Emerging Economies: The Changing Landscape in Foreign Aid, Giving, and Investment

OTTAWA, Sept. 26, 2013 /CNW/ - New research funded by Canada's International Development Research Centre (IDRC) shows that emerging economies are dramatically increasing their financial flows to the developing world. And as previously happened in developed countries, most of those flows are from private rather than public sources, notably through remittances.

The analysis, conducted by the Hudson Institute's Center for Global Prosperity in Washington, DC, is published in the 2013 Index of Global Philanthropy and Remittances: With a Special Report on Emerging Economies. The Index is being launched on Thursday, September 26 at the Economic Club of Canada. Dr Carol Adelman, Director of Hudson's Center for Global Prosperity and co-author of the new report, will discuss its findings and implications for global assistance to the developing world.

For the first time, the 2013 Index looks at the total economic engagement of developed countries and emerging economies with the developing world. This unique approach looks not just at government aid, but private financial flows including global philanthropy, private capital investment, and private remittances sent by migrants back home.

Of all financial flows, private flows from developed to developing countries are greater than 80%; government aid is less than 20%, the opposite of 40 years ago. In the four emerging economies studied - Brazil, China, India, and South Africa - more than 95% of financial flows to developing countries are private and fewer than 5% are government aid. The dominance of private flows over government aid reflects a dramatic change in developing countries.

The 2013 Index shows that emerging economies play a significant role in private flows to developing countries. The four emerging economies studied provide 15% of the US$680 billion in private flows from both developed and emerging economies in the form of private capital investment ($88 billion), remittances ($14.2 billion), and philanthropy ($366 million).  "Private philanthropy was the most difficult to measure," says Adelman, "and is very likely underestimated."

The research uncovered a growing philanthropic infrastructure in each of the four countries with the beginnings of creative overseas philanthropic projects. Adelman is optimistic about philanthropy in emerging economies. "Our research shows encouraging signs that emerging economies will increase giving beyond their own borders," she reports.

The Hudson Institute partnered with five in-country nonprofit organizations to collect the data: Charity SA in South Africa; China Foundation Center in China; Comunitas and Grupo de Institutos Fundacoes e Empresas in Brazil; and the Sampradaan Indian Centre for Philanthropy.

IDRC President Jean Lebel will open the lecture. The report can be downloaded online at www.global-prosperity.org/

Journalists can also join in the conversation through Twitter #Adelman and Facebook.

For more information, visit www.idrc.ca.

Putting research to work
Canada's International Development Research Centre (IDRC) funds practical research in developing countries to increase prosperity and security, and to foster democracy and the rule of law, in support of Canada's international development efforts. We promote growth and development and encourage sharing knowledge with policymakers, other researchers, and communities around the world. The result is innovative, lasting solutions that aim to bring change to those who need it most.

SOURCE: International Development Research Centre

Isabelle Bourgeault-Tassé
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