Foreign aid? No, thanks

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  • Published 7.07.13

New Delhi, July 6: When US secretary of state John Kerry announced a $150,000 American aid for Uttarakhand flood victims two Sundays ago, he appeared almost embarrassed at how small the amount was.

He needn’t have worried. It was $150,000 (Rs 90 lakh) more than India would accept.

Finance minister P. Chidambaram said on Tuesday that India would approach multilateral agencies like the World Bank and the Asian Development Bank for loans to rebuild the disaster-hit state.

However, New Delhi has turned down bilateral assistance from foreign countries for the Uttarakhand calamity, building on a quiet but assertive diplomatic aid policy that has coincided with its growing economic clout.

It’s a policy that has seen India change from a country that happily accepted foreign aid to tide it over natural disasters just a decade ago to a nation that routinely rejects bilateral assistance to handle such crises.

Instead of taking aid, New Delhi has emerged a regular donor whenever natural disasters strike anywhere in the world, from impoverished Haiti to developed Japan.

India has made it clear to both the US and Japan, which offered $200,000 towards Uttarakhand relief, that it will not accept the aid and that any funding must be given to NGOs of the foreign governments’ choice.

“As a general policy in case of rescue and relief operations, we have followed the practice that we have adequate ability to respond to emergency requirements,” external affairs ministry spokesperson Syed Akbaruddin said on Wednesday.

The policy is entrenched in India’s increasing attempts to showcase its economic power to the world, and to shed memories of a past that saw it dependent on US rice during the 1960s to stave off starvation deaths.

In 1991, India had to mortgage its gold reserves to get a loan from the International Monetary Fund. Today, India still remains one of the world’s largest overall aid recipients from agencies such as Britain’s Department for International Development, but in no sector are those funds critical. In disaster aid, those funds are nil.

The man widely credited with turning the Indian economy around in 1991 — current Prime Minister Manmohan Singh — was also the man who marked the shift in the country’s disaster aid policy when he rejected bilateral assistance after the 2004 tsunami.

“We feel that we can cope up with the situation on our own and we will take their help if needed,” Singh had said at the time after giant Indian Ocean waves killed over 12,000 and displaced more than 600,000 in India.

Instead, India handed over cheques for $25 million to Sri Lanka, $1 million to Indonesia and $500,000 to Thailand for relief and rehabilitation. It also airdropped food, medicines and blankets over Sri Lanka’s devastated coasts.

Just months earlier, India had accepted nominal bilateral aid after floods tore through Bihar’s plains. After the Bengal floods in 2002, the Gujarat earthquake in 2001, and the Latur temblor in 1993, India had gratefully accepted funds from foreign countries (see chart).

But Singh’s post-tsunami statement evolved into a diplomatic policy that has since then seen India offer help both to neighbours and to countries almost halfway across the globe.

After the 2005 Kashmir earthquake that led to deaths and damage both in India and Pakistan, New Delhi refused to accept aid but sent blankets, medicines and food to Pakistan-occupied Kashmir after convincing an initially suspicious Islamabad. It also handed over a $25 million cheque to Pakistan.

Myanmar and China have also been beneficiaries of the policy. India donated $5 million towards Haiti’s reconstruction after a powerful earthquake hit the tiny Caribbean country in 2010.

The policy is also about driving home a point to countries that have traditionally led the world’s economic system.

The US — politely told by India to hunt for NGOs to disburse their meagre donations to — received Indian aid after Hurricane Katrina struck its southern states. And as Japan grappled with the Fukushima earthquake and subsequent nuclear incident, India sent blankets and medicines to help victims.