9. Reinvesting in Canada’s Foreign Aid Program

Reverse the decline in Canadian foreign aid

A mother who’s forced to choose between sending her children to school or turning them onto the street to beg in traffic faces an impossible choice. If her children get an education, they could break free of the relentless cycle of poverty.

But if they don’t beg in the street, they won’t eat. This is no hypothetical scenario. It’s a reality facing millions of parents in developing countries today.

Across the world, the poor aren’t some special minority group who will eventually reap the benefits of the trickledown effects of economic growth. In fact, half of the world’s population – or 3 billion people – live on an average of less than $2 a day.

Canadians want to change this harsh reality. Many volunteer or contribute to non-governmental organizations working to end poverty. Sending Canadian tax dollars to Southern countries is another important way in which we try to do it. It’s called Official Development Assistance

Official Development Assistance can make a tremendous difference to the lives of the poor.
It can help meet basic needs, such as education and health, provide opportunities
for people to help themselves, and promote basic human rights.
And progress is being made:
  • Since 1960, in little more than 35 years, the rate at which children are dying in developing countries has been more than halved;
  • The enrollment of girls in primary and secondary schools increased from 38% to 68% in the past two decades;
  • Aid-funded programs have immunized half the children in Sub-Saharan Africa against basic diseases, an increase of 20% since the 1980s.

Yet four decades of aid efforts haven’t reduced the number of poor. In fact, the number of those living in extreme poverty, (less than a $1 a day), is growing at an alarming rate. According to United Nations calculations, 1.3 billion people – or a third of the population of developing countries – live in extreme poverty, where providing for the basics of life is a daily struggle.

What’s more, the gap in income between the world’s richest and poorest has more than doubled in just 35 years. By 1994, the share of the richest 20% of the population in the global economy had soared to 86%, while the share of the poorest had shrunk to 1.1%, from 2.3% in 1960.

So why argue for spending more money on aid when evidence of progress is mixed?

There’s no single, or simple, explanation for this situation. The in common Agenda addresses many important issues that are perpetuating poverty. But another reason is that only a small portion of the aid money we spend in the name of the poor actually goes to meet their real needs.

In fact, one estimate for the early 1990s was that less than 35 per cent of Canadian government-to-government aid went to poverty alleviation projects. Excluding emergency food aid, less than 20 per cent of Canadian Official Development Assistance is spent on meeting basic human needs – supporting primary health care and basic education, providing safe water, sanitation, and family planning – programs that are essential to ending extreme poverty.

In particular, only a small part of Official Development Assistance has been directed to increasing people’s control over their lives, expanding their choices, or building on their talents and assets. Women constitute 70% of the world’s poor. Improving the design of aid programs to maximize women’s greater control over their lives is essential. Yet despite the importance of primary education for improving women’s lives and those of their children, donor governments, among them Canada, have yet to turn an agreed target of universal primary education for all by 2015 into detailed strategies to achieve this goal.

When aid is given effectively, it can and does work. To work, aid must be targeted
both to meet basic human needs, and to create genuine opportunities
for the poor to improve their situation.

Too often in the past, aid has gone more to strategic allies than to poor nations and poor people. Unfortunately, the end of the Cold War did not bring any greater focus to aid expenditures on ending poverty. Canadian commercial advantage and Canada’s diplomatic profile remain important criteria for assessing the choice of countries, sectors and strategies for Canada’s aid program. More than 30% of Canadian bilateral and multilateral aid is still tied to Canadian purchases, despite evidence that tied aid adds up to a 15% overpricing of goods and services.

And the expectations for aid are also expanding. It’s now expected to meet a wide variety of Canadian interests, from improving environmental practices in the South, to promoting Canadian investment opportunities in developing countries, to constructing conditions for peace in countries emerging from civil conflict. Added to little evidence of a strategic focus on poverty for aid, the limited collaboration in formulating Canadian policies across several government departments – CIDA (Canada’s aid agency), Foreign Affairs and Finance – has resulted in inconsistent policies with contradictory impact on the day-to-day lives of millions of the world’s poor people.

And the amount of aid is steadily declining. By 1998, Canadian development assistance of $2 billion will have reached a 30-year low, falling more than 40 per cent since 1991. As a measure of our generosity as a nation, Canadian aid dropped from 0.49 per cent of our gross national product (GNP) in 1991 to an estimated 0.27 per cent by 1998.

What’s Possible?

These depressing statistics mustn’t stop us from pushing for more and better-placed ODA. When aid is given effectively, it can and does work. But it must be targeted both to meet basic human needs, and to create genuine opportunities for the poor to change their situation through programs defined by citizens themselves and supported by government policies.

For example, aid has worked to make a difference in the educational opportunities, health and life expectancy of those living in developing countries. If all this was accomplished on less than a quarter of the global aid budget, imagine what could be achieved with 60 per cent or more of the aid budget invested in primary education, adult literacy, primary health care, clean water, and in expanding the participation of the poor in securing their rights and determining their well-being.

And imagine what could happen if women had access to land, credit, and training. We already know that an extra year in school for 1,000 women living in Pakistan was beneficial. Their wages increased by approximately 20 per cent, and 60 child deaths and three maternal deaths were prevented. The cost was only $30,000.

And imagine what would happen if people in developing countries could make their own decisions about whether to use aid to build rural roads or an airport hangar. That kind of local control could go a long way towards eradicating poverty.

While we should work towards reversing the decline in dollars dedicated to development cooperation, this isn’t enough in itself. What matters is how we use these resources.

Writing in the 1997 Human Development Report, James Gustave Speth says: “Poverty is not to be suffered in silence by the poor. Nor can it be tolerated by those with the power to change it.” Sustained international development cooperation – that promotes the basic rights of poor people – can eradicate poverty.

Adds Speth: “The challenge now is to mobilize action state by state, organization by organization, individual by individual.”

Canadian Centre for International Co-operation Archives – Agenda 9