Re-focusing Canadian aid: Much ado about nothing

By Rachael Calleja and Yiagadeesen Samy

As originally posted at Embassy.

The recent Canadian government announcement to boost the number of countries of focus for its bilateral development assistance from 20 to 25 will not make a big difference to its aid program. While the proposed change is laudable and, if implemented, could improve the effectiveness of Canadian aid by reducing fragmentation, we doubt this latest announcement will have any tangible effect.

Many will debate why the Democratic Republic of Congo, Burma, Benin or Burkina Faso have been added to the list of priority countries, or why Bolivia, Pakistan and Sudan are no longer on the list. But such a discussion is at best useless, and at worst counterproductive, because it distracts us from the real issues of aid fragmentation and effectiveness.

In fact, the parameters for choosing priority countries—based on their need, their capacity to benefit from aid, and their alignment with Canadian foreign policy priorities— are so broad that it is easy for anyone to justify why the 25 countries were chosen.

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Foreign Policy Coherence and Aid: More of the Same

In recent years, CIDA has been cited as one of the poorest international performers in fragmentation and policy coherence.  In 2008 Canada ranked as the second worst bilateral donor (following Germany) in terms of fragmentation in aid programming. Similar studies have shown that Canada ranks in the bottom 20th percentile for aid fragmentation amongst the largest 40 bilateral and multilateral donors.

One of the key challenges that historically threatened the coherence of Canadian aid policy was the inability of CIDA to focus on specific priority countries and sectors.  Over the past decade, Canada has shown some improvements towards focusing aid spending, with aid concentration in priority countries (as a percentage of total bilateral aid) trending upward, peaking at 47% in 2010.  However, in 2011, that number fell to 39%, roughly half of what the target was expected to be.  With the remainder of bilateral funding spread between 126 additional bilateral recipients, efforts to reduce fragmentation through channeling more aid to fewer priority recipients appear to have been limited by CIDA’s continued allocation of a large proportion of aid funds beyond the stated priority recipients; it will be interesting to see whether these numbers change over the next few years.

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Canada’s new aid policy: Responsibility to reimburse?

As originally published by iPolitics.

There has been a lot of discussion recently about the benefits expected to come from folding Canada’s development agency, CIDA, under the wing of Foreign Affairs. The new entity will be home to development, trade and foreign policy and likely will be called DFATD. Many pundits see the change as positive, anticipating gains in policy coherence.

Others have made the efficiency argument, foreseeing gains through the elimination of duplication. Still others laud the move as a shift toward “whole of government” engagement in the world, and as such the continuation of a process initiated under Paul Martin.

These are potentially valid arguments, but are all based on conjecture and untestable, given the lack of transparency in the current government’s foreign policy, which ranges from scant parliamentary accountability to minimal public engagement. Without a clear and publicly available framework indicating how revamped development resources are to be allocated and evaluated, it will be difficult to know if this new ‘mega-bureaucracy’ will have a meaningful impact along the lines its advocates claim.

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A Humanitarian Bailout?

The NPSIA blog post “Legal Liability and Humanitarianism” discussed the shocking but real possibility that humanitarian organizations may be held legally liable for the assistance they provide. Remarkably, an ever more shocking reality that humanitarians must deal with has been highlighted over the past couple of weeks. And, like legal liability, this issue has gone unaddressed in the academic literature. The issue being: humanitarian organizations with large aid footprints have run out of funds.

This is an issue that is largely separate from the much-discussed problem of humanitarian agencies having too little funding. The problems that result from a humanitarian organization having limited funding and the problems that arise from an organization running out of funds differ considerably. Limited funding leads to problems with project implementation. In contrast, running out of funds leads to the immediate suspension of aid as occurred with the UNRWA cash assistance program in the Gaza Strip earlier this month. Not only does it seem likely that such an action will further marginalize those on the margins but, as the Gaza case demonstrates, such an action may also lead to social instability, revolt, and the repeal of further assistance.

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We must be careful as a nation donating to fragile states

As originally published in The Ottawa Citizen, August 19, 2012

In the last decade, Afghanistan and Haiti have been the two largest recipients of Canadian official development assistance (ODA), receiving more than the traditionally large recipients of Canadian aid of the 1990s such as Bangladesh and China. Key reasons for this transformation in Canadian priorities were the 9/11 attacks and perceived need to remove the Taliban regime from power in the case of Afghanistan, and the forced exit of Jean-Bertrand Aristide in 2004, as well as the more recent earthquake in the case of Haiti.

Canada is certainly not alone in throwing large sums of money at these countries. Globally, Haiti has received $8.1 billion (U.S.) in aid from 2001 to 2010 while Afghanistan has received a staggering $36.5 billion, not to mention the billions more spent on security and diplomacy initiatives in Afghanistan and to a lesser extent Haiti. Nor are Afghanistan and Haiti alone in the category of countries classified as fragile. In its assessment on resource flows to fragile states, the OECD reported that approximately $47 billion (37 per cent) in ODA went to 45 fragile states in 2009.

Based on a 2012 fragile states report that we have just completed for the Canadian government, we question whether aid is having an impact in fragile situations such as Afghanistan and Haiti. In our report, Afghanistan ranked second only to Somalia — a failed state — in 2012 and has been in our top five for almost a decade. In fact, since 2001 there has been deterioration in key measures of Afghanistan’s governance, security and crime, economic performance, human development and even the environment.

In the case of Haiti, the situation was improving in the two years prior to the 2010 earthquake. In particular, improvements in the state’s capacity to provide a safe environment to its citizens and in the political sphere were, to a certain extent, offsetting the country’s poor economic performance.

However, the earthquake’s devastating effects mean that the situation in the country is beginning to deteriorate again. Specifically, our report shows increasing problems in governance, security and crime, human development, gender and the environment, and only a very minor improvement in Haiti’s economic performance.

Needless to say the results for both these countries are far from encouraging, especially considering the money their governments have been given. Examining the big picture allows us to draw two basic conclusions. First, we have clear evidence that Afghanistan is stuck in a fragility “trap,” whose situation can best be characterized as worsening, despite receiving global support over the last decade, with promises of billions more by the international community at the recent Tokyo Conference.

Second, we have evidence of volatility and quick reversal in the case of Haiti where rapid gains in the previous decade were quickly evaporated when the earthquake struck.

Given the difficult financial situation faced by many donor countries, global aid flows will not increase over the next few years and may even decline more than they already have. Canada will be no exception as the projected freeze to the international assistance envelope will mean that its aid to gross national income ratio will remain stagnant. It is essential now more than ever that our aid dollars be more effectively used and carefully monitored.

For that reason, having the right tools to monitor how donor money is spent must be a priority if Canada is to avoid another lost decade of aid spending. An effective donor program on fragile states must be linked more thoroughly to development planning through a three-step process.

First, detailed structured risk analysis, covering everything from governance and security to environment and demography, should be properly used by donor agencies. Most agencies work from different starting points and assumptions; by using a common set of benchmarks, misinterpretation, duplication and redundancies are avoided.

Second, this multi-sector approach should be demand-based and not supply driven. This means that agencies need to identify links between key causes of fragility and identifiable focal points of activity in which the donors must be engaged, not where they want to be engaged.

Third, these multi-sector risk assessments should be used constantly and we must consistently monitor and evaluate progress. The key goal is to determine if aid is having the desired impact and if course corrections are required.

David Carment is a fellow at the Calgary-based Canadian Defence and Foreign Affairs Institute and a professor of international affairs at Carleton University. He is editor of Canadian Foreign Policy Journal.

Yiagadeesen Samy is an associate professor of international affairs at Carleton University and a research associate at the Ottawa-based North-South Institute. Their work on failed and fragile states can be found at carleton.ca/cifp.

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