From ‘Assistance’ to Cooperation and Partnership :Policy Options

The countries we help through international assistance are no longer just recipients, but partners in a global mission to meet sustainable development goals.

September 20, 2016. published in ‘Policy Options’. 

The global economic crisis of 2008, and the stagnation and political crises that followed, have made us acutely aware that our future can no longer rely on relationships with other developed countries. The North (basically OECD countries) and the South (developing countries), rich and poor, must increasingly cooperate.

Our vocabulary and thinking is changing. We are moving beyond what we used to call “assistance,” the charitable response of richer nations to global poverty, to something less paternalistic. We now talk of “development cooperation.” Today’s assistance is multifaceted, and includes more than just financial and technical aid. It can include preferential tariffs on goods from the least­developed countries (LDCs); tweaking the legal frameworks defining what constitutes a refugee; and adjusting intellectual property rules to allow for preferential transfers of technology to LDCs. Development cooperation also encompasses a topic that is particularly hot today: fair payment of taxation by foreign investors, for example, a Canadian mining company operating in a poor African country.

As the federal government reviews its international assistance policies, it should be guided by this evolving vision of development, with financial aid as just one component. The UN Agenda 2030 for Sustainable Development will shape how the government approaches cooperation, seeing the countries it assists as partners in a collective mission to alleviate poverty, rather than mere recipients.

Building relationships through partnerships and enhanced development cooperation

Looking ahead, for political, commercial and security reasons, Canada will need to engage with a more complex array of actors. Some of these countries will be very poor. Our trading and investment partners are as likely to be emerging developing economies as they are familiar OECD countries. The BRICS and other middle­income countries (MICs) are already competing with the United States and other G­7 nations as economic actors. They are reshaping global markets as suppliers and buyers, sometimes as equity investors. The economies of these countries are growing much faster than ours is, even during this extended period of economic stagnation. Today’s BRICS superstar is India, which, despite its 300 million poor, is now growing at about 7 percent per year — faster than China.

 

Critically, more and more developing countries, even the poorest, are changing socially: they are more democratic, and their populations are better educated, with growing expectations of enhanced well­being for their sons and daughters. These expectations are often frustrated by Northern unwillingness to share old privileges and power that have been jealously guarded since the Second World War. One symbolic battlefield is around fairer, more representative governance of global institutions such as the IMF and World Bank. The battle, often driven by the BRICS, has led to the creation of several parallel global financial institutions. One recent (2015) dramatic step was the creation by China of its US$50 billion+ Asia Infrastructure Investment Bank. We saw most major European countries rushing to join as founding contributors, despite very public US objections. Canada belatedly asked China if it could join, after stalling for months under US pressure.

These rapidly changing power relationships between Southern and Northern powers yield a key message: Canada, as a middle power that was substantially absent from the global dialogue for a decade, has a lot of catching up to do. We need new friends, new partnerships in the world.

Obvious candidates are the BRICS, notably China, India and Brazil; but there are also emerging lower­middle­income developing countries (LMICs) such as Ghana, Vietnam, Indonesia, even Egypt or Nigeria. These and other nations could soon be important trade and investment partners for Canada. Of course, old neighbours and friends in the OECD and the G­7 will still be important, but they won’t be enough. Indeed, some of them are already ahead of Canada in building their own new South­facing partnerships.

An enhanced development cooperation approach is a key entry point, a place where we can build relationships and demonstrate our merit as a good partner, to show mutual respect and build trust. However, such partnerships require more than a 24­hour drop­by trade mission, with Canadian politicians desperately searching for a few deals to sign. We need sustained engagements on the ground, over decades, sharing in the struggles of partner countries to end poverty.

Canada was such an engaged partner for many decades. CIDA was the vehicle for our development cooperation activities since the late 1960s — activities that were seen as innovative (the first to provide funding for multiyear programs, rather than individual NGO­led projects) and generous (our aid level peaked at 0.54 percent of GNI in 1975 under Pierre Trudeau). But our leadership presence slowly faded, first from the austerity measures under the Chrétien government, then from the very ambiguous engagement of the Harper years, when our credibility as an innovative donor decreased. Programs became more politicized, and budget cuts sent overall international assistance to a low of 0.23 percent of gross national income (GNI).

But who now should be the beneficiaries of our development assistance? The 2030 United Nations Agenda for Sustainable Development’s core target is to eliminate extreme poverty. The extremely poor population largely resides within the LDCs. Unfortunately, the Harper era saw a distortion toward countries that were considered political or commercial favourites, rather than toward the LDCs. Looking forward, the poorest, still numbering about 1 billion, are in two overlapping country groupings. These are the 48 UN­listed LDCs and some 20 “fragile” countries that are vulnerable and conflict­-afflicted, such as Haiti. An updated list of countries of focus for Canada is urgently needed, and it should consist mainly of LDCs and the ‘fragiles’. Our funding for LDCs should meet the UN aid target of 0.20 percent of GNI.

 

Aid focused on the poorest will meet our commitment under Agenda 2030’s signature principle of “No ­One Left Behind.” However, it does not preclude development cooperation with a few middle­ income countries with whom Canada has important strategic or historic ties, such as the Caribbean states. For them, there could be customized agreements, partnerships or actions that do not require diverting scarce aid. These could focus on arrangements around trade, investment, technology transfer and fairer taxation. They could include possible new cooperation instruments that seek to help engage the private sector, or so­called “triangular cooperation”: innovative aid projects involving partnerships between Canada, a new developing country donor such as Brazil or China, and an LDC or other poorer country.

The 2030 UN Agenda for Sustainable Development as our guide

The universality principle embedded in the preamble of Agenda 2030 brings development cooperation into the heart of Canadian domestic policy. It means all countries, developing and developed, are committed to the same goals as core economic and social performance targets. It is Canada’s statement of global solidarity. This “obligation,” essentially putting Canada on equal footing with developing nations, was once seen as an unacceptable intrusion by former Conservative foreign affairs minister John Baird.

There is a synergy between many of the 17 sustainable development goals (SDGs) and the Trudeau government’s core domestic policy commitments such as working toward gender equity, tackling neglect of our Indigenous population and fighting climate change. This synergy is being taken very seriously as a domestic policy mandate by many Western countries. Already the leaders of Germany and Finland have made full public presentations in the UN on their “whole of government” governance structures for SDGs. Canada has been slower to act, and we have yet to announce our plan. Logically it should be driven by a powerful office that reports directly to the prime minister, and coordinates and monitors activities in partnership with the provinces and territories.

Canada is now in the middle of a complex consultation, seeking new thinking on how to be a better development cooperation partner. Drawing upon Agenda 2030, there are easy­to­select thematic priorities such as gender equity, climate change and poverty elimination. But the real challenge is how we frame and implement the new programs. The rules of the game have changed. Under the Paris Declaration on aid effectiveness, recipient countries should be in the driver’s seat. Partnership is becoming the new norm of international development cooperation. We need to learn how to work differently: it is not a federal department’s choices but the recipient’s stated priorities that should dictate the framework for development cooperation. To this end we will need new cooperation strategies that are prepared jointly with our partner countries. Such strategies should be built around stable four­ to five­year budget commitments.

 

All this means we need to recognize the many practical challenges confronting Canada’s aid officials and partners like civil society organizations. We could start by reclaiming the name CIDA (Canadian International Development Agency), the brand recognized by ordinary Canadians and our partner­ recipients. Global Affairs Canada staff involved in implementing development programs need empathetic senior managers who understand that some of the most effective work is inherently risky. Tidy goals set in Ottawa often fail to internalize the challenges of working in another continent and culture. Finally, the government requires staff who are working closely with their clients on the ground. This requires decentralization — Global Affairs’ development assistance teams working out of our embassies with delegated authority.

As long as they are generous, and delivered effectively and with commitment, our development cooperation programs in the least developed and middle­income countries can be key to the future economic and political partnerships Canada needs as a middle power in a troubled world.

URL:  https://jsinclair43.wordpress.com/2016/10/26/from-assistance-to-cooperation-and-partnership-policy-options/

 

John Sinclair.    September 20, 2016

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G20 needs new blood, sense of mission

The Hill Times  OPINION

by John Sinclair. 

PUBLISHED : Wednesday, Aug. 31, 2016

G20 needs new blood, sense of mission

Trudeau might suggest a tighter-knit forum for decisions on core global issues, starting with climate change.

As China prepares to host the G20 leaders’ summit for the first time this week, it is promising a different kind of summit, one focused on global development and the challenges of implementing the pro-poor goals of the UN’s new Agenda 2030.

But China seems fated to do little better than past chairs. The G20 is starting to look as tired as the G7. It needs new blood and a new sense of mission. Perhaps there are too many Europeans; certainly there is no voice at the table for the poorest nations.

The G20 started in 1999 as a club of finance ministers mainly G7 but augmented by the BRICS and a few other friendly minor countries, including some middle-income developing countries. The goal was to make symbolic amends for an ineffective International Monetary Fund response to the recent Asian financial crisis.

The world has avoided a new depression in 2008 via massive stimulus packages implemented by a G20, upgraded to a Leaders’ Summit. However, the regulatory reform of the flawed global financial systems that triggered the crisis is still unfinished. Indeed, the situation has been compounded by the ripple effect of recent European financial disorder. As for the upcoming United States election, it is being fought over who can most forcefully say globalization is the cause of all our social ills, including growing inequality and underemployment.

The global financial crisis continues into its eighth year. And it is in the second year of a refugee crisis, as Europe copes badly with the flow of battered humanity escaping the conflict in Syria. The Brexit referendum bombshell, driven by the UK’s own distinct crisis of unwanted migrants from inside the European Union, has stunned an already stalled Europe. Deep depression describes the mood in the very dis-united United Kingdom. Meanwhile many countries, rich and poor, are struggling with trade losses due to China’s policy of a calculated slowdown to 6.5 per cent growth.

China has perhaps over-invited developing countries as summit guests since there will be no big news, no bold new G20 action, no new aid pledges for the least developed or fragile states. Everybody is waiting for a breakthrough in the gloomy economic news.

But the latest IMF forecasts are all about shrinking growth. Global growth is down to 3.1 per cent for 2016, with most of that coming from emerging economies. They’re led by India, moving slightly ahead of China. The growth forecast for so-called advanced economies is just 1.8 per cent. All this is conveniently blamed upon Brexit. It means a major G20 preoccupation this weekend will be how to help the UK and EU find a soft landing after the folly of that referendum.

So what might we see out of Hangzhou? The working agenda is dominated by work by  finance ministers and central bank governors. There is again a pre-negotiated communiqué. The Leaders appear somewhat bystanders.

Once more there will be “almost completed” deals on structural reform, tougher regulation of footloose bankers and this year’s special innovation: promises of more infrastructure spending. Talk about reformed international financial architecture is promised, but the horse is already out of the stable, symbolized by China’s new $50-billion-plus Asian Infrastructure Investment Bank. [Canada announced plans to finally join just days before the G20 meeting.]

Another round of technical debate is needed to forge a broad consensus around so-called tax fairness reform. The present package is essentially designed for large/high-income economies.  In many European countries public pressure insists governments stop tax-avoiding, profit-shifting companies like Starbucks or Google. But the same OECD countries are home to multinational giants seeking every way of avoiding paying taxes. The weakest victims, poorer developing countries, are essentially excluded from both the design and benefits of new OECD/G20 anti-tax-evasion measures. They are to be denied access to key data on taxes evasion by multinational giants.

What key innovations for an enhanced G20 might Prime Minister Justin Trudeau press? He has gone to China a few days early to “reset” the bilateral relationship. He might use that access and Chinese respect for his prime ministerial father’s boldness to get China’s sympathetic ear for an effort to transform the G20 into strictly a leaders’ dialogue.

They need to break the common image of the G20 as a vehicle used by a tired G7 to try to get the BRICS (Brazil, Russia, India, China, and South Africa) to align with their worldview. Mr. Trudeau might suggest that leaders act more boldly to revamp the G20 as a tighter-knit forum for debate and decisions on core global issues, economic and political, starting with climate change. An encouraging precedent is that reportedly the United States and China plan to jointly announce their ratification of the Paris climate agreement on the eve of the summit.

Another G20 initiative could be a new Marshall Plan designed to assure financing, public and private, for the poorest countries in implementing the UN’s Agenda 2030.

And why not encourage the 2017 G20, under German leadership, to target a lasting peace for the Middle East?

G20 finance ministers and central bankers would still have their own high-level meetings on topics like upgraded financial regulation. They could simply mandate a small delegation to report at one session of an otherwise leaders-only G20 meeting.

Acting together, G20 leaders could mobilize the resources and political willpower to counter the economic pessimism reflected in Trumpism and the rise of the radical conservative right in Europe. They should also show the driving spirit to ensure the UN Agenda 2030 is not a fanciful dream, but something realizable.

The G20 needs a more compact forum, but one with the inclusiveness of the UN. It could start by adding a permanent seat for least-developed and fragile states, perhaps by reducing the disproportionate European presence.

John Sinclair is a Cambridge-educated economics graduate formerly with the Canadian International Development Agency and the World Bank. He comments on international development with the McLeod Group, teaches, and writes.

 

 

Who’s Leading the world?

Who’s Leading the World?

August 11, 2014 by John Sinclair.                 http://cips.uottawa.ca/whos-leading-the-world

The simple but disturbing answer is: nobody.

Our world has over a billion people still living in extreme poverty. There are 25 million jobless in Europe. Jihadists control half of Iraq. The Doha Trade Round is in its 13th year without producing any major benefits. And we are burning carbon ever faster, bringing ourselves closer to global warming disaster.

Meanwhile the G7 seems focused on reviving the Cold War, while the G20 is stuck in first gear working mainly on institutional reform in the mega-banking sector. G2 is a non-starter: the USA and China have very different worldviews.  Despite a recent boost for the UN’s leadership in transposing old MDGs into new Sustainable Development Goals for 2015-30, ultimately it is a tired and underfunded family of institutions. Even the BRICS—who are key to future global leadership—are in defensive mode and starting to create their own parallel world of institutions.

This is not anarchy: things are being done, and some crises are being tackled (especially when they hit the CNN headlines). But leadership and vision are absent. We are seeing institutional frameworks that should complement each other instead struggling to protect old turf. Competition, rather than partnership and co-ordination, is still the norm. Meanwhile, jobless growth in often unequal societies is squandering the potential of the next generation, driving the young towards social apathy and even terrorism.

Much of the flawed leadership can be linked to the 2007 global financial crisis, which transformed a modest club of finance ministers into the Leaders’ G20. The crisis proved beyond the capability of the G7 alone: it was China’s economic weight (and its four trillion dollars of US Treasury bonds) that proved key to financial rescue.

The G20 rescue plan was too single-mindedly focused on stabilization (i.e. saving those “too big to fail” banks); creating jobs was only a secondary consideration. As a result, the crisis still casts a cloud over the world economy. Global stagnation has become the new norm: seven years into the crisis, the IMF has just lowered its 2014 world growth forecast.

And now the global governance framework is getting into deeper geo-political trouble with Russia’s expulsion from the G8 for its actions in Crimea. The likely tragic error of an incompetent Ukrainian separatist shooting down the wrong plane has raised Cold War tensions to heights not seen in decades.

Almost at the same time, there was a critical action in Brazil at the latest BRICS Summit. This group now represents over a quarter of the global economy, outshining the old G7 in growth. Reflecting their frustration at the failure of Western governments to deliver on promised first steps towards rebalancing power within the World Bank and the IMF, BRICS leaders announced two new global instruments. One is the New Development Bank (NDB), a World Bank clone designed to finance infrastructure and other development projects, with an initial $50 billion in capital and a $100 billion Contingent Reserve Arrangement to replace key functions of the IMF. By 2016 the NDB will move into a glossy HQ tower in Shanghai under its first president, an Indian.

So where are we going with global governance?

The news seems uniformly bleak. The G8 is dead, leaving the G7 as an old Western clique. The G20 is underperforming even in reforming global financial systems. Now this year’s chair (the Australian PM) again wants to expel Russia, a move that could shatter the organisation. Meanwhile, the BRICS are racing ahead building a parallel governance framework driven by the global South.

Even the conservative editors of the Economist, according to their commentary last month, think the North is missing the boat in blocking the South from its fair share of leadership in the world of multilateral organisations. On the urgent issues of trade reform, political reconciliation and climate change, G7 leaders seem to want such items kept off the G20 agenda because that wider forum would be too ‘unmanageable’ (i.e. would not meekly buy into the G7’s worldview). And is it just coincidence that in the first nine G20 meetings, the summit has never been hosted by any of the developing countries who constitute 8 of its 20 members?

Sadly, neither North nor South seems ready for change. Drift seems to be the favoured scenario, even in the face of growing global challenges. Both hide from the reality that global economics and politics are increasingly intertwined. They grumble at indecision in the UN Security Council (UNSC), a body unaltered since it was created to include only World War II victors. Critically, no existing or aspirant member wants to give up their blocking UNSC veto. The concern is that the North will sign on to bold Post-2015 goals in the UN, but then refuse the funding and other actions needed to implement them.

Canada, once a leader in the multilateral domain, is now seen as a spoiler and foot-dragger. We were the biggest cheerleader for expelling Russia from the G8, and now we and the Australians seem to oppose any idea of broadening the G20’s mandate. We prefer to revel in the fantasy of the G7 as the world’s natural leaders, while countries of much greater significance (e.g. China and India) sit by in a hamstrung G20.

It would seem that Canada and others in the G7 find it difficult to deal with nations holding a different—and increasingly important—worldview.  It might be a bold move for Canada to encourage a moreinclusive G20, with a voice for the weakest as well as the most powerful. At present, however, political insecurity is keeping a weakened North distant from its future partners in the South.