Governments from the South are assuming leading roles in decisions on global issues ranging from 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 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 policy makers have successfully met the challenges of macro management and a viable balance of payments have made their economies more market oriented to raise 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.
So policy makers face the arduous task of tackling long prevailing social ills which have often propelled the political system and also led to energetic involvement of civil society organizations. Though economic performance in Brazil and South Africa has improved in recent years, there are concerns whether the improvement can be sustained in the current international economic environment, and weaker performance will mean fewer funds for the countries’ social programs.
Innovative programs are needed to reach the poor as growth merely may not lead to better social outcomes, particularly in Brazil and South Africa. A major problem with social programs has been to ensure delivery of the 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 Security Council, attention has shifted over time towards development and economic reform. The most recent IBSA gatherings have revealed 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 and so provides 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 delivery of services to the poor and digital identities would further improve delivery. Meanwhile, South Africa’s multimillion-dollar Accelerated and Shared Growth Initiative for South Africa development strategy was designed to make good of 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 G20 provides them with an opportunity to shift focus of international economic governance from macro issues, particularly misalignment of interest rates and exchange rates among the G7 to development for the poor so that greater progress can be made in meeting the MDGs. They can push for reform of the institutions currently in charge of international economic governance, reform not merely in increasing voting shares of developing countries, but more importantly in policies supported by these institutions.
IBSA is now trying to implement joint projects of interest to 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 of 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 critical importance of civil society in design and execution of programs directed towards the poor, and 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 Centre 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.
