South-South Cooperation (SSC) has come a long way since its inception. The concept was born at the 1955 Bandung Conference in Indonesia, and broadly defined by the United Nations as sharing development solutions guided by the principles of demand, mutual benefit, equality, non-interference and non-conditionality. Being among the largest developing economies, India and China are increasingly steering the course of SSC. They are shaping development cooperation in the Global South through trade and investment and their growing influence in the global economic and political governance architecture.
Asian-led South-South Cooperation
India, for instance, was the fifth largest investor in Africa at $54 billion and the continent's third largest trading partner at $62 billion in 2017–2018. Around the same period, China surpassed the United States as Africa's largest trading partner with trade valued at $185 billion in 2018. As one of the key regions of China's Belt and Road Initiative (BRI), Chinese investments in Africa totaled $147.66 billion by 2020. India, until 2019, extended 279 Lines of Credit (LoCs) worth $28 billion to 63 countries primarily in Asia, Africa and Latin America. New Delhi plays a significant role in supporting infrastructure development and connectivity in the South through various initiatives.
India and China will likely remain the lead protagonists of SSC for decades to come. The challenge, however, is for future SSC to adequately respond to emergent transnational issues such the Covid-19 pandemic and climate change. Despite some aligned positions between developing countries in past international climate negotiations, climate change continues to be a challenge that needs to be met with stronger alignments, and a cleaner, greener and sustainable SSC. As economies of the South grapple with the post-pandemic recovery, their growing requirements for climate-resilient infrastructure, disaster relief aid, and the need to access clean energy offer an opportunity for Asian-led SSC to bridge the gaps in global climate and sustainable development action.
Climate Solutions Hubs
China and India are both, to varying degrees, leaders in cost-competitive clean technology solutions that they are well-positioned and eager to export across developing countries. India is the world's third largest solar and fourth largest wind energy producer and, with a recently announced battery manufacturing mission, poised to develop a stronger foothold in clean mobility and clean power technologies. The Indo-French initiative, International Solar Alliance (ISA), is a key venue for demonstrating India's leadership in deploying climate-friendly infrastructure, technology and finance to other countries. Through the ISA and other such initiatives, India extends LoCs to develop solar and other clean energy projects to emerging economies.
China is the largest domestic and outbound investor in renewable energy. While undermined by China's overseas fossil fuel investments, President Xi Jinping has striven to reiterate Beijing's vision of a green BRI by announcing a number of related multilateral coalitions and initiatives, the 2060 carbon neutrality pledge and the $3.1 billion South-South Cooperation Climate Fund, among others.
Creating demand-driven synergies in southern cooperation can further push Beijing to green its overseas credit. Building consensus around climate change associated socio-economic costs and a shared understanding of vulnerability to climate disasters among southern nations can drive the demand for clean energy in recipient countries. However, this may not be enough for lower-middle income (LMC) and low-income countries (LIC) that account for a substantial portion of China's foreign investments. It is estimated that LMCs and LICs received less than 15% of global energy investments in 2018, which coupled with their rapidly growing energy demand and limited finance resources, leaves them with very few avenues to pursue clean energy options.
Stronger triangular cooperation, such as through ISA, is thus, essential to mobilize low-cost finance, technical assistance, and capacity building to make clean energy more attractive and accessible across the South. New Delhi's initiative to host a Brazil-Russia-India-China-South Africa (BRICS) summit on green hydrogen could also serve as a template for strengthening the group's climate cooperation and spur new coalitions that can support low-carbon development.
Leveraging Global Climate Governance and Finance
India and China have been important voices for the global South in international climate negotiations, from the Kyoto Protocol to the Paris Agreement, and other Conference of Parties (CoP) venues. India's role in building a "southern coalition", together with China, to incorporate the principle of Common but Differentiated Responsibility (CBDR) within the UN framework is well recognized. In the pre- and post-Paris world, the BASIC (Brazil, South Africa, India and China) and Like-Minded Developing Countries alliances have been instrumental in coalescing and advancing southern interests.
Similarly, it is increasingly important to highlight that insufficient climate finance from the North continues to be the Achilles heel of meaningful climate action. Estimates show that 76% of tracked climate finance is still invested within the country of origin. To shed some light on the magnitude of the funds needed consider this – a recent International Energy Agency (IEA) report determined that clean energy investments to the tune of $1 trillion a year are needed in emerging and developing economies (excluding China) to bring major social and economic benefits. These countries collectively account for two-thirds of the world's population but receive only one fifth of investments in clean energy.
A Green Foreign Policy?
Partnerships with southern economies are at the heart of the foreign policies of New Delhi and Beijing. India's Neighbourhood First and Act East policies as well as initiatives like ISA underscore the importance of SSC in the country's strategic calculus. Similarly for China, Africa, the Indian subcontinent, and East Asian middle powers are vital BRI regions of geo-economic and geopolitical influence. Centering clean energy partnerships in these engagements can serve to mutually reinforce the creation of sustainable infrastructure and mobilize financial and technology flows in line with the UN's 2030 Sustainable Development Agenda. Given their own rising influence and ambition, both countries have a crucial role to play in SSC on climate change. A growing Indian and Chinese role in climate change mitigation and adaptation is not just positive for their international standing; it will also respond to the developing worlds' economic imperatives, socio-economic priorities, and climate security needs.
