Big developing countries are shaking up the world of aid

August 17th, 2011  |  Source: The Economist

Charity begins abroad:  BETWEEN 1951 and 1992 India received about $55 billion in foreign aid, making it the largest recipient in history. Now it seems on the verge of setting up its own aid-giving body. A spokesman for the foreign ministry says the government is in “active discussions” to create an India Agency for Partnership in Development (IAPD), an equivalent of America’s Agency for International Development (USAID) or Britain’s Department for International Development (DFID). Bureaucrats in other ministries are dragging their feet but Gurpreet Singh of RIS, a Delhi think-tank, says the government will announce the body within months, and give it $11.3 billion to spend over the next five to seven years.

India’s switch from the world’s biggest recipient to donor is part of a wider change shaking up foreign aid. Ten years ago the vast majority of official development assistance came from about 15 rich industrialised countries that are members of the Development Assistance Committee (DAC), a 50-year-old club of the aid establishment. Even today, America remains the largest single donor, dishing out $31 billion in 2010.

But second on the list, if reports monitored by New York University’s Wagner School are to be believed, would be China, which gave away $25 billion in 2007. (Statistics on aid from new donors are dodgy and the line between aid and trade is blurred; by another count China’s officially reported aid was only $1.9 billion in 2009.) Brazil, which is also thinking about setting up its own aid agency, gives up to $4 billion a year of assistance, broadly defined. That would put it on a par with Sweden, Italy—or Saudi Arabia, another big donor outside the establishment club. If India gives around $2 billion a year, it would rank with Australia or Belgium.

According to a new report by a non-governmental organisation called Global Humanitarian Assistance, aid (conservatively defined) from non-DAC countries rose by 143% in 2005-08, to $11.2 billion, before falling during the financial crisis. Aid from the BRICs (Brazil, Russia, India and China) more than doubled. The establishment donors’ aid monopoly is finished.

Abstract only.For the full article go to: 

http://www.economist.com/node/21525836?fsrc=scn/fb/wl/ar/charitybeginsabroad




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