UNCTAD: South-South Cooperation for a Better Future

Jan 23, 2023 | News

South-South cooperation and economic integration are intrinsic to the original purpose of UNCTAD. After a hiatus in the closing decades of the last century, their appreciation as a means to help resolve the major economic challenges of developing countries in a globally integrated economy has been growing again.

UNCTAD’s original centre-periphery framework identified the structural asymmetries in trade, technology and finance as the major obstacles for the development of the Global South. The institution aimed at serving as an arena for policy debate and rule-making negotiations to resolve those problems.

Especially after the Third UNCTAD conference in 1972 that led to calls for a New International Economic Order, it was becoming increasingly evident that transformational changes were needed but would be contested. The central lesson from the earlier UNCTAD period was that developing countries ought to ‘improve their collective bargaining power’,  ‘mobilise countervailing pressure’ and ‘intensify trade and other linkages between themselves’, as noted by Gamani Corea, UNCTAD`s third Secretary General.

The world economy has since evolved along a different pathway, one that has generated new challenges and asymmetries: recurrent trade shocks and debt crises, widening income and wealth inequalities, food crises, a highly financialized globalization system and taxing climate change adaptation challenges. Varieties of developing country groupings have faced up to these challenges, with the ‘Group of 77 and China’ as their unifying instrument within UNCTAD.

It was at the peak of the global financial crisis that the United Nations General Assembly made its most fervent call (the ‘Nairobi Outcome’ of 2009) to reinstate the need for cooperation and integration in the Global South, and invited `developed countries and multilateral institutions to enhance their support’ to that aim. In this vein, it praised the initiatives by UNCTAD and other UN agencies in ‘setting up new units and work programmes to support and promote South-South cooperation’.

UNCTAD incorporated this mission in the official document presented by the Secretary General in preparation for the XIII Conference (held in Doha, 2012). More specifically, it revised the centre-periphery conceptual framework in view of the evolving structure of the world economy through ‘finance-driven globalization’; and proposed a re-orientation towards an internationally coordinated strategy to advance through a sustainable and inclusive development agenda, dubbed ‘development-led globalization’. Its more concrete mandates responding to the ‘Nairobi Outcome’ included reinstating the role of public policy for resource mobilization, production and income distribution; strengthening multilateral arrangements to forge collective responses to global challenges; and deepening South-South cooperation to enhance stability and growth.

These are the central propositions informing the mission of UNCTAD’s unit for ‘Economic Cooperation and Integration among Developing Countries’ (ECIDC), within the Division on Globalization and Development Strategies (DGDS). Accordingly, ECIDC takes as its analytical axis a macro-financial perspective of the global economy and a structural perspective on development strategies, extended to incorporate environmental sustainability concerns, given the centrality of macroeconomics, finance and the environment for stability and growth.

Around this analytical axis, it focuses on three main areas of work that are key for a successful strategy of South-South cooperation and integration in an adversely uneven globalization structure:

  • Analysis and policy propositions for a South-South-coordinated industrial transformation consistent with a viable agrarian transition that supports full employment, income generation, rising productivity and food security;
  • Analysis and effective regional propositions for South-South trade and financial integration that shields developing countries from external shocks, alleviates finance and debt constraints, and generates countervailing leverage in the process of integration with developed partners to channel global demand, technology transfers and financial support;
  • Continuous reassessment and enhancement of governance; at a national level by prioritizing the role of the state in the economy, social welfare and climate change challenges; at a regional level supporting institutional set-ups that manage the processes of structural transformation, trade, finance and macroeconomic stability; and at a global level supporting and advancing multilateral processes and institutions.

For a substantive elaboration and references, please see the UNCTAD South-South Cooperation webpage