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India's development cooperation in a changing global environment
07 March 2013

To analyse India’s growing stature within a shifting development cooperation context, Observer Research Foundation and Saferworld organised "Mapping Experiences around International Development Cooperation: New Challenges and Opportunities" on 5 March in New Delhi. The all-day roundtable featured a nationally diverse selection of presenters. ORF’s Director, Mr. Sunjoy Joshi kicked off proceedings by noting that both development and conflicts are manifestations of inherently political processes. Conflicts arise in situations where stakeholders have nothing to lose. Development provides stakeholders with potential gains which by creating new power relationships - can become the reason for conflict. Therefore rather than attempting to depoliticize the notion of development, any development intervention must be understood fully in the light of political impact.

The keynote address was given by Mr. P.S. Raghavan, Additional Secretary, Development Partnership Administration (DPA), the Ministry of External Affairs. MEA had set up the DPA in January 2012, given the country’s enhanced development donor stature. DPA aims to positively impact partners within the ’South-South’ paradigm, while streamlining procedures and engaging with other development stakeholders.

Mr. Raghavan questioned the sustainability of the historically-dominant North-South development framework, especially given OECD donor fatigue and lacking economic growth. While India doubtlessly benefitted from post-independence aid, especially the university system, conditionality made aid a form of control. These memories influence India’s modern development cooperation decisions. Whether it be Lines of Credit or capacity-building grants, India’s aid is based on a demand-driven, ’consultative model of engagement’ beneficial for India and partner nations.

Panel one aimed to present an overview of challenges and opportunities facing development cooperation. Panel chair and Saferworld Senior Advisor Ivan Campbell noted that Saferworld works to prevent violent conflict and build peace in war torn areas. After working closely with western nations, Saferworld is shifting its focus to emerging nation donor impact, specifically in Brazil, China and India.

Dr. C. Raja Mohan, Head of ORF’s Strategic Affairs Programme, discussed the increasing convergence between security and development policy. Additionally, Dr. Raja Mohan noted the conflict between the West’s ’new humanitarianism’ and emerging nations’ desire to reap political benefits from aid. In general, aid should be predicated on avoiding the West’s nation building mistakes, ’doing no harm’.

Mr. Ian Shapiro, representing DFID, looked at modern development from an ’Old World’ giver. He noted that the UK has reaffirmed its goal to make aid commitments 0.7% of GDP, in stark contrast to both UK austerity and policies in many OECD counterparts. Shapiro believes aid must create ’catalytic and sustainable’ programs in areas not reached by the massive monetary flows of globalisation. Finally, RIS Senior Fellow Sachin Chaturvedi noted that ’South-South Cooperation’ (SSC) is not a new phenomenon but one stretching back six decades. Modern SSC is aimed at mutual benefit and dependent on ’policy coherence’. SSC and policy coherence can unleash the power of the private sector, allowing for more ’holistic’ development.

Panel two, dealing with ’Engagement in Conflict-Affected States’, was chaired by ORF’s Distinguished Fellow, Mr. H.H.S. Viswanathan who mentioned an old Bantu saying, "the hand that gives is the hand that controls." The Tampadipa Institute’s Khin Zaw Win presented on Myanmar’s long-running experience with civil war and slow post-1988 transition to an open economy and government system. Rather than exploitative investments and projects, Myanmar’s ’democracy dividend’ will only be reaped with deep, long-term development engagement and win-win private sector economic investments. Both must take into account local stakeholders.

Rand Merchant Bank’s Lucy Corkin discussed the political ramifications of foreign development, of which provider countries must be aware. Many African nations fall into the ’aid trap’, where the pursuit of aid (often making up 50+% of public budgets) undermines government capacity. Aid often burdens understaffed governments that must seek, disburse and regulate it. Saferworld’s Campbell outlined three development cooperation lessons previously learnt by Western nations. Providers must (1) engage with local communities, (2) grapple with the underlying promoters of conflict, and (3) avoid displacing local communities.

The panel three focused on the role of the private sector and civil society. ORF Visiting Fellow Rohit Bansal believes Indian development cooperation is severely lagging, especially when compared to China. NGOs, not nations, are the entities truly ’going to bat’ for impoverished nations, like South Sudan. It is essential that a better framework be developed by both actors to identify the ’genuine needs of a society’. India’s DPA has a tough mandate in brining together stakeholders to engender benefits for recipient nations.

Mr. André de Mello e Souza, of Brasilia’s Institute for Applied Economic Research, discussed his research on the motivations behind private aid distribution. This research posited three theories: (1) Humanitarian, where aid is allocated based on objective need; (2) Developmental, where aid is given based on highest efficiency and effectiveness; and (3) Fundraising Maximisation, where NGOs seek to raise money and enhance their stature through high-profile projects. There was robust support for the ’Humanitarian’ hypothesis, leading him to conclude that NGOs are more exclusively focused on objective need than governments.

Chatham House’s Gareth Price nicely touched on country justifications for assistance. He noted that if a nation’s private sector has the desire and ability to invest in a recipient country, than private investment will be touted as the best way to help an economy. Conversely, lacking private sector involvement will produce a ’moral high-ground’ justification, promoting grant and aid virtues.

P.S. Raghavan believes that while aid has inherent political angles, Indian aid is not, and cannot be, solely political in purpose. DPA projects will be objectively aimed at capacity building for certain nations. In developing these countries, India may reap ancillary political and economic benefits, enhanced safety for Indian citizens, and greater international stature. However, the aforementioned cannot be India’s first-order goals.

In surveying the global scene, Saferworld’s Campbell believes there is widespread convergence on the ’what’, the objectives of development (conflict prevention, education, infrastructure development, etc.). Yet, ’how’ these objectives are to be accomplished remains a source of disagreement and an area for future research. Development has an overall positive trajectory, but serious challenges lie ahead.

Click here for Text Speech of Mr Raghavan

(This report is prepared by Daniel Rubin, Henry Luce Fellow, Observer Research Foundation, New Delhi)