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South-South Cooperation: A Honduran Case Study

There is a new type of development cooperation that is swiftly becoming prominent throughout the world: South-South Cooperation (SSC).

May 8, 2014
Benjamin Arancibia

Development Finance open data has quickly become a hot topic for large international groups. The International Aid Transparency Initiative (IATI)World Bank, and AidData are just a few of the many organizations that have promoted this increase in open data and aid transparency. But there is a new type of development cooperation that is swiftly becoming prominent throughout the world: South-South Cooperation (SSC). In 2011, according to the United Nations Development Programme, SSC activities were estimated around 17 billion US dollars. This was a sharp increase compared to 2006 when SSC activities were estimated between 9.5 and 12 billion US dollars.

A Brief History

In 1974, the United Nations General established a Special Unit for SSC, but it didn’t start gaining traction until the late 1990s. While there was a noticeable, albeit delayed, increase in overall prominence, Central and South America, Asia, and Africa have all experienced particular growth with regards to SSC. As a result, a need for an established data standard and a way to capture this new form of data emerged. Secretaría General Iberoamericana (SEGIB) has begun to establish reports for countries throughout Latin America, but there is no overarching data standard for SSC yes.

So, what exactly does a South-South Cooperation project look like?

With our counterparts in the Chancellery of Foreign Affairs of Honduras, we have identified three major types of SSC: bilateral, triangular, and regional SSC. Bilateral SSC is when a “south” country aids another “south” country, for example Costa Rica providing technical assistance to Honduras. Triangular and regional SSC are very similar. Triangular SSC is when there are three countries involved: a country that funds the activity (donor 1), an implementation country (donor 2) to do the work, and finally, a country where the work is done (beneficiary). Donor 1 can be a traditional donor or another south country. The only difference between triangular SSC and regional SSC is that in the latter, the final beneficiary is a region.

But what does this look like in practice?

Development Gateway (DG), together with the government of Honduras, developed a South-South Cooperation module as part of its Aid Management Platform (AMP) to accurately record this particular type of development finance transaction and take an important step forward in establishing a data standard. AMP, a web-based development assistance information system developed by DG, enables local government staff to gather, access, use, and understand data on development assistance. There are currently over 20 AMP implementations around the world, and we will be extending the SSC module functionality to all other countries.

This module, in its first phase, allows users to enter project identification on South-South activities, tag national development programs to SSC projects, tag locations to SSC, and create SSC reports. It allows the government of Honduras to report to SEGIB on its SSC activities. But one major thing is missing: a data standard to collection data.

Many data standards for international aid transparency start at an aggregate level (e.g. country X received $1 million of funding from country Y in 2011), but the SSC data collection cannot be collected at this level. One of the main reasons is that many SSC activities often do not have a direct amount of funding associated with it. So the question becomes: how can someone accurately record a funding activity that has no funding attached to it, such as country X received technical assistance from country Y? Our module focuses on the components that make up projects to determine funding for these types of projects. For example, if a south country receives technical assistance from another country, SSC funding can be tracked by recording the costs of the components that make up the technical assistance. Costs associated with this project could include costs of the flight, cost of hotel, cost of transportation, and cost of food. By splitting up all of these costs into components, and subsequently associating these components to one parent project, it is possible to estimate funding associated with this type of non-traditional funding.

SSC funding is beginning to have a much larger role, especially in Latin America. Creating a new data standard is necessary to accurately represent the new large amount of non-traditional funding occurring throughout the region. AidData is planning on contributing back our lessons learned and experiences to SEGIB, IATI TAG, experimenting with its technical functionalities, and striving to develop - with its country-partners - how to accurately represent this funding.

This post originally appeared on Development Gateway's blog here.

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Benjamin Arancibia is a Technical Associate at Development Gateway.