Indian Politics & Policy Volume 1, Number 2, Fall 2018 | Page 61

Indian Politics & Policy
Emerging Donors in the
International Aid Architecture
While the post-war global
foreign aid regime has
been largely constructed
and driven by Western countries, other
country groups also played a varying
role. For a few decades, the Soviet
Union (and Maoist China despite low
per capita income) was an important
player in countries allied to its interests.
After the first oil-shock of 1973, some
of the OPEC did so in the 1970s (especially
Kuwait, Saudi Arabia, and Venezuela),
through both bilateral and multilateral
institutions (such as the OPEC
Fund for International Development)
targeted especially to members of the
Organization of the Islamic Conference
(OIC) and global-membership multilateral
institutions (notably IFAD and
UNIDO). But, with the sharp decline
in oil prices in the 1980s, the economic
power of OPEC diminished and with it
reduced any influence they might have
on the global aid regime.
However, today the economic
resurgence of non-Western countries,
epitomized by the emergence of China
and of the other BRICS (the Brazil–Russia–India–China–South
Africa
group), the BRICS-promoted New Development
Bank (NDB), and the Chinese-promoted
Asian Infrastructure
Investment Bank (AIIB), is raising new
questions, challenges, and perhaps even
hope about the future of the global aid
regime. India, like China earlier, graduated
from International Development
Association (IDA)—the largest multilateral
concessional source of development
aid—in 2014, and after a period
of transitional support till 2017, is now
off it completely, borrowing at standard
World Bank interest rates. It is an
emerging donor.
Currently, the international aid
architecture is, to simplify a bit, constituted
by two broad groups of donors
(for useful outlines of the international
aid regime and emerging donors, see
Manning 2006; Naim 2007; Paulo and
Reisen 2010; Six 2009; Walz and Ramachandran
2011; Woods 2008).
First, the traditional developed-country
donors who coordinate
their aid policies through the OECD’s
DAC, formed in 1960. The DAC defines
Official Development Assistance (ODA
or aid) as a concessional transaction
(a minimum of 25 percent must be a
grant, calculated for loans at a 10 percent
reference rate), that is concessional
loans and grants provided by governments
for the promotion of economic
development and welfare and including
technical cooperation (Chaturvedi
2008, 5). DAC ODA enjoyed near-total
dominance in the 1990s, but the pattern
has changed since the 2000s. ODA
from DAC donors in 2016 was $145 bn
(Table 1). DAC ODA as a percentage of
GNI declined from 0.51 percent (1960)
to 0.22 percent (2000) before recovering
to 0.32 percent (2016) (Table 1).
Second, a diverse non-DAC
group of emerging donors, which include
China, India, Brazil, South Africa,
Russia, and Venezuela among others,
have emerged in the 2000s. Manning
(2006) has identified four subgroups of
the non-DAC donors: (i) OECD mem-
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