Prof Sachin Chaturvedi
SPEAKING at the third Voice of the Global South Summit (VoGSS) on August 17, Prime Minister Narendra Modi spelt out a new vision and approach for Global South that not only India would follow but he also indicated others to have this new approach for saving partner countries from adverse economic conditions.
The vision of Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayas underpinned by India’s philosophy of Vasudhaiva Kutumbakam, was evident when India placed balanced and sustainable development at the centrestage. The Prime Minister proposed a ‘Global Development Compact’ for the countries of the Global South.
The proposed ‘Compact’ would be based on domestic priorities to be decided by partner countries, where India will share its development journey and development experiences. It would be human-centric, multidimensional and multi-sectoral in nature, consisting of five broad modalities which are intersubstitutable in implementation. The modalities include trade for development, capacity building for sustainable growth, technology sharing, and project-specific concessional finance and grants. In addition, India also proposed initiating a trade promotion activity worth $2.5 million, and $1-million fund towards capacity building and training in the area of trade policy and trade negotiations for the countries of the Global South.
Complex challenges
VoGSS had participation of Heads of State from around 21 countries of the Global South along with representatives from 123 countries.
With an overarching theme of ‘An Empowered Global South for a Sustainable Future’, the third VoGSS acted as a platform to expand discussions held in the previous VoGSS on a range of complex challenges that continue to affect the world, such as conflicts, food and energy security crises, and climate change – all of which disproportionately affect developing countries in a severe manner.
VoGSS is emerging as a platform for bringing together countries of the Global South for sharing their perspectives and development experiences. At the Summit, the countries of the Global South continued deliberations on challenges, priorities, and solutions for them, particularly in the short and medium terms. The aim of the ongoing process is to ensure sustainable inclusive development for all.
India’s partnership with Africa, Asia and Latin America exemplifies this modern concept of the development compact. The engagement of emerging economies with other Southern countries has provided a major pull factor for wider engagement across five elements, which emphasise the comprehensive support for development.
Five modalities
There are five modalities for extending support to partner countries: capacity building, sharing of technology, market access through trade, providing grants and concessional loans. These modalities are interdependent and work in tandem with each other. The development compact is about the principles that govern the process of South-South cooperation, which imply that the process should be demand-driven for ensuring national ownership and sustainability.
They also entail, being free from any kind of conditionality including non-interference in domestic affairs and providing space for mutual economic growth and shared gains from such partnerships. PM Modi’s announcement of ‘Development Compact’ suggests to ensure that the partner countries do not end up with indebtedness.
India’s development cooperation is coordinated by the Development Partnership Administration (DPA) of the Ministry of External Affairs. The capacity building programme is led by multiple ministries through their respective international cooperation initiatives. The flagship programme, Indian Technical Economic Cooperation (ITEC) by DPA, plays a pivotal role. Similarly, technology sharing happens through multiple initiatives of various ministries. The financial support through grants is largely managed by the concerned territorial divisions of MEA and the DPA.
Under the IDEAS scheme of 2005, EXIM Bank of India is mandated to extend Lines of Credit. Since 2008, India has been providing market access to LDCs through a programme, called Duty Free Tariff Preference (DFTP).
Current quantum
Since Independence, India has extended development assistance of $120 billion to over 187 developing countries. In the recent past, the quantum has multiplied and intensity of engagement through multiple windows has also expanded.
It is worth noting that since 1947 till 2013, India provided a grant of $16.51 billion and LoC of $13.37 billion and between 2014 and 2024, grants stand at $19.31 billion and LoC $35.51 billion. In 2019, India shared greater resources with partner countries than it was getting from OECD countries. India now gives $7.26 billion annually while receives $6.49 billion under ODA.
Global South benefits
Development Compact is a human-centric approach with balanced development opportunities. In a way, it is an extension of Atmanirbhar Bharat, where strategies for ensuring skills and knowledge base of economy, with access to technology and financial resources are important. The additional advantage that the compact offers emanates from the provision of duty-free market access, which is a direct boost to exports, employment generation and foreign exchange earnings.
It is up to the Global South to absorb the opportunities offered by this initiative of PM Modi. The national domestic initiatives like Skill India, Digital India, MUDRA and StartUp India provide a rich milieu for reimagining development programmes by the partner countries. In fact, at the VoGSS the PM had already announced setting up of DAKSHIN, the Global South Centre of Excellence, for enabling the partner countries to adapt nuances of these programmes suiting their requirements.
