Examine the problems and prospects of South-South economic cooperation. (1991)
South–South economic cooperation is horizontal exchange of trade, finance, technology and skills among developing countries on terms of sovereignty, non-conditionality and mutual benefit. It grew from the NIEO’s idea of collective self-reliance, expressed in the Buenos Aires Plan of Action (1978), the Global System of Trade Preferences (1988) and the G-15 (1989). It was meant to complement North–South exchange, not replace it.
The record
South–South merchandise trade rose from about $0.5 trillion in 1995 to over $6 trillion in 2024, about a quarter of world goods trade, and $6.8 trillion in 2025 (UNCTAD). The growth is real but lopsided: intra-Asian flows dominate it, while intra-African trade is only about 15–20% of Africa’s total.
Problems
- Competing, not complementary, economies. Most developing countries export similar commodities and low-end manufactures and import capital goods from the North, so they compete for the same markets.
- Colonial infrastructure. Ports, shipping and banking still link economies to former metropoles rather than to neighbours.
- Finance and currency. Trade finance, payment systems and reserves remain dollar-based. BRICS discusses settlement in national currencies, yet its New Delhi Declaration (September 2026) adopted no common currency.
- Dependence on the North. Capital, frontier technology and the largest consumer markets remain largely Northern.
- New asymmetry within the South. Immanuel Wallerstein‘s semi-periphery can reproduce core–periphery relations inside the South. China supplies manufactures and loans and buys raw materials; India’s trade deficit with China rose from $99.2 billion in 2024–25 to $112.2 billion in 2025–26, and Sri Lanka’s debt distress showed the risks of project lending.
- Political rivalries and heterogeneity. India–China and Egypt–Ethiopia tensions, oil exporters versus importers, and very different income levels erode common positions; the GSTP stayed marginal.
- Delivery gaps. Announced credit often exceeds disbursement.
Prospects
- Scale and growth. The South holds most of the world’s population and a rising share of demand, with China, India, Indonesia and the Gulf supplying capital and markets; critical minerals give producers leverage to process locally.
- Institutions. The New Development Bank (about $43 billion approved for 139 projects by end-2025; Uzbekistan joined in June 2026), the AIIB, the African Continental Free Trade Area (trading since 2021) and local-currency settlement build an infrastructure the 1970s lacked.
- Knowledge and digital cooperation. India’s ITEC (since 1964), lines of credit, the International Solar Alliance, Vaccine Maitri and exportable digital public infrastructure show low-cost, demand-driven models. Triangular cooperation adds Northern finance under Southern ownership.
- Northern retreat as a push. OECD data show official aid fell 23.1% in real terms in 2025, and unilateral US tariffs have risen, so Southern markets and the borrowers’ forum launched at Seville (2025) gain value.
Assessment
For dependency writers such as Samir Amin, collective self-reliance was a route out of peripheral status. Liberal economists counter that trade among similar economies yields smaller gains than integration with richer markets. India’s line sits between: Narendra Modi‘s Global Development Compact (August 2024) offers trade, skills, technology and concessional finance without debt traps, and S. Jaishankar insisted at the UN (September 2026) that the South’s right to industrialise must not be denied.
Conclusion
South–South cooperation has moved from rhetoric in 1991 to a quarter of world trade today, but much of it is Asian and China-centred. Its prospects depend on overcoming similar export structures and the new asymmetry within the South. It succeeds as a complement that widens options and bargaining power, not as a substitute for the North.