Non-alignment relating to Chinese and US aid



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First let us take a look at non-alignment, which third world countries like to invoke when confronted with world power rivalry. The Non-aligned movement was based on the principles suggested at the Bandung conference in Indonesia in 1955, and then formally adopted by a Declaration in Bruin Islands in Yugoslavia in 1956 on the initiation by Prime minister Jawaharlal Nehru and President Tito, where the member countries adopted a resolution in condemnation of hegemonic practices by the US and other countries, and criticism of the UN for being dominated by the US. The leadership for the movement was provided by Jawaharlal Nehru, President Tito, Sukarno and Nasser. The need to guard the independence of the membership countries comprising 120, in the face of complex international situations demanding allegiance to either of the two warring super-powers was emphasized. Cuba's Fidel Castro was a prominent leader in the condemnation of the US. However, when the USSR invaded Afghanistan in 1979 and the UN adopted a resolution against USSR, Cuba voted against the resolution. Its neutrality was thus irreparably jeopardized. Later Yugoslavia broke up into several states and most of these breakaway states were not any more interested in being non-aligned. Further, Egypt one of the leaders in the NAM, today is very much under US control. Hence of the 120 countries which originally came together to form the NAM, the big players who gave it invaluable strong leadership, are today hardly recognizable as neutral. They are aligned in varying degree to one or the other of the two world power camps led by the US and China. Some like India are strong enough to align with either camp on different issues according to her national interests. Indonesia to a degree is also economically strong to resist hegemonic pressure.


Third world countries whether non-aligned or not are heavily dependent on rich countries for development. Unless they maintain a growth rate above 5% creation of employment opportunities, essential infrastructure development is not possible. This for most of the poor countries is not possible without foreign aid. In the case of Sri Lanka, which had a GDP less than 5% for the last five years and has to pay about Rs.3 billion per year to service its loans, it is a gigantic task to recover and unless a rich country comes to its aid it may slide down further; and be more vulnerable to external interference and encroachment into its independence, sovereignty and territorial integrity. However, there is nothing called a free lunch and Sri Lanka will have to carefully manage its policy on foreign aid. The often-quoted epithet "beggars cannot be choosers" may not be applicable as we may be capable of making correct choices.


In this connection it may be worthwhile to see how aid is given by the two biggest aid givers the US and China, and the implications for the recipient. A study of the aid policy and its impact on trade between the donor and recipient, would throw light on the suitability of the aid giver, and Africa may be the best region for such a study for Africa is the largest aid recipient from both China and the US. Recent studies conducted by social scientists show that the US aid policy in Africa is well known for its conditionality and selectivity (Burnside & Dollor). By contrast, China the largest emerging competitor to traditional donors, always offers unconditional aid to African partners and pursues mutual benefits based on the framework of South-South cooperation.


One useful measure of the goodness of aid is its impact on bilateral trade; the impact on the trade flow between donor and recipient, donor's exports and imports from recipient. Chinese aid shows a positive impact on China – Africa bilateral trade, but the US aid exhibits little influence on the bilateral trade between the US and African countries for it pays more attention to its global power (Liu, Aclan 2017). With reference to the impact on total trade, strong positive effects are shown in the Chinese aid, but not in the US aid. This indicates that trade interests are more crucial for China and its economic development than to the US. However, aid is indispensable for the US to protect its existing global structure of power and wealth (Amusa K, Mosukan N, & Viegi, 2016). US aid to Africa has not affected exports from Africa to US, while imports from US to Africa has increased. Moreover, China's aid is bilateral, does not rely on NGO channels and instead relies on official channels. And about 70% of it is meant for infrastructure development. China's aid to Africa is not used as a political tool in the same way as that of Western donors, but it is more commercial in a win-win cooperation model.


It is often claimed that Chinese aid is "rogue aid" guided by selfish interests with the aim of entrapping the recipient country to "cough out" its assets. One cited example is the Hambantota harbour, and several such projects in Africa and Asia are also mentioned. However, Dreher and Fuchs (2015) empirically tested to what extent self-interests shape Chinese aid allocation based on the data in Chinese project aid, food aid, and medical staff and total aid money to developing countries from 1956 to 2006. The evidence suggested China's aid allocation does not depend on recipient's endowment with natural resources. Therefore, it is unjustified to condemn Chinese aid as "rogue aid". These findings are also supported by other researchers (Brautigam, 2009). Further evidence could be found in a two-volume publication titled "China's Foreign Aid and Investment Diplomacy" by John F Copper (2016). These research findings show that though China has geopolitical ambitions it does not interfere in the internal affairs of recipient countries. Instead it wins over countries to its side by giving aid for mutually beneficial projects in terms of bilateral trade and soft diplomacy.


In contrast the US aid is linked to a more aggressive foreign policy and expectations of loyalty in regard to US hegemonic agendas. For instance, US would expect recipients of its aid to fall in line and lend support at the UN on controversial issues favourable to US. Sri Lanka has been at the receiving end during the last few years at the UNHRC on account of this infringing approach of the US and other Western powers. The UNHRC Resolution 30/1 masterminded by the West is a weapon in their hand to be used to make Sri Lanka pliable and do their bidding. A true friend like China would never have resorted to such treachery. China, a true friend had no chance to rescue us as our treacherous leaders had placed our country's neck on the block.


As mentioned earlier there is no such thing as a free lunch and China has geopolitical ambitions. Its Road and Belt Initiative is proving to be beneficial to Asian, African and East European countries. Sri Lanka, being strategically placed with a port built and operated by Chinese in the sea route of the RBI, stand to gain immensely by the project. The agreement with the Chinese on the Hambantota port, which at present is disadvantageous to Sri Lanka thanks to the bungling of the previous government, may have to be renegotiated. Sri Lanka will have to play its cards carefully in this regard. This is where the concept of non-alignment assumes its relevance.


In the region of the South and South East Asia three categories of countries could be identified based on their relationship with the US and China; 1. Those shifting towards China - Pakistan, Nepal, Bangladesh, Malaysia, Cambodia and Laos 2. Those playing both sides; Indonesia, Thailand and Myanmar, 3. Those counter acting China; India, Japan and Taiwan. In the last five years Sri Lanka was tilting towards the US. At the very beginning the government stopped all major Chinese projects and was lending support to the countries in the region opposed to China. However, it was forced to go down on its knees pay compensation and enter into an agreement on the Hambantota port on terms disadvantageous to Sri Lanka. The present Sri Lankan government has said it will take a neutral stand in the global power struggle. Does this mean it will opt to be in Category 2 playing both sides?


Here we must look at Sri Lanka's experience in the recent past with regard to its foreign relations and the foreign aid it received. The Western countries helped the previous government to come to power, and the latter bent over backwards to please the West. Yet what we received from them was not aid but interference in our internal affairs. Further, the West in the last decade or so had been acting more like our enemy, helping the LTTE and the separatists, dictating us on constitution reforms, security matters and minority grievances on the pretext of human rights requirements. What they offered in the form of assistance were the dubious agreements ACSA, MCC and SOFA which were designed to take Sri Lanka in their economic and military grip. There is no apparent advantage in positively aligning with the West at this juncture. Such a move would antagonize our perennial friend China.


In view of China emerging as a major aid giver President Trump has changed his earlier policy of "America First", which proposed to cut down foreign aid by a third, and declared that USD 60 Billion would be made available for investment in foreign countries. If Sri Lanka is to benefit from this offer, attempting to play both sides in a kind of neutral manner may not work. Sri Lanka would be forced to enter into the evil agreements ACSA, MCC and SOFA with disastrous consequences mentioned before. Moreover, Sri Lanka may have to forget about negotiating a profitable arrangement with China regarding the Hambantota port. China had invested heavily in Sri Lanka and would not like to lose its strong relationship with it. Further China would like to see Sri Lanka developing into a strong partner of its ambitious R&BI. China needs a loyal friend in the region and in all probability would not like to sour its relations with Sri Lanka over the issues connected with Hambantota port. If the port is going to play a major role in the R&BI, China needs to have a perfect relationship with Sri Lanka which is not possible if the latter is unhappy and not prospering. China and Sri Lanka must get together and work for the prosperity, stability and peace in the Indian Ocean.


N.A.DE S. AMARATUNGA


 
 
 
 
 
 
 
 
 
 
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