From Recipients to Donors

Emerging Powers and the Changing Development Landscape

Doctor Emma Mawdsley

• Publisher: Zed Books
• Year: 2012
• ISBN:
  9781848139497
• Edition: 1
• Topic: Economía
• Subtopic: Economía política

From Recipients to Donors examines the emergence, or re-emergence, of a large number of nations as partners and donors in international development, from global powers such as Brazil, China and India, to Gulf states such as Saudi Arabia, to former socialist states such as Poland and Russia. The impact of these countries in international development has grown sharply, and as a result they have become a subject of intense interest and analysis. This unique book explores the range of opportunities and challenges this phenomenon presents for poorer countries and for development policy, ideology and governance. Drawing on the author's rich original research, whilst expertly condensing published and unpublished material, From Recipients to Donors is an essential critical analysis and review for anyone interested in development, aid and international relations.

1 | Contexts: the rising powers and mainstream foreign aid

This book is about the opportunities and challenges raised by the growing numbers and visibility of a diverse spectrum of official foreign aid donors and development cooperation partners. In order to understand the changes that are reverberating through the aid and development sectors, and the extent to which these are impacting beyond these arenas, we need to set them within their wider contexts. The first part of this chapter therefore sketches out some of the epochal shifts in global power being driven by the emerging powers – trends that are predicted to deepen over the next years and decades, even if their exact contours remain uncertain.

The second half of the chapter examines contemporary patterns and trends within ‘mainstream’ foreign aid, focusing on those elements that are especially relevant to the rise of the (re-)emerging development partners. After an overview of the ways in which aid is formally defined and theoretically positioned, we examine the new millennial aid paradigm, or Paris Agenda as it has come to be known. Initially DAC-led, this rapidly became a wider process intended to improve the effectiveness of foreign aid in achieving monitorable development outcomes. However, as we shall see, the Paris Agenda appears to have had limited success to date, and for this and other reasons the ‘global consensus’ is presently in a state of considerable flux. The ‘rise’ of the non-DAC donors and development partners is one of several factors contributing to uncertainty and change in contemporary aid governance.

Changing global geographies of wealth and power

In 2003 Goldman Sachs released a startling set of predictions about how four emerging economies – catchily termed the BRICs (Brazil, Russia, India and China) – would compare to those of the G6 (France, Germany, Italy, Japan, the UK and the USA) over the next few decades. They calculated that by 2025 the BRIC economies would be over half as large as those of the G6 combined, and by 2040 they would have overtaken them (Goldman Sachs 2003). While Goldman Sachs analysts were by no means the first to project tremendous shifts in economic power, their intervention was particularly effective at catching world attention. These claims have of course been extensively reviewed and critiqued. Like all scenario modelling they rely on assumptions and calculations that can be teased apart and queried, while events like the most recent global financial crisis will impact on the predicted tends (Copestake 2010). Analysts have pointed to underlying weaknesses within individual BRIC countries, such as India’s enormous burden of poverty and China’s ageing population, and the fact that behind the convenient label, Brazil, Russia, India and China have very different resource endowments, political systems, demographic futures and strategic interests (Armijo 2007). As with any grouping of countries, their agendas may clash and their futures diverge. Åslund (2010), for example, argues that Russia should not be included within this grouping given an older and declining population and a less dynamic economy (see also Scott et al. 2010).¹ In the meantime, the formal grouping has expanded – South Africa was invited to the third BRICs summit in China in 2011. But while the degree of change may be debated and future scenarios are certainly open to discussion, the vast majority of commentators across the world recognize that the pattern of Western domination that emerged in the eighteenth century and which prevailed over the nineteenth and twentieth centuries is being challenged. To take just one example:

Trade between developing countries, and between them and the BRICS, is rising twice as fast as world trade. Even more strikingly, while growth has headed south, debt has headed north, the opposite of what happened in the 1970s and 1980s, when poor countries ran up vast debts. Gross public debt in the rich countries is rising, from about 75% of GDP at the start of the crisis in 2007 to a forecast 110% by 2015, says the IMF. Public debt in emerging markets is below 40% of GDP and flat. (The Economist 2010: 69, cited in Sidaway 2012)

The BRICs are central to this shift but they are by no means alone. In 2009, Robert Ward of the Economist Intelligence Unit coined the acronym CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), identifying them as second-generation emerging powers with young populations, decent growth rates, emerging middle-class consumer markets, diversified economies, and reasonably robust financial systems. In a discussion that is pertinent to the more specific focus of this book, Schulz (2010a: 1) suggests that the CIVETS constitute a ‘third wave’ of development players, noting that they bring ‘a new wave of development partnerships that go beyond the rich-poor logic and promote South-South knowledge exchange and peer-to-peer learning’.

Other countries that have been described as emerging powers include Argentina, Chile, Hungary, Malaysia and Poland. As we might expect, then, there is no consensus on which countries constitute the rising or emerging powers. Political scientists, international relations theorists, military strategists, credit rating agencies, financial institutions, investors and private sector firms all have different and varied criteria (Jaffrelot 2009). The more powerful of these countries, which despite low per capita incomes have large and rapidly growing economies, are at the leading edge of the challenge to Western dominance, including in the field of development cooperation. Many smaller countries are providing numerical weight and more voices in the struggle, although the positioning of individual governments depends on the issue at hand. Arenas include the various bodies of the United Nations, the World Trade Organization, the IMF and the World Bank (Woods 2010). In a speech given to the newly established China–Africa Cooperation Forum (FOCAC) in 2000, the Chinese president Jiang Zemin critiqued the uneven experience of globalization, and asserted that developing countries (with which China somewhat problematically identifies itself) must therefore act together to:

strengthen co-operation and consultation on multilateral institutions such as the UN and the WTO, so as to safeguard the common interests of the developing countries … [and] co-ordinate positions on reforming multilateral economic and trade regimes and formulating new rules, with a view to increasing the collective bargaining capacity of developing countries and make efforts towards the democratisation of international relations and the establishment of a just and equitable new international economic order … The Ministers agree to work for the reform of the United Nations and particularly the UN Security Council that will be geographically representative.²

This is not the first time that alliances of weaker countries have attempted to contest and restructure world power relations. The Non-Aligned Movement, with its origins in the 1950s (discussed in more detail in Chapter 2), has sought to create a collective platform from which ‘Third World’ and other countries could assert their right to economic and political sovereignty. The call for a New International Economic Order (NIEO) in the 1970s was another attempt to correct the excessive dominance of the industrialized nations, and in particular improve the terms of trade and the value of primary commodities for the poorer countries.³ As well as these more defined movements and moments, throughout the course of the twentieth century Southern and Gulf nations have sought to influence global governance regimes as best they can, with variable success, to shape a world order that better reflects their interests (Braveboy-Wagner 2009; Alden et al. 2010). More recently, Central and Eastern European states have been actively engaged in attempts to reorient European Union agendas, priorities and approaches ‘eastwards’, with notable successes in some contexts (Lightfoot 2010).⁴

What has changed in the new millennium is the growing economic leverage behind the emerging powers (Nel and Stephen 2010). For the first time in the post-war period, some have enough economic weight to demand rather than request change, and more so when they act together. However, there are still many hurdles to confront – including resistance from Western states, the concerns and suspicions of smaller countries, and the substantial barriers to working cooperatively (Taylor 2009). Moreover, in some contexts and on some issues the leading emerging powers are increasingly aligning with the existing power structures, sometimes at the expense of their solidarity with less powerful countries. As we shall see in Chapter 6, the superseding of the G8 by the G20 signals the reality of a more multipolar economic world, but the inclusion of the large emerging economies doesn’t necessarily mean that the interests of the majority of poorer countries are assured. Just as the emerging powers don’t share the same interests and agendas with each other, so too the relationships between the emerging powers and poorer states are not necessarily aligned in all matters. For example, notwithstanding the various claims by some of the large Southern states to leadership and solidarity with other low- and middle-income countries (articulated in Jiang Zemin’s statement above, for example), in fact they represent a variety of opportunities and threats for poorer and smaller countries. Moreover, it is critical to distinguish between poor countries and poor people. The latter are present, if in different proportions, in all countries. The USA has the highest poverty rates in the OECD; and although the G20 countries account for 90 per cent of the world’s GDP (Fang 2010), they also house 58 per cent of the world’s poor (Sumner 2010; Wissenbach 2010; Glennie 2011a). Alliances and strategies that may suit the governments and elites of poorer countries are by no means guaranteed to suit different poor and marginalized groups within them (Prashad 2008; Taylor 2009). Finally, notwithstanding the major shifts under way, we should be careful not to exaggerate the degree of change – Nye (2011) observes that the West still commands military dominance, but also a substantial share of global trade, capital and multinational firms (see also Frynas and Paulo 2007).

To help analyse these complex interrelations we can draw upon the Asian Drivers framework (Institute of Development Studies 2005). Although this framework was originally formulated to examine the regional and global impacts of the Indian and Chinese economies on poorer countries, we can extend its analytical approach to the broader resolution of the emerging powers (although we should note that the sheer size and power of China and India make them distinctive global actors). As well as the other Southern emerging powers (such as Brazil and South Africa), for the purposes of this discussion I include the powerful Gulf states, Russia and Central and Eastern European donors.

The Asian Drivers framework The emerging powers are now effectively the engines of global economic growth, as investors and markets, and as producers of goods and services (Goldstein et al. 2006; Aycut and Goldstein 2007; Kaplinsky and Messner 2008), and this economic muscle is underpinning growing global influence in the structures of power. But while there has been considerable discussion and analysis of the implications, opportunities and risks for the industrialized economies, researchers at the Institute of Development Studies have sought to address the neglected question of the impacts for the rather differently situated poorer countries of the world.

In order to get a stronger analytical purchase on these emerging patterns and trends, the Asian Drivers team devised a framework which addresses four key vectors of impact: production and trade flows; financial flows; environmental spillovers; and global and regional governance. They then disaggregated the impacts across two axes: direct/indirect and competitive/complementary. Direct impacts arise from bilateral economic flows and political relations between two countries. These include, say, the import of affordable consumer products from China; a growing market for commodities and resources in India; or investment in bauxite mining or agricultural processing. Indirect impacts, on the other hand, are experienced in third-country or global settings. They arise from the broader reverberations that the rapid growth of India and China are having around the world. For example, the extraordinary competitiveness of the Chinese manufacturing sector has changed the conditions for domestic manufacturing for many other countries, rich and poor (Kaplinsky 2005). Many textile and garment manufacturers in Kenya, for example, find themselves in competition with China in selling to the EU, and often can’t match its economies of scale and other advantages (although alternative opportunities may also open up in Chinese markets for Kenyan textiles: Kamau and McCormick 2011). Another indirect impact is on commodity producers of oil, minerals, timber, biofuels and food crops – exporters are profiting not only through demand from surging emerging economies themselves, but also from the higher world prices driven by the economic dynamism of the Asian Drivers/emerging powers.

As these examples suggest, both the direct and indirect impacts of the Asian Drivers/emerging powers can be complementary or competitive to other countries and groups within them. This constitutes the second axis of the framework. Thus, consumers may benefit from affordable Chinese manufactured goods, but workers may lose their jobs as manufacturing units and investment relocate to Special Economic Zones in Guangdong province. Some states may feel they benefit from India’s strong line on climate change in international negotiations as it demands that the West take up a full and fair share of its responsibilities; whereas more vulnerable island states and many drought-stricken African countries may wish for a more cooperative approach which focuses on rapidly addressing greenhouse gas mitigation efforts. Urban elites may benefit from accelerated resource extraction, energy infrastructure and investment opportunities, whereas small farmers and pastoralists may lose their lands, or suffer from the pollution and environmental degradation that all too often accompanies industrial growth.

The Asian Drivers framework is helpful to this analysis of the (re-)emerging development actors because it captures some of the complex dynamics of changing international relations, pointing to plural and heterogeneous impacts for different sectors and social groups within and across different countries and contexts. Specifically, it can be extended to think through the direct and indirect impacts of the new geopolitics of aid and development cooperation, and how these may bring opportunities but also costs and challenges for different countries, sectors and groups. As we shall see in future chapters, certain elements of development cooperati...

Table of contents

• Cover
• About the author
• Dedication
• Title
• Copyright
• Contents
• Tables and boxes
• Acknowledgements
• Abbreviations
• Introduction
• 1: Contexts: the rising powers and mainstream foreign aid
• 2: Histories and lineages of non-DAC aid and development cooperation
• 3: The (re-)emerging development partners today: institutions, recipients and flows
• 4: Modalities and practices: the substance of (re-)emerging development partnerships
• 5: Discourse, imagery and performance: constructing non-DAC development assistance
• 6: Institutional overtures, challenges and changes: changing development governance
• 7: From aid to development effectiveness and New Global Partnerships
• Notes
• Bibliography
• Index