“Development Compact” Proposed by India

Source: The post “Development Compact” Proposed by India has been created, based on the article “India offers an alternate development path for Global South nations” published in “Indian Express” on 6th August 2024.

UPSC Syllabus Topic: GS paper 2 – International Relations – Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

Context: The article discusses Prime Minister Modi’s “Development Compact” for the Global South, focusing on cooperation in areas like technology, finance, health, and sustainability. It highlights India’s role in promoting development, sharing experiences, and addressing global challenges through mutual collaboration.

For detailed information on India and Global South read this article here

What is the “Development Compact” Proposed by India?

1. Prime Minister Narendra Modi introduced a “Development Compact” during the Third Voice of Global South Summit (VoGSS) to improve cooperation among Global South countries.
2. This compact focuses on five key areas: capacity building, technology sharing, trade development, grants, and concessional finance.
3. If implemented effectively, it could redefine how these nations engage with each other and address common challenges.

Why is the significance of “Development Compact”?

1. Developing countries are struggling with severe debt, with a public debt of $29 trillion in 2023 (UNCTAD).
2. Net interest payments on public debt for developing countries reached $847 billion.
3. 54 developing countries spend over 10% of their revenues on interest payments alone.
4. The OECD countries have failed to meet their commitment of 0.7% of GNP as ODA, affecting aid.
5. Climate finance commitments of $100 billion have not been fulfilled, increasing vulnerability.
6. The Global South requires alternative paths to sustainable growth, addressing debt, aid gaps, and policy space squeezed by global finance.

What New Hope Does the VoGSS Provide?

1. The collapse of the Washington consensus brought new opportunities to discuss alternative development paths.
2. The VoGSS platform, under the theme “Empowering Global South for Sustainable Future,” focuses on exchanging development insights and crafting policies that reflect the unique needs and experiences of the Global South.
3. India urged the Global South to address global uncertainty, vulnerability, terrorism, and secessionist movements affecting their democracies, using this platform for collective action.

What Development Initiatives Has India Introduced?

India has shared several initiatives that could be adapted by other Global South nations:

1. Sustainability: Promoting Lifestyle for Environment (LiFE), advancing SDGs, and increasing the use of renewable energy.
2. Health Security: Launching concepts like “One World One Health,” and aiding other nations by building healthcare facilities.
3. Disaster Response: Acting as a first responder in crises, showcasing efforts in places like Papua New Guinea and Ukraine.
4. Financial Inclusion: Enhancing connectivity through UPI and Digital Public Infrastructure, with agreements already in place with 12 countries.
5. Education and Skills: Strengthening educational links and capacity building, highlighted by the launch of the Global South Centre of Excellence, DAKSHIN.
6. Other Announcement Made: India announced funding for capacity building and trade policy training amounting to $3.5 million. A Social Impact Fund was also established with an initial $25 million to support various initiatives, adding to the approximately $7.5 billion that India annually extends to partner countries in the Global South.

Question for practice:

Examine how India’s “Development Compact” aims to address the challenges faced by the Global South and promote sustainable growth.