May 2014, No. 1 Vol. LI, The 50th Anniversary of the Group of 77 at the UN

South-South cooperation has been a key initiative of the developing countries, aimed at contributing to the achievement of social and economic development of their nations and peoples by forging economic and technical ties between them.

Exchanges and communication routes that linked the southern world can be traced back to ancient times, but cooperation among developing countries as an organized process is much more recent, dating back to some five or six decades.

In this regard, the Group of 77, established in 1964 on the occasion of the First UNCTAD as a negotiating mechanism with the North on economic matters, became the main expression of the developing countries in the promotion of South-South cooperation with the adoption of the transcendent Caracas Programme of Action (CPA) in 1981, which brought the concept of collective self-reliance to the operational stage.  This concept was initially launched by the Non­Aligned Movement in 1970.

While several cooperative programmes were agreed upon before the adoption of the CPA and implemented to varying degrees by various sub-regional, regional and interregional groupings in the developing world, the CPA appears as the synthesis of the great project of South-South cooperation that had been brewing in all discussions between the developing countries and constitutes the more appropriate and natural framework for cooperation.

The CPA identifies a set of priority actions in the fields of trade, technology, food and agriculture, energy, raw materials, finance, industrialization and technical cooperation. Actions in these sectors are accompanied in the CPA by the adoption of a set of mechanisms that had no precedent in the history of South-South cooperation, related to coordination, monitoring, follow­up and evaluation, aimed at providing an operational base and ensuring the effective implementation of the Programme.  These priority actions were later expanded by other gatherings of the Group, in particular in the Havana Programme of Action adopted by the First South Summit of the Group of 77 in 2000.

Cooperative actions identified in the CPA required financial support and to this end the Group of 77 presented resolution 38/201, adopted by the United Nations General Assembly in 1983, which provided for the liquidation of the United Nations Emergency Operations Trust Fund and the allocation of its remaining balance.  As stated in the resolution, 12 per cent of the balance was allocated "to activities in economic and technical cooperation among developing countries of critical importance to developing countries, according to the priorities set by them".

In order to channel these resources, a Trust Fund administered directly by the Administrator of the UNDP was established in 1984. It had a limited activity until 1986, when a High-level Meeting on Economic Cooperation among Developing Countries held in Cairo agreed upon the main features required for launching the Fund's operations, including definition of its objectives and criteria for project selection, as well as operational arrangements for the submission, appraisal and approval of project proposals. The Cairo meeting decided to name the Fund after the late Manuel Perez-Guerrero and it formally became the Perez-Guerrero Trust Fund on Economic and Technical Cooperation among Developing Countries (PGTF) in 1986 by means of General Assembly Decision 41/457.  PGTF was renamed in 2011 as Perez-Guerrero Trust Fund (PGTF) for South-South Cooperation by means of General Assembly Decision 66/549.

PGTF was established with an initial core capital of US$ 5 million with the condition that only interest accrued on PGTF could be used to support projects so as to preserve intact the core capital.  In 27 years of operation, it has proved to be a useful mechanism for providing catalytic financial support to south-South cooperation activities according to the priorities set up by the Group of 77. To date, it has allocated US $12.4 million in support of 253 projects, which involved the direct participation of 124 member countries of the Group of 77 and the collective participation of the entire membership. Approved projects addressed all the priority areas identified in the CPA, were implemented at all geographic levels - sub-regional, regional and interregional- and involved numerous institutions of the South, i.e. 94 national and 38 regional and international institutions had primary responsibility in the implementation of projects, and a significantly larger number of institutions have participated in and/or benefitted from the projects, but did not have the primary responsibility in their implementation.

PGTF was originally conceived to operate solely on the basis of the interest earnings of the initial core capital, but the substantial decline in interest rates that started in the early 2000s and has become more acute in recent years called for action to expand the resources of the Fund. A sustained fund-raising effort launched in 1997 has permitted to preserve the responsiveness of PGTF by supplementing interest earnings with contributions from member countries of the Group of 77 and international institutions, and by increasing the multiplier effect of its resources through co-financing with other institutions.  To date, member countries have contributed more than US$ 1.8 million and in the past five years additional resources that were mobilized increased by 75 percent the available resources coming from interest earnings of the initial core capital.

I have had the privilege of participating in the preparatory work and negotiations that led to the adoption of the CPA in 1981, and subsequently in the implementation of a number of priority actions identified in the CPA, as well as in the entire life of PGTF, spanning from 1987 to date, as Chairman of the PGTF Committee of Experts and Chairman of the Fund.  Based on my personal experience, several important lessons could be drawn from these two important mechanisms.

The CPA and the subsequent decisions taken by the Group in follow-up gatherings and, in particular, at the First South Summit in Havana are a living evidence of the ability of the Group of 77 to identify and agree upon the most critical issues that could be addressed through South-South cooperation, and to identify new areas of cooperation, as well as to update and expand already identified priority actions, in response to the evolving circumstances and needs of development.

The PGTF, in addition to being a success story of the Group of 77 in funding South­ South cooperation activities, albeit at a very modest scale, is the practical evidence of the importance of having independent funding sources to ensure that activities carried out effectively reflect the priorities and interests of the developing countries.