The Indian government?s announcement last week of a $10m grant package to support the budgetary needs of the Palestinian National Authority (PNA) has shone light on an incipient phenomenon?of India donning the mantle of a donor nation with a war chest that can be deployed worldwide to gain soft power.
For strategic and moral reasons, India has been a dependable benefactor of the nascent Palestinian state. Since the Palestinian issue is like a carotid artery that animates the entire Arab world, where India has large immigrant worker populations and key oil suppliers, subventions to prop up the PNA or to relieve blockaded civilians in the Gaza Strip are worthwhile from the perspective of enlightened self-interest.
According to the UN Relief and Works Agency (UNRWA), the specialised organisation that has been succouring Gaza?s desperate population with a monetary tightrope, ?India was among the first few countries to donate $1m at UNRWA?s flash appeal following the war in Gaza? and topped it up with another $1m to save UNRWA?s education and health agenda during ?a challenging financial climate?.
From a poor country that scraped through the post-independence decade with foreign food aid and suffered humiliating currency devaluation in 1966 to qualify for World Bank-IMF loans, India has come a long way by becoming a giver of foreign aid. Today, India has enough foreign exchange reserves (above $280 billion) to, if it wanted, halt borrowing from Bretton Woods institutions and look outward with bags of money rather than inward like a sulking panhandler.
The additions to national morale from India shedding the image of a handout-hungry basket case and replacing it with the air and mannerism of a self-sufficient power with deep pockets are inestimable. These psychological boosts are worth their expense because they alter the mental makeup of India and prepare it for a bigger role on the world stage. Arguments that foreign aid could be well spent within India?s impoverished regions lack persuasion because expanding the country?s global stature will eventually redound to improving socio-economic welfare of those left behind at home by imbalanced growth.
As with remittances and outsourcing, the mantra that ?what goes around, comes around? has resonance in the political economy of foreign aid. The net benefits of being recognised as a power that can be looked up to in an hour of crisis outweigh uninformed claims that India needs to feed its own poor before over-generously opening its purse strings to foreigners. Every aid rupee that is cleverly spent overseas to win goodwill for India is perfectly affordable.
Palestine is not alone in the logbooks of recent Indian foreign philanthropy. New Delhi has just handed over Rs 250 crore (approximately $5.4m) to Bhutan for rehabilitation and reconstruction of areas jolted by an earthquake last September. The direct military threat posed to Bhutan by an encroaching Chinese juggernaut and the Bhutanese royalty?s experiment in introducing gradual democracy are two good motives for India to strengthen Thimphu?s capacity via aid.
Last month, when a massive earthquake destroyed Haiti in what the UN termed the ?worst ever disaster?, a significant event occurred in the flattened epicentre, Port-au-Prince. The minister of state for external affairs, Shashi Tharoor, made history as the first Indian ever to set foot on Haitian soil with an already deposited relief pledge of $5m. The gesture was bound to be viewed with appreciation in Latin
America, a region where India has yet to make its presence felt in comparison to China or Russia.
One of the imperatives for India to raise its global profile is to maintain fast economic growth and parlay it into greater influence by entering international domains where it had hitherto been a non-entity. This applies both to issue areas such as aid diplomacy as well as to engaging with geographically distant countries. The current generation of Indian policymakers has unfortunately narrowed its realm of concern to South, Southeast and East Asia, the US and the EU and shed interest in the world, especially Africa and Latin America, where China moved in early and is now a prime actor. ?Global outlook? sounds like a banal and overused phrase but it is direly needed to reprogramme India?s basic orientation to the world.
India?s emerging foreign aid policy framework is also dogged by inadequate involvement of the nation?s business giants while playing global Good Samaritan. Established donors like the US, Japan, Canada, Australia and the EU tie aid to investment opportunities for their respective multinational corporations. Even China, which lacks an independent capitalist class, has state-owned capitalist firms at the vanguard of its aid empire in Africa.
The disconnect between the Indian state?s aid cheques and its foreign advocacy on behalf of Indian industry is a conceptual flaw. When ?public-private partnership? is a buzz phrase in many domestic sectors, it can be easily carried forward into a prospective external aid doctrine.
A gap that India can fill in the universe of aid dispensers is by harnessing its comparative advantage in niche human capital segments. Shashi Tharoor could have made waves in Haiti had he landed not only with money but with a posse of Indian medical professionals to treat victims. Cuba and Israel often steal a march over conventional aid givers by sending their skilled civilians into needy zones. For starters, India could flood English-speaking parts of Africa with computer engineers, mathematics and science instructors, who will be welcomed with open arms.
The word ?donor? is often hated in poor countries, but a doctor or a teacher is always revered. India must be conscious of its mojo as a knowledge hub and draw maximum leverage from it.
The author is associate professor of world politics at the OP Jindal Global University