My name is James Haga, and I work as a director with Engineers Without Borders Canada.
EWB is a movement of 55,000 Canadians who are committed to creating opportunities for rural Africans. We do so in a systematic way that you would expect from engineers, focusing not on symptoms, but rather on the root causes of why poverty persists.
In short, our one and only recommendation to this committee today is that the Government of Canada recognize the cost-saving benefit of increased foreign aid transparency by signing on to the International Aid Transparency Initiative, which I'll henceforth refer to as IATI, if that makes sense for everybody.
To be clear, with the current global economic situation we understand that this is not the time to ask for increases in our aid budget. Rather, we're here to seek support for a simple policy recommendation that will improve the effectiveness and efficiency of our existing aid dollars.
Bearing in mind the fiscal situation of the federal government, our proposal directly addresses this committee's interest in receiving proposals that will help our government to achieve a balanced budget.
In recent years the Government of Canada's efforts to make our foreign aid more effective and transparent have led to a number of important improvements. For instance, we applaud Prime Minister Harper's leadership on the international stage as part of the Commission on Information and Accountability for Women's and Children's Health, in addition to CIDA's recent decision to launch an open data portal for its aid information.
We also wholeheartedly agree with International Cooperation Minister Bev Oda in saying that aid agencies must “reduce duplication, and increase their accountability and transparency for those in donor countries demanding full value” for their aid investment. In light of these comments, we believe the next step for the Canadian government to improve aid effectiveness is to publish our aid information in a common, internationally agreed upon format through the International Aid Transparency Initiative.
We'd like to suggest three primary benefits to Canada in signing on to IATI.
First is cost savings and value for money. Signing on to IATI would represent good value for money for Canadian taxpayers and will help our government slowly achieve a balanced budget. A cost-benefit analysis done by a U.K.-based research organization called Aidinfo confirmed that, even by the most conservative estimates, the efficiency savings for implementing IATI are likely to pay for the transactional costs within one or two years. For CIDA specifically, the low-estimate savings on an annual basis are $245,000, while the high-estimate savings are over $1 million.
Our second reason is reduced bureaucracy and transaction costs. Signing on to the International Aid Transparency Initiative would reduce redundancies in annual reporting for Canada and our aid-recipient partner countries by simplifying and standardizing the reporting system. This will help Canada achieve economies of scale and would require fewer staff and fewer resources to collect and disseminate aid information.
Our third reason is reduced corruption and improved effectiveness. Cost-benefit analysis again suggests that the 21 donors that have already signed on to the International Aid Transparency Initiative will collectively improve the effectiveness of their aid by $1.6 billion. Signing on to IATI decreases the diversion of Canadian aid by providing increased opportunities for public scrutiny of data. This could mean an increase in effectiveness on the order of tens of millions of dollars.
Consider that Prime Minister Harper recently made an announcement of over $60 million towards supporting Tanzania's health system, which includes providing greater access to upgraded health centres, training of health care workers, and so on and so forth. By signing on to IATI, Canada will improve the effectiveness of our aid system substantially, ensuring that more initiatives like supporting Tanzania's health system can be funded by our country.
In terms of costs associated with implementing this initiative, consider, for instance, the experience of the Dutch government, with an annual aid budget of just over $6 billion, similar to Canada. They have spent $138,000 to change their information management systems and become compliant with this initiative. In the case of the United Kingdom, their costs totalled $240,000 to become IATI-compliant. Based on the Government of Canada's commitment in budget 2011 to strengthen the effectiveness of Canada's aid program, EWB encourages the Standing Committee on Finance to endorse the following recommendation: that the Government of Canada recognize the cost-saving benefits of improved aid transparency by signing on to the International Aid Transparency Initiative.
This initiative has been adopted by many of Canada's closest partners, including the United Kingdom, the World Bank, and the Netherlands, in addition to 18 others. It's been endorsed by 22 aid-recipient countries, including Canadian countries of focus such as Ghana, Tanzania, Honduras, and Vietnam.