AID POLICY: Piecing together the Chinese aid jigsaw

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– No one would claim that it is easy to nail down the exact details of the Chinese aid budget, but does Chinese aid deserve the kind of adjectives often applied to it? Is it really “veiled and opaque”? “Wrapped in mystery”? And if it is this un-transparent, is that because everything depends on a secret centralized masterplan in Beijing, or because the system is so disorganized that no one actually knows the whole story of what is going on?

Sven Grimm and colleagues from the University of Stellenbosch in South Africa set out to assess how opaque Chinese aid to Africa actually is. They started while on a field trip to Rwanda, asking questions about how much Chinese aid the country received. “The first thing we found,” said Grimm, “was that a lot of people who should know, don’t actually know.”

In China itself, they initially found the same thing when they questioned Chinese officials, members of think-tanks and academics working in the field of Chinese-African relations. “Their first reaction tended to be, ‘We don’t know. You will have to ask the African governments.”

But once you start digging, said Grimm, you find there is more information out there than you would think. His newly published report on the Transparency of Chinese Aid offers a guidebook for researchers, detailing where to look, and what information they might find.

The government prints statistical year books, like the Almanac of China’s Foreign Relations and Trade, which gives aggregate figures for total external assistance; and China’s Trade and External Economics Statistical Yearbook offers data in three categories – engineering projects, labour services and design and consulting.

The Chinese Export-Import Bank publishes annual reports which include important information on its concessional loans, such as normal interest rates (2-3 percent) and repayment periods (15-20 years with a 5-7 year grace period.)

White paper on aid policy

Most helpful of all – and a new departure for China – was the early 2011 publication of a white paper entitled China’s Aid Policy. Apart from being a sign of a greater openness, this revealed the geographical distribution of Chinese aid and the kind of countries that received it. Some 45.7 percent went to Africa, the biggest recipient; 32.8 percent to Asia; and 12.7 percent to Latin America and the Caribbean. Some 39.7 percent went to Least Developed Countries; and 11 percent went to medium and high income countries – countries at least as well off, and perhaps better off than China itself.

China hasn’t appeared in our aid transparency rankings up till now … The rankings haven’t been finalized, but China won’t be at the bottom of the listThe paper also listed more than 2,000 complete “turnkey” projects implemented overseas by the end of 2009, broken down by sector – agricultural projects, hospitals, factories, transport infrastructure and – yes – those ubiquitous sports stadiums. So data is certainly there and someone is collecting it, noted Grimm.

But what you don’t get, says Grimm, is any regular publication of data. “It’s scattered; there’s no one annual report. And when it comes to country level, then you have difficulties.”

This is where Chinese aid really is opaque. An apparently simple question such as, “How much aid does China give Rwanda?” is very difficult to answer, and country specific data is never published. “We do know,” Grimm and his colleagues were told, “but we are not publishing it.”

That said, Development Assistance Committee (DAC, within the Organisation for Economic Co-operation and Development, OECD) donors that do publish top-line statistics on aid delivery are often much more reticent about where exactly the money ends up – one of the issues on the table at the annual aid effectiveness forum to be held in Busan, South Korea, in November 2011.

Chinese researchers – who also find this a frustration – shared tips with the team from Stellenbosch. Their advice, apart from asking the African recipients, was to wait for a senior Chinese official to visit the country concerned. The speeches often include previously unpublished statistics, and it is also a good time to ask questions.

Fear of domestic backlash?

But why are the Chinese so coy? Fear of competitive pressures, certainly, says Grimm.

They don’t want countries asking, “Why do they get more than we do?” Invidious comparisons with other donors? Possibly. In total spending China is only a modest donor, hugely outranked by the European Union or the USA. And perhaps also because of problems with its own domestic constituency, including online critics who are quick to ask why China should be giving money to foreign countries rather than its own poorer and least developed provinces.

Karin Christiansen, the director of Publish What You Fund, which campaigns for greater aid transparency, says China is not alone in fearing that too much information might cause a domestic backlash. “There’s still a fear among Western donors,” she says, “that telling people more will just make them suspicious. I think it has taken a lot of Western donors quite a long time to see transparency of their aid as actually a way of building support rather than a way of undermining it.”

Christiansen’s organization has been trying to rate the transparency of Chinese aid on the same basis as it rates the DAC countries. It is tricky because the statistics are not comparable; China includes in “aid” some things which DAC countries do not, and vice-versa.

She told IRIN: “China hasn’t appeared in our aid transparency rankings up till now, but our new figures are due out in November and they will include China for the first time. I think there will be a lot of interest to see where China stands. The rankings haven’t yet been finalized, but China won’t be at the bottom of the list.”

from IRIN

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