McLeod Group Blog, March 21, 2018
The initial reaction to the February 27 federal budget was “two cheers for development,” with the announcement of an addition of $2 billion over the next five years to the International Assistance Envelope (see our previous blog). Now that the excitement has died down, and since the budget is as much a policy statement as a fiscal document, several questions are emerging. These questions are worth examining in light of the government’s claims of “global leadership”, an expression used often in the budget document.
For instance, what is the new International Assistance Innovation Program and what does it hope to achieve? The budget document describes this mechanism as providing “greater flexibility for financing arrangements and partnerships.” But the government also just launched a Development Finance Institute, as part of Canada’s effort to jump on the international bandwagon to find private pockets from which to draw funds for international assistance. So just what objectives are each of these mechanisms to achieve, and why the duplication? What role will the Export Development Corporation play?
Then there’s the proposed Sovereign Loans Program, which is described as diversifying the tools Canada has to engage partner countries. It will require countries receiving this form of assistance to pay it back. Those with memories of the 1980s and 1990s will remember the efforts devoted to managing the excessive debt of developing countries through the Heavily Indebted Poor Countries (HIPC) Initiative, which resulted in a significant amount of sovereign debt being written off. Are donor countries headed down the same road, 20 years later, and is Canada scrambling to be one of the gang? It looks like a case of “been there, done that, and forgot the lessons.”
Both programs will come from existing unallocated resources, rather than from the increase to aid budget. This suggests that there is a lot of money in the system which has not been committed to programs and projects, which supports the criticism that Canada talks a good line but is mighty slow to deliver. Will the new programs improve that performance? How will these programs put additional resources in the hands of women, in keeping with the goals of the Feminist International Assistance Policy?
It seems that rather than focussing on true official development assistance and ensuring that attention is given to effective aid reaching the poorest, especially women and girls, Canada is multiplying the number of tools it has and putting its energy into the bright and shiny new ones. Nonetheless, there is considerable evidence that support to building capacity in developing countries is an essential investment for reducing poverty, addressing gender inequality and strengthening resilience to deal with climate change. There is little evidence from the budget that these objectives will receive the funds necessary for Canada to play its part.
Returning to the issue of “global leadership”, as preparations intensify for the 2018 G7 heads of government meeting, in Charlevoix, Québec, it is useful to look at how Canada compares with the other countries around the table in terms of commitment to foreign aid. In 2016, the last year for which data are available, Canada spent 0.26% of its gross national income on official development assistance. Britain spent 0.7%, Germany 0.7%, France 0.38%, Italy 0.26%, Japan 0.20% and the United States 0.18%.
We want to give credit where it’s due. Canada is speaking out clearly about feminism and development cooperation and has issued an important policy statement to this effect. But global leadership means putting money where your mouth is, showing real commitment to delivering on the principles you articulate. Canada isn’t there yet. Shuffling resources around within the existing international assistance envelope and creating new mechanisms with fancy labels won’t do it.
If Canada is going to lead, there is a lot of catching up to do first, even to reach the same level as France, its fellow G7 country. Bon courage!