Global South Prospects

The experts of Valdai discussion Club shared their views on the prospects for creating integration platforms in the Global South. The world economy is experiencing a new round of disintegration, and experts are sure that platforms which become aggregation tools for corporations countries and regions are gaining new meaning.

Recently, the countries of the Global South have achieved some success in creating integration platforms in Asia and Africa, catching up with developed economies in this aspect. Such a trend may have a positive effect on the state of the global economy, since there is now an urgent need for a variety of platforms. There is also a great demand for variability in trade and investment flows, expansion of the set of reserve currencies.

Lately, regional integration projects have made significant progress in the countries of the Global South. Among the most notable associations are the African Continental Free Trade Area (AfCFTA) and the Comprehensive Regional Economic Partnership (CEP). The evolution of such associations opens up opportunities for creating more diverse platforms for interaction, a significant part of which can be launched by developing countries. The largest and most comprehensive of these platforms can unite the Community of Latin American and Caribbean Countries (Latin America), the African Union (Africa), the SCO (Eurasia).

Other possible options for the development of platforms for the countries of the South may be "pragmatic platforms" involving cooperation between national and regional development institutions, "intellectual platforms" aimed at forming digital economic alliances and expanding digital interaction between participants, and interaction within the framework of "sustainable platforms" focused on green development.

The vast territory of the Global South can become a laboratory of innovation in various types of platforms, which can include not only platforms between countries (C2C) or regions (R2R), but also platforms that unite key corporations of the Global South (B2B) in strategic sectors, including high technology and IT.

Talking about a deeper level of integration, then the basis for cooperation can be BRICS+, covering the South African Development Community (SADC), MERCOSUR, the Bay of Bengal Initiative for Diversified Technical and Economic Cooperation (BIMSTEC), the China-ASEAN FTA, the Eurasian Economic Union (EAEU).

The integration process in the South has crucial differences from the "northern" version, the South is more fragmented, but this makes it possible to aggregate numerous regional integration projects and relevant development institutions. The South can make a breakthrough with the reasonable use of the rich experience of the "northern" partners in the integration structures formation . The advantages of the South are its openness and inclusivity, the multicultural nature of the associations, which implies the rejection of the "center-periphery" system, significantly greater opportunities for reducing tariff barriers and higher growth potential.

China has already demonstrated opportunities to expand economic cooperation with the countries of the South. The Belt and Road Initiative is a vivid example that has no analogues, even taking into account the Western projects "Building a Better World" (B3W) and "Global Gateway". The latter are inferior to the Chinese initiative, since they do not provide appropriate measures for interaction with other projects of the Global South.

In the future, deeper interaction and the formation of platforms by the States of the Global South can increase the potential for the use of national currencies and lead to the de-dollarization of trade and investment in developing countries. The latter can be attractive by reducing transaction costs and currency inconsistencies.

However, in order to achieve visible results in the platform initiatives development, the Global South needs an impetus, which probably should come from China and India, it is their cooperation that will determine the development of the process. Despite their differences, they still interact within BRICS and SCO, and this cooperation can be strengthened if both countries realize the advantages arising from the formation of platforms for developing economies.

Most importantly, the formation of extensive and inclusive platforms covering the Global South will allow developing countries to create their own ways to integrate into the global economy. The countries of Latin America, Africa and Eurasia can become key participants of such platforms. This should be considered as a great chance for developing economies to make a tangible contribution to the reconstruction of global governance, using different building materials (regional blocks) and other approaches in economic development and modernization.

Source: Valdai discussion club

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