This time for Africa: With USAID slashed, India and Japan must step in to support development

It is vital that African aid recipients do not find themselves stranded, without time to recalibrate their dependence on the Overseas Development Assistance of the rich world. It is also vital that those who step forward to throw them a lifeline are not donors who cynically leverage the aid they give to secure geopolitical allegiance.

China has been actively scouting support from countries for the reunification of Taiwan without the precondition that the process be peaceful.

Foreign aid figures prominently among the casualties of the United States’ policy shift, under President Donald Trump, to an ‘America First’ philosophy. It is not just the freeze, and possible curtailment, of funds disbursed from USAID that is at stake.

Also on the chopping block are chunks of the aid budgets of rich, European nations as they struggle to satisfy Trump’s demand that all members of the North Atlantic Treaty Organization increase their defence spending, not just to meet the NATO target of 2% of GDP, but to compensate for past funding deficits.

The latest manifestation of this rich-nation tradeoff between aid and arms has been British Prime Minister Keir Starmer’s announcement that Britain would increase its defence spending from 2.3% of GDP to 2.5% of GDP, with the additional funds being mobilized by cutting the foreign aid budget from 0.5% of GDP to 0.3% of GDP.

In breach

While the United Nations passed a resolution in 1970, calling upon developed countries to set aside 0.7% of their Gross National Income for Overseas Development Assistance, the norm has consistently been honoured more in the breach than in the observance, except in the case of a handful of countries.

For example, in 2023, only five countries gave aid amounting to 0.7% of GNI or more: Norway (1.09%), Luxembourg (0.99%), Sweden (0.93%), Germany (0.82%), and Denmark (0.73%). In terms of the absolute amount of aid, the US was on top, donating $64.99 billion, although that amounted to only 0.24% of its GNI.

Britain has not only failed to meet the target but also diverted a part of the foreign aid budget to housing and feeding asylum seekers who entered Britain. After the Ukraine war started, the aid budgets of all major countries diverted significant chunks to Ukraine, at the expense of the underdeveloped countries that used to receive the funds in the past.

Overseas Development Assistance is an instrumentality of state policy, the milk of human kindness and a salve for the guilty conscience arising from past colonial plunders, mixed in different proportions for different nations. Aid for the Palestinians helps maintain Israel as a proxy of the West, more specifically of the US, in relative stability.

Aid wins friends and influences people in the developing world, a task essential for persuading their leaders to vote in particular ways at forums such as the United Nations. It is an input to societal stability, and, therefore, an incentive for developing country populations to stay put at home and build their futures there, rather than migrate to the rich world.

Aid for healthcare helps outbreaks of disease to be contained locally and prevents their spread across borders to haunt rich world populations, germs rarely waiting at border checkpoints for the immigration officials’ stamp approving entry.

Aid for energy transition in the developing world helps fight climate change globally, apart from eliciting a modicum of gratitude from the nations so helped. The Nordic countries tend to be motivated by fellow feeling more than most other rich donors, however.

Most of Europe feels the pressure to turn inward and direct their budgetary outlays to their own people, rather than splurge on distress in distant lands in the period of hardship experienced after the covid pandemic.

Time to step up

This is an ideal time for China to turn on its own tap of funded benevolence, shifting gears slightly from loan-financed infrastructure projects in the developing world under the Belt and Road Initiative to larger proportions of development grants. It has foreign exchange reserves of over $3.5 trillion.

It is not in the interest of the rest of the world to let China emerge as a major buyer of developing world goodwill. Former Japanese Prime Minister Shinzo Abe had a vision of partnering with India to make a big impact in Africa with financial aid, training, transfer of expertise, and improved connectivity. When it comes to low-cost digital public services, there are few countries that can beat India.

If Japan were to come forth with the funds and India, with its low-cost expertise, there is much tangible good that can be delivered in Africa and other parts of the developing world. Sowing intelligently designed development assistance to reap goodwill would be a sensible strategy for India and Japan, fulfilling Abe’s vision of a confluence of the two seas.

As the rich world steps back from third-world misery, lndia and Japan should step up, even as China seeks to grab the opportunity to buy goodwill.

Let the hunger games begin!