Recent trends in international development efforts : background and issue at stake

1. Recent trends in international development  efforts : background and issue at stake A Southern Perspective Stakeholders Meeting of the Belgian Cooperation Brussels Vicente Paolo Yu III 4 May 2011

2. Wēijī - precarious moment; crucial point in a dangerous context

3. Multiple crises withdifferentiated impacts on North and South: • Finance/economic • Food • Energy • Climate change • Natural disasters • Widening the development gap

4. Multiple crises  threatens development; reduces adaptive capacity in poor countries the poor in many developing countries are in fact becoming even poorer and more insecure. Human development is at risk in many developing countries, and ability to cope is becoming further eroded Periods of crisis is when development cooperation between North and South has to be even more intensified and strengthened, but in ways different from traditional ODA approaches

5. Emergence of the «South» A new trend of convergence with the North?

6. Source: UNCTAD (December 2010)

7. Rising South – a largely Asian story Source: UNCTAD (December 2010)

8. Global and national economic imbalances which continue to threaten growth prospects in many developing countries: • persistent boom-bust cycles which, in many cases, have been driven by fluctuations in interest rates and commodity prices determined in financial markets located, funded and regulated in the advanced countries. These fluctuations have hit the South severely, especially given the recent accumulation of debt, especially in the private sector. • weak investment performance in many countries • growing income inequalities – although there are exceptions, especially in countries implementing aggressively distributive wage, employment and income support policies.

9. Broad-based development across all of the South is needed • More inclusive • Focused on development of productive capacity • Supported by multilateral reforms providing policy space and channeling real and financial resources for sustained growth and equity.

10. Challenges for North-South Development Cooperation: • Development cooperation must be strengthened: • Focusing on the development of productive capacity in the South • Creation of enabling global environment – reforms in institutional arrangements, policies, modalities for action – that would increase South ability to increase productive capacity and living standards sustainably while also maintaining ability of North to continue to provide decent living standards for their people • It is easy for altruism to take place when times are good, which is when it is not really needed, but harder for cooperation to take place when times are bad, which is when it is really needed

11. Belgium has been a good example in maintaining and increasing net levels of ODA disbursement despite financial crisis Belgian ODA Net Disbursements: 2004-2010 (in US$ Millions at current prices) (OECD-DAC database)

12. OECD DAC overall record in net ODA disbursements has been more volatile OECD DAC ODA Net Disbursements: 2004-2010 (in US$ Millions at current prices) (OECD-DAC database)

13. Development of productive capacity in the South requires North-South development cooperation in: • Adequate and predictable sources of development finance to complement domestic resource mobilization for the development of productive capacity (e.g. productive infrastructure investment that creates jobs in increasingly diversified and higher-value added economic sectors) • Financial policy regulatory reform to promote longer-term productive investment • Support for reforms in international financial architecture to support catching-up and inclusive growth in the South. These can include development banks, compensatory financing, balance of payments support, currency arrangements and a wide variety of other mechanisms

14. south@southcentre.org www.southcentre.org Tel: +41 22 791 80 50Fax: +41 22 798 85 31 17-19 Chemin du Champ d'Anier1209 Petit Saconnex, Geneva Thank you Vicente Paolo Yu South Centre 17 Chemin du Champ d’Anier 1211 Geneva Tel: +41 22 7918050 Fax: +41 22 7988531 Email: yu@southcentre.org