How are the emerging donors (from China to Azerbaijan) changing the aid business?

September 11, 2013

     By Duncan Green     

Oxfam’s ‘BRICSAMIT’ group (BRICS + Mexico, Indonesia, Turkey) is now up and running and doing some innovative thinking about the role ofDaria the emerging powers, including their role as donors. Here Russia/CIS regional researcher Daria Ukhova (right) explores recent developments.

While the eyes of many international aid observers are currently on the BRICS bank (already discussed in this blog), another trend has yet to get much attention. In the last two years, several emerging powers have either opened or announced plans to establish their own international development agencies (or similar administrative units). They include:

–       Mexican Agency for International Development Cooperation (AMEXID) (September 2011);

–       India’s Development Partnership Administration (January 2012);

–       South African Development Partnership Agency (SADPA) (was expected to become operational in 2013, and is likely to begin work in September 2013);

–       fivefold increase of the budget and expansion of the mandate of the Russia’s Federal Agency for the Commonwealth of Independent States, Compatriots Living Abroad and International Humanitarian Cooperation (Roscooperation) in May 2013;

–       possible ‘re-establishment’ of the Brazilian Cooperation Agency (ABC) / creation of a new development and cooperation agency (announced in late May 2013 by President Rousseff).

It’s not just the BRICS, or even the ‘next 11’ or the CIVETS. Azerbaijan opened its international development agency, AIDA, in September 2011.

The trend is not completely new: some Gulf states and Turkey opened their agencies many years ago. Nor is it uniform: China – one of the largest donors in the group – has not yet consolidated its development assistance under the umbrella of a single agency, although it is strengthening its coordination of aid efforts. As the first White Paper on China’s Foreign Aid (2011) explained, the Ministries of Commerce, Foreign Affairs and Finance established a foreign aid inter-agency liaison mechanism back in 2008 and upgraded it into an inter-agency coordination mechanism in February 2011.

That said, the trend is clear, and raises several questions.

Why? Why now? Most of the ‘emerging’ donors have assistance programmes stretching back to the 1950s. So, why have so many of them decided – quite recently and rather simultaneously – to institutionalise their aid efforts? On the one hand, this could simply be a response to the need to effectively manage significantly increased aid volumes in recent years. Moreover, DFID, the World Bank, UNDP, USAID, etc. have recently supported projects aimed at institutionalising several countries’ aid efforts.

China-aid-Cambodian-flood-007On the other hand, this ‘trend’ is also a sign of the emerging donors’ aspirations to a stronger position in the multi-polar world, giving moreweight to their philosophies and modalities of aid giving. Are we witnessing a deliberate attempt to shift the centre of gravity of the global aid business? The establishment of these new institutions signifies that providing aid will no longer be ad-hoc; instead, as was once the case with the traditional donors, international development aid and humanitarian response are becoming substantial parts of the foreign policy of emerging powers.

What’s old and what’s new about these new agencies? Are the ways in which these new agencies will operate significantly different from those of ‘traditional’ donors?  It is too early to draw hard conclusions, because some of these agencies have not even started operating yet, but several distinctive traits already stand out:

  1. Principles of South-South cooperation at the core. All the agencies – except the Russian one – have openly proclaimed South-South cooperation as their founding principle. Roscooperation’s strategy is being formulated at the moment, but the agency is viewed by the authorities primarily as a tool of ‘soft power’ to advance Russia’s interests abroad and raise its profile as a donor. We still need to wait and see, however, whether and how the rhetoric translates into the programme activities of the new agencies.
  2. Thinking regionally. All the agencies are expected to focus their efforts at the regional level and also, in the case of Brazil and India, on Africa.
  3. As in most traditional aid donors, these new agencies have close ties with ministries of foreign affairs. But in some of the new donors, such as Brazil, ties with the Ministry of Development, Industry and Commerce are increasingly important. Whether this kind of move would be reproduced in the other countries remains a question, but Brazil’s example does signify increasing blurring of the distinction between aid and investment, and we can expect that the form that the new agencies eventually take will reflect this.
  4. Interestingly, while most of the agencies manage/plan to manage both multilateral & bilateral aid (similar to traditional donor agencies), in Russia, the agency’s role will be confined to dealing exclusively with bilateral projects. Russia aims to increase the share of bilateral aid in its overall aid and thus to increase its visibility as donor. (Until recently, Russia’s bilateral aid had a miniscule share, since aid was managed primarily by the Ministry of Finance, largely consisting of contributions to the UN bodies.)
  5. It seems likely that triangular cooperation, which, for example, Brazilians are already following with USAID in Africa, will bebrazil_africaemphasised at least in some of the new agencies’ strategies (e.g. triangular co-operation is part of SADPA’s strategic orientation). 
  6. Some of the new agencies (e.g. AMEXCID) have already shown great interest in partnering with the private sector – a trend, which is clear also among the traditional donors. The private sector has its own Technical Council at AMEXCID.
  7. Finally, while creation of the agencies could be considered as a step towards improving the measurement and monitoring of effectiveness of aid coming from the new donors, it is still not clear what kind of practices will underpin this. Will the new agencies be following the fads of the traditional donors, e.g. results agenda, RCTs, etc.? Or will they come up with alternatives?

How (if at all) can CSOs influence the policies of the new agencies? That’s probably the most pressing question for us at Oxfam and for our NGO colleagues.

In India, the Development Partnership Administration has supported the creation of the Forum on Indian Development Cooperation (FIDC), in which Oxfam participates. This provides a space for civil society to directly engage with DPA officials on issues such as transparency and accountability.

In Mexico, the Law on International Development Cooperation includes the participation of CSOs in the Advisory Board of the new agency, but does not grant them a right to vote. Under former president Calderon’s administration, a number of CSOs were invited to form a Technical Council to advise the Executive Director and the Advisory Board of AMEXCID. Along with other 11 CSOs, Oxfam accepted. However, CSOs’ involvement depends on the political will of the government, and there have been no follow-up meetings under the current administration.

With this newly opening space the question that, however, remains is how much interest do national CSOs actually have in their own governments’ aid programmes? And how does it affect the relationship of international NGOs like Oxfam with the national CSOs?

What’s the ‘bigger meaning’ of the ‘new agencies’? The decisive entry of these new donors is likely to create/exacerbate a competition among traditional donors and emerging powers, with each side claiming that their brand of aid benefits the poor more and brings ‘real’ development. That in turn prompts some bigger questions. How to distinguish between a propaganda war and real concern for equality and China in Africa 2the interests of poor people? Is this competition a good or a bad thing for the poor? What can civil society do in order to protect the rights of the excluded and the poor in this fast changing environment?

To conclude, we are clearly witnessing an important and potentially transformatory development in the international aid landscape. To understand what exactly is going to happen and the role of global civil society in this process, the questions that I raised in this post will certainly require further thinking and research.

This post greatly benefited from contributions by my colleagues from the Oxfam BRICSAMIT group: Nina Best (Brazil), Elena Konovalova (Russia), Supriya Roychoudhury (India), Kevin May (China), Marianne Buenaventura (South Africa), Alejandra d’Hyver (Mexico), Meryem Aslan (Turkey)

September 11, 2013
Duncan Green