The Development Compact

Abstract

India’s development cooperation efforts began soon after the country gained its Independence in 1947. Indeed, there are some incidences that date back to even pre-Independence days. India is a strong believer of the fact that developing coun- tries should not be entirely dependent upon assistance from the developed world; they must pool their own resources and capabilities to help each other. This article examines the larger framework of Indian external assistance through the concept of ‘development compact’. The new development compact is between actors of the South, rather than the North–South exchange that characterized earlier arrangements; it is no longer about the imposition of conditionalities for recipient countries but more on the principles that govern South–South Cooperation (SSC) such as mutual gain, non-interference, collective growth opportunities and indeed an absence of conditionalities. The modern concept of a development compact provides for development assistance that works at five different levels, namely trade and investment, technology, skills upgrade, lines of credit (LOC) and, finally, grants. The engagement of emerging economies with other Southern countries has provided a major pull factor for a wider engagement across these five elements, which emphasizes the comprehensive support for economic development. These factors are discussed in this article to provide an analytical taxonomy with some illustrative evidence from the Indian experience.