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In Canada, the recent business-oriented federal aid budget reveals the government to be even less committed than previously to facilitating the kind of grass-roots development that might actually serve to help ground genuine popular empowerment. Particularly wounded by government cut-backs have been Canadian NGOs who have been working directly with Southern counterparts towards such ends. (jbv)

vol 10 no 4

Canada and southern Africa: The Liberal aid massacre of 1995
our Ottawa bureau chief

Printable Version
Southern Africa Report

SAR, Vol 10, No 4, May 1995
Page 26



The federal government has completed the Foreign Policy Review, and Finance Minister Paul Martin has delivered his 1995 budget, a textbook example of a structural adjustment budget. What might Southern Africans, or Canadian friends of Southern Africa, expect from Canada's foreign policy towards the region, and from Canadian aid policy in particular? And the answer? Not a lot: cuts, conditionality, and commercialism.

The commercialisation of aid

Certainly the broad brush-strokes of policy statement and budget priorities warrant such a conclusion. Only too evident is the continued, perhaps final, retreat from the "humane internationalism" that was once said to underpin Canada's stance on development issues. This recognised the danger and inequity of the North-South divide, and the need for redistribution, if only to stymie the Reds and make the world's trading economy more effective. The Canadian International Development Agency (CIDA) was born in 1968 of a redistributive vision - unevenly realised at best, and probably self-serving, but redistributive nonetheless.

The 1995 budget, by contrast, follows the pattern of the Tory years of the late 1980's and early 1990's: a cutback of the total aid budget, an embrace of the commercial logic of "penetrating markets," of "investing in winners" rather than the poor, of selective support to countries with "emerging markets" at the expense of considerations of human rights and democratisation.

Africa, minute in the global market, is peripheral to this vision.

The main points of the foreign policy framework and the budget will probably be only too familiar to SAR readers by now. Some of the detail may be less so, and is outlined here:

(1) Canada in the World, the government's February statement on foreign policy, asserts that "the promotion of prosperity and employment" is the primary objective of Canada's foreign policy. To pursue that objective, the government commits itself to expanding NAFTA and working for the implementation of the World Trade Organisation. The Liberals foresee building an "international business `team' " with the provinces and the private sector, to assist Canada to compete in the dominant markets of the world, building on our comparative advantages.

(2) The Canadian Council for International Co-operation (CCIC) has produced a useful detailed commentary on the government's statements. The Council rightly points out that the pervasive commercial focus overrides any notion of a foreign policy based on values or principles. It also displaces any forceful argument of environmental sustainability or of poverty and global social justice. Human rights are not part of the fundamental objectives of foreign policy, but - we are told - will be promoted by trade and economic liberalisation.

The government statement asserts the need to align Official Development Assistance with its broader policy objectives. For many, this only deepens the well-founded fear that CIDA's practices will be driven by commercial calculation. Certainly there is no hint of major reform of Canada's aid policy. The program priorities are those currently espoused by CIDA: basic human needs; women in development; infrastructure; the environment; human rights, democracy, and good governance; and private sector development. Significantly, public participation does not appear as a priority for the aid programme. Conversely the private sector is seen as an important partner, and tied aid remains, a "mutual benefit" to Canada and developing countries.

(3) Three weeks after the federal foreign policy response, Paul Martin delivered a budget devoted to "fiscal balance". A budget to mollify the markets, it features handsome transfer payments to banks and bondholders, financed by spending cuts to social programmes and job cuts to the public service.

The total Official Development Assistance budget is cut from $2.594 billion in 1994/5 to $2.061 billion in 97/98, a reduction of 21%. The ODA budget for 95/6 now stands at $2.22 billion; CIDA's share of this (approx. 80%) is $1.73 billion, a cut of $312 million, or more than 15%.

Within CIDA, the divisions that were hit the hardest were those financing non-governmental organisations, and bilateral (government-to-government) programmes. Voluntary sector support was reduced by $45 million from 1994/5 (from $244 million to $199 million), a cut of more than 18%. Bilateral geographic programming was cut by $150 million to $731 million, a cut of 17%.

Programmes supporting private-sector co-operation, humanitarian assistance, and bilateral food aid were reduced by smaller amounts, on the order of 10%.

Canada's contribution to international financial institutions like the World Bank and the IMF was cut by less than 10%, from $435 million to $400 million.

(4) The February budget offered few details on how the budget cuts would be assigned to non-government programmes and agencies. These specific decisions were taken "at the highest levels", especially by the Minister, André Ouellet, in the last weeks of March. Only now, in early April, are the details and immediate consequences of these cuts becoming clear. They are grim indeed. The budget cuts to the voluntary sector will set in train a major reduction in programming in Canada and in the South, indeed a profound restructuring of the development NGO sector in Canada.

"Restructure" means cut, cut, cut

The marginalisation of public participation in the foreign policy statement has been implemented with a vengeance. CIDA has cut completely its funding to nearly a hundred smaller organisations across the country devoted to public education on global development issues. Not only have the Liberals accelerated the decline of federal support to the voluntary sector that began in the early 1990's, they have added something not even the Tories achieved - a near-total cut to resources for public education on development issues in Canada. The dollars involved are minuscule within CIDA's budget - $11 million, 6/10ths of 1% - but the cuts will seriously damage a network built up over a generation, and hundreds of people will lose their jobs. For those committed to this work, it's back to church basements. Although some of the larger agencies like OXFAM-Canada and CUSO will retain a presence across Canada, their resources will be stretched thin - in some cases, radically cut back - and they will not be able to replace the dev ed network.

One of Canada's most effective organisations in promoting the development of African NGOs, Partnership Africa-Canada, has been dismantled. Formed in the mid-1980's after the huge wave of popular financial support for famine relief, PAC grew into a coalition of more than a hundred agencies with programmes throughout Africa. The raison of its work was strengthening NGOs and citizens' associations in Africa. It had succeeded in giving priority to issues of gender, to women's organisations, to effective evaluation - all areas where NGO programming is often weak. Its annual budget exceeded $15 million, financed by CIDA monies used to match Canadians' private donations.

The Special Fund for South Africa, whose renewal ($5 million over three years) had been announced by Minister of State Christine Stewart, is now cut entirely.

Other similar "arms-length" coalitions and funding mechanisms have been dismantled or drawn back into CIDA. They include the Rehabilitation and Reconstruction Fund, administered by CCIC, and used effectively by many Canadian NGOs to support post-disaster reconstruction programmes by their Southern partners.

The clear overall trend, notes the CCIC, is a centralisation of funding towards the larger, professionally-managed organisations based in central Canada. Nonetheless, CIDA's contributions to agencies like CUSO and OXFAM-Quebec have been cut by some 15% for 95/6, often with similar cuts to follow in recent years. The same patterns hold for co-operatives, and for universities and colleges, with only trade unions as a sector being increased (by 4%). The specific individual and cumulative effects of such cuts are hard to predict. NGOs are still trying to assess the damage, and figure out how to respond. We may be sure of contractions and disruptions in programmes; there will likely be mergers and closures of some agencies as well.

A bleak and regressive picture, then.

An exception for Africa?

There may be room for a more nuanced reading, as Canadian policy relates to Southern Africa. It is hardly optimistic, and may be more a working hypothesis than a well-supported conclusion. Briefly: within Canadian policy, Africa is in the domain of the political rather than the commercial or economic. The feds' interpretation of "Canada's strategic interests" will tend to align aid and foreign policy more closely with commercial objectives in Latin America, Asia, and the Pacific Rim. There may thus be some space for more socially progressive policy initiatives within Africa - support for strengthening popular organisations and citizens' associations within a maturing civil society, for programming aimed at basic needs, some relief for the burden of official debt, and so on. (And, a cynic might add, the humanitarian assistance budget will be maintained, evidence of "official compassion" to match the readiness of Canadian citizens to respond generously to appeals for disaster relief.)

Ironically, Africa's marginal status within the global political economy may soften the prevailing commercial orientation and open some options for the aid programme not present in, say, Latin America.

One should not overstate this prospect. By the CCIC's estimate, Africa will be disproportionately hit by the cuts to the voluntary sector. These are not restricted to the "dedicated" funds like PAC and the South Africa Special Fund. Many of the individual agencies suffering cuts devoted a substantial amount of their programming budgets to Africa. And even at the bilateral level, the overall federal commitment to Africa is modest enough. (Canada's bilateral allocation for Africa and the Middle East in 95/6 will be C$328 million - at 45% the largest single portion of CIDA's geographic budget, but still reduced by $68 million, or 20.5%. By comparison, the public debt of sub-Saharan Africa at the beginning of 1993 was US$179 billion.) We are, then, talking of a working premise to be confirmed, one that at best modifies an overall picture that is both gloomy and retrograde.

So what's going on? First, some working assumptions about Canadian aid policy in the current conjuncture that are necessary to frame my assessment.

(1) We are experiencing and witnessing the end of the Western postwar aid "project". Almost all of the OECD countries are reducing their aid budgets (Japan is a notable exception), and changing their composition towards market promotion and humanitarian relief. This shift has become more marked with the end of the Cold War in the late '80's, and of the ideological competition that accompanied it.

The energy of politicians, senior officials and the heavy hitters of the business world is now devoted to creating and consolidating trade and investment blocs like NAFTA. More generally, the organising pole of economic policy and foreign relations is the drive for profits, to be promoted by "liberating the markets" - deregulating transnational corporations and financial institutions.

Within Africa, the IMF has played the role of priest and gendarme to ensure compliance with this agenda, with the World Bank firmly in support. The notorious SAPs provide the policy expression and prescription. (African arguments for alternative reform policies have been given short shrift.)

(2) Canada is more and more becoming a country of the Americas, driven by an official and corporate agenda that has taken us into the OAS, the FTA and NAFTA, and most recently, the Action Plan for the integration of the Americas.

(3) These two developments underlie "Canada's strategic interests", in official eyes at least. The end of the postwar aid regime also means that CIDA is ever more a bit player in federal policy forums. The agency is politically adrift, lacking a clear and legislated anti-poverty mandate or a powerful leader or ally in Cabinet, unable to offer any competing vision either to Canada's Ministry of Finance or the nostrums of the World Bank or the IMF. Such political weakness is hardly a recent phenomenon, but is especially marked by comparison with the power of the Finance Minister's agenda.

Is there any room here for progressive aid initiatives in Southern Africa?

Progressive prospects?

Within the bilateral branch of CIDA, staff recognise the need to support African initiatives to build the capacity of Africa's social, political and economic institutions, at the community, national or regional level. South Africa and Southern Africa receive particular attention, though the priority of the region within the (reduced) bilateral aid budget for Africa is still to be determined. Programme documents also recognise the necessity to redirect aid programmes to meet basic needs: food security, literacy, water supply, shelter, and primary health care, with a particular focus on the needs of poor women in both rural and urban areas.

Within CIDA's bilateral programme for Southern Africa, as elsewhere within the Africa section, officials are open to collaborating with both Canadian and African NGOs in programmes aimed at strengthening civil society. (By contrast, CIDA's practice in the Americas has been much less open to comparable initiatives.) It's not clear whether this will move CIDA's programming significantly away from conventional patterns of infrastructural spending and balance-of-payments support such as food aid and lines of credit. And, it is another question entirely whether CIDA has the operational programming experience or capacity to develop these sentiments into a coherent framework or methodology - certainly with the cuts to agencies like PAC, CIDA has fewer reliable and effective actors to call upon.

How then are we to weigh these countervailing signals within the overall picture? Against these possibilities are some fairly tough political realities.

It's important to point out first, the apparently anomalous nature of the government's moves within the aid programme. If African policy is the domain of the political, it may also be the domain of the idiosyncratic. When other federal departments are devolving budgets to private agencies for implementation, CIDA is going against the tide. It is recentralising by cutting NGO administration of the aid programme. Observers close to the government see this not as a twist on the "reinventing government" agenda, but an expression of the power of Ouellet, widely considered to be a control freak. The evident space for personal intervention by a powerful minister could well lead to additional cuts, particularly to NGOs.

This becomes more likely if one sees the cuts to global education as part of the broader agenda to end state funding to progressive advocacy organisations, dismissing them as "special interest groups". To the Liberals, the costs may be slight. Neither Canadians involved in global education nor African NGOs are likely to vote for the Minister. Politically, they figure to be a soft target.

Nor is the aid budget simply the whimsical intervention of Ouellet. The overall approach to the aid programme - if not the detailed allocations - mirrors the logic of an internal position paper prepared by the (then) Department of External Affairs in 1992/3, in the last year of Tory rule. Widely denounced at the time, it was nominally withdrawn from consideration. It endorsed a heavily profit-oriented vision of aid, summarised candidly by a source at the time as "invest in winners, not the poor". There is a clear fit between the final political decisions of 1995 and the bottom line thinking of the earlier paper. Discredited or not, its opinion seems to be all too alive and well.

Nor should we expect too much from the more "open" sections of CIDA. Even if Bilateral is ready to explore "capacity-building" or "basic needs" programming in Southern Africa, CIDA staff themselves are sceptical about the agency's experience and capacity to carry out this kind of work. In a country like Zambia, for example, as much as 60% of CIDA's annual aid budget in the 1980's was made up of grants for balance-of-payments support. Even if Zambia's complete debt burden were lifted by the western donors and the international financial institutions, an agency like CIDA has limited practical experience with on-the-ground programming in the social sector on which to base a different approach to its budget. Moreover, the cuts in the current budget will seriously limit its options for collaborating with Canadian or African NGOs. Finally, it is not yet clear how CIDA's priorities for the region will address the choice between the daunting and complex work of reconstruction in Mozambique and Angola, or easier and more commercially attractive options with the private sector, particularly in South Africa.

So, the various doors may not be completely closed to progressive initiatives in the aid program. But just how real and extensive these options may be, how they can be leveraged, remains to be seen.

Fight back

And, as always, what to do? The historic change in the aid project, the reworking of relations between NGOs and the state - these suggest we are at a fairly major watershed. Responses are needed at several levels:

(1) individuals and organisations should challenge the Minister of Foreign Affairs, directly and through their own MPs, on the effects of the budget:

* demand government commitment to NGOs and citizens' associations in the South, as well as to global education and support for public policy participation in Canada

* demand that budget cuts fall on contributions to the IFIs, on Bilateral programmes (Bilateral regularly fails to expend its allocations), and on private-sector collaboration.

* demand an end to tied aid and commercial logic for Canada's aid programme: if we are going to have a smaller programme (this seems inevitable) it should at least be focused on poverty and the basic needs of poor people; and, where possible, should be designed and delivered in concert with community-based organisations.

(2) With the evident limits on even a liberal official aid policy, Canadian development NGOs and their Southern partners will have to reconsider their links with the Canadian state. Many Canadian organisations have based their work with CIDA on the assumption of "non-antagonistic" interests and relations. These may not hold any longer.

(3) More generally, it is time for activists to explore new forms of collaboration and support across sectors, regions and national boundaries. The issues of social justice are clearly global now; at the same time, there will be modest (and diminishing) federal support for international co-operation among community, popular, and nongovernmental organisations. Even as we challenge wrong-headed official policy, we will have to begin to reach out to those with whom we have common cause within Canada and beyond, to define new forms of "peoples' diplomacy".

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