George Roter, CEO and co-founder of Engineers Without Borders Canada
This is the second of a four-part series on innovative ways to deliver aid in our conflicted world.
Let's start by getting this out of the way: There is much about foreign aid that works.
We should put to rest the tired arguments about whether countries like Canada should give any aid at all. Those who say it is a black hole of spending neglect the fact that for millions of people, aid has literally saved their lives. In doing so, it has created more favourable conditions for global prosperity.
It is far from a conclusive answer to poverty, but aid can transform lives by creating the basic conditions required for a people to prosper: good health, access to education and responsible governance. From this fertile soil much can grow, and does.
Take Malawi, one of the least developed countries in sub-Saharan Africa. Life in this small, landlocked country has become appreciably better in recent years due to foreign aid.
Since the introduction of an aid-funded fertilizer subsidy program, cereal production has nearly doubled. With the country now able to feed itself year in and year out, life expectancy has jumped from 46 to 54, despite the ravages of AIDS. And GDP has grown by more than 9 per cent a year, making Malawians on average twice as rich as they were a decade ago.
This is an impressive record. Even more impressive is that it's been replicated throughout much of sub-Saharan Africa.
Now comes the regretful part of this story: While foreign aid is doing much good, it could work a lot better than it does now.
The aid system has been built on a shaky foundation, modelled on the framework of a construction project: Project plans are drawn up, financing is provided, procurement of services and goods follows, ending finally with project execution and a finished product. Taking an example from the aid sector, the flawed logic follows that if a water pump is planned and installed, a community will have clean water. Voila.
The problem is that we, the benevolent donors, delude ourselves by believing that development is so linear. We desperately want aid to be simple, even if it means avoiding the mounting wall of evidence that proves it is not. The shiny, build-a-water-pump style of aid might make for a great photo op – happy children playing in the fresh water, a group of women being trained to make up a water committee. But over time, pumps break down, and water committees don't have the resources to fix them.
It's an inconvenient truth that we need to take a more systemic approach, getting serious about investing in cash-strapped local institutions that will ultimately be responsible for the long-term development of their countries. Right now, that's not happening. In Malawi, for instance, donors spend about 10 times more money on short-term water and sanitation projects than on the institutions that will manage them in the long-term.
On the bright side, new models and efforts are emerging that recognize the need for a smarter approach to foreign aid. One practical solution is called "Cash on Delivery" aid, aiming to realign the unequal power relationship that prevails between donor and recipient countries.
Cash on Delivery puts accountability at the heart of the aid relationship. The basic idea is that donor countries transfer aid money when there are measurable, proven results. Take education financing: A primary indicator is established up front – for example, school examination pass rate – with funds transferred to the recipient country only after progress is achieved. This puts responsibility for achieving results firmly in the hands of recipient countries, providing the flexibility and incentives needed to achieve a goal in the way that makes the most sense.
Canada and other donor countries would be wise to stop viewing aid as a "construction project" and recognize that systemic approaches to development are necessary to get the results we want.
Aid works. But it could work much better. Let's get on with it.
George Roter is CEO and co-founder of Engineers Without Borders Canada. EWB's James Haga also contributed to this article. To see a video conversation with Mr. Roter, visit the Canadian International Council's website at www.opencanada.org/newhumanitarians.