Emerging donors that might change the game

Urwah Saari

Urwah Saari

AUSPICE Malaysia

This week, we expand the discussion into wider sphere, focusing on emerging donors in international development assistance. Apart from traditional or established donor members in OECD Development Assistance Committee (DAC), the emergence of China, the United Arab Emirates, Saudi Arabia, Korea, Venezuela, India, Kuwait and Brazil, among others in recent years has changed the ‘economic and political game board’, which has been dominated by the OEDC DAC. In our key reading material, Ngaire Woods states that it is approximately USD 100 Billions of aids were spent by these emerging new donors, which he cites Moises Naim opined that huge amount of money spent as generous but toxic. Perhaps Woods seems to be biased in his generalisation that these emerging donors are much as the same as those established donors, nevertheless what only matter to the receivers is how much local interests can be realised by that foreign aid. Whether they are to be utilised at the interest of the government or regime of the country, or to serve hidden agenda of the donors remain in heated debate.

Foreign aid has been used as political intervention mechanism by United States and it oftens justified through media propaganda

Woods suggests that emerging donor especially China provides unconditional support of rogue states such as Sudan and Zimbabwe, however established donor such as United States has been involved in providing aid to Afghan insurgent groups during Soviet’s invasion at the end of 1970. The US was aware that Soviet’s progression to world dominance would reach one step ahead should Afghanistan fall into their control, therefore at all cost, providing financial aid to insurgent groups was the US best indirect intervention to hold Soviet progression and perceived as simplest way to pursue political agenda.

Tanzania-Zambia Tazara Railway project was single largest foreign aid by China and perceived as symbolism of Chinese support for African newly independent countries

There is some opinion that perceives foreign aid as indirect new imperialism, to certain extent able to put the sovereignty of receiving state into question.  While some donor countries  seem to be “sincere” through their unconditional aids, nevertheless we often see that these donors had hidden interests. While it seems unfair to judge motives of the new donors, no one could able to reject that in the world full of competition, every investment should have return.  UK finally ends it aid to India last year, after few years growing debate over whether India should no more receive UK’s aid whilst India is also an emerging donor and it GDP has leaped to 7% compared to UK itself, especially after aFrench company won a $15 billions military mega deal, snubbed UK’s offer. If UK expects it aid to India as investment for future inter government economic deal, definitely India is no longer need it. Critics therefore suggest that aid should be channelled directly to the poor people, via established civil group and NGO.

When I mention earlier on foreign aid might put sovereignty of a country into question, it may perfect to fit into this discussion after Najib Razak Prime Minister of Malaysia was allegedly of receiving huge amount of money, believed to be close to $700 millions directly into his personal bank account. At the time his administration is facing allegations of misconduct of national’s investment arm 1MDB, abuse of power in $1.25 billion submarine scandal and interference of judiciary and legislative has made Mr Najib vulnerable and fragile leader. It was finally discovered that $700 millions money was considered as gift from undisclosed Saudi royal family for his election campaign in 2013, which Gardner suggest according to his source that Saudi is concern over Muslim Brotherhood’s influence in Malaysia. No body able to provide the reason behind the gift, however with rising concern over his credibility and transparency, Mr Najib may have condemned his country’s sovereignty at stake but he willing to take in order to survive.