The world’s poorest, sacrificed to the whims of the almighty market. Charities and non-governmental organizations carrying the water for profitable mining companies. Profits before people. These are just some of the critiques levelled against the federal government’s foreign-aid pivot, recently formalized in an address by new International Co-operation Minister Julian Fantino.
However, while the implementation of the Conservatives’ foreign-aid vision has been bumpy, the ideas themselves are on the mark. Given the problems that long-term aid is intended to address, a focus on economic incentives is the right way to start a serious conversation about how to leverage scarce aid dollars into real, positive impact designed to lift poor people out of poverty. What’s now needed is a broad understanding of what that will actually look like.
Using the power of economic incentives and local entrepreneurs to catalyze development isn’t new. Muhammed Yunus, founder of Bangladeshi micro-credit lender the Grameen Bank, or Bill Drayton of the social-entrepreneurship firm Ashoka, have been stressing this approach to reducing poverty for decades. What is new is hearing these ideas voiced by a Canadian cabinet minister in a position to make this kind of change happen on a large scale, through Canadian efforts.
The goal, Mr. Fantino says, is to make people and countries trade-and-investment-ready. Through aid, Canada can make capital available, connect businesses to markets, and encourage greater investment.
Whether the true potential in what Mr. Fantino has proposed is realized remains to be seen. For many, it is tough to see how sustainable, locally owned-and-operated development overseas can result from the Conservatives’ most high-profile development policy to date: promoting public-private partnerships in which Canadian NGOs do community engagement for highly profitable Canadian mining companies, on the public dime.
But beyond the miners-and-NGOs brouhaha, let’s take a closer look at what aligning development goals and economic growth means. Consider the experience of 65-year-old Le Ngog Em, a pomelo farmer in Vinh Long province in Vietnam.
Close to his farm, Britain’s Department for International Development (DFID) funded an international-standard fresh-cut fruit-processing company, the first in Vietnam. The company signed a contract with Mr. Le to buy produce at a fixed price every six months. Last year Mr. Le’s income increased by around $14,000 – a jump of 70 per cent over his income prior to DFID’s intervention. This is just one of hundreds of similar examples cited by development agencies worldwide. It’s also part of the reason why, recession aside, the world remains on track to meet the number-one millennium development goal: halving the proportion of people living on less than a dollar a day.
So how could a Canadian version of a market-driven foreign aid policy work in practice? Currently, CIDA operates initiatives to promote micro-credit and pair Canadian expertise in agri-business with southern producers. But providing skills development and mentorship to market through other professions and sectors in which Canada excels – from accountancy to engineering, law to pharmaceuticals, smartphones to, yes, journalism – can and should also be considered as potential drivers for innovative development initiatives.
My own NGO, which manages media development projects in Africa, currently relies on CIDA for less than 30 per cent of its funding. Curiously, our other major government partners – DFID in the UK, AusAID in Australia, and the European Union – have all adopted a very similar ethos to the one laid out by Mr. Fantino. Across the board, projects need to emphasize professional skills development, results-driven initiatives, financial sustainability, a value-for-money ethos applied to development investments, and outcomes that promote beneficiaries’ self-reliance.
In practice, this has meant introducing programming that emphasizes smart skills training, paired with intelligent public-private partnerships to provide relevant economic incentives. If done right, these add value to the product and service in question, while making the producer – whether it’s a farmer, a scientist, or a journalist – more competitive, within his or her local market and overseas.
It’s an approach to development that works. And when you compare the business jargon of skills development with the foreign-aid parlance of capacity building, you realize that these two worlds are not as far from each other as they might appear.
Of course, any policy that uses market-driven economic development initiatives to boost poor countries ought to kick off a new policy conversation – one about the need for rich countries to open their markets to trade. However, as aid agencies and development workers worldwide are coming to realize, a lot can be done in the short term to promote market growth, professional development and self-reliance.
In this light, Mr. Fantino has a rare opportunity: to inspire a far more ambitious, interesting, and potentially constructive role for Canada overseas than has been the case in years. It’s now time to make good on this potential.
Rachel Pulfer is the executive director of Journalists for Human Rights