The Rise of the Global South: How Trade Is Rewriting the Rules of the Global Economy

Nearly 100 years after the Great Depression, tariffs and trade barriers are once again reshaping the global economy. Rising protectionism and geopolitical tensions are putting pressure on international trade rules, slowing growth, and testing globalization. Yet, in the middle of this uncertainty, one big change stands out: the Global South is becoming the new driving force of world trade and production.

According to the UNCTAD’s upcoming Trade and Development Report 2025 (whose early findings are available here), global economic growth remains weak and below pre-pandemic levels. Short-term boosts from tariff adjustments and investments in artificial intelligence gave some relief in early 2025, but overall trade growth is still stuck around 2.5–3%.

The traditional engines of the global economy—the advanced economies—are showing signs of slowing down. In contrast, developing countries now account for over 30% of global output, up from just 18% in 1995, and their share of world trade has grown rapidly, reflecting a clear shift in the geography of global commerce. While UNCTAD’s findings do not specifically highlight Africa, a recent report by DHL and the NYU Stern School of Business noted that Sub-Saharan Africa’s trade activity in recent years has expanded faster than the global average.

Yet the growth of trade in developing countries has not been accompanied by corresponding progress in finance: the global financial system remains heavily concentrated in the Global North, dominated by a few major economies and anchored in U.S. dollar-based networks. This creates a major imbalance: while the Global South is now producing and trading more, it still heavily depends on Northern financial markets to fund its development, where financial power and financial infrastructure remain concentrated. The result? Higher borrowing costs, currency instability, and rising debt risks for many developing countries.

UNCTAD’s analysis shows how closely trade and finance are linked. Over 90% of global trade now depends on financial systems, and decisions made by a few central banks in advanced economies can affect trade and capital flows worldwide. These global financial shocks often hit developing countries hardest, limiting their export potential and weakening the benefits of integration into world markets.

Between 2007 and 2024, the Global South’s share of world GDP rose from 24% to 33%, and its share of global trade from 30% to 43%. Yet its share of global finance remains only 19%, compared to the North’s 81%.

This gap shows that the world economy still needs reform. Without a fairer and more inclusive financial system, the progress of the Global South may be at risk.

UNCTAD concludes by stating that 2025 could mark a turning point for globalization. Since trade and finance are inseparable, countries need new forms of cooperation and governance. The report recommends that nations (especially developing countries) should:

• Strengthen domestic revenues to rely less on foreign capital.
• Build stronger financial defenses against sudden shifts in global capital flows.
• Revive inclusive multilateralism so that trade and finance work for people, the planet, and shared prosperity.
• Deepen regional integration to boost local production and South–South trade (in line with this, our recent paper explores actionable strategies to expand trade between Southern economies (specifically, between Africa and the Latin America & Carribean region), highlighting untapped complementarities, policy levers, and practical mechanisms to turn intra-South trade into a real engine of growth and resilience).

The rise of the Global South invites the world to imagine a fairer, more balanced globalization. Yet, if financial and institutional reforms fail to keep pace, this moment of renewal could slip back into the very asymmetries it was meant to overcome.