New donors, same old practices? South-South Cooperation of Latin American emerging donors

Abstract

Foreign development assistance has been widely used for the last 60 years. In spite of changing conditions in the geopolitical scene and the increasing number of new development actors, development assistance has retained its salience. Most countries around the globe are involved in the aid regime, either as recipients, as donors and frequently as both. Middle-income countries (MICs) that until recently were recipients of aid, today are rivalling traditional donors practices.

Despite MICs’ economic growth rates, the distribution of income is extremely unequal. Pockets of wealth are surrounded by oceans of poverty, and yet they are actively increasing their development assistance offer. If middle-income countries still have domestic challenges to overcome, why do they engage in the provision of development assistance? While some argue that MICs use it to advance foreign policy interests in the same way that traditional donors do, this work will put forward that elements unique to these countries, such as the desire to reaffirm themselves as global actors, strongly drive their South-South cooperation policies.

This paper aims to answer the question of why MICs offer development assistance through the study of Latin American cooperation policies. For this purpose, the author proposes to build a typology based on the motivations of traditional donors, which will facilitate the comparison of traditional and emerging donors’ practices. This analysis will be supported by a combination of IR approaches. The implications of this work include deeper understanding of the drivers of development assistance policies and providing elements to extend similar studies to other MICs.

Introduction

Official development assistance (or foreign aid) emerged as a mechanism to promote economic development in the 1950s^a. What began as an act of diplomatic solidarity and temporary relief in the aftermath of the Second World War, by the 1990s had acquired such salience that most industrialised nations had structured aid policies, established aid agencies and joined the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD). At the beginning of the new Millennium, foreign aid had become a norm rather than the exception in the industrialised world (Lancaster 2007: 13).

A gradual and steady rise of official development assistance (ODA) flows has been observed over the last 60 years^b. During most of this period, developed countries (or traditional donors) provided the main share of global ODA³. This tendency started to change by the late 1990s and emerging donors (or non-DAC donors) increased their participation. Countries that not long ago were recipients of ODA today are becoming important development contributors^d. Robust macroeconomic conditions in most of MICs give them large marge of manoeuvre to channel resources to South-South Cooperation (SSC) flows^e. South-South Cooperation has become a mechanism of assertive foreign policy used by new donors to gain political and economic influence, that at the same time, is embedded in a discourse of solidarity, complementarity and lack of hierarchy (Abdenur and Fonseca 2013: 1477).

According to the aid research and database Aiddata.org, 38 non-DAC donors have been identified^f. The BRICS (Brazil, Russia, India, China and South Africa) are particularly active, with their policies acquiring extended geographical outreach and the size and sectorial diversity of their programs growing. Similarly, Mexico, Indonesia, South Korea, Turkey, Chile, Thailand, the Gulf Countries and even Cuba and Venezuela are active providers of development assistance. While these countries share dynamic economies, colonial past, common challenges and the experience of having been recipients of aid, they also constitute a heterogeneous group with diverse practices (Rowlands 2012). These elements along with strong emphasis on respect for the principles of non-interference and national sovereignty, rejection of hierarchy and the pursuit of common benefits lie at the core of new development partners’ activities (Mawdsley 2012: 152).

Due to a lack of reliable records and the absence of a common definition of ODA-like flows, exact financial data on the contributions to international development by emerging donors are unknown. Some estimates show that South-South development flows have significantly grown in the last decade (Kindornay et al. 2013). Davies (2010) suggests that in 2008 the expenditure by new donors was equivalent to 10 to 15 per cent of DAC donors’ ODA. Park (2011) notes that in 2008 ODA-like flows from China, Turkey, Korea and Saudi Arabia were around 12 per cent of global ODA and he also projects that such contributions will reach 20 per cent by 2015. Callan et al. (2013) believe that ODA-like flows from emerging donors are around 10 per cent of global contributions and will double by 2020.

The so-called new donors have a double identity, as donors and as recipients, which exposes the numerous domestic challenges that they still face (Quadir 2013: 332). Economic growth registered by most of MICs does not appear to spill down to all sectors of the population^g. Small groups live in opulent conditions, while the vast majority remain submerged under the poverty line. Massive public protests recently witnessed in Brazil, Mexico, South Africa, Thailand and Turkey, reflect continued economic marginalisation and discontent within large sectors of the population. The contrast of burgeoning middle classes against the 74 per cent of population living under US$1.25 a day and the 79 per cent of the population under US$2 a day that are concentrated in MICs, demonstrates the rampant growth of inequality (Sumner 2013: 358). This challenge of poverty and inequality is particularly noticeable in Latin America. Although government efforts to alleviate poverty and reduce inequality have been very intense, 35 per cent of Latin Americans still live in conditions of poverty and more than 80 million (equivalent to 13 per cent of total population) still live under extreme poverty, leaving Latin America as one of the most unequal regions of the world (World Bank 2013: 9, 22)^h.

The emerging powers that have been most vocal about unequal representation in global governance are the ones that have the most unequal domestic societies (Gray and Murphy 2013: 190). In brief, MICs still have numerous development demands to fulfil and limited resources for such purposes, and yet they are increasing their offer of foreign assistance. This raises the question of how to explain the rising levels of MICs development assistance, given that they still face a myriad of domestic challenges.

Academic literature discusses that motivations behind development assistance vary from a wide range of reasons between pure humanitarian altruism to the selfish pursuit of the national interestⁱ. In practice, the purpose of foreign assistance is frequently a combination resulting from what Huntington describes, as a conflict between the moral obligation of the donor and the desire to advance its national interest (1970: 174). But since these arguments result from the analysis of traditional donors (Lancaster 2007; Van der Veen 2011; Lundsgaarde 2012), can we claim that the same applies to non-DAC donors?

It appears that the rationale of development cooperation offered by MICs is indeed not far from that of industrialised states: development assistance serves as an instrument of foreign policy (Haan 2009). Emerging countries are pushing their way onto the global stage and challenging Western dominance in different domains. With increased frequency, developing countries host international meetings, present candidacies for international positions or institutionalise alternate groupings (including G77, ALBA, BRICS or IBSA). Further efforts are also given to seek larger share markets and to be active in world politics.

To achieve these objectives, MICs need to win allies. SSC seems to have become one of the preferred mechanisms for developing countries to acquire support and to increase their influence in the international scene (Woods 2005; Kragelund 2008; Brautigam 2009; Mawdsley 2012; Quadir 2013; Burges 2014). In similar ways to industrialised countries, emerging donors have recognised the virtues of development assistance as a useful tool to advance foreign policy interests. But in addition to geopolitical considerations, there are specific logics to SSC that are not necessarily mirroring broader power struggles (Abdenur and Fonseca 2013: 1488). Elements unique to new development partners, stemmed from their idiosyncrasies, history, cultural heritage and national identity also shape deeply their development assistance policies and practices, for instance, the need to reaffirm their sovereignty, to acquire economic autonomy, as well as, to consolidate regional or global leadership.

This paper aims to explain these elements. After the introduction and background, a typology of development assistance based on the motivations of traditional donors will be presented. These categories result from the analysis of traditional donors policies and will be used to understand and compare the motivations driving new donors. The analysis will be made under the lens of several streams of international relations theory, IPE and post-colonial theory. In the following section, I will analyse Latin America SSC practices. The choice of case study is grounded in the long-standing Latin American tradition of international cooperation and solidarity. The region has been the cradle of several SSC landmarks and in the last decade SSC has re-emerged and reinforced its role as an essential element of intra-regional relations (Morazán et al. 2011)^j. The paper will finish with a brief conclusion summarizing the main arguments outlined and will note some avenues for further research.

Why do countries offer ODA? – IR theory perspectives

The appearance of numerous new development actors, along with the unprecedent rise of ODA and ODA-like flows, demonstrates that foreign assistance has not completely lost its relevance. As such, there is an increasing amount of academic studies dedicated to it. For the most part, the current academic debate focuses on the effectiveness of aid and the aid-development paradigm, overlooking aspects such as the motivations of non-DAC donors, which will be adressed by this paper. Scholars of international relations have used several approaches to understand the motivations that drive traditional ODA: Morgenthau (1962: 308), Mason (1964: 107), Huntington (1970: 171), Thorbecke (2000: 13), Lancaster (2007: 2; Lancaster 2008: 46), Haan (2009: 194) and Herbert (2012: 70) agree that development per se is one of the purposes of ODA, but is not the only one, and rarely the predominant one as we will see next.

In realist terms, foreign aid is considered as an instrument to advance the national interest, which in this case is understood in terms of power and geostrategic interests (Morgenthau 1962: 301; Hook 1993: 34). Realism bases its analysis on the anarchical nature of the international system and states struggle for survival. States seek to obtain and maintain power, which realists understand as the military capabilities required to ensuring the subsistence of the state (Hollis and Smith 1990). Morgenthau (1962: 301) contends that foreign aid is an integral part of foreign policy, and it should thus be used as an element of the political weaponry of a country. For Morgenthau, foreign assistance can help to accomplish ends that military force or traditional diplomacy cannot. The neorealist definition of power and security includes also the combined capabilities of the state (Hollis and Smith 1990; Hook 1993: 16; Wendt 1995: 73; Schraeder et al. 1998: 3; Ayllón 2006: 16). Thus in neorealist views, foreign assistance should also serve to the advancement of states’ economic power.

The realist and neorealist approaches present some limitations for the study of foreign aid. To start, the only actors considered as members of the international community are states, excluding other influential agents, such as international organisations, transnational corporations and non-government organisations (NGOs). Second, realist theories do not give enough attention to domestic factors, which in public policy play a significant role. And finally, realism and neorealism do not consider moral values, ideas or social structures that influence human and state behaviour.

Followers of the liberal tradition argue that ODA is a reflection of the state’s desire to collaborate against global challenges (Lancaster 2007: 4; Haan 2009: 64). Nations enter into cooperative behaviour because they recognise the benefits they gained by participating in networks and international regimes (Cooper and Flemes 2013: 948). They see international structures as favourable for a prosperous and peaceful world order and as suitable spaces for negotiation and cooperation (Hindess 2004: 3; Mawdsley 2012). Liberals believe that interventions in favour of global order are justified because aid is considered as a contribution to global public goods (GPGs). Besides, aid conditionality is accepted because aid is used as a ‘legitimate’ instrument to promote democratic regimes and free market economies in the developing world that eventually will bring global benefits.

Contributions to the provision of GPGs, such as the international financial system, eradication of pandemics or environment preservation, are good examples that illustrate the approach of IPE to international development assistance. GPGs overlap in the international and national levels, encompass economic and political interests and at the same time entail market mechanisms and state regulation. IPE on one hand perceives that aid is determined by economic interests pushed by lobby groups, by the national interest of states and by the bargaining process within the state structure (Hopkins Hindess 2004). Similar to the liberal approach, the aid regime is seen as an arena for interstate cooperation that facilitates contacts, provides information and sets the conditions to achieve common goals (Martin 1999). Due to the overflowing benefits produced by public goods, it is in the interest of rich nations to channel ODA to contain pandemics or to fight climate change in poor countries that do not have the resources or the willingness to do so. Promoters of this approach argue that the international community should be interested in supporting poorer countries to have access to GPGs not only for altruist reasons but to enable them to contribute to public goods in the future (Kaul et al. 1999). Furthermore, when donors offer foreign aid for the provision of GPGs, the national constituency within the donor country benefits too, which makes domestic justification of ODA easier (UNIDO 2008).

Under the constructivist lens, foreign assistance is read as a set of norms and ideas constructed by states. Constructivism emerged when neorealist theories seemed unable to explain the causes of such international events (Price and Reus-Smit 1998). Wendt indicates that one of the differences between neorealists and constructivists rests in the assumption that for the former the structure of the international relations system is made of material capabilities, whereas for the latter it also includes social relationships (1995: 73). David Lumsdaine, the main supporter of this interpretation, sustains that foreign aid cannot only be explained on the basis of economic and political interests of donors; humanitarian convictions and moral values equally shape aid policies (1993: 29). In other words, foreign aid is influenced not only by international norms, but also by the ‘ethical’ behaviour of states.

Official development assistance is a good example of how ideas and beliefs can be institutionalised in international norms and regimes. Riddell (2007) observes that under the basis of moral obligation and international solidarity, foreign aid became the ‘right’ (and expected) thing to do to address human suffering, because of the capabilities of developed countries and the growing gap between rich and poor nations. Eventually, foreign aid practices turned into a widespread institutionalised norm: “…rich countries are expected to help poor countries to improve the social wellbeing of their populations” (Lancaster 2007: 61; Lancaster 2008: 59). This behaviour consolidated itself as a moral duty and was reinforced by the desire for a good reputation from North countries.

While liberal schools, international political economy and constructivism include in their analysis other actors aside from states, they also present some limitations to the study of ODA. Liberals downplay the importance of domestic factors, as a result of its narrow focus based in international interactions (Fawcett and Hurrell 1995: 61). Constructivists and international political economy do not give enough importance to geostrategic interests that in fact are still very significant in aid allocations.

According to critical and Marxist theories, foreign aid aims to preserve capitalist exploitation (Lancaster 2008: 3; Haan 2009: 3). Marxists stress that ODA perpetuates the North-South division between rich and poor countries. Structuralists denounce that the capitalist model promoted by the West entails a trade system in which rich countries exploit poor nations (Pollock et al. 2001: 16), and therefore, ODA only perpetuates the structural dominance of the centre over the periphery. For the proponents of these schools, bilateral ODA should be substituted by multilateral assistance (Hook 1995; Schraeder et al. 1998: 3-4). Marxist theories challenge the legitimacy of foreign assistance and claim that it should be ended. In their interpretation, if there were any development programs, they should be managed and implemented by renewed democratic international organisations.

Conversely, Cammack (2001) notes that efforts towards poverty alleviation promoted by Western countries and international financial institutions (IFIs) are rooted in a global capitalist strategy. Since the early 1990s, IFIs engaged in the implementation of structural adjustment programs that focused more on the creation of a favourable environment for global capitalism than in promoting economic development. Cammack (2004: 190) affirms that while the World Bank is committed to poverty alleviation, its intentions and development programs are subordinated to capitalist principles. Critics of Marxist theories contend that the introduction to industrialisation and modernity by colonial powers and the insertion in the globalisation process is however beneficial for poor countries (Sachs 2005). Marxism is useful to expose the hierarchical nature of the international system and the domination of transnational capitalist classes. But it may not be fully adequate to explain the motivations of foreign assistance policies, since Marxists consider that the expansion of capitalism and the preservation of exploitation regimes are the only incentives driving foreign aid policies. Moreover, Marxism does not leave either margin to ponder the effects of identity, values and beliefs on public policies.

Closely aligned with Marxist and dependency schools, postcolonial theory argues that Western institutions impose neoliberal conditions favorable to global capitalism. ODA is, offered as a ‘gift’ that reinforces the hierarchical position of North-South relations and that reaffirms the sphere of influence of dominant countries. Post-colonial theorist affirm that poor countries are led into poverty by a global system based on market expansion, in which industrialised countries (the centre) receive all the benefits. Poor nations are still subordinated to their former masters through new local elites and the policies of international financial institutions. Nkrumah condensed this vision as follows: “The essence of neo-colonialism is that the State which is subject to it is, in the theory, independent and has all the outward trappings of international sovereignty. In reality its economic system and thus political policy is directed from outside” (Sethi 2011). When foreign aid is considered as a gift, development assistance is embedded in a discourse constructed for such a purpose (Kapoor 2008: 91). For instance, development discourse defines Third World population as underdevelopment and uncultured, while the Industrialised World is defined as developed and superior; hence, the industrialised world represents the model that poor countries must aspire to accomplish (Selby 2007; Nair 2013). Postcolonial theory mainly concentrates its analysis on discourse; whereas it brings useful tools for a clearer understanding of foreign aid, discourse on its own cannot explain the motivations of ODA.

The debate within the discipline of international relations of the analysis of traditional aid motivations has been briefly presented. As noted, ODA motivations are dynamic, intertwined with each other and rarely a single reason dictates ODA. In the words of Hook (1995: 167), “foreign aid takes the shape of its container” and therefore it should be analysed under different lenses. Due to the multidimensional nature of foreign aid and to the diversity of new actors, the best alternative for the study of ODA is a combined theoretical approach, in which geostrategic allocations, the weight of ideas, values and identity, the impact of norms and regimes, the influence of economic interests, the desire of collaboration and the analysis of the current capitalist system are all considered.

Typology of oda motivations

The following typology will present the variety of outcomes of traditional aid and at the same time will help to identify the different modalities of development cooperation delivered by non-DAC donors. Based on the theoretical lenses above, ODA can be then classified in the following categories:

Political-diplomatic

This kind of aid is the one offered in exchange of political or diplomatic leverage. Alesina and Dollar (2000: 46) point out that foreign assistance from the US, Japan, France, Germany and the UK ‘buys’ UN votes. France, Portugal and the UK offer development assistance to consolidate their sphere of influence in former colonial territories (Mason 1964). Under this category it is also included what some consider as ‘cultural aid’, which refers to aid offered to promote language, traditions, heritage, social structures or ideology, to expand religion or assist diasporas (Lancaster 2007: 15). Countries with colonial ties, such as France, Portugal, Spain, Italy and the UK are prone to offer this kind of assistance; though, its main goal is to reinforce political alliances or to increase spheres of influence.

France is probably the country that has best used cultural aid. It has taken advantage of colonial ties and cultural heritage to reaffirm its magnetic field in francophone Africa, the Middle East and the Caribbean (Hook 1993; Schraeder et al. 1998: 11-15). Policy makers tend to incorporate French values in ODA policies to ensure the dissemination of French culture and to position the country at the ‘front rank’. During the Cold War, these cultural features helped to maintain the French non-alignment strategy and reinforce alliances with African countries.

Security-military

Foreign assistance for military aid is the one advanced to extend or strengthen donors’ security. In the views of Morgenthau (1962: 303), it is offered to buttress alliances. Huntington (1971: 130) and Van der Veen (2011: 10) agree that countries deliver development assistance to enhance physical security. According to Lasensky (2003), donors seek military advantages in exchange for aid, for example, to establish or use military bases (e.g. in Turkey and Pakistan), to create military alliances (e.g. with Israel and Egypt) or to contain the expansion of communist regimes (e.g. in Korea and Vietnam).

US foreign aid is known by its geostrategic drivers. But after the 9/11 attacks, the UK also stepped up its development allocations to countries perceived as allies, for example Pakistan, as well as, to countries perceived as threats such as, Iraq or Afghanistan (Woods 2005: 404). In a similar way, French ODA has been associated to the provision of military aid to friendly regimes in former African colonies (Schraeder et al. 1998: 12).

Humanitarian

Humanitarian aid is extended to alleviate human suffering and to protect human welfare in crisis provoked by natural or man-made disasters^k. It is usually provided on short-term basis. Morgenthau (1962: 301) considers humanitarian assistance as the only kind of aid that is selfless and non-political. According to Hook (1993: 24), during the Cold War Sweden used foreign assistance as a strategy to emphasize its autonomy from superpowers, even though it was argued that Swedish aid was structured on humanitarian basis.

Huntington (1970: 175) and Heinrich (2013: 423-424) agree that humanitarian aid is most persuasive when domestic back up exists. Heinrich further observes that humanitarian crises are more likely to be reported in domestic media. When citizens are aware of disasters or crises, they are more inclined to support the aid efforts of their governments.

Altruistic or developmental

Altruistic aid is the one that seeks to enhance economic development. According to Lumsdaine (1993: 38), this kind of aid is the sort of assistance offered with the pure objective of improving the quality of life. Altruistic aid is usually offered on soft-terms and in long-term basis. Morgenthau (1962: 304) refers to it as ‘aid for economic development’ and Hook (1995) labels it under ‘aid welfare’. The difference between humanitarian and altruistic aid is that the former is provided in emergency situations and its interventions are punctual, while the latter seeks sustained development with long-term interventions.

This is probably the most difficult category to justify in the eyes of domestic constituencies: how can governments explain aid policies to promote economic development in other countries? Lumsdaine (1993: 64) suggests that “[public] support for aid stemmed from the same sources as attempts to provide for the poor at home”. Altruistic assistance is characteristic of the model applied by any country with solid welfare systems and substantial civil society engagement (Hopkins 2000: 331; Haan 2009: 33; Shaw 2011: 7).

Commercial

Aid under this category is the sort of foreign assistance that donors extend with the objective of obtaining economic benefits. Schraeder et al. (1998: 9), Woods (2005: 401), Lancaster (2007: 14-15) and Van der Veen (2011: 10) note that commercial foreign assistance directly contributes to the economy of the donor by expanding export markets, providing access to raw materials, offering energy supplies or promoting foreign investment. Due to its nature and the related procurement conditions this form of ODA is often referred as ‘tied aid’. The most relevant example in this category is Japan, whose economic interests are the core drivers of its aid. Economic prosperity of neighbours is critical to Japanese economic growth and therefore its aid concentrates in the Asia-Pacific Rim. The business community and the Ministry of Trade and Industry have great influence on ODA policy-making and so Japanese aid allocations tend to be heavily tied compared to other DAC-donors (Mason 1964; Huntington 1970: 169; Schraeder et al. 1998: 9-10; Lancaster 2007: 14). This reflects the importance of aid allocations bringing economic benefits to donor countries.

Prestige

Prestige aid occurs when donors offer ODA to gain reputation and respect or to reflect certain identity in the international community. Morgenthau (1962: 304) suggests that prestige aid may bring political returns. Donors tend to offer this variant of aid to improve their image and compensate for previous ‘wrong doing’ (Bauer 2000: 72; Kragelund 2008: 580). Prestige aid can become generous when it contributes to the provision of GPGs helping donors portray themselves as ‘good global citizens’ and ‘generous nations’ (Herbert 2012: 82-83; Mawdsley 2012: 149). In this case, development assistance represents the means for smaller countries to affirm themselves as members of the international community. Prestige aid is also used to project a positive image in the face of domestic constituencies in donor countries (Eyben and Savage 2012).

There are several cases of development assistance provided by non-DAC donors that are motivated in similar ways than traditional ODA and that fit into this typology. For instance, Taiwan uses aid to seek international recognition, in the same way that China offered foreign assistance to get a seat in the UN Security Council in the 1960s (Kragelund 2008: 570-571). Venezuela tries to contest Brazilian leadership and US hegemony in the Americas, as well as, challenging Western global dominance through its development cooperation program (Burges 2007; Mawdsley 2012: 167); whereas Cuba sought to promote Third World solidary and anti-US support (Ojeda 2010). Emerging donors, such as Brazil, China and India, conceive foreign assistance entwined with commercial interests (Naím 2007; Kragelund 2008: 573-574; Woods 2008: 14). Some new donors also offer development assistance to countries with shared cultural heritage to strengthen political relations, for instance, Mexico to Central America and Brazil to other Portuguese speaking nations (Ayllón and Surasky 2010; Shaw 2011: 7). Moreover, development assistance from Arab donors is frequently channelled to promote Islam (Kragelund 2008: 565).

As earlier noted, in addition to the traditional use of development cooperation as an instrument to advance foreign policy interests, there are elements that shape deeply the development assistance strategies of new donors. To further expand this argument, Latin American development assistance will be presented next.

Why do Latin American MICs provide development assistance?

Latin American cooperation started during the implementation of the import-substitution industrialisation model (ISI) in the 1950s. In his famous manifesto, Prebisch posited that the ISI model was key to overcoming economic imbalances, such as the deterioration of terms of trade in the region (Economic Commission for Latin America (ECLAC - CEPAL) (1950)). But to stimulate and maintain economic impetus, reasonable sized markets and technological capabilities were needed. For these purposes, Prebisch argued that economic integration would enable developing countries to take advantage of the economies of scale offered by larger markets, as well as, fostering technical and knowledge exchange (Couto 2007: 51).

Although, the ISI model started as the theoretical foundation for industrialisation policies in Latin America, its logic was politically expanded to become the ideological foundation for opposing intervention in the region (Flechsig 1991: 94-95). When Africa and Asia were struggling for their independence from colonial powers, Latin America had fallen under the sphere of influence of the USA both through its hegemony in the Organisation for American States (OAS) and via the imposition of military dictatorships in the continent. It was the Cuban revolution that brought Latin American voices afloat and identified them with the resistance movements in Asian and African countries. In the wake of the Bandung Conference there were two parallel Third-world manifestations: Asia and Africa against colonial powers and Latin American against US dominance. (Young 2006: 15-17). These movements eventually crossed paths in the Non-Aligned Movement (NAM) and the G77.

The Bandung Conference was the first step that countries in the periphery took to challenge the dominant system and sought to restructure inequalities and eliminate the North and South gap (Golub 2013: 1004). As developing countries began looking for autonomous models of economic growth, SSC appeared as a space for the exchange of experiences, knowledge, technology, resources and know-how that fostered the development of national capabilities. For practical reasons, SSC tends to initially occur among neighbours, but progress in communication technologies later facilitates exchanges between countries in different continents. South-South cooperation is seen to offer alternatives that are more suitable to the context of poor countries: new donors have faced similar challenges, and therefore poor countries are more likely to mirror the models and solutions implemented by them, than those offered by traditional donors (Park 2011: 39).

New donors promote the discourse of solidarity and mutual benefits as founding stones of their SSC, when at the same time foreign policy interests underpin such initiatives. Sanahuja (Roy and Andrade 2010) contends that SSC has become a distinctive feature of self-legitimisation in Latin America. But as pointed by Fernando Nivia (Morazán et al. 2011: 24), Latin American development providers tend to exaggerate altruistic discourse when in reality SSC clearly underlines foreign policy objectives.

Latin American South-South development cooperation policies are not only the result of common challenges or shared heritage. The identity and history of are also strong drivers of cooperation policies. Developing countries rarely seek to maintain colonial influence, to buttress military alliances or to provide assistance as a result of guilt or moral obligation. Instead, emerging donors use SSC to promote regional integration, obtain self-legitimation, consolidate regional or global leadership, acquire self-sufficiency, obtain non-alignment, maintain or strengthen national sovereignty, preserve regional autonomy, promote regional solidarity and increase leverage in international organisations, as we will see.

Regional integration is not only focused on trade; for developing countries it has a more comprehensive approach, such as seen in the Mesoamerica Project. It is a cooperation initiative promoting political dialogue and coordinating development projects between Mexico, nine Central American countries and Colombia. The emphasis is on communication and transport infrastructure, energy supply and (of course) trade facilitation. But it also includes joint efforts to enhance the provision of regional public goods and improve health, housing and environment standards^l. Other examples of regional integration motivated by development cooperation in Latin America are ALBA, MERCOSUR and UNASUR (Golub 2013: 1011)^m.

Chile and Colombia use SSC as an instrument of self-reaffirmation of their good citizenship and as providers of public goods on the global scene. Chile aspires to be perceived as a contributor to global governance sharing its experience of transition to democracy and institutional building (Santander Campos 2010: 108). Similarly, Colombia uses SSC to improve its international image and to be seen as a leader on the development assistance agenda debate, especially by focusing, on its experiences in fighting organised crime and governance building (Nivia-Ruiz 2010).

Latin American countries use SSC to strengthen their regional and global leadership. For instance, Brazilian foreign policy under former president Lula aimed at consolidating the country as the natural leader of South America and to expand such leadership to the international scene (Burges 2013; Merke 2013: 6); as a result, SSC became a tactical device of Brazilian foreign policy (Inoue and Vaz 2012: 513). Likewise, Venezuela, especially under the Chavez administration, sought to strengthen its international leadership in the energy sector. Energy and self-sufficiency are key elements of the Venezuelan petro-cooperation strategy, as it is commonly known (Ojeda 2010). The petro-cooperation model is based on oil both as source of funds and as a key element of technological transfers, knowledge sharing, training and investment.

Latin American MICs also use SSC as a means to reduce economic dependency and consolidate their autonomy. Cuba, for example, a small island with poor natural endowment and having suffered the embargo lead by the US, had to find its own way to promote economic growth and foster economic self-reliance. For this purpose, Cuba engaged in the development of its own capabilities and sought help from other developing countries in exchange of SSC (Ojeda 2010). This cooperation model consists in Cuba offering technical assistance or training, in exchange of resources or technology (for example, Cuban medical services in return of Venezuelan or African oil).

Some Latin American development cooperation initiatives have non-alignment as their main objective and seek to challenge Western dominance. These schemes give developing countries choices beyond partnerships with powerful nations or with capitalist interests. At the same time, these options help MICs to protect their sovereignty (Mukherjee 2012: 266). For instance, Proyecto Mesoamerica, the Mexico-Chile fund, Banco do Sul, the IBSA fund and the new BRICS bank were conceived as alternatives to the IMF and WB to fund development projects in the South.

Brazil has used SSC to win allies and to increase its leverage in international organisations. Brazil, as well as other emerging economies, such as India and South Africa, actively fosters coalitions within international fora to undermine Western dominance, for example, the WTO Doha round and the UN climate change conference (Flemes in Roy and Andrade 2010: 15; Burges 2013). Moreover, Brazil is not shy about its aspirations to get a permanent seat in the UN Security Council and its SSC policy is perceived as being directed towards this goal, in case the said reform succeeds (Walz and Ramachandran 2011: 16). In brief, development assistance is for MICs a mechanism to win a seat in the table of negotiations.

Finally, SSC gives development partners a way of self-legitimisation. Supporters of SSC argue that it has a more developmental approach than traditional aid since it does not focus only on poverty alleviation and because it is less self-interested. Developing countries claim that SSC is offered on the basis of equality and not as a hierarchical imposition from dominant partners. Echoing the principles emerged from Bandung, SSC is provided as a sign of solidarity, respecting the rights of self-determination and non-interference and promoting larger ownership in recipient countries (Roussel 2013)ⁿ. In addition, SSC providers contend that it is more cost-effective and more suitable to the conditions of recipients than traditional North-South schemes (Sanahuja in Roy and Andrade 2010: 19; Burges 2012: 235). To sum up, while SSC in the 1950s and 1960s focused on exchanging industrial expertise, today Latin American cooperation is driven by a broad range of factors that expose diverse motivations.

Conclusions

This paper has presented the practices of Latin American donors to contribute to better understanding of the development cooperation policies of new donors. Traditional ODA and new development cooperation are useful instruments of foreign policy since first appearance and have become increasingly more salient, for both DAC and non-DAC donors. Development cooperation is influenced by the international and domestic context, the self-perception and the international image of states, the domestic public support and local lobbies, the national structure and international current affairs, as well as, national identity, history and cultural heritage. These last tend to be more accentuated in the policy making of new development partners rather than in traditional donors’ policies.

New donors have found in SSC a means to reach goals considered essential to their survival. There are very clear examples among new development partners of the use of SSC to pursue their national interest in realist terms, as well as, non-material goals, such as the acquisition of prestige, recognition, respect and membership. Emphasis is on the fact that this sort of elements is strongly manifest in the practices of new donors. As this article has argued, the shape of SSC policies stems from the deep influence of national factors such as identity, cultural heritage, colonial past and national idiosyncrasy in the policy-making process.

At first sight, SSC in Latin America appears to be mainly determined by the sentiment of solidarity and friendship with neighbours. Common language, culture and history bring these nations naturally together. Although, Latin American SSC could be associated to prestige, far beyond the desire of recognition, SSC in the region has become an instrument of self-reaffirmation, self-reliance, integration and more important, opposition to foreign intervention. As in the past ISI era, SSC presents an opportunity for MICs not only for strengthening their foreign relations, but also to develop national capabilities and spur economic development.

Latin American SSC strategies display particular traits resulting from cultural homogeneity and relative cohesion of the region. Shared colonial experience, vulnerability to neoliberal globalisation, rejection of hierarchies, common challenges and experiences, respect of non-interference and sovereignty principles and pursuit of mutual benefits are some of the characteristics that are also present in the policies of other Southern providers (e.g. India, South Africa, Turkey) (Mawdsley 2012: 152). The differences between the practices and modalities of new development partners and traditional donors are unmistakable. By the same token, the heterogeneous nature and diverse identity of emerging donors makes it difficult to draw generalisations based on only few cases. This paper has briefly presented some of the major characteristics of Latin American SSC with the purpose to further understand Latin American donors as a stepping stone to extend similar research on other development partners.

Today foreign aid is facing new challenges as a result of the evolving conditions in the international system. Development assistance has been surpassed by other sources of funding, and while it is still crucial for global development efforts, a renewed aid architecture including new actors and modalities is needed. The participation of Southern providers and SSC experiences bring added value to the table of negotiations. Better understanding of new donors, brought by further analysis of their development cooperation policies, can only be beneficial for a stronger engagement and closer collaboration among all stakeholders of a renewed development assistance paradigm.

Endnotes

^aFor the purpose of this paper and to avoid repetition foreign aid and official development assistance (ODA) from traditional donors are used interchangeably.

^bOECD 2012. Is it ODA? Paris, Organisation for Economic Cooperation and Development 4. ODA refers to those flows to countries and territories on the DAC list of recipients and to multilateral development institutions, which are provided by official agencies to favour the promotion of economic development and welfare of developing countries. It should be concessional and should contain a grant element of at least 25 per cent.

^cOECD, http://www.oecd.org/dac/dacmembers.htm, accessed on 29 October 2013. Traditional donors or DAC-donors refer to the 28 countries members of the OECD-DAC, with the exceptions of some late comers such as Korea and the new members of the European Union.

^dOECD, www.oecd.org/dac/stats/daclist, accessed on 14 November 2013. Emerging donors refers to middle-income countries that are part of the DAC list of ODA recipients and have become development providers.

^eUNDP, http://ssc.undp.org/content/ssc/about/what_is_ssc.html, accessed on 05 December 2013. UNDP defines South-South cooperation as a broad framework for collaboration among countries of the South in the political, economic, social, cultural, environmental and technical domains. Therefore, development assistance between developing countries is considered as SSC.

^f http://aiddata.org/, accessed on 4 August 2014.

^gWorld Bank, http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG/countries/MX-BR-CN-IN-ID-TR-ZA?display=default accessed on 17 July 2014. The average growth rate of MICs between 2004 and 2013 is 6.3% (annual growth rate of GDP, based on 2005 constant US dollars).

^hWorld Bank, http://povertydata.worldbank.org/poverty/region/LAC, accessed on 10 July 2014. According to the World Bank, a US$4 a day moderate poverty line is more appropriate for the prevailing costs of living in the LAC region.

ⁱThe national interest is the perceived needs and desires of one sovereign state in relation to other sovereign states. Nuechterlein D. E. 1976. National Interests and Foreign Policy: A Conceptual Framework for Analysis and Decision-Making. British Journal of International Studies 2(3):246-266.

^jBuenos Aires Plan of Action, 1978; Caracas Plan of Action for Economic Cooperation between Developing Countries, 1981; San Jose Plan of Action, 1997; High-level event on South-South Cooperation and Capacity Development in Bogota, 2010; First High-level meeting of the Global Partnership for Effective Development Cooperation in Mexico City, 2013.

^kOECD, http://www.oecd.org/site/dacsmpd11/glossary.htm, accessed on 9 January 2014.

^lAMEXCID, http://amexcid.gob.mx/index.php/ique-es-el-proyecto-mesoamerica, accessed 9 January 2014; Proyecto Mesoamerica, http://www.proyectomesoamerica.org/, accessed 9 January 2014.

^mAlianza Bolivariana para los Pueblos de Nuestra América (Bolivarian Alliance of the People of the Americas), portalalba.org. ALBA members are: Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, St Vincent and the Granadines and Venezuela.

Mercado Común del Sur, http://www.mercosur.int/. MERCOSUR members are: Argentina, Bolivia, Brazil, Paraguay, Uruguay and Venezuela.

ⁿ https://bcc-cuny.digication.com/MWHreader/Bandung_Declaration, accessed 21 July 2014.