India: Emerging as a Major Donor on the Global Map

The South Asian giant, India, is being termed as an emerging power on the international humanitarian aid scene, bringing new funds and perspectives. If statistics are to be believed, the country has extended cash assistance worth $15 billion over the last few years to countries in need, in addition to other tangible aid.

The Aid So Far

The nation has been spreading a proportion of money that its economic growth is generating as aid to countries in need.

Following is the list of some of the major overseas alliances where India either provided aid, or pledged to give funds. As evident from the list, the number of countries benefiting from Indian aid is showing an upward trend.

The beneficiaries pan neighbors strategic to India such as African countries, Afghanistan, Sri Lanka and Nepal.

1. Africa

The India-Africa summit held in May 2011 focused around the development goals of Africa, where Indian Prime Minister Manmohan Singh announced a line of credit worth $5 billion for the same. The grants included the following:

• Increase the training slots for the Africans under the Indian Technical and Economic Cooperation (ITEC) by 900, totaling to 2500 by 2014; also raise the total scholarships offered during the same period to 22,000
• Establish rural technology parks, food testing laboratories, food processing business incubation centres and centres on geo- informatics applications and rural development
• Provide increased access to the African airlines for Indian cities to overcome the problem of insufficient air connectivity between the two nations

Earlier in 2008, India offered a $5.4 billion worth of aid to the country at the first Summit in Delhi focused on regional integration through infrastructure development; it also offered an additional $700 million to establish new institutions and training programs in consultation with the African Union and its institutions.

In addition, over the years, India has forwarded aid to many African nations such as Ethiopia, Somalia, Libya and Angola, and is still in the process of supporting development in these countries.

• Ethiopia
  • In January 2012, India promised investment worth $300 million to fund a rail project to Djibouti, its neighboring state
  • In May 2011, India gave $700 million for establishment of four capacity building institutions, including a vocational training centre, an IT centre, a Women’s solar engineering vocational training centre and a farm science centre; also announced setting up of an India-Africa virtual university to meet the demands among Africans for higher studies in Indian institutions under which 10,000 new scholarships would offered
• Libya - In January 2012, India handed over humanitarian assistance consisting of life saving medicines and medical equipment worth $1 million to the Libyan National Transitional Council (NTC) after it requested for the same
• Somalia – India announced an aid worth $2 million for the African Union Mission in Somalia, known as the Horn of Africa, in January 2012
• Senegal - In 2007, gave $110 million as long-term loans to finance Indian exports to Africa, that funded the sale of 500 buses by Tata Motors to Senegal
• Angola - Gave $40 million to Angola in 2007 to fund a railway project managed by RITES, Indian Railway’s consultancy division

All these initiatives aim at supporting infrastructural development along with attainment of economic and social prosperity in Africa.

2. Afghanistan

During 2002-2006, the country was the largest recipient of aid from India amounting to $650 million on account of overthrow of the Taliban. Recently, in May 2011, India pledged $500m to Afghanistan in addition to its ongoing commitment of $1.5 billion. This aid is being direct towards the following:

• Deployment of basic infrastructure requirements such as wells, toilets, power plants and satellite transmitters
• Completion of road link to Iran's border
• Construction of a new parliament building in Kabul
• Training of Afghan accountants and economists
• $180 million worth Salma Dam development project in Herat, India’s biggest aid project in the country

India's aid has elevated it to Afghanistan's top tier of donors. In terms of pledged donations through 2013, India now ranks fifth behind the US, UK, Japan and Canada.

3. Sri Lanka

In recent years, India provided assistance in all possible forms towards the reconstruction of Tamils in war-torn regions of Sri Lanka. Some of the initiatives are listed below.

• Handed over houses, medical equipment and significant financial assistance in January 2012
  • Gave surgical and intensive care equipment worth $1.1 million to the District General Hospital
  • Funded repair work of over 79 war-damaged schools
  • Increased educational assistance worth LK Rs 2.5 billion in grant to deserving students
  • Provided agricultural implements worth $3.2 million to kick-start agricultural work
• A $270 million project to build 49,000 houses for the war-displaced is currently underway
• Gave aid to revive 25 acres of industrial zone in Sri Lanka in December 2011 helping investors to start businesses and generate employment for about 2000 people
• Sanctioned $100 million for reconstruction projects in early 2010

4. Bangladesh

In January 2010, India announced a $1billion line of credit for Bangladesh, the highest one-off amount to any country from India. The loan would aid infrastructural development, including building railway bridges, supply of locomotives and assistance in dredging.

5. Nepal

In January 2012, India pledged assistance for building the Nepal Police Academy in Panauti and provided military supplies as requested by Nepal. Earlier in summer of 2006, India forwarded $218 million worth of economic aid to the country.

6. Others

In addition to the above, many other nations in distress have benefitted from help extended by India over the years such as Haiti, Bhutan, Myanmar, and Pakistan.

In January 2010, India gave $5 million to Haiti after the devastating earthquake that struck the country.

India funded hydropower stations in Bhutan in mid 2009. In fact, Bhutan in the 15 years leading up to 2006, accounted for almost 30% of all Indian overseas aid.

In June 2008, India announced a contribution of $200,000 for repair and renovation of the Shwedagon Pagoda complex, Yangon, Myanmar, that was badly bit by cyclone Nargis that year. In addition, the nation also sent aircrafts carrying glucose bottles, tarpaulin, other relief material and army doctors to the effected places.

Over the years, India has contributed about Rs.1 billion to the earthquake-hit areas of Pakistan and over $500 million to aid economic expansion in Maldives.

Reasons

India’s gradual shift towards becoming a donor for economies in distress is part of its strategy to leverage the power of investment to buy friends. These nations would eventually help India in its long-term social, political and economic aspirations.

It has been looking into ways to enter Africa, which remains one of the most resource rich continents in the world, and where there is great potential for expansion. Also, it needs Africa's support for its bid for a permanent seat in the UN Security Council.

Afghanistan posses over $3 trillion in untapped mineral resources that gives neighboring countries, including India, more reason to forge a stronger foothold apart from political motivations.

India’s aid programs have become more ambitious recently and are reaching out to regions where India wishes to exert more influence such as Central and Southeast Asia.

The Reality

While all this creates a proud picture of India, there is a dark reality it conceals. The fund directed outwards bare the cost of internal deficiencies within India that has been begging for financial and other support. India is still a developing nation, and although its economy has shown multifold increase, the emphasis for investment of this cash assistance should be in suffering parts of India.

Countries like the US and Japan, the traditional givers and donors, have very low level of poverty. India is one of the poorest places in the world. Even the quality of poverty differs. While the poor in US or America may face hardships, there is relief in the form of social security and healthcare benefits. It is hard to find people dying of poverty. In India, poverty is an epidemic that kills thousands every year. Parts of the country remain poorer than sub-saharan Africa, and people have variously eaten the hard rinds of mangoes and sometimes mud cakes in the desperation to appease their hunger. Farmer suicides grip the nations countryside and are a common phenomenon.

With having more reasons to utilize this money generated by the economy within the country, how wise is it to distribute it to the outside world in the name of strategic partnerships? Can this be considered as nation’s premature move?