Thank you, Mr. Chair. It's a pleasure to be here. It's an honour to be consulted before such an accomplished and experienced group of individuals.
I will give you a bit of background. I returned with my family to Vancouver last year after spending nearly 20 years based in Boston, where I did my education in economics at Harvard and then spent almost a decade with the faculty of the Harvard Business School. My research is on foreign aid primarily, but I also have looked into a number of areas of economic development. Part of the foreign aid research has been on aid allocation decisions by donor countries, so it is especially exciting to be a part of this committee.
I've also maintained a foot in the real world, working during grad school on refugee issues in Uganda and then briefly for the Millennium Challenge Corporation, a U.S. government aid agency, in the year that it was starting up, and then advising the government of Liberia on economic policy. Most recently, in my return to Vancouver I'm Simon Fraser's in-kind contribution towards CIRDI, the Canadian International Resources and Development Institute, where I'm working on issues of resource governance.
I'd like to make myself available informally to the committee—to the individuals and to the analysts—going forward, to the extent that it's helpful.
Canada has the tenth-largest economy in the world. Its contribution towards the GDP of advanced economies is just over 3%, meaning that on a good day we might be contributing 5% of the expenditure towards solving the global public good. Now, 5% is a funny number. Done well, that means we can target a handful of problems, work in a handful of places, and really push the envelope and lead the agenda in terms of generating change. Done without much focus, it might be like trying to boil the ocean.
How has Canada's focus on foreign aid been so far? I'm not sure how many of you have the handout that I sent in. Yes? Okay. I can refer to it.
I looked at the top 10 aid recipients in the last year for which OECD provided the data. The leader of the list is Ukraine, with around $130 million U.S., and then it goes down to Jordan and the West Bank and Gaza as numbers 9 and 10. Then I compared their GDP and the total aid from other donors to these countries. As you'll be able to see when you see the prepared remarks, to only one country do we actually give the equivalent of 1% of the country's gross domestic product, and that is Haiti. Most of the others are at less than half a per cent of their GDP.
If you look at the share of the aid received by all our recipient countries, you see that the two leading countries are the Ukraine and the Philippines, where we give close to 10% of their total aid, and those aren't aid-dependent countries. Those are middle-income countries that don't really rely on aid for much. If you were to look at countries where we give at least a half a per cent of their GDP in aid and we contribute at least 5% of the total aid received by those countries, you would see only two countries on the list, Mali and Haiti. That's a fairly low bar for being a real driver of those countries' inclusive development agendas.
That was exhibit A. The second one that I wanted to talk about, exhibit B, which corresponds to table 2, is the possibility of thematic focus, of leading the global agenda on a substantive issue.
In my world of economic development and resource governance, I admire a handful of programs by some bilaterals. Norway has a couple.
One is their support to countries around oil governance. Their annual spend on that is around $50 million Canadian a year. It's a relatively narrow issue, but that $50 million is well within the resource envelope of a country like Canada in terms of pursuing global leadership.
A second is their climate and forest initiative. Norway is by far the world leader amongst donor countries in trying to solve the problem of climate change that's caused by deforestation. They acted for a number of years when everyone else was kind of fiddling around and trying to understand the problem. Their spend on that is close to $500 million Canadian. That's much larger, but it's still well within possibility for Canada if we were to dream big on an issue like that.
The U.K., which, as you know, has hit 0.7% of its own GDP toward aid spending, is the world leader on being the smart donor. They spend around $600 million Canadian on research. Of course, they're spending across the gamut of development issues.
Perhaps not coincidentally, I'm working on two projects, one out of the LSE and the other out of the University of Manchester, that are basically applied research projects. We're working closely with advisers in DFID, the Department for International Development, in bringing economics research to bear on the challenges they're confronting.
Again, it's $600 million across the gamut. Canada could achieve leadership with a fraction of that on a select group of issues.
From the United States government, Obama's initiative, Power Africa, gives $390 million Canadian a year. Again, that's well within our ambitions.
Even the Millennium Challenge Corporation, which is seen as the best bilateral aid agency that helps countries that are growing successfully, is only about $1.6 billion Canadian.
Substantive themes are also the way knowledge is organized. With a few exceptions, there are very few area specialists and many more specialists who know something about water engineering or financial regulation. The sustainable development goals are organized into substantive areas.
This is not to say there's no point in having a strong presence in any one or handful of countries.
My recommendation is a two-track approach, one of depth with breadth.
On the country side, we could search for a handful of countries where Canada could play an outsized role. By far one of the largest bilateral aid donors, contributing on the same order of magnitude as the World Bank, Canada can be involved in a whole-of-problem approach to creating inclusive growth. This would be good for us as well as for them.
It would be good for us because we would get exposure to the areas we might not have chosen to specialize in. We could have that on-the-ground presence that would allow us to see the issues that were rising in importance as well as to involve the whole of the Canadian ecosystem back home, from provincial regulators to city planners to university educators to high school teachers, or however we would choose to engage with that country.
Given the findings of the first table, to do this effectively Canada would need to choose a much smaller number than the 25 countries, particularly if we were also to take almost an equivalent amount of our budget and invest it in a handful of issue areas where Canada could aim to be the best in the world and could aim to involve, again, our ecosystem of actors, from our professors in the universities to our civil society leaders to our provincial and municipal leaders to our private sector and investment community as part of the change in these particular areas.
In table 3 I list some hypothetical Canadian focus areas. The countries might be....
These aren't based on any empirical process. That's my next point.
Imagine we're present in Haiti, Mali, Syria, Peru, and Mongolia, and we're working on substantive themes, such as maternal health, responsible mining, agricultural productivity, water management, and refugee welfare. This would be a representative portfolio on which Canada could have strong ambitions in a handful of substantive areas as well as in a handful of geographic areas. This would not be done in isolation from our multilateral engagement strategy.
Here again there would be strong investment in a handful of broad-reaching international organizations, such as the UN Secretariat or the G20, as well as in a handful of international organizations that have substantive expertise, such as the World Health Organization or the UNHCR, where our goal would be to be a leading voice, to be among the top two or three countries in terms of staff members, leading reform efforts, playing host to meetings, pushing initiatives, and, of course, funding.
How would we choose these areas? I suggest putting together a scorecard. Bringing in people and listening to Canadians is obviously important, but looking at a scorecard as well could identify and rate the need for us to be engaged in this area, and whether there's a gap that other donors aren't filling.
With Canadian capacity, can we be the best in the world at something? Can we provide it at sufficient scale?
Then, of course, there's the national interest. Can we engage a Canadian ecosystem outside of the international development constituency and can we make Canadian lives better by this engagement?
I look forward to your questions.