Questioning the rationale of South-South cooperation

By Darmansjah Djumala

JAKARTA (JP): The Non-Aligned Movement (NAM), acknowledging the rapid changes in the international economic environment, characterized by globalization and trade liberalization, has recognized the necessity to establish a strong platform for negotiations in the World Trade Organization (WTO) and the Group of Seven (G-7) industrial nations.

The conclusion was reached during the movement's 12th summit in Durban on Sept. 2-3 and demonstrates its desire to actively participate in WTO negotiations (with the aim of utilizing market access of the organization's member economies) and its intention to open a dialog with G-7 countries.

Given the financial crisis now facing some NAM nations and the potentially contagious effect on other members, the movement is planning to construct a course for the revival of dialog between the North (industrial countries) and the South (developing nations).

Assuming that the North-South dialog is to be revitalized, regardless of the format and the substance of the discussions, many may reminisce about the South-South cooperation that was once claimed as the backbone of economic cooperation among developing countries.

During the Durban NAM Summit, however, observers noticed that more attention was given to trade and financial issues than to South-South cooperation. One may argue that in the era of globalization and liberalization, the international setting, particularly the economic realm, has changed so rapidly and substantially that the states have become more realistic and pragmatic in pursuing their interests.

It is therefore quite intriguing to question the rationale of the South-South cooperation in the new international setting.

Given the emerging regionalism, it is also interesting to inquire whether the traditional premise that South-South cooperation is "leverage" for developing countries for North- South cooperation is still valid or is obsolete. If it is viewed as outdated, then how is the South-South cooperation to be repositioned and reoriented to adjust to the new international setting.

The South-South cooperation was first initiated to increase the leverage or bargaining position of developing countries vis-a-vis the developed countries in international negotiations and in the North-South dialog. The efforts to boost the leverage were very much inspired by the success of the Organization of Petroleum Exporting Countries (OPEC) (whose members are mostly developing nations) in determining oil prices during the 1970s. The developing countries were also encouraged by OPEC's achievement to correct the pattern of economic relationships between the North and the South.

As observed by Nassau A. Adam (Worlds Apart, The North-South Divide and the International System, Zed Books, London & New Jersey, 1993), taking advantage of the shock produced by developments on the oil front, the developing countries launched a major drive for a restructuring of international economic relations. The developing countries demanded to establish a more balanced and equitable economic order which was then known as the New International Economic Order (NIEO).

In the light of the struggle for the NIEO, the notion of leverage of the South vis-a-vis the North carried logic. Since the developing countries perceived the North-South cooperation as unfair and uneven, the South promoted cooperation among themselves to raise their leverage in negotiations with the North. It was strongly believed that solid cooperation among developing countries could place them in a better bargaining position.

The pattern of inter-state relationships in the international system, which was marked by East-West confrontation and the Cold War, also contributed to the South's affirmation to rectify the international economic order.

During the era of confrontation and the Cold War, developing countries were quite often supported by the communist block in negotiations with the United Nations (UN) and the UNCTAD (United Nations Conference on Trade and Development). It is, therefore, understandable that during the Cold War era, the idea of leverage, which was considered as jargon in the context of its relationship to the North, was somewhat relevant.

The South-South cooperation was partly triggered by the North- South relations in the old international setting when negotiations between the North and the South, particularly within the framework of the UN, were conducted in a confrontational manner. This confrontational approach was also employed during negotiations for the NIEO.

Many are in agreement that the confrontational manner practiced by developing countries was induced by the seemingly increased bargaining position resulting from the oil shock. In their efforts to fight for the NIEO and to promote self-reliance, the developing countries carried out a two-prong strategy -- on one front to pursue North-South dialog and to forge the South- South cooperation on the other.

Even though the international setting has changed, the two- prong strategy applied in the old (Cold War era) international system continues to be implemented in the new (post-Cold War era) international setting.

Despite the similarity in the "strategy", the two systems use different "approaches" and "forums" where the developed and developing countries negotiate their respective interests. As mentioned above, in the old international system, which was bipolar and marked by East-West rivalry, the approach used by developing countries in negotiating with developed countries was confrontational and idealistic.

While the North-South negotiations were held in the UN and UNCTAD, the South-South cooperation was deliberated in the forums of the NAM and Group of 77 (G-77) developing countries.

Unlike the old system, the new system is unipolar, which is denoted by a seeming contradiction on the one hand and fragmentation precipitated by emerging regionalism and globalization on the other (Henry Kissinger, Diplomacy, Simon & Schuster, 1995).

This new system very much effects the style and approach of the negotiations between the North and the South and the forum for negotiations. While the old international system used confrontational and idealistic approaches, the new system applies a pragmatic and realistic approach.

As to the forum for negotiations, it breeds new forms of cooperation both for the North-South and the South-South cooperatives.

In the new international setting, economic cooperation between the North and the South in many cases takes the form of regional groupings. The Asia Pacific Economic Cooperation (APEC) forum, the Asian-European Meeting (ASEM) and the North American Free Trade Area (NAFTA) are relevant cases of cooperation between the North and the South using pragmatic and realistic approaches.

Instead of blaming an uneven international economic order and insisting on fair and equal participation in the global economic decision-making process (something that is widely believed to be a logical consequence and derived from the interplay of bargaining power -- political, military and economic -- between the developed and the developing countries) these regional economic groupings should address issues of immediate interest to their members, such as investment and trade liberalization with a view to adjusting to the growing trend towards globalization.

The pragmatic and realistic approach is also practiced by the South-South cooperation in the framework of the Group of 15 developing countries (G-15) by setting up cooperatives focused on workable programs to obtain tangible results.

Recognizing the changes in the international setting and in approaches to North-South dialog, it is imperative that the South-South cooperation, including its rationale and focus, is repositioned and reoriented. The "leverage" rationale of South- South cooperation was postulated for so long as its raison d'etre, the current international system is characterized by an economic pragmatism under which the states speak the same language -- market and economic liberalism.

It is, therefore, strongly argued that the jargon of "leverage" which has been so far adhered to by the South as a motive and driving force in encounters with the North is no longer valid and sounds rhetorical. This conviction is based on the fact that, as history shows, the notion of leverage was first adopted by the South at a time of confrontation, resulting from the Cold War which is now no longer relevant.

In addition to that, the word "leverage" itself in the context of North-South relations connotes a struggle of the South to be equal both politically and economically with the North, which is, as realists contend, unlikely. The South might be obsessed with catching up with the North, but with technological advancement largely pioneered by the North and world financial institutions dominated by the North, a dynamic power gap exists and will continue to exist between the North and the South and consequently the South will remain relatively weaker politically, militarily and economically than the North.

The rationale of South-South cooperation is therefore not to increase leverage vis-a-vis the North. Rather, it is a "necessity" and a "must" for developing countries to cooperate with the North in order to survive the tight competition between nations in the era of globalization and liberalization.

If the North imposes trade barriers to products of developing countries and applies discriminatory trade practices under this preferential treatment, then the South market could serve as an alternative.

In the era of globalization and liberalization, the South has to be realistic and pragmatic in setting up cooperation both with the North and between themselves. The realistic and pragmatic approach exercised by such regional blocks as APEC, especially in the field of investment and trade liberalization, could also be adopted as a strategy for South-South cooperation in the framework of G-15 for promoting economic cooperation among developing countries.

The writer is an international political economic observer and is currently a student of the Post-Graduate Program of Political Sciences at the University of Indonesia in Jakarta.