Policy Coherence for Development

Canada (1998), Development Co-operation Review


Development Co-operation Review 1998: Summary and Conclusions


In the context of rapidly-changing domestic and international challenges looking towards the new century, the Canadian government's foreign policy statement -- Canada in the World -- set out a comprehensive agenda for Canada's foreign policy and development co-operation. Based on a major national consultation effort, the statement renewed and updated Canada's commitment to an active role in collective approaches to the creation of a better world. The high ambitions that Canada has set for itself continue a long tradition of constructive engagement in world affairs and development efforts, a tradition that both draws upon and nourishes Canada's national identity. A recent historic manifestation of this tradition is Canada's contribution to concluding the treaty to ban antipersonnel landmines, signed in Ottawa in December 1997. Another recent initiative was the Global Knowledge Conference, held in Toronto in June 1997, co-sponsored by the Canadian International Development Agency (CIDA) with the World Bank, the United Nations Development Programme and others, with the aim of highlighting the new challenges and opportunities for developing countries in an age where the knowledge/communications revolution is a powerful new factor in development. These two initiatives illustrate Canada's special ability to help lead the international community towards action which pushes out the frontiers of international co-operation.

The prominent international role that Canada has set for itself has not, however, been accompanied by increases in resources allocated for development co-operation. On the contrary, in the context of a fundamental fiscal adjustment to respond to its domestic public debt burden, Canada's official development assistance (ODA) effort has declined significantly, from an average of approximately 0.45 per cent of gross national product (GNP) at the beginning of the 1990s to 0.32 per cent in 1996. The ODA/GNP ratio is projected to fall still further by 1998/99, to below 0.30 per cent.

At the same time, the ministries and agencies charged with the prosecution of Canada's foreign policy and development agenda have taken important reform measures to equip themselves with the necessary human resources and institutional systems and structures to tackle the expanded missions set for them in Canada in the World in a coherent and co-ordinated fashion. But they face an increasing mismatch between the scope of their mandate and the diminishing means at their disposal. Reductions in ODA, combined with a growing range of goals, brings into sharper focus, for example, the issue of the wide dispersion of Canadian aid efforts. It is already clear that ODA budget cuts have reduced programming in many partner countries to levels at which past activities can no longer be continued and previous leadership roles have to be relinquished.

Canada has exercised important influence at the multilateral level, based on the quality of its analyses, the effort invested in multilateral governing bodies, and also derived in the past from Canada's readiness to provide a relatively high share of the financing of a number of multilateral organisations and regional development banks. This positive influence stands to suffer now that Canada is no longer prepared to make its traditional extra effort in financing multilateral development co-operation.

Thus, at the end of the 1990s, there is a paradox at the heart of Canada's internationalism. The determination continues to be involved in a very wide range of issues and with as wide a range of partners and multilateral organisations as possible, while the aid budget has been cut by 29 per cent over six years. This paradox raises concerns about Canada's ability to meet expectations about Canada's role in the world, both at home and internationally.

Canada in the World: a new vision of Canada's international role

Canada in the World outlines a new vision for the role of Canadian foreign policy based on three objectives:

  • the promotion of prosperity and employment;
  • the protection of Canada's security within a stable global framework; and
  • the projection of Canadian values and culture.

Canada in the World points to development co-operation as "an important instrument in support of these objectives, and indeed as an investment in prosperity and employment". Canada in the World also places special emphasis on the need for coherent responses to global challenges and specifically mandates the different Canadian actors involved to co-ordinate their efforts. Various inter-ministerial co-ordination mechanisms have been established to this effect. In particular, the Department of Foreign Affairs and International Trade's (DFAIT's) recently created Global and Human Issues Bureau is charged with ensuring coherent responses to international issues ranging from the global environment, to child labour, to international crime and preventive diplomacy.

Canada's foreign policy is also characterised by intense efforts to identify and analyse forthcoming global shifts and challenges, with a view to formulating effective and timely responses. "Canada 2005", a government-wide policy research effort to identify critical issues for Canada including competitiveness, economic integration and human security, is an illustration of the intellectual investment being made.
With the current Ministers for Foreign Affairs, International Trade, and Finance all having experience and interest in development matters, together with the Cabinet-ranked Minister for International Co-operation, there is a strong team at Cabinet level. Meetings of Cabinet thus function as the ultimate policy co-ordination forum for Canada's programme. However, with three ministers successively holding the International Co-operation portfolio since January 1996, the continuity of strong and sustained promotion of the core development co-operation programme at the political level has suffered.

At the same time, alongside the longer-term goals for development co-operation, Canada in the World also promotes the objective of enhancing trade with developing countries with attendant benefits to employment in Canada. A series of high-profile trade promotion missions, led by the Prime Minister ("Team Canada") have focused on fast-growing developing countries. This focus, in combination with the aid budget cuts, has led some in Canada to see a shift in priorities in relations with developing countries, driven by budgetary and commercial concerns. Meanwhile, Canada's politically visible initiatives on international issues such as child labour and landmines have served to focus the attention of the Canadian public on particular sets of development issues, while the overall resources allocated to development co-operation have declined.

The Canadian International Development Agency (CIDA): an agency in renewal

Canada in the World pointed to the need for a redirection of Canada's development co-operation activities in order to meet new challenges, and a clearer definition of objectives and stricter evaluation of the actual impacts of ODA-supported programmes. Over the past few years, CIDA has embarked on a comprehensive and thorough renewal process, aimed at addressing the twin objectives of operationalising the mandate provided by Canada in the World and improving programme delivery practices.
Efforts to improve the focus and contents of programmes have concentrated on the formulation of a range of policy guidelines to translate the directions given in Canada in the World into concrete programmes. CIDA's Policy on Poverty Reduction, adopted in June 1995, provides an overarching analytical link among the set of priorities with which CIDA works: basic human needs; gender equity; infrastructure services; human rights, democracy and good governance; private sector development; and environment. These themes and priorities match well with the common strategy document adopted by Development Assistant Committee (DAC) Members in May 1996, Shaping the 21st Century: The Contribution of Development Co-operation, which CIDA has adopted as a central reference point in its own corporate goals.

Taken together, CIDA's programme priorities represent a formidable agenda for any agency to take on. It is not the intention for each of CIDA's country and other programmes to address all these challenges simultaneously. While environment and gender equality are treated by CIDA as fundamental cross-cutting concerns that are addressed in all activities, the objective for CIDA's geographical branches is to formulate coherent programmes consistent with one or more priorities in line with the needs and circumstances of partner countries and to complement activities of other donors. The definition of measurable and realistic objectives, consistent with available financial and human resources, is another key challenge.

The Agency has made major progress towards redirecting its bilateral programmes from a traditional sector-focus to a theme-based approach, with a clear concentration on results, rather than inputs. The relationship between some of these themes would however merit further clarification. The distinction between the poverty reduction and the basic human needs objectives, for example, seems not always to be fully understood by staff, so that the translation of the poverty reduction thrust into country programmes still has some way to go. (Encouragingly, the new CIDA programme framework for Tanzania, issued in September 1997, shows how this can be done.) Much work also remains on the classification and statistical reporting of activities in line with these themes, as required by Canada in the World.

CIDA has made major strides in building the human rights and governance dimension into its programme priorities and design in all aspects of its operations. This work includes a good deal of low-key, but strategically critical, support for organisations in developing countries promoting and defending civil rights, constitutional government and democratic processes. This coherent, broad approach reflects a high level of integration between a variety of development co-operation policies, such as humanitarian assistance in emergency situations and longer-term development co-operation aiming at poverty reduction, equity and sustainable economic growth. CIDA is also active in the area of conflict prevention and peacebuilding and, together with DFAIT, has created a new Canadian structure for organising rapid responses to emergency situations with volunteer and non-governmental organisation assistance.

a) Results-based management and a learning organisation

Efforts towards improving the effectiveness of its programme delivery systems have been similarly thorough, spurred by internal assessments pointing in similar directions to the findings of a 1993 Report by the Auditor-General of Canada which highlighted a need for improvement in programme management practices. The exemplary relationship that has subsequently developed between the Auditor-General and CIDA, aiming at identifying and addressing critical areas of weakness and monitoring progress, is noteworthy. This relationship is succeeding in transforming the management culture in CIDA, changing the "mindset" of staff to focus much more on results and impacts of programmes and projects, and injecting fresh energy and morale into the Agency. These changes have been accompanied by a comprehensive initiative to renew CIDA staff, both in terms of age and skills composition, and a large investment in training. In the process, CIDA has moved to the front ranks of the Canadian public sector in terms of its human resource management and the creation of a results-based management culture.

With the introduction of results-based management and the emphasis placed on continuous assessment and monitoring of projects, a "portfolio management" approach has quickly emerged in the geographical branches. This allows a clearer view of the "state of play" across the whole range of projects and programmes, and permits more timely and effective linking between programme managers at all levels, and, most importantly, between Ottawa and the field. Thus the whole management system is being streamlined and speeded up, with early identification of problems and opportunities and the implementation of corrective measures long before programme completion.

Another important management reform is the dissolution of CIDA's professional branch, with its personnel now distributed among the geographical units, although a core has been allocated to the Policy Branch, giving it a multidisciplinary capacity and strengthening its ability to affect the programming process. As in a number of other aid agencies which have also taken this step, including the World Bank and the Department for International Development in the United Kingdom, the various categories of professionals are being linked across the Agency through "networks" which share experience and new knowledge. There is also a strong network devoted to promoting best practices for local capacity development, an issue which CIDA actively advances on the international level.

In sum, CIDA's efforts to become a "learning organisation" have taken a leap forward. More broadly, the reform process has made CIDA a much more integrated and policy and performance driven organisation than it was at the time of the last DAC Review of Canada in June 1994. A major programme is underway to devise and introduce a new unified management information system to support the new management approach.

At the same time, the practice of results-based management highlights the dilemmas faced by many donors in their attempt to develop genuine partnerships with recipients. The essential challenge is to reconcile the needs, objectives and leadership responsibilities of developing-country partners with the demanding accountability criteria required of CIDA by the government, the Parliament and the Canadian public.

b) Managing diverse partnerships

There is a larger issue here as well for Canada, a country which has made a special point of building its development co-operation around the concept and practice of Canadian partnerships. Canadian aid at its best sees a strong fusion of Canadian partnerships with the development partnership on the ground, with some outstanding examples, such as the co-operation with South Africa described later in this Report. The International Development Research Centre (IDRC) carries this principle through to the international level, as a notable expression of Canada's partnership philosophy. The Canada in the World statement reinforces this orientation towards enlisting Canadian organisations and interests in its development co-operation efforts, while recognising that public support for aid in Canada (as in other DAC countries) is overwhelmingly based on altruistic and humanitarian motives.

The challenge is to ensure that Canadian initiative, partnerships and accountability systems reinforce rather than weaken the all-important partnerships with developing countries, and that the process of managing Canadian stakeholders and their multiple objectives does not impair development objectives. There is potential tension between the impulses for partnerships in the field and in Canada. Canadian institutions and solutions are often highly appropriate and valued by developing country partners but this may not always be the case, or adaptation to local needs may be inadequate.

Canada's extensive use of tied aid is an area where this tension can be most acute. As part of the Canadian government's overall concern with accountability and the impact of public expenditures, there would seem to be a strong case for Canada, like other donors, to re-examine the efficiency of tied aid as a means of promoting exports and employment, alongside the costs and benefits of tied aid for developing countries receiving Canadian ODA.

A further source of tension in Canadian aid management is the balance between centralised and decentralised management of country programmes. After a major (and, in some respects, excessive) decentralisation effort began to prove costly and difficult to manage, CIDA has now "recentralised" with its country directors and programme managers located in Ottawa. The largest field offices have five or six CIDA professionals, but most have only two and some just one. However, in countries with a substantial country programme these field offices are usually supported by significant Project Support Units, including local professional and administrative staff. It remains to be seen whether the slim CIDA presence in the field is fully compatible with the demands for improved field-based partnerships and donor co-ordination in developing countries, notably in increasingly complex areas such as poverty reduction and governance. Moreover, the limitations of centralisation might become more apparent in the event that the Canadian programme were restored as a greater critical mass in partner countries.

Canada's ODA volume: a critical turning point for Canada

The previous Review of Canada by the Development Assistance Committee had raised the concern that insufficient resources could undermine Canada's ability to pursue its ambitious policy objectives. This concern is even more pressing today.

Final revised expenditure figures are not available at the time of writing to support a precise comparison with other areas of Canadian federal expenditure. However, it is clear that the International Assistance Envelope has been one of the most heavily cut items in the federal government budget. With the further cuts already programmed, the projected reduction in the Envelope between 1993-94 and 1998-99 is C$ 767 million or around 29 per cent, more than twice the reduction level of the federal budget as a whole. A substantial and sustained effort will be required in the future if Canada's ODA/GNP ratio is to return to its level of the beginning of the 1990s, i.e. around 0.45 per cent. Even a lesser growth objective, which would still imply a retreat from Canada's previous aid volume targets, would present a major challenge for political decision-making on budget priorities. (See Figure 2 in Chapter 1.)

In early 1998, the Minister for Finance will present a new federal budget to Parliament. While the previously-announced cuts in the International Assistance Envelope for 1998-99 are expected to be confirmed at that time, an announcement of a further decline in the International Assistance Envelope for 1999-2000 would be a fundamental setback to prospects for a recovery in Canada's ODA volume. Even holding the aid budget constant would involve a further decline in ODA/GNP performance. An increase of around 5 per cent would be needed simply for Canada's ODA not to lose any further ground in relation to current GNP growth. Even if Canada's ODA were to increase by one percentage point faster than GNP each year, it would take half a century for Canada to regain the 0.45 per cent of GNP level. The budget choices will be critical for the future impact of Canada's ODA programme, and Canada's valued international role.