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International Co-operation Minister Julian Fantino (CHRIS WATTIE/REUTERS)
International Co-operation Minister Julian Fantino (CHRIS WATTIE/REUTERS)

SINGER and ROTMAN

Canada's foreign aid: Building markets, not reliance? Bold Add to ...

Last Friday, International Co-operation Minister Julian Fantino unveiled the federal government’s new development policy on economic growth in a rapidly changing global context. The core idea: build markets to reduce poverty.

Mr. Fantino said recent Canadian aid recipients such as Thailand and Brazil are now key investment and export markets for Canada, and he outlined three elements to the strategy: helping countries with their legislative and regulatory structures for private-sector growth; helping small and medium businesses in developing countries to grow; and helping people in those countries to develop technical and vocational skills. He also spoke about the importance of innovation as a driver of social and economic growth.

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This is a constructive and bold approach for Canada’s foreign aid because it’s long term and addresses a key question head-on: How can poor countries lift themselves out of poverty? The private sector is the long-term driver of economic growth and jobs. Neither aid donors nor recipients want a situation of never-ending dependency on the charity of rich countries. The best thing countries such as Canada can do is to encourage and motivate development partners to become resilient and self-reliant, and the new policy is a shift in that direction.

Canada must continue to respond robustly to short-term humanitarian crises. Some are immediate disasters, such as the earthquake in Haiti or the famine in the Horn of Africa. This work is often done on the ground by highly dedicated non-governmental partners, and it’s critical.

Other humanitarian crises we need to confront are slow-burning. It’s simply unacceptable that 300,000 women die annually during pregnancy and childbirth, and that nearly seven million children under 5 die annually; most of these deaths are in the developing world, and preventable. At the 2010 G8 meeting, Canada focused the world’s attention on maternal, newborn and child health through the Muskoka Initiative.

What the new policy unveiled by Mr. Fantino does is take the long-term view. The government plans to use Canadian aid dollars to support economic growth strategies and jobs. There simply isn’t enough money in the coffers of governments, or enough expertise, to solve the global challenges. While charity in the face of a sudden humanitarian crisis (such as an earthquake or famine) or slow-burning ones (such as the deaths of women and children) is critically necessary, it’s insufficient for long-term development.

What can boost economic development is innovation because, ultimately, countries have only two sources of wealth. First is the non-corrupt mining of natural resources in the ground (and the policy the minister announced also has a focus on the role Canada can play through its resources sector working in partnership with NGOs). Second is innovation: mining ideas from citizens and translating these ideas into enterprises providing goods and services people value.

Our experience at Grand Challenges Canada shows that ideas and talent are everywhere, and that poor countries are rich in ideas. Unfortunately, the opportunity to develop talent and ideas is not, and matching talent to opportunity is what we’re trying to do in our Stars in Global Health competitions. We’ve been privileged to support bold ideas from innovators in developing countries – such as a wristband that monitors women for complications of pregnancy, an incentive system so mothers who vaccinate their children get free agricultural seeds, and distribution of life-saving oral rehydration solution for diarrhea.

A great example that combines economic development and innovation is A to Z Textile Mills in Tanzania. It’s the largest supplier of long-lasting insecticide-treated bed nets for malaria in Africa, making more than 20 million of them a year and employing thousands of people. They produce a life-saving technology that also delivers economic growth and jobs. Imagine 100 companies like this across the continent – that’s a game changer in international development.

With an increasing focus on economic growth and innovation, Canada’s development policy takes a much needed long-term view, and acknowledges that no sector alone has all the answers. We need to work together to solve the global challenges we face.

Peter A. Singer is the CEO and Joseph L. Rotman the chairman of Grand Challenges Canada.

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