Commonwealth Deputy Secretary-General Ransford Smith has described the rise of the world’s Dynamic Developing Economies (DDE) as a ‘defining period’, which could benefit both emerging economies and the world’s poorest and most vulnerable countries.
Mr Smith was speaking at a Special Event on ‘Dynamic Developing Countries and LDCs: Integrating the South’, organised by the Commonwealth Secretariat and the United Nations Conference on Trade and Development (UNCTAD), which took place on 25 April 2012 in Doha, Qatar, on the penultimate day of UNCTAD Xlll.
He said that co-operation between the world’s poorest countries and DDEs can result in a win-win scenario for both groups with DDEs gaining greater global leverage and Least Developed Countries (LDCs) benefiting from new trade and aid opportunities.
“We are going through a defining period with the rise of DEEs. The South now accounts for three-quarters of global foreign exchange reserves, and a significant portion of foreign investment is also being sourced from developing countries,” he said.
But Mr Smith stressed that structural transformation should be placed at the core of the relationship between DDEs and LDCs, citing a Commonwealth study which showed that less than 10 per cent of exports from poorer countries are going to DDEs.
“This underscores the need for a diversified South-South export structure,” he said.
In his presentation, the Deputy Secretary-General added that government to government assistance between developing countries is also important: “The investment in people, institutions and infrastructure that is needed to build productive capacity and to raise the output of goods and services requires the mobilisation of both public and private capital.”
Mr Smith was speaking on a high-level panel, which included Dr Supachai Panitchpakdi, Secretary-General of UNCTAD; Rob Davies, Minister of Trade, South Africa; and Ghulam Muhammed Quader, Minister of Commerce, Government of Bangladesh.
Dr Supachai told delegates that despite the opportunities, there were also challenges, including how to integrate LDCs into the growth processes of DDEs, and the enormous supply side capacity of emerging economies against a very weak production base in LDCs.
The Secretariat's Economic Affairs Division and UNCTAD’s Unit on Economic Cooperation and Integration Among Developing Countries have been collaborating for several years on the potential of South-South trade and aid. Earlier this month, the two organisations hosted a meeting in London, UK, which focused on trade and aid flows between DDEs and LDCs. At the forum, global trade experts discussed how ‘South-South’ trade has offered new partnerships and opportunities for poorer countries, including through export market diversification and new investment flows. Emerging economies are also becoming vital development partners, opening up vistas for more sustainable and inclusive development.