The Dilemmas of the Global South

As new trade barriers and restrictions are emanating from the advanced economies there is a stronger case for the affected emerging economies to compensate these adverse effects via greater openness of markets across the Global South. Developing countries have in fact proceeded to liberalize their markets in recent years, which to a significant degree was driven by regional integration. Against the backdrop of rising barriers in the advanced world, any steps directed at liberalizing the markets among the developing nations raise the preferential margin that producers from the developing world may benefit from. This in turn increases the expediency of building platforms of South-South cooperation, including on the basis of “integration of integrations” that bring together the main regional integration blocks of the developing world. 

Today the evolution of the platforms of the Global South is at a crucial juncture: throughout the past several years significant steps have been undertaken by developing nations to build pan-continental integration platforms – in Africa it was the creation of the African Continental Free Trade Area (AfCFTA), while in Eurasia the expansion of SCO membership was accompanied by the creation of RCEP. The next stage in this process would be to link up all of the pan-continental platforms in Eurasia, Africa and Latin America into one common platform that would cover the bulk of the developing world with important implications for the future evolution in global governance. On the other hand, the issue of the BRICS expansion that emerged in May 2022 suggests that rather than the aggregation of regional integration groups of the Global South under the banner of BRICS+ a different track is entertained by China and its BRICS partners that targets increasing the membership of the core of the Global South.
Hence, the current dilemma of the Global South is the following: to prioritize the expansion in the core, or to place the emphasis on creating a horizontal network of regional alliances – while the former paradigm focusses on including more heavyweights into the BRICS core, the “integration of integrations” framework for regional alliances allows the Global South to depart from the “core-periphery” pattern that has been an intrinsic feature of the world economy over the past decades.

Moreover, apart from the possibility of creating a “no core – no periphery” framework across the Global South, the creation of a network of regional alliances enables the developing economies to create a new layer of global governance that thus far has remained void – there is currently no mechanism in the global economy that would allow for the horizontal coordination among the regional integration blocks and among their regional development institutions. 

Perhaps most importantly the “integration of integrations” represents a unique opportunity to innovate and to create a new framework of cooperation that brings together regional blocks rather than individual countries. This is a tremendous opportunity terrain for the Global South to advance new and varied forms of partnerships – thus far largely unexplored. While it may seem to be a safer option to always follow in the footsteps of the such advanced regional leaders as the EU in building the regional projects for the developing nations, one needs to remember that “imitation is always sub-par compared to the original”. Creating a network of regional partnerships across the Global South allows the developing world to finally aspire to lead the global community rather than to follow in the footsteps of the developed economies.

Importantly, the Western regional institutions are actively pursuing the path of cooperation among regional integration blocks with the EU being a key driving force of this innovation in economic integration. In May 2022 the High Representative and the European Commission adopted a Joint Communication on a ‘Strategic Partnership with the Gulf’ with the aim to deepen the European Union (EU)’s cooperation with the Gulf Cooperation Council (GCC) and its Member countries. In developing its cooperation with the GCC countries the EU is seeking to employ its new “Global gateway” framework along with the relevant development institutions – as stated by the European Commission: “the EU Global Gateway provides a dynamic framework for cooperation with GCC partners to foster sustainable investments in the broader Middle East region as well as in Africa”.  

In the end, the path of building a framework for “integration of integrations” is fraught with risks and uncertainties. If there is a common standard or level of import duties that is to be enforced across the enlarged platform, there may be issues of compliance and observance. There is also the prerequisite that the creation of such platforms is accompanied by extensive academic assessments of the effects of such an undertaking for the regions and the individual economies of the Global South. The path to a different Global Governance system will be a treacherous one, but without innovation and audacity there is no leadership and no material change in the status quo. Audentis fortuna iuvat.

World Economy
Enter the Platform World: What Are the Prospects for the Global South?
Yaroslav Lissovolik
The world economy is entering a stage in which platforms are becoming key aggregation vehicles at the level of corporates, countries and regions. The Global South countries are starting to play catch-up vis-à-vis the advanced economies in building such platforms, with substantial advances made in building regional platforms in Africa and Asia in the past several years.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.