AID MONEY ALWAYS COMES WITH STRINGS ATTACHED

The Narendra Modi government’s position that India will not accept official humanitarian assistance from foreign governments to supplement domestic funding for disaster relief matches that of its predecessor, the Manmohan government.

In 2004, after the devastating Asian tsunami wreaked havoc along the Indian Ocean coastline, Singh asserted that India would not accept humanitarian assistance from foreign governments as indigenous Indian resources would suffice to deal with the crisis. In fact, the Singh government cut cheques to provide assistance to other Asian countries affected by the tsunami.

The principle being established and what it projected was clear: India was no longer a desperate country which would indiscriminately accept money from anyone for anything but would be selective in the money we would take especially from foreign governments. The Atal Bihari Vajpayee government in 1999 had already deleted a number of European countries and Canada as official bilateral donors, on the same principle that those monies were not needed.

This is not a matter of prickly and insecure egos and national pride. One element of national sovereignty is to refuse aid based on one’s priorities. As a former colony of several European powers, it’s perfectly proper for India to assert this element of sovereignty and not be “colonised” by foreign money we do not want. After all, aid money always comes with strings attached, explicit or implicit.

But even this is not the whole story. The reality is that like in many other areas of public spending, the real constraint is not the supply of funds but limited and overstretched state capacity, a crucial dimension of good governance. Saying India is still a poor country and should, therefore, accept all offers of assistance misses the point. For one thing, India has established itself as a net foreign aid donor, not recipient. In any case, simply pouring more money into a situation where the real constraint is capacity does not lead to better outcomes but in fact may lead to worse.

From the experience of some of the poorest countries in Africa or for that matter Afghanistan and Iraq after the US invasion, huge amounts of money poured in but could not be absorbed by fragile and weak institutions. The end result was mostly corruption and waste of resources rather than improved outcomes.

India is not as desperate: but state capacity is limited and weak in crucial areas including the delivery of public health, sanitation, and in this case disaster relief. The truth is that given the level of state capacity for disaster relief on the ground, presently committed monies — both official and private — are more than enough.

There is, therefore, no legitimate reason to revisit the “Singh doctrine” that India should not accept money from foreign governments for disaster relief. The one exception I would argue for is assistance in kind, regardless of its source, which fills crucial gaps in state capacity. During the Gujarat earthquake of 2001, Israel set up and operated field hospitals run by the Israeli Defence Force which made a difference in the relief efforts. Had Israel merely cut a cheque to India, there’s no reason to believe that outcomes on the ground would have improved.

In the case of the current Kerala disaster, no official offers from foreign governments have been received at the time of filing. So far, the United Arab Emirates (UAE) which has a large population of migrant workers from Kerala, has unofficially offered financial assistance, which has been unofficially rejected by the Indian government.

Whether governments or individuals, it’s always easier to throw money at a problem than help resolve the underlying problem. As it happens, the UAE is a wealthy state with a high level of state capacity and surely would be in a position to offer meaningful assistance in kind, such as setting up field hospitals and helping rebuild the shattered infrastructure.

If, indeed, there’s a special relationship between Kerala and the UAE because of the many migrants who work there, surely the UAE government can do better than simply write a cheque. After all, workers from Kerala helped build the UAE’s infrastructure. It would be very fitting if the UAE returned the favour.

IF, INDEED, THERE’S A SPECIAL RELATIONSHIP BETWEEN KERALA AND THE UNITED ARAB EMIRATES, ITS GOVERNMENT CAN DO BETTER THAN JUST WRITE A CHEQUE