West meets South-South

Many newly industrializing countries are becoming, like Western donors, active in development policy - and increasingly so. These new 'Southern' donors, from China and India to Brazil and South Africa, are appearing on the world stage at a time when the Western donor community is working hard to live up to its commitments in the developing world.

The yardstick for this is the 2005 Paris Declaration, an agreement between donor and recipient countries designed to increase the effectiveness of the aid. Many fear that the growing commitment of the new donors could endanger the standards of Western development policy, since these donors' South-South cooperation follows non-Western principles and mechanisms. It's against this background that we ask ourselves: is cooperation between traditional and new donors possible and appropriate, and is it for the good of poorer developing countries? Perhaps both groups have something to learn from one another.

South-South cooperation in focus

The 'new' donors – many have been supporting poorer developing countries for decades – view their aid as different from Western development aid. They see their growing commitment as more than a simple financial move, and they link their aid to trade preferences and the promotion of foreign direct investments among their companies.

From the Southern donor perspective, the link between aid and investment answers the question of effectiveness: "We managed to better establish our companies in the recipient country – thus the aid was effective." Mutual benefit, not altruism, defines this kind of commitment. This principle of South-South cooperation, in which aid is used to promote development in both donor and recipient countries, has been held in high regard by developing countries since the Conference of Non-Aligned States in Bandung in 1955.

Yet this does not give a clear definition of South-South cooperation. It is hard to say at what point export promotion becomes true cooperation, providing a truly mutual benefit.

From development aid to a global development policy

However, a new conversation about the significance of development cooperation beyond the Paris Agenda is obviously needed in the 'North' as well. Several leading African economists have caused a stir with calls for an end to development aid, and former French development agency head Jean-Michel Severino is now calling for the "end of ODA" in the midst of efforts to find a shift of emphasis of development policy. This should not be understood as capitulation in the face of the challenges, Severino has said, but as part of a shift in thinking about aid. Relationships between donors and recipients – whether North-South or South-South – are always characterized by inequality: one gives and the other takes. Increasingly, countries from the South are rejecting this basic philosophy.

Once the millennium development goals deadline passes in 2015, the aim must be to place the creation of global development partnerships at the centre of the discussion. These development partnerships should enable joint contributions to the creation of public goods such as peace and a clean environment. Aid alone is not enough; the partnerships must be broader. Since this cannot be accomplished without the large newly industrializing countries, they should be consulted on the possible forms, content and standards of such cooperation.

Trilateral cooperation as a way to a joint goal?

Trilateral or triangular cooperation – that is, cooperation with new donors in a further developing country – is the subject of intense discussion at present, not least because such cooperation also allows the West some influence over the behaviour of countries like China, India or Brazil in developing countries.

The greatest potential of trilateral cooperation lies in the fact that it can serve as a strategic bridge between Western development policy and South-South cooperation. In practice, however, there are only a few small-scale projects, above all with Latin-American countries such as Mexico or Chile, in third countries of the region. To date, China and India have shown little interest in three-way cooperation, since it is regarded as a vehicle by which the West attempts to export its standards. Western donors, on the other hand, emphasize advantages of trilateral cooperation such as reduced costs, joint learning and the opportunity to make use of the specific knowledge of the partners. At the same time, trilateral cooperation cannot be expected to automatically lead to more effective aid: indeed, the large number of small-scale projects is problematic, according to current effectiveness criteria.

In view of the already widespread skepticism of the new donors towards the Paris Agenda – seen by many as a Western Trojan horse – 'Paris' should not set the tone of the debate. The North-South opposition is not inevitable, as was shown by an international exchange on the potential of trilateral cooperation in August this year. That exchange took place as part of the Global Governance School at the Deutsches Institut für Entwicklungspolitik (German Development Institute, or DIE) and was attended by researchers and practitioners from China, India, Brazil, South Arica and other newly industrializing countries. Joint discussions and the conduct of specific research cooperation between DIE and Chinese, Indian or South African partners lead to new perspectives on both sides.

Trilateral cooperation is not a one-way street, through which the emerging donors are “integrated” in order to conform to our standards. If the global partnerships are to be effective, we must overcome the old North-South thinking, which too often still sets the tone of debate. Joint problem solutions must be the central focus here, and this must occur between partners with different experiences on equal terms. Both sides, North and South, must attempt to learn from and maybe even with each other in the interest of developing countries.

This column reflects the opinions of the authors.

Axel Berger is a researcher at the Training Department of the Bonn-based thinktank Deutsches Institut für Entwicklungspolitik, the German Development Institute.

Dr Sven Grimm is a researcher at the Bi- and Multilateral Development Cooperation Department of the German Development Institute.

The German Development Institute is one of the leading think tanks for development policy worldwide. The Institute draws together the knowledge of development research available worldwide, dedicating its work to key issues facing the future of development policy. The unique research profile of the Institute is the result of the cooperation between research, consulting and professional training. The Institute is building bridges between theory and practice and works within international research networks.

Author: Axel Berger and Sven Grimm
Editor: Sophie Tarr