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Canadian Foreign Aid Tilted To Commercial Gain

Canadian Foreign Aid Tilted To Commercial Gain

Posted by Bruce McDougall on May 26, 2014

If true generosity expects nothing in return, Canada’s approach to foreign aid has been rather selfish. While giving with one hand, the country has lined its own pockets with the other. Whether this makes sense or not depends on your definition of foreign aid.

Until 2007, much of the food that Canada provided to developing nations had to be purchased in Canada; of other goods and services, one-third had to come from Canada until just last year.

Through the Canadian International Development Agency (CIDA), Canada provides aid to several developing nations in the western hemisphere, including Colombia, Peru, Bolivia, Haiti and Honduras. The amounts are comparatively small: about $27 million to Colombia, for example, $28 million to Peru, and $26 million to Bolivia, the poorest country in South America.

In some communities, CIDA’s money seems to have contributed to stability and prosperity. In Bolivia, where the gross national income is about $2,000 (compared to $45,000 in Canada) and 15% of the population live in poverty, CIDA’s money has helped to train more than 6,000 women to develop skills as carpenters, plumbers and electricians. CIDA has also helped about 180 family-run coffee growers to export some of their production to Canada. Although they shipped only 80 kilograms apiece, the families earned valuable foreign currency for their efforts.

In other countries, Canada’s assistance was more self-serving. In Peru, CIDA funding was used to train about 1,500 “officials and civil society representatives on preventing and managing conflicts linked to natural resources,” according to CIDA’s annual report. While the language is open to interpretation, the training sounds as if it was directed at police and law-enforcement personnel to help mining companies control protests against their operations.

This might contribute to a more stable and productive society and help regional governments in Peru to “sustainably develop the extractive and natural resources sector”, which is one of CIDA’s objectives in the country. But it also helps mining companies to conduct their operations without pesky interference from people who might object to their presence. Many of those mining companies are Canadian.

Again, depending on your point of view, it might make sense to support a country’s mining industry, even if the industry’s major operators are foreign companies. This seems to be the perspective of Canada’s current government, which last year incorporated CIDA into the department of foreign affairs, trade and development.

Other organizations have objected to the transformation of Canada’s aid programs into another aspect of the country’s policies on trade and development. The Canadian International Council CIC), for example, objects to Canada’s “commercialization of aid” and says Canada’s government has made “a stark public declaration of [its] intention to reorient official development assistance towards the interests of private Canadian companies, particularly those in the extractive sector.”

An independent foreign-relations organization, whose members include former MPs like Bill Graham and Perrin Beatty as well as Jim Balsillie, co-founder of Research in Motion, the CIC says “all poor people [are worthy of assistance], not just those living in communities affected by Canadian mining companies. Partnerships [between CIDA and mining companies] do nothing to actually improve the practices of extractive companies; they merely encourage adding on charitable side projects.”

Canada is not alone in delivering assistance to other countries while contributing to its domestic industries. The UK continues to award many of its aid-funded contracts to British firms. The U.S., the world’s largest aid donor, requires some of its US$30 billion in aid funding to be used for purchases from companies in the countries that receive the assistance, with the notable exception of food, motor vehicles and U.S.-patented pharmaceuticals.




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