12. The Changing Aid Landscape and the Political Economy of Development in Southeast Asia

Recent changes in the aid landscape in Southeast Asia—particularly China’s growing role as a donor—have empowered predatory, populist and authoritarian elites by allowing them to reduce aid from traditional donors in favour of aid with fewer policy or institution-related conditions attached or that otherwise better fits with their political priorities. This undermines traditional donors’ efforts to promote neoliberal and liberal-democratic reform. However, this shift is not as dramatic as some contend. Concern about the impact of Chinese lending on government debt levels induces caution among many Southeast Asian governments, and China has backed some liberal policy and institutional reform initiatives, meaning that its agenda is not always at odds with those of traditional donors.