Thursday, April 26, 2012

Does aid to Africa from Brics countries differ from traditional aid? | Jonathan Glennie | Global development |

In the new scramble for Africa, emerging economies insist their aid motives are not those of the west – but African nations should still beware
MDG : BRICS leaders meeting
MDG : China in Africa : Chinese labourers working on electrical grid in Bata, Equatorial Guinea
Chinese labourers work on a project in Bata, Equatorial Guinea. Photograph: Abdelhak Senna/AFP/Getty Images
It is not original to remark that there is a modern-day scramble for Africataking place. Economic growth averaging around 5% on the continent for the past decade is certainly good news compared with two decades of increasing poverty. But on the other side of the coin are the reasons for that growth: the large-scale export of commodities with no clear industrial or institutional benefits. "Jobless growth", the source of the uprisings in north Africa, is the norm in Africa, and although manufacturing exports quadrupled to over $100bn in the last decade, manufacturing is actually declining as a proportion of GDP from a fairly stable 17% between 1965 and 1990 to 13% today.
Clearly African countries need to think hard about their development strategies and how best to take advantage of the changing global context. Is the ever-growing interest in Africa's land and resources its route out of poverty, or are we seeing dependency theory in action, with resources being extracted with little resembling sustainable development left behind? A recent article on the impact of oil wealth in Chad bears out this complex picture.
Although trade and investment will ultimately be far more important, a changing African aidscape will also play a part in the continent's future. What is the role of aid in this context? What are its motives? And are some aid partners better than others?
The US secretary of state, Hillary Clinton, certainly seems to think so, urging poor countries at an aid conference in Busan, South Korea, to "be wary of donors who are more interested in extracting your resources than in building your capacity". It is hard to imagine a more absurd statement from a US official, given the country's leading role in previous scrambles for Africa – not to mention its weak record (with other donors) of "building capacity" over more than 50 years of aid-giving. From the cold war to aid conditionality supporting its own interests, to the pouring of money into the Horn of Africa after the 9/11 attacks, the US pretty much wrote the book on how to use aid to ensure strategic interests. Clinton should remember John Kennedy's assertion in 1962: "Aid is a method by which the United States maintains a position of influence and control around the world … I put it right at the top of the essential programmes in protecting the security of the free world."
While Clinton tries to deny reality, the Brics countries are engaged in their own propaganda, claiming their "south-south co-operation", which often explicitly links aid with trade, places a new emphasis on mutual benefit, solidarity and self-reliance. Are they right? Many African leaders appear to think so. According to Ethiopia's prime minister, Meles Zenawi: "China, its amazing re-emergence and its commitment for a win-win partnership with Africa, is one of the reasons for the beginning of the African renaissance."
Brazil, another Brics country, is at the forefront of the south-south rhetoric, insisting that far from eschewing capacity building, as Clinton claims, its co-operation is entirely focused on it. But Brazil's trade with Africa, which grew five-fold between 2002 and 2009, follows distinctly colonial patterns, as Padraig Carmody says in his book The New Scramble for Africa – Brazil exports manufactured goods and food to Africa, while Africa provides Brazil with oil and coal.
So where does the truth lie?
First, the OECD's development assistance committee (DAC) and Brics categories are not necessarily that useful – neither is a homogenous group. Brazilian aid has little in common with Chinese aid: it is relatively miniscule and focuses on technology and capacity, while China's huge aid budget funds infrastructure. Russia is totally different again, and South Africa is still close to irrelevant in aid terms, with a budget of under $100m. Nor does Norwegian aid resemble US aid in any significant way, despite signing up to the same DAC ways of working.
In some important ways it can be more useful to separate western (US and Europe) style aid from eastern (Korean, Japanese and Chinese). The latter are generally less interested in policy conditionality and more focused on infrastructure, while the former have a strong tendency to conditionalise aid, while focusing, at least in the MDG era, on social sectors. Of western donors, only Germany spent more than 15% of its aid on infrastructure in 2009-10, while South Korea and Japan both spent over 40%, and China 60%.
The appearance of China, India and Brazil on the scene, coupled with the dire problems in western economies, has transformed the political landscape. These three countries, along with South Africa, are steeped in an anti-imperialist tradition and ideology that promotes self-reliance and partnership over the faux charity of colonial powers, which give with one hand and crush with the other. They also have a greater familiarity with the political and economic conditions of developing countries, probably an advantage both commercially and in terms of promoting development.
Their growing prominence is a welcome balance to the deeply ingrained arrogance of western donors. However, this difference can easily be exaggerated. India and China are clearly using aid money to achieve political interests and economic advantage, in similar ways to traditional donors. China insists its partners ditch recognition of Taiwan, and its spending in Africa is heavily focused on resource-rich countries such as Sudan. India uses credit lines to promote its exports and focuses on the energy sector, as the world's fifth-largest energy consumer. Even South Africa, once the cause celebre of anti-imperialism, has become something of an imperial presence in many less powerful countries in Africa. According to Unctad, over 50% of foreign investment in Botswana, the Democratic Republic of the Congo, Lesotho, Malawi and Swaziland comes from South Africa. As it grows in power, it is more than likely that its new aid programme will come to the service of such strategic investments.
Is foreign investment vital for growth, or a tool for resource extraction? Is aid solidarity or bribery? All donors, DAC or Brics, old or new, have mixed motives – part goodwill, part strategic interest. African countries would be foolish to believe the rhetoric of traditional or emerging partners, and should base their aid management strategies on a realistic assessment of the incentives and intentions of all entities that arrive at their airports bearing gifts

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