Friday, March 8, 2013

     India’s USAID

Author:  Rohit Bansal

The headline is to grab your attention! The essay hereafter aims that you trackserious money that’s been committed on Thursday for aid to the world outside (development assistance, DA,and partnership are the politically correct formulation).
This allocation, proposed by P Chidambaram in his budget, is a serious Rs7,018 crore.
For context, that’s nearly double of Rs3,508 crore our government actual spent just a while back in 2011-12.
Before we gripe into the ‘Bihar-versus-Bhutan,’ argument,ie, why a relatively poor country like us, with a slowing growth engine,should be handing out tax payer’s money, let’s first be informed of government’s ambitions.
Since nearly a year, largely unreported, we have under Salman Khurshid in the ministry of external affairs (MEA), the Development Partnerships Administration (DPA). Its job is to handle New Delhi’s aid projects through the stages of concept, launch, execution and completion. DPA owes its origin to Jaswant Singh’s budget of 2003-04, albeit Singh called it India Development Assistance. Semantics apart, DPA is finally up and running under PS Raghavan, a mandarin and former PMO man. It is Raghavan’s mandate now to manage the present allocation of Rs7,018 crore and the whopping Rs75,000 crore ($15 billion) we expect to commit over the next five years.
With our limited capacities, Chidambaram has committed a large portion of the Rs7,018 crore in the immediate neighbourhood.
The idea? If we fix polio, but our neighbour doesn’t, we might as well not have fixed it!
So, Thimpu has been allocated Rs2,525 crore of which Rs1,468 crore will be a loan.  Kabul where Chidambaram has budgeted Rs2,875 crore for plan and Rs548 crore for non-plan. Dhaka will get Rs580 crore (the figure was only Rs30 crore in budget estimates for 2012-13 and a puny Rs8.8 in actuals of 2011-12). Colombo gets Rs500 crore against Rs290 crore last time. The folks in Male have been punished. Their budgetary estimates of Rs286 crore in 2012-13 had already become Rs30 in the revised estimates of 2012-13; Rs30 crore is where the allocation stays in the 2013-14 budget. Kathmandu is up at Rs380  crore (revised estimates in 2012-13 were Rs270 crore). Colombo gets Rs500 crore. (Revised 2012-13 Rs290 crore). Islamabad, if you still wondered, doesn’t appreciate our development overtures, unmindful that without mutual stakes, conflict is imperative. I have complaints against the tiny amounts allotted to Africa, only Rs300 crore for a land of the future!
The equivalence with USAID - their budget exceeds $51 billion - isn’t meant to make the DPA folks cringe. Their challenge, like that the development arm in the US, or DFID, which does that job for the UK, is to consolidate outgoing aid and streamline all administrative matters around the process. It is also not to fire and forget; but to help in assessing the effectiveness of some Rs50,000-crore credit lines that New Delhi is extending, besides telling the paying public what have been the ‘returns on development’ for project finance and technology transferred.
This requires attracting talent outside the MEA, including having social auditors.
The days of DA as the preserve of western powers are numbered. Beijing already has a head start over Washington in many capitals of Africa. Brasilia proudly publishes an annual report on the aid related activities. Cape Town too now has an office for formulation and dissemination such partnerships. Good politics demands that India joined in. But wisely.
DA is an extension of determining political and economic convergence, including whether India Inc gets preference in contracts. DA creates relationships, in theory entirely equal ones, thatthe two sides covet. While we have been spending the money money - we apparently gave Rs20 crore to Myanmar way back in 1955 - returns from funding knowledge and capacity have been greatly underestimated.  So has the impact this has had via soft power. The Ethiopian PM’s wife was trained under India’s technical and economic cooperation programme. HamidKarzai studied in Shimla. Another African leader famously asked Manmohan Singh if he knew “Singh” his former math teacher. Ministers from Juba, the world’s newest national capital,now routinely trust our hospitals.
The dividends should be self evident. But so far, MEA hasn’t leveraged this in its institutional memory. With DPA now, a more business-like approach is expected.

(The columnist is CEO & Co-Founder, India Strategy Group, Hammurabi & Solomon Consulting. Tweets @therohitbansal).
Last modified on Wednesday, 06 March 2013 18:17
Rohit Bansal

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