Cooperation for development: the re-emergence of Russia as a new donor?

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Cooperation for development: the re-emergence of Russia as a new donor?

1.From recipient to donor

international assistance development

The Soviet Union was actively involved in the international development assistance [1, P. 55-56; 2, P. 115]. Economic crisis, which followed the U.S.S.R. collapse, resulted in Russia's inclusion in the list of aid recipient countries. Since 1990 Russia together with some other Central and East Europe countries and transition economies was included in Part II of the Development Assistance Committee (DAC) list of aid recipient countries. See History of DAC lists of aid recipient countries // Organisation for Economic Cooperation and Development. URL: http://www.oecd.org/document/55/0,3343,en_2649_34447_35832055_1_1_1_1,00.html (date of access: 18.06.2010). Aid to these countries was recorded separately as official aid (OA) not as official development assistance (ODA).

With successive revisions, recipient countries system on the two-part list became increasingly complex. At the same time, aid to more advanced developing and transition countries declined as they became more prosperous, with several states becoming donors themselves. In 2005 the DAC therefore reverted to a single List of ODA Recipients, abolishing Part II. Russia and countries which joined the European Union in 2004 and 2007 were excluded from the DAC list. See DAC List of Aid Recipients used for 2005 and 2006 flows // Organisation for Economic Cooperation and Development. URL: http://www.oecd.org/dataoecd/23/34/37954893.pdf (date of access: 18.06.2010). OECD databases don't include aid received by Russia. See Development Database on Aid Activities: CRS online // Organisation for Economic Cooperation and Development. URL: http://www.oecd.org/document/0/0,2340,en_2649_34447_37679488_1_1_1_1,00.html (date of access: 18.06.2010). This information can be found in the OECD Development Cooperation Reports and World Bank World Development Indicators database archive (Table 1). See Economy Statistics > Aid > percent of GNI > Russia (historical data) // NationMaster.com. URL: http://www.nationmaster.com/time.php?stat=eco_aid_of_gni-economy-aid-of-gni&country=rs-russia (date of access: 28.07.2010).

Table 1. Official aid to Russia from the DAC members, international organizations and other countries reporting to the DAC Czech Republic, Hungary, Iceland, Republic of Korea, Poland, Slovakia, Turkey, Kuwait, Saudi Arabia, United Arab Emirates, Taiwan, Israel and some others.

2.Legal system

Russian legislation in the sphere of development assistance is still being developed. The analysis shows that it lacks the majority of terms and notions (including such important as ODA) and some terms have different definitions than the same terms in the DAC documents [5]. Some external aid provision notions can be found in certain by-laws, For example, Government Resolution No. 644 of 31 August 2000 On emergency assistance to foreign states. regional integration treaties For example, Treaty on the Eurasian Economic Community establishment of 10 October 2000, Treaty on the Union State of Russia and Belarus establishment of 8 December 1999. and strategic concept documents The Foreign Policy Concept of the Russian Federation, Russia's National Security Strategy through to 2020, Concept for the Long-Term Social and Economic Development of Russia through 2020..

Some terms (humanitarian aid, technical aid) were officially recognized in the legislation on Russia's participation in the international development assistance as a recipient. Federal Law of 4 May 1999 No. 95-FZ On aid (assistance) provided to the Russian Federation and amending and updating certain legislative acts of the Russian Federation on taxes and establishing benefits on payments to the state non-budget funds in connection with aid (assistance) provided to the Russian Federation», Government Resolution of 17 September 1999 No. 1046 On approval of registration procedure of projects and programmes of technical aid (assistance), issuing certificates, confirming funds, goods and services' status of technical aid (assistance)».

Active formation of the legal basis for Russia's development cooperation was launched in 2005, when in the course of preparation to the next-year G8 Presidency Russia identified the main priorities on development cooperation and pledged to significantly increase financing of external aid. Russian authorities started preparation of a document designed to assure that the federal government uses a systemic approach to Russia's participation in international development assistance.

In November 2006 the Russian Government approved a draft Concept of Russia's Participation in International Development Assistance (Development Assistance Concept). The Concept was endorsed by the Russian President on 14 June 2007 [6]. The Concept defines major goals, objectives, and principles of Russia's international development assistance policy. One of the goals of the Concept adoption was establishment of the national development assistance system. It shows that Russia aims at becoming not just a new donor, but a donor equal to its G8 partners.

The legal framework for the Concept is provided by the Constitution of the Russian Federation, the Russian Foreign Policy Concept, the Russian Security Concept, and the Budget Code of the Russian Federation. It should be noted, that since 2007 some of these documents have been changed and new concept documents have been adopted. The New Foreign Policy Concept of the Russian Federation was adopted on 12 July 2008, Russia's National Security Strategy through to 2020 was approved on 13 May 2009, the Climate Doctrine of the Russian Federation was approved on 17 December 2009, the Russian Federation's Food Security Doctrine was adopted on 1 February 2010. Currently a Program on Efficient and Systematic Use of the Foreign Policy Factors for Long-Term Development of the Russian Federation is being prepared by order of Russian President. Program on Efficient and Systematic Use of the Foreign Policy Factors for Long-Term Development of the Russian Federation // Russki Newsweek. 11.05.2010. URL: https://www.hse.ru/data/2010/09/27/1223786940/Foreign_policy_for_modernisation_program.doc (date of access: 19.06.2010).

Thus, Development Assistance Concept should be updated to reflect new priorities of Russian foreign policy (for example, use of foreign policy for national modernization, increase of Latin American countries' significance) and recent developments in other spheres. It can be done by adopting a strategy or state programme on Development Assistance Concept's practical implementation.

Russian executive authorities rarely mention the Development Assistance Concept in their documents. The Federal Service for the Oversight of Consumer Protection and Welfare is apparently the only Russia's executive agency that directly mentions the Concept in its Policy Guidelines for 2009 - 2010.

Moreover, none of the aforementioned strategic documents contains references to the Development Assistance Concept. However a draft Program on Efficient and Systematic Use of the Foreign Policy Factors for Long-Term Development of the Russian Federation provides for the need of establishment of the Russian agency of international development and an effective national development assistance system. Program on Efficient and Systematic Use of the Foreign Policy Factors for Long-Term Development of the Russian Federation // Russki Newsweek. 11.05.2010. URL: https://www.hse.ru/data/2010/09/27/1223786940/Foreign_policy_for_modernisation_program.doc (date of access: 19.06.2010).

The Concept is based on the United Nations Charter and other international instruments such as the Millennium Declaration, the Monterrey Consensus, the Johannesburg Plan of Implementation of the World Summit on Sustainable Development, the 2005 World Summit Outcome, the Paris Declaration and other international documents. The international donor community provisions laid out in other international documents should obviously be reflected in the Concept (for example, the Accra Agenda for Action adopted in 2008) as well.

According to the Concept the need and importance of aid assistance can be explained by the following reason:

- dependence of any country on economic conditions of both its immediate neighbors and many far away countries due to economic globalization;

- influence of sustainable development on global security through reducing threats of the spread of terrorism, infectious diseases, unregulated migration, and environmental disasters.

International development assistance policy according to the Concept is aimed at meeting Russia's economic and political interests by:

- strengthening Russia's international position and credibility;

- stabilizing socioeconomic and political situation in the partner countries;

- establishing a belt of good neighborliness; prevent the occurrence of potential focal points of tension and conflict, primarily in the regions neighboring Russia;

- creating a favorable external environment for Russia's own development.

According to the Deputy Finance Minister of Russia Sergey Storchak “the Concept sets the groundbreaking principle for Russia - a country helps itself by helping neighboring poor countries”. Development of poor countries favors an increase of its consumption of goods produced in the donor countries. S. Storchak's statement to the news agencies // Ministry of Finance of Russia. 17.11.2006. URL

http://www.minfin.ru/ru/press/speech/index.php?pg4=45&id4=3756 (date of access: 19.06.2010).

The Concept outlines procedures and basic principles of establishing a national system of international development assistance to be created in several stages, but it doesn't set timeframes and terms for the stages. According to the Concept establishment of a specialized governmental agency for development assistance and specialized assistance programs should be preceded by the first stage which includes development and approval of a regulatory and legal framework; selection of assistance priorities; creation and adjustment of interactive mechanisms with partner countries and international organizations; development of bilateral and multilateral mechanisms for assistance delivery; establishment of a group of international development assistance stakeholders in Russia; identification of areas and modes of engagement with the business community in the area of development assistance; and implementation and performance assessment of initial assistance programs.

In November 2007 the Russian Government adopted the Plan of Measures to Implement the Concept, which provides for adoption of measures to create legal and institutional basis for Russia's development assistance. Russian Deputy Minister of Foreign Affairs Alexander Yakovenko Interview with Interfax News Agency on International Development Assistance, December 22, 2008 // Ministry of Foreign Affairs of Russia. 23.12.2008. URL: http://www.mid.ru/brp_4.nsf/0/A1F31B6576799123C325752A00256D9B (date of access: 10.12.2010). The Plan, to be implemented from 2008 to 2010, includes four main areas: legal regulation, effectiveness and monitoring, management and realization. Analysis of Russian authorities' decisions and actions shows that a lot of concrete initiatives were implemented, but the planned institutional changes haven't been made yet. In particular, the Budget Code amendments are still needed to define the notion of “concessional credit or credit extended on development assistance terms” along with confirming legislatively the formation of an Official Development Assistance Budget. Ibid. According to the Plan of Measures these amendments should have been done in 2010.

Thus, amendment of the Plan of Measures is required, or a new action plan adoption can be considered for 2012-2014. The plan should include measures in the sphere of development assistance within the preparation to Russian Presidency in G8 in 2014 and Millennium Development Goals (MDGs) summit in 2015.

Russian national programme of International Development Assistance on bilateral basis for 2012-2014 is being prepared by the Intergovernmental Working Group on Russia's Participation in International Development Assistance. Prime Minister Vladimir Putin meets with Farit Mukhametshin, head of the Federal Agency for the Commonwealth of Independent States, Compatriots Living Abroad and International Cultural Cooperation // Website of the Prime-Minister of Russia. 8.07.2010. URL: http://premier.gov.ru/eng/events/news/11325/ (date of access: 10.12.2010).

3.Authorities responsible for Russia's participation in international development assistance

The Concept of Russia's Participation in International Development Assistance mentions the following agencies responsible for development assistance: the President, the Parliament, the Ministry of Foreign Affairs, the Ministry of Finance, the Ministry of Economic Development, the Ministry of Civil Defence, Emergencies and Disaster Relief, the Ministry of Industry and Energy (now reorganized into the Ministry of Industry and Trade and the Ministry of Energy). The Plan of Measures to Implement the Concept adds to the list the Ministry of Education and Science, the Ministry of Healthcare and Social Development, the Ministry of Natural Resources and Environmental Protection. Other interested agencies can also participate in the activities.

The Russian President Executive Office plays an important role in development assistance and cooperation for development as it supports participation in G8 and G20 forums and preparation of the summit documents. Aide to the President A. Dvorkovich chairs the intergovernmental commission on Russia's participation in G8 and G20.

According to the Concept expenditures on Russia's international development assistance, including the determination of priority countries and regions, political advisability of aid provision, as well as the amount, delivery channels, types and terms of such assistance, are jointly coordinated by the Ministry of Foreign Affairs and the Ministry of Finance in consultation with other federal executive authorities.

Within the Ministry of Foreign Affairs both regional and functional departments (such as, Department of International Organisations) are responsible for different aspects of development assistance.

According to its charter the Department of International Financial Relations, State Debt and State Financial Assets of the Ministry of Finance is responsible for preparation of proposals on official development assistance on multilateral and bilateral basis. Russian Ministry of Finance Order of 29 July 2005 No. 199 // Ministry of Finance of Russia. URL: http://minfin.consultant.ru/doc.asp?ID=5714 (date of access: 24.04.2010). In December 2009 this department was divided into the Department of International Financial Relations and the Department of State Debt and State Financial Assets. Structure of the Ministry // Ministry of Finance of Russia. URL: http://www1.minfin.ru/ru/ministry/structure/departments/ (date of access: 24.04.2010). Thus the Department of International Financial Relations can become the principal body on international development assistance in the Ministry of Finance.

In September 2008 the Federal Agency for the Commonwealth of Independent States, Compatriots Living Abroad and International Humanitarian Cooperation (Rossotrudnichestvo) was established under the jurisdiction of the Ministry of Foreign Affairs. According to its Charter this federal executive body is engaged in facilitation and development of international relations between Russia and the member-states of the Commonwealth of Independent States (CIS) and other states, as well as in the sphere of international humanitarian cooperation. It develops and realizes programmes of aid only for the CIS member states. Charter of the Commonwealth of Independent States, Compatriots Living Abroad and International Humanitarian Cooperation // Rossotrudnichestvo. URL: http://rs.gov.ru/node/610 (date of access: 19.06.2010). Thus, Rossotrudnichestvo doesn't represent the Russian agency of international development, creation of which is provided for by the Development Assistance Concept.

Now Russia's national programme of development assistance on a bilateral basis is being elaborated by the Interagency working group on Russia's participation in international development assistance. Prime Minister Vladimir Putin meets with Farit Mukhametshin, head of the Federal Agency for the Commonwealth of Independent States, Compatriots Living Abroad and International Cultural Cooperation // Website of the Prime-Minister of Russia. 8.07.2010. URL: http://premier.gov.ru/eng/events/news/11325/ (date of access: 10.12.2010).

4.Development assistance volumes

Until recently, Russia's participation in development assistance was quite limited both in scope and types of assistance, mainly for objective reasons. However, Russia continued to take part in humanitarian operations, made regular contributions to international organizations, and agreed to relieve the debt burden for poor countries.

Russia's participation in development assistance depends on country's economic situation, its role in the international relations and taxpayers' attitude to donor activities. The Government underlined that adoption of the Development Assistance Concept itself wouldn't bring automatic increase of budget spending on ODA. Russian Government meeting agenda for 23 November 2006 // PRODEMO. 24.11.2006. URL: http://www.prodemo.ru/_template.html?sec=1171&doc=51799691 (date of access: 19.06.2010).

Given that the national system of ODA accounting data has not been established the data for certain years from different sources can vary substantially. According to the Russian Government federal budget expenditures for development assistance not including debt relief were USD97 million. Ibid. According to the Deputy Finance Minister of Russia D. Pankin in 2003-2005 volume of Russia's aid to developing countries amounted to USD50-60 million. D. Pankin's statement to the news agencies // Ministry of Finance of Russia. 22.12.2008. URL: http://www.minfin.ru/ru/official/index.php?id4=6895 (date of access: 19.06.2010). The discrepancies can be explained by different methodologies used and incompleteness of information.

A major step of national development system creation was participation in the preparation of the Muskoka Accountability report (MAR) - Assessing Action and Results against Development-Related Commitments which was presented to the G8 summit in Canada in 2010. The data collected and analyzed using the OECD methodologies helps assess Russia's contribution to the international development assistance from 2005 to 2009. Assessing action and results against development-related G8 commitments. The Russian Federation contribution // Ministry of Finance of Russia. 21.06.2010. URL: http://www1.minfin.ru/common/img/uploaded/library/2010/06/Presentation-Eng.doc (date of access: 02.08.2010). Table 2 compares data from the MAR and Russian official sources for different years collected by author.

Table 2. Russian ODA, USD million

5.Russia's participation in international organizations and multilateral institutions

Russia is a member of many major international organizations and institutions engaged in development assistance (UN system, Bretton Woods institutions, G8, G20).

The Development Assistance Concept emphasizes Russia's participation in international organizations. Over the course of establishment of the national development assistance system: “Russia will provide international development assistance mainly on a multilateral basis, that is by making voluntary and earmarked contributions to the international financial and economic institutions, first of all, to United Nations programs, funds, and specialized agencies, regional economic commissions and other organizations participating in development programs; by participating in global funds; and by implementing special international initiatives of the Group of Eight, World Bank, IMF, and UN agencies”.

Expanding multilateral development assistance, Russia uses its advantages such as availability of well-established aid delivery mechanisms and additional coordination and harmonization opportunities provided by international organizations, as well as financial monitoring systems, and technical capacity/expertise and knowledge. Opening Address by Russia's Minister of Finance A.L. Kudrin at the International Conference on New Partnerships in Global Development Finance // Moscow International Conference on New Partnerships in Global Development Finance. 17-18 February 2010. 17.02.2010. URL: http://www.mgdf.ru/eng/press/speeches/opening_kudrin (date of access: 19.06.2010).

According to the OECD estimates in 2008 Russia's contribution to the main international organizations engaged in the development assistance was USD117 million. 67 percent (USD78.4 million) was allocated to the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund), 16.7 percent (19.5 million) - to the International Development Association (IDA) and 12.8 percent (15 million) - to the World Food Program (WFP). [8]

Such concentration of multilateral aid allocation to small number of international organizations, is observed in other emerging donor's activities. For example, Inter-American Development Bank accounts for almost 94 percent of Argentina's contributions to major international development institutions, 77 percent of Chile's and 60 percent of Mexico's, WFP accounts for almost 94 percent of Saudi Arabia's contributions and 70 percent of India's, IDA accounts for almost 70 percent Brazil's contributions, 48 percent of the South Africa's and 44 percent of Kuwait's [8]. Multilateral aid of the OECD member-states is allocated much more evenly [9].

Russia's membership in the G8 and development commitments made in the forum were among the main reasons for expanding its participation in development assistance. The experience of Russia's G8 partners was useful in elaboration of the Development Assistance Concept. Substantial strengthening of development assistance efforts by Russia's G8 partners has become an important factor directly influencing the federal government activities in this area.

Russian G8 Presidency in 2006 became a major landmark in its national development assistance system creation when the main priorities on development cooperation were identified and a significant increase of external aid financing was pledged.

On 6-7 April 2006 the international conference “Emerging Donors in the Global Development Community” was convened in Moscow under the auspices of Russia's G8 Presidency. The aim of the conference was to recognize the importance and growing contribution to global development by non-traditional and “(re)emerging” donor countries. Impressive success in achieving domestic development goals has allowed a growing number of developing and transition economies to look into disseminating their development experience beyond their national borders and to share their knowledge with other developing partner countries seeking to advance their own economic and social development objectives. The conference also aimed at promoting understanding of various approaches to development, with a view of enhancing the effectiveness and complementarity of the efforts of all donors, traditional and emerging. Russia G8 Emerging Donors 2006 Conference // New Partnerships in Global Development Finance. Moscow International Conference. February 17-18 2010. 17.02.2010. URL: http://www.mgdf.ru/eng/donors2006 (date of access: 19.10.2010).

Specific commitments, including in the development sphere, were made at the St. Petersburg G8 summit. The summit documents reflected G8 members' intention to allocate considerable funds for development assistance, first of all for health assistance. USD24.7 billion was pledged over different periods of time (from 1 to 20 years). USD21.6 billion was pledged for fight with infectious diseases, USD1 billion for health systems development in the developing countries, USD0.5 billion for avian influenza and preparedness for a possible pandemic influenza. USD1.3 billion was intended for the Global Fund to Fight AIDS, Tuberculosis and Malaria, USD0.2 billion - for other international institutions and mechanisms (Global Polio Eradication Initiative, Global Alliance for Vaccines and Immunization, African AIDS Vaccine Programme and others) [10].

To enhance international capacity to counter the spread of the viruses Russia proposed to establish the World Health Organization Collaborating Centre on Influenza for Eurasia and Central Asia. Fight Against Infectious Diseases // G8 Information Centre. 16.07.2006. URL: http://www.g8.utoronto.ca/summit/2006stpetersburg/infdis.html (date of access: 19.10.2010). Russian Presidency proposed to establish a regional coordination mechanism to promote HIV vaccine development in the countries of Eastern Europe and Central Asia. Ibid.

Russia is a not member of the OECD, though all G8 members are members of the OECD and its DAC. Thus, Russia, like Brazil, China, India and South Africa does not report the aid flows to the DAC, though these countries have increasingly important development co-operation programmes [8]. The Russian Government admits that the absence of the data on Russia's ODA expenditures in the OECD statistical data doesn't strengthen the credibility of Russia in the international community. It is important for Russia not only to increase efforts on ODA and other development finance provision, but get official recognition of these expenditures by the international community. Hence, Russia's ODA expenditures need to be reflected in the international statistics published by the OECD DAC.

The Russian authorities declared that they intended to begin reporting aid to the DAC once there was the necessary capacity to do so. [8, P. 138] and support that other emerging donors start reporting on a voluntary basis information on annual total disbursements of gross and net ODA. Emerging Donors in the Global Development Community. Joint Chairs' Statement // New Partnerships in Global Development Finance. Moscow International Conference. February 17-18 2010. URL: http://www.mgdf.ru/files/G8_Emerging_donors_JointChairStatement.pdf (date of access: 19.06.2010). At the Conference “New Partnerships in Global Development Finance” in 2010 Russia proposed to other new development partners that they “join together and ask the OECD DAC to work with us in a special group that will focus initially on building capacity for aid statistics and reporting, and other aid management concerns”. In addition, it was proposed that the new development partners observed and learned from the DAC peer review process. Chairman's Summary - The Moscow Process // New Partnerships in Global Development Finance. Moscow International Conference. February 17-18 2010. 18.02.2010. URL: http://www.mgdf.ru/eng/press/speeches/chairmans_summary (date of access: 19.10.2010).

Several international organizations are engaged in strengthening of institutional capacity of Russian Government agencies involved in international development assistance. For example, United Nations Development Program implements a project aimed at improving institutional capacity of Russian agencies by making available international best practices in aid administration. Support to Russia's Effective Participation in the International ODA Architecture // UNDP in the Russian Federation. URL: http://www.undp.ru/index.php?iso=RU&lid=1&pid=39 (date of access: 19.10.2010).

The World Bank and the UK Department for International Development together with the Russian Ministry of Finance initiated a technical assistance program "Russia as a Donor Initiative (RDI)" which should strengthen capacity of Russian Ministries and agencies in the area of international aid. Russia Cares: the First Session of World Bank - DFID Program Advisory Council “Russia as a Donor Initiative (RDI)” // The World Bank. 14.05.2009. URL: go.worldbank.org/O3TNN7YRR0 (date of access: 19.10.2010).

European Bank for Reconstruction and Development (EBRD) funds projects on infrastructure development in Russia and together with the Russian Government carries out projects under the Northern Dimension Environmental Partnership (NDEP). See Northern Dimension Environmental Partnership web-site. URL: http://www.ndep.org (date of access: 19.10.2010). According to the EBRD representatives Russia could more actively participate in its activities, for example, in the Early Transition Countries Initiative, See European Bank for Reconstruction and Development web-site. URL: http://www.ebrd.com/pages/about/where/etc.shtml (date of access: 19.10.2010). or using EBRD resources for development assistance in the Western Balkans and Central Asia. Zettelmeyer J. The EBRD's approach to economic development and the role of new development partners // New Partnerships in Global Development Finance. Moscow International Conference. February 17-18 2010. URL: http://www.mgdf.ru/files/Zettelmeyer_-_panel_2_Day_1.pdf (date of access: 19.06.2010).

Russia (especially Russian private sector) still receives resources from several international development institutions.

Russia is the largest recipient of the European Bank for Reconstruction and Development (EBRD) finance. From 1991 to 2008 the EBRD allocated USD11.7 billion (27 percent of all its allocations for the period) to Russian economic agents. In 2008 31.5 percent of EBRD finance was allocated to Russia [11, P. 95].

The International Finance Corporation (IFC) invested USD2 billion in Russia, targeted towards business sectors and regions most in need. The IFC is drawing in other investors to counter the economic crisis through creation of new facilities for trade finance, microfinance, bank capitalization, infrastructure, and restructured business debt. Some of these ventures are being customized to assist Russia's recovery and future growth. Welcoming remarks for Moscow International Conference on “New Partnerships in Global Development Finance” by Robert B. Zoellick, President of the World Bank Group // Moscow International Conference on New Partnerships in Global Development Finance. 17-18 February 2010. 17.02.2010. URL: http://www.mgdf.ru/eng/press/speeches/opening_zoellick (date of access: 19.06.2010).

6.Instruments and principles of assistance provision

The Development Assistance Concept states that “the governments of developing countries must shoulder primary responsibility for overcoming poverty and underdevelopment of their nations” but “a radical improvement of socioeconomic conditions in these countries will be possible only if the international community takes resolute and concerted action to facilitate their development”. Thus Russia recognizes and shares one the main principles of development assistance effectiveness enhancement - country ownership of developing countries which should take stronger leadership of their own development policies and be engaged in shaping those policies [12].

According to the Russian authorities the absence of a systemic approach in using federal budget funds for purposes of development assistance makes it difficult to bring in the desired economic and social outcomes in the recipient countries or create political and economic benefits for Russia. Russia's policy in international development assistance is based on a weighted balance between the objectives of such policy and the capacity for their attainment. The recipient countries must demonstrate their interest in a consistent development of bilateral cooperation with Russia.

A set of instruments Russia uses for external aid allocation has been gradually increasing. Over the last few years, Russia mostly contributed to development assistance by writing off debts under loans lent by the former Soviet Union, for example, within the framework of the Heavily Indebted Poor Countries Initiative. Currently it is focusing on assistance in the form of grants to international funds and programs of international development assistance, and aims to establish and develop a national system of instruments to provide such assistance on a bilateral basis.

The draft Development Assistance Concept provided for a national system that rests on the DAC principles. The adopted Development Assistance Concept refers to the DAC principles but some definitions have different meaning. The Concept does not mention other official flows (transactions by the official sector with countries on the List of Aid Recipients which do not meet the conditions for eligibility as ODA or OA), which are still used by the government agencies. Russian Government meeting agenda for 23 November 2006 // PRODEMO. 24.11.2006. URL: http://www.prodemo.ru/_template.html?sec=1171&doc=51799691 (date of access: 19.06.2010).

The instruments listed in the Concept include the provision of international development assistance on a trilateral basis, involving the use of financial and logistic capacity of the “traditional” donor countries and international organizations through already existing or newly created trust funds of the World Bank, United Nations, UN specialized agencies, and other institutions. In that case Russia will have the right to select recipient countries and areas of assistance and will be able to use Russian technical assistance specialists. In the OECD documents «triangular cooperation» means support given by an OECD donor to the transfer of knowledge and experience from one developing country (often a middle-income country) to another. Aid effectiveness lexicon // The Aid Effectiveness Portal. URL: http://www.aideffectiveness.org/Tools-Definitions-AE-portal-lexicon.html (date of access: 19.06.2010). This assistance is accounted as bilateral aid. Probably, assistance on a trilateral basis partly coincided with a term «multi-bilateral activities», used by the OECD. See. for example DAC Peer Review. Luxembourg. Paris: OECD, 2003. URL: http://www.oecd.org/document/28/0,3343,en_2649_34603_2502876_1_1_1_1,00.html (date of access: 19.06.2010).

The Concept for the Long-Term Social and Economic Development of Russia through 2020 approved on 17 November 2008 states that the Russian participants of external economic activity would be supported by tied loans and international development aid mechanisms for Russian goods and services promotion in the developing countries markets. The Concept for the Long-Term Social and Economic Development also provides for elaboration of a system of incentives, including financial, for foreign citizens study in the Russian institutes of higher education and exchange programs promotion for the development of economic ties with the countries participating in the joint educational programmes [13].

The importance of the emerging donors is caused not only by the additional resources they grant, but also by the experience of their own successful economic development and experience as recipients of development assistance, which they can share with the partner-countries. At the same time a diversity of experiences and practical activities of many new donors requires an effective system of coordination and defining a balance between coordinated multilateral and bilateral assistance. Emerging Donors in the Global Development Community. Agenda // New Partnerships in Global Development Finance. Moscow International Conference. February 17-18 2010. URL: http://www.mgdf.ru/files/G8_Emerging_donors_Agenda.pdf (date of access: 19.10.2010). Use of traditional ODA instruments as well as innovative financing instruments by the new donors should be welcome. According to the Russian Ministry of Foreign Affairs Russia regards innovative approaches to development financing as one of the priorities for international aid architecture strengthening. On the outcomes of the Development Cooperation Forum of ECOSOC, the official web site of the Ministry of Foreign Affairs of Russia, 2 July 2010. http://www.mid.ru/brp_4.nsf/0/A63EEA2FA4411851C325775400480D9A. However, so far use of innovative approaches by Russia is limited.

7.Spheres of development assistance

Current priorities of Russia's development assistance have been mainly formulated under the influence of Russian G8 Presidency in 2006. Energy, health and education have been put forward. These priorities and the OECD recommendations on higher concentration on limited development areas have been taken into account in the Concept of Russia's Participation in International Development Assistance. Some government representatives emphasize a priority of energy sphere «because normal development of health and education without access to energy is impossible». «A science of help». Interview of S. Storchak to Vremya Novostei newspaper // Ministry of Finance of Russia. 02.04.2007. URL: http://www.minfin.ru/ru/press/interview/index.php?id4=48 (date of access: 19.06.2010).

Cooperation for development is pursued by Russia also in such spheres as good governance. For example the Federal Service for Fiscal Monitoring (Rosfinmnitoring) helps several countries of the Commonwealth of Independent States to develop fiscal monitoring systems. Ibid.

Debt relief

Over the last few years, Russia mostly contributed by writing off debts of the developing countries, for example, within the framework of the Heavily Indebted Poor Countries Initiative. Given the limited resources and large debts under loans lent by the former Soviet Union, debt relief has been and continues to be one of the important areas of Russia's development assistance.

In 2003 Russian President said that Russia ranked first in the share of developing countries' debt relief to its GDP. In absolute value Russia ranked third after Japan and France. Speech at an official diner in the name of Lord Mayor of the City of London // Website of the President of Russia. 25.06.2003. URL: http://archive.kremlin.ru/text/appears/2003/06/47770.shtml (date of access: 19.10.2010).

At the G8 Gleneagles summit in 2006 Russia “committed to cancel USD11.3 billion worth of debts owed by African countries, including USD2.2 billion of debt relief to the HIPC Initiative.

In December 2006 the Russian Government decided to write off debts of debtors - participants of the Heavily Indebted Poor Countries Initiative that, reached the completion point before 31 December 2006.

As of 2007 6 eligible African countries responded that they are interested in this offer. These countries have some positive results in poverty reduction. They are Benin (debt owing to Russia - 11.75 million), Zambia (112.2 million), Madagascar (102.45 million), Mozambique (148.6 million), Tanzania (20.68 million), Ethiopia (162.8 million).

This scheme of debt relief provides for use of loan for development financing. Russia and a partner-country agree on the procedures of effective released funds usage. These funds can be used for the implementation of the projects in Russian priority areas. «A science of help». Interview of S. Storchak to Vremya Novostei newspaper // Ministry of Finance of Russia. 02.04.2007. URL: http://www.minfin.ru/ru/press/interview/index.php?id4=48 (date of access: 19.06.2010). Russia also participates in debt relief activities carried out by the Paris Club.

Precise information on debt relief is not available. In July 2008 Russian President said that “recently, we have written off debts, especially to African states and several others, that amount to about USD16 billion”. Interview with Japanese Media // Website of the President of Russia. 03.07.2008. URL: http://archive.kremlin.ru/eng/speeches/2008/07/03/1900_type82916_203527.shtml (date of access: 19.06.2010).

The report on results and main directions of the Ministry of Finance activities for 2010-2012 states that loans were issued by the U.S.S.R. on the assumption of political interests, on favourable terms and without analyzing debtors' capabilities to fully satisfy the debt conditions. The majority of the U.S.S.R. debtors are less developed countries. According to the Ministry of Finance as of 1 January 2009 11 countries (including 1 CIS country) have unsettled debt commitments owing to Russia. The Government aims at decreasing the number of debtors with unsettled U.S.S.R. debt commitments to one country in 2012. The conditions of debts adjustment are not disclosed [14].

Energy

Russian initiative to help develop energy infrastructure in rural areas of African countries was supported by other G8 members and is now realized through the participation in the “Global Village Energy Partnership”. Building of mini-power plants, mini-hydroelectric power plants, power lines for electric energy access in remote regions of African countries is carried out under this programme. Russia plans to contribute about USD30 million to thus programme over four years starting from 2007. A. Bokarev's statement to the information agencies // Ministry of Finance of Russia. 28.01.2009. URL: http://www1.minfin.ru/ru/press/speech/index.php?id4=7018 (date of access: 19.06.2010).