A Chinese Model For Foreign Aid

By Kris Hartley, Asit Biswas 18 December, 2017

As the US & EU retreat from foreign aid, Biswas & Hartley call for China to lead & ensure the SDGs' success

This article was first published on Project Syndicate and the authors have kindly given us permission to re-publish it. The original publication can be found here. 
As the United States and the European Union retreat from their foreign-aid commitments, only one country has the resources and the interest to assume the mantle of global development leadership. The world will have to become accustomed to China’s new role.

Last month, the Bill & Melinda Gates Foundation released a status report tracking progress on the United Nations Sustainable Development Goals (SDGs). The data, which were meant to highlight efforts to eradicate extreme poverty and reduce premature deaths, was also intended to cajole. Countries can, and must, do more to address the global development challenges that the planet collectively faces, the report concluded.
No country was singled out in the Gates report for its potential to restore the “world’s commitment to development.” Rather, “leaders everywhere” bear responsibility for ensuring that the SDGs are met by 2030. But we believe there is one country that can do more than others to build the world envisaged by the SDGs: China.

“We believe there is one country that can do more than others to build the world envisaged by the SDGs: China”

International development is at a crossroads

Two years into the SDG program, international development is at a crossroads. The United States, long the torchbearer of foreign aid, is retreating; so is Europe (albeit to a lesser extent). But China, with its newly articulated global ambitions, has an opportunity to reinvigorate the conception and delivery of humanitarian assistance.
Adopted by the UN General Assembly in 2015, the SDGs outline a vision for global development that targets poverty, education, public health, inequality, sustainability, and climate action over the next 15 years. It presents a broad vision for development, whereby issues once viewed as country-specific are treated as challenges for the entire world to tackle collectively. By contrast, the Millennium Development Goals, which ended in 2015, were more narrowly focused, and primarily targeted at issues affecting poor countries.

Some of the SDG targets are already in jeopardy

But the Gates’ study suggests that some of the SDG targets are already in jeopardy. For example, the health goal (SDG 3), which includes a target for eliminating preventable deaths among newborns and children, is unlikely to be achieved in the allotted timeframe. At the current pace, mortality reduction in South Asia and Africa will not be realized until mid-century.
Clearly, more investment is needed globally in the types of interventions that have proven effective locally. Ethiopia’s Health Extension Worker program and Malawi’s Health Surveillance Assistant program have been proven to reduce child mortality. Aid dollars should be earmarked to help programs like these expand to other regions.

“Growing isolationism… is having severe consequences for foreign assistance”

Instead, the opposite is happening. The growing isolationism associated with the populist backlash around the world is having severe consequences for foreign assistance. According to the OECD, bilateral aid to the world’s least-developed countries fell by nearly 4% in 2016. This is an alarming drop for these countries, given that official development assistance (ODA) accounts for more than two thirds of the aid they receive.
The US, which remains the world’s largest donor for nutrition programs and for maternal and child health initiatives, is leading the funding retreat. President Donald Trump’s 2017 budget proposal includes a staggering 45% cut to funding by the US Agency for International Development for water and sanitation projects, a 26% cut to global health funding, and the elimination of funds for family planning. While it is not clear whether Congress will support Trump’s budget request, which would amount to billions of dollars in lost aid, even a minor reduction in US aid spending would hurt many of the world’s poorest.
The US is not alone in its foreign aid retrenchment. The European Union’s 2018 draft budget proposes a €90 million (USD106 million) cut to development spending, while Austria, Germany, and Italy have all diverted development assistance budgets towards migration crises viewed as imminent national security threats. These are troubling trends, because private philanthropy cannot replace aid withdrawn by governments.

China should be the new champion for international development

The world needs a new champion for international development, and China should assume the role. With weakening ODA commitments from traditional donors, China has a chance to lead in human development, poverty alleviation, and public health spending.

Chinese leaders have recently shown interest in aid to strengthen civil society & improve livelihoods…

…China’s flagship “Belt and Road Initiative” includes health cooperation as part of its proposed strategy

It is true that China’s aid model differs from the West’s. Europe and the US have historically focused on funding health care and education initiatives, while encouraging civil-society growth and participation. China, on the other hand, grants aid on a bilateral basis, and has typically targeted its funding toward infrastructure projects. But Chinese leaders have also recently shown interest in aid to strengthen civil society and improve livelihoods.
Although Chinese ODA is still a fraction of what OECD countries spend, China has signaled its interest in becoming a development leader, especially in the health sector. At the 2015 UN Sustainable Development Summit in New York, China pledged USD2 billion  to help implement the SDG agenda, and China’s flagship “Belt and Road Initiative” includes health cooperation as part of its proposed strategy. In 2014, China also committed USD47 million to help contain the Ebola outbreak in West Africa. While that was significantly lower than the US pledge of USD1.8 billion, China was among the fastest to deliver on its commitment.
China’s geopolitical and economic influence is growing, and so, too, must its role in promoting international peace and development. Skepticism about China’s development intentions will no doubt emerge, given China’s political and ideological differences with the West. But the skepticism could yield positive results, especially if it prompts Western powers to reevaluate their foreign aid retreat.

Having lifted 470mn of its citizens out of extreme poverty between 1990 & 2005, China has the experience to lead

Even if it does not, China has the tools to become a leader in international development. And, having lifted some 470 million of its own citizens out of extreme poverty between 1990 and 2005, it also has the experience. But, more than anything, China now has the political opportunity. As the US and Europe turn inward, ensuring the SDGs’ success will increasingly depend on encouraging – and becoming accustomed to – Chinese leadership.

Further Reading

• Hopes & Fears While Remaining Irrationally Exuberant – Spurred by recent news, China Water Risk’s Tan shares her musings from not kidding ourselves, including that tech will solve-all, to adjusting our goals and piercing our irrational bubbles to bring down waste
• Fashion Headlines This Festive Season – With lots happening in fashion over the last quarter, China Water Risk’s Dawn McGregor shares what is making her hopeful but also fearful. Plus, see what she says is forcing the industry to develop a new relationship with pollution
• Moutai: Risks Along The Intoxicating River – Moutai’s stocks have soared & with a 90% profit margin it is hard not to have a hopeful outlook but China Water Risk’s Yuanchao Xu warns of river basin risks – best to keep a clear head to ensure future prosperity
• Aquaculture: 8 Fishy Facts – Think because we get fish from water that its “Fish forever more”( 年年有“鱼”)? China Water Risk’s Woody Chan shares 8 must-knows on aquaculture that will make you re-think this
• Making Glaciers On Top Of The World – We sat down with Sonam Wangchuk, the real-life Phunsukh Wangdu of the Indian movie ‘3 Idiots’, to learn why he is and what challenges there are to overcome in creating artificial glaciers, known as Ice Stupas

• Can China Clean Up Its Act? – China faces unprecedented air, water & soil pollution after decades of growth. With its contaminated land area bigger than the United Kingdom, Asit K Biswas & Cecilia Tortajada look at what China’s policymakers are doing to change this
• Managing the World’s Liquid Asset – Water – Savvy investors now recognise water as a business risk yet there is still no agreed global standard & framework for sustainability reporting. Biswas, Tortajada & Chandler on why corporates & governments must do more to change the culture & mindset over the use of water
• What ‘Xi’s Thought’ Means For Water – One key message from Xi Jinping at the 19th National Congress was harmony between environment & economic growth, surely this bodes well for water? China Water Risk’s Feng Hu reviews
• Green Development For A Beautiful China – The Minister of Environmental Protection Ganjie Li outlined the MEP’s achievements and future plans at the 19th People’s Congress. What are the key takeaways? China Water Risk’s Yuanchao Xu reviews
• The War on Water Pollution – Premier Li has just declared war on pollution. Tan expands on the government’s stratagems & offensives and fundamental changes required to shore up the MEP’s arsenal in order to wage a successful war