15 May – The growing phenomenon of investments by developing country firms in other developing countries – sometimes referred to as ‘South-South investment’ – offers significant opportunities for human development, according to representatives from both the private and public sectors who met at an international symposium in Prague, Czech Republic.
The Forum was organized by both the United Nations Development Programme (UNDP) and the United Nations Office for South-South Cooperation (UNOSSC) as part of the South-South Global Thinkers Coalition, an initiative supported by Yingke Law Firm of China to engage think tanks from across the South to research new and innovative strategies to overcome old challenges of poverty, exclusion and deprivation through South-South and triangular cooperation.
Ivan Jancarek, Junior Deputy Minister of the Czech Republic, said the private sector is needed to achieve any realistic progress toward achieving the Sustainable Development Goals, the broad-based global framework that is targeted to end all forms of poverty globally by the year 2030. He said cross-border regional investments are particularly relevant to achieving the SDGs because they can lead to increased productive capacities, higher and more diverse tax revenue streams and job creation. Over recent years, South-South foreign direct investment has stayed strong even as global FDI has been volatile.
“To realise the promise of the new global agenda, quality public services are needed,” said Margaret Thomas, interim head of UNDP’s Development Impact Group. “Ending poverty, malnutrition, illiteracy, preventable deaths of children, and more all require significant investments and good public policy,” she said. “The challenge is formidable, but today’s event demonstrated that the commitments of the 2030 Agenda are being translated into action both in the South, and by the South.”
Xiaojun Grace Wang, UNOSSC Deputy Director, said aligning public policy with both human need and private incentive is critical to ensuring that “investments benefit everyone, and leave no one behind in poverty.”
Wang said the challenges in leveraging the full potential of the private sector, through public-private partnerships, especially in Europe and CIS, needs to be diligently addressed to maximize the development impact of South-South Investments. “There are many different dimensions to South-South Cooperation,” she said. “In knowledge and information, in public infrastructure, exchange of policies, best practices and through the promotion of trade and investment. South-South cooperation needs to capture the different realities of countries, capture opportunities, and be future oriented. Digital transformation, for example, is occurring across the South, opening up new frontiers of opportunities for investors and for Southern countries to leapfrog in development.”
Linda Yang, Executive Chairperson of Yingke Global Board of Directors, said the private sector in most countries stands ready to make all necessary investments to fuel economic growth and achieve the SDGs, because “what is generally good for society is good for business, and what is good for business is generally good for society.” She said, provided the right policies are in place, access to capital through South-South investment flows at the right time can ensure economic growth, job creation and public sector revenue to invest in critically important public goods and services that are needed to “both lift people out of poverty, and to help prevent them from falling back into poverty.”
The full day event started by exploring global, regional and domestic investment trends. Selim Jahan, Director of the United Nations Human Development Office, noted how investments could contribute to human development through strengthening the necessary sectors of society: basic infrastructure, human capital, regional public goods, knowledge, and information. When these investments are made “within a conducive regulatory framework [that] ensures the benefits of economic growth are evenly distributed,” and the outcomes are generally positive for everyone.