Working with Civil Society in Foreign Aid: Possibilities for South-South Cooperation?

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In this timely article based on his book-length study, Brian Tomlinson ((Executive Director, AidWatch Canada)) argues for a larger role for civil society in delivering aid between countries in the global South.

1. The rise of the South and civil society

The United Nations Development Programme (UNDP) 2013 ‘Human Development Report’ focuses global attention on ‘the rise of the South’. The South is developing “at an unprecedented speed and scale” with significant reductions in extreme poverty across many middle-income countries ((UNDP 2013.)).

This article looks more closely at the implications of the ‘rise of the South’ through South–South cooperation (SSC), and more specifically at the sometimes-neglected potential for Southern civil society organizations (CSOs) in SSC ((CSOs can be defined as non-market and non-state organizations outside of the family in which people organize themselves to pursue shared interests in the public domain. Examples include community-based organizations and village associations, environmental groups, women’s rights groups, farmers’ associations, faith-based organizations, labor unions, co-operatives, professional associations, chambers of commerce, independent research institutes and the not-for-profit media. NGOs are a subset of CSOs that are not rooted in a particular constituency such as workers (trade unions) or church members. This paper uses CSOs in reference to the full range of voluntary associations. International NGOs (INGOs) are NGOs which are formally associated with the global governance system.)). It draws from a major UNDP China study undertaken in partnership with the Chinese Academy of International Trade and Economic Cooperation ((See the full study, Working with Civil Society in Foreign Aid: Possibilities for South-South Cooperation, published as an e-book by UNDP China in September 2013, accessible at http://www.undp.org/content/china/en/home/library/south-south-cooperation/working-with-civil-society-in-foreign-aid/.)).

The UNDP China study reflects upon some common themes from this experience and suggests possible areas of good practices in aid partnerships with CSOs. It argues that SSC should seek a diverse set of relationships, not only with governments, but also between peoples, organized as civil society, across the South. SSC principles, which are often shared by CSOs, suggest roles for civil society in South–South aid delivery that have great promise in deepening international social solidarity ((The notion of ‘social solidarity’ shares many of the principles defining SSC, but from the perspective of CSOs as independent development actors in their own right. The notion of social solidarity in international cooperation speaks to a shared solidarity with people, especially poor and marginalized populations, collaborating across national boundaries to ensure that people are able to claim their rights. CSOs in many developing countries also share a goal of strengthening developing-country government positions vis-à-vis their official development partners.)).

The ‘rise of the South’ has already contributed to a more diverse architecture for development assistance. This evolving aid architecture not only involves new actors. It also challenges, as well as complements, traditional forms of North-South development cooperation. Several middle-income countries – among them China, Brazil, Turkey, India, South Africa, Poland and Saudi Arabia – are rapidly expanding into new roles and modalities for SSC. ((While the focus in this study is on SSC, it is also acknowledged that SSC often includes triangular cooperation involving financing from traditional DAC donors.)) According to estimates, documented in the study, current SSC reached approximately US$17.2 billion by 2011, and is growing annually. This is a significant source of development cooperation when compared to current stagnating aid flows from traditional DAC donors. SSC represented 14% of total real DAC ODA in 2011, but closer to 25% of DAC donor country programmable aid (including DAC humanitarian assistance and food aid ((Real ODA is total ODA less debt cancellation, student and refugee costs in donor countries. Country Programmable Aid (CPA) is the proportion of aid that the DAC calculates available for programming by developing country partners. Humanitarian assistance and food aid is usually excluded from CPA but is included in the calculation in this sentence.))).

The growth of SSC is not the only dynamic that is affecting an evolving and more complex global aid architecture. The past decade has also witnessed the growth of CSOs as major aid and development actors. Civil society organizations now transfer very significant levels of resources, with estimates ranging from US$50 to US$76 billion annually ((See UNDP China, 2013, page 31 for the background for this calculation. The author has calculated that eight global International NGO families had combined global revenue from all their affiliates of over US$11.7 billion in 2011, up more than 40% since 2005. (UNDP China, 2013, page 35))) This level is at least triple, and perhaps even four times, the current level of SSC.

CSOs as aid actors have not been an exclusively Northern donor country phenomenon. In most middle-income developing countries, CSOs have been diverse, sophisticated development actors; they have played dynamic and innovative roles at all levels of socio-economic development. To date, they have worked mainly with external resources from official DAC donors or from Northern CSOs in the DAC countries. In a few middle-income countries CSOs have evolved with domestic sources of finance, for example, Islamic CSOs in Turkey.

Many CSOs in Southern aid-providing countries would be highly supportive of strengthening SSC and would have invaluable experience to contribute. On the whole, Southern CSOs reflect SSC principles in their own discourse on development cooperation practice. Increasingly CSOs in SSC partner countries are also seeking out the knowledge and expertise of CSOs in the SSC aid-providing countries.

Several countries involved in SSC are currently reviewing their policies for development cooperation, including among others China, Turkey, India, Brazil, and South Africa. To date, the primary partnerships in SSC have mainly been with governments. As SSC expands in scope, it may be an opportune time to set out some lessons from CSO experiences as aid actors in order to inform these new policies. What roles and approaches in relationships with Southern CSOs in SSC would be consistent with the principles and purposes that guide each country’s evolving SSC programs? This article first set out some comparative advantages of CSOs as development actors, then some issues affecting the development effectiveness of CSOs, and some conclusions on areas for further consideration by SSC aid-providers.

2. What do CSOs bring to development cooperation?

CSOs bring together many millions of citizens for highly diverse purposes in the public realm and are active in almost all countries of the world. Hundreds of thousands of such organizations, working at all levels, promote development and poverty reduction, strengthen peoples’ voices in governance, and respond to humanitarian emergencies. Most of these CSOs have little or no relationship to the aid regime. But as noted above, a growing and highly organized segment of civil society, historically emanating from the North, but now throughout the South, sustain many partnerships for development within the aid system.

These CSOs take many organizational forms, ranging from large multinational international non-governmental organization (INGOs), to national NGOs, faith-based organizations, cooperatives, emergency responders, volunteer-senders, community-based organizations, trade unions, women’s rights organization, human rights defenders, and many more.

The vast majority of international CSOs from DAC donor countries deliver a range of development services, sometimes through on-the-ground operations, but increasingly through partnerships with local and national CSOs in developing countries. Increasingly, developing country CSO counterparts are demanding partnerships with Northern CSOs consistent with aid effectiveness principles (particularly country ownership) and with SSC principles (solidarity, mutuality and non-interference). They are seeking arrangements where Southern CSOs are leading, and power and decision-making is shared and negotiated in the context of long-term financing.

As independent voluntary development actors, CSOs determine their own priorities and undertake programs and long-term partnerships based on these priorities. Official aid-providers on the other hand also have their own goals and objectives. Why then would aid-providers decide to channel aid through CSOs, rather than directly to governments? What are some of the potential comparative advantages for aid-providers in working in partnership with CSOs?

CSO partnerships have the potential to enrich SSC for development by broadening and deepening SSC reach in a number of important areas:

Provision of services: CSOs have a strong on-the-ground presence in service delivery, with some working directly with difficult-to-reach communities of poor people ((More than half (54%) of the aid channeled by DAC donors through CSOs in 2011 was allocated to “social infrastructure and services (areas such as education, health maternal and child health). This compares to 46% for these DAC donors’ aid (i.e. excluding CSOs). UNDP China, 2013, 36.)) At the same time, most CSOs acknowledge the primary role and responsibility of the State to provide health, education and other essential services to its citizens. CSOs, at their best, complement the work of government and official aid-providers; they fill gaps in government programs to the poorest sections of the population, and may create innovative alternatives with local populations. They can be an agile and flexible means of providing services and reaching populations that government might have difficulty reaching.

First responders in humanitarian emergencies: CSOs (particularly INGOs such as CARE or Oxfam) are able to organize effective rapid responses in humanitarian crises ((Humanitarian assistance makes up 17% of DAC donor aid delivered through CSOs, compared to 10% of DAC donor aid, excluding CSOs. UNDP China, 2013, 27.)). Specialized humanitarian capacities have been developed over decades of coordinated responses to complex emergencies, with highly trained personnel.

Effective channels in conflict-affected countries: CSOs can be very effective in supporting conflict-affected populations, which may be inaccessible to government aid-providers or multilateral donors. Working with local counterparts and communities they can begin to rebuild social relations and trust, a task that may not be possible for external official aid-providers, which may be identified with parties to the conflict.

Sharing expertise: CSOs have specialized (country-specific) expertise and on-the-ground experience with local communities and constituencies that might enrich development policy and approaches of other aid-providers and CSOs. CSOs can provide technical expertise through the recruitment and support for specialized volunteers on the ground.

Strengthening accountability: CSOs act together to assist affected communities and citizens to hold governments at all levels to account for policies and programs, promoting transparency and accountability. They can also act as a counter-weight to corruption. An important role for CSOs is to work with governments and multilateral organizations to identify standards, norms and effective practices in development, consistent with international human rights agreements and development results.

Expanding public support for development cooperation: CSOs in aid-providing countries play an important role in sensitizing citizens in these countries to global issues. For governments newly involved or expanding their roles in SSC, citizens are often unaware and perhaps unsupportive of these new foreign policy directions. Involving a diversity of CSOs in SSC may contribute to greater public understanding of SSC and give people opportunities to participate directly in development as volunteers in partner countries. Raising private financial resources may also be an important public role for CSOs in aid-providing countries ((Official aid-providers may be tempted to focus their policies with CSOs on leveraging CSO funds for their own development purposes. But CSOs are not established in the first instance to be donors of money. Rather, they are first and foremost voluntary organizations of people who join together because they share values, goals and expertise, and they seek on this basis to partner across borders to build independent people-to-people relationships.)).

3. Aid-Providers’ partnerships with CSOs: Some Issues and considerations

While there are many aspects of CSOs’ contributions to development cooperation that can enrich SSC, SSC has its own principles and approaches within which greater engagement with CSOs need to be considered. For many decades, CSOs in the DAC donor countries have been embedded and strongly influenced by a North-South ‘donor-recipient model’ of aid delivery. For both governments and CSOs in middle-income countries, SSC partnerships aim to be distinct from this donor-recipient model. At their best, SSC partnerships are rooted in common development experiences, and the relevance of these different development experiences to the conditions facing low-income countries.

Despite the potential to contribute, research reveals in fact very limited SSC experience from which to draw lessons to structure the inclusion of Southern CSOs in official SSC ((The research of the UNDP China study developed a case study on Turkey that documented that Islamic Turkish CSOs were partnering in a few countries with TIKA, the Turkish aid agency. However, in Brazil, also a country with very rich domestic CSO involvement in development, there were very few cases of their engagement with ABC or other Brazilian ministries in Brazilian SSC to date. See UNDP China, 2013, Turkey and Brazil case studies.)) The research did not examine CSO-to-CSO SSC for which there are a number of prominent examples such as BRAC based in Bangladesh or Ibon International, based in the Philippines. Indeed to date, it appears to be the case that SSC governments have had very little dialogue with domestic CSOs to identify issues involved and the potential for greater collaborations. Nevertheless recently in Brazil, India, Turkey and South Africa official aid agencies have organized forums to pursue a more inclusive dialogue with CSOs ((These specific opportunities for dialogue and engagement are described in the Turkey and Brazil Case Studies and in the shorter case studies on India and South Africa in UNDP-China, 2013, pages 167 and following.)). The background research for the UNDP China paper suggests several important issue areas that might be taken into consideration as this dialogue develops and SSC aid-provider consider the inclusion of CSOs in their SSC aid policies ((Each of these areas is developed in more depth in the UNDP China research for the e-book publication.)).

a) Legal and regulatory conditions

The capacities of CSOs to operate effectively as independent actors in development require an enabling legal framework. While each country works within its unique legal and constitutional context, laws and regulations governing the formation and operations of CSOs create important conditions shaping the roles of CSOs in society and across national boundaries. In creating policies for effective partnerships with CSOs in development cooperation, SSC aid-providers should acknowledge and address critical issues in the legal and regulatory environment affecting CSOs in both SSC providing countries and in partner developing countries.

The regulation of CSOs in developing countries is complex. In many countries the laws and regulations were established many decades ago and are now ill suited to the growth of CSOs and their work in development cooperation. In several SSC aid-providing countries, such as Brazil and India, laws were shaped by the assumption of the country as an aid recipient. The Brazilian legal system, for example, does not allow the direct transfer of funds by Brazilian organizations to counterparts in other countries. This greatly reduces the ability of these organizations to work within SSC and to provide flexible financial resources to partners in developing countries.

In many developing countries CSOs are facing an increasingly persistent narrowing of the legal and regulatory space for their operations. Issues that limit CSO effectiveness in carrying out their agreed mandate relate to:

• Mandatory registration of organizations, rendering illegal any activities by unregistered CSOs, including smaller community-based organizations and informal associations;
• Opaque and partial implementation of regulations by government officials for the creation and monitoring of not-for-profit organizations, resulting in political targeting of specific organizations;
• Onerous reporting conditions, including a requirement to re-register (sometimes annually), and
• Severe limitations on CSO freedom to access funding for their work, particularly from international sources.

In his April 2013 report to the Human Rights Council, Special Rapporteur, Maina Kiai, drew attention to “increased control and undue restrictions in relation to funding received [by CSOs].” CIVICUS’ 2013 State of Civil Society Report (citing the International Center for Not-for-Profit Law) sets out a growing list of 23 countries with such restrictions and points to a “contagion effect” with laws introduced in one country drawing inspiration from laws in other jurisdictions. These restrictions often target foreign funding for CSOs engaged in policy advocacy and the defence of human rights at the country level.

In discussing the issue of state sovereignty with respect to financing CSOs, the Special Rapporteur calls upon States to “demonstrate a change in mentality by highlighting that funding associations contribute to the development of a flourishing, diversified and independent civil society, which is characteristic of a dynamic democracy.” States must “allow access by NGOs to foreign funding as a part of international cooperation to which civil society is entitled to the same extent as Governments.”

b) CSO accountability and transparency

SSC aid-providers, particularly those relatively new to working with CSOs, face practical issues of knowledge of the CSO sector in making appropriate choices for partnerships between different CSOs. CSOs in turn have been challenged to demonstrate greater transparency of their programs and accountability to various constituencies.

Given their high degree of diversity, standardizing accountability for CSOs is complex. Nevertheless over the past decade CSOs have responded to these challenges. They have done so through adherence and reporting to several acknowledged global accountability standards. These include the International NGO Accountability Charter, the Sphere Project’s standards and guidance for humanitarian and emergency relief NGOs, and the widely-accepted Istanbul Principles for CSO Development Effectiveness and related guidelines for implementation ((For a summary description of these mechanisms see Annex Three of UNDP China, 2013: 129 -138.)) In many countries, national CSO coalitions have come together around voluntary accountability Codes and Standards that contribute to a framework for quality assurance.

Despite the weakness inherent in voluntary mechanisms, they do help to improve CSO accountability, while also being flexible enough to safeguard CSO diversity and independence. The INGO Charter and several country-level Codes have been augmented with peer review processes. Transparency is a pre-requisite for effective CSO accountability and many CSOs have been improving access to financial and other information on web sites over the past decade. Increasing numbers of International NGOs and CSOs are being asked to publish their data according to the common standard of the International Aid Transparency Initiative (IATI), alongside other aid actors. As more CSOs publish their data to the IATI standard, this will provide a unique opportunity for SSC aid-providers to aggregate and compare CSO project and program information.

Nevertheless, as distinct and highly diverse actors in development, CSOs face particular challenges in addressing transparency and accountability issues:

• Tensions for CSOs in responding to multiple constituencies: legal obligations to funders or government regulatory bodies, and moral claims for accountability by beneficiary populations.
• Demands for reporting to meet legal and regulatory requirements as well as CSO voluntary mechanisms, internal processes and partner relationships.
• Accessibility of CSO data and program information for primary beneficiaries.
• Growing competitiveness in CSO relationships may make individual CSOs concerned about making available detailed program and budgetary information.
• Protecting individual privacy and possible exposure of highly vulnerable CSOs and individuals such as human rights defenders.

Increasingly CSOs in partner countries are developing their own codes of conduct, oriented to conditions for effective partnership and programmatic implementation on the ground. But with a great number of such country-specific mechanisms, alongside continued challenges in CSO transparency, SSC aid-providers considering expanding partnerships with CSOs may benefit from a prior mapping of CSO strengths and vulnerabilities (in both specific partner countries and the SSC aid providing country). Such mapping can be a useful tool to identify CSOs and appropriate conditions for partnerships.

c) SSC institutional arrangements for engaging CSOs

To date SSC aid-providers have had limited experience in choosing different institutional arrangements with CSOs in the delivery of aid. But as SSC aid-providers explore partnership options, it will be important to be aware of the impact that different institutional arrangements (for funding or policy dialogue) have on the agreed development outcomes of the partnership. All development assistance providers are rightly focusing on maximizing fiduciary accountability on the part of the organization receiving funds. However, funding arrangements can and do take many different forms in which fiduciary accountability can be clear and fully realized. Equally crucial is the impact of the terms of funding policies and arrangements on the capacities of CSOs, working in difficult country contexts, to implement effective development programs and achieve sustainable results.

Funding Mechanisms

Aid resources from aid-providers can reach CSOs in developing countries through (1) direct funding of local initiatives (often coordinated by an aid-provider’s embassy); (2) financing partnerships mediated by CSOs based in the aid-provider’s country; (3) aid-providers’ pooled funding mechanisms in the developing country; and (4) aid resources implemented by local governments. The most common channel for DAC donors has been via CSOs and INGOs largely based in the DAC donor country, working with counterparts in many developing countries.

From the point of view of CSOs in developing countries, different funding arrangements and terms governing financial contributions from aid-providers (whether governments or other INGOs) have raised some particular issues:

• Restrictions in funding for core organizational costs, which can undermine the long-term sustainability of the CSO and its relationships with its constituencies.
• The choice of local CSO programs, driven by the need for external funding, is shaped by aid-providers’ (including INGOs) priorities for funding. The latter are usually developed with little engagement with developing country CSOs. These funding relationships can have significant impact on the ability of local CSOs to truly respond to the specific priorities of local constituencies and beneficiaries.
• Local CSOs sometimes enter into unproductive competition with each other for funding, undermining the potential for open CSO dialogue and program collaboration at the country level.
• Many CSOs do not enjoy a “level playing field”. While local programs of CSOs are often shaped by aid-providers’ priorities, many CSOs in developing countries operate with very limited information about the plans and priorities of different aid-providers. As such, they may miss opportunities for funding, and their funding proposals may be at a considerable disadvantage to other CSOs more closely aligned with aid-providers.
• Local CSOs are sometimes pressured through funding relationships to align with government programs, even though they have significant concerns about the efficacy of government development plans, particularly if they are not the result of socially inclusive consultation and participation. Similarly, without sustained access and dialogue between CSOs and government (see below), practical collaboration and alignment with local government is difficult.

Assessments by the DAC donors and other analysts of funding arrangements have pointed to important good practices in CSO support. Table One highlights some of these considerations.

Table One: Official Aid-Provider Funding Arrangements for CSOs

Any of these arrangements might include roles for CSOs in delivering technical assistance. Since the 1990s there has been a surge in volunteers from OECD countries working in development, mainly managed through various specialized and non-specialized CSOs. One estimate put the number at more than 50,000 volunteers in a give year.

Policy dialogue with aid-providers and partner governments

CSOs are increasingly engaged with other development actors, including aid-providers, to influence policy directions and create learning environments. In the past decade CSOs have also become major actors in strengthening accountability of governments. They do so through independent research and evidence-based advocacy to deepen public and government commitments and approaches in development cooperation. CSOs monitor aid flows giving some independent assurance that these resources are going to the intended beneficiaries and achieving sustainable results on the ground. While often dominated by Northern INGOs, Southern CSO networks are becoming increasingly strong voices in policy dialogue at international forums, such as UN bodies, and other global processes.

Domestic CSOs in many middle-income countries involved in SSC have also been active in domestic policy dialogue and advocacy over the past several decades, with a wealth of critical development experience upon which to draw. However, these CSOs in India or Brazil for example, have had limited engagement with policy directions for their country’s SSC. As SSC expands, these CSOs could play important roles in deepening understanding of SSC among different constituencies, but also in responding to important partner country CSO concerns that are affected by SSC initiatives.

Several independent assessments have highlighted some critical factors that make for effective policy engagements that are relevant to both CSOs and governments:

• Evidence-based research and documentation, provided by both CSOs and government for the dialogue, can create a common ground for exchange and improved policies and practices.
• Longer-term, step-by-step engagement is more likely to produce successful outcomes for all stakeholders than one-off sessions.
• CSO credibility and legitimacy in policy dialogue is also based on strong CSO linkages with affected communities and constituencies.
• Skills for policy dialogue are often weak for many CSOs, which could benefit from training. Similarly government officials may require new skills and an understanding of effective approaches to consultations with CSO actors.
• CSO coalitions and networks are a means for inclusion in policy dialogue, an avenue for negotiating the purposes of a dialogue, and a way to strengthen outreach to a diversity of affected stakeholders.

Development policies often affect vested interests and CSOs may bring voices of those excluded from policy processes to the table to promote changes and new laws. For this reason, selected CSOs challenging the status quo may face significant disabling conditions limiting their access and effectiveness in policy dialogue. CSOs have witnessed disabling practices in areas such as manipulation of CSO regulatory and legal requirements, arbitrary limits placed on their operations and on access to (foreign) funding. Governments sometimes impose limitations on the right to assembly, which affect the space for participation and advocacy by representative peoples’ organizations and other CSOs.

4. Conclusions: Areas for further reflection

Countries engaged in SSC stress some key approaches that differentiate their aid provision:

  • strengthening capacities for self-development;
  • guided by country ownership, and a policy of non-interference with no political conditionality;
  • implementing principles of equality and mutual benefit;
  • responding to actual conditions in developing countries based on practical development experience.

 
It is also the case that many CSOs interested in SSC strive to be independent and voluntary organizations, with their own principles, mandates and programmes. Effective relationships with CSOs in SSC will require clarity in establishing areas of common purpose and objectives. Clarity includes a shared recognition and agreement on both the potential but also the limitations of SSC collaborations. For many CSOs, these limitations include guarding against co-optation of their organization, real or perceived, by the SSC aid-providing State.
 
Within the context of SSC principles, the UNDP China study raises a number of considerations that are important for deepening the scope and roles of CSOs in South–South aid delivery:
 
1. Defining the inclusion of CSOs in official policies for SSC A number of SSC aid-providers are elaborating policies that define the purposes and arrangements for their development cooperation. For those who wish to move in this direction, this process of developing policy presents an opportunity to consider how the SSC aid-provider intends to work with CSOs. Such policies might consider the rationale for working with CSOs, criteria for selecting CSOs for partnerships, programming priorities for such partnerships, financing arrangements, and a commitment to program and policy dialogue.
2. Creating enabling conditions for CSOs to engage in SSC The legal and political environment for CSOs evolves differently in each country. It is particularly important that CSOs have a clear and transparent legal framework within which to structure their domestic work, to participate in official SSC programming and to undertake a variety of relationships with diverse stakeholders in partner countries. Best practice suggests that it would be important for SSC aid-providers to develop knowledge of local legal and regulatory issues for CSOs in partner countries where they are considering partnerships.
3. Strengthening the capacity of CSOs for SSC CSOs in middle-income countries have largely worked inside a domestic arena where they often have been recipients of aid. It is important that CSOs and aid-providers do not assume that all the skills required for SSC are the same as those developed within the domestic context. It is important to develop skills in analysing appropriate ways of conducting development cooperation respecting principles of SSC, putting in place conditions for effective and equitable partnerships, and analysing the country-specific cultural, political and economic realities affecting development.
4. Creating an environment of trust Where there is little previous experience and institutional knowledge of CSOs in development cooperation, CSO roles in SSC will likely be an iterative process. It is one in which the SSC aid-provider and the CSO build knowledge and trust of each other over time.
5. Spaces for policy dialogue and learning Sustained policy dialogue is an essential ingredient for developing trust and knowledge across different partnerships for SSC. Development actors benefit from systematic exchange of experience. A great deal of this knowledge resides within the CSO community. CSO coalitions and country platforms are often ideally suited to facilitate exchanges with a diverse and broad range of CSOs not easily accessible to development assistance providers and governments.
 
In recent years, governments, traditional donors, SSC aid-providers, multilateral organizations and CSOs have agreed on measures to improve their development practices. Many CSOs are learning from their experiences to become more effective development actors. SSC is growing significantly each year. Perhaps the time has come to consider how to utilize the experience of CSOs, long considered only as recipients of aid, as the basis for SSC with a wider reach and impact with diversity of developing country partners.

In Brief

In this timely article based on his book-length study, Brian Tomlinson argues for a larger role for civil society in delivering aid between countries in the global South.
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