Designing for Impact South-South Trade and Investment

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Foreword by the International Trade Centre

The international community gathered in Buenos Aires in March 2019 to renew its commitment to South-South trade and investment at the Second High-level Conference on South-South Cooperation, known as BAPA+40. For the first time ever, the outcome document adopted by the conference recognized South-South trade and investment as integral to achieving Agenda 2030.

South-South trade and investment are increasingly contributing to global growth and development. This means more must be done to showcase the value of promoting South-South collaboration and engagement. This report shows that South-South trade and investment cooperation can produce tangible results, especially by improving learning and adopting solutions and technologies that are adaptable to local circumstances.

This report shows development actors how to design and carry out successful South-South trade and investment programmes. The publication draws from the International Trade Centre’s (ITC) extensive experience promoting South-South trade and investment through flagship programmes such as Supporting Indian Trade and Investment for Africa and the Partnership for Investment and Growth in Africa.

Insights from interviews with ITC staff and analysis from case studies in implementing South-South programmes in the agribusiness and light manufacturing sectors have been distilled into a practical guide for effective project management, trade and investment promotion, and facilitation of technology and knowledge transfer. Here is the key: in a South-South context, projects must be flexible and given space to determine which solutions work, while bridging information and perception asymmetries between Southern actors.

We are navigating challenging times. The COVID-19 pandemic has affected the global health and economic systems. The ultimate objective of the Sustainable Development Goals is to improve people’s lives. This can only be achieved with economic transformation and, by extension, trade and investment cooperation. As 2030 draws closer, governments, institutions and development agencies must redouble their efforts to meet the targets set by the Sustainable Development Goals.

This report is indeed timely. It helps development actors answer critical questions: why promote South-South trade and investment? How can we, as development actors, design and execute responsible and inclusive programmes that support the growth and resilience of micro, small and medium-sized enterprises in the Global South?

It is only by learning from doing and through collective action that we can produce solutions that address the most pressing challenges of our time.

Pamela Coke-Hamilton
Executive Director
International Trade Centre

Foreword by the Institute of Development Studies

As countries across the world grapple with the effects of COVID-19 and look towards ‘post-pandemic’ transformations, and as we enter the final decade of the UN Global Goals, fresh thinking and action in trade, investment and development have never been more welcome. In this, there are many opportunities to look to, learn from and strengthen South-South trade and investment flows.

Such flows are already growing. South-South trade stood at 52% of developing country exports in 2018. By 2025, companies from the South will generate one-third of global foreign direct investment outflows. There is growing evidence of the major opportunities provided, not just to enhance economic development, but also to generate positive impacts for social justice and sustainability, helping countries achieve many of the Sustainable Development Goals. Important questions concern not just the quantity of trade and investment, but quality, in terms of which actors and relationships are involved, and who gains or loses.

While learning is accumulating around such issues, programmes that support South-South trade promotion and catalyse investment flows towards inclusive, sustainable developmental outcomes are still relatively small. They are not easily or widely replicated, and few are scalable.

Moreover, historically, South-South trade and investment programmes have been critiqued for shortcomings related to design and implementation, lack of systematic follow-up and institutional capacity. Targeted support to make these partnerships work better to achieve development impact and scale-up has therefore become a priority of many donors and governments. Yet gaps remain in how to achieve this in practical terms.

This report, part of a close collaboration between ITC and the Institute of Development Studies, helps fill these gaps. Through accessible guidelines and case studies, it focuses on the often-neglected questions of practical design and implementation. It shows why these practical issues are so imperative for effective programmes aiming at more inclusive and sustainable outcomes that can be scaled up.

The report combined the experience, expertise and values of our respective organizations. In the case of the Institute of Development Studies, it also aligns closely with our new 2020–2025 Strategy ‘Transforming Knowledge, Transforming Lives’. I am delighted to see it published, and hope it will be of value to everyone concerned with the vital issue of how South-South trade and investment can contribute to a better world for all.

Professor Melissa Leach Director,
Institute of Development Studies