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article imageWill the UK's end of foreign aid to India begin a donor trend?

By Michael Krebs     Feb 18, 2013 in World
The UK's decision to end aid to India in 2015 sets a number of questions in motion and ultimately may redefine the notions of national pride and of the donor-recipient relationship.
On November 9, 2012, British development secretary Justine Greening remarked on the progress she had seen first hand in India.
“India is successfully developing, and our own bilateral relationship has to keep up with 21st century India,” Greening said, according to the New York Times.
The UK had announced its decision to end the foreign assistance it had been providing to India for more than 50 years. The British government's announcement is considerable, as the UK is the largest single donor to India.
"To put the aid stoppage in context, consider that UK assistance comprises about 15 per cent of all foreign aid received by India," Raj M. Desai and Natasha Ledlie wrote for the Brookings Institution. "The UK gives slightly less than 10 per cent of its foreign aid to India. This makes India the largest beneficiary of UK aid and the UK the largest donor to India."
While the British decision does not take effect until 2015, the debate on its ramifications for the global donor-recipient relationship and for emerging-market nationalism has already begun.
“There is a real concern that all the major donors are looking at excluding emerging economies from their aid programs,” Emma Seery, the head of development finance at Oxfam, told the New York Times. “These countries have large pockets of poverty, and we are afraid that this trend will remove this extra lifeline from the poorest.”
While there remains widespread poverty across India, the Indian economy has been expanding dramatically. This expansion has attracted the attention of many within the UK government who are grappling with challenging economic realities at home and who are being forced to implement tough domestic austerity measures.
India's economic success has been a source of pride for the developing nation and has fueled a nationalist position that is cheering on the UK's decision.
"There's something deeply condescending about receiving aid from a foreign country, especially one that has ruled you for 200 years," Meghna Roy wrote for the Times of India. "Self-respecting nationalists should welcome UK`s decision to stop aid to India in 2015."
However, The Guardian reminds us that India is home to "a third of the world's people living on less than $1.25 a day – more than all the poor in sub-Saharan Africa."
Global donor-recipient relationships may be altered in the wake of the UK decision, as global economic challenges continue to force difficult fiscal decisions among the world's developed nations.
In the United States where the economy has remained on fragile footing, the national political discourse has centered on budget cuts and tax increases. According to the Center for American Progress, the United States delivered foreign aid to 149 countries in 2011. A component of the current sequestration discussions in Washington DC does center on cuts in foreign aid, but it is unclear how far along these conversations have moved.
More about India, Foreign aid, Foreign policy, Poverty, Developing nations
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