A New Dawn: India From Aid Recipient to Aid Donor

Discussion in 'Economy & Infrastructure' started by thakur_ritesh, Dec 12, 2011.

  1. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Slightly dated article (6 months old), but worth a read on changing dynamics on flow of aid "to" India to now "from" India.

    India Gives[TABLE="width: 100%"]
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    [TD]In the recent India-Africa summit in Ethiopia, India emerged as a source rather than a recipient of foreign aid.[/TD]
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    by Shashi Tharoor

    [FONT=&amp]The recent India-Africa summit in Addis Ababa, Ethiopia, at whichIndia's government pledged $5bn in aid to African countries, drew attention toa largely overlooked phenomenon - India's emergence as a source, ratherthan a recipient, of foreign aid.
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    [FONT=&amp]For decades after independence -when Britain left the subcontinent one of the poorest and most ravaged regionson earth, with an effective growth rate of zero per cent over thepreceding two centuries - India was seen as an impoverished land of destitute people,desperately in need of international handouts. Many developed countriesshowcased their aid to India; Norway, for example, established in 1959 itsfirst-ever aid program there.
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    [FONT=&amp]But, with the liberalisation ofthe Indian economy in 1991, the country embarked upon a period of dizzyinggrowth, averaging nearly eight per cent each year since then. Duringthis time, India weaned itself from dependence on aid, preferring to borrowfrom multilateral lenders and, increasingly, from commercial banks. Most foreignaid programs - with the sole exception of Britain's - have dwindled orbeen eliminated altogether.

    Today, the proverbial shoe is on the other foot. Long known for its rhetoricalfaith in South-South cooperation, India has begun putting its money where onlyits mouth used to be. It has now emerged as a significant donor to developingcountries in Africa and Asia, second only to China in the range and quantity ofdevelopment assistance given by countries of the global south.[/FONT]

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    Money to spend[/FONT]

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    The Indian Technical and EconomicCooperation Program (ITEC) was established in 1964, but now has real money tooffer, in addition to training facilities and technological know-how. Nationalsfrom 156 countries have benefited from ITEC grants, which have broughtdeveloping country students to Indian universities for courses in everythingfrom software development to animal husbandry.

    In addition, India has built factories, hospitals, and parliaments in variouscountries, and sent doctors, teachers, and IT professionals to treat and trainthe nationals of recipient countries. Concessional loans at trifling interestrates (between 0.25 per cent and 0.75 per cent, well below the cost ofservicing the loans) are also extended as lines of credit, tied mainly to thepurchase of Indian goods and services, and countries in Africa have beenclamouring for them.

    In Asia, India remains by far the largest single donor to its neighbor Bhutan,as well as a generous aid donor to Nepal, the Maldives, Bangladesh, and Sri Lankaas it recovers from civil war. Given Afghanistan's vital importance for thesecurity of the subcontinent, India's assistance program there already amountsto more than $1.2bn - modest from the standpoint of Afghan needs, but large fora non-traditional donor - and it is set to rise further.

    India's efforts in Afghanistan have focused on humanitarian infrastructure,social projects, and development of skills and capacity. Five Indian medicalmissions provide treatment and free medicines to more than 1,000 patients aday, most of them poor women and children. The Indian-built Indira GandhiCentre for Child Health in Kabul is connected through a telemedicine link withtwo specialty medical centres in India.

    A million tons of Indian food assistance provides 100 grams of high-proteinbiscuits to two million of Afghanistan's six million schoolchildren, a third ofwhom are girls. Indian engineers, braving attacks that claimed several lives,built a 130 mile (218km) highway from Zaranj to Delaram in southwest Afghanistan,opening a trade route to the Iranian border. Indians braved the 3,000m heightsto run a power-transmission line from Pul-e-Khumri to Kabul - givinground-the-clock electricity to the capital for the first time since 1982. Indiais currently engaged in building the Afghan Parliament building, a visible andevocative symbol of democracy.

    India has also commissioned 100 small development projects (mainlyquick-gestation, small-scale social-sector projects), and pledged further fundsfor education, health, power, and telecommunications. Of course, some inPakistan see nefarious designs behind this assistance, but the ultimateobjective is straightforward: to build indigenous Afghan capabilities foreffective governance, reflecting India's commitment to regional stability inthe face of terror and violence.

    In Africa, India's strength as an aid provider is that it is not anover-developed power, but rather one whose own experience of developmentchallenges is both recent and familiar. African countries, for example, look atChina and the United States with a certain awe, but do not, for a moment,believe that they can become like either of them. India, by contrast, comesacross as a land that has faced, and is still surmounting, problems rather likethose confronting its beneficiaries. If India can do it, many Africans reason,perhaps we can learn from them.

    Moreover, unlike China, India does not descend on other countries with a heavygovernmental footprint. India's private sector is a far more important player,and the government often confines itself to opening doors and letting Africancountries work with the most efficient Indian provider that they can find.

    Similarly, unlike the Chinese, Indian employers do not come into a foreigncountry with an overwhelming labour force that lives in ghettoes, or imposetheir ways of doing things on aid recipients. Instead, they recruit, hire, andtrain local workers and foremen, and leave behind enhanced capacities. WhereasChina's omnipresence has provoked hostility in several African countries - a presidential candidate in Zambia even campaigned on an explicitlyanti-Chinese platform - Indian businesses have faced no such reaction in thepast two decades. Indeed, Uganda, where Idi Amin expelled Indian settlers in1972, has been actively wooing them back under President Yoweri Museveni.

    Finally, India accommodates itself to aid recipients' desires, advancing fundsto African regional banks or the New Economic Partnership for Africa'sDevelopment (NEPAD). Its focus on capacity development, its accessibility, andits long record of support for developing countries have made India anincreasingly welcome donor. This could not have been imagined even 20 yearsago, and it is one of the best consequences of India's emergence as a globaleconomic power.[/FONT]


    http://www.aljazeera.com/indepth/opinion/2011/06/201161410198655929.html
     
    nrj and ejazr like this.
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  3. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    In July the govt. came up with an Indian version of USAID, although it has a more boring name of Indian Agency for Partnership in Development


    India to set up central foreign aid agency | Global development | guardian.co.uk
    India is to set up a central foreign aid agency to prevent funds from being misused and delays in aid delivery .

    India's aid commitments have soared in recent years as the country seeks to improve its strategic, political and economic clout on the world stage, especially as China extends its hand.

    The agency will reportedly be called the Indian Agency for Partnership in Development, overseeing $11.3bn (Rs 50,000 crore) over the next five to seven years.

    The move has been welcomed by policymakers who say a central agency will halt leakages, curb delays, slash operation costs and prevent projects being rushed through by individuals misusing their discretionary powers. Furthermore, aid would no longer be driven by territorial divisions and regional interests, making way for a cohesive aid strategy.

    Rajiv Sharma, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI) said: "The creation of an aid agency is a recognition by the Indian establishment that India has arrived as a global player with strategic interests. In the past we have ducked this issue because we were one of the largest recipients of aid."

    Gopalaswami Parthasarathy, a former diplomat and member of the Centre for Policy Research said an agency is urgently needed, as one person currently handles aid to Bangladesh, Sri Lanka, Maldives and Burma. "How can you have one joint secretary to deal with aid to some of our biggest recipients? He would have political and diplomatic work to conduct too," he said.

    The agency will have to ensure quick decision-making and insulate aid from political considerations if it is to deliver aid effectively. Experts say that India's legal framework monitoring government procurement should be strengthened to boost accountability and to prevent it from falling prey to corruption.

    The concerns over aid management are timely. Earlier this year, the government auditor revealed that $22.6bn (Rs 1 lakh crore) in foreign aid given to India was lying unused due to poor planning by various ministries.

    The creation of the aid agency, believed to be modelled on the US international development agency, USAid, raises the question of whether India should be dishing out aid at all when it still receives international aid and suffers from rampant poverty and poor development. But supporters of India's foreign aid programme say aid helps the country's domestic agenda indirectly by opening economic doors, ensuring regional peace and boosting business opportunities in recipient countries.

    Gurpreet Bhatia of the Research and Information System for Developing Countries said: "Aid will pacify India's neighbours and change their perception about us, sending out a message that we are here to help and protect them."

    Aid has already helped foster India's interests in countries such as Afghanistan, Bangladesh and some African countries including Somalia and Ethopia. Pakistan and India have long been jostling for influence in Afghanistan, and, in May 2011, India pledged $500m to Afghanistan in addition to its existing commitment of $1.5bn, acquiring considerable goodwill. Also in May this year, $5bn was promised to African countries to reach its development goals, following an injection of $5.4bn in 2008 for infrastructure development. Africa provides widescale business opportunities to India as well as China, which is also vying for a slice of the continent's economic resources. In January 2010, India announced a $1bn line of credit for Bangladesh, the highest one-off amount to any country from India as a reward for its co-operation in dealing with terrorism and insurgency.
     
  4. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Few aid programs Shashi Tharoor hasnt mentioned and are worth mentioning:

    The recent aid announced to AU (African Union), comes over the back drop of another assistance which earlier was to the tune of 5b usd as well.

    India has handed out aid to pakistan on numerous occasions.

    India has now committed a total of 2b usd to Afghanistan.

    Indian aid program extends to south east and central asia.

    India has put in worth a 10b usd with IMF which is used to prop up distressed economies world wide.

    With the EU debt crisis widening and looking more stark, it is worth mentioning along with China, and Brazil, India is the other country that the EU is looking out for to come up with some sort of face saver for them which will involve financial assistance.

    There is more to Indian Aid program but these were few which were worth mentioning.
     

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