IFCC-XI adopts measures for South-South
cooperation
Havana, 24 Mar (Martin Khor) -- The Group of 77 and China
adopted a set of measures to strengthen South-South cooperation
to confront challenges faced by developing countries at the
conclusion of a three-day meeting held here.
Among the measures adopted is the publication of an annual
report on South-South cooperation; the conclusion of the third
round of the GSTP (General System of Trade Preferences among
developing countries) by 2006; the establishment of an
intergovernmental study group to hold a workshop on a G77 Trade
and Development Bank; strengthening G77 cooperation in monetary
and financial areas; and initiating a study on new and dynamic
sectors.
The "Recommendations on South-South cooperation" were adopted by
the 11th session of the intergovernmental follow-up and
coordination committee on economic cooperation among developing
countries (IFCC-XI) of the G77, held in Havana on 21-23 March.
The G77 is also scheduled to hold the second South Summit in
Doha in June. A meeting of experts to help prepare the Summit is
expected to be held in Jamaica in May. The first South Summit
was held in Havana in April 2000.
The IFCC-XI was attended by Ministers and senior officials of 77
countries and representatives of 15 international organizations.
The IFCC is the main committee of the G77 that deals with
South-South cooperation and meets every two or three years.
At the opening session, K.D. Knight, Minister of Foreign Affairs
and Foreign Trade of Jamaica (which currently chairs the G77),
said that the emerging international economic order is
characterized by systemic inequities in global economic
governance, external debt problems, insufficient ODA (official
development assistance) and declining terms of trade.
"This makes it imperative that developing countries explore new
and dynamic ways of responding to these growing disparities," he
said. "South-South cooperation remains the most practical means
of advancing this objective." While not a substitute for
North-South dialogue, South-South cooperation is an important
platform for developing countries to undertake joint programmes
and projects, and overcome the social and economic instability
associated with the global environment.
Later, at a high-level dialogue session, Knight said that the
G77 and China needed to take a collective negotiating stance in
various fora, as well as measures such as regional and
South-South agreements to prevent the South from falling into
financial crises. He added that the G77 secretariat needed to be
strengthened.
Cuban Minister for Foreign Investment and Economic Cooperation,
Marta Mordes, said that many developing countries are now saying
"no to brutal neo-liberalism" where a weaker role of the state
is a prerequisite for obtaining loans from international
financial institutions which have given unfulfilled promises
that this would lead to development. She mentioned new
initiatives that are paving the way for the G77 and China on
South-South cooperation, including the process for true
integration of Latin America and the Carribean, and programmes
involving food security, the fight against HIV/AIDS and coping
with natural disasters.
Ambassador Munir Akram of Pakistan, speaking in his capacity as
the President of ECOSOC, said that the global trends for
developing countries are mixed. While the share of developing
countries in global trade and investment is growing, most of the
growth is concentrated in Asia and limited to a few countries.
Globally, income disparities are widening with 1.6 billion
people worse off economically than 20 years ago and 54 countries
poorer now than in 1990. Worse, the net outflow of resources
from developing countries in 2003 reached an all-time high of
$248 billion.
Akram said strengthening South-South cooperation required a
focused and action-oriented platform and for development; a
systematic institutional follow-up mechanism to ensure
implementation of decisions; intensifying cooperation in trade,
investment and human resource development; multilayered
partnership involving interaction between people, business
sector and governments of the South; and a complementary
North-South dialogue.
Stating that the global system lacks fairness, Akram said that
the South Summit should outline a North-South partnership based
on correct governance and policies at national and international
levels, financial resources for developing countries through the
debt, ODA, investment and trade instruments, a multilateral
trading system based on clearly defined development priorities,
and access to technology.
Later, speaking for Pakistan, Akram said that to bring coherence
to institutions working on South issues, greater integration and
reporting mechanisms were needed, with the following first
steps: an overarching Coordinating Council of the G77
institutions to oversee implementation of decisions; a regular
annual report on the status of South-South cooperation;
establishing an eminent persons group of the South;
strengthening and expanding the G77 secretariat, and
reinvigorating the trade and commerce bodies in the South.
Commenting on the UN Secretary General's report for the UN
Summit in September, issued on 21 March, Akram welcomed its
focus on the MDGs (Millennium Development Goals) but said that
it did not adequately address trade issues nor does it address
other development issues such as commodities, net outflow of
resources from developing countries, allocation of IMF quotas,
and decision-making in the Bretton Woods institutions and the
WTO.
He said that for the UN Summit in September, Pakistan favours a
set of quick-win actions on trade, such as immediate agreement
on the end date for agriculture export subsidies (including an
early end to cotton subsidies), a commitment to early
elimination of tariff peaks and escalation against exports of
developing countries, a commitment not to circumvent the
elimination of quotas on textiles and clothing exports of
developing countries, a moratorium on the use of anti-dumping
actions against low-income countries, an end to arbitrary and
abusive use of sanitary and phytosanitary standards and measures
to restrain exports of low-income countries, full participation
of developing countries in standard setting processes and
acceptance of a review of the development dimension of the TRIPS
agreement.
Kenyan Minister for Planning and National Development Peter
Anyang' Nyong'O, traced the history of G77 related decisions and
discussions on establishing a G77 Trade and Development Bank and
of Kenya's initiatives, including undertaking a feasibility
study report. He urged that an intergovernmental study group be
formed and to hold a workshop which could report to the South
Summit for action.
Nyong'O said that with declining aid and rising debt, the effect
of debt servicing on developing countries is "debilitating" and
the time has come for developed countries to "cancel these debts
so we can pursue the MDGs in earnest."
India's representative to the UN in New York, Ambassador Nirupam
Sen, said the South's collective voice and agenda represents an
advance in building a conducive international environment for
development. "The 'governance' net was cast over the South
through structural adjustment programmes and trade-related
global agreements, which had neither the development goals nor
interests of developing countries as their objective," he said.
"Developing countries found their policy space, domestic and
external, increasingly circumscribed. Today, in many respects,
the environment is more harsh. The voice of developing countries
is vital to level the playing fields."
Sen said that by 1990, commodity prices were below their 1932
level, and this has devastated Sub-Saharan Africa while
sustaining high living standards of the developed world, whose
export subsidies and domestic support further depressed
commodity prices. From 1990 to 2002, loss of income to
developing countries from the price declines equals the
subsidies paid by OECD countries to their farmers and is five
times their ODA.
"In Nebuchadnezzar's dream only the feet were made of iron,
today, the heart of the international economy is made of iron.
To transfer the assets of the poor, one does not need the
medieval rack as the terms of trade and price mechanism are
enough. Similarly, the negative impact of the TRIPS agreement is
not just on prices of medicines and public health but also (a
matter seldom discussed) on science and technology, the key to
achieving MDGs and economic growth."
Sen said that a most important dimension of South-South
cooperation is political and practical solidarity, and a crucial
beginning was made with groups of countries that fought the
battle on agriculture and Singapore issues in the WTO.
He added that UNCTAD and its secretariat is of critical
importance, especially since the WTO does not deal with the
commodity issue and with developing supply capacity, besides
being non-transparent and non-inclusive. "For the developing
countries this makes UNCTAD a vital component of the
multilateral trading system. Its leadership is therefore an
important question that the South has to consider carefully."
Sen added that South-South cooperation is necessary to mitigate
the adverse effects of international economic policies. He
provided details of how India is contributing to South-South
cooperation through imports, investment, projects, trade
agreements and technical assistance. "The capacities in the
South have risen dramatically, the situation now is that there
are hardly any goods and services required in the South that
cannot be sourced from the South itself. A conscious drive is
needed to step up intra-South trade, investment and technology."
Ambassador Zhang Yishan of China called for developing countries
to formulate preferential policies to encourage cooperation
among themselves in technology. Also, trade and investment, as
well as "triangle cooperation" in which developed countries or
international agencies offer funds to assist economic
cooperation among developing countries.
He also outlined China's efforts in South-South cooperation,
including being the fastest growing market for developing
countries' exports, investments in the South, free-trade
agreements with developing countries and regions and a
China-Africa Cooperation Forum.
The Nigeria Minister of State for Foreign Affairs, Alhaji
Abubakar Tanko, said that with the onslaught of globalization
and its inequities, the South was looking for answers, and
strengthening South-South cooperation is vital. However, there
is a deficit in implementation of decisions. Stating that the
starting point should be action and not rhetoric, he said that
the present state of South-South cooperation leaves much to be
desired, and progress in implementation of the Havana programme
(of the first South Summit) was poor. He elaborated on two
projects that Nigeria is engaged in, the South-South Healthcare
delivery programme and the action committee on raw materials.
Ambassador Rezlan Jenie of Indonesia said that it was important
to reinvigorate "South consciousness" so that it is part of the
ethos of all developing countries, and that people strengthen
their belief in the South and their mutual trust. He announced
that to commemorate the 50th anniversary of the Bandung
Conference of 1955 that gave birth to the Non-Aligned Movement,
Indonesia would host the Asia-Africa Summit and Golden Jubilee
on 18-23 April in Jakarta and Bandung.
Director of the Special Unit for South-South Cooperation, UNDP,
Yiping Zhou, said there had been unprecedented progress and
dynamism in South-South cooperation in recent years. He cited
the NEPAD in Africa, regional integration in Latin America and
Asia, and the fact that over 40% of developing countries'
exports today go to other developing countries. There has also
been progress in the South's role in other areas, such as in
economic growth, investment and emergency relief.
Zhou said that South-South cooperation is redefining the
geography of trade, finance, investment, technology transfer and
development cooperation. There are however major differences
among regions and countries, and the scaling up of South-South
cooperation gains are hampered by three problems.
Firstly, there is need for a consolidated and manageable
South-South agenda with a few well- thought-out goals, since
existing South-South action plans pull the South in too many
diverging directions. Second, is a need for strengthened
structures and mechanisms to implement such a consolidated
agenda. Third, is the need for a better financing strategy for
South-South cooperation.
Managing Director of the Common Fund for Commodities, Ali Mchumo,
highlighted the adverse effects of the decline in commodity
prices and the domination by transnationals over the commodity
value chains (with coffee-producing countries receiving only $5
billion out of the overall coffee business of $70 billion).
Mchumo called for the implementation of past international
resolutions on providing more resources for commodity
development, better market access for commodities within the WTO
framework, engaging the international community to address the
commodity price decline, and commodity diversification (and a
possible fund for this). He urged developing countries to take
the initiative and become committed to addressing the commodity
problematique.
At the concluding session, delegates adopted two documents, the
recommendations on South-South cooperation and recommendations
on specific South-South projects.
The document on South-South cooperation reaffirmed previous G77
statements relating to South-South cooperation. It called for
the publication of an annual report on South-South cooperation
by the Special Unit for South-South Cooperation in consultation
with the G77 Chairman. It invited parties involved to conclude
the GSTP third round by 2006.
It established an open ended intergovernmental study group to
hold a workshop in New York on the proposed G77 Trade and
Development Bank in May and to report to the South Summit in
Doha in June. It noted the need expressed at the G77 Chapters
meeting to improve coherence of the overall policy adopted by
the Ministers of Finance and Ministers of Foreign Affairs
regarding monetary and financial issues and called for
implementation of the first South Summit's decision on the need
to strengthen cooperation in monetary and financial fields.
It also asked the G77 chairman, in collaboration with UNCTAD, to
submit a study on new and dynamic sectors including services and
creative industries; encouraged arrangements for South-South
sectoral cooperation; and called for a South-South Forum on
public and private partnership. It called for consideration for
establishing a line of credit to enhance South-South trade, and
greater coordination among Southern institutions.
