Earlier this year, two interesting foreign policy stories from India
made news across the world. In February, the Indian finance minister Pranab
Mukherjee stated
that India should voluntarily give up the 280 million pounds it receives from
the UK every year in foreign aid, calling it “peanuts” in the growing Indian
development scene. A few months later,
India announced the establishment of its own foreign aid agency- cautiously
named the Development Partnership Administration- with 15 billion dollars in
spending money for the next 5 years. While Whitehall and Downing Street were
scrambling to save face (the UK also lost a $13 billion deal from the Indian Air force), there was a quiet smugness in the Indian media-Despite its crushing
poverty, India was no longer an aid recipient, but an aid donor.
The politics of foreign
aid are as complex as the art of foreign policy and diplomacy. With more
developing nations like India and China using aid as a strategic foreign policy
tool, the poles of global power projection are shifting. Foreign aid served as
a major extension of the reach of the US State Department from the 60s and 70s
to counter the perceived threats of communism. The ideas of American
exceptionalism and the desire to export ideas of democracy and freedom have
however, been a thin disguise over the many strings attached to international
aid- both military and humanitarian aid. The truth is aid has rarely been a
purely moral issue and it is same for the up and coming aid donors of today.
Indian universities for example, receive
funds from the World Bank for the development of technical infrastructure such
as computing facilities, on the condition that purchases are made from globally
recognized companies. So a university in India gets cheap computers and Dell
and IBM make a profit creating more jobs in the US. Some strings are not as
innocent- think military assistance and intelligence gathering operations. The You-scratch-my-back-I-scratch-yours
ideology tends to leave scars at times even under the
banner of aid and assistance.
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| New Best Friends- Iran and Venezuela (photo taken from thecuttingedgenews.com) |
Major recipients of aid
from India are in Africa, Central Asia and India’s immediate neighbourhood- all
areas with resources, energy or security benefits that India needs. Iranian aid
is setting up hospitals in sympathetic Latin American countries and the Chinese
are collaborating with countries across Asia-Pacific and Africa where land-grabbing is one directly observed effect. While
developing country aid is still miniscule in comparison to developed country
aid, this new phenomenon is raising eyebrows in the West.
Even more interesting
however, is that countries receiving aid are now being courted by multiple
competing donors. Tiny Pacific island
nations such as the Cook islands, Samoa and Tongo- nations that hardly ever
make the news- are now receiving aid from
China, the United States and Australia to name a few. The world of international aid has become a
new global marketplace, complete with buyers and sellers, haggling and
marketing. And as with any market economy, the greater
the supply the lower the costs- i.e. the greater the power of the recipient to
negotiate and get a better deal. The
larger number of aid donors with competing interests, the weaker
the power of established western foreign aid.
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| Wooing Hillary Clinton in the Cook Islands (photo: Marty Melville- taken from nbcnews.com) |
In a talk
delivered at Georgetown University in 2010,
Robert Zoellick, former president of the World Bank, touched upon what he
called an outdated notion of the third world. “The flow of knowledge is no
longer North to South, West to East, rich to poor”. Indeed a portion of
international assistance from India comes in the form of technical expertise
and training rather than monetary aid. African diplomats and students are being
trained in Indian universities. Hamid Karzai was educated in India and today
India is a closer partner to Afghanistan than all its other neighbours- quietly
funding many of their infrastructure projects.
But while the politics of aid play out on the global stage, millions
of people have grown dependent on foreign aid. Forty
percent of Nepal’s central government expenditure for example, is covered
by aid. The UK Department for International Development (DFID) was quick to
point out that the aid money that India declined saves
hundreds of thousands of people a year. The DFID is now planning to operate
at another scale- targeting poorer Indian states and the Indian private sector
directly rather than going through the central government.
It would appear that the world of international aid has also become
subject to the forces of globalization- becoming a global marketplace where the
traditional powers are gradually changing.
This article reminds me of the US lawmakers' debate on foreign aid for China. Some senators argue that "the idea that we would give foreign aid to China is an insult to the American taxpayer". However, Nisha Desai Biswal, the assistant administrator for Asia at the United States Agency for International Development, claimed that the China aid over the past decade actually fundamentally advances America's own interests in the country.
ReplyDeleteAccording to Biswal, as much as a third of particulate pollution in California is due to coal-fired power plants in China, so the financial incentives are geared toward encouraging the Chinese to cut back on their environmentally harmful or illegal practices for the sake of Americans' health and economy.
Surely there's no easy way to measure the success of the USAID programs, especially given the lack of regulation and enforcement regarding the environment and in other areas of the Chinese economy, but I do agree that such kinds of foreign aids are based on mutual interests and are a natural product of globalization.