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So, rather than decrease, the coming era could see an increase in the importance and quantity of international public finance, of which what has traditionally been called “aid” will play a part. In their keenness to demonstrate the transformative importance of their work, aid donors often forget that many MICs never really needed aid as such. Aid has played a negligible role in terms of quantity in many countries for decades especially the very large and/or long-term MICs. India, China, South Africa, North Africa, most of Latin America – these countries and regions have never received very much aid compared with the size of their economies, and their current resurgence has little to do with aid, as some analysts and campaigners sometimes imply when they say that aid has “done its job”. The well-known statistics (first raised by Andy Sumner) that 70% of the world’s poorest people live in MICs is slightly misleading – all it means is that five very large countries (China, India, Pakistan, Nigeria, Indonesia) crossed an arbitrary income barrier in the last decade or so – and has little significance for development cooperation policy. As we enter a new era, international public finance can continue to accompany the development process in such countries, cajoling and catalyzing change at a number of levels, even when it is a small proportion of overall financial resources and is becoming less concessional.
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Conclusion
In summary, yes, all relationships should evolve as circumstances change – thus the interminable strategy discussions taking place in NGOs and government agencies. And, yes, we should be open to the new possibilities emerging as countries appear to be generating more domestic resources – the main lesson of the general shift to MIC status over the last ten years – particularly with regard to moving out of a harmful dependence on aid. There are no easy answers, and as ever the development cooperation landscape will emerge organically as much as it will be planned. But the rhetoric that is leading some agencies to exit from key countries when they cross the LIC-MIC threshold is misguided and appears not fully to take into account either the complex needs of countries even as they emerge from very low-income status, or the broadening set of international objectives leaders appear set to sign up to. The role of international public finance, not just aid, has never been more important, and in this evolving context the LIC-MIC distinction has acquired a status well beyond its relevance to global development discussions. ■ JONATHAN GLENNIE is an Overseas Development Institute (ODI) Research Associate and an independent consultant. Previously, he managed Christian Aid’s aid programme in Colombia and worked on several international campaigns, including Make Poverty History and the Jubilee Debt Campaign. He is the author of The Trouble with Aid: Why less could mean more for Africa (Zed Books, 2008).
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