Saturday, 14 May 2011

Jean-Philippe Stijns on "Emerging Partners: Anything but Rogue Aid"

Dear Helmut,
I meant to respond to your post earlier but I was myself tied up with the drafting of our own forthcoming report about Africa and its Emerging Partners, prepared for the 2011 edition of the African Economic Outlook. The report is under embargo until its official launch on June 6 in Lisbon at the occasion of the annual meetings of the African Development Bank, so I won’t comment on it. However, I can allow myself to share a few personal opinions.
I very much support the major points you make, especially that it’s not ‘rogue’. The following is thus a matter of nuances. You are quite right to points that out emerging partners, China but also typically all other emerging countries engaging African countries, do tend to take a more holistic approach to promoting the export-oriented industries and cooperating with fellow southern countries. Consequently, and even more so since they tend to use different funding modalities, it is difficult to identify and even more so quantify how ‘aid’ these emerging countries provide, say, to African countries.
But as you also rightly point out, the number of these new ‘donor’ countries has been rising steadily. Interestingly, as they mature, these emerging donors tend to adopt some of the practices of the older donors. For instance, South Africa is considering the establishment of a South Africa Development Partnership Agency (SADPA) during the last quarter of 2011. The key is that as these emerging partners are confronted with similar challenges than those of traditional donors, they will naturally try some of recipes that have helped traditional partners to cope with the same challenges. If you want to monitor and control where your cooperation money goes, whether you want to call it ‘aid’ or not, you will quickly realize that you need an agency that does that…
My point is that it does not matter whether you or I or they want to call it ‘aid’ or not. “L’argent n’a pas d’odeur” as Emperor Vespasian told his son who was shocked to see his dad collecting money on public toilets. Yes, some of the aid money that emerging donors give takes the form of concessional conditions on otherwise commercial lending. But so does, Western aid money too in some cases, and this concessionality component in lending to developing countries for development-related purposes is estimated and counted as aid by the good old DAC itself.
So, why do Southern donors typically insist as much that their money not be labeled as aid as western donors insist that it be? It’s not as much an ideological tendency rooted in some cooperation culture that does not want to infringe on the sovereignty of fellow Southern countries. Southern countries can play hard ball with each other and do not refrain to attract attention to their cooperation efforts when there is a good diplomatic reasons to do so.
The real reason is that they are countries that still have a large chunk of their own population that is poor. In other words, they still developing countries themselves. They are therefore not so keen to make it obvious to their own poor citizens that some of their tax money is spent abroad for ‘altruistic’ purposes. Rather, they are more comfortable to argue that it is not a giveaway but a win-win transaction and that they are pursuing their own development / national agenda in doing so…
So, I would argue that while there important differences between DAC and non-DAC aid / cooperation that may warrant the use of a different term, such as perhaps ‘international development cooperation’, aid it still is and we should try to avoid falling victim to the emerging countries’ effort to cast themselves as less altruistic than they actually are J
That’s it for now. Some other thoughts may come later.
Have a great week-end!

Jean-Philippe Stijns, Ph.D.
Economist, EMEA Desk
Tel. :  33 (0) 1 45 24 99 93
Fax. : 33 (0) 1 44 30 61 30
Mailing address
2, rue Andre-Pascal
75775 Paris Cedex 16, France
Visiting address
"Le Seine Saint-Germain"
12, boulevard des Iles - Building B
92130 Issy-les-Moulineaux, France


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