India, shy of donor tag, wins US praise

by Dave

The Economic Times

India and China were not meant to have been active participants in the 3rd High Level Forum on Aid Effectiveness, which was called by the World Bank and the Organisation for Economic Cooperation and Development (OECD), the group representing the world’s richest donor nations.

But the two Asian nations were forced to step out of the sidelines in order to fend off what they said was an effort by traditional donor nations to include them in their fold of aid priorities.

“This is their show, not ours. We are not donors in the traditional sense of the term – former colonial powers or very wealthy countries dispensing aid to the developing world,” said a foreign ministry official on the Indian team.

“Neither do we particularly like the term ‘aid.’ What we are engaged in with our developing country partners is development cooperation. After all, we ourselves are still recipients of aid,” he added.

The Sept. 2-4 forum was attended by 1,200 delegates from 120 countries, including ministers, government and aid agency officials, as well as nongovernment activists and economists.

The meet brought together ministers from the world’s poorest countries and key officials from rich donor nations and agencies who Thursday agreed to a set of rules and principles aimed at making the multi-billion dollar aid industry more efficient.

The event came in the backdrop of a global financial downturn, and mounting claims that corruption is eating into the $120 bn given in aid every year – at the expense of the world’s 1.4 bn poorest people.

Equally, developing countries charge donors with using aid as an instrument to not only force political change – in Myanmar and Zimbabwe for instance – but also to further their businesses by tying aid to the purchase of goods and services by recipients.

,…made it clear that its tradition of extending ‘development assistance’ to Africa falls within the ambit of what it calls South-South cooperation.

The Indian official described the one bn dollars that India extends as aid every year as “miniscule” compared to Western aid but added: “We will continue to help countries in Africa.”

In common with African countries, India is opposed to donors attaching conditions to their aid and considers money that goes into increasing knowledge and capacity as the best kind of aid.

However, both Chinese and Indian officials say they have come under increasing pressure from some rich nations to be part of efforts to ‘harmonise’ aid – technical jargon that describes attempts by donor nations to erase the contradictions that often mark their individual aid policies.

“We say harmonisation is their problem. Let donor countries harmonise among themselves first,” the Indian official said.

A Chinese diplomat said: “We have staved off pressure for the moment. China, India and Brazil need to act together.”
But the Chinese role in African development differs vastly from India’s – Beijing has faced much criticism for its no-questions-asked aid to Africa in exchange for access to the continent’s abundant natural resources.

It is seen as a cynical role that has propped up dictators and, in come cases, alienated locals. In contrast, the United States views the Indian role as benign and pro-democracy.

“It is very important for India to be involved in development cooperation,” said Henrietta H. Fore, who, as Director
of Foreign Assistance in the State Department and USAID Administrator, is one of the most senior aid officials in the Bush Administration.

In an interview with media at the ‘aid summit’, Fore praised the way India has “shored up fragile countries and post-conflict societies” – most recently Nepal and Afghanistan.

In this context, she mentioned four new democracies of Europe – Poland, Romania, Bulgaria and Croatia – saying there was a need to build up democratic institutions in these countries.

“They are very excited,” Fore said, noting India’s contributions in building up the knowledge sector in South Asian countries.