Development partnerships have undergone significant shifts in recent times. The traditional donor-recipient relationship is a thing of the past. In contemporary times, countries are keen to build partnerships and cooperative frameworks with each other to catalyse development, mobilise essential resources, thus leveraging global public goods. Further, the current international development architecture has been deeply punctured by multiple shocks i.e., the COVID-19 pandemic, worsening effects of climate change, and unrest in Gaza and Ukraine have led to rising food and fuel prices, mounting inflation, and escalating debt burdens. These multidimensional yet interconnected challenges have also triggered an emergency kind of situation where financing for sustainable development goals (SDGs) is in danger. Here, the SDG financing gap expanded from US$2.5 trillion in 2020 to an astounding US$4.2 trillion in 2023. Further, many developing economies—particularly the least developed countries (LDCs), low-income countries, and the small island developing states (SIDS)—are bearing the brunt. Notably, the escalating debts accompanied by the debt servicing costs are stressing out the LDCs and other developing economies.
The current international development architecture has been deeply punctured by multiple shocks i.e., the COVID-19 pandemic, worsening effects of climate change, and unrest in Gaza and Ukraine have led to rising food and fuel prices, mounting inflation, and escalating debt burdens.
However, Official Development Assistance (ODA) has somewhat managed to put up a decent show amidst this embroiling situation. Despite the visible dip in global GDP, the volume of ODA provided by traditional donors—i.e., the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD)—reached its highest-level ever in 2020 i.e., US$ 161 billion. Indeed, this is indicative of a key element of ODA—acting as a shock absorber in times of crises. Also, in the face of an economic slowdown, ODA by DAC donors experienced its highest growth rates with a ‘slowing-but-positive-GDP growth’ in the OECD countries. However, being used as an emergency response measure during the pandemic has put ODA under excessive pressure. This highlights the viable economic dimension of development cooperation, accentuating its importance for countering poverty, climate, and food and water scarcity, among other issues.
In a strategic sense, development partnerships play a pivotal role in strengthening and consolidating a nation’s foreign policy objectives. Also, the modern-day international development landscape is not just one country offering resources and services to another. It signifies a complex instrument of political manoeuvring with multiple intentions and interests having varying degrees of impact and potentially detrimental results. Here, while trying to navigate the shifting geopolitical currents, the developing economies find themselves in a fix to respond to the unfolding great power competition.
Against this backdrop, the Indo-Pacific becomes critical. Owing to the geopolitical and geoeconomic imperatives, this region has grabbed significant global attention. It also reflects a unique blend of vital security stakes and key sustainability issues. The continued dominance of a security-based narrative in this region has raised concerns about how nations can effectively cooperate to achieve the SDGs where resources are scarce and capabilities to access these resources are limited.
The Indo-Pacific becomes critical. Owing to the geopolitical and geoeconomic imperatives, this region has grabbed significant global attention.
However, recognising the role of strategic agendas helps assess the motivations and effectiveness of aid, revealing that political drivers are not inherently unethical or counterproductive. Instead, they often enhance aid effectiveness. Perceived in this sense, the ubiquity of geostrategic imperatives in the region also serves to align strategic goals with compatible development cooperation objectives, leading to partnerships that serve mutual benefits.
The intersection between geopolitical interests and development cooperation is integral to international relations today, often determining the success of aid programmes. In 1996, the OECD acknowledged that donor countries’ self-interest plays a role in development cooperation, advocating mutual benefits rather than a one-sided model. Ultimately, comprehending these strategic underpinnings allows for a nuanced evaluation of aid effectiveness, ensuring that development initiatives balance geopolitical interests while meeting the needs of all parties involved. Accommodating strategic and economic interests has therefore become central to fostering partnerships. For development cooperation to thrive, it must accommodate strategic and economic interests while being inclusive and flexible. This is particularly important in regions like the Indo-Pacific, where competition between major powers, such as the US and China, creates complex dynamics. Here, partnerships are often shaped to address regional security concerns, promote economic growth, or counterbalance the influence of a rival power.
Multiple donors working on similar projects without coordination can lead to duplication of efforts, mismanagement of resources, and confusion in recipient countries.
Nonetheless, concerns remain regarding development partnerships becoming competitive to the point of being detrimental to regional partners. For instance, the geopolitical rivalry between the US and China, with their respective strategic initiatives, forces smaller nations to employ tactical hedging which can hinder constructive regional cooperation. Second, competing partnerships can also lead to fragmented aid programmes with overlapping goals and inefficiencies. Multiple donors working on similar projects without coordination can lead to duplication of efforts, mismanagement of resources, and confusion in recipient countries. Third, competition may pressure regional partners to conform to donor demands that may not align with local priorities. This reduces recipient agency, making development cooperation less responsive to genuine needs. Fourth, some partners may prioritise immediate infrastructural investments that neglect sustainability or environmental concerns. This can lead to environmental degradation and social displacement, undermining long-term development. Fifth, competitive partnerships undermine multilateral cooperation by prioritising bilateral engagements that reinforce power imbalances. Regional institutions may struggle to maintain unity and collaborative frameworks, limiting their ability to address cross-border challenges. Finally, competitive aid can lead to projects that favour certain regions or social groups over others, exacerbating existing inequalities.
Despite these challenges, development cooperation remains crucial for fostering sustainable economic growth and addressing shared vulnerabilities like climate change and economic shocks. To prevent detrimental outcomes, development partners need to prioritise transparent, coordinated, and inclusive approaches, ensuring rigorous evaluation of projects, diversification of partnerships, and maintaining balanced relationships to reduce over-dependency on any single donor. Cooperative frameworks must also be administered judiciously, considering local contexts and stakeholder engagement to ensure inclusivity and sustainability.
Swati Prabhu is an Associate Fellow at the Observer Research Foundation.
Pratnashree Basu is an Associate Fellow with ORF’s Strategic Studies Programme.
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