In-depth: The rise of the "new" donors

AID POLICY: Reaching out to "emerging donors"

The food crisis in the Horn - everyone's concern
DAKAR, 19 October 2011 (IRIN) - Guyana, Thailand, Botswana, South Africa, Poland and Sudan share something in common: they all committed to the Horn of Africa drought appeal.

Higher up the scale, with multi-million dollar pledges, were China (US$63 million); Saudi Arabia ($60 million); Brazil ($32 million); United Arab Emirates ($17 million) and Qatar ($5.6 million).

Non-DAC donors – countries that are not members of the Organisation for Economic Co-operation and Development’s Development Assistance Committee - reported $622 million worth of humanitarian assistance in 2010 and contributed 6 percent of total reported humanitarian aid between 2000 and 2008, according to the UN Office for the Coordination of Humanitarian Affairs (OCHA) Financial Tracking Service.

When it comes to all types of foreign assistance, non-DAC donors are collectively estimated to have given $60 billion in 2010, according to aid watchdog Development Initiatives; and the UN estimates non-western donors provided almost 10 percent of overall aid in 2008. South-south trade meanwhile, accounted for more than a quarter of global trade in 2008.

Growing influence

Though many non-DAC donors’ aid pots are still relatively small (India reported just $36.5 million in humanitarian aid in 2010), amounts grow annually (in 2000 it gave $200,000); their economic clout is growing (India is tipped to be the third-largest global economy in 2020), and many are shunning the stigma of “recipient-only-status”, says Shoko Arakaki, chief of funding coordination at OCHA.

But the power of these new donors extends beyond money. As well as being a significant donor to Haiti in 2010, Brazil wielded influence by leading the UN Stabilization Mission for Haiti (MINUSTAH). The government plays an active role in global disaster preparedness, such as the International Strategy for Disaster Reduction and Global Facility for Disaster Reduction and Recovery (GRDRR), according to Germany-based Global Public Policy Institute (GPPi).

The influence of these donors is likely to grow further, says Claudia Meier, public research associate at GPPi, and could reshape coordination and accountability bodies, such as the DAC, which have to date remained relatively “closed”. Of the emerging donors only South Korea has joined DAC. It has also joined the Good Humanitarian Donorship Initiative alongside Poland, Brazil, Estonia and Lithuania – the GHD is reaching out to Turkey, Croatia, United Arab Emirates and Singapore to join.

Some emerging donors shun membership of these structures as they have not been part of their establishment, said Meier, who wrote Humanitarian Assistance: Truly Universal?, which analyzes entry points for collaboration with non-western humanitarian donors.

Brazil cited this as a reason for not joining the DAC. Many prefer regional coordination bodies, says GPPi, such as the Association of Southeast Asian nations (ASEAN), the Organisation of the Islamic Conference or the League of Arab States, which are “taking a more active role in [humanitarian] coordination”.

As Karin Christiansen, head of Publish What You Fund (PWYF), told IRIN: “Both the system and the donors need to change… Emerging donors might drive this reform… Ultimately, the more people in the tent, the language will have to change.”

Other likely changes are the growing influence of consortia and pooled funds, into which donors – both traditional and not - are putting increasingly large amounts, says deputy funding director at Oxfam, Suzi Faye.

Relief organizations from emerging economies are also likely to develop more of an international humanitarian role, said Meier.  “Maybe an Indian NGO, the Chinese Red Cross, the Red Crescents of the Gulf States [will emerge]… they are not fully there yet, but there are lots of signs of their professionalization,” she said.

Opportunities

Opportunities arise with donor diversification, said Kerry Smith, researcher with aid watchdog Development Initiatives. Emerging donors often tend to be recipients and providers of aid, and thus have a better understanding of the needs and constraints facing developing countries in emergency response. India has sophisticated disaster management systems after decades of disaster response, and has helped shape those of Pakistan and Afghanistan – two of its largest aid recipients.

These donors often tend to stress a more equal, solidarity-based relationship, rather than the traditional top-down donor-recipient dynamic, said Smith. As Brazil said: “[The Brazilian government believes that] development cooperation is not limited to the interaction between donors and recipients [and] understand[s] it as an exchange between peers, with mutual benefits and responsibilities.”

Many non-western donors do not distinguish short-term humanitarian aid from longer-term “development aid” – perhaps because they know the distinction to be blurred – which could help plug the gaps in the usually under-funded relief-to-development continuum.  

Further, tapping into aid from “new” sources can in some circumstances increase aid agencies’ access to those in need - most aid workers agree that humanitarian space has shrunk over the past two decades.


Photo: US Air Force/Master Sgt. Jeremy Lock
Brazil leads the UN Stabilization Mission for Haiti
For example, India is one of the few humanitarian donors in Afghanistan that is not involved in the conflict; in Myanmar, many western-backed NGOs found it hard to respond to Cyclone Nargis but those working with ASEAN donors were able to intervene more quickly, partly because of its long-term relationship with the Burmese authorities.

Non-western donors may also take a more sensitive approach to respecting a country’s sovereignty, say analysts. India puts sovereignty at the heart of its humanitarian response policy, having refused an onslaught of aid after the 2004 tsunami. In future, aid agencies will need to pay greater attention to “non-intrusive support”, wrote Randolph Kent of the humanitarian futures project, in Death of Hegemony.

"When western agencies rolled up after the Sichuan earthquake in China, the Chinese told them flatly they were not needed. Generally, greater sensitivity to regional culture, gaining real knowledge of what is wanted by governments and communities in disaster-prone regions and building contacts in those regions well before another humanitarian disaster, is the way in which the west can continue to play an international humanitarian role - rather than the presumption that it is wanted and needed."

Reaching out

As the donor picture shifts, aid agencies are starting to build new relationships, but too slowly, said Meier. “Not enough dialogue is going on yet.”

One exception at a policy level is the UN-based humanitarian dialogue platform, chaired by Sweden and Brazil, which tries to “bridge the artificial donor-affected population gap and to discuss humanitarian assistance among all states on a consistent basis”, said Meier.

Some UN agencies have also been fairly active at forging relationships with new donors, say analysts, including World Food Programme, the UN Children’s Fund, and the UN Relief and Works Agency (UNRWA), which respectively received 2.5 percent, 1.7 percent and 3.6 percent of their humanitarian funding from non-DAC donors in 2008, after significant reach-out – particularly to Gulf donors.

OCHA, which coordinates the Emergency Response Fund, Country Humanitarian Fund and the Central Emergency Response Fund, has made a big effort to reach out to new donors, said Arakaki - and the results are starting to show.

The ERF and CHF have increased their donor bases in the past 15 years, with 40 donors, including Brazil, UAE and Mexico, Nigeria and Gabon among the top 10 contributors to the Haiti emergency Response Fund, she said.

The CERF is even more diverse, with 140 donors in 2010. Unique to the fund is that 40 of its donors are also recipients. “The more new members that come on board, the more of an example it sets... Donors also realized today’s donor can be tomorrow’s victim,” said Arakaki.

The draw of such pooled funds to some emerging donors is ease: they can write a cheque and OCHA does the rest. “Many of them want to identify the simplest mechanism to give money as quickly as possible,” said Arakaki.

This is particularly true for governments that do not have the legal set-up to administer and track foreign funding. The law in Poland, for instance, means it can take up to three months to disburse money to a national or international NGO; thus the government finds it much easier to give to pooled funds or UN agencies and the International Federation of the Red Cross, according to Development Initiatives’ Smith.

The amounts are still small, however: 90 percent of CERF funding in 2010 still came from the same “traditional” 10-12 donors.

NGOs catching up


Whether it is murky entry points for dialogue, emerging donors’ penchant for pooled funds, or a host of other reasons, NGOs appear to be behind UN agencies in reaching out to new donors. Most of the big international NGOs are building relationships: World Vision for instance, fund-raises in Thailand, the Philippines, India, Malaysia, Mexico, Brazil, Colombia and Chile through its country offices, according to spokesman Christopher Weeks, and the South Korea and Taiwan offices now donate funds, rather than receive funds, he said. But the numbers remain small.

Gulf donors contributed just $1.5 million to Oxfam’s $473 million annual budget, according to Faye. But building relationships with these donors is still important. “Rather than just going after money, we are trying to build real partnerships, as well as seeing how Oxfam can influence them on a policy level.”

GPPi acknowledges the challenges involved in finding “entry points for dialogue”: many emerging donors – such as South Africa – do not have separate development ministries to administer aid; Brazil has a fragmented aid system, with no legal framework to regulate, monitor or evaluate aid, according to the Overseas Development Institute, while the aid motivations of India remain largely unknown.  

There is “great variance” in donor transparency, according to PWYF’s Christiansen: Estonia is “extremely transparent” at one end of the scale, while China is “not as murky as everyone thinks”, she said. PWYF will be releasing a report on emerging donor transparency in November. For those donors still honing their humanitarian and development financing systems: “There are benefits to setting up good transparent systems from the beginning... If you have to retrofit, then it is much harder,” Christiansen says.

For relationships to work, emerging donors need more respect, a representative from one emerging donor’s foreign aid ministry told IRIN in Dakar: many of them have been giving aid for decades without being noticed, he said. Meier added: “They all of a sudden have been discovered as cash cows, while still not getting a say in international governance.”

The DAC still does not include China, Russia, Saudi Arabia or Brazil, and no meeting ground exists for all donors to discuss humanitarian assistance other than the annual UN General Assembly and the Economic and Social Council (ECOSOC). “This reinforces the idea of aid being part of the western agenda,” said Antonio Donini, researcher at Tufts University’s Feinstein institute.

An NGO, One.org, has called on emerging donors to join existing coordination structures. But Christiansen says these structures themselves need to change to be more welcoming to new members. She hopes forging a mutually respectful dialogue between aid agencies, new and established donors, will be on the agenda at the aid effectiveness conference in Busan, South Korea in November.

“Things may get messier before they become clearer, but it is already incredibly messy – we need a bit less hubris, and a bit more action,” she said. 

For more on aid policy, visit IRIN's in-depth: The rise of the "new" donors

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