Foreign aid and press freedom: A history of suspicions and silver linings

The NewsClick searches have left public opinion cleaved between the excessive nature of the police action and suspicion surrounding allegations of Chinese funding. The Indian media, too, seems to be a divided house, with one section trying to portray journalists linked to the portal as “Chinese Jaichands”.

Though the Indian regulatory framework allows foreign funding in the news media industry (more on that later), at the heart of the case against NewsClick is the portal’s alleged use of foreign funds to allegedly peddle “false narratives” against India and in favour of its geopolitical rival. 

NewsClick has denied all the allegations against it, including that it ever received funds or instructions from any Chinese entity. And many have alleged that authorities have only deployed a false case to crack down on the news outfit seen as critical of the Narendra Modi government. 

Meanwhile, the New York Times, which had first put out a report suggesting NewsClick was part of a Chinese propaganda campaign, has now said that it would “find it deeply troubling and unacceptable if any government were to use our reporting as an excuse to silence journalists”.

But NewsClick or its journalists are neither the first nor the last to be subjected to such accusations. 

Foreign aid, growth, and suspicion

Scepticism surrounding foreign funds can stifle global cooperation, deter genuine investors, and impede international aid and development efforts. Foreign Direct Investment, after all, can spur growth, create jobs, and bring in advanced technologies. Especially for small and independent media outfits, aid from foreign entities could go a long way in giving a fillip to fact-based investigative journalism. The OCCRP and the Global Investigative Journalism Network are examples, with several foreign donors.  

But while the free flow of capital could generally be viewed favourably in a globalised economy, there remain concerns about foreign investments in the media, even when foreign entities are minority stakeholders.

When they are not an excuse to crack down on the free press, such anxieties stem from three primary areas. One, the apprehension of potential bias, the fear that foreign-owned media might present news with a bias favouring their foreign investors’ interests. Second, a perceived risk to national security, with anxieties about foreign governments using media investments as tools of propaganda or influence. And finally, an ostensible threat to cultural integrity; that foreign ownership could misrepresent local culture and values.

Suspicion surrounding foreign funds is primarily rooted in historical experiences and the complexities of geopolitics. Not without example in the ancient and medieval eras, when the mass media was absent, such anxieties had peaked in the last century during the two World Wars and the Cold War. 

In 1987, American academic John M Rothbeg had written about three models to study foreign investments. “The first, the Trojan Horse model, regards foreign investments as a means for controlling host states. The second, the Scapegoat model, treats foreign investors and their home countries as targets to blame for the social and economic ills found in underdeveloped hosts. The third, the non-Foreign Entity model, sees foreign investors as attempting to appear as domestic, rather than foreign, firms, with effects on foreign policy being the result of the interdependence between the host and home states that is created by foreign investments.” 

And now, in the age of popular authoritarianism, isolationism, and artificial intelligence, these suspicions have found renewed vigour as new power blocs jostle against the tattered remains of the globalisation narrative.

Philippines and Russia

In the Philippines, those in support of President Rodrigo Duterte have accused sections of the independent press, which receive foreign funding, of being part of a conspiracy to oust the nationalist president. These include the Maria Ressa-led Rappler, Vera Files, Philippine Center for Investigative Journalism, and MindaNews.

Responding to such accusations in 2019, Sheila S Coronel, the co-founder of the Philippine Center for Investigative Journalism, pointed out that what was happening in Philippines was straight out of a Russian playbook. “In 2012, Russia passed a law that branded certain NGOs as ‘foreign agents’ simply because they received foreign funding. In 2015, Putin signed an even more restrictive law that would allow the government to shut down foreign-backed groups it – and no one else – deemed ‘undesirable’. The Putin playbook – aimed at crushing critical voices and silencing civil society – has been used in several other countries, including Hungary and, recently, Brazil.”

Australia

In Australia, whose relations with China have seen a marked decline over the last decade, there have been anxieties surrounding Chinese influence on the Australian press, from WeChat to content syndication deals.

In August, public broadcaster ABC put out a report headlined “China is trying to buy influence with media in the Pacific as it aims to strengthen its presence in the region”. It was based on an OCCRP investigation into local paper Solomon Star. “Concerns have been raised about foreign influence in Pacific media after it was revealed Solomon Islands' longest-running newspaper received funding from China in return for favourable coverage,” read the ABC report.

But Alfred Sasako, Solomon Star’s editor, told the OCCRP that any suggestion it had a pro-Beijing bias was “a figment of the imagination of anyone who is trying to demonise China”. He said the paper had tried unsuccessfully for more than a decade to get funding from Australia.

Meanwhile, Chinese migrants in Australia, forming around 2.3 percent of the total population, complain that Australian media has fuelled suspicious attitudes towards them. 

A survey by the Australia-China Relations Institute in August had noted that several Australian news outlets and politicians tried to differentiate the Communist party of China from Chinese Australian communities. But 59 percent of survey respondents said they were still worried despite this distinction because of “excessive negative reporting”.

In 2020, several newspapers part of the Nine Entertainment group had quit carrying a China Daily supplement after the non-renewal of a deal – amid a standoff between the two countries over the pandemic.

United Kingdom

In the United Kingdom, the acquisition of The Evening Standard in 2009 and The Independent in 2010 Lebedev Holdings – founded by Alexander Lebedev, a former KGB agent and a Russian oligarch – was frowned upon by critics. Some hailed it as investments that saved the papers from potential financial collapse, but many feared the implications of such ownership.

Evgeny Lebedev, Alexander’s son and a prominent figure in the UK’s media and social circles, declared his commitment to the independence of the newspapers' editorial teams. However, the papers’ balance sheets have shrunk. One of them, The Independent, in fact has been reduced to the digital version, albeit with some credibility and traffic.

As the Russian war in Ukraine goes on, the UK government has raised the pitch for sanctions against entities linked to Russian president Vladimir Putin. After reports that security services had raised concerns about Evgeny being made a peer – granted membership of the House of Lords – in 2020, the Russian-British businessman declared that he was “not some agent of Russia”.

Boris Johnson, as the UK PM, had pushed for Lebedev’s membership. His spokesperson told the Guardian, “Lebedev is a British citizen. He has invested in British journalism and has extensively criticised the Russian regime. It is not right to judge people on the basis of their country of birth or the sound of their surname. This is a tiresome and xenophobic campaign.”

But many others in Britain take the claim that Lebedev has been critical of the Putin regime with a pinch of salt. Several editorials under his bylines were seen as soft on Putin after the Russian annexation of Crimea.

Lebedev’s case is very different to NewsClick’s, where the NYT report and the Delhi Police FIR have accused the Indian news portal of taking inputs from a US millionaire, Neville Roy Singham. 

Meanwhile, NewsClick has denied all the charges. One of its investors even put out a statement saying that “none of the principals of PSF or WMH, including myself, have ever influenced, guided, or directed the journalistic work of Newsclick”. It added that “it appears that much of the basis for this action by the Indian government stems from a slanderous article that was published by The New York Times on August 5, 2023”.

In India, a dull market amid domestic suspicion, global slowdown

India has seen a greater control on foreign funding of domestic entities in recent years, especially NGOs and religious organisations. Behind the suspicion is a perceived threat that such foreign-funded entities may be detrimental to national interest or affect the security, strategic or economic interests of the state. However, this argument is straight out of the British Raj playbook to curb civil freedoms, even as political parties are allowed foreign funds through opaque electoral bonds.

Amid such anxieties, a global economic slowdown, and the Covid impact, foreign direct investments in the information and broadcasting sector are nowhere near the pre-2021 mark, suggests data part of the 2023 report by FICCI-EY.

FDI in India’s media sector is governed by the consolidated FDI policy, which the Department for Promotion of Industry and Internal Trade periodically updates.

The limit varies depending on the media segment. In the print sector, FDI up to 26 percent is allowed with government approval for news and current affairs. In the broadcasting sector, up to 49 percent FDI is allowed under the government route. For uplinking of news and current affairs channels, FDI up to 26 percent is permissible, with government approval. The Ministry of Information and Broadcasting and the Telecom Regulatory Authority of India have a say in regulation and tariffs.

While the FDI policy didn’t address digital media until 2019, by December of that year, it allowed up to 26 percent FDI for uploading or streaming news via digital media with government approval.

Meanwhile, major global players like Netflix, Amazon Prime, and Disney+ have established a strong presence in the country, leveraging localised content and partnerships with Indian studios. Additionally, large media corporations are strategically partnering with or acquiring local entities, signalling their long-term commitment to the Indian market.

The India of this decade is far from the early liberalisation years in the 1990s, when the Left and several media associations had resisted the idea of foreign players entering the news space. The government did allow FDI, but only permitting foreign entities a minority stake. The press has always been Indian.