WATERLOO, Canada — Governments from the South are assuming leading roles in decisions on global issues such as climate change, health governance, trade regimes, and water and food security.
Complementing the new economic and geopolitical importance of the developing world is the rapid pace of South-South investment, cooperation and trade.
Earlier this month, South African President Jacob Zuma, accompanied by what was described as the largest South African business delegation to visit any country, paid a visit to India.
Bilateral trade rose to $7.5 billion last year, up from $1.3 billion in 2001, while investments are reported to hover around $9 billion.
Meanwhile, bilateral trade between Brazil and India is expected to surpass $6 billion by the end of the year, according to the Brazil-India Chamber of Commerce. However, these three large countries face enormous challenges of meeting the aspirations of their populations, many of whom are hungry and poor.
The policymakers have successfully met the challenges of macro- management, while a viable balance of payments have made their economies more market-oriented amid rising sustainable growth rates. But economic growth is not sufficient for the public, which demands social equity because of the history of colonial rule in India, apartheid in South Africa and military rule in Brazil.
Therefore, policymakers face the arduous task of tackling long-prevailing social ills that have often propelled the political system and led to the energetic involvement of civil society organizations.
Although economic performance in Brazil and the rest of South Africa has improved in recent years, there are concerns whether the improvements can be sustained in the current international economic environment. Weaker performance would mean fewer funds for the countries’ social programs.
Innovative programs are needed to reach the poor since growth does not necessarily lead to better social outcomes, particularly in Brazil and South Africa. A major problem with social programs has been ensuring delivery of services and benefits to the poor.
While the India-Brazil-South Africa Dialogue Forum (IBSA) was launched in June 2003 to push for the countries’ attempts to get into the U.N. Security Council, attention has shifted over time toward development and economic reform. The most recent IBSA gatherings have revealed a staunch commitment to issues related to the fields of technology and renewable energy.
Food security is a common concern of enormous importance in India, Brazil and South Africa, given the poverty and the extent of malnourishment. Brazil’s social policies have been successful as they are based on background research, successful innovative targeting and shrewd combination of programs.
For instance, Zero Hunger works in close conjunction with Bolsa Escuela and under the umbrella of Bolsa Familia, thus providing a combination of social polices that tackle hunger, education, health and empowerment.
India’s rural employment scheme, NREGA, has been successful in providing income to the poor. The Right to Information Act has helped to improve the delivery of services to the poor; digital identities would further improve delivery.
Meanwhile, South Africa’s multimillion-dollar Accelerated and Shared Growth Initiative for development strategy was designed to make good on the ruling party’s 2004 election pledges: namely, to halve poverty and unemployment by 2014, improve broad-based economic empowerment, and accelerate employment equity.
These countries’ membership in the Group of 20 provides them with an opportunity to shift their focus on international economic governance from macro-issues — particularly the misalignment of interest rates and exchange rates among the Group of Seven nations to development for the poor — so that greater progress can be made in meeting the Millennium Development Goals. They can push for reform of the institutions currently in charge of international economic governance — not merely to increase the voting shares of developing countries but, more importantly, to reform policies supported by these institutions.
IBSA is now trying to implement joint projects of interest with other countries. For instance, it has launched its development fund, designed to address small-scale development challenges in some of the poorest countries in the world — from Haiti to Guinea Bissau and even Palestine. Their experiences in providing credit in poor countries can be used for joint operations in other developing countries or even in industrialized countries.
The experience of Grameen Bank in providing micro finance in Bangladesh is being used to provide credit to the poor in New York city.
The three democracies face similar challenges of tackling poverty and deprivation. The problem before Brazil and South Africa is more severe as economic growth has been slower than in India. Their experience shows the crucial importance of civil society in the design and execution of programs directed toward the poor. This is an important factor to be factored in by multilateral and bilateral agencies involved in poverty-alleviation projects in developing countries.
The three countries can extend cooperation beyond multilateral trade negotiations into the areas of finance and provision of services.
Manmohan Agarwal is a visiting fellow at the Center for International Governance Innvoation (CIGI) in Waterloo, Canada. Hany Besada is a senior researcher with CIGI. Lyal White is a senior lecturer with the University of Pretoria’s Gordon Institute of Business Science in South Africa.
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