Global South harnessed more than half of the world's economic growth in recent years

This is article 2 of 3 in the Beyond Aid series. Here is article 1.

Global South countries harnessed more than half of the world's economic growth in recent years. Their foreign direct investment outflows now represent a third of global flows. And intra-South trade is significant and ever-growing. While development cooperation is often viewed as being between developed and developing countries, with the developed partner providing the funding, it is thus no surprise that there also exists plenty of South-South cooperation (SSC), meaning cross-country partnerships between developing nations.

Characteristics and principles of South-South cooperation

As Shenhong Yao, Director of the Division of Strategic Planning and South-South Cooperation at UNIDO, frames it: "The global landscape is shifting. Emerging economies in the Global South are no longer just recipients of aid. They are sources of innovation, technology, and investment. This creates an opportunity to reshape development partnerships around peer learning and mutual accountability, rather than the traditional donor-recipient model." What is now known as SSC stems from the adoption of the Buenos Aires Plan of Action for Promoting and Implementing Technical Cooperation among Developing Countries (BAPA) by 138 UN Member States in 1978. However, cooperation between developing countries has existed well before that. According to Bernadette Vega-Sánchez, independent consultant and former staff at the Mexican Agency for International Development Cooperation (AMEXCID), "there's a lot of South-South exchange that happens without us knowing or labelling it as SSC. It's normal in many societies: You share what you have, you contribute with your knowledge."

SSC is defined as two or more developing countries pursuing their national capacity development objectives by sharing knowledge, skills, resources and technical know-how. Rather than exchanging large sums of money, it is thus primarily a knowledge-based modality focused on capacity-building and fostering self-reliance. While that means that SSC projects are often small, Vega-Sánchez argues that "sometimes we need small. We need that knowledge exchange to reach the point where we can implement big infrastructure projects, for example. To cover all these miles of knowledge or capacity, SSC contributes a lot." Rather than magnitude, a key constraint of SSC stems from project durations and scope, as funding is often project-specific and short-term, making it difficult to plan and build lasting capacity systematically.

Principles of SSC include solidarity, country ownership, mutual benefit, non-conditionality, mutual accountability and a multi-stakeholder approach, among others. However, Vega-Sánchez warns that "nothing is guaranteed. Just because those are your principles and you repeat them constantly, doesn't mean they will be driving every exchange. And there are risks to replicate traditional practises that might not work." Nonetheless, given the partner's more similar contexts, the horizontal and Southern-led approach seen as a strength of triangular cooperation applies even more to SSC. Yao told us that, "it naturally supports more coherent, country-driven approaches. When a state adapts an industrial policy or technology that a peer has already tested under comparable conditions, the learning curve is shorter, and uptake is faster." Working with other developing partners can thus produce solutions that are designed with the limitations of developing countries in mind, and therefore, more feasible, contextually adapted and cost-effective.

Without large financial flows from one country to another, SSC is less prone to creating dependencies or hierarchies, and, according to Martín Rivero Illa, Coordinator of the Social Cohesion and SSC Area at the Ibero-American General Secretariat (SEGIB), "it is mostly demand-driven, not based on what a donor offers. It starts from what a country needs and then seeing how to help achieve that." This aligns with what Nicola Banks, Professor at the University of Manchester's Global Development Institute and Co-Founder and Director of One World Together, told us: "You can identify locally relevant priorities, which sounds simple, but is so far removed from our system where donors in the Global North decide, we will fund women and girls, or we will fund climate change responses, and local organisations then have to fit whatever they do into those boxes." With a more demand-driven approach, the cooperation is more equipped to tackle a country's true needs rather than donors' policy priorities and lets partners choose which issues to focus on and how to address them.

Too little data, or the wrong data?

Similarly to triangular cooperation, data scarcity constrains measuring, researching and scaling SSC. However, many practitioners also criticise how development impact and effectiveness are measured in the first place, arguing that the focus is too narrow and excludes approaches less reliant on direct funding. Vega-Sánchez thinks that "how we treat data also shapes decision-making. If everything is measured in terms of ODA, then all the attention goes there. But money is only part of the story; it's a means, not the solution. Still, there's a lot more to do regarding analysing the results, analysing what happens afterwards in SSC." Some common definitions of development cooperation are also fundamentally at odds with how many developing countries self-define it, leading to underreporting of projects and partnerships that do not fit those narrow frames. Despite the scarcity of comparable, quantitative data, case studies can highlight good practice examples and areas with special potential for successful cooperation, while acknowledging the need for more quantification. Importantly, the cooperation design itself is no less rigorous, as large organisations working on SSC, such as UNIDO, generally apply the same standards and requirements as for any other intervention.

China's growing role in South-South cooperation

Of course, not all SSC is small, horizontal, or primarily knowledge-based. China provides around 3 billion USD per year bilaterally to other countries through its Belt and Road Initiative and other programmes, and a major share flows into large infrastructure projects. While Chinese development projects are often criticised for creating dependencies and pursuing a geopolitical agenda, this funding is becoming ever-more important as many Western donors are cutting their ODA. Despite scepticism, Chinese ODA generally complies with the principles of SSC, which also normatively align with its criticisms of the Western-centric world order. There is even a specific UNIDO Centre for South-South Industrial Cooperation in China (UCSSIC China), reflecting its global importance and professionalisation. Chinese development policies have also shifted gradually in response to changing domestic and foreign policy priorities, aligning more closely with multilateral institutions and recipient countries. As Yao put it, "solidarity and mutual benefit are not in tension. They are complementary, and both are at work."

Regardless of one's views on Chinese SSC, unlike much other development assistance, it is not going anywhere soon. Additionally, many developing countries now prefer it over traditional aid from the West, given its fewer, more flexible conditions. While it has significantly added to Africa's debt burden, it also created physical infrastructure that would otherwise have been unattainable, thereby elevating the continent's economic potential, and similar observations hold for other regions. If Western countries do not want to lose influence in the development sphere to China, perhaps they need to instead learn from it and embrace the principles of SSC, even in North-South cooperation.

Towards successful South-South cooperation

Looking ahead, the trajectory of SSC will be shaped by how well it can evolve beyond its current constraints. As Rivero Illa told us, "a major challenge is how you incorporate different actors apart from governments, particularly civil society, universities and the private sector." Broadening this base will be essential: although developing-state governments arguably have a deeper understanding of local contexts than decision-makers in the Global North, they cannot know every local situation and nuance, and the grassroots knowledge held by local businesses and civil society organisations will be decisive for long-term success.

The coming years are likely to see SSC expand significantly in both scope and scale. With many developed countries reducing their ODA and stepping back from development cooperation while players from the Global South gain prominence, SSC is poised to take on a more central role, sometimes complementing North-South cooperation, sometimes replacing it where traditional donors retreat. The opportunity is considerable, but so is the risk: as projects grow larger and more numerous, a rigorous approach, paired with the principles of solidarity, country ownership and mutual accountability that distinguish SSC will need to be actively safeguarded. Whether SSC can scale without drifting toward the donor-recipient dynamics it was meant to transcend will define the future of development cooperation.

illuminem Voices is a democratic space presenting the opinions of leading Sustainability Thought Leaders, their views do not necessarily represent those of illuminem.

The world needs sustainability knowledge. At illuminem, no interest group or shareholder can influence our work. Thank you for supporting our mission to make high-quality and independent sustainability information free for all. Every contribution helps. Thank you for donating today.