THE INTER-REGIONAL SOUTH-SOUTH COOPERATION FOR INCLUSIVE SUSTAINABLE DEVELOPMENT

1. THE INTER-REGIONAL SOUTH-SOUTH COOPERATION FOR INCLUSIVE SUSTAINABLE DEVELOPMENT Alicia Bárcena Executive Secretary

2. The Global Economy Marked by Uncertainty • Global economy will grow 3.1% in 2013 & 3.8% in 2014. • Slow recovery of the US (1.9% for 2013) • Europe grew by 1.2% in the second quarter after 6 quarters of negative growth (-0.4% for 2013) • China grew by 7.5% in the second quarter (7.5% for 2013) • The favourable financial situation in developed countries contrasts with a weak real economy • Growth in developing countries is slowing • More restrictive financial scenario is expected with the withdrawal of QE in the United States

3. Slowdown in world trade to 5.2% International trade volumes and world GDP, 1980-2013 (Percentages) Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of information from the International Monetary Fund (IMF) and World Trade Organization (WTO).

4. Greater growth dynamism of the South … • Emerging economies represented 38% of world GDP in 2012. It is expected that emerging economies’ share in world GDP will exceed that of advanced economies in the coming decades. SHARE OF ADVANCED AND EMERGING ECONOMIES IN WORLD GDP (1980-2018, percent of total GDP measured in current US$) Actual Forecast % of total 38% 20% Source: On the basis of data from World Economic Outlook Database, April (2013)

5. The South led the recovery of the world economy after the global crisis, and will be more dynamic than advanced economies for some time to come... GDP GROWTH RATES BY REGIONS, 2009-2018 Source: ECLAC based on official data from DESA-UN, ESCAP-UN and 2018 IMF estimates.

6. Increasing relevance of South-South relations in trade… • South-South trade grew as a proportion of global trade and it could exceed North-North trade by 2017 EVOLUTION OF WORLD EXPORTS BY REGION, 1985-2020 (Percentages of total exports) Fuente: ECLAC, based on COMTRADE Database and International Trade and Integration Division projections from 2012 onwards

7. …and in investment flows… • Between 2005 and 2012, developing countries increased their share both as receptors of FDI flows (from 37% to 58%) and as source of FDI flows (from 17% to 27%). • Almost 60% of FDI originating from developing countries corresponds to South-South flows. • The most dynamic countries in South-South FDI are Russia, China, South Africa, Malaysia, Singapore, Mexico and Brazil. • With the exception of China, India and Brazil, most South-South FDI flows are intra-regional • An important characteristic of South-South flows is that they are in general “greenfield” investment as opposed to South-North FDI flows that are in general mergers and/or acquisitions. WORLD: OUTFLOWS OF FDI (in US$ billions) WORLD: INFLOWS OF FDI, 1990-2011 (In US$ billions) 27% 58%

8. Several mega-regional negotiations under way are reshaping the global trade landscape • Trans-Pacific Partnership (TPP) • Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, Viet Nam • Transatlantic Trade and Investment Partnership • Between the United States and the European Union • Regional Comprehensive Economic Partnership • Australia, China, India, Japan, New Zealand, Republic of Korea and the 10 members of ASEAN • China-Japan-Republic of Korea Free Trade Agreement • European Union-Japan Free Trade Agreement • These processes aim to create large economically integrated areas at trans-Atlantic and trans-Pacific levels

9. These mega-negotiations seek to link the world’s three major “factories” European Union-Japan Free Trade Agreement Transatlantic Trade and Investment Partnership Trans-Pacific Partnership Regional Comprehensive Economic Partnership

10. …but in LAC the development model is reaching boundaries Economic • Better macroeconomic indicators: international reserves, low public debt, low inflation but with less fiscal space • Growth based on consumption and exports of natural resources not on investment • Governance of natural resources should be a priority • Export based structures are limited: 23% to 1.4% and imports > exports • Productive structure is based on static comparative advantages and lags in innovation, science and technology Social • Improving poverty rates but reductions have reached a plateau • High labour market informality with low productivity • Segregation: urban/ public vs private goods Environmental • Energy and water: scarcity-Land degradation and biodiversity loss • High incidence of natural disasters

11. Growth is more based on consumption and net exports rather than on investment LAC: Exports values of goods 2000-2013 (Percentages) LAC: GDP and determinants of growth, 2012-2013 (Percentages based on dlls of 2005) Fuente: Comisión Económica para América Latina y el Caribe (CEPAL), sobre la base de cifras oficiales.

12. Poverty and extreme poverty are at their lowest rates in 20 years but LAC remains as the most unequal region in the world LATIN AMERICA: POVERTY AND INDIGENCE, 1980-2012 a (Percentages) LATIN AMERICA AND OTHER REGIONS OF THE WORLD: GINI CONCENTRATION COEFFICIENT, AROUND 2009 a

13. Latin America and the Caribbean: quantifying the set of targets Source:: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of CEPALSTAT and special tabulations of data from household surveys conducted in the respective countries.

14. … And faces several emerging challenges • The demographic transition is changing the development profile: some societies are still enjoying a demographic dividend, while others are entering the ageing process • Urbanization with segregation: megacities, medium-sized cities contains 80% of the population, public vs private goods • Public safety has emerged as one of the main issues of concern in Latin America and the Caribbean • Climate change and vulnerability (SIDS) and risks related to disasters are emerging as critical issues for the region • The official development assistance to middle-income countries is declining: fiscal space is stretching • Fiscal policies: spending and taxation should become more progressive

15. Towards the future we want: a regional perspective of Post 2015 agenda Fulfillment of MDGs: necessary but not sufficient From basic needs to closing structural gaps Move from national- developing-countries-oriented targets to universalobjectives, with revived metrics Equality, sustainability and productivity at the center The post-2015 development agenda requires a global financing and technology transfer covenant Concepts with a long-term, rights-based approach The goal: more resilient, self-sufficient, secure and balanced economies Sustained shared prosperity Transparent, accountable global governance; rule of law

16. ….Makes more critical the role of the regional space • Complementarities between global and regional institutions, in an asymmetric international context • Protection of the weaker players (SIDS, Landlocked, LDCs) • A greater sense of belonging to regional and subregional institutions (CELAC, UNASUR, Mercosur, CAN, SICA and CARICOM) • With interdependence, cooperation is shifting towards the subregional and regional levels • Deeper intra-regional integration: 19% regional (25% Central America; 25% Mercosur; 4% Pacific Alliance

17. Cooperation between regions: social issues Social Issues • BRICS. Member of think tanks network on sustainable development in the BRICS countries. • MDG indicators: the Cost of Hunger in Africa (COHA) AU, WFP, UNECA. • Technical assistance to adapt a methodology in the African context and implement national studies. • Social protection. Participation in interregional studies and disseminating LAC policy experiences to other regions. Specially on CCT programmes. • e-health and e-education. Disseminating best • practices and promoting networking on • the use of information and communications technologies in social issues.

18. Cooperation between regions: population REDATAM: Promoting the use and analysis of information on censuses and surveys ACCESS TO THE REDATAM SERVER FOR ON-LINE PROCESSING, 2011-2013

19. Cooperation between regions: environment • Access to information, environmental justice and participation: • In the framework of the application of Principle 10 of the Rio Declaration on Environment and Development in Latin American and the Caribbean (Rio, 2012), ECLAC and the Aarhus Secretariat (ECE) have initiated a permanent collaborative work to exchange experiences and deepener environmental democracy. • Climate Change: • “The United Nations Regional Commissions and the • Climate Change Challenges” (2009) • Joint side events at the Conferences of the Parties to the UNFCCC • Human Settlements: • Joint Project “Eco-efficient and sustainable urban infrastructure development in Asia and Latin America” (ESCAP - ECLAC - UN-HABITAT): • 14 case studies, 2 Seminars (Bangkok & Santiago) • “Are we building competitive and livable cities? • Guidelines for developing eco-efficient and socially • inclusive infrastructure” (2011)

20. Cooperation on Natural Disasters:

21. There is potential for further inter-regional cooperation • Governance of natural resources • Assessment and riskreduction of natural disasterstobuildresilience • Exchange of experiencesongreentechnology • Gettingreadyforthebig data revolution and nationalaccountingbeyond GDP • Sharingcriteria and experienceson FDI • Contributingto a multilateral global dealforfinancial and tradeinclusion • Exchange of urbanizationprocess

22. SDGs: an oportunity for inter-regional cooperation • Right-based –universal approach • Erradication of extreme extreme poverty is possible in the next decade with productivity and decent jobs • Equality at the center, in particular women autonomy • A technological paradigm shift towards sustainable development. • Transformational-universal goals & targets are needed • Universal global partnerships (financing, technologies, trade) • Critical aspirations of society towards shared prosperity