The contemporary form of foreign aid emerged in response to a dramatically changing global political and economic milieu since the end of the Second World War (1939–1945). The war-torn Europe was on the verge of collapse and there was an urgent need for economic reconstruction of the European countries for their recovery from the catastrophe. This led to the introduction of the Marshall Plan 1 by the US in 1948. While the key concerns that guided the US to give foreign aid to Western Europe were the containment of Communism, getting access to natural resources and raw materials, and gaining a prominent role in the global trade and investment system, altruistic claims of the US helped them mobilise support from a wide spectrum of political opinion both at home and abroad (Tarp 2006, 26). The motives behind the US aid could therefore be characterised as multifaceted.
After the success of the Marshall Plan, the attention of the industrialised developed countries turned to the developing countries, many of which became independent in the decade of 1960s. The aid policy during this period was framed in the context of Cold War. Later, the provision of development assistance to poorer countries came to be considered as a taken-for-granted function played by all major Western democracies (Alesina and Dollar 2000). With the Marshall Plan began the legacy of the foreign aid programmes and aid transfers from the developed to the less-developed countries. Eventually, the North to South flows of money and resources came to be understood as an established feature of the international political economy (IPE), and the international aid architecture became a new theatre of power play between countries.
The idea of international aid architecture being exclusively a North to South flow of resources is being challenged by those countries of the Global South that are providing development assistance to other developing countries. Some of these countries despite being recipients of Western aid have been providing development assistance to their peers for more than six decades. This dual role of a recipient and a donor is played by many countries in the Global South including, China, India and Brazil. Even though their development assistance volume and scale are much smaller than the traditional donors, they have been involved in development assistance for as long as the developed countries. What is new is that these countries have increased their development assistance budgets and scope, thereby receiving much greater attention from both the Western donors and also from the recipient countries which have got more choice when it comes to donors. These developing countries are repositioning themselves from recipients to that of “providers” of development assistance, thereby endorsing and further strengthening South-South Cooperation (SSC). Even though the emerging powers are making a mark in international development through their changing roles and identities, some of them prefer not to join the traditional donors club of the Organisation for Economic Cooperation and Development (OECD)–Development Assistance Committee (DAC) and continue to maintain their Third World/ Southern identities. This book analyse the role of emerging powers as development assistance providers, their growing assistance to the Global South, their changing identities and motivations, and its overall impact on international politics.
Emerging Powers in Global Power Transition
It is the continuous struggle for power that defines international politics. The relation between countries is driven by their struggle for power in the international system (Liska 1960; Baldwin 1966; Morgenthau 1962). The nature of competition among states is continuously changing in the wake of increasing economic competition between them, thereby changing it from competition for control over territory to competition for market shares in the world economy (Strange 1995, 55). In the present scenario of economic globalisation, the chances of major wars are more or less diminishing and the possession of nuclear weapons has made wars much more dangerous and costly affair. The use of military force has, therefore, become less enticing and the use of economic instruments has become more alluring to countries seeking power shift in the international system. Strange (1995) finds growing prominence of industrial and trade policy over defence and foreign policy.
With the rising prominence of emerging powers in the international system, there are growing concerns on the changing contours of power, which seems to be shifting in favour of the emerging economies. The power structures in international politics are in constant flux, where emerging economies are gaining more traction, especially in terms of economic power which they want to translate into political influence. This power shift was increasingly evident with the high economic growth achieved by the Asian economies in the twenty-first century, especially China and India. This power transfer is taking place not just from the North to South but also from the West to East (Hoge 2004; Layne 2012). Depending on their interests and based on the issues, emerging powers are trying to create changes in the international system, which could in turn help them rise in the emerging world order. As the case may be, they are also trying to maximise their gains by taking up different roles that can cater to their aspirations and interests. The emerging powers are making their presence felt in areas that were traditionally considered as the domain of the developed countries of the Global North.
Foreign aid is an important economic instrument through which the emerging powers are trying to wield influence in international politics. Here, they are not directly challenging the international aid architecture created by the traditional donors; instead, they are slowly making inroads into the system. With the developed countries in the world increasingly looking inward and cutting down on their aid commitments, the void left by them is being filled by the emerging powers that are bringing in new dimensions and scope into foreign aid architecture. Even though some of these countries have a strong disagreement over OECD’s definition and principles on foreign aid, they are not keen to reform the international aid architecture created and maintained by the great powers. Instead, they are trying to make their aid look like independent but complementary to the existing foreign aid architecture. Hence, challenging the existing system is not in their immediate interest. As Randall Schweller (2011, 287) puts it, current system is in a state of “time’s entropy” in which “the old architecture is becoming creakier and more resistant to change. New rules and arrangements will be simply piled on top of old ones”. Hence, it is not great power conflict or a great power concert that would change the international order, but a time’s entropy (Schweller 2011). The emerging powers choose not to be the direct challengers of the existing system, unless challenged by a great power in its core area of interest. Though their efforts are focussed on creating greater economic and political clout, they aim to achieve it through economic instruments that can assist them in the process of power transition in a hierarchical international system. The experience of the emerging powers as recipients of aid has made them realise that foreign aid helps to buy influence and is a useful tool in delivering policy outcomes from the recipients (Liska 1960). This understanding has helped the emerging powers in creating their own aid programmes for the Global South, based on the principles of SSC. Susan Strange argues that an effective way to change the current hegemonic order is to bring together “Latin American, Asians and Africans who share some of the same interests and concerns for the future” (Strange 1995, 71). By expanding their aid to the developing countries in the Global South, the emerging powers are trying to lead these countries. While several motivations drive emerging powers’ assistance to the Global South, one important factor driving their assistance is their realisation of the power of aid to change the global distribution of wealth (Strange 1995). Hence, the emerging powers are looking forward to power transitions at both systemic and state levels through their foreign aid to the Global South.
Emerging Powers and Development Partnerships
Various terminologies have been used by the traditional donors to denote developing countries of the Global South who give development assistance, including non-DAC donors,2 non-traditional donors,3 emerging donors,4 new donors5 and re-emerging donors.6 However, these countries themselves do not agree with these terminologies and have officially declared their discomfort at being called as donors, which they consider a Western construct. Most of these countries conside...