Tuesday, November 22, 2011

Study on aid from non-DAC donors

The Center for Global Development in Washington released in November 2011 an interesting paper that discusses foreign aid offered by non-Development Assistance Countries (DAC) such as China, India, Brazil, South Africa, Venezuela, Turkey, Russia, Saudi Arabia, Kuwait, and UAE.

The paper, written by Julie Walz and Vijaya Ramachandran, divides these donors into three categories of aid delivery: the DAC model, the Arab model, and the Southern model. The study laments the lack of transparency in the aid programs of most of these countries.

In a comparative table that provides a lower and upper estimate for the aid levels of several countries, including China, I believe the paper does a disservice by providing an upper limit estimate for China of $25 billion of aid in 2009.

The paper notes that the upper estimate comes from an NYU Wagner School study that includes pledges of aid, loans, and government-sponsored investment projects. This is unfortunate as most of this engagement does not qualify as aid. It is misleading to suggest that it does constitute aid by using the $25 billion figure as the upper estimate. The legitimate figure for China’s global aid is about $4 billion.

Bräutigam calculated that China’s annual aid to Africa is now about $2 billion. It is generally agreed that almost 50 percent of China’s aid goes to Africa. It is reasonable to estimate that the rest of the world receives another $2 billion, making a total of $4 billion.

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