Uneven convergence in development? The case of India’s lines of credit to Africa

Abstract

This paper examines the uneven convergence between Indian development cooperation and the (so-called) ‘traditional’ development establishment. Using the case of Indian government concessional lines of credit (LoCs), handled by the Export–Import Bank, it demonstrates how diplomatic, strategic and party-political interests drove a major revision in LoC policy in 2015. The Indian government directly adopted policies from the World Bank and the UK’s Department for International Development on project selection and design, tendering and monitoring. These were designed to increase technical proficiency, timeliness and development outcomes but also to bring about a change in the companies undertaking these projects. Such policies indicate some degree of departure from the non-interventionist, non-hierarchical norms of India’s original South–South Cooperation, whereby the recipient (in theory) exclusively made decisions over what projects were done and how. To some extent, that role is now shared. This partially mirrors changes among the DAC donors, many of whom are redefining the definition of OECD Official Development Assistance (ODA), increasing blended finance and focusing more on economic development (and less on poverty reduction). However, while converging in these aspects of technical planning and implementation, the political and strategic interests driving the LoC changes did not extend to examining developmental or environmental outcomes; state-to-state relations continue to have primacy in the project-approval process. The paper therefore finds uneven convergence in India’s development cooperation, with change in technical policies but greater persistence in norms. This reflects the wider multidirectional evolution of the global development sphere.

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Summary:

A new working paper by Barnaby Dye analyses how India’s development cooperation with Africa has significantly changed. Founded after India’s independence, the country’s development cooperation programme was rhetorically framed as demand-led, non-interventionist and premised on respect for sovereignty. India has long contrasted itself with the ‘traditional’, ‘western’ development establishment of OECD donor agencies and multilateral organisations like the World Bank.

However, in 2015, India adopted specific policies from the World Bank and UK’s Department for International Development in one of its flagship development schemes, the concessional Lines of Credit (LoCs), handled by the state-owned Export-Import Bank. These changed policy processes of project selection and design, tendering and monitoring. These amount to a much more interventionist development policy where Indian authorities have a greater say over what happens, how, and by whom- powers now previously exclusively held by recipient governments.

However, the changes have not been total. India continues to insist on the principles of sovereignty-first, of mutual respect and demand-led development cooperation. Thus, the projects continue to be negotiated primarily through state-to-state bilateral forums, concentrating on meeting the demands of recipient governments.

Relatedly, the changes are primarily focused on technical improvements to delivery of projects, aiming for timely, functioning and on-budget projects. There is not a political focus on development outcomes, consideration of environmental impacts or assessment of those displaced or affected by Indian-financed schemes. Moreover, research suggests that no subsided loans proposals have been rejected, again suggesting that the Indian governments focus is on improvement on the technical aspect of projects, not their developmental outcomes.

The working paper demonstrates the set of interest driving this pattern of reforms, and frames these changes in a wider pattern of convergence: developing countries from China to South Korea have, in different and particular ways, adopted policies associated with the established OECD development establishment. Equally, donors in that establishment have adopted the economic-growth focus and blended finance approach associated with the ‘new’/rising power’s development cooperation.

Thus, the working paper argues that India’s selective convergence reflects its attempts to deal with its growing portfolio of development cooperation, and particular domestic political priorities.

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