON-BOARD IN PROMOTING SOUTH-SOUTH COOPERATION: The countries of the South underscored their position that South-South cooperation was a manifestation of solidarity among the peoples and countries of the South that contributed to their national well-being, national and collective self-reliance and the attainment of the internationally agreed development goals including Millennium Development Goals (MDGs). They stressed, as indicated in the Nairobi outcome document which the General Assembly adopted (64/222) at the High-level UN Conference on South-South cooperation, that, 'it was the prerogative of the countries of the South to set up South-South cooperation agenda' and they reiterated that South-South cooperation was not a substitute for but a complement to North-South cooperation. Â
The member states across the board, stressed further as to how to maximise the potential of the South-South and Triangular cooperation and foster enabling environment for its success. In that regard, they pointed out to a number of challenges, including the need to (a) explore real South-South cooperation flows and financial assistance, trade and investment were redefining the international architecture of development, (b) devise effective schemes for cooperation and exchange of experiences and lessons learned; and (c) promote inclusive associations; especially with academia, local government, parliamentarians, the private sector and foundations in South-South planning, implementation and monitoring and evaluation.
There was a call to focus on mobilising much needed resources through a new global partnership for the South-South cooperation. Within the context of the post-2015 development agenda and a rapidly evolving global development landscape, delegations reiterated their unwavering support for South-South and Triangular cooperation and its potential to tackle the toughest development challenges, in particular poverty eradication as outlined in 2030 Sustainable Development agenda. They demanded further mainstreaming the South-South and Triangular cooperation in the strategic plans and programmes of UN development system organisations. They also called for stepping up efforts to strengthen the UN Office of the South-South Cooperation and submit a comprehensive report on the issue.
The Chinese President Xi Jinping organised a High-level Roundtable on the sideline of the 70th session and committed $1.0 billion for the South-South countries. Earlier, Bangladesh Presidency of the UN High-level Committee of the South-South Cooperation arranged $3.0 million donation for the SSC office to strengthen its activities.
Good news is, at the request of South-South countries, the UNDP Administrator on behalf of UN Secretary General upgraded the Director position of the UN Office of South-South Cooperation to an Envoy of the Secretary General and at the request of member states supported by UNDP (SSC/18/IM/1), UN Secretary General submitted a comprehensive report at the 70th session. As per Report A/70/344, "up to 80 per cent of the UN Resident Coordinators who responded to a 2014 survey by the Department of Economic and Social Affairs (DESA) indicated that they had received requests from Governments of developing countries to support their cooperation with other countries of the South".
Dr. A. K. Abdul Momen, Professor Emeritus and former President of the UN High-level Committee on the South-South Cooperation, United Nations, presented this paper at a seminar in Dhaka organised by Economic Relations Division on August 20, 2016.
abdul_momen@hotmail.com
South-South trade grows to unprecedented level
A K Abdul Momen in the second of a three-part paper, titled Should Bangladesh take leadership role in South-South Cooperation? | Published: August 26, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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