Johannesburg, July 25 - Cooperation between the countries of the South such as India and South Africa will shape the future economy of the world, according to South African Minister of Trade and Industry Rob Davies.

'South-South is already a reality in the global economy,' Davies told captains of business and industry from both countries at the closing session of the Doing Business with India Conference here Friday.

'Developing countries are now accounting for some 37 percent of world trade and this is poised to reach 50 percent in the near future. We need to orientate ourselves and our trade and investment relations increasingly around that reality.

'We have indicated that the priority (for the South African government) is going to be South-South. This is where we want to take our work over the next five years.'

Referring to the challenges for developing nations at the World Trade Organisation (WTO), Davies said: '(These) will come because everyone and his dog now realises that the industrial markets of our own countries are where we need to go.

'So we are going to find that the US, if it wants to conclude the round, is going to have to cede increased market access in a list of countries starting with China. India comes next and South Africa is on that list as well.'

Davies said establishing very strong political connections in the South-South arena and the broad architecture of a framework of cooperative arrangements would serve the developing countries well, citing the India-Brazil-South Africa (IBSA) initiative as an example of this cooperation.