Thursday, 24 July 2014

How is China changing the international donor landscape?

With the establishment of the BRICS Bank, plans for which were being consolidated at the recent BRICS Summit, and the Asian Infrastructure Development Bank, South-South collaboration is changing the global development architecture.

At the same time, these new development banks will have a complementary role by providing additional loans to developing countries with enormous infrastructure investment needs. The creation of these institutions is can be seen one aspect of South-South cooperation, and also part of a wider process of fragmentation of development cooperation.

For emerging development partners, this form of engagement is distinctly different to  traditional donor-recipient relations, who often focus on the Paris Declaration, and emphasise issues such as the use of national systems and un-tying of aid.

Credit: GovernmentZA (CC BY-ND 2.0)
South-South cooperation focuses on a different set of principles, including equal partnerships, respect for national sovereignty, and non-interference in domestic affairs or recipient countries. Other characteristics of South-South cooperation are that aid should be mutually beneficial (which is often translated as “tied aid”), whereby development funds are channelled to domestic firms from donor countries.

China’s Growing Role in Africa

The expansion of South-South cooperation has provided additional development opportunities for Africa. Indeed, China has become a key driver of growth in Africa. Together with an improved policy environment in Africa, this has led to the branding of Africa as the “emerging continent” with an average growth rate of nearly 5 per cent in 2013 and possessing three of the ten fastest growth economies of the world.

China is not only investing in the extractive sectors, but Chinese SMEs are also becoming more active in African markets, which demonstrate the business opportunities on the continent. However, it should be emphasised that it is the responsibility of African governments to translate this growth into sustainable development and poverty reduction.

It is clear that there are clear complementarities between the development modalities of traditional donors and China, although this would require strong and effective leadership from aid recipient countries. One good example of how different aid modalities can be effective in building value chain production process and expanding the manufacturing base , which could be supported through infrastructure development financed by China, while overall competitiveness will be supported by policy reforms through a budget support operation by traditional development partners.

China, Africa and Triangular Development?

These kinds of complementarities are also reflected in the triangular development cooperation models, which aim to foster cooperation between traditional donors, emerging development partners and recipient countries. From the perspective of African recipients, triangular development cooperation also means opportunity to share best practices and learn lessons from other developing countries. For example, China high growth rates over the last three decades have reduced poverty in historical terms and this admired by many developing countries.

For fragile states, both China and traditional donors are complementary in reconstruction and peacebuilding process, although this can differ widely for individual African countries depending on the resource endowment and existing investment, trade and development cooperation relationships.

Credit: UN Photo (CC BY-NC-ND 2.0)
One recent trend is that China is moving beyond trade and investment opportunities, and increasingly is participating more widely in UN peacekeeping operations in Africa.

One of the conditions for this is that there is clear African mandate, as expressed by the African Union and other Regional Economic Communities.

This fits well with the Chinese win-win approach that respects the principles of national sovereignty and non-interference in the domestic affairs of a country.

The Capacity for Coordination

However, to ensure that these additional development financing opportunities provided by South-South cooperation are harnessed requires the capacity to align all development partners with the national development plan of Africa both at regional and national level. This is a challenge for many fragile states which, at least in the early phase of post conflict recovery, lack the capacity to coordinator donors.

Two policy options can be considered:

1.    All development partners could support fragile states by improving transparency of their interventions, thereby facilitating coordination of development cooperation.

2.    Fragile states can designate a lead development partner to support the coordination activities in the country, although once capacity is sufficient, this should be undertaken by Government itself. These approaches will support the successful transition from fragility to sustainable development.

Richard Schiere is Chief Results Officer in the Quality Assurance and Results Department of the African Development Bank Group. He authored the article entitled "The Impact of China on the Donor Landscape in African Fragile States' in the recently published IDS Bulletin, "China and International Development: Challenges and Opportunities". The findings, interpretations, and conclusions expressed in this article are entirely those of the author and do not necessarily represent the view of the African Development Bank, its Board of Directors, or the countries they represent.

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Monday, 14 July 2014

Brazilian development cooperation: critical juncture or hiatus?

As the fans head home after the FIFA World Cup final, Brazil is preparing to be in the spotlight again, but this time for an event with major development policy implications, as host nation for the 2014 BRICS Summit.

International interest in Brazil’s international development cooperation has soared in the last few years.

Some hoped Brazil would blaze a new trail in international cooperation. This perceived potential for Brazil as a leader in development cooperation is also one of the reasons why there is an increased interest domestically in Brazil’s international role.

In reality, however, the country still faces many obstacles to be able to build on its strengths and accumulated knowledge to shape new paths in international cooperation.

Brazil’s increased engagement in development cooperation

Though Brazil has been engaging as a provider of development cooperation since the ‘70s, this increased to unprecedented levels during the Lula administration (2002-2010), with the internationalisation of its social polices, as well as rising disbursements. Public debate in the country has slowly been picking up, and now a growing number of national institutions, civil society organisations, social movements and think tanks are debating South-South Cooperation (SSC), the term used to describe a broad framework for collaboration among countries of the South in the political, economic, social, cultural, and technical domains

A number of new developments have brought both excitement and concern to the small Brazilian SSC community.
Credit: Governo de Sergipe (CC BY-NC-SA 2.0)

In 2013, President Dilma Rousseff announced the creation of a new cooperation agency, which would combine both the cooperation and trade portfolio. In the same year, the Ministry of Foreign Affairs committed to establishing a foreign policy council.

Currently, a White Paper on foreign policy is being drafted. These internal and external factors indicate that Brazilian SSC could be at a critical juncture, and one that potentially will see a deeper, more long-term engagement in development cooperation.

But Brazil’s prominent international role has been accompanied by persistent national development challenges, partly due to the lack of a public policy and lack of an institutional framework to ensure overall planning, coordination and a sustainable flow of resources for SSC. Additionally, the role and contribution of civil society to development cooperation is not fully recognised by the government, diminishing its potential for innovation and impact.

To complicate the scenario, support for development cooperation has also plummeted in recent years, as Dilma Rousseff does not share her predecessor’s enthusiasm.

Although the president announced the creation of a new cooepration agency, this proposal has not taken off. Moreover, though there are no official figures, the budget for cooperation initiatives has decreased significantly since 2010. In this context, can we expect Brazil to be a leader in reinventing a crumbling development cooperation system?

No single model for Brazilian development cooperation 

Brazil’s development cooperation has several modalities – technical cooperation, education, science and technology, humanitarian cooperation, and financial cooperation - and it involves a multitude of actors including governmental agencies, the private sector and civil society. Some argue that the current structure of SSC is extremely fragmented, and that this leads to lack of coordination and coherence of Brazil’s engagement with the Global South. Others emphasise that the fact that country’s cooperation involves various institutions should be seen as one of the key advantages of its SSC.

The COBRADI reports (PDF), which shared, for the first time, comprehensive official data on Brazilian development cooperation, and a growing number of academic studies, are helping to assess the complex puzzle that represents the diversity of Brazilian cooperation. Yet, there are still many information gaps, and civil society has recently begun actively demanding more transparency and accountability.

What is clear is that there is no single model for Brazilian development cooperation but many policies and multiple practices, deeply influenced by the implementing agencies and partners involved. However, consistent features are emerging, in publications and debates, of a  seemingly unique and distinctive kind of Brazilian government-led cooperation:

  • It is implemented by people with first hand-experience, i.e. public servants that have experience in implementing policies and programmes in Brazil
  • Increasingly there has been an enmeshment of modalities in flagship projects, blurring the lines between technical, humanitarian and financial cooperation, and trade.
  • Its most innovative actors pursue structuring cooperation, meaning their objective is to strengthen partners’ institutions in order to increase their autonomy, or self-reliance.

Brazil’s elections provide short hiatus to work out future directions

Interesting discussions are taking place about what kind of international development cooperation policy, and agency, the country should have. Should SSC guiding principles (such as mutual benefits and being demand-driven) be accompanied by others political principles that Brazilians favour (human rights, for instance)? How far can cooperation, trade and investment interests be aligned without the country exporting its own internal conflicts (such as the case of ProSavannah in Mozambique)? Where should the development agency be anchored?

Credit: coolloud (CC BY-NC-ND 2.0)
2014 is unlikely to see great changes in Brazilian development cooperation, as all attention is on pressing domestic issues, not least because of the presidential elections this autumn. The opening days of the World Cup saw a resumption of protests in the streets, and while these died down as World Cup fever set in, activists are now mobilising around the new protest focus of the BRICS Summit. Academics and practitioners involved in the field are hoping this will give them time to unpack some of the thorny issues Brazilian SSC faces, as well as to engage in dialogue with the government.

More evidence is essential to ensure that debates and political choices draw on the recent history and actual challenges and opportunities. I hope that our recently published  Brazil ‘State of the Debate’ report, which captures its current engagement in development cooperation, gathering and analysing the main ideas and narratives, institutions and interests that inform its practices –is a significant first step in charting Brazil’s evolving development cooperation.

Bianca Suyama is Executive Coordinator at ArticulaçãoSUL. She co-authored 'Brazil's Engagement in International Development Cooperation: the State of the Debate' produced as part of the IDS Rising Powers in International Development programme.  

Thursday, 10 July 2014

China needs to maintain careful balance over BRICS Development Bank

Next week, the sixth BRICS Heads of State summit will take place in Fortaleza, Brazil. As the summit approaches, questions are being asked about the grouping’s capacity to advance reform of global governance. Top of the agenda will be discussions of the soon-to-be-launched BRICS Development Bank.

Since last year’s meeting in Durban, South Africa, the global context has changed significantly, with rising powers playing key roles in some of the major tectonic shifts underway.

First, the crisis that began in Crimea has pushed Russia to deepen its ties to the other BRICS countries in hopes of garnering support for its positions and actions in Eastern Europe, where it vies with the West for influence. 

Second, in the realm of development, the ongoing debates about the post-2015 development agenda, set to replace the Millennium Development Goals, have intensified in several countries and regions, although to differing degrees.  There is growing eagerness among Western stakeholders to better understand the interests and positions of rising powers within these debates, especially in light of the BRICS’ shared resistance to what they perceive to be Northern-led normative frameworks for development. 

Finally, there are new or renewed loci of instability, such as Iraq, which are likely to affect not only the geopolitics of the region, where rising powers have accumulated significant stakes, but also, more broadly, relations among global and rising powers.

In light of this context of rapid change, what resolutions and what degree of resolve will the BRICS summit in Fortaleza generate?

China’s pivotal role amongst the BRICS and the BRICS development bank

Although China is not the only answer to these questions, it has come to assume a pivotal role amongst the BRICS.  In the field of development, the sheer size of its economy and the  global reach of its companies, diplomacy, and diaspora, give it considerable economic and political clout, both within and beyond the BRICS coalition.  In the field of international development, the extent to which China may overshadow the other BRICS will be tested by the launch of the BRICS development bank, which, along with the contingency reserve fund, will represent the first concrete institutional innovation by the BRICS. 

Financially speaking, this investment is but a drop in the bucket of China’s gargantuan South-South development cooperation.  This is not the case for the other BRICS, all of which have experienced some degree of economic growth but also face much greater financial constraints, particularly in light of the recent economic slowdown. 

What, then, are China’s interests in participating in the initiative? 

In my article in the forthcoming IDS Bulletin 'China and International Development...', I argue that the Chinese government’s motivations are primarily political.

In addition to helping the coalition press for speedier reform of development organisations such as the Bretton Woods Institutions, the venture will allow China to further burnish its image as a willing multilateralist player in the field of development and to reinforce its frequent claim that it is working in solidarity with other developing countries, rather than acting as a lone-wolf rising power.  Nurturing this role has become increasingly important for Chinese ruling elites given the common perception that China has relied heavily on bilateral ties in consolidating its South-South cooperation in Asia, Africa, and Latin America.

In order to reap the political benefits of this initiative, however, China has to maintain a careful balance so as not to dominate the bank, as doing so could underscore the asymmetries it brings to the coalition. Unfettered protagonism by China would risk delegitimising the BRICS as a multilateral effort, which was designed to accelerate the shift towards a more multi-polar configuration of the international system.

A balanced bank governance structure, in which all five coalition members have equal representation and equal say, will be essential in maximising the bank’s potential not only in addressing the financing gap in infrastructure and industrial policy, but also making it into an important platform through which to decide upon the rules of development cooperation. This will also be a chance for the BRICS to prove their capacity to generate innovative solutions to socio-economic issues that are dear to all of the grouping members, such as poverty alleviation, sustainable development, and inequality reduction.

Adriana Abdenur is a Professor at the Institute of International Relations, Pontifical Catholic University of Rio de Janeiro (PUC-Rio) and a researcher at the BRICS Policy Center. She is a contributor to the forthcoming IDS Bulletin ‘China and International Development: Challenges and Opportunities’, which can be pre-ordered online.

Wednesday, 2 July 2014

In the eye of the beholder? Public-Private Partnerships in Agriculture

Source: Fabio Venni from
What do the University of Pennsylvania, the Paris metro, Merck’s Mectizan Donation Program and the African Cocoa Initiative have in common? Answer: They have all (allegedly) been founded or operated as public-private partnerships (PPPs).

I say ‘allegedly’ since what is – or is not – defined as a PPP seems to be very much in the eye of the beholder. A paper for the Dutch Ministry of Foreign Affairs, for example, uses a relatively strict definition of PPPs as collaborations between government and business agents to carry out a specific task, while jointly assuming risks and responsibilities, and sharing resources, competences and benefits. While others (see, for example this paper from a 2007 Future Agricultures Consortium conference) include any formal or informal arrangement between public- and private-sector entities, such as knowledge-sharing networks, technology financing, or subcontracted research.

If answering ‘what is a PPP’ seems hard, then identifying what makes them work successfully for development is even harder, despite substantial experience with partnership approaches in recent years. This question is at the heart of research IDS is leading with the International Fund for Agricultural Development and the International Institute for Environment and Development over the course of 2014. The aim is to identify what it takes to make PPPs in agriculture effective at delivering positive development outcomes for small-scale farmers and rural communities.

Reviewing what has already been published on the subject and talking with farmers, companies, NGOs, donors and other experts leads me to an initial ‘hypothesis’, based on five key elements:

1. A clear public good aim linked to national policy
The ‘theory of change’ that leads governments or donors into PPPs is often unhelpfully vague. Projects lack a clear definition of the specific public benefit to be achieved, for whom and how this fits within national policies and programmes. They are driven instead by a broad sense that working with the private sector brings unique opportunities and resources to bear in tackling development problems. The risk is that partners have different views about aims and objectives, and this leads to disappointment on at least one side and disagreements about necessary actions.

2. Clear and transparent roles and objectives of partners
Benefits are unlikely to emerge from PPPs if the partnerships themselves are dysfunctional. There are many analyses of what it takes to make partnerships (of any type, not just PPPs) work, but integral to all is that the roles, responsibilities and objectives of partners are clear, transparent and understood. Yet participants in PPPs frequently expressed frustration at the failure to identify clear and transparent roles. Farmers’ organisations in particular are often overlooked in this process.

3. Resources for management and process
In the words of one interviewee, ‘If we know what a PPP should look like, why are they so difficult? Because there is a lack of investment in the processes to make PPPs work.’ Partnerships carry significant costs in terms of time, money and effort to establish and maintain the initiative, and manage it well. Accountability mechanisms are also needed to engage and respond to project stakeholders who are not direct partners. PPPs that lack explicit resources for such processes are characterised by disagreements among partners and with other stakeholders, and disappointment with the results.

4. Flexibility
Flexibility and the space for continuous adaptation and learning, though largely overlooked in the literature, was highlighted by many we spoke to as crucial. Agricultural markets are unpredictable – subject to frequent external shocks (climate, market risks, price volatility), and projects can also create unintended consequences (positive or negative). While dealing with complex markets is not unique to PPPs, partnerships tend to make it more difficult to adapt. Unless flexibility is built in from the beginning, partnerships find it difficult to make changes in inputs and outputs, to mitigate and compensate if harm is caused, or to enhance positive spillovers.

5. Brokerage
Source: Marsyas, 07.04.2007

The notion of partnership ‘brokerage’ was another area that was weakly reflected in the literature but emerged strongly in our discussions. Brokerage involves a set of functions designed to develop and implement partnerships, such as introducing partners, facilitating negotiations and problem solving. They may be delivered by one individual/organisation or handled across different organisations. However, without an independent third party or parties that can build trust between the partners, PPPs will often flounder.

Having set out my hypotheses, now the interesting work begins. Alongside local researchers in Ghana, Indonesia, Rwanda and Uganda we are reviewing the experience and learning from four IFAD-led PPPs, giving us the opportunity to test these hypotheses and develop recommendations for government, donors and private sector organisations involved in brokering, developing and/or implementing agricultural PPPs.

In a follow up blog, I’ll let you know how our hypotheses stacked up against the evidence.

By Jodie Thorpe, Research Fellow, Institute of Development Studies

Monday, 9 June 2014

Li Keqiang goes to Addis: China-Africa cooperation and the modernisation of a continent

In May, Chinese Premier Li Keqiang paid a visit to the African Union (AU) in the course of a tour of four African countries: Ethiopia, Kenya, Nigeria, and Angola.  A key feature of the visit was the explicit linkage of the Chinese dream (“a great renewal of the Chinese nation”), with the African dream (“a blueprint for the continent’s next fifty years of development”), as emerging in the African Union’s consultation draft for its Africa 2063 Agenda, launched last year. 

Two-way trade flows between China and African states grew to $200bn in 2012, making China Africa’s largest trading partner. During his visit, Premier Le Keqiang proposed to double this to $400bn by 2020, and to increase investment stocks to $100bn from the current $25bn. As well as pledging at least half of China’s future aid effort to Africa, Li promised to add a further $10bn to an existing line of financial credits of $20bn for 2012-2015 and to inject a further $2bn into the existing $3bn China Africa Fund, dedicated to enterprise investment in Africa.

Li also hinted at a new joint financing fund with the African Development Bank, as a platform for trilateral cooperation in Africa’s infrastructural development, including regional aviation and high-speed rail networks. A $2bn Africa Growing Together Fund with untied procurement, was subsequently announced at the African Development Bank annual meeting in Kigali.

Creating the African Dream?

But beyond the dramatic numbers, Premier Li pledged China’s active role in a sustainable and inclusive African economic transformation over the coming decades. Directly using the graphic terms of the draft AU Agenda 2063 he portrayed a diversified, urbanised and green Africa of 2bn people, with dynamic cities and a thriving cultural life, a key force in a multipolar world, joined up by regional air networks, expressways and high speed rail.  And he announced a readiness to help the transfer of industries from a transforming China to a transforming Africa (PDF),  as “both sides face the task of achieving modernization”.

The power of dreams is not the stuff of economic textbooks, but China is bringing a form of public entrepreneurship to Africa that is already making a very  tangible impact. Much of the recent and planned infrastructure development on the continent –power, roads, railways, ports and mobile telephony - involves Chinese funding and construction input. A new expressway from Addis to Adama, and a new fast train from Abuja to Kaduna were two projects Li inaugurated on this trip.

Economic transformation has become new African development narrative, as demonstrated in several recent reports by the AU/UN Economic Commission for Africa, the  African Development Bank and the African Centre for Economic Transformation (ACET) (PDF), all based around this theme. It is clear that the developmental states of Asia – China, South Korea, Japan and Malaysia – are increasingly seen in Africa as role models, as well as being sources of investment and initiative.

China and the African Union: The New Embrace 

Li Keqiang’s visit was also an occasion to cement ties between Forum for China Africa Cooperation (FOCAC) and the AU.  AU membership in FOCAC, and an ongoing strategic dialogue between China and the AU, are very recent developments.

Geopolitical and geo-economic linkages between the Chinese and African development trajectories are thus now positioned, by China, within the African Union’s own frameworks, and aligned with African objectives, which neutralises charges of neocolonialism from within Africa itself. China will help Africa’s structural transformation. The big question here is to what extent China’s experience and accomplishments can guide Africa’s integration ambitions, in a continent with fragmented political structures rather than a unitary state, and with even more vast spatial challenges and ethnic diversity compared to China.

A major investment by China in an inclusive African economic transformation also requires investment in effective states, and peace and security in Africa.  China is already a significant supplier of UN peacekeepers to Africa, and participates in the G8++ process for enhanced coordination and collaboration within the AU Peace and Security Architecture.

Even as it reiterates its policy on non-interference in internal political affairs, its now large and growing investments indicate just how much China counts on the emergence of effective states in Africa. The new Chinese initiatives announced in Addis on regional connectivity, poverty reduction, ecological conservation, and on peace and security, all indicate the breadth of its approach and an expressed readiness to work with others in taking these agendas forward.

China as Africa’s Public  Entrepreneur?

In sum, China is ready and able to think big and long-term on the African development agenda and to act more rapidly than most other actors, in a mode of public entrepreneurship.

At the same time, success requires convergence of agendas across the areas of responsible, inclusive governance, conflict resolution and peacebuilding, as well as coordination across multiple institutional frameworks.  Japan, the EU, the US, the BRICS and the G7 in its Brussels communiqué are lining up to assist the African transformation and peace and security agendas. Le Keqiang has signaled to Africa and the world of China’s readiness to engage – and to be a leader – in this hugely important endeavour.  

This blog was written by Richard Carey and Li Xiaoyun, with the assistance of Yunnan Chen. Li Xiaoyun and Richard Carey are members of the IDS Advisory Council for the Rising Powers in Development Programme. Professor Li is Dean of the College for Humanities and Development at the China Agricultural University and Chair of the China International Development Research Network (CIDRN). Richard Carey is Chair of the International Advisory Committee of the CIDRN and former Director for Development Cooperation at the OECD. Yunnan Chen is the Research Officer for the Rising Powers in International Development Programme. 

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