Imagine this: you come home one evening to find that your father has decided to combine your Facebook account with your two older brothers’. He says that this will achieve a more coherent family image. You can still post whatever you want, just as long as everyone else is okay with it. Also, since your brothers are older, they’ll get to spend more time on the account than you do.
It sounds ridiculous, but this is pretty much what has happened to Canadian International Development.
Most rich countries have a government department set aside to manage their aid and humanitarian budgets. There’s USAID, the UK Department for International Development, and the Japan international Cooperation Agency. Up until recently, Canada had one too: CIDA, the Canadian International Development Agency.
I use the term “recently” quite loosely, because it was two years ago that the Harper government announced that CIDA would be “merged” into a department along with Foreign Affairs and Trade, making a new department: DFATD, the Department of Foreign Affairs, Trade, and Development.
As luck would have it, the day after this announcement was the Waterloo’s annual International Development conference. Ironically, the theme for the event was The Future of Aid: New Models of Cooperation. I sat in on a session on public-private partnerships, where the speakers pointed to the need for Canada to align its activities abroad. Essentially, they argued that Canada can’t invest fifty million dollars in a pit mine in Angola and five million dollars in an aid program and expect Angolans to think Canadians are benevolent people.
In the panel afterwards, conversation quickly turned to the already infamous CIDA merger. There was a gloomy atmosphere in the room. One panelist summed it up: “This is the beginning of the end”
Being the prententious first year student that I was, I raised my hand and asked “You guys all just talked about how Canada needs to align its aid with things like trade and foreign policy. Couldn’t this merger be chance to do exactly that?”
I felt pretty clever. Mr. Doomsday stopped for a second, “That’s a…nice…way to put things”.
In the weeks after the announcement, many weighed in with their opinions. This video sums it up well. Some saw this as the demise of Canadian development, with aid becoming a pawn for foreign policy objectives. Others were positive, highlighting the new legal mandate for development work and the possibility for more aligned international cooperation. UOttawa’s Roland Paris was more balanced, highlighting the opportunities but calling into question the idea that development and foreign affairs could play together nicely.
It’s been two years since the brouhaha died down, and I’m curious again. What has happened to aid under DFATD? Early warnings were not very positive. The keynote speaker at our conference, a scholar at the world renowned North South Institute, lost her job within six months of the merger as the think tank closed when the government opted not to renew funding. I went through numbers, and the preliminary insights aren’t very positive.
Colloquially known as “aid”, Official Development Assistance counts the billions of dollars that rich countries send to poor countries. This data is different whoever you ask, and since the OECD data for 2014 isn’t out yet, I looked through the last ten years of Canada’s departmental budget reports.
We see the budget peak in 2011, stay relatively steady in 2012, then start to drop in 2013 and 2014, right when CIDA was absorbed into DFATD.
Now, this may be a little bit unfair. The post-2012 drop could’ve been due to a slowdown in the Canadian economy, or maybe aid levels dropped around the world. To analyse this, we usually look at the amount of aid given as a percent of a country’s entire income (ODA as a % of GNI). This time the lack of data on 2014 is frustrating, but we can still get an idea of what’s been happening around the world:
As you can see, Canada (yellow) takes a dive after 2012, while at the same time the rich country average (bright green) increases. I excluded the US because they did decline slightly during the period in question but the excuse “Hey, at least we’re better than the US” is getting pretty lame.
How about the rest of the world? For reference, in 2005, all the leaders of the rich countries decided to give 0.7% of their income as aid. You can see that as a whole (bright green), we aren’t doing too well. The UK reached 0.7 for the first time in 2013, and fairly comparable Aussies actually passed us. It’s too soon to make any definitive judgements, but while the rest of the world increased their aid in 2013, Canada cut its aid budget significantly.
Breaking down the numbers
“Now, hold on” you might say, “wasn’t this whole merger thing supposed to make aid more efficient? Shouldn’t a dip in the numbers be expected with a big merger like this?”
That’s a tougher question, and there’s no cut and dried answer. But the question that I think we can find some insight into is: Is Canada’s aid becoming more effective or more strategic? If it is becoming more effective, funding better programs in the highest needs areas, that’s great. However, it’s possible that aid is becoming a tool for foreign policy, used to incentivize foreign governments.
Let’s look back at the data. Here, the Canadian International Development Platform, a project funded by the NSI (before its demise) is extremely useful (click for interactive).
On the far left, we again see the large drop in Canadian aid after 2012. However, the middle graph shows that this drop was not felt equally by all aid receiving countries. We see that low (purple) and lower middle-income (green) countries haven’t lost any aid, and upper middle-income countries (pink) saw an increase in aid! While it’s hard to judge where “uncoded” (brown) money went, the plummeting orange line leaves little to the imagination. Almost the entire drop in Canadian aid has been borne by the least developed countries. That means that while countries like Jordan and Thailand have had an increase in funding, countries like Haiti and the Democratic Republic of Congo have been losing out! The chart on the right hammers this home: spending on Africa and Latin America has decreased at the expense of spending on Asia.
This floored me, but it is still not definitive. We’ve seen that aid has decreased, at the expense of the poorest. But we still need to find out why. Remember, CIDA was folded into DFAIT, the Department for Foreign Affairs and International Trade. Does the new distribution of aid reflect trade/foreign policy objectives?
The data from the CIDP is a bit harder to parse here, but suffice to say that countries with lots of grey (trade) are more important. The first set of charts show that Canada trades significantly with lower middle income countries and hardly at all with low income countries (High income countries were excluded for better comparison between the remain categories).
When we look at regions, a similar pattern emerges. Asia tops the charts and Africa is almost negligible. Latin America and South Asia don’t fall quite so neatly into our expectations, but I would suggest that geography, rather than economics, has explanatory power here. Overall, we see that trade with emerging economies (Asian, Middle income) is increasingly important to Canada, and that is exactly where aid has been going.
In an ideal world, aid is given to countries that need it the most or can use it best. The reality is otherwise, that strategically important get the money. Let’s look at two countries that are strategically important to Canada for security reasons: Afghanistan and Iraq.
We’ve already seen that over the last decade in aggregate, aid to least developed countries was increasing, then dropped in 2013. Here we see the opposite! Aid to Afghanistan and Iraq was decreasing, but then jumped in 2013! Just like we saw when we looked at trade, development priorities have been sidelined in favour of economic and geopolitical interests. I don’t have time to look into it now, but I suspect that looking at Canadian mining interests would also yield some insight into who gets what in Latin America and Southern Africa.
To close, I want to reiterate two very important things. First, right now the reality is not so bad. Canada is still giving billions in foreign aid to people who desperately need it. Also, since the merger, we only have two data points to extrapolate a trend from, which is hardly fair. It’s really too early to make any judgements.
At the same time, the trends that we do see are alarming. If we wait 10 years so that we have really solid statistics on Canadian aid policy, it will be too late. The return of CIDA is extremely unlikely, but that doesn’t mean Canadian aid is doomed.
Next month, world leaders are meeting in Addis Ababa, Ethiopia to talk about this exact issue: Financing for Development. The initial “zero-draft” of their outcome document was just published, and beyond advocating increasing aid to 0.7%, it includes an entire chapter on trade (ch. D), and highlights the need for aid to go to the least developed countries (s. 8). Canada’s comments on the document seem positive, generally supportive of the focus on sustainability.
This could be a turning point for Canadian aid. We can ask policymakers to align their foreign affairs, trade and development policies in ways that benefit the least developed countries. This cannot remain the responsibility of bureaucrats, we must add our voice to those calling for justice.