Questioning the rationale of South-South cooperation

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South cooperation is still valid or is obsolete.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as outdated, then how is the South-South cooperation to be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.