Why do nations invest in international aid? Ask Norway. And China.

Norwegian aid and Chinese aid pursue widely different strategies. While Norway provides substantial funding for budget support and funds civil society organizations, China offers a combination of grants and concessional loans and prioritizes infrastructure development in poor countries.

Given its size and lack of military might, Norway has actively tried to promote the virtues of the Nordic model — a peaceful, rule-based, globalized and prosperous world. It has done this through offering a generous amount of aid, consistently giving away more than 1 percent of its Gross National Income. Such acts of generosity give Norway a seat at the table usually reserved for the bigger players in peace processes or efforts to promote development and reduce poverty around the world.

With China, little distinction is made between grants and loans, and it does not offer detailed information about aid disbursements at country level. In turn, it expects poor countries to offer access to such natural resources as oil, minerals, and agricultural products, which China needs for its own development. China’s approach is characterized by pragmatism. It does not believe in offering aid conditioned on improving local governance or combating corruption. Unlike Western donors, China controls the implementation process by bypassing the public administration of recipient countries, and awards contracts to Chinese companies.

[Washington Post]

This entry was posted in Grantmaking, Humanitarian Aid, International Cooperation by Grant Montgomery.