Should China Continue to Receive Aid?

Back in July I blogged about ‘China, Brazil and India’s Billion-Dollar Aid Appetite’ which discussed Professor Jack Chow’s Foreign Policy article. Chow questioned why China, despite considerable wealth, continued to be a major recipient of Global Fund monies. A rebuttal of Ambassador Chow’s article was published yesterday with the authors arguing that the Global Fund should continue to support China. What is their rationale?

The authors, Drew Thompson and Jia Ping, make three main points.

1. Development assistance is not a zero-sum game.

US. development assistance, whether bilateral or through multilateral mechanisms, should not be seen as a zero-sum endeavor where one recipient benefits at the expense of another.

I agree that it’s not good to play diseases or countries off each other- when health and development assistance advocates should be speaking with one voice and pushing for more money overall. However, I think that even the most optimistic individuals would acknowledge that there IS key pressure on aid budgets, and whether it is President Clinton, Bill Gates, or the UK Development Minister Andrew Mitchell, questions are being raised over the efficiency of funds. Funds are limited, and more focus is being placed on buying more ‘health’ for every dollar.

The Global Fund is in a particular fragile place. The UN estimated a need of $25.1 billion in AIDS funding for 2010 with a funding gap of $11.4 billion – including a shortfall of up to $5 billion for the Global Fund for 2010.

Why should aid dollars subsidize (perhaps there’s a better term) countries that can afford to independently provide healthcare? To recap, India spent $40 billion on national defense last year, China, officially, $80 billion on defense, and Brazil, $20 billion. But the authors provide an answer to this under point two.

2. Global Fund money can bypass government obstacles to improving health.

Global Fund resources have been deployed quickly and efficiently…bypassing bureaucratic restrictions and political allocation processes that might have seen funds earmarked for health projects diverted elsewhere, particularly by local officials

Thompson and Ping note that for health funds to come from the Chinese government, a political allocation process is required, which we all know is messy, whether due to special interests, special favours, or plain corruption. Thus Global Fund money can bypass government and go directly to improve health. This is a common argument in global health for bypassing governments, especially in fragile states. But there are three problems with this approach:

1. Weakening the public sector- Funding through off-budget channels bypasses the domestic systems, processes, and institutions that are meant to improve governance and sustain the effect of aid in the long term.

2. Coordination- How do the various non-governmental groups coordinate their activities (if they do at all)?

3. Sustainability- What is the exit plan? Is the Global Fund going to continue to give money to China for the next 15-20 years?

3. It’s about diplomacy and dialogue, not aid.

The interaction provides a unique opportunity to promote the uptake of such universal values as transparency, accountability and inclusion through democratic processes.

This gets to the heart of why most donors provide foreign aid for health- it’s for a specific agenda that fits with the donor, and not purely (or mainly) for altruistic reasons. As I noted in the previous blog, Ed Gomez and I have been looking into the role of the international community in domestic health financing in the major middle-income countries. Given that external funding constitutes such a small percentage of health financing in these middle-income countries, it seems counter-intuitive that donors would see relatively small investments (for the recipient country) and large investments for them as worthwhile. What we have found for Brazil and India is that these small monies are used catalytically- thus relatively small amounts of money are being used to pull domestic spending towards the goals of the global community, ie. donors. And the monies that are being given to these countries are tied to a specific agenda- whether normative, political or geostrategic.

Thompson and Ping make this interest explicit- the U.S. (and the Global Fund) should continue to keep giving China money because it is in the U.S. interest to do so- for promoting ‘Western’ norms (such as transparency, public participation, accountability) and for strengthening China’s health system thus helping prevent the spread of infectious disease.

While these are fair arguments, there’s also a strong case to be made for limited aid dollars to go to the most in-need countries, such as Malawi, Haiti, and Niger, whose governments are struggling to meet the basic needs of their populations, to the most vulnerable individuals, such as children, for the most common and life-threatening diseases, such as malaria and TB. These should take priority over the interests of donor countries.

But perhaps I’m too much of an idealist.

Devi Sridhar

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