Do Canadians understand the effectiveness of foreign aid?

Critique of Andrew Scheer’s plan to cut foreign aid has been swift. But the fact Scheer thinks cuts will resonate reminds us the foreign aid story hasn’t been told well in Canada, argues Matt Gouett.

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October 7, 2019
Andrew Scheer
Canada's Progressive Conservative leader Andrew Scheer speaks at a campaign rally in Halifax, Nova Scotia, on October 3, 2019. REUTERS/John Morris

Conservative Party leader Andrew Scheer announced this week that his party platform included a proposal to cut 25 percent of Canada’s foreign aid spending in order to “help Canadians get ahead at home” and “strengthen foreign aid in the countries that need it most.”

The reaction was swift. Former Liberal leader Bob Rae said the proposal was “mean-spirited” and that Scheer’s claim of aid going to upper-income countries was a “xenophobic misrepresentation.” Electoral candidates characterized the cuts as “unkind,” while others described them as “divorced from reality.”

However, two things can be true at once: Scheer’s proposal can be ill-conceived and inaccurate (or, as The Canadian Press rated it, “a lot of baloney”); and yet the critique of such a proposal can also be dangerous, by reinforcing a simplified understanding of aid.

Why does Scheer think this proposal may resonate with Canadians? Frankly, it is because governments, past and present, have not adequately shown the Canadian public what its international assistance buys them. Amorphous discussions about how Canada needs to be a responsible international actor, how Canada has not been paying its fair share and how Canada’s international assistance on the world stage helps global stability and security only resonate with certain audiences. Others need facts — consistent, tangible before-and-after reporting about how Canadian international assistance made a difference. Citing Rwanda and South Korea as aid success stories without indicating the actual role Canada’s aid played in these successes is not an argument against foreign aid cuts. Instead, it highlights that when it comes to Canada’s foreign aid, there are not a lot of facts provided.

The 0.7 percent benchmark

Since Scheer’s announcement, some of the discussion has centered on how far Canada already is from the goal endorsed by the Organisation for Economic Co-operation and Development (OECD) for development assistance (ODA) — 0.7 percent of a country’s gross national income (GNI). In 2017, Canada’s ODA was 0.264 percent of its GNI, which ranked it fifteenth among OECD donors; numbers that would look much worse under the cut Scheer is proposing. While it is true that consequences for recipient countries would be even worse with less aid, have there been repercussions from Canada being below the OECD country average for aid spending since 2013? The OECD has mentioned Canada’s low spending — in its latest review it said Canada “should scale up its ODA” — but Canada has not lost its status of being a full-fledged Development Assistance Committee (DAC) member. It may be embarrassing for Canada’s OECD representatives in Paris or Canada’s people at the World Bank in Washington, but there is no real recourse available to these international bodies.

Canada’s international reputation would likely be further sullied by such a cut but that may not make a difference at home. Some have suggested that by cutting aid, Canada would be retreating from the world stage. For example, Scheer was asked if this cut may hurt Canada’s chances for the United Nations Security Council seat (for which Canada is competing against Norway and Ireland in a vote next spring). It has been implied that Norway and Ireland are more generous than Canada when it comes to foreign aid and that the issue matters when it comes to the vote. There is no real evidence of this. In the 2010 Security Council seat election, Canada lost to Germany and Portugal, even though the year before, Portugal’s ODA levels (0.23 percent) were significantly lower than Canada and Germany (0.30 and 0.36, respectively). Canadian aid that year went to 142 different countries; for Germany, it was 131 countries; and for Portugal, a mere 54 countries. In other words, certainly, Canada’s international assistance does have some reputational effects, but they should not be overstated.

More aid is good, less aid is bad?

While Scheer’s proposed cut lacks critical details and the details provided were demonstrably misleading (Canada does not send aid to dictators; Kim Jong-un, Vladimir Putin, and Xi Jinping are not walking around with Canadian $100 bills falling out of their pockets), it does beg the question as to whether any actual cuts in aid would lead to a similar uproar as we saw this past week from critics. Unfortunately, while there are exceptions, the international assistance community in Canada — both within government and the NGO sector — has done a poor job communicating impact and how Canadian aid is providing value for the money disbursed — it has instead created a conversation around aid which hinges on more money equaling more impact. Where is the evidence of this linear relationship? The fact that there is little faith in Canada’s aid commitments and there is support for the idea that Canada needs to solve its own problems is not entirely Scheer’s fault; it speaks to a larger failure of demonstrating to Canadians what their dollars are doing. What does a $1.5 billion cut mean in real terms? Who would be impacted? How many children will not get vaccinated or not get an education as a result? These impacts are how the conversation needs to be framed; not simply saying that aid leads to poverty alleviation and less aid will lead to less poverty alleviation. It makes for a great sound bite and sows misunderstanding about the complexity of aid; a misunderstanding upon which Scheer’s proposal relies.

Adding up Scheer’s numbers

Communication aside, an assessment of Scheer’s plan itself is worrying due to some missing details. Aside from the misrepresentation that Canadian assistance is helping high-income governments and supporting dictators, Scheer says he would re-direct $700 million to help the “countries that need it most.” Where this $700 million would come from is a bit of a mystery. Canada currently gives $6.1 billion in aid — around $2.1 billion of that goes to “least developed countries (the poorest countries) and an additional $100 million to those classified as “other low income countries.” Let us assume that these countries are also below the 0.6-threshold (a value based on a number of factors including life expectancy and education) on the UN Human Development Index (HDI) that Scheer said would indicate countries were poor enough to receive Canadian assistance. So, if Scheer says foreign aid will be cut to $4.5 billion from $6.1 billion, and $2.2 billion already goes to the poorest countries, with his promised additional to the $700 million on the way, there remains a $1.6 billion mystery in Scheer’s aid budget.

Furthermore, of that current $6.1 billion, $1.1 billion goes to “lower middle-income countries;” those countries that have GNI per capita of between $1,006 and $3,955 or $3 to $11 per day. Will these countries be poor enough for Scheer? The unfortunate truth is that by relying on the HDI measurement, which only counts income for one third of the aggregate index figure and fails to recognize actual income differences between countries, Scheer’s plan really wouldn’t be targeting the poor any more than the status quo. It could very end up targeting countries that are upper-middle income, but have low literacy levels or low life expectancies. The HDI is a flawed metric; the most likely reason why serious donors do not rely on it to make aid allocation decisions.

A new conversation around aid

It is obvious that Scheer’s ploy on foreign aid is ill-conceived, does not fit donor norms of allocation and leaves much unsaid regarding which countries will continue to receive Canadian assistance. With this acknowledged, the reactions by scholars, pundits and those in the international development community are missing an opportunity to have a meaningful discussion about why Scheer was emboldened in the first place to forward such a short-sighted plan.

Development practitioners within Global Affairs Canada and Canadian NGOs need to elevate their advocacy from the more simple call of Canada being a responsible actor to one where Canada is an effective agent of poverty alleviation. Lamenting and name-calling Scheer’s policy connotes entitlement: how dare someone question the importance of Canada’s aid when we are not doing enough? Navel-gazing is required. Have the very people reliant upon taxpayer dollars to deliver critical aid programs done enough to explain the efficacy of their work? While efforts have been made, Scheer’s foreign aid gambit suggests current efforts are not enough.

As we move forward, no matter whose platform gets Canadians’ vote on October 21, conversations must be grounded in research on the effectiveness of Canadian international assistance and move away from a reliance on the notion that more aid is good and that more aid would result in a positive international reputation. It is completely possible that both are true, however, these claims would be more forceful if there was consistent evidence to substantiate them.