South South Cooperation: Origins
and trends
Richard Kozul-Wright
UNCTAD,
Unit on EICDC
December 2010
South South Cooperation




A (short) history of South South cooperation
Terminology
Recent trends
Back to the future? The 1970s vs the 2000s
INTERMISSION





A Lewis moment? A Global perspective on the rise of the south
South South interdependence: Why policy space still matters
Productive integration: East Asian Lessons
Monetary and financial cooperation:a missing link?
The South is Dead: Long Live the South!
South South Timeline
1945 Formation of Arab league
1955 Asian-African Conference in Bandung, Indonesia
1960 Latin America Free Trade Area (LAFTA)
OPEC
1961 Non-Aligned Movement (NAM)
1963 Organization of African Unity (OAU)
1964 First United Nations Conference for Trade and
Development + G77 established
1967 Association of Southeast Asian Nations (ASEAN)
1968 UNCTAD ECDC unit
1969 Andean Community
1973 Caribbean Community (CARICOM)
1974 UN General Assembly adopts Declaration for the
Establishment of a NIEO
Special Unit to Promote Technical Cooperation
among Developing Countries (TCDC) by UNDP
1975 Economic Community of West African States
(ECOWAS)
1976 Mexico City conference on ECDC; GSTP launched
1978 UN Conference on South South Cooperation,
Buenos Aires
1981 High-Level Conference of the G-77 in Caracas
Venezuela Caracas Programme of Action on ECDC
Collapse of NIEO
1985 South Asian Association for regional Cooperation
1987 The South Commission established
1988 GSTP entered into force
1991 Mercosur
1994 Common Market for Eastern and Southern Africa
(COMESA)
2000 Ministerial Conference of the Forum on ChinaAfrica Cooperation (FOCAC) held in Beijing.
First South Summit in Havana, Cuba
OAU formally adopted the NEPAD
2003 IBSA Forum.
UN General Assembly declares 19 December, UN
Day for South-South Cooperation
Marrakech Declaration on South-South Cooperation
2005 Second South Summit Doha, Qatar
2002
2007 Bank of the South
2008 UNCTAD XII, Accra, Ghana
Africa India Summit held in New Delhi, India
2009 UN High Level Conference on on South South
Cooperation Nairobi
2010 Ratification of the constitutive treaty of Unasur
Sao Paulo GSTP round signed (December)
UNCTAD’S Role




UNCTAD was the lead organisation to South South
Cooperation beginning from 1964
It focused on the regional economic
It involved in a very wide ranging research agenda, not
just on trade issues (e.g. financial arrangement)
It involved in a heavy discussion on South South
Cooperation issues during 1960-1970
Twists and terms 1
 Economic
Integration
MAIN CHARACTERISTICS OF DIFFERENT TYPES OF
TRADE INTEGRATION ARRANGEMENTS
trade
Preferential trade agreement

Reduction
Elimination
Common
of tariffs in
of tariffs in
tariffs for
intraregional
trade
intraregional
the world
the rest of
mobility
Harmonization
Free factor
policies
of economic
Yes
Free trade agreement
Yes
Customs union
desirable
Yes
Yes
Common market
desirable
Yes
Yes
Yes
Coordination
Economic union
Yes
Yes
Yes
Yes
Source: UNCTAD secretariat.
Coordination
Twists and terms 2
 Development
cooperation
 South South cooperation
Twists and terms 3


Economic cooperation among developing
countries (ECDC)
Technical cooperation among developing
countries (TCDC)
Twists and terms 4
 Triangular
cooperation
 North and South
South-South Trade Volumes, US$
3500000000
3000000000
2500000000
2000000000
1500000000
1000000000
500000000
0
1995
1996
1997
1998
1999
Asia
2000
2001
2002
Latin America and the Caribbean
2003
2004
Africa
Transition
2005
Oceania
2006
2007
2008
2009
Millions
South-South trade by region Test 2009
2000
1800
1600
1400
1200
1000
800
Oceania
Asia
400
200
LAC
0
Africa
Africa
LAC
Asia
Exporter
Source: ECIDC,UNCTAD based on UNCTADstat.
Recipient
600
FDI from developing regions, US$
350000
300000
250000
Millions USD
200000
150000
100000
50000
0
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
-50000
Africa
Latin America and the Caribbean
Asia
Oceania
2005
2006
2007
2008
2009
Evolution of South-South FDI:1990-2006
Year
World Outward FDI
(Billions of dollars)
South-South FDI*
(Billions of dollars)
South-South FDI as % of
world total
Growth rate South-South
FDI
1990
241
12
5
-14
1991
198
9
5
-23
1992
203
16
8
81
1993
243
17
7
6
1994
287
25
9
41
1995
363
27
7
10
1996
396
35
9
29
1997
476
45
9
28
1998
682
29
4
-36
1999
1077
37
3
28
2000
1233
35
3
-6
2001
753
41
5
16
2002
537
30
6
-26
2003
566
39
7
29
2004
920
77
8
96
2005
893
88
10
15
2006
1411
145
10
64
2007
2267
180
8
25
2008
1928
187
10
4
2009
1100
149
14
-20
Note: * Calculation excludes Cayman Islands, British Virgin Island and Hong Kong (China).
Net transfer of financial resources to developing economies and economies in transition,
1997-2009
Billions of Dollars
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009b
Developing
-3.6
economies
Africa
-7.0
Sub-Saharan
7.4
Africa
(excluding
Nigeria and
South
Africa)
East and
-32.1
South Asia
Western
12.4
Asia
Latin
23.2
America and
the
Caribbean
Economies
1.6
in transition
Memorandum Items
7.2
10.3
-37.1
-126.2
-195.0
-163.8
-208.2
-302.3
-378.0
-581.0
-781.9
-870.3
-890.7
-567.7
13.0
12.2
1.5
8.5
-32.2
2.6
-16.8
6.8
-5.1
4.8
-19.0
6.5
-35.4
4.1
-63.9
0.8
-87.2
-9.6
-98.7
-5.6
-91.4
-1.0
20.8
27.3
-128.2
-139.4
-124.8
-121.0
-147.7
-173.5
-181.1
-262.5
-383.6
-518.4
-478.9
-497.2
34.5
2.7
-35.3
-29.7
-23.2
-46.7
-76.9
-145.4
-175.8
-150.0
-259.5
-52.4
43.7
8.9
-2.8
3.7
-32.2
-63.2
-84.6
-109.3
-135.4
-103.2
-60.9
-38.8
0.7
-25.1
-51.5
-32.9
-27.9
-38.0
-62.4
-95.7
-117.1
-98.3
-153.0
-89.7
8.4
13.6
9.8
11.4
8.5
6.2
8.5
9.1
10.9
7.3
13.1
8.9
15.6
6.0
20.4
2.9
18.6
-7.4
28.0
-4.9
43.4
-0.7
45.7
20.3
Sovereign Wealth Funds with over $100 billion
Country
United Arab
Emirates
Abu Dhabi
Norway
Saudi Arabia
China
Singapore
China
South Korea
China
Hong Kong
Kuwait
China
Singapore
Russia
Fund
Abu Dhabi Investment Authority
Government Pension Fund - Global
SAMA Foreign Holdings
SAFE Investment Company
Government of Singapore Investment
Corporation
China Investment Corporation
National Pension Service
Hong Kong Monetary Authority
Investment Portfolio
Kuwait Investment Authority
National Social Security Fund
Temasek Holdings
National Welfare Fund
Assets
$Billion
627
Inception
1976
443
415
347.1**
340
1990
n/a
1997
1981
332.4
268.0
227.6
2007
1998
1993
202.8
146.5
143
142.5*
1953
2000
1974
2008
Global migrant stocks, 2005 (millions)
South
Migrants in
North
North (HI non(HI OECD)
OECD)
Total
Migrants from:
South
North
(HI OECD)
North
(HI nonOECD)
Total
74
3
62
25
20
1.2
156
30
1
4
0.3
5
78
91
22
191
Source: World Bank staff calculations based on migration data from University
of Sussex, United Nations, and World Bank
Factors for Growing Increased of South
South Economic Connection
Trade
 Foreign Direct Investment
 Financial flows
 Labour flows

South South Cooperation 1970
1970: last golden age of South South cooperation
10
9
8
7
6
5
4
3
2
1
0
Developing economies
Developed economies
1970 - 1980
Source: ECIDC Unit, based on UNCTADstat.
1981-1989
1995 - 2009
World
Geographical composition of world
exports:1970 and 1980
35%
30%
25%
20%
15%
10%
5%
0%
Brazil
China
India
Japan
1970
NIC
MENA
USA (before
1981)
EU15
1980
Source: ECIDC Unit, based on UNCOMTRADE.
Note: EU 15 includes, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal,
Spain, Sweden and the United Kingdom. MENA includes the Middle East and North African Countries. NIC only includes, Hong Kong,
South Korea and Singapore. China’s share of world exports corresponds to the earliest available figure in UNCOMTRADE, 1984.
Geographical composition of world
exports:1996,2006 and 2009
35%
30%
25%
20%
15%
10%
5%
0%
Brazil
China
India
Russia
Japan
1996
2006
NIC
MENA
USA
EU15
2009
Source: ECIDC Unit, based on UNCOMTRADE.
Note: EU 15 includes, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal,
Spain, Sweden and the United Kingdom. MENA includes the Middle East and North African Countries. Hong Kong, South Korea and
Singapore.
Average growth rates:
selected countries
10
9
8
7
6
5
4
3
2
1
0
Brazil
China
India
Russia
1970 - 1980
Source: ECIDC Unit, based on UNCTADstat.
Japan
1995 - 2009
NIC
United States
EU
Distribution of global output
Long run GDP trend
80
60
50
40
30
20
10
20
08
20
06
20
04
20
02
20
00
19
98
19
94
19
96
19
92
19
90
19
88
19
86
19
84
19
82
0
19
80
% of global GDP
70
Year
High Income
Low and middle Income
Low and middle income w/o China
Differences within the south?
Long run GDP trend
14
10
8
6
4
2
20
08
20
04
20
06
20
02
20
00
19
98
19
94
19
96
19
92
19
90
19
88
19
84
19
86
19
82
0
19
80
% of global GDP
12
Year
China
India
Indonesia
Brasil
LAC
SSF
South Africa
Final Thoughts
1.
Exporting economies VS Big economies
2.
Converting VS Catch up
3.
Dependance Vs Decoupling
-5
HIC
LCN
EAP
SAS
-10
-15
Year
SSF
20
20
20
20
20
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
09
07
05
03
01
99
97
95
93
91
89
87
85
83
81
79
77
75
73
71
69
67
65
63
61
Growth %
Decoupling
Decoupling of economic performances
20
15
10
5
0