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The Donor that came in from the cold: OECD-Russian engagement on development co-operation

William Hynes and Alexandra Trzeciak-Duval

IIIS Discussion Paper No. 450

Soviet, later Russian, relations with the OECD, notably its Development Assistance Committee (DAC), have oscillated over the decades, along with profound shifts in the world economic balance and in the relative strength of the Russian economy. During the Cold War, the Soviet Union rejected Marshall Aid but later sought to join the OECD. While the OECD could have been a place to pursue East-West economic interests and mutual benefits, political tensions limited the scope for collaboration. Towards the end of the Cold War, the Soviets sought increasing co-operation and this continued into the 1990s when the OECD played a key role in supporting the Former Soviet Union countries, especially the Russian Federation, and aiding their transition to a market economy. The Russian Federation has since become an accession candidate to the OECD, though this process has now been postponed because of political tensions related to Ukraine. This postponement does not preclude stronger collaboration in the area of development co-operation.

Development co-operation has been an area of both competitive and collaborative relations between the Russian Federation and OECD members. The Development Assistance Committee of the OECD has its origins in the United States inspired attempts to counter the perceived threat of Soviet communist influence through aid by expanding and improving the collective aid effort of the West. The DAC collected statistics on Soviet bloc development assistance, the accuracy of which was always disputed, and succeeded in promoting only limited in-country co-ordination between the Soviets and Western donors. During the late 1980s, this began to change as the Soviets struggled to maintain their development programmes and sought ever more co-operation. Thereafter DAC members became donors to the Former Soviet Union. Twenty years later, the Russian Federation straddles a unique middle ground between developed and developing countries and has a re-emerging aid programme. This paper reviews Soviet/Russian-DAC co-operation and suggests a twenty-first century Russian-DAC relationship that will enhance development outcomes, at long last keeping a re-emerging donor out of the cold.

Key words: Development co-operation, development assistance, aid, ODA, DAC, emerging donors, Soviet aid, Russian Federation, East-West, Cold War, Ukraine

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Last updated 28 August 2014 by IIIS (Email).