New openings and old problems of China's economic cooperation : global uneven development and stagnation in the Philippines

There has been a resurgence in activity by non-traditional donors (NTDs) since 2000. These flows of foreign development assistance (FDA) are a reflection of the global shift in production and income towards semi-peripheral economies, above all the People’s Republic of China (PRC). The PRC has also adopted its “peaceful rise” and “non-interference” policies with a strong emphasis on South-South cooperation. Some even foresee these changes as opening the space for more public-investment focused development policies, with NTDs providing ready access to capital with few conditionalities. Little attention, however, has been focused how these changes are already impacting in Southeast Asia. The PRC has now become the second largest source of FDA in the Philippines, funding major rail and other infrastructure projects and this trend is set to continue. The experience so far, however, suggests that the Philippine “soggy state” – where the state lacks autonomy from elite classes and processes that hinder development processes - has meant little benefit has accrued from the availability of concessional finance. Despite the rhetoric of “non-interference” in PRC policy, there is evidence that these FDA flows may indeed be aggravating processes of social and political exclusion.