Thursday, September 29, 2011

No Incentives for New Donors to take on Old Rules

By Peter Konijn, 28 September 2011

New donors, like China, India and Brazil, don’t buy in to the aid effectiveness framework constructed by the traditional donors under the auspices of OECD - DAC. The aid divide will not be bridged because the new donors have a different understanding of development and different use of aid, according to Mulakala in The Broker. Chanana argues that new and traditional donors have different interests and that the new donors have been excluded from the frameworks until recently and feel they are not respected.

The arguments put forward by Mulakala and Chanana are valid but lack an important dimension: the dynamics of the global power shift. To understand this dimension you need to think of new donors as emerging powers and traditional donors as declining powers.

The rise and decline of global powers is a messy and unpredictable process. The global governance system constructed by the declining powers is slowly disintegrating while a new system is not yet visible, let alone in place. This creates uncertainty and confusion.

For a long time the declining powers acted as if they were in a state of denial about the true nature of the global power shift. They expected the emerging powers to become ‘responsible’ stakeholders of the existing system and adopt existing rules. In the case of aid, the declining powers invited the emerging powers to become members of the OECD - DAC club and adhere to the Paris Declaration on aid effectiveness.

Now the declining powers realize that the emerging powers have their own foreign agenda and approach that may be best pursued inside and outside the current system. Now they realize that emerging powers have a competitive advantage of not being bound by the aid framework. For example, by operating in its own way, Chinese aid in Africa has created a positive image: delivering badly needed infrastructure, quick on results and low cost. China’s aid is believed by many to be a better fit to the needs of African countries. Even Western diplomats concur that it takes the Chinese less time to built a road than it takes Western donor agencies to conclude an environmental impact assessment.

There is no reason why the emerging powers would want to give up on their competitive advantage of delivering aid in the way they do. It has been successful in bolstering trade and investment relations with developing countries. It provides them with access to resources and markets which used to be dominated by Western and local firms.

The global power shift changes the positions of all actors in the global arena. However the perception among some actors is much slower than the change itself. Stephen Ellis sees a need to decolonise the western mind i. Centuries of Western domination have generated an extraordinary self-confidence that translated into a belief that the West has a mission to civilise the rest of the world. This mission informs their approach to development and aid. In the words of Richard Dowden ii "There's still a narrative in our minds in the West that Africa is backward and Africans have got to become like us -- 'we have go to change them' -- I think that Africans feel that and the young African generation that's coming through are now very resentful of that." One of China's big advantages is that "the Chinese have no mission, no intention at all to change Africa," says Dowden.

The global power shift has created new leverage for recipient countries to negotiate with traditional and emerging powers alike. Again looking at Africa, the emergence of China, India and Brazil, has changed the long-established patterns of interaction between Africa and the EU. The eye-catching 2006 Forum on China Africa Cooperation changed the attitude of the EU. The EU felt it had to measure up to China. This gave African countries a stronger bargaining position.

The failure of the EU in 2008 to establish trilateral cooperation between the EU, China and Africa is illustrative in this respect. According to a diplomatic cable from the US state department, the EU angered many African countries when it proposed trilateral cooperation iii. It was seen as an attempt to reign in China’s assistance to Africa. African countries were angered because they were not consulted, but even more important because they saw no benefit to trilateral cooperation. On the contrary, they believe Africa will benefit from increased competition between traditional and emerging powers. Trilateral cooperation would lessen this competition and weaken their bargaining position. Thus trilateral cooperation is not in their interest.

The short-term power dynamics between declining and emerging powers, driven by a long-term global power shift, make any fundamental agreement on a common framework for delivering aid highly unlikely. Aid is an integral part of the geo-political strategies of emerging powers to strengthen their global positions. It helps to build their soft power in other developing countries. Emerging powers have no interest in accepting a framework that may limit their ability to pursue their geo-political strategy. They may adapt their language to pacify some of the criticism, but will not change track.

Most recipient countries hope to benefit from increased competition between declining and emerging powers, as we have seen earlier. So they are fine with addressing their aid issues separately. They will not push the emerging powers towards accepting the existing aid frameworks.

The declining powers were caught unprepared and struggle, amidst a profound financial crisis, to make sense of their position and role in the world. They will stick to the established aid framework because it represents a large investment of time and money and they see no alternative. They are not ready to accept new realities on the ground and adjust to them. It will take some time for them to come around and develop a new understanding and approach to development and aid.


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