Designing for Impact: South-South Trade and Investment

Abstract

As countries across the world grapple with the effects of COVID-19 and look towards ‘post-pandemic’ transformations, and as we enter the final decade of the UN Global Goals, fresh thinking and action in trade, investment and development have never been more welcome. In this, there are many opportunities to look to, learn from and strengthen South-South trade and investment flows. Such flows are already growing. South-South trade stood at 52% of developing country exports in 2018. By 2025, companies from the South will generate one-third of global foreign direct investment outflows. There is growing evidence of the major opportunities provided, not just to enhance economic development, but also to generate positive impacts for social justice and sustainability, helping countries achieve many of the Sustainable Development Goals. Important questions concern not just the quantity of trade and investment, but quality, in terms of which actors and relationships are involved, and who gains or loses. While learning is accumulating around such issues, programmes that support South-South trade promotion and catalyse investment flows towards inclusive, sustainable developmental outcomes are still relatively small. They are not easily or widely replicated, and few are scalable. Moreover, historically, South-South trade and investment programmes have been critiqued for shortcomings related to design and implementation, lack of systematic follow-up and institutional capacity. Targeted support to make these partnerships work better to achieve development impact and scale-up has therefore become a priority of many donors and governments. Yet gaps remain in how to achieve this in practical terms. This report, part of a close collaboration between ITC and the Institute of Development Studies, helps fill these gaps. Through accessible guidelines and case studies, it focuses on the often-neglected questions of practical design and implementation. It shows why these practical issues are so imperative for effective programmes aiming at more inclusive and sustainable outcomes that can be scaled up. The report combined the experience, expertise and values of our respective organizations. In the case of the Institute of Development Studies, it also aligns closely with our new 2020–2025 Strategy ‘Transforming Knowledge, Transforming Lives’. I am delighted to see it published, and hope it will be of value to everyone concerned with the vital issue of how South-South trade and investment can contribute to a better world for all.