I am doing a series of articles on the book “Rethinking Canadian Aid” (University of Ottawa Press, 2015), and now it’s time for “Chapter 15: Charity Begins at Home: The Extractive Sector as an Illustration of Changes and Continuities in the New De Facto Canadian Aid Policy” by Gabriel C. Goyette. I’ve addressed some of the issues already in my review of Chapter 7 (Critique of Rethinking Canadian Aid – Chapter 7 – Continental Shift) so it will be interesting to see how far Goyette goes.
Of the many changes that have occurred, two stand out in the literature on Canadian aid for their importance. First, the government has placed programmatic emphasis on aid effectiveness, which has led to an overly technical conception of practices. Second, it has instrumentalized aid policy and made it subservient to broader foreign policy, notably through changes in CIDA’s countries of focus and the criteria for selecting them, the emergence of priority themes with a strong impact on disbursements, a religious and security turn in aid delivery, an emphasis on humanitarian assistance, the marginalization of gender issues, and the growth of the role of the private sector, both in policy making and in practice.
My first reaction is “wow”. What a dramatic turn for aid policy. Except most of it isn’t true except amongst the rhetoric of academics and NGOs. First, aid policy has already been shown in the above chapters to not being subservient, but rather at most, tangential or marginal. Pronouncements of policy do not change the reality on the ground (strike one), and the ground delivery is relatively unchanged as is the disbursement patterns amongst countries in need (strike two). Emphasis on humanitarian assistance has little to do with core development, count it as a foul ball. Gender marginalization? I’ll call it a ball, as one of the key ingredients for approaches to remain current is to show concrete approaches that are different from other methodologies and with higher results, and gender equality programming has not consistently done that…early on, it eclipsed “women in development”, but after that, it was mainstreamed and then new issues clamoured for new attention. Growth of the role of the private sector in policymaking and in practice? Yep, that’s strike three. Chapter 7 already gave lie to that premise.
The key basis for Goyette’s analysis is the Corporate Social Responsibility (CSR) Strategy for the extractive sector. First, let’s deal with the limits of CSR to tell you anything. Governance, by and large, is “huge” for development discussions. In-country governance, democracy, transparency, global governance, donor relations, etc., all huge topics. Human rights alone could overwhelm most governance discussions for developing countries. CSR? A tiny part of the picture. Gets press, lots of people (particularly NGOs) like to rail against big corps and the need for CSR, particularly in the extractive industries. But in terms of CIDA’s expenditures? A rounding error, on a good day (as Goyette notes, but discounts). EITI gets $10M over five years — $2M a year. Chicken feed. The Andean Regional Initiative? Another $20M over 5 years, or $4M a year. Three CSR projects at the bilateral level, and a new education institute at UBC. All in all, just enough cover to tell NGOs “we’re doing something” and to give all those letter writers something to read. Means nothing to the core of development policy.
Where Goyette loses me is the argument against aid effectiveness. “Nonetheless, it is worth recalling that no comprehensive study has substantiated the notion that aid concentration is a major contributor to development effectiveness.” Actually, he’s right. No comprehensive study. Well, except for 60 years of development by multiple donors that show spreading your development too thin makes for multiple drips in small buckets that make no difference whatsoever, hence every developing country itself talking about the need for larger-scale projects to actually impact the economy and repeated calls across the entire development community to “scale up”. I particularly like the skewed analysis that “more than half of the countries added to the list” (i.e. 4 > 3.5 of the 7) were priority markets. Except for the fact that all other things being equal, development projects in countries with basic infrastructure in place produce greater results than those with nothing, and since the current government is about results and aid effectiveness, it’s not surprising that it would choose those countries where development was likely to actually produce demonstrable results. And, if the policy was so “apparent”, wouldn’t they have added 7 countries, not 4, tied to trade?
I particularly like the apparent criticism that “CIDA’s thematic focus on sustainable economic growth is particularly well suited to support extractive industries. Its three areas of privileged intervention are “building economic foundations, growing business and investing in people” (CIDA 2011a). These areas favourably align with the requirements of the extractive sector.” That’s not a coincidence, nor is it as sinister as the NGOs claim. Think about it for a minute. Name a business sector that will produce large-scale economic returns in a developing country. No, go ahead, I’ll wait. (Insert humming of the Jeopardy theme.) Great, which did you choose — agriculture (like bananas) or mining? And then look at some of the countries chosen and ask if they have an agriculture option that will generate economic growth? No? Hmmm…maybe the country might focus on mining then. Bottom line, there are five big pillars for private-sector to contribute to development — agriculture (limited for some), extractive industries (sometimes the only resource), tourism (think small islands in particular), regional infrastructure and manufacturing (such as telecoms or factories, for narrow niches), and power generation (think dams). Agriculture is popular with NGOs, but it takes corporations to make it truly profitable without relying on “fair trade” marketing protection; extractive industries are terrible for the environment, and greed is always bad; tourism is condescending, unreliable, and exploitative of the human infrastructure as disposable income is spent on funding development (1%ers); infrastructure development is too big corp or exploiting cheap labour; and power generation destroys the environment. Pick one.
In sum, the Canadian government’s choice of countries of focus and priority themes demonstrates a desire to ensure that aid will contribute to Canada’s trade policy priorities and benefit Canada’s own economic interests, rather than those of developing countries. These new aid policies illustrate the practical implications of the integrated foreign policy mentioned above. This does not mean Canada’s aid will have no development result on the ground. However, it illustrates how decisions are made not for the sake of development efficiency or maximal impact of Canadian ODA, but for their foreign policy impact and benefits to Canadians.
Really? I must have missed the evidence of that in the chapter. No data, no proof, just “well, it’s obvious”. No, it’s not obvious. In fact, if you look at the rest of the government’s approach to all sectors (domestic and foreign), you see a consistent focus on “clear demonstrable results”. And, if you were choosing countries where results would be clear and demonstrable (i.e. a key component of aid effectiveness), those are the countries that are chosen. What isn’t proven is which part is the cart, and which part is the horse — if the government abandoned countries where results weren’t forthcoming and switched to some that were, and then looked at those countries and tried to maximize Canadian development investment, wouldn’t you get the same outcome? Only if you assume it fits and that there are no other explanations does the “evidence” hold.
I particularly like the further evidence of the corporate conspiracy by the fact that the government consulted the private-sector during the CSR preparations. Umm, a small question — if you were putting in place a policy that would effectively serve as policy “regulation”, wouldn’t you consult the sector being regulated? The government does in every other sector of the economy. And yet NGOs weren’t consulted. Wait, really? Because I’m pretty sure there were a bunch of meetings with NGOs during the same period. Oh, but those apparently didn’t count. So NGOs were silenced, apparently. Hmm…isn’t that the complaint in every field for the current government? Do they talk to the NGOs they want to talk to and ignore the ones they don’t? Apparently that has a more sinister logic when it’s development. I really like the fact that the NGOs say “Oh, we were consulted but it was too fast” and not a real consultation because nothing changed, but then conclude that *although nothing changed*, the private-sector was driving it. Presumably, the private-sector had changes that weren’t adopted too, then, if *nothing changed*?
We then come to the conclusions:
- A new aid policy epitomized by the CSR policy, except that this policy only results in $5M a year in direct spending, has no relevance to more than a handful of actual CIDA projects, and is a minor but highly visible aspect of overall governance;
- Aid is used as a tool for the expansion of Canadian companies abroad, which would be a little hard to do without money behind it, but sure, let’s ignore the need for evidence or the significance of the counter-evidence that tied-aid had dropped; and,
- No official aid policy (except apparently every academic in the book knows what it “really” is) + no consultation (except what do you consult on if there isn’t a policy?) + unpredictable flows = a loss of legitimacy … by whose analysis? I didn’t see the government fall over this, as most Canadians don’t really care about what CIDA does or doesn’t do.
All of the above “analysis” with “no evidence” to come to conclusions that are unsupported and in two cases, almost random. So you would think, from the above, that my conclusion would be the chapter was completely worthless. But then, there’s this nugget at the end:
…these types of CSR can help in terms of risk and corporate image management (Porter and Kramer 2006, 2011), they fail to provide the full value, long-term stability, proper orientation of innovation, and first-mover opportunities attainable by a strategic or “civil” approach to CSR (Zadek 2004, 2006). Although qualitative progress on CSR can bring value to company shareholders and society alike, it is a complex, and often long and costly process. By promoting a simplistic and primary approach to CSR, the government has missed an opportunity to help Canadian companies in this process. An open policy process would presumably have helped identify and resolve this weakness in the government’s approach, thus maximizing the benefits of the expenses incurred.
Four sentences that are absolutely breathtaking in their thesis. THAT should have been the basis for the paper because that would add to the debate. Each one of the sentences could be argued, substantiated, and tested with data and evidence. Sigh. Maybe someday we’ll see that one instead of the content that was here.