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Foreign Aid From Undemocratic States Raises Questions


Foreign aid from undemocratic countries to developing nations, especially in Africa, is on the rise. This raises questions of whether these aid flows are undermining development projects by traditional western agencies, the United States and others. Assistance from nations such as China, Venezuela and Iran has been called "rogue aid." Critics say this is because full terms and conditions of the assistance are not always disclosed, and because recipients are seldom required to strengthen governmental institutions, eliminate corruption or enact economic reforms. VOA's Bill Rodgers has more in this report.

President Hu Jintao's recent trip through Africa, where he was greeted with full honors at every stop, underscored China's growing economic and political clout in the continent. China now sends several billion dollars in aid to Africa every year.

Yet Beijing's objective is not necessarily to foster development, says Harvard University economics professor Kenneth Rogoff. "China's goal is to maintain good relations, to try to lock in natural resources. And they are much less focused on governance and institution issues. They are much less concerned about whether the countries are going to grow and do well over time, as long as the natural resources are coming."

Moises Naim, a foreign-policy analyst writing recently in The New York Times, called assistance from China, Venezuela, and other non-democratic countries "rogue aid." He asserts it is ultimately detrimental because it tends to be non-transparent and sets no conditions for reforms. This is in contrast to aid from the United States, the World Bank and other traditional Western donors, which is generally aimed at encouraging good governance.

The World Bank, for example, has a strict screening process before it provides aid to poor countries. Alan Gelb is the Bank's director for development policy.

"The amount of money that a country gets is not determined simply by the projects. It is determined by the assessment of the management and governance of the country. So we also have a concern beyond our projects as to the financial management within the country itself."

Governments in Zimbabwe and Sudan are largely bolstered by Chinese aid. Critics say China's backing for the Sudanese regime on the Darfur issue is, in large part, based on ensuring a steady supply of Sudanese oil.

In Venezuela's case, President Hugo Chavez uses his country's vast oil wealth to funnel aid to Nicaragua, Bolivia and other nations in an effort to create an anti-U.S. alliance.

However, the United States also has used foreign aid to pursue foreign-policy objectives, especially during the Cold War, when President John F. Kennedy and others provided aid to America's anti-communist allies.

Steven Radelet is with the private Center for Global Development in Washington. He says we should proceed with caution. "The United States gave aid to the government of Zaire for a long time, and we didn't care what kind of governance they had as long they were an ally with us in the Cold War. So we have to be a little bit careful, I think, in pointing the finger too much, because we've done the same thing and continue to do the same thing in many countries around the world."

So-called "rogue aid" provides money for highways and other infrastructure projects in Africa and elsewhere that are no longer funded by traditional donors.

There are both benefits and risks with this aid, according to the World Bank's Alan Gelb. "The benefits are that there's more money and it is often going to infrastructure areas where the existing traditional donors have moved away from. So it is creating perhaps some competition in the system, and I think that fundamentally that is healthy... Having said that, though, what we would like to see is more reporting and more transparency in terms of these flows, both from the sides of the new donors and from the sides of the countries."

Ultimately the responsibility lies with the countries themselves, and how they handle the aid from China and others. Steven Radelet sees a welcome shift in attitude toward accountability. "There is a growing number of democracies in Africa -- from South Africa, to Tanzania, to Ghana, to Zambia, to Senegal and more recently Liberia -- where there is more of a focus on accountability and transparency. It will put those countries to a test to see if they really will stick with that, but I think many of them will. I think that is a different case than in Zimbabwe or Sudan, where we don't have democratically elected, accountable governments, and I think there is a greater risk that we won't have transparency around these transactions."

While China and other non-democratic nations will continue using foreign aid to expand their influence, it is clear that good-governance principles and democratic reforms promoted by Western aid agencies will only be effective if the recipients themselves want to adopt them.

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