South-South Economic Cooperation: Exploring Mekong-

About the Project

The project South-South Economic Cooperation: Exploring Mekong-Ganga Relationship aims at exploring and analysing trade and investment relationship between India and three countries of the Greater Mekong Sub-region, viz. Cambodia, Lao PDR and Vietnam. Future state of affairs will be explored keeping in mind the historical ties and geographical proximity between these countries and recent attempts to forge closer trade and investment cooperation. This will be done by analysing the present volume and composition of trade and investment as well as the perceptions of diverse stakeholders, especially business and civil society.

This project is being supported by Swiss Agency for Development and Cooperation, Berne, Switzerland.

I. Background

South-South economic cooperation has long been promoted as a means to reduce the dependence of developing countries on markets of developed countries and also to enhance diversification of Southern exports beyond primary commodities. The Cancún fiasco and the emergence of G-20+ alliance have increased the importance of this aspect of cooperation. There is much scope for enhancing South-South trade cooperation between India and the Mekong countries. The WTO, in its annual report of 2003, has identified South-South trade cooperation as one of the major issues of topical interest in international trade.

It is true that South-South trade has increased from 6.5 percent of the world trade in 1990 to 10.7 percent in 2001. But this increase has been confined mostly among Latin American and ASEAN countries. Therefore, it is an imperative to find out the scope and perceptions of trade between India (being a member of SAARC) and the Mekong countries (members of ASEAN) in order to simulate counterfactuals on future trade scenarios between these countries and to recommend policy measures to enhance trade.

In this context, it is necessary to mention why South-South trade is important. Experts have put forward two reasons for enhancing South-South trade: a) to reduce the dependency of developing countries on markets of developed countries, and b) to enhance diversification of southern exports beyond primary commodities.

Having the experience of working on trade and development issues, CUTS Centre for International Trade, Economics & Environment (CUTS-CITEE) has taken up the challenge of exploring the possibility of enhancing South-South trade and investment, which at present constitutes a small proportion of global trade and foreign direct investment.

This initiative on South-South economic cooperation will look at demand and supply-side factors, which can enhance (or are hindering) trade and investment between India and select countries of the Greater Mekong Sub-region (GMS).

II. Objectives

The project has the following inter-related objectives:

To facilitate cross-fertilisation of experiences and lessons learnt on economic (trade and investment) cooperation between India and three GMS countries in order to develop appropriate policy responses.
To strengthen the capacity of the GMS countries on exploring and articulating issues relating to South-South economic cooperation by providing necessary ‘know-how’ and ‘do-how’ to policy-makers, business community, civil society and other stakeholders.
To facilitate the synergy between governments, civil society organisations and other stakeholders to learn from each other and strengthen their collective perspectives and positions on future economic cooperation scenarios between India and the GMS countries.
To prepare an advocacy document for public education on development-oriented South-South economic cooperation on learning from research and other activities and by taking into account the interests and priorities of trade and investment relationship between India and the GMS countries.

III. Methodology

The core of the project is field research, i.e. to find out perceptions on current and future trade and investment relationship between these countries from different stakeholders: policy-makers, business community, civil society organisations (through interviews, discussions, etc).

Before conducting the field research, a review and compilation of the current literature (political and economic aspects of cooperation, analytical literature and elements from the trade promotion projects) on trade and investment relationship between India and the GMS countries will be undertaken. Though the literature is not well developed, this review will provide valuable reference and help in presenting counterfactuals.