Government of Canada

Foreign Affairs, Trade and Development Canada

www.international.gc.ca

A New Effective Approach To Canadian Aid

Speaking Notes for the Honourable Beverley J. Oda Minister Of International Cooperation at the Munk Centre for International Studies

May 20, 2009

TORONTO

Introduction by Janice Gross Stein, Director of the Munk Centre for International Studies at the University of Toronto.

Thank you for that kind introduction Janice.

A few years ago, a prominent economist, William Easterly, wrote that there were two tragedies afflicting the world's poor.

The first one is, sadly, all too familiar: the extreme poverty that affects the lives of billions of people around the world.

The wasted potential, the violence and misery of daily existence.

The millions of men, women and children who die from preventable diseases every year.

The second tragedy is that the has West spent $2.3 trillion on foreign aid over the last five decades and still has not managed to get twelve-cent medicines to children to prevent half of all malaria deaths or to get four-dollar bed nets to poor families.

My purpose here is to talk about how Canada is going to lead the world in ending this second tragedy of ineffective aid, so we can end the first tragedy of extreme poverty.

What I will talk about is not a plan to increase aid flows, although Canada has certainly done its part and more in that regard.

What I will talk about is not something that aims to please Irish rock stars.

But what I will talk about, plainly and simply, is how we are going to make Canada's aid work better.

How we will make our aid as effective as we can. How we can genuinely help the world's poor.

Making aid more effective has always been important, but particularly so in the current climate of economic crisis.

Until now, the global economic and financial crisis has barely touched the developing world.

The International Monetary Fund, however, projects that the outlook for developing economies is declining sharply.

This will jeopardize important gains that have been achieved over the past decade.

If we don't act quickly and smartly, more children will die of preventable diseases; many will leave school; the most vulnerable will suffer permanent damage from malnutrition and hunger; and millions of people will lose their jobs.

According to the latest forecasts, the slowing of economic growth will not only keep the poor from getting wealthier, it could also drag down another 53 million more people into poverty.

The World Bank estimates some 40 low-income countries are "highly vulnerable" since they will likely experience less demand and lower prices for their commodities, as well as less foreign direct investment.

Clearly, foreign aid is going to be part of the solution to the impact of the economic crisis in the developing world.

And I can assure you that Canada will keep doing its share to help those in need.

Let me give a few examples.

Our Government is on track to double international assistance, with a planned budget of 5 billion dollars annually by 2010-2011.

Furthermore, we have now met our G8 commitment of doubling aid to Africa-bringing the total to $2.1 billion for this year.

And we have made multi-year pledges to support development in the Americas, Eastern Europe, Africa, the Middle East and Asia, including Afghanistan.

Most importantly, and this is sadly not true of all countries, Canada lives up to its commitments.

When this government makes a pledge, it delivers on it.

But the other effect of the economic crisis is that Canadians, more than ever before, expect their tax dollars to be used in the best way possible.

They want to know that, as we increase the amount of their money we spend on aid, it is making a difference in the lives of people who need it.

They want to see real outcomes and clear results.

What's the key to making aid work better-to aid effectiveness?

Efficiency to squeeze the most out of every aid dollar;

Focus and priorities to maximize impact and results; and

Greater transparency and accountability so that Canadians see how their tax dollars make a difference in the developing world.

When the Prime Minister appointed me Minister of International Cooperation in 2007, he gave me the mandate to make our aid work better.

Indeed, our Government has clearly committed to make Canada's international assistance more efficient, more focused, and more accountable through federal budgets and direction in Speeches from the Throne.

Armed with clear direction, I have made greater aid effectiveness my top priority.

I want to make sure our aid makes a real difference in the lives of those living in poverty.

So let me now chart the path we've been on to make our international assistance more effective.

I'll start with how we're making our tax dollars work harder through greater efficiency.

For decades, it has been common practice for donors to give their aid with strings attached.

Tied aid was as much about helping ourselves as it was about helping those living in poverty

As recently as last year, half of Canada's food aid had to be bought in Canada.

And more than one-third of our other aid was tied to the purchase of goods and services from Canadian suppliers.

This government is proud of Canadian Agriculture. Sometimes, however, it would be cheaper to buy food locally than to ship it across the world from Canada.

Sometimes, local expertise would be just as good as in Canada, but at a lower cost.

Tied aid meant that we got less aid for our dollar.

In fact, the OECD estimates that tied aid makes developing countries pay up to 30 percent more than they need to-35 percent in the case of food aid.

This wasn't fair to them, and it wasn't the kind of efficiency Canadians demand from us.

So, in April 2008, I announced that Canada's food aid would immediately be fully untied.

Instead of sending food, we now provide cash to agencies such as the World Food Programme, which then buy the right food at the best prices in areas closest to the hungry.

The Executive Director of the World Food Programme, Josette Sheeran, thanked all Canadians for this action, and called the Government one of its "most secure and creative partners on the frontlines of hunger."

We deliver what we commit to, and we get real results.

Following the same logic, I also announced, last September, that we will fully untie all aid by 2012-13.

Not just food aid - this will extend to all good and services needed in our aid work.

Aid spending isn't the only way we are becoming more efficient.

In our own operations, we are taking 15 percent of CIDA's headquarters staff, putting them in the field, and giving them more responsibility and flexibility.

It means that our people will be closer to our partners on the ground, that they will be better able to assess local needs and develop more timely and effective responses.

It means a shift away from grand plans concocted in Ottawa, to realistic solutions developed locally.

And that means our aid will get better results and be more effective.

Being more effective also means concentrating our resources for greater impact.

That brings me to our second principle of aid effectiveness: achieving greater focus.

For far too long, Canada's bilateral aid—currently 53 percent of CIDA's total aid budget—was spread too thinly, among so many countries and themes that it was hard to see it making any difference at all.

We set out to change that.

In February, I announced that CIDA will invest 80 percent of bilateral resources in 20 countries of focus.

We chose those 20 countries based on their real needs, their capacity to benefit from aid, and their alignment with Canadian foreign policy priorities.

To ensure consistency, any changes to the list of 20 countries will now require Cabinet approval.

In other words, CIDA's priorities will be long-lasting and strategic, not driven by the headline of the day.

As I have noted in the past, other countries will continue to receive Canadian aid, in various ways—through humanitarian assistance for example and through CIDA's partnership branch that support the work of Canadian NGOs in many countries.

The difference is that we will be focusing our aid much more than ever before.

And since we can't be attempting to meet every need in any one country just by ourselves, we also need to look at the thematic side of our aid.

Up until now, our aid has been scattered across literally dozens of different activities, driven by decades of political and bureaucratic fashions both within Canada and in multilateral agencies.

Being thinly spread, our money hasn't had as much impact as it could or should.

We need to focus our aid thematically, just as we did geographically.

And so today, I will share with you the next steps we are taking to better focus Canada's aid.

We have established three priority themes that will guide CIDA's work going forward: increasing food security, stimulating sustainable economic growth, and securing the future of children and youth.

Over the past few years, the food crisis has captured the world's attention.

The FAO estimates that the number of undernourished people in the world has increased by 75 million in 2007 and 40 million in 2008, largely due to higher food prices

Two-thirds of the of the 963 million suffering from malnutrition and hunger live in Asia, one in three people in sub-Saharan Africa are chronically hungry, and high food prices has increased the number of hungry people in Latin America and the Caribbean to 51 million.

While food prices have stabilized of late, they remain high and will likely continue to fluctuate.

What's more, the structural causes of the crisis-including low investment in agricultural production and an emphasis on exports-have not gone away.

This is critical because the World Bank estimates that GDP growth from agriculture benefits the incomes of poor people two to four times more than GDP growth in other sectors of the economy.

Ready access to food is a fundamental need for all people.

Without adequate supplies of food, development is impossible.

And so CIDA is placing high priority on initiatives that increase access to healthy and nutritious food, whether it be rehabilitating degraded farmland, introducing agricultural techniques that are environmentaly responsible or distributing micronutrients.

Given the power of economic growth to fight poverty, and the risks posed by the current economic crisis, our second thematic priority is to stimulate sustainable economic growth.

Countries in Asia, Latin America, and in Africa, have shown, over and over again, that growing the economy is the best way to help people lift themselves out of poverty permanently.

We will support initiatives that seek to increase the growth rate of an economy, particularly through the private sector, which generates nine out of 10 jobs in developing countries.

Skills training, microcredit, and properly functioning commercial frameworks are all part of promoting economic growth, as is ensuring that the environmental impact of this growth is minimized.

With our third priority theme-securing the future of children and youth-we are taking aim at one of the most appalling tragedies of our time: the deaths of ten million children a year from preventable diseases.

Ten million children who would be alive, each year, if only they had access to 12-cent medicines and four-dollar bednets.

Our government has done much to help prevent more children from dying each year.

We have contributed over $105 million to the Canadian-led Initiative to Save a Million Lives to keep children healthy.

We have made polio vaccination one our signature projects in Afghanistan, and our goal is to eradicate it by the end of 2009.

We have given over $700 million to the Global Fund to fight AIDS, Tuberculosis and Malaria and $200 million to the Stop Tuberculosis Partnership to extend TB treatment further than ever before.

But we need to do more… And we will do more.

Keeping children alive is only part of the equation; we also want them to grow and prosper.

Although child mortality rates have decreased by 30 percent in developing countries since 1990, nearly 10 million young children continue to die each year - forty percent of child deaths occurring among newborns.

We will do this by such means as promoting women's health to reduce child mortality rates and providing children with basic quality education and training so that youth have the skills to engage meaningfully in their communities.

This is particularly important now, when 67 countries are experiencing so-called youth tsunami, where up to 60 percent of the population is under age 30.

Through 2020, some of the world's poorest and often most politically unstable countries—including among others Afghanistan, Pakistan and Colombia—will have the largest youth populations and in many developing countries, children (under 18 years old) currently make up more than 50 percent of the total population.

These three themes will be core for my department, CIDA. Looking at the Government as a whole, we will also use our aid money on two complementary themes. These foreign policy themes are to promote democracy and ensure security and stability.

Democracy is not a luxury of the rich, nor is it the inevitable product of economic growth.

Democracy must be actively promoted within societies, and, once established, must be guarded with eternal vigilance.

And democracy is not a theoretical abstraction, or a Western conceit.

Democracy is an essential component of development, and democratic values are fundamental to Canadians who are worried about the increasing number of failed and failing democracies in the world.

This is why our government has committed to the creation of a new Democracy Promotion Agency.

And as we have seen in Afghanistan, there can be no development without security and stability.

One billion of the world's poorest people currently reside in states where attempts to improve their lives are disrupted due to crime, violence, insecurity, and insurgency.

Ensuring security and stability is of the utmost importance and Canada's response will build upon its engagement and lessons learned in countries like Afghanistan, Haiti, or Sudan.

Our aim is to ensure that the basic needs of the individuals are met while helping countries develop the capacity to self-govern.

One final word on our focus: we cannot effectively implement these bilateral and thematic priorities while ignoring governance, the environment and equality between men and women.

No longer will these critical considerations be hived off into silos of their own and put at the forefront once in a while for political consideration; they will from now on be integrated into everything we do.

And of course, we will also continue our work to promote freedom, human rights and the rule of law.

I've spoken about the first two principles of our aid effectiveness approach: greater efficiency and greater focus.

I would like to end now with a few words about the last principle: accountability.

In 2006, Prime Minister Harper introduced the Federal Accountability Act to make the federal government more accountable to Canadians.

In that spirit, we are determined to strengthen monitoring and evaluation of our aid program.

For example, we will engage independent auditors to measure results.

And we are inviting people from the outside to sit on CIDA's internal Evaluation Committee.

Accountability is also about providing good information to Canadians.

So in addition to reporting annually to Parliament, I asked that CIDA, from now on, produces a "Development for Results Report" that will show Canadians how their tax dollars are making a difference.

We will do our best to communicate meaningful results, and to be open about the setbacks that sometimes thwart our best intentions.

Our Conservative Government made a promise to Canadians.

We pledged to make Canada's international assistance program more efficient, more focused, and more accountable.

In short-more effective.

We have delivered on that commitment by untying aid… through greater bilateral and thematic focus… and by increasing accountability.

Now, I know that not all of these measures will be popular.

There will be those who will complain that we aren't supporting this initiative or the other.

But setting priorities is, fundamentally, about making choices.

Our government believes that Afghanistan, Haiti and key countries in Africa and the Americas are important to Canadians and need our support.

We believe that ensuring people have enough food to eat, that they have jobs and that children all over the world should be healthy and secure, are important to Canadians and need our support.

If there are better ideas out there, I am all ears.

But, until I, and Cabinet, can be convinced that there are more important things we should be doing, these are the things we will do, and the priorities we have set.

The first tragedy of the developing world is the billions who live in poverty.

There are many reasons for this, some going back centuries.

There is only so much that Canada can do by itself to help end this tragedy.

But the second tragedy, of ineffective Canadian aid, is entirely within our power to fix.

And by making our aid effective, we can lead the world in ending the second tragedy and thus moving that much more quickly to ending the first tragedy of extreme poverty.

Aid can-and must-work better.

With greater efficiency, focus, and accountability, we are making it better already, in a new approach to Canadian aid never seen before.

We will continue to make our aid better.

This is what the poor of the world need, and this is what Canadians demand of us.

Thank you.