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As the Aid Players Shift

 Bonnie Koenig is a consultant working with non-governmental organizations on developing their strategic thinking and international programs. She is the author of “Going Global for the Greater Good.”

In a November 2011 PDT blog post by Communications Director Elmira Bayrasli wrote: “In the moving that we’ve done over the past several years, we’ve found that there is no single path to getting there: development work is hard and complicated. The one thing we have found is that you’ve got to be flexible, willing to respond and adapt to change.”  Part of adapting to change is observing or analyzing change in the external environment so you know as a practitioner what you must adapt to.  One of the major changes currently taking place in the global environment is the changing role of “leading” countries.  We are seeing the emergence of Asian and Latin American economies and aid (Brazil and China as two significant examples) at the same time that Europe and the US are increasingly focused on their own domestic financial challenges.

The role of simultaneously being a developing (receiving aid) and developed (giving aid) country is a relatively new development. Donors who are also beneficiaries are going to have a different perspective on their giving than countries that have traditionally been just on the giving end. Many of these new donors are stressing that their aid is different from those of traditional donors. Brazil and China are two examples.

Brazil continues to receive about 2% of its annual income in aid, as it has for the past two decades. (which is roughly the same amount as its own aid program).  Brazil’s aid program is framed by appeals to “solidarity and co-operation.”

Beijing’s inaugural report on foreign aid, released in April 20111, stresses that Chinese aid is “mutual help between developing countries…”

While some have been concerned that China’s foreign aid will be used to politically interfere with countries, this does not initially appear to be any more significant than how other countries have used aid to indirectly advocate their own interests. For example, The China-Africa Development Fund is an equity investment vehicle encouraging Chinese companies to operate in Africa. Chinese domestic policy is evolving and as its aid practices are still new, they can be expected to evolve as well.

What might the implications be of these new donors on the world stage?  For countries receiving aid, there may be changes in how this “new aid” manifests itself, such as capacity building “with Chinese characteristics.” One area where China seems to be placing a focus is on the building of local infrastructure. This is not a new trend (for example Cuban aid in the Caribbean in the 1970’s and 1980’s was often focused in this direction), but it may be a more widely felt trend in the future.

For northern based international NGOs the increasing influence of “developing country” donors may mean a need for internal realignments to create more decision-making space for southern partners.  Together with the increasing status of their nations, many local civil society organizations want to play more prominent roles as well. For example, “building on years of leadership, symbolized by the groundbreaking World Social Forums that started in Porto Alegre in 2001, some in Brazilian civil society also want to become world players, competing with the big northern NGOs in shaping the international debate, not just the domestic one.” This will pose particular challenges to organizations that are not paying close attention to this trend.  As Duncan Green of Oxfam notes:  “Despite the recognition of the reality of multipolarity, the 1970s division of the world into rich ‘North’ and poor ‘South’ remains deeply rooted in the hearts and minds of many INGO staff, as well as in the rhetoric of developing country governments.”

“Mutual relationships” and partnerships may also be increasingly important and grantees may need to ‘recalibrate’ their relationships with donor groups from what they may have traditionally been used to.  To date there seems to have been little written on the implications for NGOs and other grantee groups of the new countries entering the donor arena, but I suspect that we are just at the beginning of some interesting discussions.

2 Comments

  1. rende says:

    Your post provides a framework for what I observed in Cambodia. INGOs in Cambodia provide a considerable level of social services, majority of which unfortunately are overlapping, fragmented and partial. I also observed Cambodia has opened up to Chinese aid for infrastructure, land use and construction. These aid sources are not competing, however my conversations with the INGOs confirm your point: the idea of partnership within aid community in Cambodia has started evolving. Thanks for the post!

  2. Weh Yeoh says:

    Good stuff Bonnie. As I was reading, I thought of two points. Number one is that as countries who have been recipients of aid start to give their own foreign aid, countries such as Australia are pulling out, because they believe that they should not long receive funding if they can afford to give to other countries. However, this mindset is problematic for two reasons. Firstly it assumes that development work only revolves around money, and not around other resources like expertise. Secondly, I think it epitomises the traditional structure of donor and recipient, and ignores the new trend that you mentioned of “mutual help”.
    The second point is that we should not be surprised about new donors speaking openly about the benefits of foreign aid to their own countries. Again, from an Australian point of view, our own foreign aid is given in line with “national interest”. There’s not mincing words here – we give aid where it benefits us, in terms of economics, stability or whatever else. It would then be highly hypocritical to point at new donors and say that this is unethical.


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