New Focus Countries not about Effective Aid

In February 2009, Bev Oda, Minister of International Cooperation, announced 20 countries in which the former CIDA aimed to concentrate 80% of Canada’s bilateral aid. This list of focus countries was intended to reflect Canadian interests, country need, and the potential for Canadian aid to make a difference.  In most cases, these were countries where Canada had been an active player in the aid game for decades and many had long been top recipients of Canadian aid.  In a few, the intensity of the relationship had been more recent and acute (Afghanistan).

Overall, the aim was to focus Canada’s aid to make it more effective. Rather than disperse its meagre aid dollars over too many recipients, Canada aimed to concentrate its efforts in fewer countries to increase its impact on poverty.

At the end of June, Canada’s Department of Foreign Affairs, Trade, and Development (DFATD) announced it was changing this list for the first time since 2009.  Adding seven new countries to the list (Benin, Burkina Faso, Burma, Democratic Republic of Congo, Jordan, Mongolia, and the Philippines) and removing two (Bolivia and Pakistan) to arrive at a new total of 25 countries.  What’s more, Canada will now concentrate 90% of its bilateral aid budget in these countries.

Why these countries?  Most observers agree: commercial interests appear to have played a significant role in their selection. Indeed, last year’s Global Market Action Plan had laid out the commercial opportunities the Canadian government perceived in many emerging markets.  It is not surprising, therefore, to see several of those emerging markets (Burma, Burkina Faso, and Mongolia) added to the list of focus countries to bolster Canadian commercial interests. Other reasons also played a role.  Jordan and Philippines were reportedly added to the list to further enable Canadian humanitarian responses in the wake of the Syrian refugee crisis and Typhoon Haiyan.  The Democratic Republic of Congo, though resource rich, has low levels of human development in the wake of its prolonged and ongoing conflict since the 1990s. Benin and Burkina Faso might indicate renewed attention to Francophone Africa.

Clearly, a variety of reasons motivated the inclusion of countries as additions to the list, though DFATD characterized the selection of focus countries as “based on their real needs, their capacity to benefit from aid, and their alignment with Canadian foreign policy priorities.”  Lost in this is the original motivation for focusing Canada’s aid – to make it more effective.

Effective aid, in this context, is not simply aid done another way, or delivered by or to benefit the private sector.  Global norms established in the past decade suggest that to be effective, aid should be substantial, predictable, and long-term. By revising the list of focus countries after only five years and in response to our own commercial and foreign policy interests rather than compelling cases for development effectiveness, the government has demonstrated that effectiveness is not its primary concern.

Figure 1: Average Annual Total Canadian ODA to Focus Countries, 2004-2012

New focus countries in green.
Source: OECD Creditor Reporting System

To be sure, several of the countries added to the list are classified as low income economies and have low levels of human development (Benin, Burma, Burkina Faso, and DRC) meeting the criteria of ‘real needs’, but, as Figure 1 shows, in only two of these (Burkina Faso and DRC) has Canada been providing significant amounts of total net aid in the recent past (>$25 million USD annually averaged between 2004 and 2012).  Furthermore, in none of the middle-income countries has Canada provided on average more than $20 million USD annually in the 2004-2012 period. Mongolia, for instance received on average only $2.6 million annually in that period. Low levels of aid committed previously to these countries make an argument for effectiveness based on a substantial aid relationship difficult to believe.

Likewise, the fact that Canada is revising its focus countries adding new countries and dropping two former focus countries from the list for apparent political reasons, also raises issues about predictability and long-term nature of Canada’s aid commitment to such countries.  Five years in the aid business is shorter than it sounds given that it typically takes years between planning an aid program and actually implementing it on the ground.  Apart from short-term humanitarian programming or other quick-in initiatives, it is unlikely than any of Canada’s major bilateral projects planned in Pakistan or Bolivia since they were named focus countries in 2009 would have yet concluded, let alone be evaluated for their effectiveness or impact. Regardless of any internal analysis undertaken by DFATD, the decisions to drop these countries can be based on little more than a preliminary sense of what effect being focus countries had on either Pakistan or Bolivia, let alone the effectiveness of Canada’s aid in either country. Even if this preliminary sense is negative (there is no public indication this is the case), cutting and running from a commitment to focus, in this instance, flies directly in the face of the aid effectiveness aims under which focus countries were first introduced for Canada’s aid.

Commercial motives and political expedience shaped these changes to Canada’s list of aid focus countries.  Focusing aid where Canada has had little aid presence and suddenly prioritizing others that have been characterized as ‘emerging market opportunities’ highlight the short-term, self-interested, and ill-conceived nature of these changes.  Aid, under this government, has become simply a tool of Canadian trade and foreign policy with no pretense to being primarily about fighting poverty.  There should be no illusion about the motives for these decisions. Focusing Canada’s aid in these countries may enhance other Canadian interests, but it is decidedly not about aid effectiveness.

Table 1: Select Indicators for New Focus Countries

¹ Source: World Bank Bilateral Remittance Matrix
² Source: Industry Canada, Trade Data Online
³ Source: World Bank, World Development Indicators
⁴ Source: CIDP – Canada’s Development Footprint Beyond Aid: Interactive Data
⁵ Source: World Bank – Country and Lending Groups