Abstract
The book under review has three sections, nine chapters, bibliography and an index. At the outset, it has foreword written by Shyam Saran, Chairman, Research and Information System for Developing Countries; Sujata Mehta, Secretary (M&ER), Ministry of External Affairs, Government of India who have mentioned the significance of global partnership and effective development cooperation through South–South Cooperation (SSC) approach.
Section one discussed about the policy and institutional framework while section two dealt with country and regional case studies; finally, section three summed up the SSC and global imperatives like expanding frontiers, new trends and the way forward.
The first chapter deals with genesis and evolution of SSC besides the key features of development cooperation strategy in a lucid manner. One of the key features of development cooperation strategy is capacity building. Capacity building through manpower training and technical cooperation was a form of SSC which figured very early in post-colonial development across southern economies. Later the significance of trade, investment and development finance was emphasised which happens through line of credit (LoC) based on the general policy of mutual benefit. In the early years of independence efforts focussed on increasing trade and investment capacity and in the resources necessary to manage related administrative mechanisms.
In September 1950, India sent a seven-member trade delegation to Indonesia to explore the possibilities of developing trade between the two countries, which resulted in a trade agreement between the two countries signed early in the following year. During those years, India was also paying attention to build an infrastructure for strengthening trade linkages, for instance, by establishing trade missions in different towns in Tibet. One example of India’s ‘development compact’ approach comes out, categorically in a policy decision in 1969, when India approved seven Indo-African joint ventures. Besides production and services sectors played an important part in eliciting private sector support.
Later when the value of LoCs grew, India provided further major support to the private sector. Financial support creates opportunities for sharing technology. In several cases, funds advanced under LoCs have helped partner countries to expand their agricultural and industrial production and eventually enhance their general economic competitiveness. Access to technology, machinery and instrumentation has helped them to improve their productivity.
Further when we looked at the engagement with neighbours under SSC, India’s development cooperation policy has mainly focussed on its immediate neighbourhood, with an assumption that India can play a constructive role at the global level only when it has peaceful, friendly and productive relations with adjacent countries. Therefore, the challenge has been to balance bilaterally beneficial relationships with robust efforts for regional cooperation. But Beijing’s cross-border aggression in the Himalayas, which culminated in the Sino-Indian border war of 1962, was a matter of grave concern not only for India but also for other countries in the region such as Nepal and Bhutan. As a result, India adopted a three-pronged approach under which it opted for enhanced engagement in the Himalayan region promoting economic progress and political stability.
Further, one of the highlights of the chapter which provided an account of evolution of institutional architecture of Indian development cooperation in a chronological order beginning from 1946 to January 2012 detailing the purpose of each of the programme undertaken. The chapter has given details of India’s development cooperation in a historical context under various programmes or projects, such as Small Development Projects, Quick Impact Projects and Development Partnership Administration among others.
The second chapter deals with the development compact wherein the words of Arthur Lewis were given in the beginning which is appropriate. It says that
When Northern economies were booming, the South could reap some advantages in linking itself with Northern markets. If the North is now entering a period of structural readjustment to much lower levels of growth, the developing countries must increasingly look to themselves and to each other to sustain their momentum of development.
The chapter began with economist Mahbub ul Haq who enumerated the advantages of SSC in its various facets in a paper ‘Beyond the Slogan of SSC’ and articulated the need for the South to organise its countervailing power on political, economic and intellectual fronts in order to maximise domestic agricultural development, enhance import substitution and explore South–South trade opportunities. The tenor of his argument seems close to the Singer–Prebisch theory of unequal exchange and stressed that all the diplomatic skills and rhetorical eloquence, taken together, offered no substitute for tough decisions needed within the South.
The chapter further discussed the concept of a development compact against the background of a right to development articulated by Prof Arjun Sengupta. On the lines of Stoltenberg’s idea of development agreements Sengupta suggested that compacts be established between industrialised and developing countries to ensure that the latter received sufficient resources for development as they tried to reform their economies through programmes such as structural adjustment programme (SAP), and in the process minimise the social costs of reform. In fact, the focus of the development compact was on mutual commitment for development between developed and developing countries.
The UNDP Human Development Report of 2003 further explained the proposition, defining the development compact as an arrangement based on a system of shared responsibility whereby all countries could orientate their efforts towards helping poor countries to achieve their development goals. The compact allows poor countries to pitch for higher assistance and improved market access, while provider countries can demand better governance and accountability in return.
Sengupta argued that the development compact must be based on the principles of ‘mutuality of obligations’ and ‘reciprocity of conditionality’. Under the compact developed countries and international organisations will provide assistance necessary for the successful implementation of development plans in poor countries, while in return developing countries will cooperate in the process through bold reform programmes. In the absence of appropriate capacity within a developing country, the developed countries are obligated to provide whatever assistance is necessary for developing countries to achieve their targets. The development compact envisages a reciprocal obligation between developing countries and bilateral donors, international organisations and the UN system; hence it will be a country’s specific arrangement, instead of a traditional ‘one-size-fits all’ solution applied across the board to all problems of developing countries.
Later it dealt with comparison of framework and ingredient approaches and provided intra-regional exports in Asia during 1995–2012 in terms of total merchandise exports, manufacturing exports and primary commodities. Further, it showcased the development compact in a flow chart manner covering five building blocks, viz. capacity building, trade and investment, development finance, grants and technology. Later the Colombo Plan was discussed with country-specific initiatives wherein India has supported several national initiatives across partner countries. Finally, the chapter highlighted the trade and Indian engagement wherein India’s merchandise exports to the South and merchandise imports from the South during 1995–2013 were presented. Besides, Indian LoC to developing countries during 2006–2015 were presented and discussed the processes adopted in it by Exim Bank, an instrument of the Ministry of Finance as part of new arrangements for managing credit lines.
The third chapter deals with Indian institutional architecture compiled by the author which is really useful. Apart from it, cooperation in agriculture extended by India to countries such as Vietnam, North Korea, Myanmar and Sri Lanka was also discussed. India extended policy and training support to African nations in a big way in the field of agriculture while Indian council for agricultural research (ICAR), India and consultative group for international agricultural research (CGIAR) of The World Bank played their role in this context. The support also included provision of agricultural equipment, marketing arrangements, etc. As part of science diplomacy, the chapter dealt with science and technology (S&T) programmes with the South, regional groupings and area of focus in S&T cooperation in a tabular format. Besides India supported many training programmes and acted as a host country to several institutions, some of them directly associated with the department of science and technology (DST). Besides, India established institutions abroad and involved in sharing technologies with other countries. It also promoted cultural linkages and extended cooperation in health sector.
In section two, the fourth chapter deals with the case study of Nepal insofar as evolving framework and achieving the success of communities through Nepal’s economic development. In this context, India played an important part in the growth of several academic institutions in Nepal. One such institution is Tribhuvan University which received support for many years.
The fifth chapter deals with the case study of Ethiopia and Mozambique. The value chain approach for supporting the sugar industry in a bilateral partnership with Ethiopia and expanding the sugar sector in keeping with national development priorities was part of India’s development cooperation. In Mozambique, it was solar panel production unit for domestic rural electrification and export of the panels were enabled by Indian development cooperation.
The sixth chapter discusses the entrepreneurship development in Laos and Cambodia with a focus on production and distribution issues. The SSC has prioritised and indeed intensified industrialisation as a way of reducing inequality, overcoming under- and unemployment and promoting skill development. The view rests on the Prebisch’s proposition that sluggish growth, in demand for peripherally produced commodities and a burgeoning peripheral demand for industrial products manufactured at the centre, results in declining terms of trade for developing countries. This, in turn, makes it difficult for developing countries to generate sufficient export earnings to finance the imports they need for their development, hence always causing them to operate under a threat of current account deficit.
The seventh chapter tried to explore the niches in commonwealth of independent states (CIS), and the experiences from Tajikistan and Kyrgyzstan were presented. The dynamics of development compact in Tajikistan is rebuilding the Varzob Hydropower station and setting up of fruit processing plant given the huge fruit production in the country. As part of transfer of technology in the field of information, communication and technology (ICT), India had established its comparative advantage in setting up of centre for information technology in Tajikistan. Similarly, modern engineering workshop at Tajik State Technical University in Dushanbe was also set up with India’s support. All these demonstrate that India was committed towards regional integration and peaceful neighbourhood through development cooperation.
As regards the Kyrgyz linkages India was the country to establish diplomatic relations in 1992 and a resident mission was set up 2 years later. Subsequently the two countries have signed several framework agreements relating to culture, trade and economic cooperation, civil aviation, investment promotion and protection, avoidance of double taxation and consular convention. Later in their fifth meeting in 2010, a protocol was signed between the two countries for cooperation and investment in mineral exploration and development, food processing, chemicals and petrochemicals, IT, healthcare, S&T, tourism, education and sports and culture, thus India’s relations with Kyrgyzstan have expanded substantially.
Section three summed up the whole discussion in the eighth chapter and explained the SSC and global imperatives for promoting the same. After gaining independence India was faced with a challenge to eradicate poverty and bring the fruits of economic and social development to their people. It is this shared challenge that inspired early initiatives to promote SSC. In fact, countries of developing world not only cooperated in sharing their modest capabilities and resources with each other on the basis of mutual benefit but also created forums through which they could work to create a more level playing field to promote their interests in the international economic order. Later the non-aligned movement (NAM) became an influential vehicle for that purpose, while the G-77 emerged as a key grouping of developing countries that worked on promoting the economic and trade interests of developing countries at the UN and in negotiations with the economically developed countries of the West. The G-15 was formed by NAM as a means of engaging the G-7 developed countries in a dialogue over reform of the international economic order. Nevertheless, author opined that while initiatives of this kind were successful in achieving some benefits for the developing world, the essential structure of the global economy remained mostly unchanged and the demands of NAM and the G-77 remained in the realm of rhetoric.
Further, it was opined that there was certainly some progress in promoting economic cooperation among developing countries, but it was limited in both scope and scale. The SSC could serve only as a modest supplement to the much more important role played by the overseas development assistance (ODA) bilaterally as well as multilaterally, from developed to developing nations. Against the background it was felt that the SSC has contemporary relevance since it is a significant component of international development cooperation. In fact the significance of SSC lies in the very diversity among developing countries, with varying and contrasting human and material resources and technical capabilities that allow effective cooperation on the basis of genuine complementarities. Second, a small group of developing countries has now emerged as significant economies with financial, technological and management capabilities such as China, India and Brazil. Moreover, rapid rise in their GDP, their ability to offer financial assistance and to invest in other developing countries have significantly increased in recent years.
The ninth chapter discussed about expanding frontiers, new trends and the way forward for a better development cooperation programme. While discussing new trends the emergence of small development projects (SDPs) and quick impact projects (QIPs) was mentioned and highlighted the engagement of civil society. It was mentioned that during the early stages of its development, India had greatly benefited from the services of volunteers on various development projects. It was also emphasised that there is a need for support for science diplomacy. India involved itself in capacity development efforts for easy access to science, technology and innovation (STI) particularly through the creation of an enabling environment. Finally, emerging challenges were listed out which include maintaining the health of Exim Bank, expectations and scope for DPA, need for professionalising impact evaluation and assessment and going beyond projects.
The book has provided an analysis of SSC in a historical context with underlying institutional architecture and the way forward in a lucid manner. It is of immense use to the policymakers, researchers and the students of social sciences.