The New Development Bank Seminar, held under the auspices of President Abdel Fattah El-Sisi, concluded its activities in the New Administrative Capital with a high-level discussion panel on "Enhancing Global Development through South-South Cooperation."
This panel aimed to delve into the dynamics of South-South cooperation, exploring its potential to address the unique challenges faced by countries in the Global South. It offered a platform to share experiences, lessons learned, and best practices, while also identifying areas where further efforts and deeper integration are needed.
South-South cooperation has emerged as a transformative force in the global economic landscape, reshaping relationships and collaborations among countries in the Global South. In the wake of profound shifts in the international economic order, this cooperation model stands as a beacon of mutual support, sustainable growth, and shared knowledge. The increasing output share and trade flows among Emerging Markets and Developing Countries (EMDCs) highlight a trend towards a more integrated, cooperative Global South.
However, these countries still face significant challenges, including infrastructure deficits, food insecurity, and the impacts of global crises like the financial downturns and the COVID-19 pandemic. Addressing these issues necessitates a commitment to deeper cooperation and a multifaceted approach encompassing industry, finance, investment, trade, technology, and knowledge exchange.
The panel was moderated by Professor Sachin Chaturvedi, Director General, Research and Information System for Developing countries (RIS), India. Panelists included Ms. Dima Al Khatib, Director of the United Nations Office for South-South Cooperation, Mr. Abdourhamane Diaw, Country Manager for Egypt, African Development Bank, Ms. Ran Meng, Deputy Director-General of the Department of International Cooperation, China International Development Cooperation Agency (CIDCA), Dr. Mustafizur Rahman, Fellow at the Centre for Policy Dialogue, Bangladesh, and Dr. Hafez Ghanem, nonresident senior fellow at the Brookings Institution and former VP of the World Bank.
Professor Sachin Chaturvedi, Director General, Research and Information System for Developing countries (RIS), India, emphasized that the Global South needs to reach global standards of infrastructure and technological development and build capacities to keep pace with technological advancements. Hence, it is crucial for countries of the South to cooperate to turn these goals into actionable steps that serve the Global South.
He stressed that the Global South needs to restructure its debts, as these debts impact the sustainability of their economies from environmental, social, and economic perspectives. He highlighted the importance of bilateral and multilateral cooperation through various development banks.
Ms. Dima Al Khatib, Director of the United Nations Office for South-South Cooperation, thanked the Egyptian government for organizing the forum. She stated the necessity of moving forward with South-South cooperation to achieve sustainable development goals, noting that many Southern countries are still far from achieving these goals, with only 15% commitment to the 140 sub-goals in many emerging countries.
She added that there are numerous challenges in utilizing technology, digital transformation, and innovative industrial procedures, alongside a funding gap for developmental projects and difficulties in creating job opportunities.
“Developing countries clearly suffer from high debt levels, with debt servicing costs sometimes exceeding spending on essential social services like education and healthcare. Approximately 3 billion people globally pay for education and healthcare,” She pointed.
Al Khatib explained that the current financial structure does not adequately address the problems of these countries. With 190 member states in the UN General Assembly, there is a constant call for financial reforms and the issuance of international resolutions to reform economic systems.
She mentioned the potential for cooperation among South countries to support developmental processes, strengthen developing nations to face these challenges, and provide technical support and build political capacities. Egypt serves as a good model for supporting the private sector and investment, and its experience can be shared to disseminate best practices among developing countries.
Al Khatib also stressed the need for regional engagement and the creation of common regional platforms, as well as the establishment of a unified council for Southern countries to support cooperation and highlight challenges, calling for a focus on the cooperation triangle through financing, change, and dialogue, and conducting studies through a network of experts in the Global South.
Mr. Abdourhamane Diaw, Country Manager for Egypt, African Development Bank, praised the role of the Ministry of International Cooperation in organizing the first New Development Bank seminar outside the founding countries, affirming the importance of South-South cooperation and its impact on the global economy.
Diaw emphasized that Africa has a significant role in global development discussions, considering its demographic diversity, capabilities, renewable energy resources, and vast land area as strengths to focus on in South-South cooperation.
He detailed that Africa's population is mostly young, with a high consumption power, holding a considerable share of the world's population. In agriculture, Africa possesses a substantial portion of the world's agricultural land but needs significant investment in its infrastructure.
Country Manager for Egypt, African Development Bank highlighted that Africa has the greatest potential for investment in renewable energy globally, but many African countries suffer from heavy debt burdens, with debt servicing in 22 African countries collectively amounting to approximately $74 billion annually. This necessitates reforming global financial structures and improving access to financing in financial markets.
Ms. Ran Meng, Deputy Director-General of the Department of International Cooperation, China International Development Cooperation Agency (CIDCA), said that the BRICS group reflects the Global South, with China as a founding member aimed at enhancing cooperation with Southern countries.
She added that since 2021, China has focused on supporting the Global Development Initiative (GDI), allocating nearly $4 billion for the initiative. The Chinese President proposed the GDI at the UN General Assembly to enhance international development cooperation and draw attention to developing countries' developmental issues.
She emphasized that China works on knowledge transfer in various fields, particularly with countries of the South, in cooperation with different governments to strengthen developing countries' capacities and monitor the implementation of sustainable development goals in these countries.
For his part, Dr. Mustafizur Rahman, Fellow at the Centre for Policy Dialogue, Bangladesh, thanked Dr. Rania Al-Mashat, Minister of International Cooperation, for the opportunity, affirming the importance of South-South cooperation, especially as these countries are affected by climate changes while facing greater difficulties in obtaining funding to enhance their efforts in addressing these changes.
He said that Bangladesh was among the first countries to join the New Development Bank, aiming to cooperate in transportation, infrastructure, and digital transformation to achieve sustainability, enabling it to meet new competition standards and sustainability criteria, and build required skills.
Rahman referred to an IMF report indicating rising debt levels, stating that low-income countries may face difficulties in meeting their debt obligations. This highlights the importance of the New Development Bank, which focuses on lending in local currencies, as developing economies struggle with heavy debt burdens and local currency depreciation against the dollar, imposing greater challenges.
Furthermore, Hafez Ghanem, nonresident senior fellow at the Brookings Institution and former VP of the World Bank pointed out that discussing South-South cooperation should focus on two main points: reforming global financial structures and financing climate action. He noted that the financial design has not changed since 1944 when the UN was first established with only 45 countries, compared to the current 190 countries in the UN General Assembly.
He emphasized the urgent need to reconsider governance and voting systems in the UN General Assembly, citing the example of India, which is larger than the UK in terms of national income and population, yet the UK's voting share in the UN Assembly remains larger than India’s. Thus, there is a need to reconsider the allocation of voting rights in the UN bodies.