Development Cooperation and Aid Effectiveness in Asia

January 19, 2011

By Anthea Mulakala

In November 2011, Korea will host the Fourth High Level Forum on Aid Effectiveness (HLF4). The HLF mechanism was established by the Organization for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC) to take stock of donors’ progress on their commitments to the Paris Declaration on Aid Effectiveness. The Paris Declaration outlines a set of principles and indicators for delivering more effective development assistance. Signed by over 100 donor and developing countries, it is regarded as an important benchmark of aid commitment and development success.

HLF4 is significant for several reasons. First it is being held for the first time in Asia. Previous high level events have been held in Europe, and HLF3 was held in Accra, Ghana. Second it will be hosted by Korea, one of the newest members of the DAC and the first former aid recipient country to join the DAC. Third, the international development landscape has become increasingly complex with new players populating the field, contributing their resources and approaches to development cooperation. These include private sector foundations like Bill and Melinda Gates, issue-specific vertical funds like the Global Fund for AIDS, Tuberculosis and Malaria, and rising non-DAC donors like India and China. Indeed, many feel that the current international aid architecture needs to evolve to embrace and maximize the value of these new forms of cooperation.

In Seoul in December 2010, the Korea Development Institute and The Asia Foundation jointly hosted the first in a series of dialogues focusing on Asian approaches to development cooperation. The dialogues bring together experts and development cooperation officials from Korea, China, India, Malaysia, Singapore, and Thailand to contribute the Asian experience of development cooperation to the ongoing dialogue on aid effectiveness leading up to HLF4.

The Seoul meeting revealed several common features of development cooperation across this diverse group of Asian donors. First, though often characterized as new or emerging donors, many of these countries have a long history of development cooperation that has simply fallen under the radar of traditional aid frameworks for many years. India, for example, has been providing technical assistance and training to third countries since 1964. China has been aiding Africa since the 1950s. Malaysia’s Technical Cooperation Programme has been in operation since 1980.

Second, these countries share the unique experience of being both aid recipients and aid donors, often simultaneously. This unique experience provides them with a unique understanding of other developing countries and has shaped the partnership philosophy and delivery of aid by these donors. In particular, these Asian donors emphasize the importance of country ownership, country-led development cooperation and respecting the sovereignty of their partner countries with few conditionalities or strings attached. “Aid” is rarely used in their terminology, and they view their approach as distinctly non-western and free from a colonial psyche.

Third, these countries wish to share their own success as an alternative path for developing countries. Korea’s “developmental state” model used ODA to help transform the country from one of the poorest in the world to an Asian tiger. Similarly, Singapore’s investment in human resources transformed the natural resource-poor city state into an economic wonder in the two decades following its independence in 1965. As a result, training as capacity building is a common type of bilateral assistance across these countries. All six development cooperation programs invest heavily in providing training and technical advice that draws on the experience of their own development success.

Fourth, development cooperation tends to be more explicitly tied to economic and foreign policy objectives with these Asian donors than it is with traditional donors, such as the UK, whose development agenda is explicitly poverty focused. Not surprisingly, the largest recipients of Indian assistance are Nepal and Bhutan. In the 1990s, China made an explicit choice to focus its aid on African countries, to promote both African development and mutual economic benefits. Thailand has concentrated its assistance on its neighbors as a tool for foreign policy and regional integration. Malaysia’s fourth Prime Minister, Mahathir Mohamad, used the country’s technical cooperation program as a means of strengthening the collective self-reliance of southern countries as a counterweight to western influence. This multi-objective orientation has resulted in complex “aid management” in these countries. While Korea and Thailand have dedicated “aid” agencies, India, Malaysia, Singapore, and China do not. With or without dedicated agencies, cooperation is often managed through multiple government departments.

Looking forward to HLF4 in Busan in 2011, what are the implications of this new development landscape?  While five of the six countries (all except Singapore) have signed the Paris Declaration, most signed as aid recipients rather than aid donors. And while Korea joined the DAC in 2010, India, China, and Singapore may not be as interested in joining, believing that a one-size-fits-all aid architecture and the emphasis on delivery mechanisms is not relevant to their modes and objectives of cooperation. These new donors and others may challenge the status quo at Busan by calling for a more inclusive approach to “development effectiveness” that embraces the principles of cooperation as practiced in South-South partnerships. Over the next 10 months in the run-up to HLF4, KDI and The Asia Foundation will work to provide a forum for these Asian donors to articulate their views and consider options for a more inclusive dialogue in Busan.

Anthea Mulakala is The Asia Foundation’s country representative in Malaysia and regional advisor for donor relations. She can be reached at [email protected].

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