0146 GMT September 23, 2017
Trade between the Global South and the Global North — approximately between 2.5 and 3 trillion — add up to less than the trade flows within the Earth’s two main poles, IPS reported.
With a rapid population growth on the horizon, the potential to increase South-South trade and South-North trade is crucial to maintain economic growth and promote a sustainable and inclusive model of globalization.
With more than 80 percent of the world population living in developing countries, South-South trade has the potential to increase in the years to come and to become a vector for economic growth and prosperity for a major world region whose potential has not been fully tapped during past decades.
The 2017 International Day for South-South Cooperation is an important opportunity to raise awareness about the importance of strengthening and enhancing economic cooperation between the world’s most populous regions.
According to the US Energy Information Administration, seven out of 10 countries with the highest proven oil reserves in the world are located in the Global South (Venezuela, Saudi Arabia, Iran, Iraq, Kuwait, United Arab Emirates (UAE) and Libya). If we look at the world’s diamond producing countries, four out of seven are in the sub-Saharan Africa region (Botswana, Angola, the Democratic Republic of Congo and Namibia). Not only does the Global South account for more than 80 percent of the world population, it is also blessed with abundant natural resources.
There are numerous obstacles to unleashing the full potential of South-South trade cooperation, notably in the Arab region. In 1997, 14 Arab countries took the initiative to establish the Greater Arab Free Trade Area — a pan-Arab free trade and economic union — to spur economic growth in the Middle East and North Africa.
This initiative can still become a success story if Arab states agree to remove and to eliminate tariffs hindering trade liberalization from taking full effect. The Persian Gulf Cooperation Council is a good starting point. But even within this grouping which is one of the most successful economic trade block, setbacks occur.
In addition, the unprecedented rise of military conflicts in the Arab region has hindered trade and economic growth. Ideological and political differences are still dividing Arab states in different sub-camps. These obstacles are also rife in many other regions in the Global South.
Another fundamental problem impeding better South-South trade cooperation is the current structure of the trade system.
Many countries in the Global South are raw material producers with a strong primary sector in which the economic backbone is built primarily on the export of raw materials and commodities.
Commodity and raw material prices are subject to volatility spurring social instability, as witnessed during the 2007-2008 world food price crisis or in the recent drop in oil prices.