Talk by Shri PS Raghavan, SS (DP) on Development Partnership Administration (DPA)

In this session, Mr P S Raghavan, who serves as SS (DPA) in the Ministry of External Affairs, gave a detailed presentation on the Development Partnership Administration (DPA). In particular, he focussed on the functions of the DPA, its achievements to date, the challenges that it faces and its future course. The presentation was followed by a question-answer session. Following are some of the main points to emerge from the presentation and the ensuing round of questions and answers.

India has had a long history as a provider of development assistance. However, our various initiatives have often been projected (unfairly in many cases) as lacking in co-ordination and focus. The DPA was established in January 2012 to address this issue by streamlining the delivery of assistance and improving the effectiveness of such efforts. When deciding upon the structure and functioning of the DPA, the MEA sought to learn from the experiences of various other prominent models, such as those of USAid and DFID. Unlike them, the DPA is an integral part of the MEA. It is a multi-division department within the MEA. It does not formulate development assistance policy, but deals with its implementation.

India’s development assistance takes one of three forms: grant assistance, lines of credit (LOCs) and capacity-building. The DPA is implementing a number of major ongoing grant assistance projects, many of them in India’s neighbourhood. Perhaps the most impressive of these is the housing project for internally displaced persons (IDPs) in Sri Lanka. Under this ambitious project, 50,000 houses are to be built, representing a significant percentage of the total housing requirement for IDPs. The project is following an owner-driven model, characterised by direct cash transfers to beneficiaries, who build their own houses with logistical and technical support from reputed NGOs. Launched in October 2012, the housing project has made remarkable progress. Moreover, it is complemented by a multitude of other rehabilitation projects in Sri Lanka, such as the distribution of family packs and bicycles, demining, the renovation of schools, etc. Indeed, the popular perception that India is not doing much to help IDPs in Sri Lanka is not borne out by the facts on the ground.

There are several other notable grant assistance projects taking place in other neighbouring countries. In Afghanistan, India is constructing the Parliament building, two power sub-stations in Doshi and Charikar, and the Salma Dam near the Iranian border. India is also running a massive wheat donation programme. In Nepal, appreciable progress is being made in various connectivity projects, both along the Indo-Nepal border and across it. In Myanmar too, several connectivity projects are under way. This is of great strategic importance to the north-east of India as it gains an outlet into south-east Asia. In this regard, the Trilateral Highway, linking Imphal, Manipur to the Thai border, via Mandalay, is especially noteworthy. India is also engaged in the establishment of a Myanmar Institute of Information Technology (MIIT), modelled on the IIITs in India. In Bhutan, India is implementing a number of hydropower projects. India’s Small Development Projects, which are responsive to the requirements of local communities, are very popular among neighbouring countries.

The other two strands of the DPA’s development assistance – LOCs and capacity-building – also have numerous achievements. Since 2003, almost $10 billion worth of LOCs has been extended, with Africa receiving the lion’s share (approximately 60%). Such LOCs are used to fund a wide range of projects in areas such as agriculture, irrigation, food processing, rural electrification, healthcare, IT and infrastructure. Examples of LOCs extended to African countries include an LOC of $640 million for the up-gradation of three sugar mills in Ethiopia and one of $178 million for a water supply project in Tanzania. Neighbouring countries have also been major recipients of LOCs from India – notable recent examples are Sri Lanka ($966 million), Bangladesh ($800 million) and Myanmar ($500 million). Turning to capacity-building, the Indian Technical and Economic Co-operation (ITEC) programme has long been a flagship programme of India’s development assistance. It has been very successful, continues to expand and generates a lot of goodwill towards India in other developing countries.

India faces a number of challenges in the implementation of both grant projects and LOC projects. In implementing grant projects, India grapples with various host country challenges (many of which exist in our own country too): delays in statutory approvals and land acquisition, local protests (by environmentalists, vested interests and others), lack of necessary infrastructure and changes in the scope of the work are some of them. There are also internal challenges, such as ensuring the adequacy and predictability of budget allocations, fine-tuning approval/appraisal procedures and reducing the dependence on PSUs. As far as LOC projects are concerned, the main host country challenges are weak project conceptualisation, a lack of project synchronisation and the overly narrow pool of Indian companies involved in project proposals and implementation (which is an internal issue as well). Additionally, due to the political sensitivities of partner countries, India often cannot carry out rigorous project appraisal. LOC projects, like grant assistance ones, are also subject to the various political, economic, social and security risks posed by the partner country.

The DPA has taken some steps to tackle the above challenges. A greater emphasis is being placed on project conceptualisation, appraisal and monitoring. Project Management Consultants are to be engaged for large projects. Indian corporates are briefed on LOC project opportunities in the hope that greater awareness will widen the pool of Indian companies involved in these projects. Borrowing governments are being sensitised on the need for transparent practices. The terms governing LOCs are being revised to meet IMF conditionalities on borrowing governments on the minimum grant element in concessional loans that they can access. This will make the loans more attractive for partner countries. This, in turn, will presumably make these countries more open to stringent guidelines, aimed at bringing about greater transparency and synchronisation in the implementation of projects.

DPA is moving in a number of other directions. Public outreach, both at home and abroad, is required in order to spread awareness of DPA’s activities. The induction of technical, multi-sectoral expertise in DPA is important, given that it deals with areas as diverse as health, IT, power and roads, to name a few. This exercise has begun and will be intensified. DPA is in a unique position to benefit from cross-sectoral and cross-regional experience-sharing and must make full use of this. Though DPA is not a policy-making body, the experience it imbibes should feed back into the fine-tuning of India’s approaches to development partnerships. Measures are being explored for combining development partnership with India’s private sector investments as an effective way of expanding India’s development footprint abroad. A better utilisation of NGO expertise in socio-economic programmes would also help enormously.

Finally, the philosophy underpinning India’s development partnership perspectives should also be considered. A fundamental point to keep in mind is that – unlike Western “traditional donors” – India is a developing country. Therefore, while our development assistance must be in line with our partners’ priorities, it must also be closely linked to our own commercial, foreign policy and strategic interests, energy requirements, food security and search for natural resources. India has often been described as an “emerging donor”. We dispute both words of that term. Our assistance is not “emerging”: it dates back to Nehruvian days. And we do not consider ourselves donors, but development partners. Unlike the aid of Western donors, which is often conditional on recipient government policies regarding governance, human rights, etc., India’s development assistance is demand-driven and does not constrain the sovereignty of its partners in any way. Indeed, India sees this as one of the defining features of South-South co-operation.

The growing role played by India and other developing countries in the area of development assistance seems to be causing some anxiety in the West. Western countries, many of which are experiencing “donor fatigue”, are wary of losing influence in a sphere they traditionally dominated. In many ways, the much-touted Busan process is an attempt by the West to standardise the delivery of aid/assistance along the lines of the norms and principles that have typified Western aid. It is also a way for Western donors to hang onto the coattails of developing country donors to enter countries and regions where they have not been active. These observations explain India’s serious reservations about the Busan process. More generally, India is wary of some of the premises underlying the post-MDG development agenda. In particular, India is adamant that it should not become a means for the West to pass on a greater burden to developing countries. Whereas North-South aid is a historical responsibility, South-South co-operation is a voluntary undertaking. Developing countries’ development assistance should be distinct from North-South commitments, rather than a substitute for them or an excuse for developed countries to diminish their aid programmes.