The rise of emerging donors continues to be among the biggest stories in global development, with the share of funding these nontraditional players contribute to the industry increasing each year. That’s why today Devex is releasing its latest research report, “Devex Reports: Emerging Donors,” an in-depth look at the practices and priorities of development’s donors on the rise.
Building on our leading coverage of development finance, Devex researchers looked at donor documents and conducted interviews with leading officials to evaluate and compare the total spending, key funding trends and regional and sectoral priorities of aid efforts in China, the United Arab Emirates, Turkey, South Korea, India, Brazil, Russia and South Africa.
Be sure to download the full report to read all of our research, and in the meantime, here are some key findings on emerging donors that every development professional should know.
Spending by emerging donors has seen sustained growth. Determined to reshape the global development finance landscape, emerging donors have been markedly increasing their foreign aid spending and should continue to do so. Despite slowing growth in these emerging economies, global development consulting firm Dalberg estimates that emerging donors will account for 20 percent of all foreign aid by 2020, nearly doubling the 7-10 percent share these donors contributed in 2012.
China remains a foreign aid juggernaut. China is the biggest player in the emerging donor space, with aid spending that rivals Western donors, and it spends billions more than the next biggest-spending emerging donor Devex profiled, the United Arab Emirates. China provided aid to 121 countries between 2010 and 2012, with more than half of that funding going to Africa, according to its latest report on its aid program. Chinese aid is also closely linked to the country’s strategic priorities — with its “win-win” approach to foreign aid, China ties aid to the purchase of Chinese goods and services.
The United Arab Emirates is a standout. While it may not get as much press as China for its aid efforts, in the past few years the UAE has quietly scaled up its financial contribution to global development. At $5.4 billion, the UAE’s official development assistance budget in 2013 more than quadrupled over the previous year. Channeling most of its aid to majority-Muslim nations in the Middle East and North Africa, the UAE further formalized its development efforts by establishing its Ministry of International Cooperation and Development, its new development policymaking agency.
Most spending by emerging donors is disbursed regionally. Emerging donors may talk about the global scope of their giving, but for those Devex profiled, foreign aid programs largely invest in projects in neighboring regions. India’s foreign aid program, for example, largely focuses on South Asia, with that region projected to account for 84 percent of total spending in 2015-16. It should be noted that China is an outlier here, since it’s taken a keen interest in African development, and particularly infrastructure projects. Based on the most recent figures, more than half of Chinese aid goes to Africa.
Emerging donors’ sectoral priorities run the gamut. As development observers might expect, Devex found that emerging donors’ sectors of interest are driven by diverse geopolitical and economic concerns. That means these donors seek to take advantage of particular resources and knowledge of areas like health, education and infrastructure. Russia, for instance, has built programs that leverage the country’s understanding of the medical and education infrastructure of its partner countries in the former Soviet Union.