John McKay

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Aid Bill’s Good Ends, Questionable Means

Lee Berthiaume, Embassy Newspaper, June 20th, 2007
Link: Aid Bill’s Good Ends, Questionable Means

Committee hears of UK’s “more detailed” development reform, and from Canadian officials who say proposals would increase costs and bureaucracy

Following a 1994 scandal in which the British government was accused of using international aid money to further its business and political interests abroad, the parliament began to rethink how the country did international development.

In 1999, it adopted an act that set out a poverty-reduction mandate for the Department for International Development and, just last year, adopted an act calling for increased transparency and accountability, both of which bear many similarities to what the Canadian government is contemplating for CIDA.

In testimony to the Senate Committee on Foreign Affairs last week, a senior DFID official testified that both acts have proven beneficial to British development efforts both at home and abroad.

The committee is currently examining Bill C-293, a private member’s bill that has already gone through the House. The bill aims to increase transparency and accountability, and includes provisions that would require Canadian international aid be used for poverty reduction.

“One of the effects of the 2002 act was to make us very explicit about what our core objective is,” Mark Lowcock, director general of DFID’s policy and international division, told senators on June 13 of the poverty reduction act. “It has been our experience that clarity on the objective helps with efficiency and effectiveness.”

Staff members are more motivated, public support for foreign assistance has increased, and problems encountered when using aid programs for multiple objectives have been avoided, said Mr. Lowcock, who appeared by video conference.

“Of course, Britain has a wide range of other goals in its international policy, but we have other tools to assist in the achievement of those goals,” he added.

Mr. Lowcock said British officials use the UN Millennium Development Goals as the framework for its development efforts, and a wide range of activities can be considered poverty reduction strategies.

“Parliament concluded that the broad poverty test was a good test,” he said. “The central issue, as they established it in finalizing the legislation here, in judging whether to approve any spending proposal…is one of effect and of motivation. Will the effect of this spending be to reduce poverty, and is the purpose or motivation to promote development?”

Mr. Lowcock said DFID has a separate budget for conflict reduction and security promotion projects, which are not considered official development assistance by the OECD, but very important in improving people’s livelihoods.

Anti-Poverty Definition Unclear

Critics of Bill C-293, including Conservative MPs and government bureaucrats who testified before the committee the previous day, had raised concerns that the bill’s definition of poverty reduction was unclear, and that mandating that Canadian aid be used solely for that purpose could tie the government’s hands.

In addition, the critics have charged that the proposed bill’s new reporting and transparency clauses would only duplicate reports that are already available to the public, tie up staff, and waste money.

Mr. Lowcock said the private member’s bill passed last year to increase the country’s foreign aid transparency “is actually rather more detailed than the provisions in the draft bill that you, I believe, are looking at.” However, he said it was too early to say what impact the legislation has had.

Critics of Bill C-293 have also raised serious objections to provisions that make consultations with stakeholders mandatory before projects are implemented.

Others, however, including Senator Roméo Dallaire, say the provision does not define the extent or scope to which consultations must be undertaken, including whether they include all aspects of a project or simply a discussion about the overall program, and that the international co-operation minister can lay out ground rules.

Mr. Lowcock said British legislation does not include mandatory consultations. Rather, consultations are a matter of course.

“We consult with the countries and people who live in them who are the intended beneficiaries,” he said. “This consultation is motivated by a belief that we do not have all the answers.”

In testimony to the committee the previous day, senior Foreign Affairs, CIDA and Finance officials expressed their concerns with Bill C-293.

“We support a thorough analysis by the committee prior to committing the government to a new and significantly different modus operandi,” said Stephen Wallace, vice-president of the Afghanistan Task Force at CIDA.

“For example, the obligation to consult could cover literally thousands of decisions every year around the world for which specific consultation arrangements would need to be established and where Canadian civil society organizations may not even be present.”

Mr. Wallace acknowledged that the wording of the bill leaves the consultation rules open for interpretation, and raised the possibility that parties who aren’t included may take legal action because of their exclusion.

While Mr. Wallace said there is room for the government to improve in its reporting on international development efforts, he noted that CIDA and other departments already produce numerous reports for Parliament and the public.

Provisions will Increase Costs

Graham Flack, assistant deputy minister of international trade and finance at Finance Canada, said Bill C-293’s provisions would increase costs.

“We are, of course, at the service of Parliament, and if Parliament wants us to do the same report twice, we will do that,” he said. “If you want us to consult on every project, Mr. Wallace may have to develop several new teams to do that, but we can do it.

“However, this has consequences and costs, and we invite senators to consider those costs.”

Mr. Flack also raised concerns that the new reporting requirements may cut Canada out of the loop at the World Bank and International Monetary Fund if statements made on the country’s behalf during closed door meetings, including debates around another country’s economic situation or policies, are made public.

“If we had to provide a summary of that representation, it could move markets, potentially, to the extent that that information was market sensitive,” he said. “It could certainly undermine our relationship with those countries.”

However, civil society organizations have noted the government already provides that information through an annual report released by Finance Canada in the spring, and that the proposed bill only mandates those representations always be included.

“All three of us very much share the intent behind the proposal,” said John Sloan, director general of DFAIT’s economic policy bureau, “but we are worried that the drafting as it currently stands will provide both a certain additional complexity, and perhaps layers of bureaucracy that will impede our ability to implement an effective and efficient international assistance program.”

The committee also heard from Lucien Bradet, president and CEO of the Canadian Council on Africa, on June 12, who felt the act imposes a narrower mandate for CIDA without any benefits.

Former Canadian ambassador and author Robert Fowler testified the following day and said the bill will not address any of the current problems Canada’s foreign aid efforts are afflicted with. George Ayittey, a professor at American University in Washington, D.C., meanwhile, recommended references to poverty reduction be changed to wealth creation.