Page 4 - Echoes of the Global South V2

Executive Summary

The Global South has emerged as a significant force in reshaping global economic power dynamics. This diverse coalition
of nations spanning Africa, Asia, Latin America, the Pacific Islands, and the Caribbean now commands an impressive
economic presence, contributing over 40% of global GDP, 23% of worldwide merchandise trade, and attracting more
than 65% of inward foreign direct investments. Led by economic powerhouses like China, India, Brazil, and South Africa,
the Global South is transforming from a peripheral economic zone into a central player in the multipolar world order.

The region's rising influence stems from innovative geoeconomic strategies employed by its major actors. China's Belt
and Road Initiative (BRI) stands as a prime example of infrastructure diplomacy, using large-scale projects to strengthen
economic ties and extend geopolitical influence across continents. Similarly, regional integration efforts through initiatives
like the African Continental Free Trade Area (AfCFTA) and ASEAN Economic Community (AEC) are breaking down
trade barriers and addressing infrastructure gaps. These emerging economies are actively diversifying their trade and
investment portfolios, reducing historical dependencies on Western markets while building economic resilience.

However, this transformation is not without challenges. The extensive use of Chinese loans, particularly through the
BRI, has raised concerns about debt sustainability and economic sovereignty among certain nations. Within the Global
South, vast economic inequalities, institutional weaknesses persist, and hurdles for collective action and sustainable
development. Countries are struggling with severe poverty, political instability, and infrastructure deficits. Moreover,
increasing competition between Western powers and emerging actors like China and India creates a complex geopolitical
environment that Global South nations must carefully navigate while maintaining their autonomy.

The emergence of new geoeconomic actors is also reshaping regional dynamics. China's infrastructure investments
through the BRI have secured strategic positions that amplify its global influence. India has positioned itself as a
champion of South-South cooperation, launching initiatives like the International Solar Alliance (ISA) and pursuing
regional integration through its Act East Policy. Brazil leverages its vast natural resources and leadership in BRICS to
influence global markets, while South Africa focuses on continental integration through the African Union (AU).

Financing sustainable development remains a critical challenge. The widening gap in funding for UN Sustainable
Development Goals (SDGs) has prompted innovative solutions, including South-South and triangular cooperation.
Regional financial institutions like the African Development Bank (AfDB) play crucial roles in mobilising resources for
sustainable development projects.

To address these challenges and opportunities, several key policy recommendations emerge:
First, economic resilience must be strengthened through diversification. Countries should develop value-added industries,
integrate into global value chains, and reduce dependence on limited commodity exports. Sound macroeconomic
policies, robust social protection systems, and diverse trade partnerships are essential for withstanding economic
shocks.

Second, regional cooperation needs stronger institutions and reduced trade barriers. This includes investing in capacity
building for regional organisations and developing infrastructure to boost intra-regional trade and economic integration.

Third, technological advancement must be prioritised. Bridging the digital divide requires investments in infrastructure,
digital literacy programs, and support for local tech startups. Emerging technologies like AI, blockchain, and renewable
energy solutions can drive innovation and sustainable development.

Fourth, sustainable development should be pursued through green growth strategies. This involves promoting renewable
energy, sustainable agriculture, and circular economy initiatives. Climate change must be addressed through robust
adaptation and mitigation strategies supported by increased international climate finance.

4 ECHOES OF THE GLOBAL SOUTH