Giving Foreign Aid a Bad Name
Michael Glosny wrote a piece for the December 2006 issue of CSIS’s Freeman Report that speculates on the motivations behind China’s growing foreign aid expenditures.
In the end, there is still much that is left unanswered about Chinese foreign aid – and that is the central problem. On the one hand, it may be difficult to draw stark conclusions about the intentions behind China’s foreign aid. However, it is clear that China’s foreign aid policy has become more active, sophisticated, and is driven by a range of different objectives.
It is safe to say that reducing poverty and promoting human development are not chief among those objectives. Following the recent announcement of the creation of a $5 billion China-Africa development fund, the China Daily reported that the purpose of the fund is “to encourage Chinese companies to invest in Africa and provide support to them.” So, China’s big foreign assistance push in Africa is actually an investment vehicle to assist Chinese companies overseas, cultivate export markets, and support the procurement of natural resources. On the other hand, China did pledge to cancel the debt of the least developed African countries.
Meanwhile, the US has a bona fide slogan for its foreign assistance strategy: reducing poverty through economic growth (!). Sure, it doesn’t always turn out that way, but the US can point to demonstrable achievements supporting human development in Africa and elsewhere. The Bush Administration’s malaria and HIV/AIDS initiatives are prominent examples of this. The US also has an independent agency set up to help US companies overseas, OPIC, but its budget is a tiny fraction of total US foreign assistance.
Glosny also points out that China’s actual foreign aid expenditures are unknowable, since official Chinese figures fail to provide data on individual programs. Sound familiar? China has a similar problem with its military expenditures — an issue that has garnered far more attention from the Bush Administration. But foreign assistance should not be overlooked in the debate over transparency. The US foreign aid budget, for example, includes funding for various security assistance and training programs. Perhaps so too for China.
Whatever China’s actual foreign aid expenditures and motivations, it would be overly generous to suggest that China is using foreign aid to improve governance and reduce poverty. For now, that task is left to the MCC.
