South-South Economic Co-operation: Lessons from the Indian Experience

Most discussions of the New International Economic Order in its various guises, have included statements that economic co-operation among developing countries should be promoted. This pious hope seems to be based on one or more of several assumptions: that South-South economic relations are somehow better for development, industrialisation, human capital formation, and technological progress than North-South ones;2 that South-South relations have in some form been held back by the existing structure of the international economy, so that appropriate measures to remove structural barriers would release the productive forces involved and so lead to greater economic growth; that South-South intercourse could — to some unspecified (but it is hoped a large) extent — replace North-South economic relations and so enable the South to achieve greater self-reliance or at least to strike better bargains with the North in future economic negotiations; and that the North was probably doomed to long-term economic stagnation, or in any case would place increasing restrictions on access to its markets and technologies by the South, so that the only feasible way to promote sustained growth in the South would be to rely on intra-South exchange.3