The federal government is evaluating trade and investment opportunities in dozens of developing countries to help determine how foreign aid should be disbursed, raising questions about whether Canada’s push for “economic diplomacy” is an effective way to reduce global poverty.
An internal analysis of bilateral aid programs, produced by the Canadian International Development Agency and obtained by The Globe and Mail, suggests Canada’s commercial interests have become a key consideration in determining how much aid a developing country will receive. The report, titled Reviewing CIDA’s Bilateral Engagement, was written shortly before CIDA was merged with the Department of Foreign Affairs and International Trade in June.
The CIDA assessment is the clearest sign yet that Canada’s development objectives were shifting even before the merger was announced in the 2013 federal budget. And it comes as Foreign Affairs has instructed officials to make opening new markets to Canadian goods and services the dominant focus of Canada’s foreign policy.
A majority of the three dozen countries included in the foreign aid report are promoted as destinations for Canadian aid in part because of the commercial benefits they can offer to Canada.
For example, Indonesia is “an important commercial and political partner” for Canada in Asia, and growing commercial interests in Egypt and Jordan mean those countries should both continue to receive foreign aid, the document says.
Benin is favoured because it provides a stable political and investment climate, while Ghana is a “promising economic partner.”
More than a dozen countries are identified as having mineral resources that are of interest to Canadian firms, including Mongolia, Peru, Bolivia and Ghana. The conflict-torn Democratic Republic of the Congo is of “strategic interest” to Canada, the document notes, because of significant investments in that country’s extractive sector by Canadian companies.
Stephen Brown, an aid expert at the University of Ottawa and author of a book about CIDA, said the document suggests that trade interests are increasingly winning out over development values.
“Over all, the government seems to have forgotten that Canadian law defines the purpose of Canadian foreign aid as poverty reduction,” he said. “Even before the merger, we’re seeing huge emphasis – not in every country, but in the majority of countries – on what Canada has to gain and especially what Canadian private companies have to gain.”
Margaux Stastny, a spokeswoman for International Development Minister Christian Paradis, wrote in an e-mail that Canada’s development work remains focused on improving the lives of those who are most in need. But she added that the goal of reducing poverty cannot be addressed in isolation, meaning security, governance and trade must also be taken into account.
Mr. Paradis has noted that the “vast majority” of global markets the federal government is targeting for trade and investment are located in developing countries. “By stimulating the economy in these countries and helping them create an environment conducive to investment, we are contributing to the well-being of people living in poverty,” he told an audience in Montreal late last year.
Poverty, aid effectiveness and other considerations, such as domestic politics and regional security, are also considered but appear to receive less attention over all in the partly redacted document. In the case of the Democratic Republic of the Congo, the assessment notes that that there is “tremendous need” in the African country, which is among the poorest countries in the world, and points out that Canada has worked there to prevent sexual and gender-based violence.
The report was produced in March, 2013, less than two weeks before the government announced it would eliminate CIDA as a standalone agency. It was provided to The Globe in response to an access-to-information request.
The decision to merge CIDA’s development work with the Foreign Affairs and International Trade department prompted criticism from some international development experts and non-governmental organizations, who worried Canada’s commitment to poverty reduction and humanitarian aid would be diluted. Others welcomed the amalgamation, saying it would reduce conflicting messages in Canadian foreign policy and could help increase overall resources for poverty-reduction efforts.
Although commerce and politics have played a role in Canada’s development decisions in the past, aid experts say the emphasis on favouring developing countries that offer trade and investment benefits to Canada is a more recent shift.
Diana Rivington, a former director of human development and gender equality at CIDA, said the change shows a greater focus on the short-term benefits Canada can gain from development work. “What I see in these choices is a vision of Canada that is not as broad as it was,” she said.
Scott Gilmore, founder of a development organization called Building Markets, said he does not see a problem with Canada’s foreign aid benefiting domestic interests when it is also helping people in developing countries.
“It’s not a zero-sum game,” said Mr. Gilmore, who is also a member of an external advisory group that is being consulted about the CIDA merger. “There are lots of things that Canada can do that maximize our ability to reduce poverty which also – simultaneously – are of benefit to Canada, either [to] our foreign policy interests or our trade interests.”
In 2011, the federal government announced it would launch a series of jointly funded pilot projects involving Canadian mining companies and non-governmental organizations – a move often cited as an example of CIDA’s work with the private sector. The agency also established a new institute aimed at providing regulatory advice to developing countries with significant mineral potential.
The projects were criticized for providing what was seen by some as indirect subsidies for mining companies’ corporate social responsibility programs. Proponents argued CIDA’s work with the extractive sector can help harness those companies’ resources to help improve the lives of people in poverty.
Hélène Laverdière, the NDP’s international development critic, said the CIDA assessment demonstrates that Canada is increasingly using foreign aid to further its trade interests. “That’s not the job of our international assistance, and the ODA Accountability Act is very clear that [aid] should focus on poverty reduction, taking into account the perspectives of the poor and human rights, of course.”
The handful of countries where commercial interests do not appear to be a significant factor include Haiti, which is of “long-term foreign policy interest” because of its large diaspora community in Canada and past commitments. Aid to Afghanistan is important to honour past sacrifices and commitments, and to “burden share” with Canada’s allies, and development efforts in the West Bank and Gaza should continue because they have been welcomed by Israel as crucial support for peace in the region.
Kim Mackrael is a parliamentary reporter in Ottawa.