Efem Nkam Ubi, Research Fellow, Nigerian Institute of International Affairs
Subjects of Interest
- Economic Development
- Geopolitical Analysis
- International Affairs
- International Trade
How developing nations can harness South-South relations and develop 12 Feb 2018
The economic disparities between the developed and developing countries are generally staggering. The developed economies are more industrialized and their populations are relatively wealthier, with per capita incomes in multiples of those in developing countries. But with the rise of the emerging powers and frontier markets such as China, India, Brazil, Indonesia, Mexico, Nigeria and South Africa, the global economic architecture is poised to change.
According to a 2016 report published by PricewaterhouseCoopers (PwC), Nigeria is projected to become one of the 10 largest economies of the world by 2050. The country's Gross Domestic Product (GDP) is estimated to reach $6.4 trillion by 2050, according to PwC's The World in 2050: Will the shift in global economic power continue? This means Nigeria would leapfrog the United Kingdom and France. Both advanced countries are likely to continue to grow at less than half the rate of Nigeria's expansion.
With the shift in global economic power in the next decades, the combined economies of the current emerging and frontier markets – chiefly China, India, Indonesia, Indonesia and Mexico – would outstrip the combined economies of the current richest countries of the world or the so-called Global North. Moreover, these frontline developing countries are offering alternative models of development as shaped by their recent growth experiences, from which other developing countries can learn.
These emerging economies also have a crucial role to play in driving new forms of South-South relations that are imperative for development of the Global South. That is why in 2012, Former Chinese President, Hu Jintao, opined that, China, India, Brazil, Russia, South Africa, together with other emerging economies with growing economic and political clout, are the defenders of the Global South and a force for world peace.
As a matter of fact, there is a growing movement in the economic governance system called “collectivization.” It entails the rising trend whereby developing countries are forming groupings, such as BRICS (Brazil, Russia, India, China and South Africa) to be able to increase their bargaining power for a better share in global economics.
China and a few emerging powers are core members of some of World Trade Organisation's (WTO) negotiating groups often comprising of developing countries. China, for instance, was instrumental in the founding of G20 – the most influential entity in global economic governance, with nearly half of its members comprising developing countries. The goals of BRICS include promoting economic, trade and investment cooperation, as well as reforming the International Monetary Fund (IMF) and the international monetary systems.
In other words, whether they are negotiating bilaterally or multilaterally, the emerging powers of the Global South should consistently accommodate the legitimate concerns of peer countries. This type of global development partnership will denote a commitment to ending poverty and allow for the sharing of obligations to boost the common interests of all humanity.
It must continue to be the mission of the Global South to end the North-Side divide and the economic disparities that come with that reactionary construct. According to a 1990 report by the South Commission, which was made up of individuals from developing countries, “It is the views of the developing nations that the world remains undivided…there would not be one part developed, rich, and dominating, and the other underdeveloped, poor, and dominated.”
The current global order is one that perpetuates extreme poverty. Despite record economic growth in the last decade and half, 767 million people lived on less than $1.90 a day in 2013, according to World Bank figures, with half of the extreme poor living in Sub-Saharan Africa. Such extreme poverty needs to be addressed. As far back as 1973, then-President of the World Bank, Robert McNamara, at a speech in Nairobi, cautioned that “growth is not equitably reaching the poor.” But the gap between the rich and poor countries has since widened.
The partnership of developing countries should seek to address persistent conflicts and security challenges that bedevil some developing nations. A country's strength and prosperity are contingent upon not just economic growth but also security of life and property.
Internal security is also paramount in attracting international capital flows. A classic example is how the Boko Haram insurgency in the north-eastern part of Nigeria in almost a decade has deprived the region of critical investment in infrastructure and development of the private sector to provide jobs. The mobilization of capital must be geared towards implementing economic programmes that will reduce poverty and achieve the 2030 Agenda for Sustainable Development.
Trade is a key component of South-South cooperation. Indeed, trade between developing countries has grown rapidly, with more than 40 percent of exports in developing countries now going to other developing nations. But the intra-South trade momentum needs to be ramped up and sustained.
The challenges of the Global South – especially the African continent, which remains the poorest region in the world – are not insurmountable, even though they appear intractable. Issues such as lack of infrastructure, poverty, environmental degradation, climate change and insecurity can be addressed if there is political will. Individual governments have their role to play, while partnering with other developing countries to ultimately achieve development and raise the standard of living of their citizens.
Efem N Ubi, PhD, is a Research Fellow and Head, Division of International Economic Relations, at the Nigerian Institute of International Affairs, Lagos.