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Pierre Beemans

CIDA vs. The Senate Foreign Affairs Committee

The Ottawa Citizen ran an article on February 17 on the report of the Senate Committee for Foreign Affairs and International Trade, which has been looking at foreign aid and CIDA for the last year or two. The article highlighted one of the options recommended for consideration, which was that CIDA be dismantled, and touched on several others. It also chastised the Agency for being inefficient and ineffective, and criticized it for its excessively high administrative costs.

One would like to assume that serious-minded people like the Honourable Members of the Senate of Canada have looked deeply into the complex issues surrounding Canadian foreign aid and CIDA. On the other hand one has to wonder, given the criticisms and conclusions that are reported. To be fair, The Ottawa Citizen is not always noted for its insight and accuracy, so one may not be getting the real gist of the what the Senators said. Still, as the Senate Committee report still hadn’t been posted on the Senate website by early March, one has to go with what one has at hand -- and what The Citizen tells us calls for a rebuttal.

Dismantling CIDA would be a shell game unless Canada were to get out of the aid business altogether: there will always need to be a structure to administer our foreign aid and it will always be cumbersome -- not so much because of the nature of foreign aid as because of the political constraints these same Canadian politicians saddle any administration with.

I read that Senators see as an option the moving of CIDA's functions to External Affairs. Hmm. They should look at External Affairs as carefully as they did CIDA; DEA is not what any objective observer would call a paragon of efficiency in program delivery of any kind, and it is every bit as responsive to domestic and partisan political considerations as CIDA.

What the Senators have right is that CIDA as an institution badly needs re-thinking. The idea of dividing CIDA up into separate agencies with more specialized mandates is worth looking at, although it carries the risk of winding up with even more money going into administrative overheads as each agency winds up with its own complete institutional infrastructure.

The starting point for looking at CIDA has to be that foreign aid and its delivery are not there purely for the purpose of helping the poor of the world: the poor are at the heart of it, but there are other interests. CIDA has to respond to quite a broad Canadian foreign policy system and objectives. UNICEF and UNDP can rightly claim to exist for development purposes only; the International Red Cross is there for humanitarian purposes only. However, Canadian politicians (and other government departments) have always stated that CIDA's development and humanitarian objectives have to be met in such a way as to also respond to the objectives of Canada's relations with other governments and multilateral institutions, to its international trade objectives (and their domestic economic corollaries), and now increasingly, to Canada's international security objectives. After all, CIDA does come under the Foreign Affairs and International Trade Act.

Canadian domestic political considerations are not irrelevant either, especially when it comes to awarding contracts for purchase of goods and services to be supplied as foreign aid.

So, we still have some forms of foreign aid going to what will soon be the second largest economy in the world, China, to countries which are notoriously corrupt - like Indonesia and Congo, to countries that are lined up to join the EU - like Ukraine, and so on. We want to have entrees to as many developing countries as possible, and even a modest 'Canada Fund' of $200-300,000 a year can help to open doors for our Ambassadors in relatively prosperous countries like Uruguay or Thailand. We want support for and involvement in international development from the Canadian public, so CIDA struggles to find mechanisms to respond to as many local and national NGOs, colleges, universities, coops, professional associations, church groups, etc. as possible, and to assist Canadian enterprises to do business in developing countries in ways that may yield some ancillary developmental benefits. In the multilateral field we want Canada to be present at as many tables as it can, so we put money into almost all of the international financial institutions, most of the UN aid agencies, aid agencies of La Francophonie and the OAS, etc. etc.

Well, when you have as many wickets as that in your bank, you need a lot of tellers. Try eliminating any of them in practice (as distinct from preaching righteously that CIDA should be more focused) and see what kind of roars you hear from various oxen in Canada who feel they are being gored. And you have to pay those tellers, provide them with offices and computers and air fares to visit CIDA's programs or meet with other donors, hire specialists to develop appropriate policies and strategies and evaluate how well CIDA is doing, etc. All of which costs money. A lot of it.

Still, the Auditor General, politicians, the media and in fact most CIDA officials agree that (a) CIDA's administrative costs have to be reduced and (b) its efficiency and effectiveness improved. As to (b), Senators note that "81% of CIDA staff are in the Ottawa area" (it has a name: Gatineau) while the people we are trying to help live in developing countries. It's the (a) part that sticks in the craw. The solution seems to be so obvious that it is amazing that no one thought of it before the Senate Committee: put 80% of CIDA's staff overseas.

Well, actually, someone did think of that before. Marcel Masse, one of CIDA's greatest presidents, implemented a decentralization program in the 1980s to place the managers responsible for delivering our aid to developing countries in those countries themselves. The costs of maintaining Canadian staff in the field (in countries, for example, where local landlords may charge US$3,000 a month or more for decent housing and where tuition at an acceptable international school may cost US$20,000 per year per child) ran at upwards of half a million dollars per person per year. CIDA had to back off decentralization when its admin budget started to skyrocket.

CIDA has tried to find other ways to decentralize its program delivery and lower its administrative budget: it has created program support offices in most of its major recipient countries staffed by national professionals paid local rates rather than by expensive expatriates; it has tried to channel more money through multilateral agencies like UNICEF and the Red Cross, or multi-donor partnerships because their admin costs don't count as part of CIDA's admin budget.

There is one other way, of course: write a cheque to the developing country government, earmarked for whatever program of theirs it is you want to support, let them manage and disburse the funds through their own ministries or local NGOs, and meet with them periodically to see how well it is being spent. The downside is that Canadian suppliers and consulting firms will scream to their politicians when the developing countries use our funds to buy less expensive goods and services inside their own borders, or from Korea, India, China, etc. Canadian NGOs will complain that they risk being marginalized when funds no longer flow through them to developing country NGOs. And the media will howl for the blood of CIDA (and of the government in power) when the first case of misuse of funds or of project failure occurs.

The reality is that there will always be some degree of misuse or of failure in foreign aid. It is a high-risk business and if there were no failures or corruption it would probably be a sign that we were helping the agencies or communities that didn't need our help. Ian Smillie and Bob Fowler, who are quoted in The Citizen article, are quite right that CIDA is slower in its response times and more risk averse than most other donors. That is largely because CIDA has had to wrap itself in ever more complex control mechanisms and reporting systems that will satisfy Treasury Board, the Auditor General, the Minister and its own senior management who have to respond to every partisan question in the House, every breathless 'expose' in the media, every demand by a local NGO or a Canadian exporter, and every question from a Canadian taxpayer. The latest hoops to leap through put in place by the Accountability Act are certainly not going to make things any better.

Given all those competing demands, the wonder is that CIDA is as efficient and effective as it is. And the fact is that, despite all the legitimate criticism, what CIDA does it does pretty well. It does, in fact, have quite a bit to show for the $12.4 billion it has spent in Africa. A good chunk of that didn't produce the desired results, of course, but what is impressive is the amount that CIDA has learned through its evaluation system from its mistakes and its efforts to improve itself. If Ministers and their aides weren't so timorous about giving ammunition to the opposition of the day (are CIDA officers still prohibited from talking to the media or the public without getting clearance from the Minister's office?), CIDA could provide information and insights that would make for a much-needed and healthy public debate on Canada's aid program.

To return to the Senate report: the idea of giving CIDA a "stand-alone statutory mandate" is very sound, especially if the debate surrounding the enactment of a 'CIDA Act' is based on well-informed discussions in the media, community organizations, academia, regional fora, etc. Ideally, in my view, it would lead to the establishment of CIDA as a Crown corporation along the lines of the International Development Research Centre (perhaps even merged with the IDRC) with its own Board of Governors reporting to Parliament, subject to clear management and financial controls, policy frameworks and program objectives, performance criteria and reporting arrangements etc., but freed of the micro-reporting, cross-management and political forelock-tugging that currently bedevil it. It would be nice for Parliament to hand CIDA its marching orders and say, "Now, go out and do something for the poor of the world: do it well and don't be afraid of making some mistakes. Just don't make stupid ones, and it you do, learn from them and get better at your business!"

Pierre Beemans

(In the interests of transparency, I should mention that I spent spent 20 years in CIDA in Canada and overseas, leaving as a Director-General, and a further 9 years as a Vice-President at IDRC before retiring in 2000.)

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