March 21st 2013 signalled the end of CIDA
After 45 years of loyal service, the agency was told its services were no longer needed and that it would be amalgamated with DFAIT to form the acronym-unfriendly DFATD. The announcement did not manage to make it onto Finance Minister Jim Flaherty’s speech, but instead was subtly slipped on page 144 of the 240 pages 2013 Federal Budget in a chapter titled “Supporting families and communities” with little fanfare and even fewer details. Although there had been rumours and signals preceding the announcement such as the cuts to the department in the previous budget, the appointment of Julian Fantino as Minister of International Cooperation, and internal emails sent to CIDA staff outlining the sharing of certain services with DFAIT, the announcement came off as a surprise to CIDA staff and the broader international affairs community in Canada.

Initial responses to the merger have been mixed. Supporters of the decision have echoed the rationale put forward by the current government by stating that better integration in the realms of trade, diplomacy, and development will allow Canada to broadcast a coherent and consistent message in the international arena. Opponents of the decision have claimed that the independence of the department was critical for its ability to fulfil its mandate. Opponents of the decision further contend that in recent years what exactly that mandate entails has been obscured by a policy shift away from poverty reduction in the poorest nations towards commercial and trade interests as evidenced by the establishment of private sector partnerships by the agency in recent years. Opponents see amalgamation of CIDA into DFAIT as the latest development in a long line of moves that have characterised this shift in priority for the Canadian government.

Two fundamental questions that arise from the decision are:
A. How will the move affect the different stakeholders; and
B. What should be the role of development agencies going forward?

How will the move affect the different stakeholders?
On the domestic front, despite the assurance that the amalgamation would not result in job losses, it is generally understood that there will be some areas of duplication once CIDA is integrated into DFAIT. Another stakeholder that stands to come out on the losing end is the NGO sector. Severe cuts to CIDA in last year’s budget combined with its amalgamation into DFAIT have resulted in NGOs seeing their voice and funding curtailed significantly. NGOs, particularly those that depended heavily on CIDA, will have to explore alternative sources of funding and adapt accordingly to this new arrangement. The outcome for developing countries is more tempered. In his book “The End of Poverty”, Jeffrey Sachs contends that Americans believe that up to 25% of their national budget goes to foreign aid. Although the neighbours to the North are generally more astute and better informed than their American counterparts, perhaps they are guilty of overestimating the size and reach of their foreign aid dollars as well. Foreign aid dollars, though they get a lot of attention in the media pale in comparison to remittances and foreign direct investment in the vast majority of developing countries. Furthermore, the international aid architecture is so fragmented that an alignment with governmental priorities for one of the many donors will not have such far-reaching effects for recipients. Furthermore, in recent years, “new donors like China and India have assumed a greater role in the development of poor countries and have successfully managed to counter the hegemonic presence of traditional donors like the U.S., the U.K. and Canada. This has effectively meant more choices and more flexibility, if not more money for developing nations. Combining this information with the fact that a significant proportion of donor countries have undergone rapid economic development in recent years leads us to our second question: What should be the role of development agencies going forward?

What should be the role of development agencies going forward?
What poor countries need is not more aid by a litany of donors targeting everything under the sun. Instead a more integrated approach that includes mutually beneficial trade arrangements, infrastructure development, capacity building and the development of a sustainable private sector is more likely to contribute to long-term economic growth and development. The current CIDA strategy touches on a couple of these and also focuses on social and human security issues like maternal and child health, education, and food security. The new DFATD will have further opportunities to build on the work of CIDA while focusing on a specific set of countries. Of course the department would do well to target countries on the basis of need instead of commercial interests (if media reports are to be believed). One could argue that in comparison to the old model of sprinkling a little aid to all of Canada’s friends in the developing world, the new direction despite its downsides and the unfair criticism it has received in the media, is better adapted to the current environment and needs of developing countries’ citizens.

Of course, it is still unclear how exactly this will all play out since little information has been released regarding this merger. As others have stated, it could take months, even years for the full integration of CIDA into the new department. Issues such as cooperation within the new department, a comprehensive unified policy, and funding mechanisms for the development portfolio all need to be addressed in the coming months. To the government’s advantage, it is worth noting that the Scandinavian nations, often lauded for establishing the best practices in pretty much everything, have adopted a similar centralized model for their foreign affairs and aid agencies. All this to say that the move in itself will not define for better or for worse the outcomes of Canadian foreign aid. Only time and the policies that follow will tell what role the newly minted DFATD will play in the realm of international development. Regardless of one’s take on the merger, it is safe to say that it is indeed an exciting time for the newest DFATD employees and the broader international affairs community in Canada.


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