A year on, CIDCA struggles to get off the ground

MANILA — Understaffing, slowness, and internal politics plague the China International Development Cooperation Agency, or CIDCA, one year after the Chinese government announced its creation in March 2018, leaving some experts asking why so little has happened. CIDCA is a new iteration of Chinese aid, which has historically served countries mainly in Africa and Asia. The independent bilateral agency was created to use foreign aid as a diplomatic tool and to facilitate the implementation of Chinese President Xi Jinping’s $1 trillion international trade endeavor known as the Belt and Road Initiative. “Of course it takes some time to set up an aid agency, but the pace with which things have been happening is indeed slow,” Marina Rudyak, who researches Chinese foreign aid at Heidelberg University in Germany, told Devex. “If you look at its main objectives, we see CIDCA aligning with China’s foreign policy, but we don’t see it playing a visible role in strategy development.” CIDCA was established to solve Chinese aid’s biggest problem: fragmentation. Currently, no less than 33 government agencies are involved in an aid system so complicated that even President Xi acknowledged it needs to be more efficient. As a result, CIDCA was designed to promote aid coordination, planning, and monitoring through its recently established seven departments, some of which have entire divisions dedicated to achieving the aforementioned goals. “How China balances its diplomatic and economic interests will directly affect its aid delivery and effectiveness.” --— Zhang Denghua, research fellow, Australia National University Department of Pacific Affairs In the past year, the aid agency has taken a step forward by releasing a draft set of regulations and conducting meetings with foreign dignitaries. But persistent structural issues make improving aid delivery a major challenge. A ‘community of common destiny’ CIDCA’s draft set of regulations released in November 2018 clearly state that the Chinese government will use foreign aid to support the country’s overall foreign policy, namely BRI. China is not unique in using foreign aid to support its development agenda, such as facilitating Chinese companies' access to natural resources and markets in recipient countries. According to the regulations, the Chinese government hopes that its foreign aid efforts will result in a new kind of international relations based on a “community of common destiny” — a concept popularized by Xi himself, that refers to a win-win relationship between China and its developing country partners. Yet CIDCA’s website reveals that the agency’s officials have primarily been conducting meetings with foreign government representatives and United Nations officials. No development plans have been formally announced yet. “We can see that these [aid planning, monitoring, and supporting overall Chinese policy] are the priorities of the new aid agency, but how they’re going to implement it, … it’s still too early to tell,” said Zhang Denghua, a research fellow at the Australia National University’s Department of Pacific Affairs. “I’m very interested in seeing how this new aid agency will promote internal aid coordination.” One of the major challenges for CIDCA is that it’s only a vice-ministry level agency and has to coordinate with several higher-ranking agencies that are responsible for actually implementing aid projects. Some of these line agencies, including the Ministry of Commerce, or MOFCOM, which was historically responsible for the overall coordination of bilateral aid, and the Ministry of Foreign Affairs, which had to ensure that aid was aligned with China’s main foreign policy goals, are very powerful. And they could have different interests — commercial versus foreign — making coordination “very, very difficult,” according to Zhang. When challenges arise, CIDCA will have to report to Yang Jiechi and Wang Yi, China’s two top diplomats representing the Communist Party of China and the government respectively. Yang is the director of the party’s Office of Foreign Affairs and former MFA minister. Wang is the incumbent foreign minister and state councilor. Given CIDCA’s power structure, “how China balances its diplomatic and economic interests will directly affect its aid delivery and effectiveness,” Zhang noted. No aid-related work experience Another major challenge is that neither CIDCA’s chairman nor any of its three newly appointed deputy directors have any aid-related work experience. The Chinese government surprised aid watchers last year when it appointed Wang Xiaotao, the former deputy head of the National Development and Reform Commission, as CIDCA’s new chief. It was widely assumed that the agency’s new boss would come from either MFA or MOFCOM, both of which traditionally dominated the front lines of Chinese aid. Rudyak says that Wang was chosen to balance these heavyweight agencies, each of which ended up getting a representative in CIDCA’s management team. But she argues that choosing someone from NDRC, which is in charge of domestic economic construction and coordinating BRI, may have resulted in further “complicating things” by adding a third interest party to an already crowded space. In a nod to the status quo, one of CIDCA’s three deputy directors is Zhou Liujun, who effectively functions as MOFCOM’s representative. But, Zhou was formerly director general of the agency’s Department of Trade in Services and Commercial Services and never worked in MOFCOM’s Department of Foreign Aid. Another deputy director is Deng Boqing who is MFA’s representative. But Deng also doesn’t have any aid-related work experience and instead was a career diplomat. The last deputy director is Zhang Maoyu, whom both Rudyak and ANU’s Zhang suspect is a political appointee given his lack of affiliation with either MOFCOM or MFA. He previously worked for 30 years with the China National Intellectual Property Administration. The new leadership will benefit from an experienced aid staff largely drawn from MOFCOM’s now-defunct Department of Foreign Aid. However, ANU’s Zhang estimates that CIDCA only employs about 90 people, which he says is simply not enough to oversee aid funds within CIDCA’s mandate. That includes the multibillion dollar South-South Cooperation Fund and supporting the trillion-dollar-plus BRI. New aid white paper? Chinese aid watchdogs are eager to find out how CIDCA will push forward. Of particular relevance to the big aid players is whether or not CIDCA will be responsible for trilateral cooperation with other donors. A paragraph in its new draft set of regulations indicates that the bilateral agency is open to dialogue with international aid agencies, but MOFCOM is still institutionally responsible for cooperation with other donor agencies. “This means that while [international aid agencies] can theoretically cooperate with CIDCA, CIDCA doesn’t have to sign international agreements with them, which typically constitutes the basis for cooperation,” Rudyak noted. This ambiguity has already left some development practitioners confused. CIDCA has a big task ahead of it and while Rudyak is uncertain of what to expect, she concedes that this year the aid agency may release the final version of the “Foreign Aid Measures” that will govern CIDCA’s work. She’s also heard murmurs from the development community in Beijing that CIDCA will publish a new aid white paper at the end of this month or early April. The last time China released an aid white paper was in 2014. It summarized what the Asian powerhouse did from 2010-2012, notably, distribute over $14 billion in grants, interest-free loans, and long-term, low-interest concessional loans to developing countries primarily in Asia and Africa. An updated version will obviously align aid more closely with BRI. Rudyak hopes that it will include a strategic outlook that CIDCA desperately needs or more concrete statements on improving aid efficiency or transparency. “The real question is if it will follow the same format and just summarize past performance or if it will offer something new?”