Politics of Aid Development

Why do we have foreign aid programs? 

• Strategic interests 

• Diplomatic relationships 

• Economic Objectives 

• Domestic political pressures

Who provides aid? A snapshot of western aid regime 

• International NGOS 

• National governments 

• The United Nations 

• Donor governments 

• Commodity organizations

According to Global Affairs Canada's 2026-27 departmental plan, spending reductions are being implemented through:

• Recalibration of international assistance programs 

• Alignment of development and security programming with strategic priorities 

• Broader expenditure reduction across global affairs Canada 

why has aid changed over time?

• The rise of religious fundamentalism 

• A return to economic nationalism 

• Populism 

• The refugee crisis 

• The environmental crisis 

• COVID-19

What is one of the key trends for the ODA

Official development assistance (ODA) volume reached a new high of USD 224 billion in 2023 for the fifth consecutive year primarily driven by increased aid for Ukraine and humanitarian assistance

ODA( Official Development Assistance) what does it include?

• Official sources 

• Public sector grants and loans 

Developmental 

• Usually long term 

Concessional 

• Grants and loans that have a grant equivalent

What does the ODA not include?

• Military assistance

• Nuclear energy 

• Peacekeeping 

• Private sector loans and transactions 

• Funds raised by private donations 

• Cultural programmes

“Grey Matter” : What ODA didn't used to include, but now does 

• Debt relief 

• Humanitarian and emergency relief 

• Including humanitarian relief efforts in conflict zones 

• Expenditure on refugee resettlement in donor countries 

• Financial support for LDC students in donor countries 

Different donor types 

DAC donors 

• Eg. global affairs Canada; UK department for international development 

“New” and emerging providers 

• Eg. china, India, Brazil 

Multilateral banks and organizations 

• Eg the world bank, the world food programme, the world health organization 

NGOS and foundations 

• Eg. CARE, save the children, MSF, Gates, Mastercard 

Non-DAC donors 

Reporting states 

• Turkey ( US $7.61bn) 

• Saudi Arabia ( $US2.12bn) 

Non reporting states 

• China ( US 2.94bn)

• India ($US 2.12 bn) </strong></span></p></li><li><p><span style="background-color: transparent;"><strong>Brazil ( 0s0.03bn) </strong></span></p></li><li><p><span style="background-color: transparent;"><strong>South Africa ($USo.03bn) 

 Where is the Chinese capital going?  On what terms? To which recipe NTS? 

Multilateral Banks and Organizations 

• United nations organizations 

• Eg. the united nations children's fund ( UNICEF), the united nations aids agnecy ( UNAIDS) 

International financial institutions (IFIS) 

• eg . World bank, IDA, the IMF, the asia development bank, the african development ban, the interamerican development bank, and the islamic development bank

Single purpose funds 

• Eg. the global fund for aids, tuberculosis and malaria; the global alliance for vaccines and immunization( GAVO ), the global environmental facilities ; the green climate fund ; and the intentional fund for agricultural development (IFAD)

ODA has 3 components

• Multilateral

• Bilateral

• NGOS

How ODA projections are calculated

• Government surveys

• Official government announcements

• Economic forecasts

Where foreign aid is distributed?

• particularly focusing on:

  • Least Developed Countries (LDCs).

  • Sub-Saharan Africa.

  • Healthcare and development sectors.

  • Multilateral organizations, such as international institutions.

What should policymakers do with ODA Cuts?

• Prioritize the poorest and most vulnerable countries, especially LDCs and fragile states.

• Avoid sudden aid withdrawals that could disrupt essential services.

• Coordinate funding reductions with recipient countries.

• Make remaining aid more effective and support development through trade, investment and other policies.

The UNSC (1945) 

5 permanent members 

P5= US, Russia, France, Britain and China - all have vetoes 

10 non permanent members 

(elected every year to 2 year terms) 

The Bretton Woods institutions 

• The international monetary fund  (1945)- 191 Members weighted voting 

• The world bank group (19450- 189 members, weighted voting 

• The world trade organization (1995)- 166 members

The Marshall plan (194*) 

• The united states provided over US $13bn (1.1-2% of GNI) for the recovery and reconstruction of europe 

• Precursor to the world bank - the international bank for reconstruction and development ( IBRD)

The Organization for European economic cooperation ( 194*) 

• Established to coordinate the delivery of European aid 

• US and Canada - observer states

The Truman doctrine ( 1949)

Print four speech linked the delivery of US foreign aid to the continent of communism 

Defending the core: US foreign policy 1945-1991 

• Protecting private property

• Maintaining trade with the Core 

• Avoiding military economic, diplomatic dependence on the Soviet bloc 

• Maintaining the international monetary system  

• Suppressing states that pose a threat to the capitalist world system 

What is the IMF?

• Founded in 1945 “ to faster global monetary cooperation, secure financial stability, facilitate  international trade, promote high employment and sustainable economic growth and reduce poverty around the world” 

• it lends and makes money lending

• Short term assistance for balance of payment problems 

• Apriasails of members countries 

• Technical assistance in fiscal and monetary policy

• Banker of last resort

IMF shareholders

• It has shareholders, 191 member states, shareholders

• The capital they provide to the bank 

• The special drawing rights ( ie euros, sterling, dollars) 

• Their voting shares - weighted voting

Americas role in the IMF 

Containment during the cold war (1945-1991) 

• Instrumental in managing the threat of communism, including “non aligned states” 

• Structural adjustment after the debt crisis of 1982- liberalization, privatization, deregulation, and public sector retrenchment” 

• Maintaining trade with the core ( most powerful countries)

How does the US control, The IMF?

Weighted voting 

Robert Wade

• The US treasury influences the IMF by approving the managing director and including bailout packages and loan recipients

• Wade argues that IMF policy has been  used to facilitate asset transfers to foreign owners and weaken domestic control over financial systems, reflecting the influence of wall street and the US treasury on IMF policy

What are the options for the US foreign policy instrument?

• Debt rescheduling and moratoriums

• Use inflation to “vaporize” dent

• debt to equity swaps

• Bankruptcy and asset restructuring

• Domestic savings and capital controls

 Development Assistance Group (DAG), 

The DAC has been the central forum for overseeing development aid among the world's major donor countries.

 Its membership consists of high-­ income countries that provide substantial volumes of assistance across borders, and its founding mission was to monitor and report these aid flows.

Main points from Malambos article study on Zambia

• Relationships between donor and recipient countries have historically been unequal. 

• The terms “donor” and “recipient” are themselves problematic, and I only use them here as illustrative of the power imbalances in aid relationships.

• Ownership is difficult to define

• Nomthandazo Malambo argues that country ownership is central to decolonizing international development, but traditional definitions of ownership must expand beyond administrative power and process control to explicitly center race and antiracismOS

Solutions proposed for Zambia

• Concrete Antiracist Reforms

• Not Just a "Seat at the Table

• Post-Aid and South-South Collaboration

• 
  

Hard Power examples

• Debt financing, advanced manufacturing, defense spending 

Why is China considered a threat?

It challenges the liberal intentional economic order 

The Asian International investment bank (AIIB) 

• The AIIB has 102 member and prospective member countries, including the UK, Germany, france, Italy, russia, India, South korea, Australia, brazil, Saudi Arabia 

• The United States and Japan have never been members 

• Canada joined the AIIN in 2018 suspended on 14 June 2003: until further notice”

The Global Security Initiative 

• Established in 2023 to provide “comprehensive security as a global public good” 

• “Focusing on dialogue and cooperation with regional organizations such ASEAN and the African union 

• Efforts to play the role of the peacemaker somewhat inconsistent with its support for Russia and its foreign policy ambitions in Taiwan and the South China Sea 

How has China enhanced Hard Power?

• Debt Financing

• Advanced manufacturing

• Defence spending

The Silk Road Fund

•  Established in 2014, state owned investment fund with over USD 40bn in investment finance 

• China development bank ( CDB) and the export import bank ( EXIM bank)

Deal sustainability framework 

Debt for commodities and collateral swaps to ease balance of payments crisis is primarily in the developing world 

Benefits of Aid ( BRI)

• BRI involves countries and regions that account for ⅓ of world trade and GDP and over 60% of the world's population 

• If completed, BRI could reduce travel times along economic corridors travel times along economic corridors by 12%, increase trade between 2.7% and 9.7% increase income by up 3.4% and lift 7.6 million people from extreme poverty 

What is driving Chinas BRI?

• The BRI seeks to re terrorize developmental spaces by connecting them via economic corridors consisting of hard and soft infrastructure networks 

The Benefit of “going out”

Raw Materials

New Markets

Geopolitics

How does The BRI address China's Problems of Capital accumulation? 

• Absorbs in or under used manufacturing capacity 
  
  

• Allows China to relocate unwanted domestic production faicclites abroad

What is the Belt and Road Initiative (BRI)?

• Launched by President Xi Jinping in 2013.

• A massive infrastructure and investment initiative connecting China with countries across Asia, Africa, Europe, and beyond.

• Includes construction of roads, railways, ports, pipelines, industrial parks, and telecommunications networks.

• China presents the BRI as a way to promote economic development, international trade, and cooperation.

 ECOSOC

Economic and Social Council of the UN

How Has NGOS changed over time?

More humanitarian crisis

Globalization of information, communication and low cost travel

Social Mobilization

increased spending on humanitarian aid

Outsourcing of humanitarian assistance

What are the problems of NGO led development

• NGOS as agents for donors

• NGOS as agents of intended beneficiaries

• Problems of accountability

• Coporte actors

5 metaphors for philanthropy/global power

Bridges

Satellites

Leapfrogging

Platforms

Interdigitating

What does the Satellite metaphor mean

apparently autonomous organizations that nevertheless remain intellectually or institutionally connected to philanthropic centers of influence

What is leapfrogging ?

The ability to bypass governments, political struggles or incremental institutional change in favour of supposedly faster, technocentric solutions

What does the Platform?

Ability to build insus titoins and networks form which preferred development ideas and policy models cna be disseminated and normalized

What is Interdigating ?

• embedding foundations within dense networks of public, private, and philosophic actors and investors, making philanthropic influence harder to isolate or challenge

What are some of the issues with Global Philanthropy

•  exercise disproportionate influence over international development relative to their formal authority or financial contribution 

• 
  

What was the main goal of the Green Revolution

•  raise yields through improved seeds, fertilizer, pesticides, irrigation and scientific expertise 

Chemical Fertilizers

• Introduced in the early 20th century taking the place of manure and “guano”

• Developed by german chemists fritiiz herber and Carl Bosch 

• Use ammonia to supplement nitrogen and phosphorus, making soil productive

High Yielding Varieties ( HYVS)

• Conventional cross breeding techniques involving rice, wheat and maize 

• Pioneered by norman borloug, a plant pathologist working on new varieties of disease resistant wheat after WW2 

• Awarded the nobel peace prize 1970

who controls the global food system?

Seed and pesticides: Bayer, Croteva and BASF

Global grain and commodity trading: ADM, Bunge, Cargill, Louis Dreyfus, and COFO international

Big Finance: Blackrock, Vanguard, State Street + other institutional investors, holding stakes across multiple hard food corporations, creating horizontal financial linkages across firms that otherwise appear to compete 

What is an example of the Bridges metaphor?

• impact investing

• blended finance

• development impact bonds

• venture philanthropy

• private investment in development projects.

What is a technocratic solution?

Treats development problems as things that can be solved through: experts, technology, data, management, investment and scientific solutions.