indian development partnership: genesis and evolution
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Forum for Indian Development Cooperation
18th January 2014
Indian Development Partnership:
Genesis and Evolution
Sachin Chaturvedi
• India’s own experience that India committed to the promotion of thesocial and economic development of newly independent countriesand their people, as lack of skills was realized to be a majorimpediment to realizing developmental goals.
• India launched manpower training programmes.
• India’s own experience when engineers from the Indian Institute ofTechnology (IIT) provided major technical support in rebuilding thecountry after Independence.
• Accumulated experience in skills development by being part ofseveral multilateral programmes for skills development
Genesis and Evolution
• The programmes included
- Colombo Plan, the Special Commonwealth Assistance forAfrica Programme (SCAAP),
- the US (United States) Third Country Programme and
- the Technical Assistance Programme of the UN and itsspecialized agencies.
• India established a new division within the Ministry of ExternalAffairs (MEA) to deal with these and other programmes.
• Economic and Coordination Division established in 1961,
• But soon realized that the training programmes had expanded and, asa result, the Indian Technical and Economic Cooperation waslaunched in 1964.
Genesis and Evolution
• In accordance with the philosophy of India’s foreign policy, anapproach of friendship and cooperation with the aim of peacefulco-existence became the foundation principle of India’sdevelopment cooperation policy.
• Framework of SSC and its associated values facilitate theovercoming of multitudes of problems, differences and conflictsthat might pull all the efforts for cooperation in different directions.
• Under Nehru, India had an element of idealism impacting on Indianforeign policy which was not very different from Gandhi’sphilosophy of ‘Growth for All’ and the idea of “One World”
Philosophy
• As a part of this, India articulated that the economicdevelopment of all countries is an obligation of the wholeinternational community.
• This was very much part of India’s commitment tointernationalism, wherein all countries contribute to therapid evolution of a new and just economic order underwhich all nations can live without fear or despair (Nehru1948).
Philosophy
Conceptual Framework
• Key SSC offers lessons for making flows more ‘effective’ bybeing inclusive.
• With demise of Washington consensus and less than expectedperformance of developed countries on Paris Declaration andunexpected expansion in SSC, a new context has emerged.
• Continued recession in the North and ascendance in the aidprogrammes from the South have given further fillip to this newcontext, which is yet to be fully captured at the theoreticalcanvass.
• Fundamental difference between structuralists and monetarists andSSC by character is closer to strcuturalists, would be indifferent tothe idea of stability and infact may even be closer to theassumption that growth may be accomplished even withinflationary pressure.
Learning from Principles of South-South Cooperation
* “Development compact’, works at five different levels,viz.- trade and investment,- technology,- skill upgradation,- lines of credit and finally- grants.
• The lines of credit and grants may be pooled underfinancing mechanisms.
• The engagement by the emerging economies with theother southern countries has provided major pull factorfor wider engagement across the five elements.
• Long-standing development cooperation policy of India underwentdramatic policy changes in the early 2000s.
• India asserted against the recall of aid as India went for nuclear.
• The strength was from economic buoyancy that transformed thedelicate balance of India’s dual role as a recipient and as anassistance provider (a ‘development partner’) for fellow developingcountries.
• India set a minimum ceiling for incoming aid (US$25 million), whichdrove out several smaller donors.
• Accumulation of a sizable foreign exchange reserve, resulting fromhigh economic growth and sizable expansion in foreign trade andforeign direct investment.
Recent Policy Changes
Evolution of Indian Development Cooperation Architecture: A Chronological Expose
Year Programme Purpose
1949 Cultural Fellowships Established MEA established cultural fellowships for fellow developing countries
1954 Indian Aid Mission (IAM) Launched at Kathmandu for coordinating and monitoring implementation of various Indian projects in Nepal
1964 First Agreement for Periodic Review ofdevelopment projects
This was signed with Nepal, during the visit of the Indian External Affairs Minister, to undertake a periodicreview of the progress made on Indian-aided projects
1966 Indian Cooperation Mission (ICM) The PM rechristened the IAM to ICM signifying the fact that Indian cooperation goes deeper than aid.
1969 Joint Commission (JC) at Afghanistanestablished for project reviews. Laterexpanded to other countries
Entrusted with (a) identifying resources and capabilities for undertaking projects of mutual interest and (b)exploring possibilities for expanding trade including land transit trade arrangements.
1961 Economic and Coordination Division(ECD)
A new Division was established at MEA to coordinate technical cooperation among other MEA programmes
1964 Consolidated Training programmelaunched as ITEC
Indian Technical and Economic Cooperation Programme (ITEC) launched as a part of the Economic Divisionfor which a special cell was formed.
1980 New Economic Cooperation Wing(ECW) launched at the Nepal mission
Economic Cooperation Wing was established at the Nepal mission, subsuming ICM
1994 Special Volunteers Programme (SPV)launched
India launched a special programme targeting 10 countries in Asia and Africa to assist in developmentprogrammes of partners countries
1995 Establishment of ITEC Division ITEC; SCAAP and Aid to Disaster Relief (ADR) hived off from the Economic Division to provide greater focuson Indian economic diplomacy. Later subsumed in the Technical Cooperation Division
2003 India Development Initiative (IDI) Budget Speech announcement for supporting fellow developing countries.
2004 IDEAS Lines of Credit (LoCs)Launched
India Development and Economic Assistance Scheme (IDEAS) launched to provide Lines of Credit by theEXIM Bank.
2005 Development Partnership Division A new Division created for better delivery of development projects. This was later merged with TechnicalCooperation Division.
2007 India International DevelopmentCooperation Agency (IIDCA)
Budget Speech announcement for setting up of IIDCA as one-stop shop for coordinating all projects, lines ofcredit, technical cooperation, deputation of experts and training of foreign nationals in India
2012 Development Partnership Administration(DPA)
A new division within the MEA established for coordinating India’s development assistance.
• However, the recent institutional changes are not completelyunprecedented.
• A long series of institutional innovations have been attempted atvarious levels and at different points of time for experimenting ondelivery mechanisms and also for bringing the idea of impactevaluation and assessment into the development partnershipprogramme of India.
• What emerges clearly is the lack of consistency in these efforts. Theinstitutional arrangements, which have often led to changes andrearrangements—sometimes within a year or so—have affectedperformance and commitment.
• The concerned divisions within the MEA dealing with planning (atthe headquarters) and delivery (at the end of missions) have alsogone through several changes.
Genesis and Evolution
11
* Budget speech (2003-04) suggested a change in India’said policy:
“a stage has come in our development where weshould now, firstly, review our dependence on externaldonors.
Second, extend support to the national efforts of otherdeveloping countries, And, thirdly, re-examine the lineof credit route of international assistance to others.
Having fought against poverty as a country and apeople, we know the pain this burden imposes.”
New Focus in India’s DC Policy
12
* Later, in the Annual Budget of 2007-08,announced the setting of the IndiaInternational Development Cooperation Agency(IIDCA) in February 2007.
“107. In keeping with India's growing stature in international affairs,we must willingly assume greater responsibility in promoting developmentin other developing countries.
At present, India extends development cooperation through a number ofMinistries and agencies and the total sum is about US$ 1 billion perannum. It is felt that all activities relating to development cooperationshould be brought under one umbrella.
Accordingly, Government proposes to establish the India InternationalDevelopment Cooperation Agency (IIDCA). The Ministries of ExternalAffairs, Finance and Commerce and other stakeholders will berepresented on IIDCA. “
New Focus in India’s DC Policy
13
• This is for dealing with developmentcooperation with other countries.
• India has believed in the imperatives ofSouth- South Cooperation since itsindependence.
• Project based bilateral funding to a new trendof regional focus.
• Absence of IIDCA – coordination andassessment is a major challenge
• DPA – the new addition
Focus in India’s DC Policy
According to the decision taken at the first India-Africa ForumSummit, Indian Government will be setting up 21 institutions inAfrica
– India Africa Institute of foreign Trade (Kampala, Uganda)
– India Africa Diamond Institute (Gaborone, Botswana)
– India Africa Institute of Educational Planning and Administration(Bujumbura, Burundi)
– India Africa Institute of Information Technology (Ghana)
Institution Building
Institution Building– Government of India approved a USD 30 million line of credit to
Angola for setting up an Industrial Development Park
– An amount of 700 million dollars will be made available byGovernment of India to establish new institutions and trainingprogrammes in Africa.
– A MoU was signed with the Central African Republic for settingup an IT Centre for Excellence in Bangui
– A multi member team of Indian customs officers providedsupport for developing capacities to undertake customs valuationto Ethiopian revenue and customs authority
– Capacity in Tanzania to deal with cyber crime
– Specialised courses and institution creation by the Indian Instituteof Foreign Trade in Kampala, Uganda.
– Five human settlement institutions to support low cost housing(Zambia, Kenya, Togo, Mauritania and the DRC)
Key Development Partners for Nepal
256.11
184.42
112.5492.6158.69
50.7348.45
42.38
233.74
Donor-wise disbursements for 2010-11(US$ million)
World Bank Group
Asian Development Bank
United Nations
United Kingdom
Japan
India
USAID
European Union
Other
Source: Ministry of Finance, Nepal (2012)
202.85
135.07
129.63
110.9952.89
50.36
398.01
Sector- wise disbursements for 2010-11 (US$ million)
Education
Local Development
Health
Road Transportation
Drinking Water
Electricity
Other
Source: Ministry of Finance, Nepal (2012)
Local Developments Sectors
0
20
40
60
80
100
120
140
160
180
200
ADB India World Bank Group
United Kingdom United Nations Others
181168
122
101
65
162
US$
mill
ions
Total Commitments-Ongoing Projects
Source: Development Cooperation Report, Fiscal Year 2010-11, Ministry of Finance, Nepal (2012)
Local DevelopmentDisbursing projects in the sector for 2010-11
Donor Agency Total Committed (US$ million)
Disbursed in 2010-11 (US$ million)
Social Safety Nets Projects World Bank 48.09 25.09
Nepal Rural Access
Programme Phase II
DFID 54.86 22.12
Small Development Projects India 168.12 12.86
Rural Reconstruction and
Rehabilitation Sector
Development Program
ADB,DFID,OPEC,Switzerl
and
140.95 10.40
Local Governance and
Community Development
Program
ADB,CIDA,Denmark,DFID
,Norway,Switzerland
158.12 9.24
Source: Development Cooperation Report, Fiscal Year 2010-11, Ministry of Finance, Nepal (2012)
• The Small Development Projects directlyimpact local communities and supportsocial-economic development, providelivelihood,
• India is now implementing such projects inAfghanistan, Sri Lanka, Bhutan andMyanmar.
• The Project Monitoring Committees overseethe implementation to ensure that there isno cost and time overrun.
SDP: Key Features
• MOU signed between GOI and GON in November 2003and renewed in June 2006 and August 2008 Projects costing less than NRs. 5 crores ($ 0.7 Million) Based on local needs; through participation of
community and local bodies of GON Development directly reaching the beneficiaries, no
overheads; direct involvement of stakeholders Low investment, no overheads Short gestation period; simple and transparent
modality
Focus of SDP• Schools, multiple campuses, nursing campuses; Other
specialised training institutes; Libraries; Gifting ofbooks, gifting of school buses
• Primary health posts, maternity centres, hospitals,gifting of ambulances/medical vans/medical equipment
• Rural electrification, micro hydro projects• Rural/Urban roads, bridges• Canals (for example, Rajkulo in Lalitpur)• Rural drinking water projects, cold storages• River Training Projects• Reforestation/ afforestation• Developmental training for GON’s senior bureaucrats.
Key Projects• GIFTING OF AMBULANCES AND BUSES
Since 1994, over 282 ambulances and 54 buses presentedacross 68 districts in Nepal (As of 31 December 2010)
• EYE CAMPSSince 2001, assistance to Nepal Netra Jyoti Sangh forcataract and trachoma surgeries through country-wide eye-camps. So far, almost 4.25 lakh patients have been examinedand more than 75,000 surgeries performed in these camps,with total Indian assistance of NRs. 13.79 crores ie $1.8Million (appx)
• Since 2007, a new School Eye Health Care Programme hasalso been launched. More than 18000 students have beenprovided with optical devices with assistance of NRs 2.67Crores ie $ 0.35 Million (appx)
OVERALL ONGOING PROJECTS(Including Large and Small Projects)
DURING 2003-2010
• 405 projects (December 31 2010) • Total outlay: over NRs.5807 Crores
ie $ 784 Million (appx).• Education, Health, Community
Development, Infrastructure
Flood Control and River Training
• India has been providing assistance toNepal for strengthening and extension ofembankments for river training and floodprotection works along Lalbakeya,Bagmati,Kamla Trijuga, Lakhandehi,Sunsari, Kankai and Kaligandaki rivers inNepal- Nrs. 102 Crores ie $ 13.2 MillionAppx
India’s Aid to Nepal (Sector-wise SDP)
2010-11 2011-12
Sector No. SDP US$ ‘000’ No. SDP US$ ‘000’
Education 21 7571.54 29 9761.36
Infrastructure Development
5 1920.56 11 4127.91
Health 5 1855.73 6 2537.16
Other 7 2172.75 3 1203.02
Source: Various Issue of Maitree (Maitree is the monthly publication of Embassy of India, Kathmandu)*data from august onwardsNote: Small Development Projects (Projects costing less than NRs 5 crores)
Afghanistan• In November 2012, the Indian Cabinet approved the third phase of the
Small Development Projects in Afghanistan. The outlay on the thirdphase of the Small Development Projects in US$ 100 million.
• The projects will be implemented over a period of four years throughlocal Afghan Government Bodies, Community Organizations, Non-Governmental Organizations, Charitable Trusts and Education andVocational Institutions.
• The money is to be spent over three years, as assistance for community-based small development projects, so that the programme’s reach isextended to 34 provinces.
• The programme’s focus is on local ownership and management ofprojects in agriculture, health, education, rural development, vocationaltraining, sanitation and drinking water.
• The Small Development Projects were earlier implemented in twophases: the first in July 2006 comprising 50 projects worth US$11,216,179; and the second in June 2008 comprising 51 projects worthUS$ 8,579,537. Most of the projects in the two phases have beencompleted.
Scaling Up
• India’s assistance to Bhutan in the 10th FiveYear Plan for 2011-12 is for Rs. 400 million.
• Similar amount is allocated for Sri Lankawith focus on fishing, small and mediumenterprises development, communityempowerment
3030
Strength and Challenges• BICS has launched major programmes for establishing
linkages with other developing countries under the South-South framework,.
• Factors helping in establishing strong linkages among thelarge developing countries and other developing countries- Common nature of factor endowment in southern
countries- Ability to provide cost effective professional services- Appropriate size of plants- Ability to scale down production as per the
requirements
31
Strength and Challenges• The fact that India focused on technical cooperation in a major way
reflects on the desire to share comparative strength with otherdeveloping countries.
• India should consider for enhancing geographical focus of ITECtraining programme and diversification of thematic areas to focus onprogrammes which may provide not only trained manpower to absorbadvances in technologies in national economies but also help indeveloping integrated and sustainable approaches to minimizeadverse environmental implications.
• Focusing on capacity building for production and value addition.
• Enabling adoption of appropriate technology.
• Institutional set up and global linkages.
• A5/O5/BICS should come together for an arrangement.
• Strengthen multilateral systems.
3232
Challenges before India
• Institutional set up and global linkages.
• Contribution towards strengthening of multilateralagencies and related systems.
• Delhi Process (2013)- Evidence Collection; Impact assessment.- OECD DAC Agenda- Approach towards DCF and TDC
• India must consider a Policy Statement: White Paper- Quantums and Impacts- Insulating Budget- Greater CSO/ Media Engagement
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