• Background
• Pivotal Countries
• Role & Responsibilities of Pivotal Countries
• Role of SU/TCDC
• Supporting Mechanisms
• Funding Arrangements
• Concluding Observations

BACKGROUND
The original impulse in promoting technical cooperation among developing countries (TCDC), based on the concept of collective self-reliance, arose during the 1970s in an environment that was fundamentally different from the situation which exists today. During the 1970s, it became increasingly evident that developing countries could benefit significantly from promoting technical cooperation among themselves in support of their development objectives and also in pursuing joint action in a number of areas of common interest. The adoption of the various cooperation agreements by the Non-Aligned countries and the Group of 77 succeeded in articulating a comprehensive philosophy and operational strategy and programme for pursuing this objective. The most notable example of such an agreement is the Non-Aligned Action Programme for Economic Cooperation among developing countries adopted in 1972 and subsequently expanded at successive conferences of the Non-Aligned Movement throughout the 1970s and beyond. The adoption of the Buenos Aires Plan of Action by the Conference on TCDC held in 1978 provided the broad conceptual framework for the implementation of TCDC. These agreements were subsequently built upon and elaborated by the Group of 77 in the Caracas Programme of Action adopted by the Group in 1981 which outlined concrete measures for promoting technical and economic cooperation among the developing countries. These efforts also received the endorsement and support of the international community, including the UN, based on various resolutions on TCDC adopted by the UN General Assembly since the 1970s.

Although the original rationale for TCDC continues to be valid and, indeed, has become even more compelling, the global economic environment in which the developing countries now operate, has changed in a number of fundamental ways.

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PIVOTAL COUNTRIES

(i) Definition
Pivotal countries can be defined as developing countries which, by virtue of their capacities and experience in promoting South South cooperation, are positioned to play a ‘lead’ role in the promotion and application of TCDC, mainly by sharing their capacities and experience with other developing countries; although they could themselves also benefit from the experience of such countries. Of course, countries designated as pivotal countries should be willing to assume the responsibilities deriving from the conferment of this status.

(ii) Criteria for Designating Pivotal Countries
The following are some of the main criteria which may be used in designating pivotal countries:

1. a rich history of participation in TCDC activities as a ‘provider’ of assistance to other developing countries and the ability to arrange the necessary financing to carry out such activities through national, bilateral or multilateral arrangements.
   
2. a strong national commitment to TCDC as demonstrated by the adoption of appropriate policies, guidelines and mechanisms that foster the application of TCDC principles and modalities;
   
3. indigenous technical and institutional capacities in one or more specialized areas such as human resources development, technology (including information technology), services, etc.
   
4. a willingness to share experiences and technical know-how in order to expand the knowledge base of other developing countries and to contribute to their overall development;
   
5. the existence of a well-functioning national TCDC focal point mechanism with clearly defined functions and/or terms of reference;
   
6. the existence of a national technical cooperation agency or institute responsible for TCDC;
   
7. a database on national capacities and experiences;
   
8. the establishment of a national TCDC fund or umbrella project to facilitate TCDC exchanges.

(iii) Initial List of Pivotal Countries
Taking into account the abovementioned criteria, the following twenty-six (26) countries have been initially identified as pivotal countries, based on their role in promoting TCDC in their respective regions as well as interregionally.

Asia and the Pacific
People’s Republic of China, India, Indonesia, Malaysia, Pakistan, Republic of Korea, Singapore and Thailand.

Africa
Ghana, Mauritius, Nigeria, Senegal and South Africa.

Latin America and the Caribbean
Argentina, Brazil, Chile, Colombia, Costa Rica, Cuba, Mexico, Peru and Trinidad and Tobago.

Arab States and Europe
Egypt, Malta, Tunisia and Turkey

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ROLE AND RESPONSIBILITIES OF PIVOTAL COUNTRIES
Pivotal countries, acting individually or collectively, are seen as agents for the promotion and application of TCDC as an important dimension of international development cooperation. The extent to which the criteria and guidelines identified above are met by these countries will serve as an indicator of their commitment to South South cooperation.

All of the pivotal countries identified have well-documented examples of major bilateral and multilateral cooperation programmes with other developing countries either in their own region or in other regions in the developing world. In addition, pivotal countries can in fact play an important role in advancing the objectives of the New Directions Strategy for TCDC which identifies several major initiatives in high priority areas such as trade and investment, debt, production and employment, macroeconomic policy coordination and aid management, poverty alleviation and the environment.

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(i) Strategic TCDC Exchanges
With regard to catalytic promotional and supportive activities, based on their own experiences, pivotal countries could assist other developing countries in the formulation of national TCDC policies; strengthening focal point mechanisms; and exchanging experiences and lessons in areas in which they have the necessary expertise and competence. They could also play an important role in TCDC sensitization and awareness by utilizing the media to popularize the role of TCDC in strengthening national and collective self-reliance through, among other things, the production of publicity material, including documentary videos for this purpose. This activity can be carried out either by the pivotal countries themselves or as part of a joint initiative with SU/TCDC. Forging closer linkages with scientific and research institutions and management training centres can also help to strengthen networking arrangements among key institutions in support of a dynamic programme of TCDC. More important, however, pivotal countries could play a catalytic role in facilitating the exchange of relevant technology and experiences regarding the application of techniques in the organization of production, such as ‘flexible specialization’ or ‘just-in-time techniques’ of production’, and cross functional management principles which have made a major contribution to productivity growth and competitiveness in the East Asian economies. This could be accomplished through enterprise - to - enterprise exchanges supported by the organization of suitable training programmes designed to impart new skills and techniques to other developing countries.Similarly, it is a well known fact that many of the economically successful countries in East Asia engaged in ‘strategic integration’ in the global economy based on the strength of selected sectors which were capable of withstanding global competition, instead of embarking on an ‘open’ and ‘unqualified’ integration in the global economy, based on extensive trade and financial liberalization, as is currently advocated in some quarters for developing countries, without regard to the level of development of the productive capacity of these countries. The East Asian countries are therefore in a position to cooperate with other developing countries in transferring their experience in this critical area in order to assist these countries to formulate appropriate macroeconomic and sectoral policies to deal with the challenge of globalization. The same is true of the experience in formulating ‘industrial policies’ which have played an important role in the development of the East Asian economies. In addition, the creative partnership forged between government and the private sector in these economies could be imitated to good effect by other developing countries and therefore also provide a basis for TCDC exchanges, particularly in the context of the increased emphasis being placed on governance and the recent recognition by the World Bank that an ‘effective state’ is an important element in the overall development equation.

(ii) Substantive Areas

(a) Expansion of Trade and Investment Opportunities
Although cooperation in a number of areas such as food security, transportation, communications and the environment is important, trade and investment assume special importance in the present climate of globalisation. In this regard, the recommendations contained in the Buenos Aires Plan of Action and other declarations of the developing countries underline the overriding importance of cooperation in these areas. Pivotal countries are therefore well placed to take the lead in promoting the expansion of South South trade through the establishment of appropriate linkages between major trading blocs in the developing world, such as ASEAN and MERCOSUR. This could expand considerably the share of the developing countries in world trade. It is indeed quite significant that current estimates suggest that by the year 2005 the combined trade of China, India, Brazil and Indonesia will account for a significant proportion of world trade. This statistic underlines the tremendous potential for the expansion of South South trade which is likely to become even more significant in the context of demographic trends which suggest that by the year 2025, more than 7 billion of the projected 8.5 billion of the world’s population will be located in the developing world. Indeed, it is increasingly being recognized that while the developed countries have in the past served as the engine of growth for the developing countries, the emergence of dynamic economies in the South and the steady growth of the population of the developing countries suggest that the dynamic for future growth will be located increasingly in the South. By facilitating exchanges between trading blocs in the South, TCDC could serve as an important instrument in laying the foundation for trade expansion among developing countries which could also serve as a stimulus for expanded growth.

Moreover, since financial cooperation is closely linked to trade expansion, there is considerable scope for cooperation among developing countries in this area. The recent experience of countries such as Mexico, Malaysia and Thailand, which have witnessed instability and volatility in their financial markets puts them in a good position to share their experiences with other developing countries in order to enable these countries to avoid similar problems. Such exchanges could also serve as a basis for increased financial cooperation among the countries of the South in an effort to counter the shocks and uncertainties created by the integration of these countries in global financial markets.

Similarly, the development of significant technical and industrial capacities in the developing countries creates a tremendous potential for the exchange of technology among these countries and, more important still, for an expansion of South-South industrial cooperation which could take the form of increased investment in other developing countries, which is already taking place, or the establishment of joint ventures and joint production enterprises based on a combination of resources available in the participating countries.

The expansion of trade and investment in the South based on the establishment of creative linkages between trading blocs and on new modes of industrial cooperation has the potential to create an important countervailing economic power in the South which could strengthen significantly their bargaining position in the global economic system.

(b) Joint Action in Support of Common Positions in Global Economic Negotiations
Cooperation in this area has become even more important in the face of the unrelenting pace of globalization and economic liberalization that has been driven largely by the economic interests of the developed countries, reflected, to a significant degree, in the activities of dominant transnational cooperations located in these countries, and which have functioned as the main globalizing agents, integrating production structures and markets on a world-wide basis. The danger of an unqualified Northern - driven process of globalization, motivated by a desire for access to cheap labour, strategic natural resources and increased trade and investment opportunities, is that it could lead to the creation of global economic structures which limit the growth of indigenous production capacities in the South and perpetuate a pattern of unequal exchange between the developed and developing countries in all areas of economic, social and cultural endeavour, resulting in disproportionate economic benefit to the former and the growing economic marginalization of large parts of the developing world.

By virtue of their capacities and experiences, pivotal countries could play a leadership role in articulating the needs of the developing countries, with individual pivotal countries or groups of such countries assuming responsibility for elaborating positions on selected issues that reflect the common interests of the developing countries in international negotiations, particularly in the context of the WTO. This approach could be applied to critical issues such as competition policy, national treatment of foreign investment (the proposed multilateral investment agreement), intellectual property rights, procurement and labour and environmental standards being dealt with in the WTO negotiations, all of which have significant implications for the development prospects of the developing countries. Initiatives of this type would need to be carried out by pivotal countries in close collaboration with institutions in the South such as the South Centre and the Third World Network (TWN), both of which have enjoyed the support of the Special Unit for TCDC in carrying out analysis and organizing workshops and seminars on globalization and economic liberalization. As an alternative, pivotal countries could second staff to the South Centre and/or provide appropriate financial support to the Centre to enable it to carry out its activities in this area. Of course, the positions advanced by pivotal countries on the issues selected by them would need to be fed into the Group of 77 to ensure overall consistency with the positions embraced by the developing countries as a whole.

It is recognized, that, given differences in levels of development of the developing countries, the economic interests of these countries are not always identical. However, since very few developing countries, including pivotal countries, despite their relatively developed capacity, are capable of surviving on their own without the support and solidarity of other developing countries, all developing countries have a vested interests in contributing to the formulation of common positions which reflect their collective interests.

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(c) Specific Initiatives to be supported by Pivotal Countries
In the context of the broad areas of cooperation outlined above, the following are some of the more specific issues for which pivotal countries could assume a lead role in promoting such cooperation:

1. the identification of opportunities for the expansion of South-South trade through the establishment of increased linkages between economic integration and cooperation arrangements (e.g. ASEAN/MERCOSUR, ASEAN/SADC, MERCOSUR/SADC);
   
2. carrying out studies to determine the present level and future potential of intra- and interregional trade flows;
   
3. introduction of the necessary policies and establishment of appropriate institutional mechanisms to support intra-regional and interregional investment among developing countries, bearing in mind that investment is a key determinant of economic growth and employment generation in developing countries;
   
4. the encouragement of intra-South investments through the introduction of incentives designed to stimulate regional and interregional investments and capital flows, including the mobilization of resources from financial institutions in the developing countries;
   
5. carrying out detailed studies and analyses to determine the potential for forward and backward linkages in markets and the nature and pattern of production complementarities among developing countries in respect of manufacturers and services;
   
6. the determination of the contribution of intra-regional trade and investment flows to domestic production, imports and exports and the service sector of developing countries;
   
7. strengthening of infrastructural facilities for communications and transport within the South, including the establishment of information networks to facilitate the rapid flow of information necessary for effective business transactions;
   
8. strengthening of small and medium enterprises through enterprise-to-enterprise exchanges in strategic sectors in order to ensure that the private sector plays a more meaningful role in TCDC and ECDC and a determination of the specific measures necessary to foster intra-regional and interregional joint ventures, business-to-business contracts and technology transfer;
   
9. the pooling of technological know-how and scientific capacities to develop a diversified production structure to ensure a more self-reliant development strategy on the part of developing countries;
   
10. the exchange of experiences on urban management in order to find optimal solutions to the problems facing developing countries in this area;
    
11. exchange of experiences on structural adjustment and the coordination of macroeconomic policies;
    
12. a review of the implications of various aspects of the new international trading regime resulting from conclusion of Uruguay Round of Multilateral Trade Negotiations on the prospects for promoting South-South cooperation;
    
13. the identification of a select number of interregional and regional production schemes as a basis for promoting technology exchanges;
    
14. the identification of specific opportunities for multi-sectoral cooperation in trade, investment and finance among developing countries;
    
15. the identification of opportunities for expanded production (in agro-industry, manufacturing etc.), based on trade complementarity;
    
16. the identification of measures to strengthen trade and financial cooperation among developing countries;
    
17. establishment of comprehensive trade information systems of developing countries, including the expansion of the South Investment, Trade and Technology Data Exchange Centre (SITTDEC) to other developing regions or establishment of similar mechanisms in these regions;
    
18. the expansion of export financing schemes and the promotion, as appropriate, of linkages/exchanges between existing schemes in the developing countries;
    
19. the promotion of inter-regional cooperation in the development of capital markets by providing the services of experts from developing countries which have fully developed markets, to others which are seeking to establish or expand such markets;
    
20. the promotion of exchanges between security markets in the developing countries and the facilitation of cross-border security trading;
    
21. the harmonization of financial regulations, including taxation and other systems in order to facilitate trade and investment among developing countries;
    
22. the establishment of intra- and inter-regional protocols designed to promote closer integration and cooperation between the financial markets of the developing countries;
    
23. the identification of opportunities for the establishment of multinational production enterprises and joint venture arrangements linked to exploitation of the resources of participating countries;
    
24. the exploration of options for creating South-based transnational enterprises as a basis for capitalizing on skill specialization and economies of scale;
    
25. establishment of an intra-South production framework;
    
26. promotion of South-South investment in manufacturing and services;
    
27. the identification of opportunities to intensify cooperation in research and development (R and D) in which developing countries have a long-term advantage;
    
28. the promotion of exchanges among developing countries in modifying patent systems and related legal instruments based on the provisions of the WTO agreement on TRIPS;
    
29. the promotion of technical exchanges in respect of the use and conservation of biodiversity resources in the developing world;
    
30. cooperation in formulating harmonized phyto-sanitary production standards in the context of an expansion of South South trade;
    
31. the promotion of intra-industry trade as a modality for trade expansion among developing countries;
    
32. the provision of support to LDCs in order to enable them to meet their commitments under the Uruguay Round agreements and also to increase their capacity to exploit more fully opportunities deriving from such agreements;
    
33. the promotion of increased linkages between Chambers of Commerce in developing countries as a stimulus for trade expansion and investment;
    
34. the adoption of measures to accelerate progress under the Global System of Trade Preferences Among Developing Countries (GSTP) which could serve as an important instrument for trade expansion among developing countries;
    
35. an analysis of linkages between industrial and trade development to facilitate the exchange of experience among developing countries in this area;
    
36. the exchange of experience among small and medium-size enterprises in order to enable them to exploit market opportunities within integration arrangements as well as interregionally;
    
37. the transfer of information and knowledge on new technologies;
    
38. the promotion of cooperation to upgrade the technological content of traditional exports of labour-intensive goods and services; and
    
39. exchange of experience in the formulation of industrial policy

A number of the areas listed above for possible action have already been identified in various decisions of the developing countries, including those embodied in the San José Plan of Action adopted by the South-South Conference on Trade, Finance and Investment held in Costa Rica from 13-15 January 1997. What is required is a pragmatic effort to establish priorities which lend themselves to an intensified pattern of TCDC and ECDC and the adoption of specific measures to carry forward selected initiatives. It is hoped that the meeting of pivotal countries would contribute significantly to this objective.

(d) Measures to be adopted by Pivotal Countries
In carrying out their ResponsibilitiesIn carrying out their responsibilities in the various areas identified, pivotal countries would need to adopt a number of specific approaches and modalities. As indicated earlier, one obvious approach is for each pivotal country, or group of such countries, to assume responsibility for initiatives in specific areas or sectors based on their established competence in the selected areas or sectors. The country or countries concerned would be responsible for preparing an action plan for advancing appropriate initiatives in the relevant area or sector. For example, a pivotal country or group of pivotal countries could assume responsibility for promoting cooperation in training and human resource development while other countries may choose specific areas of technology such as biotechnology or non-conventional energy. Yet another group may identify the services sector or some aspect of this sector such as banking, software development, informatics, etc. Having selected a specific area, the pivotal country or countries concerned should identify selected countries on a regional or interregional basis with which they would seek to carry out a pilot activity to operationalize the programme with a view to its subsequent expansion, where feasible, to other developing countries. In other words, a country choosing training and human resources development as its area of responsibility should identify the network of countries or target countries with which to promote cooperation after studying the demand and supply capabilities of various countries. This process of identifying countries would entail the necessary background studies on complementarities in resource endowments and capabilities which exist in different countries. The pivotal country, working in collaboration with universities and research institutions or individual national consultants, should initiate studies on production, resource and technological complementarities.SU/TCDC could play an important facilitating role in this regard and has in fact already developed a methodology for matching capacities and needs among countries in selected areas in the form of capacity and needs matching exercises (CNMs) - a number of which have been sponsored by the Unit over the years in such areas as technology, minerals, forestry and poverty eradication. An exercise of this type was recently carried out in Haiti in which 16 Latin American and Caribbean countries agreed to sponsor a number of projects in support of that country ’s reconstruction effort.

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ROLE OF SU/TCDC
Under the New Directions strategy, SU/TCDC has been given the mandate to support pivotal countries in carrying out their role as catalysts for intensifying TCDC. The strengthening of cooperation between pivotal countries and SU/TCDC in fact constitutes a strategic partnership aimed at assisting the developing countries to promote cooperation in high priority areas which are likely to have a major development impact on a large number of developing countries.

The New Directions strategy for TCDC, in calling for a closer operational integration between TCDC and ECDC, also provides increased opportunities for cooperation between SU/TCDC and UNCTAD in support of wider schemes of economic cooperation.

SU/TCDC will therefore play a supportive role, in conjunction with other parties, by utilizing TCDC instrumentalities such as capacities and needs matching exercises (CNMs), subject-specific workshops and seminars and networking between relevant institutions in seeking to promote activities initiated by pivotal countries in their relevant areas of competence.

However, while SU/TCDC will assist pivotal countries to a very limited extent, in establishing appropriate institutional arrangements for carrying out their responsibility, mainly through the provision of advice and information, the main thrust of support provided by the Unit will be to enable other developing countries to benefit from the expertise, experience and training opportunities provided by pivotal countries.

The TCDC Information Referral System (TCDC-INRES) which represents the largest database on institutional capacities in the South continues to serve as an important source of information on South-South cooperation. Its expansion into a Multi-Dimensional Information System, which will incorporate data not only on institutional capacities but also experts, centres of excellence and, most importantly, innovative technical cooperation experiences capable of replication in other developing countries, should facilitate an intensified pattern of South-South cooperation in which pivotal countries are expected to play a leading role.

In this regard, it should be pointed out that the rapid evolution of the Internet and related Information Technologies in the last few years has dramatically changed the pattern of international exchanges. The new technologies, including digitization of information, high-speed computer chips and multi-media instruments for education and research, now permit the instantaneous transfer of information among countries. These developments offer significant opportunities for identifying new modalities to operationalise TCDC exchanges. The expansion of the TCDC-INRES, together with the utilization of modern information technologies, can quicken the pace of TCDC significantly as it will allow developing countries to tap available capacities within the developing world. It will also facilitate networking arrangements and the exchange of knowledge and successful experiences among developing countries.

Seizing this opportunity would require a concerted effort to build or strengthen the information base of National TCDC Focal Points, particularly in the area of managing, maintaining and disseminating information that fosters TCDC. Pivotal countries should, therefore, play a leading role in utilizing state-of-the-art Information Technology Tools (e.g. electronic mail and the Internet) to improve information flows among national Focal Points. In addition, they are encouraged to establish National TCDC "Home Pages" on the Internet to disseminate information relevant to TCDC on a regular basis. The Internet and related Information Technologies provide development partners with a powerful tool for accelerating the use of TCDC in development programmes and projects.

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SUPPORTING MECHANISMS
Pivotal countries would need to adopt appropriate policies and put in place supporting mechanisms and institutional arrangements. In particular, they would need to ensure the establishment of an effective focal point mechanism for TCDC, functioning at a high level of responsibility or, alternatively, with direct access to a high level of decision making in respect of TCDC and ECDC in order to ensure that South-South cooperation is given due importance and prominence in technical cooperation activities.

Pivotal countries should actively seek to involve private sector participation in their TCDC initiatives in order to achieve optimum results. They would need to establish effective partnership with key private sector entities in the developing countries such as major business enterprises and Chambers of Commerce and Industry. This will be particularly necessary in cooperation arrangements involving the transfer of technology. The private sector in some developing countries has made significant progress and has become a major actor in the national economy. In almost every sector there exist companies with the requisite technical expertise, financial power and marketing ability to compete in the global economy. As mentioned previously, the growing economic prosperity in parts of Asia, Latin America and Africa offers significant opportunities for establishing strategic partnerships in a number of key industries. Similarly, NGOs which have widespread grassroots participation, should be seen as effective instruments for channeling the benefits of TCDC to a large number of people. They can also serve as mechanisms for monitoring and evaluating the efficacy of TCDC modalities and, when appropriate, proposing adaptations and refinements in respect of TCDC activities.

Nevertheless, it would be important for pivotal countries themselves to identify the most effective modalities and mechanisms for promoting TCDC, based on their individual experiences. Many of the experiences of pivotal countries are quite creative and could in fact be replicated in other developing countries. This could be achieved through the provision of specific technical assistance provided to other developing countries.

The provision of the necessary support for carrying out the role of a pivotal country would also require the introduction of innovative funding arrangements at both the national and international level. The following examples are relevant.

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FUNDING ARRANGEMENTS

(a) National Allocations
As a demonstration of their commitment to TCDC, pivotal countries would need to allocate resources from their national budgets for the promotion of such cooperation, as many developing countries already do.

They should also seek to establish appropriate national umbrella TCDC programmes/projects funded from their UNDP country allocation in order to ensure that flexible financing is available for carrying out their responsibilities as pivotal countries.

(b) Triangular Funding Arrangements
Pivotal countries should seek to tap bilateral as well as multilateral donor funding to facilitate triangular arrangements under which a donor would provide funding to support the exchange of experience or other cooperation arrangements among developing countries.

(c) International Funding

(i) SU/TCDC
The Executive Board has allocated approximately US $5 million a year to enable SU/TCDC to support high priority strategic TCDC initiatives which are likely to have a major development impact. These resources will be utilized to fund activities initiated by pivotal countries in areas such as trade and investment, production and employment, poverty eradication, environment and the promotion of TCDC on the understanding that, in keeping with current policy, the bulk of the assistance will be provided to enable other developing countries to benefit from the expertise and experience of pivotal countries.

(ii) Trust Fund for South South Cooperation
In accordance with the provisions of UN General Assembly resolution 50/119, a Trust Fund for the Promotion of South-South Cooperation has been established within UNDP to serve as an additional funding source. So far, only two countries, namely, Japan and the Republic of Korea, have contributed to the Fund. Pivotal countries are therefore encouraged to contribute to this Trust Fund which could serve as s funding source for activities carried out by them, including those for which joint action is required by developing countries in support of a common position in global negotiations.

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The identification of pivotal countries to serve as catalysts for the promotion of TCDC represents an important development in the evolution of South-South cooperation. It is therefore important to identify concrete measures that will enable these countries to serve as agents for the intensification of such cooperation in support of the development aspirations of the developing countries and as a means of influencing the shape of the emerging global order in a manner consistent with the interests of the developing countries.