Presented by Queenie Diane Malabanan at the First High-Level Follow-up Dialogue on Financing for Development in Asia and Pacific. 

The Reality of Aid Network

The South-South and triangular cooperation has the capacity and potential to play a crucial and distinct role in development cooperation. It has presented wider options for developing countries, both in terms of additional financing for development, and as an alternative to traditional aid. However, the reality of global crises and inequalities in recent decades has also shown the drawbacks in South-South relations. While emerging Southern powers may be motivated by principles of solidarity in providing aid to developing countries, they also have their own strategic interests and foreign policies. If left unguarded, these South-South relationships may evolve into new forms of inequalities and underdevelopment. It is thus imperative that the policies and practices of all emerging Southern providers be also subjected to close scrutiny through the lens of the widely accepted principles of SSC.

On tied aid: The demand of developing countries to untie foreign aid applies to both Northern and Southern donors, and is consistent with the principle of non-conditionality. Whatever advantages that goods or services from the donor country may have, the recipient country must be given leeway in applying its own procurement systems and standards to South-South and triangular cooperation projects based on its own priorities and needs.

On debt sustainability: Poor countries seeking debt relief will surely welcome new soft loans from Southern creditors that are easier to avail of than from traditional IFIs or Northern countries. But there is a similar danger of falling into a South-South debt trap. Both Southern lenders and lendees should practice due prudence and due diligence. Debts from Southern creditors proven to be illegitimate should be canceled.

On mutual accountability and transparency: In most accounts of SSC, there is hardly ever mention of citizen’s or even parliamentary participation in steering these initiatives. ODA from the emerging lenders have been restricted to government-to-government affairs pursued as pure commercial undertakings, with little opportunity for CSO participation. The serious lack of transparency precludes any real democratic ownership of SSC. Without information, there can be no meaningful participation in shaping policies and monitoring outcomes. Citizens are inhibited from exercising their right to make demands on their own government. It undermines the accountability of the institutions involved in SSC to the people on both sides of the partnership. CSOs have reportedly raised concerns over limited transparency in the use of funds emanating from SSC and have urged for greater disclosure on investments from SSC. The lack of transparency and dearth of information invites corruption. Public participation in monitoring and evaluation of SSC should be expanded, for example, through elected representatives and CSOs at the national and local level.

On country and democratic ownership: The recipient country—its own needs, priorities, and systems—must determine the content and direction of the national development strategy and the development partnership. Country ownership must be democratic ownership. The recipient country’s development agenda, including its partnerships with Southern donors, must be democratically shaped. The responsibility for charting a national development strategy necessarily lies with the program country, not the donor, if the principle of country ownership and sovereignty is to be respected. SSC initiatives, processes and outcomes must not be limited to governments—which weakens the ideal of country ownership—but rather expanded to ensure the support and participation of other stakeholders within the recipient country.

On human rights, democracy and good governance: While SSC principles of respect for national sovereignty, non-conditionality, and non-interference in domestic affairs are attractive to poor countries with limited development funding options, total disregard for domestic policy issues can also have the unintended effects of rewarding abusive and corrupt regimes that have poor records in human rights and governance, and indirectly undermining domestic efforts to fight corruption and institute democratic reforms. The said SSC principles should not serve as excuse to aggravate social and environmental problems in partner countries, because such an approach will defeat the very purpose of SSC. International law and international standards on environment and human rights, on specific rights of labor, indigenous peoples, women, children and so on, are applicable to all countries.

On CSO engagement: CSOs have much to contribute to development partnerships, including grassroots experience, rights-based framework, and exercise of watchdog functions to ensure accountability, among others. Spaces and opportunities are currently too inadequate for CSOs to engage South-South and triangular cooperation processes. The institutional development of SSTC should include measures, both by providers and recipients and by multilateral bodies, to create and support multi-stakeholder formal bodies and broad consultation processes that will help determine and monitor policies, plans and strategies. Such bodies and processes should include CSOs, especially those that represent women, minorities, indigenous peoples, and other marginalized groups. An enabling environment for CSOs to be effective development actors must also be secured.

Reference: CPDE Working Group on South-South Cooperation (2016). Country Case Studies on South-South Cooperation. Quezon City, Philippines