1 India’s Experience in Development CooperationIGD Symposium on Development Diplomacy PRATYUSH, RIS
2 Flow of the PresentationIntroduction Genesis and Evolution Maturing of India’s Development Cooperation Emerging Dynamics
3 Introduction India has followed the principles of SSC since its independence in 1947 Renewed world interest in India’s Development Cooperation and SSC are recent India has believed in ‘Partner and Partnership’ and not in ‘Leader and Leadership’ Along with its Development Compact, India provides market access and duty free tariff preferences to LDCs
4 Genesis and Evolution Indian FP was inspired by Gandhi’s philosophy of ‘Growth for All’ and ‘One World’. Realisation of skills gap led India to help fellow newly independent countries India accumulated experience in skills development through the Colombo Plan, SCAAP, Third Country Prog. This led to the estb. The Eco. and Coordination Division in 1961 and then ITEC in 1964
5 Contd. Development Cooperation Policy underwent a major change in early 2000s A minimum ceiling of USD 25 million was set for incoming foreign aid to India Only G-7 countries are left to provide aid. In 2016, India declined aid from UK too Foreign Exchange reserve rose from USD 5.8 billion in 1991 to USD 350 billion in
6 Contd. The recent institutional changes (DPA) are not completely unprecedented. What emerges clearly is the lack of consistency in these efforts In Nepal, India established Indian Aid Mission (IAM) in 1954 In 1966, IAM was renamed as Indian Cooperation Mission (ICM) ICM was wound up in 1980 to be replaced by Economic Cooperation Wing (ECW)
7 Contd. The importance of evaluation and impact assessment were realised by MEA but, no standing institutional arrangement was estb First such review of projects was undertaken in Nepal in 1964 (under ICM) //ly review projects were carried out in Afghanistan, Iran, Sri Lanka and Czechoslovakia (Under Joint Commission)
8 Contd. JC was entrusted with (a) identifying resources and capabilities for undertaking development projects of mutual interest (b) exploring possibilities for expanding trade However, there was no arrangement at the central level to coordinate and harmonize various policy decisions across countries Changes were taking place at the headquarters as well. The dealing changed hands from Ministry of Finance (MoF) to MEA
9 Contd. Special division Economic and Coordination Division (ECD) was set up. It was mandated to take care of aid and trade relations with Nepal apart from monitoring of projects This division also formed inter-ministerial committees and study groups to streamline the process ECD linked FP with the economic growth of India for the first time
10 Contd. A new orientation in Indian DC led to 3 major activities (a) technical assistance (b) promotion of economic collaboration (c) analytical and advisory function National Industrial Development Cooperation (NIDC) of India helped several developing economies in carrying out techno-economic surveys. (Afghanistan, Yemen, Fiji and Mauritius in 1970s) Simul. ITEC was providing CB prog for countries like Ghana, Nigeria, Tanzania and Uganda The Economic Division was restructured in 1995 in creation of a special administrative division within MEA
11 Contd. Special Volunteers Programme (SVP) was launched in 1994 however, very little is known of this prog 2003 in many ways could be considered the year which brought about paradigm shift in India’s DC 2003 budget speech resulted in the decision to estb a new aid agency It led to the introduction of India Development Initiative (IDI) under MoF with an allocation of USD 43 million for
12 Contd. IDI resulted in (a) cap to incoming aid and transferring small aid to India’s CSOs (b) Debt cancellation for HIPCs In 2007, IDI was renamed as India International Development Cooperation Agency (IIDCA) Guiding principle of this new agency was that India’s assistance would be directed especially at developing countries that were in greater need of external aid than India
13 Contd. India’s external assistance in 2007 stood at USD 1 billion and was exercised through different line ministries. IIDCA was to bring it all under one umbrella MEA, MoF and Commerce and Industry were the stakeholders of the board of IIDCA Interestingly all announcement of IIDCA were either in the parliament or in the media with no mention in the MEA Annual Reports
14 Contd. It was only in 2012 that MEA Annual Report announced the setting up of Development Partnership Administration (DPA) As the name suggests it is not an agency but, just one of the several other divisions of MEA. In hindsight, this seems to be a far more balanced approach, as MEA has now more time to connect together various relevant divisions dealing with the evaluation of credit lines and projets.
15 Maturing of India’s Development CooperationApart from increase in quantum of India’s assistance, the geographical expansion has taken place as well Nature of development assistance has diversified as well which now includes new areas like frontier technologies ‘Effective Partnerships’ through providing unilateral market access to most exports from LDCs. This scheme was initiated in 2008.
16 DEVELOPMENT COMPACT CAPACITY BUILDING TRADE & INV. DEV. FINANCE GRANTSTECH.
17 Emerging Dynamics 3 key instruments of India’s Development Cooperation are (a) LoC (b) Grant based assistance and (c) Skill upgradation through ITEC LoCs are administered by Indian Development and Economic Assistance Scheme (IDEAS) through EXIM Bank. (Any finance originating out of the public exchequer and authorized by parliament or reflected in the consolidated fund falls under the ambit of public money. It is not private capital owing to the sovereign guarantee provided by the govt) Grant specific interventions by India have been in Nepal and Bhutan since 1950s. In fact, the programme based assistance are carried out in Bhutan. CB is taken care by ITEC programmes where 54 empanelled institutions in India provide over 200 training prog
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