With an outgoing overseas development assistance agency now in place, India needs to articulate its development cooperation agenda in a cogent manner
For reasons quite inexplicable, an important initiative of the government of India has gone completely unreported in the media. A new body for governing India’s outgoing development assistance, called the Development Partnership Administration (DPA), has been set up under the Economic Relations Division of the Ministry of External Affairs (MEA). The set-up seems to be just short of an “aid” agency, which most of the members of the development community were expecting for quite long. DPA is expected to help in the consolidation of outgoing aid and streamline all administrative matters related to this process. It will also help in assessing the effectiveness of credit lines that India is extending to its partners, which has grown in the last few years.
In the past few years, emerging economies, in particular China and India, have been in the limelight for their enhanced involvement in development partnership projects. Some commentators have been critical of China’s involvement in Africa that the government released a white paper on China’s aid policy underlining its objectives, historical context and its accomplishments. Brazil publishes an annual report on the aid related activities. South Africa has recently operationalised an office for formulation and dissemination of details on such partnerships.
Now that an agency is in place, India needs to articulate its development cooperation agenda in a cogent manner. With enhanced quantums, particularly since 2003, India has strong grounds to release, if not a white paper, at least an official policy statement, to bring to the table the unique Indian model of “development compact.” The facets for engagement include trade and investment, technology transfer, finance through credit lines and capacity building though a flagship programme, viz. the Indian Technical and Economic Cooperation (ITEC) programme. Western aid is often criticised for conflicting policies, for instance, giving aid for improving on the one hand, and providing huge subsidies to their own farmers on the other, which actually perpetuates “aid-dependence.” India has worked to create technical capacities, and provided production support. In 2008, the Prime Minister, during the India-Africa Forum Summit, announced the DFTP (duty free tariff preference) scheme for 49 least developed Countries (33 in Africa, 15 in Asia and one in the Americas). Our preliminary research indicates that India provides somewhere close to $3 billion, some of which is in cash but a large part of it in kind.
Actually the idea of an Indian aid agency has been around for quite sometime now. It was first mooted in the Budget speech of 2003 when then Finance Minister Jaswant Singh announced an agency in his budget speech. He had called it “India Development Assistance (IDA).” This was the time when India was “shining” and the government had driven away quite a few bilateral donors. Subsequently a minimum limit of $25 million was fixed for the government to accept any bilateral assistance. The rest of it was allowed to go to specified civil society organisations and other agencies.
Nothing much happened on this proposal until 2007 when Mr. P. Chidambaram announced the government’s intention to establish the “India International Development Cooperation Agency (IIDCA)” to provide unified administration of the country’s outgoing development assistance. It was stated that one guiding principle for the new agency would be that India’s assistance be directed especially at developing countries that are in greater need of external aid.
Traditionally, marginal
Traditionally, Indian development assistance programme has at best been a marginal component in the overall foreign policy framework. However, apart from rising quantums and leveraging of various other related instruments, India is now bringing to the table its experience in supporting successful small-scale programmes, which have created a niche for themselves. The Small Development Project (SDP) programme was launched to ensure economic deliverables, particularly in the areas of education, health and infrastructure.
The SDPs generally cost less than Rs.3.12 crore with the focus on areas like infrastructure development and capacity building in the areas of education, health and community development. The idea is that the projects should meet local needs and managed by local communities and institutions, saving project implementation costs. The most important feature is the local ownership of the programme. The first such programme was launched in 2003 in Nepal. Since then, India has been trying this model in Sri Lanka and Afghanistan.
For a U.N.-led initiative
At the recent 4th High Level Forum on Aid Effectiveness held at Busan, South Korea, India, along with other emerging economies, agreed to the setting-up of a global mechanism to improve the effectiveness of global aid flows. The Organisation for Economic Cooperation and Development (OECD) and its Development Assistance Committee (DAC) were keen to set up a new entity called Global Partnership for managing the global aid architecture. Several rounds of discussions on this proposal have revealed wide differences in perception between Indian and DAC members on aid and development cooperation. There is, therefore, no reason why India should support a DAC platform. In fact, India should develop strategies to support a U.N.-led initiative. The Development Cooperation Forum of Economic and Social Council (ECOSOC) and United Nations Conference on Trade and Development (UNCTAD) are two obvious candidates in this regard. At the same time, India should engage bilaterally with DAC to benefit from the expertise on project impact analysis and other practices to improve quality of delivery and introduce mechanisms for better assessment of Indian projects. Again, lessons may be learnt from the China-DAC study group for necessary course corrections.
Simultaneously, India should explore possibilities for trilateral cooperation with DAC and other partners from the South. It is also likely unavoidable that the emerging donors will coordinate more closely with DAC donors under a trilateral rubric in the future. The key challenges and gains to be made here will be in sharing complementary professional skills in the design and delivery of aid programming, as well as in the management of aid projects in areas of project finance and technology transfer. This could bring significant expenditure gains in “returns on development.”
(Sachin Chaturvedi is Senior Fellow, Research and Information System for Developing Countries. The views expressed are personal.)
Keywords: Indian development assistance, Development Partnership Administration, Economic Relations Division, Ministry of External Affairs, India aid agency
India through this programme should facilitate citizens of Afircan
nations enrich through knowledge and skills. Education, health and
infrastructure are chosen important areas on which we are resourceful.
On the whole sky is the limit and the limiting condition is only this:
India must grow fast and strong so that it generates far more
resources that can be deployed for the development of not only this
programme but also the Look East Policy. It would also do good if The
Hindu publishes op-ed articles from the academic community and its own
journalists on the scope and future of this project. Last but not the
least congrats to our government.
A refreshsing development. Should not end up like the Look East
Policy. What is the status of the officer heading this agency in MEA
for this is equally important. A white paper on the subject indicating
the plans for atleast the next two three years will greater public
interest enthusing the concerned adminsitrators. It is sad that such a
development has not been reported in the media and thanks to The Hindu
for reporting this. I do not agree with the pessimism shown by a
respondent above –small scale industries attuned to the conditions of
African nations will help the strengthening of the resources and
income level of the people. China has no doubt been doing quite a lot
in African antions but it was criticised on various grounds chief of
which was that they brought labour even for doing the menial jobs in
African nations giving little opportunity for local employment.
(continued)
It is good that India has begun aiding financially developing countries of Asia and Africa. Utmost care be taken by Government of India while chosing Managers for such schemes so that money is not laundered as is the case currently in most of Govt. departments/ agencies. Moreover, proper mechanism should be developed so that aid does not go astray in the recipent country.Aid activities be monitored from time to time by reputed Govt. agencies.
There are several economic opportunities that needs to be taped. India
is uniquely positioned with regard to issues of aid and development
and thus should ensure maximum utilization.
Economic diplomacy is the engine that propels the relationship of a country with its counterparts. To manage and channelise this outflow, creating a seperate body is a welcome move. Unlike assistance from other countries, India's help isn't exploitative, is unconditional and comes with no strings attached. This is a successful story of a receipient emerging as a donor.
The first sentence "For reasons quite inexplicable, an important
initiative of the government of India has gone completely unreported in
the media" is wrong. The DPA set up has been widely covered in the media
in both India and abroad.
Its nice to see Indian aid, and Indian values going out to the world. We do have
something to offer in these.
The small scale programmes in india were a grand failure because politicians and bureaucrats are not smart enough. The success in small
scale industries were inspite of the govt rather than because of the
govt. All the small scale programmes funded by the union govt and
every state govt are a failure.The small scale industries which were successful because they served the markets rather than follow the
diktats issued by bureaucrats and politicians. It is really sad that
we are passing our stupid small scale programmes to other countries
and make them suffer. Hope the people in africa find out truth
quickly. But they can follow the chinese because the chinese are
succesful.
India is still having starvation deaths. Why do they want to help other countries?
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