New, Non-traditional Donors: Any Cause for Worry for Aid to Education?

New, Non-traditional Donors: Any Cause for Worry for Aid to Education?

The East Asian region is often hailed as an economic success story, particularly with the rapid growth of countries such as South Korea, Japan and Singapore. These countries developed rapidly partly because of the strong investment they made in their education systems and a good part of this has been financed by Official Development Assistance, more commonly known as foreign aid.

At present, after riding the waves of financial crises and changing global geopolitics, East Asia is still thriving economically again due to strong education systems some which have been reformed to cope with new socio-economic challenges. Simultaneously, the global aid architecture has changed dramatically. Traditionally, the bulk of foreign aid has been provided by members of the Organisation for Economic Cooperation and Development (OECD). These donors adhere to certain standards and norms when providing aid, such as 1) good governance 2) aid effectiveness 3) aid transparency and 4) recipient ownership of aid programmes. In the past decade, new states such as India, China and Russia have shifted from being aid recipients to being either both recipient and donor or become donor nations. They are classified as new, non-traditional donors.

These new donors are not, or may soon be, members of the OECD and thus often do not follow ‘global norms’ when providing foreign aid. They are thus, more often than not, criticised as disrupting global development efforts and their aid is sometimes labelled as ‘rogue aid’. Such negative categorisation of these donors is, however, quite unwarranted. Firstly, the argument that these new, non-traditional donors do not follow global aid standards does not mean they do not assist with improving development. Such global standards are not exactly new or always assist in improving development projects. They are, in fact, mostly a re-hash of fixed, economic-centric theories that have significantly stalled some development projects such as those in education and other social sectors. In contrast, these new donors present an alternative development ideology which does not impose fixed ideologies on aid recipients. Furthermore, these non-traditional donors are regionally and diplomatically closer to recipient nations, having been long-term aid recipients themselves. Aid recipients therefore would, and have been increasingly more receptive to aid from these new donors.

A second criticism relating to the above is that these non-traditional donors are providing aid to corrupt, non-democratic nations. Non-traditional donors like China have been providing aid and other forms of assistance to authoritarian regimes such as Cambodia, Laos and Myanmar. The former two in particular have received Chinese aid for education-related projects, although this constitutes a small percentage of their overall aid. This aiding of autocratic regimes should not, however, be categorised as a negative action. Firstly, China does provide aid to these countries with the aim on improving development. Secondly, other OECD donors have in fact provided aid to these countries, regardless their form of political governance. In fact, Korea, an OECD donor, has been providing aid to Laos, especially to its education sector, and this volume of aid has been far larger than non-traditional donors like China.

A third criticism is that non-traditional donors often do not declare the full volume and type of aid to recipients. OECD donors have adhered to the ‘Paris Declaration’, an aid eff with one of the guidelines being aid transparency. The release of data may aid practitioners but it is not the silver bullet to improving education or other development issues. Non-traditional donors may still be working to improve development outcomes, despite the secrecy of their programmes. These new donors also set standards when providing aid to education, just as traditional bilateral donors set conditions. The challenge therefore, is to set standards that create positive development outcomes, not straitjacketed rules.

Aid from non-traditional donors to sectors such as education in fact present an opportunity for recipients. They provide a new source of aid especially with recent global financial crises resulting in aid cuts from OECD donors. A new economic rationalism that seems to be emerging may mean recipients facing a reduction of aid from traditional resources. Aid from non-traditional donors also ensures that multilateral organisations that deal with education themes also have continued financial resources, especially since certain donors have also withdrawn their financial support to focus on domestic issues. This is not to say that non-traditional aid is completely problem free. There clearly should be more discussion between non-traditional and OECD donors to clear the mistrust regarding the former’s aid projects.

Non-traditional donors should clearly prove that their aid is not wasted to corruption on the donor side and recipient end. China for example has lavishly provided aid to public sector buildings in Southeast Asian recipients without due concern for the type of governance or education systems. Furthermore, China’s aid to recipients is not within the definition of official development assistance, thus resulting in more secrecy and possible wastage of financial resource.  There should be more coordination between both sides to ensure aid results in improvements in education and ensuring that projects are free of corruption. The outcome of any development aid or assistance must ultimately be progress from a developing to a developed society.

New, non-traditional donors and their aid will continue to rise in the future development landscape. They should not be viewed as negative actors disturbing the global aid architecture but new actors that can improve education and ultimately development in recipient nations.

Dr. Li Jie Sheng is Research Analyst at The HEAD Foundation. His research focuses on the effectiveness of donors and international organisations. He holds a PhD (International Political Economy) from the University of Birmingham and a Mphil (Development Studies) from the University of Cambridge.

The HEAD Foundation Commentary is a platform to provide timely and, where appropriate, policy-relevant commentary of topical issues and contemporary developments. The views expressed by the authors are solely their own and do not reflect opinions of The HEAD Foundation

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