China, South-South Cooperation and Small Island Developing States

In recent years China has increasingly emerged as a champion of “south-south” cooperation as a new model for developing countries to move towards increasing living standards in line with the UN’s 2030 Agenda for Sustainable Development.

In January 2021, China issued a white paper titled China’s International Development Cooperation in the New Era. It emphasized China’s responsibility to show solidarity with the rest of the world by supporting global public goods. The language around how China prioritizes the needs of its south-south partners was focused to contrast the differences between China and the approach of the major developed countries in the Global North.

Almost exactly a year after the release of the white paper, the massive volcanic eruption and tsunami in Tonga and subsequent earthquake and aftershocks, has served to highlight the vulnerability of small developing nations.

Earlier this week (Feb 2022), the Food and Agriculture Organization of the United Nations (FAO) convened a global meeting to focus on developmment problems facing Small Island Developing States, or SIDS.

FAO Director-General, QU Dongyu, at High-Level Forum on South-South Cooperation on Climate Change in Madrid.

In his opening remarks at the Global SIDS Solutions Dialogue, FAO’s Chief Economist, Máximo Torero Cullen, underscored “the severe challenge that SIDS face in moving towards the UN’s 2030 Agenda for Sustainable Development“ and the pressing need to build the resilience of these states to climate change, natural disasters and other external shocks including the COVID-19 pandemic.

With around 65 million inhabitants, SIDS account for only 1 percent of CO2 emissions and yet are most vulnerable to the impacts of climate change, posing an an existential threat. Fisheries, tourism and agriculture contribute significantly to their economy, sectors whose vulnerability and fragility is making it more challenging for them to produce sufficient food to meet their populations’ needs.

SIDS in the Caribbean, the Pacific and many small islands in the Atlantic and Indian Oceans and the South China Sea depend on food imports, with 50 percent of SIDS importing more than 80 percent of their food and nearly all SIDS importing 60 percent of their food. As such, SIDS are particularly affected by disruptions in supply chains and international trade, including flight cancellations, slowdowns in the shipping industry and logistics bottlenecks.

Unique environmental and developmental needs of Small Island Developing States

Mr Shi Jiaoqun, a senior Chinese official and Special Advisor at the Food and Agriculture Organization Regional Office for Asia and the Pacific, explained the unique features of Small Island Developing States in an article publihsed by China Daily last September (2021). An exctract from that article follows:

“Nearly 30 years ago, given their were recognized as a special category at the 1992 United Nations Conference on Environment and Development. The SIDS are a group of developing countries characterized by small populations and numerous atolls spanning geographic regions-the Caribbean, the Pacific, the Atlantic, Indian Ocean, Mediterranean and South China Sea.”

“Although small individually, when looked at as a whole, the population of the SIDS represent 1 percent of the world’s inhabitants, or around 65 million people.”

“But these islanders face unique social, economic and environmental challenges due to the inherent vulnerabilities of the SIDS, including their small geographic size, their remoteness, the disproportionate impact climate change is having on their ecosystems, biodiversity loss and narrowing of their resource base.”

“With limited arable land, many of the SIDS are dependent on small-scale agriculture and ocean resources. They also rely heavily on imported foods, often foods that are processed with high amounts of sugar and salt content, leading to health issues. Statistics from the Food and Agriculture Organization of the United Nations show that almost all Caribbean and Pacific SIDS import over 60 percent of food; 50 percent of islands import over 80 percent. Despite the food availability through imports, levels of hunger across the SIDS remains at alarming 17 percent. The COVID-19 pandemic is further threatening the food security, nutrition and climate resilience of the SIDS.”

“Their collective GDP shrank by 6.9 percent in 2020 versus 4.8 percent for that of the other developing countries. This is mainly due to global contractions in two ocean economy sectors that are key to many of the SIDS: coastal tourism and fishery. For two out of three SIDS, tourism accounts for 20 percent or more of their GDP, according to an Organization for Economic Cooperation and Development report. Since the COVID-19 outbreak, the United Nations World Tourism Organization estimates that international tourist arrivals declined by 47 percent in the SIDS from January to April 2020, and warned that the road to recovery is set to be long and uncertain. The fishery sector has also been significantly impacted by the COVID-19 pandemic, adversely affecting domestic employment and nutrition.”

There are 38 Small Island Developing States (SIDS) in the world, located in the Caribbean, Pacific and Atlantic-Indian-Ocean-Mediterranean-South (AIMS) China Sea regions.

“In this challenging context, South-South and triangular cooperation (SSTC) has the opportunity to step in and demonstrate its unique advantages by addressing the agriculture, food, nutrition, environment and health issues of the SIDS. SSTC can enable the SIDS to acquire and adopt relevant solutions from other countries that have more recent experience in tackling development issues in similar socioeconomic contexts and agro-ecological zones.”

China’s focus on south-south cooperation

While many countries are cutting aid budgets, the 2021 white paper saw China expanding its foreign aid funding and making this more concessional. It showed that between 2013 and 2018 China devoted about $41.8 billion on aid (47% in the form of grants, 48% as concessional loans, and 4% as interest-free loans). This compared to a total budget of $14.41 billion in foreign aid funding between 2010 and 2012.

The document details how China is supporting the 2030 Agenda for Sustainable Development including through poverty reduction efforts, supporting agricultural productivity to address food security, improving health care systems, and supporting education (the projects China funded included 58 hospitals, 86 schools, and 56 transport projects).

The paper outlines funding allocation by region.

Between 2013-2018 funding was spent as follows:

  • 45% to Africa,
  • 37% to Asia, and
  • 7% to Latin America and the Caribbean

The white paper emphasizes the close link between the Belt and Road Initiative and China’s development cooperation agenda – the BRI is seen as an “overarching, driving force for foreign aid.”

As far back as September 2015, China gave a big boost to South-South cooperation, coinciding with President Xi Jinping’s meeting with then US President Obama in Washington, Xi made two unprecedented mega pledges totalling US$5.1 billion to assist other developing countries:

  • Firstly, Xi announced that China would set up a China South-South Climate Cooperation Fund to provide US$3.1 billion to help developing countries tackle climate change.  This announcement was made at the White House at a media conference with US President Barrack Obama.
  • Secondly, in his speech to the UN Development Summit at the , Xi said that China would set up another fund with initial spending of US$2 billion for South-South Cooperation and to aid developing countries to implement the post-2015 Development Agenda.

The sheer size of China’s initiatives were seen by the international community, and especially the developing countries as a “game changer” in international relations.

The late Martin Khor Kok Peng, Executive Director of the South Centre in Geneva, when commenting on the importance of this move by China, said:

“It is significant that Xi used the framework of South-South cooperation as the basis of the two funds.”

“In the international system, there have been two types of development cooperation:  North-South and South-South cooperation.”

“North-South cooperation has been based on the obligation of developed countries to assist developing countries because the former have much more resources and have also benefitted from their former colonies as a result of colonialism.

“Indeed, developed countries have committed to provide 0.7% of their GNP as development aid, a target that unfortunately is being met by only a handful of countries.”

“South-South cooperation on the other hand is based on solidarity and mutual benefit between developing countries as equals, and without obligations as there is no colonial history among them.”

“This is the position of the developing countries and their umbrella grouping, the G77 and China.”

Mr Khor noted that Xi himself, at a South-South roundtable he chaired at the UN, described South-South cooperation as “a great pioneering measure uniting the developing nations together for self-improvement, is featured by equality, mutual trust, mutual benefit, win-win result, solidarity and mutual assistance and can help developing nations pave a new path for development and prosperity. As the overall strength of developing nations improves, the South-South cooperation is set to play a bigger role in promoting the collective rise of developing countries.”

“In recent years”, Khor continued, “as Western countries reduced their commitment towards aid, they tried to blur the distinction and have been pressing big developing countries like China and India to also commit to provide development aid just like them, within the framework of the OECD, the rich countries’ club.”

Martin Khor Kok Peng

However, Khor noted, “the developing countries have stuck to their political position:  The developed countries have the responsibility to give adequate aid to poor countries and should not shift this on to other developing countries. The developing countries however will also help one another, through the arm of South-South cooperation.”

Sources:

UN Food and Agriculture Organization, Press Release – 2 February 2022.
https://www.scoop.co.nz/stories/WO2202/S00039/small-island-developing-states-fao-convenes-a-global-dialogue-to-update-on-latest-initiatives.htm

China Daily Global, ‘Helping hands for Small Island Developing States’,  2021-09-01.
http://global.chinadaily.com.cn/a/202109/01/WS612ebc8aa310efa1bd66c6e0.html

South Bulletin, No 90, ‘China’s boost to South-South cooperation’,16 May 2016.
https://www.southcentre.int/question/chinas-boost-to-south-south-cooperation/

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