India: aid donor or development partner?

Development Policy,Inclusive Politics04 Mar 2013Peter Konijn

In January 2012 the Indian government formally established the Development Partnership Administration (DPA) within the Ministry of Foreign Affairs, with a mandate to coordinate India’s overseas development assistance. 

The DPA is currently staffed with 20 professionals responsible for overseeing the complete project cycle including monitoring and evaluation, for India’s aid projects. The DPA has been in the making for quite some time. In 2007 an attempt to establish DPA failed because of a lack of agreement between the Ministries of Foreign Affairs and Finance on the location of the proposed agency.

The creation of the DPA signals the emergence of India as an international aid donor, which is consistent with India’s new-found status as a BRIC country and its recent transition from a low income country to a middle income country. However the Indian government has consistently refused to use terms as aid or donor when it refers to its overseas assistance, because it wants its development assistance to be seen as different from existing development aid. In the eyes of many Indians in- and outside of government, traditional North-South development aid has failed to deliver on its promises.

The basic reason for its failure is believed to lie in an unequal donor-recipient relation. This relation generally lacks ownership on the recipient side, is driven by donor interests and views and meddles in internal affairs. The new government agency therefore carries the name of development partnership instead of development assistance or aid. A second reason for not using the term development aid is rooted in domestic politics. To put it simply: there is little to no public support for development aid. Why should India aid other developing countries as most of the world’s poor live inside its own borders? Public spending in India on health and education is still amongst the lowest in the world, so why spend money on poor people elsewhere?

India’s development assistance is therefore couched in a discourse of mutual benefit and economic cooperation. It is justified because it generates economic benefits for India and not because it contributes to poverty alleviation in the partner country. This is not to say that it does not lead to poverty alleviation, but simply that it is not a stated goal. The discourse on mutual benefit and economic cooperation has deep historical roots in the Non Alignment Movement of which India under president Nehru was a big supporter.

India uses development assistance, like all other countries, as a tool of foreign policy. There is nothing special about that. Its discourse is however radically different from the Western discourse on development aid. India’s discourse is shaped by its own experiences with development assistance, the wish to distinguish from the practices of traditional OECD/DAC donors and the need to justify overseas spending in the domestic context of widespread poverty.