No.22 - October 2014

by Fantu Cheru

Africa, Emerging Economies and the Changing Development Landscape


What are the implications of new patterns of South-South cooperation (SSC) for Africa? Will they be reformist or transformative for global development policy? What will be the impact on multilateralism and the United Nations?

The development landscape for Africa and other developing countries has drastically changed with the emergence of such development partners from the global South as Brazil, China, India, and Turkey. While the member states of the OECD will remain important partners for Africa for the foreseeable future, the center of gravity is irrevocably shifting along southern and eastern axes.
Many analysts see new partners as a blessing in disguise with the potential to open policy space for African countries, while others fear “recolonization by invitation.” This briefing explores possible interpretations of this dilemma, which is key to ongoing discussions about the shape of the UN development system.

Africa’s strategic partnership with China, India, and other emerging economies since the late 1990s has had a noticeable impact on the growth of trade and overall economic performance on the continent. This spectacular growth has been underpinned by China and India’s insatiable appetite for African oil, gas, and mineral resources along with expanded investments in its infrastructure. As a result, African countries have raised their productive potential as well as moved goods to local, regional, and global markets relatively quickly.
In general, the stated objectives of these partnerships are to promote Africa–South cooperation to achieve common development goals.  This new development narrative is welcomed by African leaders, weary of Western paternalism.

The fifty-year-old G77 remains the greatest source of support for strengthening the UN development system. But, beyond the initial achievements, a half-century of political mobilization by the G77 has produced few significant results. The liberalization of national economies and a reduced role of the state became the principal ideology guiding international development policy from the 1980s onwards, and the multilateral approach to global problem solving under the auspices of the UN lost its political currency. Moreover, the industrialized countries, led by Washington, forged a project to construct a new global trading regime in the context of the Uruguay Round of trade negotiations (1984-1994) that favored an open and liberalized trading system. The power and influence of the IMF and the World Bank was significantly increased while that of the UN was substantially reduced.
The debilitating impact of two decades of structural adjustment and the realization by developing countries of the underlying strategic aims and the unbalanced nature of the new global trade regime during the Uruguay Round provided a new impetus for Third World activism.  Led by powerful emerging countries—such as China, India, Brazil, and South Africa—developing countries came together in various new “Gs” (e.g., G22, G23, G33) to promote their views on key development issues. They demanded “Special and Differential Treatment” in recognition of their low level of development. They opposed extending the remit of the WTO into new areas of investment—the so-called Singapore Issues—on the free movement and operations of international investors. This was the first time that the developing countries had come together to stop a multilateral trade negotiation dead in its tracks, signalling the beginning of a new post-Cold War political order.
The momentum for enhanced South-South tactical alliance increased in the twenty-first century with the formation of the BRICS (Brazil, Russia, India, China, and South Africa), signifying their rising importance in the world economy. A proliferation of bilaterally-led South-South cooperation platforms followed as emerging countries sought to bolster their economic relations with African countries. While access to Africa’s oil and other strategic resources was the initial motivating factor, these relationships have assumed additional dimensions to take advantage of Africa’s untapped markets, youthful population, and growing middle-class. The increased engagement of emerging powers in Africa has rung alarm bells among the traditional Western partners who are now following in China’s and India’s footsteps by establishing engagement platforms.

The differences between the new and old forms of South-South cooperation are many. First, the original SSC approach was inspired by and emphasized Third World resistance against the post-1945 world order. The new forms of SSC (whether bilateral or multilateral) are embedded in the neo-liberal paradigm and are focused on expanding business relationships in Africa. As such, these new arrangements are more reformist than “transformative.” Behind the rhetoric of “win-win cooperation,” aid, investment, and trade with Africa are strategically deployed where the interests of emerging powers are greatest.
Second, the emerging powers (and the BRICS in particular) are not trying to construct an alternative project to the present neoliberal order. Although they may try to present themselves as “transformative entities,” new SSC, as represented by BRICS for example, does not present a paradigm shift in global governance or global development.
Third, major changes in global politics and economics since the end of the Cold War have affected the cohesiveness of the G77. Besides the numerical expansion in membership (to 133 countries today), there has been an increasing differentiation among the members. The interests of the bigger developing countries are not always compatible with the interests of the least developed members. The emerging powers are unlikely to rally behind issues that are very important to developing countries, including financial aid to address climate change, or the need to cut the generous subsidies that rich countries provide to their farmers. In a recent FUNDS survey, global experts expected emerging powers to engage more as donors than recipients in future UN forums.

The new South-South cooperation arrangements, whereby individual emerging countries are pursuing their national interests through bilateral approaches, bring three significant changes in the realm of development cooperation:
• Development policy will be less about poverty and more about trade and investment.
• The future of development aid is uncertain.
• Non-aid resources from private sources will assume greater importance.
The influence of the UN system, as well as the Bretton Woods institutions, is in decline. The UN will continue to have a political role as a forum for dialogue, but most of its specialized agencies will become increasingly irrelevant. Many are already threatened by shrinking core budgets and a declining comparative advantage as new non-governmental actors have emerged. At the same time, such global issues as climate change, resource scarcity, security, and pandemics will loom ever larger, and the UN system will remain the essential and relevant forum for dialogue and negotiation on these issues. That said, it will be difficult to reach agreement between the OECD countries and the emerging powers on such issues as climate financing or burden-sharing of UN peace operations. The OECD countries will hang back until they see the emerging powers take commensurate funding steps.

The multilateral development banks will also be threatened, or lapse into secondary status unless they can carve out new roles and reduce the overlap amongst themselves. Countries will be able to choose globally from a wide variety of ways to design, finance, and deliver projects. A number of large borrowers will graduate from the World Bank’s concessional lending through the International Development Authority (IDA), leaving it very largely focused on Africa.
While the influence and importance of the emerging powers in Africa’s development will continue to grow, the traditional OECD partners should not be written off. The EU, United States, and Japan will remain large and essential trading partners for African countries, even if the relationships have historically been unequal, and sometimes exploitative. In a multipolar world, there will be overlapping spheres of interest. Both OECD countries and the emerging powers will engage in “constructive cooperation” to advance their respective national interests rather than engage in destructive competition.
African countries, however different, all confront the challenge of developing strategic approaches toward old and new partners. This is not only desirable, it is possible. Ethiopia provides a good example because it has a clear long-term development vision and has used its strategic partnership with China and other emerging partners as an explicit bargaining chip in its negotiations with European donors and vice versa.
The challenge for all African countries will be to create and maintain balanced relationships with traditional and emerging partners.

Download the full briefing paper 'Africa, Emerging Economies and the Changing Development Landscape"?' in pdf.

Fantu Cheru is Senior Researcher at the African Studies Centre, Leiden University, and Associate Senior Fellow at the Stockholm International Peace Research Institute, working on the Mali Civil Society and Peacebuilding Project. He is also a Professor Emeritus at the American University's School of International Service in Washington D.C., and continues to work as a consultant for the African Union and the Economic Commission for Africa. He has written extensively on African development, including (with C. Obi) The Rise of China and India in Africa: Challenges, Opportunities and Critical Interventions (London: Zed Books, 2010).

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