Thank you, Mr. Chairman. I am very pleased to have an opportunity to meet with you and the members of your Committee today.
CIDA's main estimates reflect our ongoing efforts to ensure that Canada's international assistance is supporting the world's most vulnerable people responsibly and effectively.
Over the past decades, the international community has made significant progress in helping to reduce world poverty. The percentage of people living on less than $1.25 per day has been cut in half. That means that between 1981 and 2005, a staggering 500 million people managed to climb out of poverty.
Until most recently, the economic crisis had barely touched the developing world. However, the World Bank now estimates some 40 low-income countries are highly vulnerable. The latest forecasts report that the economic crisis could drag down 50 million to 90 million more people into extreme poverty.
Clearly, foreign aid must be part of the solution to mitigate the impact of the economic crisis in the developing world. The reality is that in developing countries there are no quick fixes. The impacts on the lives of their populations will be deeper, more widespread, and longer to remedy.
In the face of this, it is critically important that donor countries keep official development assistance on track, and we are on track to meet our commitment to double Canada's international assistance to $5 billion annually by next year. Furthermore, we met our G-8 commitment to double our aid to Africa, with a total of $2.1 billion in the fiscal year just completed, a full year before the G-8 commitment deadline. And we have made multi-year pledges to the Americas, Eastern Europe, the Middle East, and Asia, including Afghanistan.
More importantly, our government will live up to its commitments. Since taking office, our government has committed to make our international assistance more effective and make a real difference in the lives of the people living in poverty by making it more efficient, more focused, and more accountable, and we have taken steps to do so.
First, for decades it was common practice for donors to pledge their aid with strings attached. It was known as tied aid, requiring that the needed goods and services be acquired in the donor country. The OECD estimates that tied aid makes international contributions 30% less efficient and 35% less efficient in the case of food aid.
I know this is not the kind of efficiency Canadians expect from us, so last April I announced that Canada's food aid would immediately be fully untied. Agencies such as the World Food Programme can now use Canada's money and buy the appropriate food at the best prices in areas closest to the hungry. Furthermore, Mr. Chairman, we will untie all of our aid by 2012-13 to gain even more value for Canada's contributions.
As an agency, CIDA itself will also be undertaking efficiency action. When people are on the ground seeing the conditions in the country, they are better able to react quickly, form more rigorous assessments of needs, develop appropriate responses, and reduce the decision-making process. So we are increasing the number of staff in the field, with more delegated authority and the flexibility they will need. This step will reduce the lengthy approval process and Ottawa-centric approach currently in place.
But decentralization alone is not enough to make CIDA more effective and meet the expectations of Canadians. We are determined to strengthen the monitoring and evaluation of CIDA's assistance programs. CIDA will engage independent auditors to measure results, and external, non-CIDA representatives will sit on CIDA's internal evaluation committee.
Accountability is also about being transparent and providing information to Canadians. Consequently, in addition to its required annual reports to Parliament, CIDA is now creating a “development for results report” that will show Canadians how their tax dollars are making a difference. We will do our best to communicate meaningful results and be open about setbacks that sometimes thwart our best efforts.
I also believe that more effectiveness and impact can be achieved with greater focus. We are increasing the focus of our bilateral program, the program that supports mainly development programs and projects in countries rather than aid, and that represents 53% of CIDA's total budgetary appropriations.
It has been said that Canada's bilateral spending was spread too thinly over too many countries and was too diffused, working in multiple sectors, making it hard to see how and where results were being achieved. To address this, I announced that CIDA will invest 80% of its bilateral program resources in 20 countries of focus. Those 20 countries were selected based on an analysis of their needs and their capacity to realize positive outcomes from our development efforts and in alignment with Canada's foreign policy priorities. To ensure consistency in the future, any changes to the list of 20 countries will require cabinet approval.
As I have noted, and I stress once again, other countries not selected as countries of focus will continue to receive Canadian aid through CIDA's other programs and will remain eligible to access the remaining 47% of our total aid budget. And of course Canada will always respond to the needs of victims of natural disasters or conflict through CIDA's humanitarian assistance program.
Having taken steps to focus geographically, Canada's international efforts must also be focused on fewer areas of activity or sectors. Historically, CIDA's aid has been too diffused and scattered, as I said, across literally dozens of different activities in multiple sectors, so that our money had limited impact, without the critical mass needed to make real gains.
We have now established three priority themes that will guide CIDA's work going forward: increasing food security, stimulating sustainable economic growth, and securing the future of children and youth.
Let me say a few words about each.
First, food security. Last year about this time, the food crisis, caused largely by higher food prices, captured the world's attention. The FAO estimates that the number of undernourished people in the world increased by 75 million in 2007 and 40 million in 2008. The impact of the economic crisis will be immense on the ability of millions to avoid starvation. The world's poorest live on less than $2 a day and spend 50% to 80% of that on food. In fact, the number of chronically hungry people is expected to climb to more than one billion this year.
CIDA will continue to respond to the need for emergency food aid. In fact, Canada is the third-largest single country donor to the World Food Programme. We will also be placing a high priority on initiatives that will meet the micronutrient needs of those living in poverty.
But without an adequate supply of food, development is impossible. The World Bank estimates that GDP growth from agriculture benefits the income of the poor two to four times more than growth in other sectors. Given that so much of the developing world is agriculturally based, I believe we must pay more attention to agriculture in developing countries. Whether it be with improved inputs, technical resources, the rehabilitation of degraded farmland, or irrigation, this will result in greater food self-sufficiency and food security, our first thematic focus.
We have seen how the power of a vibrant economy can reduce poverty. Countries in Asia, in Latin America, and in Africa have shown over and over again that growing the economy is the best way to help people lift themselves out of poverty permanently, and economic growth will be an essential part of helping developing countries weather the economic downturn.
It was noted at the recent World Bank-IMF meetings that economies of developing countries will grow by only 1.6% this year, compared to 6.1% last year. Canada has contributed significantly to the IMF and the World Bank and regional development banks so they can make financing more accessible to developing countries. However, it has been reported that in developing countries the private sector generates 9 out of 10 jobs, so we must create more business opportunities and support entrepreneurship and industrial development in these countries. These efforts will result in productive employment and incomes for the poor.
Elements that support economic growth could be skills training, access to financing, such as micro-credit, protection of property, and the needed supporting infrastructure. Of course, all of our development work in both agriculture and economic growth must consider the environmental impact of the project. Furthermore, all of the gains we achieve must be sustainable in the future for the next generation. Today, the fate of that generation, the children and youth living in extreme poverty, is the most distressing tragedy of our time. There are the needless deaths of 10 million children a year from preventable diseases. There are millions who do not yet have access to a quality education. More than half of the child population in developing countries, some one billion children, live in poverty.
Our government has strongly supported children and youth who face these realities, and we are continuing to support the health of women to reduce maternal and infant mortality, but we need to do more. Keeping children alive is only part of the equation. We want them to grow and prosper by providing children and youth with quality basic education and training so that they have the opportunity to live full, productive lives and engage meaningfully in their communities. This is particularly important now, as some are forecasting a youth tsunami. In 67 countries, up to 60% of the population is now under the age of 30. Through to 2020, some of the world's poorest and often most politically unstable countries will have the largest youth population, including Afghanistan, Pakistan, Colombia, and parts of Africa. Consequently, it is imperative that we make a real difference in the lives of children today for a stable and more secure tomorrow.
These three things--food security, economic growth, and children and youth--will be core for CIDA going forward. But as we have seen in Afghanistan, there can be no development without security and stability.
One billion of the world's poorest people currently live in states where crime, violence, insecurity, and insurgency are part of their daily lives. Ensuring security and stability is of the utmost importance, and Canada's response will build upon its engagement and lessons learned in countries like Afghanistan, Haiti, and Sudan. Our aim is to ensure that the basic needs are met while helping willing countries develop the capacity to self-govern, while shifting from aid dependency to responsibility and local ownership of projects and programs. This requires that good governance be integrated into all of our work in developing countries, as will sound environmental management and sustainability.
In conclusion, Mr. Chairman, our government pledged to make Canada's international assistance program more efficient, more focused, and more accountable--in short, more effective.
By untying aid, decentralization, more accountability, and through greater bilateral and thematic priorities, we are taking action. Setting priorities is fundamentally about making choices, but I believe that our agenda for aid effectiveness reflects the values of all Canadians. We are committed to making our aid make a difference in the lives of those living in poverty.
Mr. Chairman, thank you for the opportunity to speak with the committee today.
I am now available to take your questions.
Thank you.
