A New Player in the International Development Community? Chile as an Emerging Donor
The influence and relevance of emerging countries continues to rise relative to the traditional global powers. One of the topics that have made these countries prominent is their involvement in the provision of international aid. Emerging countries are becoming increasingly important donors of official development aid (ODA), and in this area in particular “South-South” collaborations are on the rise. China is the better known emerging donor, but the other BRICS countries (Brazil, Russia, India and South Africa), oil rich Venezuela and Arab countries are also active in this field.
Is Chile part of that group? As it happens with most non-DAC countries, it is not easy to quantify Chile’s provision of foreign aid. No consolidated data exists and many different Government institutions independently undertake international cooperation actions. Collecting data from different sources, we have estimated that Chile’s total provision of international assistance is on the order of $16.4 million, and therefore the country’s ODA as a percentage of GDP is around 0.0075%. This figure is not only far behind the 0.7% UN target, but it is also well below the average ODA contributions of countries with similar levels of per capita income:
Nonetheless, at the regional level Chile’s foreign aid is relatively important. According to SEGIB, in 2010 Chile participated in 5% of the bilateral cooperation projects among Latin-American countries. Given the size of Chilean projects, the country is the third most important ODA donor in the Latin American region (but lags far behind Brazil and Venezuela). The SEGIB also highlights the importance of Chile in the triangular cooperation inside the region, participating in 27 of the 42 projects carried out in 2010.
Most of the ODA provided by Chile is channeled through international organizations (IOs). Thus, roughly 80% of Chile’s international aid between 2006 and 2011 was multilateral:
The bilateral aid is mainly provided by the Chilean International Cooperation Agency (AGCI), a government entity created in 1990 with the dual mission to act as recipient and donor of ODA. Given the increasing importance of the latter role, the agency was moved from the Ministry of Planning and Cooperation to the Ministry of Foreign Relations in 2005.
AGCI's ODA mission is twofold: Triangular Cooperation (with agencies like GIZ, JICA and the WFP) and South-South Cooperation (Horizontal Cooperation), which takes the form of technical assistance and scholarships.
The single most important recipient of Chilean aid is Haiti, followed by Bolivia, Paraguay, El Salvador and Ecuador.
In light of this evidence, it seems that Chile is in fact an emerging donor—is this good or bad? Chilean society and its politicians need to define what kind of donor the country wants to be: altruistic, opportunistic or extractive? Because there is no public awareness of AGCI's work, the public debate on Chile’s ODA is nonexistent and important national decisions are basically subordinated to the interests of the Ministry of Foreign Relations. Needless to say, there is no such thing as impact evaluation of the projects, and the transparency in terms of project assignments is not exactly pristine.
Even though Chile has been a full member of the OECD since 2010, the country has kept its status as solely an observer of the DAC and has made no progresses towards full membership. The reasoning behind this attitude is not clear, but there are elements to interpret it not as a strategic behavior, but as the result of the lack of capacity and budget of AGCI and other government entities. However, it might be possible that ODA is not being reported to DAC in order to still be eligible for some programs benefiting only non-donor countries or simple because the flexibility allowed by the non-donor status is preferred.
The major challenge for AGCI is to adapt to Chile’s new role in the international cooperation context, moving from being a recipient of ODA to playing an increasingly important role as an emerging donor. AGCI has to strength its institutional capacity towards the provision of effective and broad-based international assistance. In the short and medium terms, the Agency should improve its reporting of ODA statistics by using international standards, while also enhancing transparency in the use of resources and the assignation of projects. The Agency should also promote public awareness of its activities. In the long term, AGCI should implement project impact evaluation procedures, and increase its institutional bargaining power in order to obtain more resources and gain more decision-making independence from the Ministry of Foreign Affairs.
To sum up, if Chile wants to play in the league of developed nations, its foreign assistance strategy is critical and needs to be defined. It is better to start sooner rather than later and learn from the 60-year old history of attempts by the international development community to improve people’s lives across the developing world.
Disclaimer: Any opinion and conclusion expressed here are those of the authors and do not necessarily represent the views of the institutions with which they are affiliated.
Gutierrez, Alexis and Dany Jaimovich (2012). "A new player in the international development community? Chile as an emerging donor". Manuscript, Goethe University Frankfurt.
