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South-South and triangular cooperation

South-South cooperation is recognized as an increasingly important complement to North-South cooperation in the Financing for Development outcomes. It is central to the implementation of the 2030 Agenda in areas including public and private finance mobilization, tax cooperation, sustainable production and consumption, science, research, technology and innovation and other regional public goods, such as collaboration around sustainable infrastructure, climate action, clean energy, disaster and epidemic management. The sharing of development strategies, priorities, resources and solutions among developing countries with common challenges can help countries build capacity and be a catalyst for achieving sustainable development. 

South-South cooperation trends

Existing data indicates that South-South cooperation is on the rise in volume terms. UN DESA estimates that official concessional resources (defined as concessional loans and grants, debt relief and technical cooperation) that are provided by the South for development purposes increased from a lower bound of USD 7.9 billion in 2006 to a lower bound of USD 18 billion and upper bound of USD 20 billion in 2013. Partial data suggest that in 2014 South-South cooperation surpassed the USD 20 billion reached in 2013 (see Report of the Secretary-General on Trends and progress in international development cooperation for more). Non-financial South-South cooperation modalities applicable, for example, to capacity support and policy change have also increased.

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In 2015, China established two funds worth USD 5.1 billion to help developing countries address climate change and implement the 2030 Agenda. India has announced a USD 10 billion concessional line of credit to Africa over the next five years, as well as grant assistance of USD 600 million that would include an India-Africa Development Fund of USD 100 million, an India-Africa Health Fund of USD 10 million and 50,000 scholarships for African students over the same period.

In their cooperation efforts, Southern partners also emphasize non-financial elements of cooperation, such as the sharing of experience, particularly in knowledge and technology transfer, peer-learning, resilience building, policy coherence and capacity development, including for human resources.

A 2015 UN DESA survey of developing countries found that of 129 respondents, almost two-thirds provided development cooperation to other countries. Furthermore, over one-third of the sampled governments indicated that they had a dedicated entity responsible for South-South and triangular cooperation. 

Southern multilateral financial institutions

In 2015, two new multilateral financial institutions of the South – the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB) – were established. Both banks initiated their first loans and held their first annual meetings in 2016. The NDB approved seven investment projects for a total of USD 1.5 billion in 2016. On its part, the AIIB approved, as of January 2017, USD 1.7 billion for nine projects and expects to provide between USD10 and USD15 billion loans annually over the next 15 years (see Report of the Secretary-General on Follow-up to the International Conferences on Financing for Development). 

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National development banks such as China Development Bank, the Export and Import Bank of China and the Brazilian National Development Bank, have also taken a more prominent role in financing regional and sub-regional infrastructure. In 2014, the loans disbursed by these three banks amounted to USD 1,762 billion - more than five times the USD 328 billion provided by the World Bank (see UNCTAD’s Trade and Development Report 2015 for more). 
 
Southern-led regional and sub-regional development banks, such as CAF (Corporacion Andina de Fomento/ Development Bank of Latin America), where countries are both clients and shareholders, further complement the financing landscape.  In 2015, national and sub-regional development banks in Latin America and the Caribbean exhibited stabilizing levels of commitments and disbursements, with the exception of the Brazilian Development Bank (BNDES). BNDES scaled back its lending activities following economic recession and a change of government in Brazil.
 

South-South humanitarian assistance

South-South cooperation has also increased in the area of humanitarian assistance. The share of non-DAC government donors’ contribution to international humanitarian assistance tripled from 2006 to 2015, from 4 to 12 per cent, and amounted to USD 2.6 billion in 2015, owing mainly to increases in reported funding from the Gulf States. When considering 2015 humanitarian assistance as a per cent of GNI, Turkey was the highest contributor at 0.37 per cent (it was the second highest provider in terms of volume at approximately USD 3.2 billion), followed by Kuwait (0.33 per cent) and UAE (0.25 per cent) (see Global Humanitarian Assistance Report 2016). The South-South response was also strong in the aftermath of the 2014 Ebola outbreak in Guinea, Liberia and Sierra Leone. China responded by providing approximately USD 123 million, 450 public health experts and medical workers, and building laboratories and treatment centers in affected regions. At the 2016 UN Summit of Heads of State and Government in New York, China pledged an additional USD 100 million to help deal with the refugee and migrant crises.  

Triangular cooperation
Triangular cooperation is generally understood as partnerships between two or more developing countries, supported by a developed country or multilateral organization. A 2015 survey on triangular cooperation conducted by the OECD found an increase in the overall number as well as average budgets of triangular cooperation projects as compared to a 2012 survey. The majority of triangular cooperation projects surveyed were carried out in Latin America and the Caribbean, followed by Africa, Asia-Pacific, the Middle East and North Africa region and Eastern Europe. Triangular cooperation between countries in the same region is still the most common arrangement.
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The most active countries in triangular cooperation are Japan, Chile, Brazil, Norway, Spain, Guatemala, Germany, South Africa, Mexico, and Colombia, with 20 to 160 activities each. The Pan-American Health Organisation, the International Labour Organisation and the World Food Programme were the most active international organisations.

The survey results showed that triangular co-operation projects are implemented in all sectors and depend on specific requests and expertise of the actors involved. About 30 per cent of the over 400 projects captured in the survey were in the field of government and civil society, followed by health, agriculture, environmental protection and business.

Additional links:

1.

Accelerating Sustainable Development South-South and Triangular Cooperation to Achieve the SDGs: A UNDP Strategy

2.The South-South Quarterly Newsletters (featuring stories)

3. SSC Fast Facts 2015, 2014

4. Frequently Asked Questions for South-South Cooperation