27 March 2012

Floating BRICS

The rapidly growing nations also known as the BRICS (Brazil, Russia, India, China and South Africa) are quietly turning into the next generation of donor countries. While their total foreign aid numbers pale in comparison to the United States, UK, Germany and France, the BRICS are having an impact.

All are at various points of transition from recipient to full fledged donor countries. India is debating whether to take aid money from the UK any longer and some MPs in the UK are calling for the end of aid to India.  What is developing is a South-South cooperation with countries like Brazil providing aid to African nations and China emerging as one of the major investors in SSA.

A report by GHS Initiatives brings to light the rapid economic growth of the BRICS and the parallel increase in amount spent on foreign assistance. The BRICS are a welcome entry to the global aid world for two reasons. First, they are particularly focused on global health. The Global Fund is reeling financially thanks in large part to overblown reports about graft related to disbursed funds. The wealthier donor nations are starting to make new pledges, but the major body is reeling. The BRICS, though still small, are providing more and more to the Global Fund.

Second, and probably most importantly, BRICS present a different set of interests. It is no surprise that the GHS Initiatives study finds that the BRICS give because of economic and and political interests. However, the interests of these rapidly growing nations are not exactly the same as the traditional donor countries. Rapid growth wants markets and development assistance has the ability to nurture future trade partners.

India manufactures 60% – 80% of all vaccines procured by UN agencies; China surpassed Japan in R&D investments in 2009 and now invests more in R&D than any other G7 country except the US; and Russia committed more than US$4.4 billion to production and innovation in its pharmaceutical and medical industries. As seen in the graphic below, the BRICS still have a way to go in order to catch up with the big donor nations, but their impact is being felt. The question is how the development of the BRICS will transform USAID, AUSAID, DfID and the like.