BRICS: future aid superpowers?

March 26, 2012

Britain’s aid programme for India hit the headlines this year, when New Delhi, much to the fury of the Daily Mail, described Britain’s £200 million annual aid to it as peanuts. Whether it makes sense to send money to a fast-growing emerging power that spends billions of dollars on arms is up for debate but few know that India has been boosting its own aid programme for other poor nations.  A report released today by NGO Global Health Strategies Initiatives (GHSi) finds that India’s foreign assistance grew 10.8 percent annually between 2005 and 2010.

The actual sums flowing from India are,  to use its own phrase, peanuts. The country provided $680 million in 2010. Compare that to the $3.2 billion annual contribution even from crisis-hit Italy. The difference is that Indian donations have risen from $443 million in 2005, while Italy’s have fallen 10 percent in this period, GHSi found. Indian aid has grown in fact at a rate 10 times that of the United States. Add to that Indian pharma companies’ contribution — the source of 60- 80 percent of the vaccines procured by United Nations agencies.

Other members of the BRICS group of developing countries are also stepping up overseas assistance, with a special focus on healthcare, the report said. BRICS leaders meet this week to ink a deal on setting up a BRICS development bank.

Here are the numbers for the other BRICS (according to GHSi report entitled “How the BRICS are reshaping global health and development”)

*Brazil is estimated to have provided upto $1.2 billion, mostly to Latin America and Portuguese-speaking African nations such as  Mozambique. That’s an annual increase of 20 percent since 2005

*Russia’s foreign aid amounted to $472 million in 2010, mostly to other ex-Soviet states and Africa, four times 2006 levels.

*South Africa brings up the rear with $143 million, up 8 percent a year since 2005. (Click the following graphic to enlarge)

The reasons for the change? One, the BRICS are becoming richer. Second, battling the rich world for more clout on global economic affairs,  they no longer want to be seen as poverty-stricken aid recipients. Third, increasing aid is part of a strategy to gain a greater say on international development policy, especially at lenders such as the World Bank.  And last, providing assistance is key to forging trade links with poorer countries.

The trend will be key to global aid programmes in coming years as debt and moribund growth will almost certainly prevent the West and Japan from upping (or even matching) their prior commitments.

GHSi notes the latest funding round of the Global Fund to fight AIDS, Tuberculosis and Malaria had to be cancelled because of financial shortfalls. The report said:

With donor spending from the US and Europe slowing or declining, there is an urgent need for new global health resources and champions. With this in mind, international organisations have started looking to the BRICS as potential donors and health innovators in their own right…..These countries represent a potentially transformative source of new resources and innovation for global health and development.

Of China, the leading BRIC aid donor with almost $4 billion provided in 2010 (nearly quadruple 2004 levels) the report said:

China’s leadership has come to  see global health as a mutually beneficial tool similar to other areas of foreign assistance. By helping to improve health in developing countries, Chinese policymakers feel they can have health impact and help build political and economic alliances.

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