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Africa, emerging economies and the changing development landscape

Professor Fantu Cheru

The development landscape in Africa has drastically changed with the emergence of new trade partners from the Global South, including Brazil, China, India and Turkey. What are the implications of new patterns of South-South cooperation for Africa? Will they be reformist or transformative in terms of global development policy? And what will be their impact on multilateralism and the United Nations?

Since the late 1990s, strategic partnerships between African countries and emerging economies, such as China and India, have had a noticeable impact. In general, the stated objectives of these partnerships have been to promote cooperation in order to achieve common development goals. More specifically, emerging economies’ insatiable appetite for African oil, gas and mineral resources has helped African countries raise their productive potential and move goods to local, regional and global markets more quickly. This new development narrative has been welcomed by African leaders, who are weary of Western paternalism.

 

A new impetus for South–South cooperation?

The 50-year-old Group of 77 developing nations (G77) remains the greatest source of support for strengthening the UN development system. But beyond its initial achievements the G77 has produced few significant results. The liberalization of national economies and a reduced role of the state became the principal ideology guiding international development policy from the 1980s onwards, and the multilateral approach to global problem solving under the auspices of the UN lost its political currency. Moreover, the industrialized countries, led by the United States, forged a project to construct a new global trading regime in the context of the Uruguay Round of trade negotiations (1984–94) that favoured an open and liberalized trading system. The power and influence of the International Monetary Fund (IMF) and the World Bank was significantly increased, while that of the UN was substantially reduced.

The debilitating impact of two decades of structural adjustment and the realization by developing countries of the underlying strategic aims and the unbalanced nature of the new global trade regime during the Uruguay Round provided a new impetus for Third-World activism. Led by powerful emerging countries—such as Brazil, China, India and South Africa—developing countries came together in various new configurations (e.g. the G22, G23 and G33) to promote their views on key development issues. They demanded ‘special and differential treatment’ in recognition of their low levels of development. They opposed extending the remit of the World Trade Organization (WTO) into new areas of investment—the so-called Singapore issues—on the free movement and operations of international investors. This was the first time that the developing countries had come together to block a multilateral trade negotiation, signalling the beginning of a new post-cold war political order.

The momentum for enhanced South–South tactical alliances has increased in the 21st century. For example, cooperation between Brazil, Russia, India, China and South Africa (the BRICS countries) signifies their rising importance in the world economy. A proliferation of bilaterally-led South–South cooperation platforms has followed, with emerging powers seeking to bolster their economic relations with African countries. While access to Africa’s oil and other strategic resources was the initial motivating factor, these relationships have assumed additional dimensions to take advantage of Africa’s untapped markets, youthful populations and growing middle classes. The increased engagement of emerging powers in Africa has rung alarm bells among traditional Western partners.

 

BRICS Business Council meeting
The inaugural BRICS Business Council meeting in Johannesburg on 20 August 2013. Image credit: Flickr/South African Government

 

South–South cooperation—old wine in new bottles?

The differences between the new and old forms of South–South cooperation are many. First, the original approach was inspired by and emphasized Third-World resistance to the post-1945 world order. The new forms of cooperation (whether bilateral or plurilateral) are embedded in the neoliberal paradigm and are focused on expanding business relationships in Africa. As such, these new arrangements are more reformist than ‘transformative’. Behind the rhetoric of ‘win-win cooperation’, aid, investment and trade with Africa are strategically deployed where the interests of emerging powers are greatest.

Second, the emerging powers (and the BRICS countries in particular) are not trying to construct an alternative project to the present neoliberal order. Although they may try to present themselves as ‘transformative entities', new forms of South–South cooperation do not present a paradigm shift in global governance or global development.

Third, major changes in global politics and economics since the end of the cold war have affected the cohesiveness of the G77. Besides the numerical expansion in membership (to 133 countries today), there has been an increasing differentiation among members. The interests of the larger developing countries are not always compatible with those of the least-developed members. Emerging powers are unlikely to rally behind issues that are important to developing countries, including financial aid to address climate change, or the need to cut the generous subsidies that rich countries provide to their farmers.

Changes in global development policy

The new South–South cooperation arrangements, whereby emerging countries pursue national interests through bilateral approaches, lead to three significant changes in the realm of development cooperation. First, development policy will be less about poverty and more about trade and investment. Second, the future of development aid becomes more uncertain. Third, non-aid resources from private sources will assume greater importance.

Download the full briefing paper for an explanation of these three changes: ‘Africa, Emerging Economies and the Changing Development Landscape’ (PDF).

 

Old challenges and new partnerships

The influence of the UN system is in decline. While the UN will continue to have a political role as a forum for dialogue, most of its specialized agencies will become increasingly irrelevant. Many are already threatened by shrinking core budgets and a declining comparative advantage as new non-governmental actors have emerged. At the same time, such global issues as climate change, resource scarcity, security and pandemics will loom ever larger, and the UN system will remain the essential and relevant forum for dialogue and negotiation on these issues.

The multilateral development banks will also be threatened, or lapse into secondary status unless they can carve out new roles and reduce the overlap among themselves. Countries will be able to choose from a variety of ways to design, finance, and deliver projects. A number of large borrowers will graduate from the World Bank’s concessional lending through the International Development Authority, leaving it largely focused on Africa.

While the influence and importance of emerging powers in Africa’s development will continue to grow, traditional partners should not be written off. The European Union, Japan and the USA will remain large and essential trading partners for African countries, even if the relationships have historically been unequal, and sometimes exploitative. In a multipolar world, there will be overlapping spheres of interest, where countries engage in ‘constructive cooperation’ in order to advance their respective national interests rather than engage in destructive competition.

The challenge for African countries will be to seize the opportunities, develop strategic approaches and create and maintain balanced relationships with both traditional and emerging partners.

 

This is an edited version of an article first published on the website of the Future United Nations Development System.

ABOUT THE AUTHOR(S)

Professor Fantu Cheru is a SIPRI Associate Senior Fellow with the Mali Civil Society and Peacebuilding Project.