The grand strategy behind Russia’s foreign aid program

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The grand strategy behind Russia’s foreign aid program

An analysis of Russia’s international development assistance in the

Putin years

MA Thesis

August 2015

MA History Today

Faculty of Arts, University of Groningen

Supervisor: prof. dr. J.S.A.M van Koningsbrugge Second supervisor: dr. S. de Hoop

Peter Bannink p.a.bannink@student.rug.nl

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Introduction

The Soviet Union was one of the largest ideology-led providers of international development aid in history. The collapse of the system in 1991 meant the end of its contribution to developing countries as well. In fact, the major reincarnation of the Soviet Union, the Russian Federation, found herself on the opposite side of the spectrum, and became a receiver of foreign aid. Western experts campaigned for a shock therapy to make the transition to market economy, and large sums of development assistance flows started to reach Russia in the nineties.

Since the 2000s, the aid directionality has reversed once more. Under the administration of President Vladimir Putin the Russian economy prospered and foreign debts of the country were paid off; the last batch was paid off in 2006.1_{With the ambition to belong}

to the major powers of the world again, a program for international development assistance restarted and Russia started to re-emerge as a foreign aid donor. It is this latter program and policy that is the core issue of this paper, an analysis of the shape, size, form and ideology of Russia’s re-emerging foreign policy with regard to international development assistance.

There is extensive literature on the concept of development assistance, mostly focusing on the Western world as donor countries. With the rise of other economies, the gravity of the development assistance also changed, which also did not go unnoticed in the academic literature. What this paper presents, is a summary of the recent history of Russia’s practice in international development assistance, and an analysis of what this means for Russia’s position in the world and for the traditional model of international development assistance. The research question is, why and in what ways did Russia reshape its development assistance shape in the twenty-first century?

The historiography with publications on international development assistance coming from Russia is centered around several research institutes, both inside Russia and in the West, with Russian researchers working abroad as well. Mark Rakhmangulov and Mariana Larionova from the International Organisations Research Institute of the Higher School of Economics in Moscow are two of most prominent experts in the field. Together with Marc Berenson from King’s College in London, several reports with strong data evidence were published on capital

1_{The Kremlin transferred 23.6 billion dollars to the Paris Club of Creditors in 2006. Peter Finn, ‘Oil profits help pay off}

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4 flows from Russia. D. Korepanov and J. Komagaeva run a similar institute at the St. Petersburg State University. Historical research on development assistance during the era of the Soviet Union was, amongst others, done by the American scholar Roger E. Kanet and by the Russian scholar Vladimir Mazyrin. Patty A. Gray from Ireland is another well-known scientist in the field who has focused extensively on development assistance in practice, how is it organized in the Russian institutions and ministries. Richard Manning, Kimberley Smith and Felix Zimmerman have studied the case of Russia from the perspective of the OECD, as members of its Development Assistance Committee. Their work is useful for its terminology and Western view. This papers seeks to bring together Western and Russian views on Russia’s development program, and to take this to a next level by doing case studies of three regions to discover the actual practice.

To start with, the conventions on international development assistance are reviewed and compared with the Russian practice in the last two decades. First of all, instead of accepting the notion of ‘development assistance’ at face value, it is required to study this term that is used for diverse processes like establishing infrastructure, fostering economic growth, establishing a rule of law, improving human welfare, changing culture, and empowering the marginalized. The practical reality of development assistance is that it is not a politically neutral principle. Development interventions are planned forays into poor subject-countries by sovereign agencies (be them development agencies or other countries) with articulated mission statements. The first part of chapter one will highlight the key principles of this debate on international development assistance and review how this assistance took shape in the Western world since the Marshall Plan.

The second part of this chapter will move to the ‘non-traditional’ or ‘emerging donors’, the group of countries that have a history of being a recipient of development assistance and, together with their strong economic growth, now have their own development programs. For the course of this paper this second category is limited to the BRIC countries – Brazil, Russia, India, and China, commonly termed ‘developing countries’ and ‘emerging economies.’2_This

categorization in traditional and non-traditional donors has the objective of identifying

2_{A. For example, Arab countries in the Middle East belong to these non-traditional donors. These are not included in this}

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5 whether or not a hierarchy of development aid exists and how foreign aid is part of international politics.

The second chapter starts with an overview of the Soviet practice of aid giving, since roughly the beginning of the 1950s up until the collapse of the Soviet Union in 1991. The second part of this chapter focuses on the 1990s, the years when the Russian Federation uncomfortably had to accept Western development aid. The goal is to discover what heritage and institutional structures of international development from Soviet times survived throughout the nineties.

The third chapter then moves to the core of this paper: Russia as re-emerging foreign aid donor in the Putin years. This section aims to analyze the policy of Russia, and point out the concrete activities that were the result of this policy. That means that the institutional structures will be studied, what ministries are involved, how the decision-making is organized and where do funds come from. The second section here includes spheres of aid, divided into four major research topics: energy, agricultural development, emergency aid and health issues.

The fourth chapter will review case studies from three different regions of importance for Russia: Sub-Saharan Africa, Southeast Asia and the countries in the Commonwealth of Independent States (CIS). Regions that differ greatly in proximity and economic relevance to Russia, and struggle with different development issues. This broad regional approach is aimed at discovering the grand strategy of Russia behind its development policies.

The Sub-Saharan countries in Africa are all of those Southern to the Sahara – the countries in North-Africa are considered to belong to the Arab world.3_{The countries in Africa}

have been recipients of foreign aid flows from the Western world for many decades, one trillion dollar since the 1940s according to some figures.4_{In the last two decades, annual trade}

figures between Africa and BRIC countries climbed past $200 billion, and is expected to reach $530-billion by 2015.5_{And although the involvement of the BRIC countries in Africa is often}

portrayed as a self-interested search for natural resources to fuel the limitless growth demands of their economies, based on the scope, depth and nature of the ties that actually bind and Africa and the BRIC countries, this paper will argue that this is a simplification.

3_{Political definition of ‘Major regions,’ according to the United Nations (Retrieved 23 October 2014).}

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6 Moving to Russian-African relations, these are not new, as the Soviet Union played a major role on the continent during the Cold War era, however these relations have undergone a major shift with the re-emergence of Russia’s International Development Program. In the Foreign Policy Concept of 2000, it was stated that ‘African countries, being the poorest in the world, in the future can become fast-growing emerging economies and will demand investments and capital goods,’ outlining priority measures that include ‘developing ties with African regional organizations, educational and technical assistance, and active use of trade preferences.’6_{Because of the Russia’s long-term involvement in the region and the recent vast}

increase of trade and aid, Africa is included in this study.

There are several reasons why Southeast Asia is also included in this study. First of all, Russia sees itself as a Eurasian power and therefore entitled to be involved in Asia-Pacific institutions and affairs.7_{Secondly, the existence of a powerful counterweight as China as a}

regional neighbor and the US as a widespread actor in the region bring Russia’s ambitions as key actor to the fore. And finally, to study historical motives behind development assistance; do the communist past and the ties with for example Vietnam, still have an impact on the current strategy in Southeast Asia?

The CIS countries – the countries in Eastern Europe and Central Asia that were part of the Soviet Union – are the more obvious subjects for a case study in development relations with Russia. Strong interconnected economic network, political and cultural ties stem from a shared history and the aid relationship is historically entrenched. In the 2007 Foreign Policy Concept, one of the primary goals of Russia’s international development assistance programs was developing a ‘belt of good neighborliness,’ and calls for the need of a ‘multidimensional cooperation’ with CIS countries.8_{Political and social stability in the CIS countries is of great}

importance for Russia itself, and therefore the approach will differ greatly from other studied regions.

The conclusion will return to the paradigms of traditional and non-traditional donors, as discussed in the first chapter in order to discover how the Russia’s contribution to the

6_{Foreign Policy Concept of the Russian Federation 2000 (June 2000). Russian Ministry of Foreign Affairs:}_www.mid.ru_. 7_{Leszek Buszynski, ’Russia and Southeast Asia: A New Relationship,’ Contemporary Southeast Asia 28:2 (2006).} 8_{Also repeated objective of relations with CIS, for example by Minister of Foreign Affairs Lavrov in his speech at the}

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7 international aid architecture can be reviewed. Why and in what ways did Russia, as non-traditional donor, reshape its policy on development assistance, and how did this affect the traditional donors?

As for methodology, this paper utilizes a combination of literature study, for the key concepts, and area studies, to discover the development assistance in practice. Together this should culminate into an analysis, does Russia have a grand strategy for development assistance in certain areas? The first two chapters – the framework of development assistance, the emerging donors and aid during the Soviet Union – will make use of extensive literature in the field of development studies, as well as data that is available at organizations like the Organization of Economic Cooperation and Development (OECD), the International Monetary Fund (IMF) and the World Bank. The OECD has the Development Assistance Committee (DAC) that considers itself as the ‘venue and voice’ of the major donor countries.9_{Within the United}

Nations, the UN Development Program (UNDP) and UN International Development Organization (UNIDO) have relevant publications, as well as reports of conferences with key presence of Russian delegates. Think tanks, both in the West and in Russia, have also published on this theme; key ones are the Brookings Institute and the Institute for Development Studies (IDS) in the US and Europe and the Research Centre for International Cooperation and Development on the Russian side (RCIDC).10

For the third and fourth chapter – with the in-depth study of Russia’s profile as development donor, and the case studies – the above-mentioned publications are with additional documents from primary sources. The Ministry of Foreign Affairs of the Russian Federation publishes Foreign Policy Concepts, which outline the objectives for the following years; the concepts of 2000, 2007 and 2012 are the most relevant in this regard, but are for what they are: official policy outlines.11_{More specific, the Ministry also publishes the Concept}

of International Development Assistance, again with 2007 and 2012 as relevant sources, and the Foreign Policy and Diplomatic Activities of the Russian Federation from 2011. The Ministry of Finance publishes annual reports on ‘Results and Main Directions’ of the Russian budget and the Federal Statistic Office of the Russian Federation has a rapport called ‘Investment of

9_{‘The DAC in dates’, report available on website OECD. Availabe at:}_{http://www.oecd.org/dac/1896808.pdf.}_{Accessed: 3}

May 2015.

10_{Научно-исследовательский центр содействия международному развитию, Research Centre for International}

Cooperation and Development, www.RCICD.org.

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8 Russia in the Economy of the CIS countries,’ a key document for the case study of this region. Furthermore, the Ministry of Foreign Affairs offers a great deal of transliterations of speeches, mission statements, press releases and policy memo’s, which are used extensively for this paper.

For the case study of Africa, the UN Economic Commission for Africa (UNECA) has detailed reports on the origin of funding. For Southeast Asia, the joint statements between Russia and the Association of Southeast Asian Nations (ASEAN) are used. For all regions, the Global Humanitarian Assistance program (GHA), an independent – but Western – organization, provides data on humanitarian financing and related aid flows.12

While the recent events of Russia’s interference in areas that it considers its sphere of

influence were partly conducted under the flag of international development assistance or the

provision of humanitarian aid, this will not be the focus of this paper. Although these events spark a greater relevance to the topic, the ambition of this study has a more transcending perspective: the grand strategy behind reshaping the development assistance policy.

12_{The Global Humanitarian Assistance program is run by the organization Development Initiatives, and is funded by the}

governments of Canada, the Netherlands and the United Kingdom. Country profile of Russia:

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Chapter 1: Development assistance in the twentieth century

1.1 Development assistance: definitions and debate since the Marshall Plan

Members of the Organization for Economic Cooperation and Development (OECD) comprise the largest body of foreign aid donors. The OECD is the self-appointed arbiter of the traditional aid architecture. The forerunner of the OECD, was the Organization for European Economic Cooperation (OEEC), formed to administer American and Canadian aid to Europe under the Marshall plan. Since it took over from the OEEC in 1961, the OECD’s vocation has been to build strong economies in its member countries, improve efficiency, hone market systems, expand free trade and contribute to development in industrialized as well as developing countries.13_{The OECD claims to ‘set its analytical sights on those countries – today}

nearly the whole world – that embrace a market economy.’14

As a response to the debt crisis of the early 1980s, the Washington Consensus emerged, a term coined by the British economist John Williamson in 1989. This concept brought established donors further into a system in which one set of ideas about economic policy was ‘cemented into the foundations of the aid regime.’15_{While different countries}

continued to have their own aid programs, they were all indirectly overseen by (Western) international organizations. The primary arbiter of the norms of development assistance is an exclusive club within the OECD known as the Development Assistance Committee (DAC), and it serves as the norm setting body for international aid architecture. Comprised of the twenty-three traditional donors, these club members are donors that report their Official

Development Assistance (ODA) to the OECD’s DAC. Together with multilateral organizations

financed primarily by the same states within the OECD, these donors provide assistance to almost every developing country in the world each year.16_{It is in this manner that for more}

than a half-century, Western donors have dominated the international aid arena.

13_{History of the OECD (no date). Retrieved from}_{http://www.oecd.org/}_. 14_Ibidem.

15_{Ngaire Woods, ‘Whose aid? Whose influence? China, emerging donors and the silent revolution in development}

assistance’ in: International Affairs 84 (2008) 1205–1221.

16_{Sarah Blodgett Bermeo, ‘Foreign Aid and Regime Change: A role for donor intent’ in: World Development 39:11}

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10 In the 1990s over 95% of all international development assistance flows originated from OECD countries.17_{This is, according to the Official Development Aid (ODA) definition that}

was coined by the Development Assistance Committee (DAC) of the OECD. The term ODA was first used in 1969 and is widely used as indicator of international aid flow, and was defined as:

This pinnacle of Western dominance was measured during the highpoint of the Washington Consensus-led development apparatus. But this situation has changed since then. The OECD reported in 2011 a total ODA of $133.5 billion from the 23 major donors, a fall of 2.7 percent in real terms from 2010. This decline is the first, excluding ‘years of exceptional debt relief,’ since 1997.18_{While it would be easy to dismiss these numbers as reflective of the}

continued economic crisis affecting the traditional Western donors, the OECD forecasts this stagnation to be the new norm.19_{Even without this decline in development assistance flows,}

and even disregarding the fracturing of the Western-led development assistance framework due to contentious debates within, the former conception of the development world would no longer have reigned. The reason is the emergence of donor countries that do not fit the old paradigm of development assistance.

1.2 Emerging donors entering the architecture of international development assistance

In stark contrast to the declining development assistance financing of traditional donors, the aid flows from the so-called ‘emerging donors’ have demonstrated the reverse trajectory. These providers of assistance come from such diverse countries as the BRIC

17_{Richard Manning, ‘Will “Emerging Donors” Change the Face of International Co-operation?’ in: Development Policy}

Review 24 (2006) 371–385.

18_{OECD Newsroom, ‘Development: Aid to Developing Countries falls because of Global Recession’ (4 April 2012). Available}

at: http://www.oecd.org/document/3/0,3746,en_21571361_44315115_50058883_1_1_1_1,00.html. Accessed: 8 October 2014.

19_{OECD, ‘Outlook on Aid: Survey on Donors’ Forward Spending Plans 2012-2015,’ Aid Quality and Architecture (June 2012)}

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11 countries, Turkey and South Korea; countries traditionally considered to be on the receiving end of development assistance flows. Exact figures of these aid flows are impossible to determine, but estimates range from $11 billion to $41.7 billion annually, which means 8 or 31 percent of the total amount of global Official Development Assistance.20_{These estimates}

differ greatly, mostly due to transparency issues and convergence of foreign investment and development assistance. Moreover, the rise of these non-traditional donors reflects a broader trend. Since the mid-1980s, the world’s center of economic gravity has transitioned from the United States and Europe toward Asia, and the pace of this shift is becoming increasingly dramatic. To serve as only one of many possible examples, a recent study by the McKinsey Global Institute found that 600 cities are making the largest contribution to a higher global GDP; 440 of which lie within ‘emerging economies.’21

Although these non-DAC countries have been branded ‘new’ donors by the existing aid institutions, their history of international development assistance can often traced back several decades.22_{The political origins of China and India’s (among others’) aid programs lie}

within the Non-Aligned Movement, established at the Bandung Conference in 1955.23_The

Final Communiqué from Bandung stated the aspiration of economic cooperation and growth, a ‘general desire for economic co-operation among the participating countries on the basis of mutual interest and respect for national sovereignty.’ Additionally the conference produced an agreement to provide technical assistance to one another, thus facilitating the exchange of ideas, experts, and specific training. The Communiqué also stated the importance of trans-national infrastructure created by ‘collective action’ and furthermore recommended the creation of national and regional banks and insurance companies.24_{Through stating these}

objectives, the twenty-nine participants in this Conference laid the foundation for the non-DAC donors’ general approach to international development assistance demonstrated today.

Official development assistance (ODA), a measurement defined by the OECD and used to attempt statistical analysis of international development assistance globally, is only a

20_{Julie Walz and Vijaya Ramachandran, ‘Brave New World: A Literature Review of Emerging Donors and the Changing}

Nature of Foreign Assistance’, working paper No. 273 for Center for Global Development (2011).

21_{Global McKinsey Institute, Urban world: Cities and the rise of the consuming class (June 2012).}

22_{They will therefore be termed either ‘non-DAC donors’ or ‘non-traditional donors’ for the remainder of this paper.} 23_{Adele Harmer and Lin Cotterrell, ‘Diversity in Donorship: The Changing Landscape of Official Humanitarian Aid,’ in: HPG}

Research Report 20 (2005).

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12 fraction of overall economic flows in the developing world, whose assistance contains more emphasis on production capacities and on collaboration with the private sector. This, in fact, is also true of traditional donors. Global ODA is dwarfed by other capital outflows between developed and developing worlds. From the United States, ODA was only 9% of the total in 2010. Among the other 23 major OECD donors, the proportion was 18%.25

While the attention was most strongly paid to the non-DAC donors’ activity in aid transfers and FDI, their effect has also been felt in changes to the humanitarian landscape. Not only the number of non-DAC donors contributing to international humanitarian response increased, their visibility within the humanitarian system increased as well over the past decade. Moreover, in some of the world’s more contested and protracted crisis environments, such as the Palestinian Territories and North Korea, non-DAC donors have exerted financial and policy influence. This has led to such multiplatform bodies as the UN to include non-DAC actors into its strategic objectives: “we must engage and encourage new ‘non-traditional donors’ in non-traditional ways. As humanitarian agencies, we should be more effective in enlisting new partner countries as contributors of the personnel, or the commodities or the cash we need.”26_{Nonetheless, so far, the participation of non-DAC donors policy initiatives by}

DAC donor governments has not been materialized.

The non-DAC donors significantly vary in their approach to IDA, but due to their increasing prominence in the international aid arena, scholars have begun attempts at classifying these countries’ assistance programs. Richard Manning, senior research fellow at Oxford University and chairman of the DAC committee from 2003 till 2008, identified four categories among non-DAC donors: OECD members not part of the DAC, EU members not part of the OECD, Middle East and OPEC countries, and ‘the others’ that do not fall into the first three designations.27_{Peter Kragelund, professor at Roskilde University and director at the}

International Centre for Trade and Sustainable Development, also identifies four categories, all based on EU and OECD membership: countries that are members of both organizations, OECD members not part of the EU, EU members not part of the OECD, and finally countries

25_{OECD, Statistics on Resources flow to Developing Countries, Table 2, Total Net Flows by DAC countries to Developing}

countries. Available at: http://www.oecd.org/dac/stats/statisticsonresourceflowstodevelopingcountries.htm. Accessed: 3 May 2015.

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13 that are not members of either the EU nor the OECD.28_{Zimmerman and Smith, policy analysts}

at the OECD’s Committee for Development Assistance divide non-DAC donors into three groups: emerging donors, Arab donors, and donors exhibiting south-south cooperation (SSC).29_{What all three mentioned classifications have in common is that their last group}

includes the BRIC countries, with the exception of Russia.

The BRIC countries, attracted the world’s notice due to their domestic economic and social development, have now emerged as the face of the ‘new’ or ‘emerging’ donor movement. All of these countries except Russia are classified as SSC donors. Russia was never a ‘third world country’ either. Russia is most often classified either in ‘other’ or ‘DAC-like’ categories, but it has quite some SSC characteristics, that will be explained. The SSC paradigm is not cut and dry, as many of these countries have characteristics entirely their own, but the designation as SSC donors stems from their shared historical roots. As former recipients of international aid that have enjoyed large growth in recent years, they are now turning their attention to fostering growth in other developing countries with their obtained knowledge. It seems that the BRIC countries have attracted much more apprehension from the traditional donors over their aid programs than the other emerging donors.30_{This is due not only to the}

new approach to their aid paradigm but also because their aid programs are no more immune from foreign policy and security interests than those of traditional donors.

The most prominent feature of the SSC formation of development assistance is its emphasis on assistance as ‘horizontal’ in contrast to traditional giving as fundamentally ‘vertical.’31_{Horizontal development assistance implies a lack of hierarchy and the equality of}

both parties, therefore often labelled as ‘mutual assistance’ by donor countries. It is largely motivated by the promotion of bilateral and regional trade and investment. These donors often emphasize infrastructure, especially regional infrastructure projects, to ease trade routes and lower transaction costs, not just for recipients but for the donor country’s benefit

28_{Peter Kragelund, ‘The Return of Non-DAC Donors to Africa: New Prospects for African Development?’ in: Development}

Policy Review 26:5 (2008) 555-584.

29_{Felix Zimmermann and Kimberly Smith, ‘More Actors, More Money, More Ideas for International Development}

Co-operation’ in: Journal of International Development 23:5 (July 2011) 722–738

30_{See for example with IMF: Mlachila, Montfort, and Misa Takebe, ‘FDI from BRICs to LICs: Emerging Growth Driver?’ IMF}

Working Paper (2011); Mwase, Nkunde, ‘Determinants of Development Financing Flows from Brazil, Russia, India, and China to Low-Income Countries,’ IMF Working Paper (January 2011); Mwase, Nkunde, and Yongheng Yang, ‘BRICs’ Philosophies for Development Financing and Their Implications for LICs,’ IMF Working Paper (2012); and OECD reports.

31_{Jonathan Glennie, ‘A new direction for international co-operation’ in: The Guardian (5 October 2011). Available at:}

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14 as well. As SSC donor countries develop internally, they face increasing domestic demands for resources. Here, the idea of development assistance with ‘mutual benefits’ comes around. SSC donors often begin with small regional programs, and increasingly expand these to include partners beyond their boundaries – especially, it seems, Sub-Saharan Africa.32_{When these SSC}

donors grow large to the size of the BRIC economies, this ‘mutual benefit’ becomes more problematic: the difference between vertical and horizontal aid becomes less visible. The initiating donor country has undoubtedly political leverage over the receiving country. The relationship is therefore not entirely without hierarchy, as the original SSC paradigm prescribes. The ‘mutual assistance’ element of the SSC paradigm therefore has a special significance for the BRIC countries. These countries, although they are amongst the world’s fastest growing economies, are still classified as Middle Income Countries: these countries still house the majority of the world’s poor population and three-quarter of the world’s poorest people live in Middle Income Countries.33_{And so, while their presence in international}

assistance is drastically increasing, the governments of these countries still have large responsibilities at home. By promoting the development of a recipient country, the socio-economic level of the country improves, while both trade with, and investment in this country will bring benefits to the donor nation. As well as financing, the ‘mutual benefits’ paradigm consists of exchange of experts, technical assistance, goods and services (in kind), information on best practices, and initiatives to increase joint-negotiation capacities.

The most argumentative role played by these ‘new donors,’ is that their practice of international development assistance challenges the way it was organized by ‘traditional donors.’ This challenge did not go unnoticed by the existent aid community, and the reactions have been mixed. The OECD welcomed the growing volume of aid from non-member countries. An Issues Brief published in May 2010 and written by the OECD Development Cooperation Directorate was titled, Beyond the DAC: The Welcome Role of Other Provides of

Development Cooperation. But even here, the OECD stressed the need to incorporate these

‘new’ donors into its already established architecture. 34_{It seems that the OECD wants to hold}

tight to its traditional model, because it has an element of control. Countries that were

32_{Julie Walz and Vijaya Ramachandran, ‘Brave New World: A Literature Review of Emerging Donors and the Changing}

Nature of Foreign Assistance’, working paper No. 273 for Center for Global Development (2011) 14.

33_{Andy Sumner, ‘Global Poverty and the New Bottom Billion: What if Three-quarters of the World's Poor Live in}

Middle-income Countries?’ Working paper for Institute for Development Studies (12 September 2010) 1-43.

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2 The history of development aid in the Soviet Union and Russia

2.1 Origins of Russia’s international development: Soviet international development assistance 1950 – 1990

For the four decades that the Soviet Union and the United States engaged in a global competition for influence and power, economic and development assistance to the Third

World was merely one of the many instruments used as part of the global competition. The

Soviet Union was actively involved in international development assistance from Nikita Khrushchev’s accession to power in the mid-1950s.35_{Abandoning the two-camp view}

propagated by Stalin’s chief ideologue Andrei Zhdanov, Khrushchev adopted a ‘policy of peaceful coexistence’ that included both Socialist and states and non-aligned countries. Referring to the post-war newly independent former colonies, Khrushchev declared ‘they need not go begging for up to date equipment to their former oppressors. They can get it in the socialist countries, without assuming any political or military commitments.’36_{This was a}

very attractive offer to many of the first generation of post-colonial leaders of the 1950s and 1960s.

From that point on, the Soviet practice of delivering assistance to developing countries lasted until the end of the Cold War. The majority of development assistance, called ‘economic cooperation,’ distributed during these decades was politically driven and aimed at supporting countries with similar ideological leanings as the USSR. The goal of Soviet assistance was to urge Third World countries to move toward a non-capitalist path of development, in principle the development assistance was the continuation of Cold War politics by other means. By investing considerable resources into large industrial projects of national importance, Soviet leaders aimed at creating a base for the ‘peaceful transfer’ of developing countries to the socialist camp and assisting them in reproducing the Soviet model of industrialization. In addition, economic assistance from the Soviet Union supported a favorable environment for the supply of Soviet arms and a channel for strategic national resources. Although over time arms transfers and general military support for ‘wars of national liberation’ overtook the

35_{Although it should be noted that the mission statement for the Council for Mutual Economic Assistance, founded in 1949,}

reads remarkably similar to that of the Non-Aligned Movement; regardless that the two organizations were formed for quite different objectives.

36_{Roger E. Kanet, ‘Four Decades of Soviet Economic Assistance: Superpower Economic Competition in the Developing}

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17 growth of development assistance, the latter remained an important component in the USSR’s effort against capitalism.

The ‘economic cooperation’ was coordinated by the State Committee for External Economic Affairs, a committee created in 1957. ‘Economic cooperation’ took several forms: grants, concessional loans, education of staff from developing countries in the USSR, assignment of Soviet specialists to developing countries, provision of technologies and know-how, price subsidies for goods exported to developing countries and subsidized marine cargo transfer.37_{For the most part, the USSR did not provide non-repayable grants to recipient}

countries. The most common form Soviet assistance took was credits at low interest rates for acquisition of equipment and technical assistance from the Soviet Union itself. As such, based on official criteria for Official Development Assistance (ODA, formulated years later38_{) less than}

half of the assistance delivered by the USSR to developing countries could be formally considered ODA, since granting lower interest rates for purchases of equipment are not considered tied aid. All development assistance commitments made by the USSR were secured in bilateral agreements for scientific-technological and economic cooperation.39

Economic cooperation during the Soviet era primarily took the form of large construction projects that not only served as showcases for Soviet technological achievements, but also took on national significance in the recipient country. Like the first instance of Soviet aid, commitments to Egypt for construction of the Aswan dam in 1954, these massive endeavors were large and visible projects in the state sector that were expected to increase the productive capacities of the recipient country and thereby reduce their dependence on the capitalist West. Several large government contractors – ‘Technoexport,’ ‘Tyazhpromexprot,’ ‘Technopromexport,’ ‘Prommashexport,’– as well as sector-specific ministries implemented the international projects. These projects were constructed in various sectors of heavy industry, for example, metallurgy in India, Iran, Egypt and Algeria; and electric

37_{Quintin V.S. Bach, ‘A Note on Soviet Statistics on Their Economic Aid,’ in: Soviet Studies 37:2 (1985) 269–75.} 38_{Official development assistance (ODA) is a term coined by the Development Assistance Committee (DAC) of the}

Organization for Economic Co-operation and Development (OECD) to measure aid. The DAC first used the term in 1969 and it is widely used as an indicator of international aid flow. The official definition: ‘Flows of official financing administered with the promotion of the economic development and welfare of developing countries as the main objective, and which are concessional in character with a grant element of at least 25 percent (using a fixed 10 percent rate of discount). By convention, ODA flows comprise contributions of donor government agencies, at all levels, to developing countries (“bilateral ODA”) and to multilateral institutions. ODA receipts comprise disbursements by bilateral donors and multilateral institutions.’ — OECD, Glossary of Statistical Terms

39_{D.V. Korepanov and J. Komagaeva, ‘Russia as an International Development Aid Partner: Assistance Efforts in Global}

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18 power in Egypt and Syria. The USSR also supported projects to develop infrastructure: highways in Yemen and Afghanistan; railways in Syria, Iraq, and Guinea; and deep-sea and river ports in Yemen, Somali, and Afghanistan. In the small African state of Guinea during the Khrushchev era, the USSR constructed an airport, a cannery, a sawmill, a refrigeration plant, a hospital, a polytechnic, and a hotel, as well as carrying out geological surveys and a series of research projects. 40_{Since the Soviets made no claims of ownership on the enterprises that}

they supported, they often had a psychological advantage over Western private investment that was seen by many in the developing world as a continuation of the colonial relationship of dependence. The United States were identified with Western colonial powers, paraphrasing Lenin’s definition of imperialism as the ‘highest stage of capitalism.’ This, despite strong American support for de-colonization after the Second World War.

In 1954, when Khrushchev made the first commitments of Soviet assistance to Egypt, Moscow had virtually no effective political, economic, or military presence in or relations with the countries of emerging postcolonial countries of Asia or Africa and only limited relations with Latin America.41_{Stalin was less keen on these remote areas then he was on strengthening}

his Soviet Union. However, by the 1970s Brezhnev and other key Soviet political figures spoke confidently about the emergence of a Socialist International Division of Labor that was gradually replacing the capitalist international system. This trend continued into the next decade: in 1986 alone, the USSR spent around $26 billion in 1986 on friendly poor countries in the communist world, South America, Asia and Africa.42_{This acceleration can be explained}

as the epitome of the East-West challenge for influence in the world, in the latter days of the Cold War.

As of January 1991, the overall number of large projects implemented in developing countries reached 907, including 379 industrial premises.43_{However, negative trends in the}

Soviet economy in the early 1980s and disappointed expectations regarding the pace of recipient countries’ development caused Soviet leaders to re-evaluate their assistance programs. The Soviet Union became less willing to enter economic relationships with developing countries that were not ‘mutually beneficial.’ This changed perspective remains a fundamental point that carries into Russia’s approach to development assistance today. Even

40_{Kanet, ‘Four Decades of Soviet Economic Assistance: Superpower Economic Competition in the Developing World.’} 41_Ibidem.

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19 before collapsing in 1991, the USSR had practically stopped its assistance funding to Afghanistan, Cambodia, Nicaragua, Angola, Ethiopia, and many others with whom it had aid obligations.

By the early 1990s the newly established Russian Federation found itself on the receiving end of international development assistance.Despite Russia’s undeniable need for financial support, it was never entirely comfortable as a recipient country. The forms, conditions and legal basis of Russia’s cooperation with the United Nations Development Programme (UNDP) were established in the Agreement between the Russian Federation and the UNDP on November 17, 1993. Due to this mentioned discomfort, the Law on the Ratification of the Agreement was not signed until May 4, 2000. On September 4, 2009 President Medvedev signed the decision to withdraw Russia’s status as a recipient of technical assistance from the UNDP, but allowed completion of already-begun country program projects. To this effect, between the years of 1998-2010 about 150 projects with a total funding of more than $100 million were carried out in 30 different areas of the Russian Federation, the majority in the far eastern territory of the country.44

44_{Программа развития ООН (ПРООН), (UN Development Programme, on website Ministry of Foreign Affairs of the}

Russian Federation). Available at:

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20

Chapter 3: Re-emergence of Russian Development Assistance

3.1 Development assistance in the Russian Federation

Russia began to receive international development assistance upon its establishment as a sovereign country in 1991. However even during times of domestic economic turbulence, Russia continued some activities of international assistance. The Russian Federation maintained its participation in humanitarian operations, made regular contributions to international organizations, participated in debt relief toward loans provided by the USSR (leading among other countries in terms of the volume of relieved debt to GNP), and was one of the leaders in the world in providing grants to foreign students.45_{Russia’s participation in}

development assistance in the 1990s remained mostly insignificant with respect to volume and forms of assistance.

Several factors influenced the re-emergence of Russia as a significant donor country. First and most importantly, a favorable macro-economic situation based upon sustainable economic growth strengthened Russia’s financial position. In the first decade of the twenty-first century, the federal budget of Russia had surplus, which in part allowed Russia to substantially increase federal budget expenditures to provide external loans, as well as to increase contributions to different international programs and funds supporting developing countries.46_{Changes in the emphasis of Russian foreign policy also had a notable impact.}

Shortly after Vladimir Putin was elected president of the Russian Federation in 2000, he directed policy aimed at strengthening Russia’s position in the international arena in part by increasing its participation in international organizations. Through rhetoric and soft power, the government started positioning Russia as a ‘rising’ country and a responsible and reliable international player. In the central outlines of the place Russia in the world, the Foreign Policy Concepts of Russia from 2000, 2008 and 2012 this is visible. The documents structured in five sections (‘general provisions’, ‘the modern world and Russian foreign policy’, ‘Russia’s priorities in resolving global problems’, ‘regional priorities’, and ‘formulation and implementation of Russian foreign policy’) and show a commitment to the United Nations having a central role in international affairs. There is a ‘multi-polar’ world with emphasis on

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21 four key players: Washington, Brussels, Beijing and Moscow (Concept 2008).47_{It can be argued}

that the Kremlin prefers to emphasize on the UN as central institution because traditionally the US are not the main supporters of this – moreover Russia and the US have the same voting power in the Security Council of the UN.

Russia’s development assistance, based upon DAC’s Official Development Assistance (ODA) classification, peaked at 785 million dollar in 2009, before dropping markedly to 472.32 million dollar in 2010.48_{The 3.5 times increase compared to 2008 levels was caused by}

emergency aid provision to developing counties affected by the global economic crisis. In the Foreign Aid Concept, 500 million dollar was mentioned as the amount outlined for Russia’s foreign aid, and Finance Minister Kudrin confirmed this figure in his opening address of the international conference ‘New Partnerships in Global Development Finance’ in Moscow in February 2010.49_{Based on ODA classification then, Russia’s aid budget is by far the smallest}

of the G8 members to which Russia belonged, and even the smallest of the BRIC countries.50

However, this total can be misleading. Russia began reporting its ODA to the DAC in 2010, but much of the assistance Russia counts is neglected by measuring organizations like OECD and Global Humanitarian Assistance, because it falls outside of the DAC’s definition of ODA.51

The form of Russian development assistance is primarily in the form of humanitarian aid provision, grants, trade preferences, and debt write-offs.52_{Most recent debt-write offs}

include a 32 billion dollar write off to Cuba in in July 2014 (with the obligation to still pay 3.2 billion dollar over the next ten years) and a write-off of 865 million dollar to Uzbekistan in December 2014. Russia provides aid mainly through multilateral mechanisms, however

47_{Foreign Policy Concepts of the Russian Federation 2000, 2008, 2012. Available at the website of the Ministry of Foreign}

Affairs of the Russian Federation: www.mfa.ru. Helpful analysis: Andrew Monaghan, ‘The New Russian Foreign Policy Concept: Evolving Continuity.’ Chatham House: Russia and Eurasia REP 3 (April 2013).

48_{Marina Larionova, Mark Rakhmangulov and Marc P. Berenson, ‘The Russian Federation’s International Development}

Assistance Programme: A State of the Debate Report.’ Institute of Development Studies (August 2014) 10.

49_{Concept of Russia’s Participation in International Development Assistance (14 June 2007). Available at:}

http://www.minfin.ru/common/img/uploaded/library/2007/06/concept_eng.pdf. Accessed: 3 May 2015.; Opening address of Minister of Finance of the Russian Federation Alexei Kudrin at the Moscow International Conference on New

Partnerships in Global Development Finance (Moscow, 17–18 February 2010) Available at:

www.mgdf.ru/eng/press/speeches/opening_kudrin. Accessed: 3 May 2015.

50_{Official Development Assistance, classification according to OECD’s Development Assistance Committee (DAC), includes:}

budget support, program support, projects, global funds, stand-alone technically cooperation, emergency/food aid, and debt relief.

Russia was a member of the G8 from 1998 until 2014. In March 2014, the G8 Summit was planned in the Russian city of Sochi. Due to Russia’s proclaimed role in the Crimean crisis, the remaining G7 members decided to suspend this summit, and meet in Brussels instead.

51_{Country profile Russia on Global Humanitarian Assistance:}

http://www.globalhumanitarianassistance.org/countryprofile/russia.

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22 bilateral and trilateral giving are increasing. The predominance of multilateral giving is due in part to Russia’s continued lack of sufficient regulatory and institutional framework for bilateral giving, the lack of a Ministry the occupies itself with such activities instead of competing responsible ministries that want to use development assistance for its own strategic goals. Besides, international cooperation gives Russia the benefit of using well-worked institutional mechanisms of development assistance delivery, as well as applying coordination and harmonization mechanisms, financial control systems, technical capabilities and knowledge. Simultaneously, aid delivery on a bilateral basis helps Russia to develop strategic cooperation with recipient countries and strengthen its positions in these regions. ‘Strategic cooperation’ being of primary importance along its borders, bilateral assistance continues mainly in neighboring (CIS) countries. ‘Trilateral giving’ is something of a recent catchphrase. Cooperation for development on a trilateral basis means application of financial and technical capacity of a donor country, in cooperation with international organizations.53_{When such}

type of aid is provided by Russia it is often delivered through existing or created trust funds of the World Bank, the UN institutions and other organizations.54

Russian ODA from 2004-2013 (in US millions) 55

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ODA 100 101,3 101,8 210,8 220 785 472,39 513,9 458 543 GNI 578245 744977 960335 1268988 1626045 1182452 1434767 1640478 1855654 1988216 ODA as % of GNI 0.02 0.01 0.01 0.02 0.01 0.07 0.03 0.03 0.03 0.03

3.2 Institutional practice of development assistance

A landmark event for Russia’s increasing participation in international development assistance occurred on 14 June 2007, when the Concept of Russia’s Participation in International Development Assistance was endorsed by President Putin. The Concept defines the major goals, objectives, and principles of Russia’s international development assistance

53_{Lama Hammand and Bill Morton, ‘Non-DAC donors and reform of the international aid architecture,’ in The North-South}

Institute: Issues Brief (2009).

54_{‘Russia,’ on: Research Centre for International Cooperation and Development,}_{www.RCICD.org.}

55_{Data from World Bank; Global Humanitarian Assistance; OECD Stat; Marina Larionova, Mark Rakhmangulov and Marc P.}

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23 policy. The legal framework for the Concept is provided by the Constitution of the Russian Federation, the Russian Foreign Policy Concept, the Russian Security Concept, and the Budget Code of the Russian Federation.56_{Additionally, the Concept states that the document is based}

on the United Nations Charter and other international instruments such as the Millennium Declaration, the Monterrey Consensus, the Johannesburg Plan of Implementation of the World Summit on Sustainable Development, the 2005 World Summit Outcome, the Paris Declaration, and others.

According to the Concept, the government bodies formally responsible for implementing Russian IDA policy are the Ministry of Foreign Affairs, the Ministry of Finance and the Ministry for Emergency Situations. These first two ministries together are responsible for most decision making with respect to ODA, including the prioritization of countries and regions, the political expediency of aid, the amount of aid, delivery channels, types and terms.57_{In practice however, the number of government agencies involved in IDA policy is}

much larger, including such diverse ministries as the Ministry of Industry and Trade and the Ministry of Compatriots Living Abroad.58_{Decision-making is carried out jointly by the Ministry}

of Foreign Affairs and the Finance Ministry in consultation with whichever federal executive bodies are relevant. This large number of deciding ministries is not beneficial for swift reshaping of policy – in practice, the two most powerful ministries, Foreign Affairs and Finance, are reluctant to hand over responsibilities to second-rang institutions or to each other.

Federal budget funds for development assistance are allocated according to procedures established by the Budget Code of the Russian Federation. The Ministry of Economic Development prepares annual plans for Official Development Aid in collaboration with international organizations, while the Ministry of Finance ensures that the agreed-upon ODA spending is included in the draft federal budget, informs budget funding administrators and beneficiaries of the overall budget schedule and of limits on ODA spending, and cooperates with the Federal Treasury to ensure timely financing of relevant spending items. However, proper spending of the funds is the responsibility of the federal executive bodies, which submit proposals each year to the Ministry of Finance on official volumes agreed-upon

56_{All available at Ministry of Foreign Affairs,}_www.mid.ru_.

57_{Concept of Russia’s Participation in International Development Assistance (14 June 2007). Available at:}

http://www.minfin.ru/common/img/uploaded/library/2007/06/concept_eng.pdf. Accessed: 3 May 2015.

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24 with the Ministry of Foreign Affairs together with justification for inclusion of their proposals in long-term financial plans and the federal budget. Interestingly, humanitarian aid is handled separately. Russian humanitarian aid is controlled by the Ministry for Civil Defense, Emergencies and Elimination of Consequences of Natural Disasters.59_{Development assistance}

funds in the form of debt relief (not ODA) are mostly by presidential decree.

The Accounting Chamber of the Russian Federation controls spending of appropriated funds.60_{Performance assessments of Russia’s participation in specific development assistance}

projects is carried out in coordination with the authorities of the recipient countries and/or the leadership of international organizations.61_{In addition, the Ministry of Foreign Affairs, the}

Ministry of Economic Development and Trade, and the Ministry of Finance are charged with compiling factual and analytical data of the implementation of anticorruption activities and efforts to ensure transparency in the use of IDA. The Ministry of Foreign Affairs and the Ministry of Finance are also responsible for assessing the cost-effectiveness of federal appending of IDA.

The Plan of Measures to Implement the International Development Assistance Concept was adopted in November 2007 and provides for measures to create legal and institutional bases for Russia’s development assistance.62_{The plan was to be implemented}

from 2008 to 2010, but there have been no institutional changes so far; to date there is no document that would enable all concerned agencies to address the tasks set out by the IDA Concept in an integrated manner. There are individual acts issued by federal executive agencies, but they have narrow application and do not amount to a unified system of actions to promote and enhance the effectiveness of ODA. The way the current model is organized gives no agency or ministry authoritative power or full responsibility on implementing development assistance projects. This is beneficial to the vertical structure of power, where the ministries are balanced against each other. Whereas this situation does not necessarily increase the effectiveness of development assistance, it does increase the strength of incorporating development assistance in a geopolitical grand strategy.

59_{‘Country Profile: Russia,’ Global Humanitarian Assistance. Available at:}

http://www.globalhumanitarianassistance.org/countryprofile/russia.

60_Ibidem.

61_{Concept of Russia’s Participation in International Development Assistance.}

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25 In many countries, the development assistance programs are implemented by a wide range of agencies. In Russia, the process of the implementation of aid provision still lacks a legal framework. Furthermore, even though relatively few years have passed since the existence of the Soviet Union, Russia has chosen to build its international assistance capacity almost from scratch, with little attention given to the expertise of former cadres involved in international assistance during the Soviet era.63_{Overall, there is no consensus over such}

fundamental questions as how best to administer international assistance funding, what funding levels should be, and how funding should be channeled. The responsibilities are now divided over the Ministries of Foreign Affairs, Finance and Economic Development & Trade.

These problems have the potential to be solved with the installation of an independent Russian foreign aid agency, like there is USAID in the United States and DFID in the United Kingdom. An idea for the creation of such an agency was suggested as early as 1994, when Yeltsin issued a decree creating a ‘Russian Agency for International Cooperation and Development.’64_{Yeltsin’s decree had no practical impact and the agency never materialized –}

Russia had domestic issue in those years – but the idea remained and returned in the Concept of 2007. The Concept again stated the need for the creation of an independent agency and to present measures to further modernize Russia’s international development program. And again, at the end of August 2011, the Russian government announced that a ‘RUSAID,’ an independent Russian foreign aid agency, would be launched at the beginning of 2012 complete with a staff of approximately fifty specialists.65_{It was stated that this planned federal}

agency “will contribute to international development, [and] assist other countries to advance economy and fight poverty.”66_{According to the draft of the new agency’s statue, it will}

“develop Russian assistance strategy and monitor its implementation.”67_{Eventually, these}

plans did not materialize, in September 2012, Deputy Finance Minister Storchak announced all current plans for the agency had been abandoned, formally because Russia will focus on

63_{Korepanov and Komagaeva, ‘Russia as an International Development Aid Partner,’ 17.}

64_{Patty A. Gray, ‘The Emerging Powers and Changing Landscape of Foreign Aid and Development Cooperation: Summary}

Paper Russia,’ in: Foreign Aid Perceptions (2010).

65_{Евгения Письменная и Екатерина Кравченко, Минфин России хочет помощь другим странам в ликвидации}

бедности (Russian Ministry of Finance wants to help other countries to eliminate poverty) in: VEDOMOSTI (26 August 2011). Available at: http://www.vedomosti.ru/finance/news/1349485/agentstvo_ pomoschi#ixzz1dzsrsxM4. Accessed: 3 May 2015.

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26 multilateral development cooperation.68_{As argued before, the large ministries are careful}

with handing out strategic responsibilities to newborn institutions, it is likely that Storchak’s decision is in line with this thought.

Yet, even if this agency was established, the relationship between the proposed agency and current ministries handling Russia’s development programs could add more complexity to the system of institutional coordination. According to the agency’s mandate it should be housed in the Ministry of Finance, as such it would not automatically have an institutional presence in its recipient countries because Russia’s foreign diplomatic missions are controlled by the Ministry of Foreign Affairs and the Ministry of Economic Development’s trade offices.69

In the meantime, the agency known as Rossotrudnichestvo is attempting to play the role of coordinator of development activities, at least in the territory of the CIS.70

Rossotrudnichestvo, short for the Federal Agency on Affairs of the Commonwealth of

Independent States, Compatriots Living Abroad, and International Humanitarian Cooperation,

has expressed the aim of carrying forward the long legacy of Russian cultural centers abroad.71

Its assumed role of coordinator of development aid was not part of the initial mandate given by President Medvedev in 2008, which was rather ‘to foster friendly ties for the advancement of Russia’s political and economic interests in foreign states’. To date, Rossotrudnichestvo has no active aid program of its own and its focus is mostly compatriots living abroad. Besides, its presence abroad is received with suspicion from the Western international community.72_Next

to Rossotrudnichestvo, another international organization was founded by decree of Putin. In 2007, Russkyi Mir was initiated as a government-funded organization aimed at promoting the Russian language, and “forming the Russian world as a global project” and “to promote understanding and peace by supporting and encouraging an appreciation of Russian language, heritage and culture.” Furthermore, it helps “grass roots expat organizations keep ties with Russia, and with local people interested in things Russian.”73_{The official emphasis is on}

68_{Patty A Gray, ‘Russia as a Recruited Development Donor’ in: European Journal of Development Research 27 (April 2015)}

273 – 288).

69_{Alexei Bobrik and Judyth Twigg, ‘Russia’s Foreign Aid for Health: Overview and Options’ in: Judyth Twigg (ed.), Russia’s}

Emerging Global Health Leadership for: Center for Strategic and International Studies (Washington 2012).

70_{Rossotrudnichestvo was found by ukaza by President Medvedev in September 2008. The official website with mission}

statement is: http://rs.gov.ru/.

71_{Федеральное агентство по делам Содружества Независимых Государств, соотечественников, проживающих за}

рубежом, и по международному гуманитарному сотрудничеству.

72_{Gray, ‘Summary paper Russia’ 4.}

73_{Website of Russkyi Mir, quoting V. Putin in his decree in June 2007.}_{http://russkiymir.ru/en/fund/}_{. Nikolai Gorshkov,}

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27 language and culture, which are in itself strong tools of soft power. Russkyi Mir offices are all over the world, rather in developed countries than developing countries.74

Rossotrudnichestvo and Russkyi Mir happen to run cultural projects together, the difference relies on the fact that Rossotrudnichestvo is subordinate to the Ministry of Foreign Affairs and Russkyi Mir under the Ministry of Culture. In fact, this shows again how the international power and influence are decentralized over the ministries, favouring the vertical power structure. A third ‘soft power’ institution was founded in 2010 by Presidential decree: the Russian International Affairs Council (RIAC), a new think tank with a strong second-track diplomacy component. RIAC is a bilingual platform, writing about political and economic topics.75

Because not all the details of the development aid design have been worked out, it should not be assumed that Russia lacks a substantive program. With the 2007 Concept came a newfound realization of the utility of development assistance in foreign policy. Deputy Finance Minister Storchak summarized it well shortly upon the drafting of the Concept when he stated, “the Concept sets a groundbreaking principle for Russia – a country helps itself by helping neighboring poor countries.”76_{Storchak mentions just neighboring countries here, but}

as we will see, Russia has expanded its focus regions outside of the regional sphere. Moscow is consolidating its perception of what development assistance means in the Russian context. Enlighted self-interest, or, a country helps itself by helping its neighbors echoes the mentality of for example China and the other BRIC countries. Yet, the mere existence of a Concept that freely uses the words ‘donor’ and ‘recipient’ is rather uncommon for the other BRIC countries. The next paragraphs examines the position of Russia’s development program in the world.

3.3 Assessing Russian development assistance: a comparative approach

Russia is grouped as a non-DAC donor nation that distributes aid through DAC-like methods. This is in direct contrast to the other BRIC’s nations (with which it is often grouped when speaking of ‘emerging donors’) who are bundled together under the term ‘South-South donors.’ Russia’s practice therefore has characteristics of both groups.

http://rbth.com/society/2014/09/02/cultural_relations_the_ties_that_bind_in_difficult_times_39447.html). Accessed: 3 May 2015.

74_{Ibidem, section: offices.}

75_{Website of the Russian International Affairs Council: http://russiancouncil.ru/.}

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28

a. Assistance programs

A primary characteristic of South-South donorship is their general tendency to distribute development assistance bilaterally, while DAC countries allocate development assistance both multilaterally and bilaterally.77_{SSC donors rationalize this preference for}

direct government-to-government aid in a number of ways. First, it reflects a wish to see aid as part of a deeper, mutually-beneficial bilateral relationship, and responds to a desire for visibility of the donor’s contribution. Second, because aid determinations are often made by the particular government’s embassy in the affected country, officials argue that the speed and timeliness of response is a significant advantage not offered by multilateral mechanisms. Third, as aid is often tied to in-kind goods and services, or technical assistance, and draws on the donor’s existing knowledge of a country, officials argue that this kind of response is often more appropriate.78_{In the mentality where good relations mean more than rule-of-law, it}

seems indeed often more appropriate to have this direct government-to-government programs, with visibility of transactions.

Russia in this regard fully displays the DAC style of giving, having both multilateral and bilateral currents of development assistance donations, and directly contrasts the other BRIC’s countries by having such a large share of its development assistance transferred through multilateral channels. Russia’s multilateral development assistance is concentrated in a small number of organizations: 67% was allocated to the Global Fund to Fight AIDS (about $312 million since 200279_{), Tuberculosis and Malaria, 16.7% to the International Development}

Association and 12.8% to the World Food Programme.80_{It should be noted though, that within}

multilateral giving, such a concentration of multilateral aid allocation to a small number of international organizations is observed in other non-DAC donors’ activities. For example, the World Food Programme accounts for 70% of India’s multilateral contributions and the International Development Association accounts for 70% of Brazil’s multilateral contributions.81

77_{IMF Working Paper, (March 2012).}

78_{Gareth Price, ‘Diversity in Donorship,’ report for Humanitarian Policy Group (2005).}

79_{Tinatin Zardiashvili, ‘Russia in transition from recipient to donor of Global Fund grants’ (6 February 2014) on AidsPan.}

Available at: http://www.aidspan.org/gfo_article/russia-transition-recipient-donor-global-fund-grants. Accessed: 3 May 2015.

80_{ONE Data: Russia. Available at:}_{http://www.one.org/data/}_.

81_{Development Cooperation Report 2010, OECD. Available at}

The grand strategy behind Russia’s foreign aid program