Keynote Speech

Development Cooperation Forum

Session III: “Southern partners advancing mutual learning and envisioning the contribution of South-South cooperation for sustainable development”

Date: July 21^st, 2016

Speaker: Dr Rathin Roy

Venue: UN Headquarters, New York

Mr. President, Madam Moderator, Fellow Panelists, Colleagues in the room, it is the last session, so I hope to provide a key note that is perhaps less bland than you might expect.

So let me start with the spirit behind this session: ‘how can South-South cooperation contribute to achieving the SDGs. I am not going to quote John F. Kennedy, though I am tempted to in this context, because we could ask that question either way, couldn’t we? What I will do is: I’ll say, ok, if we have a development challenge for which we have gathered over the past week to address, and an instrument called the SDGs which we can club collectively together to address, then, in that context, how can different forms of that cooperation address the institutional and other challenges that we as a collective community face in achieving our common development goals? I think in the context of using the word ‘South’, there is attached a problem, a challenge that is not addressed by throwing money at the country level, or by throwing, regrettably, ideas, at the national level. It is, I think, the one thing that we have not gathered collectively to address: the highly unequal access to three instruments of development which continue to be more or less as restrictive as they were when I was much younger than I am. These are: i) access to finance, ii) access to technology and iii) access to quality capacities and institutions in the countries of the global South. These are our collective challenges and because these challenges require us to work politically to address them, South-South cooperation becomes extremely relevant in the form and spirit in which it was conceived, which was essentially a political attempt for developing countries in the global South to come together in solidarity to address questions of access. That background has not changed. So, in that context when we ask “what South-South cooperation can contribute to the SDGs”, we would be making, I submit to you, a horrible mistake if we say it’s another complement to official development assistance. It cannot be because it is political. It is not altruistic; it is a hard-nosed political attempt to address a historic problem. Let me in the limited time I have, therefore, explore each of these and I will, if you permit me, also give you examples from my own country of how we attempt to address these access challenges in a South-South framework.

Finance is the area I am most familiar with since I come from the Ministry of Finance. I have worked in. The challenge in access to finance is not any more the fact that you have rich countries in which people save money, and you have poor countries which need these savings and we have to work on how to transfer them. That was the spirit in which we created the IMF, the World Bank, the regional development banks etc. True, concessional finance is still extremely important in a variety of situations. But, the big challenge now that emerges is that even getting access to non-concessional finance is difficult in the areas where the countries in the South want it. The most profound example of that barrier is infrastructure. Developing countries need infrastructure to complete their development transformation and that infrastructure is critical in achieving the sustainable development goals because it impacts climate change, it impacts poverty, it impacts equitability. But to create infrastructure we need access to long-term finance. Long-term finance today rests, in large measure, in the hands of sovereign wealth funds, insurance companies etc. which are not located in the South. But potentially the attractiveness of investments in the South for these companies should be self-evident with interest rates being what they are in the North and what they are in the South. That market mechanism doesn’t work because of one barrier to finance which is euphemistically called “regulatory risk”. What it is…..talk to a regulator, talk to a rating agency and you will find perceptions regarding a country’s political credibility and institutional credibility informing these quantifications of regulatory risk. That is something the private sector is entitled to do but it is something I think a House such as this should acknowledge is something that needs to be debated, because this choking of access to non-concessional finance by either providing access to finance at absurdly high rates of interest, or not providing it at all, is something that South-South Cooperation tries to address. It’s a political issue and the example I will give you is our own initiative, which is triangular, but largely South-South: Prime Minister Modi’s announcement after Paris last year about the International Solar Alliance which is an alliance between a number of countries, that benefit from lots of sun, to come together to gain finance and implement a very ambitious strategy for delivering renewable energy across the global South. Now that is neither a replacement for official development assistance nor is it even contextually relevant to think of it as such. That is an institution that seeks to address a political and institutional problem of access.

In the case of technology too I could take the example of the solar alliance. We are told, and rightly so, that exciting things are happening in the renewable space. We are told that we must not burn more coal even if we wish for our children to have lightbulbs to read with. And we listen to that; we are good global citizens of the South and we would like to be part of this endeavour. But then when I find that the intellectual property that is permitting the world to make ever more efficient batteries and ever more efficient solar systems, and is owned by the most richest countries in the world, which means that twenty five to thirty per cent, (when I implement my solar plans), of the revenues from solar electricity will revert back to the ten richest countries in the world I’m forced to think about this as a political issue. It is important at a gathering such as this that we find solutions to these political issues and that is also what South-South cooperation is about: coming together to build technology in solidarity to address a barrier to access.

The third and final barrier to access that we have and one that we all acknowledge exists, but is delightfully vague and in all my years (and I have spent many) as a UN official, I found the word “capacity” to be defined in such an adjectival way that I often lost my way. But capacity for me, in a Southern country, means the ability to take charge of my own affairs and deliver to the expectations of the electorate in a manner that addresses the political mandate that inspires a development process which is very different in every country. That capacity, therefore, must be created by people who understand that the political context dictates what is feasible; the cultural, political and institutional histories of these countries dictates what kind of capacities can be built that can be made to work; which is what we seek to do. So, in a ministry of finance, to ask for a chart of accounts that specifies a particular kind of treasury management system to be replicated as best practice all over the world is completely absurd in a country like mine where very often treasury management is done on the basis of long held and effective assumptions that are not codified. Codification may be good in a Northern context but is not necessarily so in the South. And here is where my South-South cooperation works very well. We, in our own small way, have been trying to foster with a program called ITEC in India which has brought us a community of very valuable students from all across the developing South. This program has now expanded quite significantly and has therefore, created a community of practice within the South that is able to interact in this imperfect world of the South that we live in and deliver solutions. We have recently set up with the Government of Ghana, the Kofi Annan Centre for Technology in Ghana. The idea of this Centre is that it is not enough for people to say ‘India is a great place to do IT so let India collaborate and build IT’; what we want to say is “Africa is a great place to do IT and let’s collaborate to make that happen”. So that is the kind of institutional transfer that will lift barriers to capacity; where, we do not take it as a given that if a particular country does not have a processing capacity for its natural resources, then that means that the cleverest country doing that should help them trade. No, the idea is that we make a country that is not clever in doing it cleverer in a reasonable time frame.

So, I have given you three examples, (I hope that will spark a debate), of areas where South-South cooperation can work with the SDGs, but with riders; it is not a technocratic effort, it’s a political effort. It will always remain a political effort as long as the barriers that developing countries face to access are, fundamentally, at the centre, political; as long as the institutions that mediate this access, (in my own field the IMF and the World Bank) are governed by a mandate that is fifty years old. When that changes, we will see. But until such time as doing that, this is, to quote a very famous professor called James Scott, “a weapon of the weak”. It continues to be a weapon of the weak; however ‘emerging’ you may like to believe the global South is, because these barriers to access create weaknesses which we collectively have to address in the global South. So, South-South cooperation if respected in this context and taken politically and taken fundamentally as an attempt to address a word that recurs in the SDG document but is not effectively part of any means of implementation. This word is, “access”. If taken seriously, we can work harmoniously to deliver the sustainability development goals. If, however, we try to go down the path of trying to look at the metrics of development cooperation as has been from the past, and continue to believe, for some reason, which I find very frustrating, to say that the South-South cooperation is not like North-South cooperation, if scepticism continues to hold that this is being done for politically expedient reasons, then the ability for us to collectively work to harmonize these things will not be there and that would be doing a great disservice to generations in the future in both the North and the South.

Thank you.