Whether blamed on Scott Brison’s retirement or the SNC-Lavalin affair, the revolving door of Trudeau Cabinet shuffles and resignations over the past months has heads spinning. A move that attracted little attention outside the development community was the departure of Marie-Claude Bibeau from the international development portfolio.

Bibeau’s appointment as Minister of International Development in Trudeau’s “Because it’s 2015” gender-balanced cabinet was a safe choice. Though a political novice, she has some professional experience in international development. Bibeau embraced her ministry and, by all accounts, thrived in the position.

Bibeau’s term will be closely associated with the Feminist International Assistance Policy (FIAP) adopted in 2017. Since that policy focuses on gender equality and the rights of women and girls, it is perhaps not surprising that Maryam Monsef, already Minister for Women and Gender Equality, was named as Bibeau’s successor as Minister of International Development.

The new minister has a grounding in feminist approaches in her existing cabinet role and experience with Canadian development efforts in Afghanistan. Still, the arrival of a new minister with a double portfolio for the very short period of time before the next federal election raises challenges for Global Affairs Canada and its aid program, including flattening the ministerial learning curve, capturing divided attention, and avoiding pre-election doldrums.  

Learning Curves

The aid program is a complex portfolio and presents a steep learning curve for most new ministers. While Monsef is well versed in the feminist approach of the FIAP, this does not necessarily mean she is prepared for the operational requirements of disbursing billions of dollars of Canadian aid.

Bibeau’s departure has no doubt pushed the aid bureaucracy into a frenzied preparation of briefing books and orientation sessions for Monsef and her staff. But this process comes at the worst time in the annual cycle of aid planning and programming: at the end of the government’s fiscal year, when millions of Canadian aid dollars must be approved and disbursed. The worst-case scenario of the unexpected change in minister at this time of year is that a steep learning curve immobilizes the year-end programming approvals, leading Canada to miss its spending targets and having to return aid funds to the treasury. Given lacklustre aid levels in recent years, any barriers to spending in a timely manner will further harm Canada’s reputation as a reliable aid partner.

Divided Attention

It remains to be seen whether one minister can give adequate attention to two portfolios. Though the feminist policy frameworks underpinning both ministries might make this simpler, the ability to physically be present for both portfolios simultaneously will be challenging. The new portfolio adds to Monsef’s existing Cabinet duties, so international development officials will need to deftly adapt to having a minister with less time and attention available to accomplish the same objectives expected of the aid program when it had its own dedicated minister.

Pre-Election Doldrums

The final challenge will be to ensure that the feminist agenda continues to unfold as planned. Sceptics might think that Monsef is little more than a caretaker minister to bring the aid program through to the next election. If this proves to be the case, the development community might be rightly concerned about what will be accomplished in the aid program in the run-up to the 2019 election. If Monsef does not want to make waves between now and a fall election, the risk of a period of doldrums for Canada’s aid program is high.

Budget 2019 did nothing to dispel this notion, with no new funds committed to the aid in the short term. Canada’s aid program will therefore probably remain in a holding pattern until after the election. Liberal supporters might hope that Monsef’s tenure will be an audition for the same position in the next government, but if she is not returned to cabinet, or – as is seeming increasingly possible – the Liberals are not returned to government, there will be a new Minister of International Development again, bringing the ministerial learning curve right back into the picture.

The recent cabinet shuffles will be remembered for much more than the departure of Marie-Claude Bibeau from the international development portfolio, but in Canada’s international development community, this is the change being most closely watched. If Global Affairs Canada reduces the ministerial learning curve, captures sufficient attention from an overburdened minister, and continues to implement its feminist agenda, the impact of the cabinet shuffle may prove trivial. To be sure, Monsef will play the pivotal role in making all this happen. Leaving Bibeau in this post until the 2019 election would have been a surer bet, but in politics, as in foreign aid, it seems like there is no such thing as a sure bet.

Liam Swiss is an associate professor in the Department of Sociology at Memorial University.

The post Minister of International Development and Multitasking? first appeared on The McLeod Group.

For decades development practitioners, including CIDA, have recognised the critical role of the private sector of developing countries in creating jobs for the poor.

We did not need the 2012 House Report to confuse the issue of strengthening the role of that local private sector with the promotion of Canadian offshore investment. Now, just as the very name CIDA is scratched from Canada’s international face to be replaced by the ugly acronym DFATD, there may be plans afoot to revive aid loans.

This seems to be a lose-lose option. Lending ODAable dollars to such as the IFC, the World Bank’s private sector arm, or as part of Canadian bilateral aid is not the sort of ‘innovative’ financing the world’s poorest need. It would not even meet the Harper government’s objective of helping the Canadian private sector. The only clear winner would be the institutions through which the money is channeled, giving them a competitive boost by ‘blending’ low-interest Canadian aid loans with their market borrowings.

Regardless, anxious to look more private sector-friendly, Canada is already test-driving aid loans, having abandoned them in the 1970s. Part of the reasoning then was to avoid re-creating aid debt in least-developed countries whose loans Canada had just written-off. Part was driven by a fiscally-conservative Treasury Board that judged it irresponsible for CIDA to record such risky loans as off-budget ‘assets’ that the Crown notionally expected to recoup.

Within the government’s new self-interested aid philosophy, it seems important to create privileged benefits for Canadian companies. This is hard to do while still respecting the ODA Accountability Act’s mandate of poverty reduction.

An IFC-type loan option would seem a poor choice. The World Bank’s own 2011 evaluation said IFC had largely failed to focus on poverty reduction.

The donor role is indirect. A IFC loan is untied and does not go to an offshore investor, but rather to local intermediaries, often an investment bank. There is no direct cash benefit to any Canadian company. The attraction to the foreign investor, whether Canadian or Thai, is more diffuse. The country gets a gold star for being open to reliable foreign investors. The IFC helps by checking out the institutional and regulatory environment viability of the country and the individual project. Cheap IFC financing can make the investment more financially viable, i.e. profitable for its private owners.

But why wouldn’t a Canadian company with a reliable local partner building, say, a hotel or a garment factory, simply take a tied loan from Canada’s own exporter-supporting agency, EDC or a private multi-national bank? Why muddy the water with a questionable use of aid money or the technicalities of borrowing from a local bank? And why risk breaking OECD understandings that ban trade subsidies?

Where is the benefit for the Canadian taxpayer in this complex process to leverage a presumably already viable foreign investment? Is the real merit for the Harper government simply cosmetic? One possible attraction is that it can use millions of dollars of tax-payer guaranteed loans, financed off-budget, to make it look as if helping private investors is now driving our development agenda.

But an IFC is hardly likely to wave the Canadian flag over its projects. Unlike today’s Canada, IFC cannot pick favorites, political or sectoral, especially given its international board which ranges from G8 giants and China to tiny African nations.

Key in the larger equation is the weakness of Canada’s private sector. Other than in extractives and banking, we have few internationally competitive companies seeking investment opportunities in developing countries. Many of the extractives, although legally resident in Toronto or Vancouver, are often substantially owned by foreigners. Trade Minister Ed Fast and the ‘T’ experts in the new DFATD are painfully aware of past failed attempts to increase that shallow pool of Canadian offshore investors.

Reversing this is critical to Canada’s future. But it needs a new breed of assertive entrepreneurs able to partner with the private sector in developing countries. This is hard! Too often success stories are short-lived, tied to subsidies or corruption. Giving ODA money to an IFC is not the answer.

So how might the new coherence-seeking DFATD combine both poverty reduction and broader Canadian private sector engagement? The answer may lie in reverting to old approaches. Success is not measured by the number of minor trade agreements signed. We might emulate countries like Sweden and Denmark by seeking market niches or new openings such as green technology. We need to re-establish a reputation for being serious about partnership rather than opportunistic, worse exploitative. Our too few, strong offshore investors already listen to local needs and work with emerging local entrepreneurs. Moreover, seeming dependence on DFATD, ‘T’ or ‘D’, does not impress prospective local partners.

It would help if we were seen as pressing for fairness in foreign investment, not privileged protection from local government regulations. The debate now is about greater transparency. This means no secret ‘beneficial ownership’ through offshore subsidiaries, fairer tax codes and transparent transfer pricing by foreign investors. These issues were all discussed at the recent G8 Summit, but sadly, Canada was amongst those arguing for delays.

What is certainly not needed is a new wave of aid loans. ‘Innovations’ designed to boost our offshore investments, rather than for enhancing poverty alleviation, are a false start.

The post Lending for Private Sector-led Development. Another false start? first appeared on The McLeod Group.