Foreign Affairs Committee on Feb. 19th, 2019

[Anthony Smith]

Let me start.

Our operating model provides political stability in that we are a cross-party organization. All the parties in our Parliament are represented on our board. This means that in agreeing to a long-term strategy and in taking day-to-day operational decisions, we need to hit that sweet spot where we will maintain the support across our Parliament, across our political system, if you like, for what we do.

Certainly in my four and a half years at the foundation, we have not had any decision that has caused controversy between the members of the board from the governing party and the members of the board from the opposition parties. We have all been in a position whereby we've supported the type of action we're taking, because there is cross-party support for work on democracy. That's the way we have maintained our ability to operate in an objective way that retains cross-party support.

The second thing responds partly to that and partly to the previous questions.

I think the first question for Canada is not necessarily an institutional one; it's a policy one. The first thing we need in our system—and I think it would apply to Canada too—is clarity about that vision, that you, across the political spectrum in Canada, want to work on these issues, want to be committed to these issues over the long term and are willing to fund them.

The question of the institution is the next one. The foundation is not, by the way, the only instrument our government uses for democracy support. It uses many institutions, including the ones that Carl mentioned, our colleagues at NDI and IRI. The institutions question is, if you like, a secondary one. Different models can bind in the political support you need.

Thanks.

[Carl Gershman]

I'll quickly correct one thing.

The NED Act did not establish NED. The NED was incorporated as a private organization in the District of Columbia. What the NED Act did was build that firewall and also authorize the funding for the NED, but it did not establish the NED because the NED is really a non-governmental organization, which is critically important.

I think that at the same time, of course, it's completely accountable. It has to abide by all the financial regulations. It has to be transparent and open and to let the administration and the Congress and everyone know what it's doing. It is bipartisan. I think one of the critical factors that Canada needs to think about here is that, when our government changes, the NED does not change. The only thing we do differently, if the party in power changes, is that we have somebody in the chair of our organization, chosen by us to be the chair of the board, being of the same party as the party in power. We do nothing else. The board remains the same. The policies of the institution don't change. We adjust to the conditions in the world, to what's happening in the world, and we are able to pursue a consistent long-term policy. Obviously, it has to be consensual with what is consensual among our parties that we're not pushing in one direction or another. There's kind of a bipartisan and even labour-business balance built into the institution. I think that's critically important.

I think Canada had an experience 13 years ago with another democracy institution. I think a lot of the trouble came when the party in power changed and there developed a conflict between the board and the staff. You have to build stability into something like that over the long term so that it doesn't reflect all the changes in the politics.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you very much.

I'm interested that your two organizations actually deliver your services and your support in different ways. Mr. Smith outlined that they actually have 30 in-country offices, whereas the NED does not have any in-country offices.

My question is for both of you. Who decides what the priorities are, and how do you move toward what Mr. Gershman mentioned, which I think is really important, that it be a bottom-up initiative? If you're going to build democracy, in my view, it will last longer if it's bottom-up. I'm interested in the two approaches.

How do you decide what the priorities are in the receiving country if you don't have in-country offices?

What is your experience, Mr. Smith, of having in-country offices in order to develop the priorities for your organization?

[Carl Gershman]

Anthony, why don't you go first?

[Anthony Smith]

Thank you, Carl.

Our programs can only exist and operate if we have a partner in the country. We do not go in with an agenda for a country and say, “This is what we want it to do.” Of course, we have an overall strategy that pulls out certain things that we think are critically important for good democratic practice around the world, but that's a pretty broad mandate for us.

Our methodology when we have an in-country office is that we have a partner, which would typically be a parliament, but it could be an electoral body or a civil society, which we think has an agenda that it is important to support and we can find added value in what we do to support it. We will take that agenda and use the contacts we have both in the U.K. and in other countries, including Canada, by the way, to share experiences that we think would be helpful to push that agenda forward. Although that in-country presence is very important, we do have relationships in other ways in other countries as well.

[The Chair]

Thank you.

MP Saini.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Are you not going to let Mr. Gershman answer? No?

[The Chair]

We're—

[Carl Gershman]

I'll come back and try to answer that.

[The Chair]

You can answer that in responding to the next question. Exactly.

MP Saini, please.

[Raj Saini, Liberal, Kitchener Centre, ON]

Good afternoon, gentlemen.

Mr. Gershman, I'm going to start with you.

One difference between your two organizations that I noticed, and I think you mentioned this in your opening remarks, is something very important. You mentioned that you also support business organizations in the countries. The WFD does not. Can you tell me why you think it's important to support business organizations?

[Carl Gershman]

Our Center for International Private Enterprise is unique in this field because business is often seen as a dimension of development and not democracy, whereas it's absolutely critical. A lot of the countries—Egypt, Ukraine and others—that had failed transitions failed because they couldn't get the economy right. We call it CIPE, Center for International Private Enterprise. It's able to work with the informal sector, with business associations and with think tanks. Really, it's not a development organization, but it helps in shaping the approach to the market economy to make the market economy work, to be democratic, to be free of cronyism and to be really a dynamic force in this.

I just want, in 30 seconds, to respond to the previous question to say that there are democracy activists throughout the world, including business associations, that need to be supported on the ground. It's not just a single local partner. We are responsive to demands that come from the ground, and our institutes are as well. We are a demand-driven organization.

Sorry, go ahead.

[Raj Saini, Liberal, Kitchener Centre, ON]

My next question is for both of you.

Mr. Gershman, in your opening remarks, you alluded to the changing geopolitical reality in the world. You have countries that are nascent democracies, that are having difficulty taking off. You have democracies that have been established over a short period of time, like the Visegrad nations, which are now reverting. You have the rise of populist movements. More important, out of all of that, it seems to me there's a vacuum of leadership because you have the involvement of China and Russia, whether it be in Latin America or in Africa or in Asia.

Democracy building 20 to 25 years ago was much different from what it is today because you have new actors who are trying to pursue their own prominence or their own reputation in that region of the world, i.e., China and Russia. How do you deal with this new set of factors, especially where China's been more involved in countries where democratic governance is an issue, and Russia's more involved, especially in the satellite states or the near abroad countries that it has in its sphere of influence? How are you going to deal with that impact but also continue your work in those parts of the world?

[Carl Gershman]

First, let me say that the idea of having other actors is not new. When the NED was established, you had the Soviet Union, which was another actor. I think what happened after the collapse of communism in 1989 through 1991 was people assumed that challenge was over. Actually, somebody called it a vacation from history. We didn't face these challenges anymore. What we've learned since 9/11 in 2001, since the rise of China and Russia more recently, is that there are rivals and that if we retreat from the world, these vacuums will be filled by such powers.

Right now, today, we've seen the disruptions, the penetration caused by the Soviet Union, especially in using trolls on the Internet, but China represents a much more serious threat. It's wealthier. It's investing much more money. Our figures show that China is spending somewhere in the order of $10 billion a year on what it calls external propaganda or malign activities in different countries. This could be in the form of information activities. It could be in the form of penetrating societies through what we call sharp power.

This is a new issue that people are facing. They're just coming to the realization of this in Washington. It's something we have to get our hands around. It's something, of course, we're trying to respond to with the strategic priorities we've shaped.

[Anthony Smith]

If I have time to contribute, although very briefly, one thing we really have to fight against is the view that development can be separated from democracy. I think we all know that Amartya Sen argued strongly against that. Democracy is development.

What you see now is a Chinese editorial in The Economist magazine, paid for, which says that the old dichotomy between democracy and autocracy is dead; the new dichotomy is between bad governance and good governance. China is very good at governance, and therefore is a model that others should follow. That, literally, is what has been published by China.

I think we have to be very clear within our own administrations, including the development ministry where I used to work, that you cannot promote good governance without thinking about values and democracy. You need to think about the way in which people's voices are heard, and the ways in which accountability takes place, the mechanisms that are needed to prevent the abuse of power by those in the executive and in control. It's absolutely essential to push this argument, both with those whom we know are malign but also within our own communities, which sometimes want to avoid some of those choices around democracy support. I think that's another reason Canada is so important in this debate.

[Raj Saini, Liberal, Kitchener Centre, ON]

Thank you.

[The Chair]

Thank you very much.

MP Finnigan, first of all, welcome to the committee. Please go ahead with your questions.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Thank you, Chair. Thanks to our guests for being here.

As the chair said, I'm new on this committee, but very interested. As with anybody in this country, I follow democracy around the world, so I appreciate the chance to ask some questions.

I'll start with this. I'm the chair of the agriculture committee. International trade is very important for us and for most countries and it's growing. We're signing trade agreements across the world. How is it affecting democracy, or is it? Are we closing our eyes to authoritarian countries when we want to sign trade agreements? How would you describe how this new international trade or global trade is affecting democracy, or does it affect democracy?

[Carl Gershman]

I think we want to keep a world order in which there is the rule of law and we have a rules-based world order in which countries can trade within a lawful system. We get into that only through promoting these values around the world and promoting movements in countries that want rules-based order in their own countries. If we have that, I think we will have a more open trading system. I think we have to find the right balance between defending our own sovereignty in many different areas and finding forms of international co-operation. I think we as an international community are struggling with that now.

Some countries are reacting against the pressures of globalization, but the need to maintain a rules-based international order is critical. If we can do that, I think that trade will proceed and will encourage economic growth. A lot of what China is doing today through its belt and road initiative is not promoting a rules-based international order. This is a geopolitical instrument that China is using. We've seen backlashes against this in countries like Sri Lanka, the Maldives and Malaysia. The Malaysian election in May was a reaction against the corruption encouraged in the way the Chinese are expanding their economic influence in other countries by buying off elites.

We need to defend the rules-based order. I think that's what's critical.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Thank you.

Mr. Smith, do you have any further comments?

[Anthony Smith]

I have just a very brief addition to that. Within each country, obviously, you need to have democratic institutions that enable voices to be heard when the policies are made—the trade policy of the country—that provide confidence that the trade agreements the country is signing on to have been subject to oversight by the parliament and are subject to effective judicial oversight as well.

In the way that they're important for everything, democratic institutions within a country are critically important for an international trade agenda. They're important for a stable business environment. They're important for confidence in the democratic system of every country.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Thank you very much.

Moving on, would you say there are threats of danger or evidence of threats of the democratic movement being eroded either from within or from outside of our countries, especially in the last 25 years with the arrival of the web? How has that affected the democratic movement around the world?

Either of you can answer.

[Carl Gershman]

We once thought that social media would be a force strengthening indigenous democratic movements. Certainly these indigenous democratic movements use social media to strengthen their communications capability, their ability to get information out and their ability to network with each other. What we did not expect, and I think this is the surprise, was the way autocratic governments would master the Internet and use it to try to penetrate into societies, to disrupt democracy and democratic procedures and to encourage distrust. This has become very, very dangerous.

I want to really emphasize the need to maintain an open Internet. These issues are being negotiated every day. We don't want to see autocratic governments controlling the Internet. We have to fight for the independence of the Internet, but we also then have to defend ourselves against abuse from autocratic governments. We have to realize that this is the new frontier. This is the new front line of struggle for democracy in the field of information, and we have to master ways in which that can be done.

The NED published a report in December 2017 that really coined the term “sharp power” to distinguish it from soft power. Soft powers are our universities, our culture and the way it organically spreads around the world. Sharp power is the use of information and information tools by governments to penetrate and manipulate other societies. We have to understand that and we have to be able to defend ourselves against that.

[The Chair]

Thank you very much. The time is up.

We're going to move to MP Aboultaif, please.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Good afternoon and thank you to both of you.

There is some mention of authoritarian capitalism and that makes it a challenge to protect and promote democracy, and from our perspective it keeps the challenge going. We know that democracy is a long process. It needs patience, determination and investment in many ways in order to maintain and continue promoting it in different places of the world. NED does excellent work supporting pro-democracy around the world.

Mr. Gershman, you spoke about the non-governmental character of the NED. You mentioned that this gives you a benefit of being more effective on the world stage. Are there any downsides to not operating as an arm, in this instance, of the U.S. government?