$6.4 trillion shortfall spurs call for deeper South-South cooperation at Abu Dhabi forum

The development financing gap for the Global South could surge to $6.4 trillion by 2030, according to a recent report published by OECD, underscoring the urgent need for deeper cooperation among developing economies. This call to action was a key message from government leaders and experts convening at the inaugural edition of Global South Economic Forum (GSEF), held at Anwar Gargash Diplomatic Academy (AGDA) in Abu Dhabi.

As globalisation gives way to a new, multipolar world order, the forum emphasized the growing importance of South-South cooperation in accelerating trade, investment, and strategic partnerships across the developing world through its five thematic sessions.

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Ahmed Al Sayegh, Minister of State, Economic and Trade Affairs, Ministry of Foreign Affairs, UAE, said: “The nations of the Global South are no longer peripheral in global economic affairs. They are central to shaping the agenda, contributing to ideas and advancing frameworks for equitable cooperation. Collectively, these nations are helping recalibrate partnerships and offering pragmatic solutions rooted in shared ambition and mutual respect.”

The UAE, he said, believes that the voices, values, and visions of the Global South are indispensable to shaping a more inclusive and balanced international system.

“The Global South today holds unmatched potential as engines of growth and innovation, as stewards of critical resources and cultural heritage and as advocates for a more just and resilient global economy,” he said. “To realise this potential, we ought to work together to harness emerging technologies including artificial intelligence, clean energy and digital finance, for sustainable development; deepen economic integration through trade corridors, smart infrastructure and investment facilitation; reclaim global narratives toward inclusivity and strengthen South-South and equally important South-North partnerships based on mutual respect, shared opportunity and strategic autonomy,” the Minister said. 

“Whether through investments in clean energy, digital connectivity, food security or development financing, we remain committed to enabling pathways for shared prosperity,” he said, adding, “As a nation at the crossroads of continent and cultures, the UAE sees its role not only as a bridge but also as a collaborator and catalyst for cooperation that transcends geography,” Al Sayegh added. 

The UAE’s Comprehensive Economic Partnership Agreements (Cepas) are a leading example of South-South cooperation in action. As a result of these agreements, the UAE’s total foreign trade surged by 49 per cent, reaching Dh5.23 trillion ($1.42 trillion) in 2024, up from Dh3.5 trillion ($949 billion) in 2021, according to the World Trade Organization (WTO).

Nickolay E. Mladenov, Director General of AGDA, said: “Through the Cepas, the UAE is sought to build bridges at a time when others build walls. We hope that the Global South Economic Forum is part of that process of openness, building bridges and allowing countries and thought leaders to align together around ideas for the future ahead of us.”

According to a recent Boston Consulting Group (BCG) report, Global South is becoming a powerhouse of economic growth. Excluding China, the bloc of 133 nations accounts for roughly 18 per cent of global GDP. Including China, that share rises to 40 per cent – and represents 65 per cent of the global population. The combined GDP of these nations is projected to grow by 4.2 per cent annually through 2029, more than double the 1.9 per cent expected for advanced economies.

Trade within the Global South is also rising, with South-South trade projected to grow at a CAGR of 3.8 per cent through 2033, compared to 2.2 per cent for North-North trade. By 2033, Global South trade could reach $14 trillion annually. However, the OECD’s Global Outlook on Financing Sustainable Development 2025 paints a stark picture. While external finance to developing nations reached $5.24 trillion in 2022, it still falls short of the $9.24 trillion required annually to meet the UN 2030 Agenda. The financing gap has widened due to climate change, geopolitical tensions, and slower-than-needed increases in available resources.

“Between 2015 and 2022, financing needs rose 36 per cent, while actual resource flows increased by just 22 per cent – leaving a 60 per cent shortfall,” the OECD warned. Without structural reform, this gap could hit $6.4 trillion by 2030.

Global South Economic Forum (GSEF 2025), convened by the Centre of Geoeconomics for the Global South (COGGS) in collaboration with AGDA, Emirates Centre for Strategic Studies and Research (ECSSR), and China’s Academy of Contemporary China and World Studies (ACCWS), brought together over 100 delegates – several senior government officials and members of the diplomatic corps in UAE. The forum aims to shape dialogue on geoeconomic challenges, promote regional integration and technology adoption, and enhance collective frameworks for reshaping global economic governance. The Bureau of Research on Industries and Economic Fundamentals has facilitated the presence of the Indian delegation at the forum.

Mohammed Saqib, an economist and convenor of COGGS, remarked: “The world is on the cusp of a new economic order. Global South is emerging as a driving force in shaping global systems, and our collective voice is gaining strength in a multipolar world. We are committed to building equitable economic frameworks.”

The forum also addressed investment trends. According to the World Investment Report 2024, FDI flows to developing countries declined by 7 per cent to $867 billion, driven largely by an 8 per cent drop in developing Asia. Despite over 1,000 new greenfield project announcements in developing countries, most were concentrated in Southeast Asia and West Asia, with Africa and Latin America seeing limited activity.

“GSEF wasn’t an echo chamber of ideas - the forum is a crucible of tested wisdom, where real-world experience met real-time challenges. Far from exclusive, GSEF thrives on inclusion, bringing diverse voices to the same table to shape a tomorrow that’s moving in many directions,” Ayanangsha Maitra, co-ordinator of GSEF, remarked. 

Somshankar Bandyopadhyay

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somshankar@khaleejtimes.com

Somshankar Bandyopadhyay is a News Editor with close to three decades of experience. Currently, he manages the business section, ensuring that the top economic and business news of the day reaches its readers.