Foreign Affairs Committee on June 2nd, 2016

[Eric Werker]

Norway has started by potentially being one of the largest hydrocarbon contributors to global warming per capita just because of its large oil production, but it has used it. Rather than run away from it, with a much smaller economy than Canada's it has taken the lead in creating solutions to climate change. It can be done. It's completely changed the perception others would have of Norway vis-à-vis the environment.

[The Vice-Chair, Conservative, Dean Allison]

Thank you very much.

Thank you very much, Mr. Aubin.

We're now going to move back to the Liberal side for the final round. Mr. Levitt has given his time to Mr. Fragiskatos. We'll turn it over to you, sir.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Mr. Greenhill, in 2012 you wrote an op ed for the National Post focusing on Afghanistan. Your general point was that development can happen in conflict zones. You took on a stereotype or a myth that development could not happen in conflict zones. I wonder if you could focus on that. I ask the question particularly in light of what's happening in the Middle East, in Syria.

[Robert Greenhill]

Here's the point. These are the most difficult areas of the world, and if you want to look for failure, you can find it. These are failed states. If you want to find a failure in a failed state, you can find it, but if you want to find successes and you do it the right way, you can find them as well.

There were some extraordinary successes in Afghanistan. Every year 40,000 or 50,000 children are alive who would have died under the old regime. Maternal mortality is still one of the highest in the world, but it's fallen by record rates. Not only are eight or nine million girls and boys in school, compared to a million under the Taliban, but about 500,000 are graduating from secondary school every year. The elements of the future are being laid. The point is, though, that it takes time and engagement.

I'll give you an example. As one of our flagship projects, we tried to build 50 schools in Kandahar. It was very difficult. They kept getting blown up. In the meantime, working with the Bangladesh Rural Advancement Committee, BRAC, CIDA supported the creation of over a thousand schools in rural Afghanistan. That ended up having tremendous success, particularly for girls. Why was that done? It didn't have a Canadian flag. It worked with an NGO from Bangladesh who knew how to work with poor, rural, conservative Muslim communities, and it did it well.

That was interesting. We weren't trying to wave the flag. We were trying to change the conditions on the ground. We can do great things in these areas, but it requires senior leadership, as well as consistent, persistent support and a willingness to learn.

Interestingly, that article came because of a hatchet job that was done using reports that the CIDA team had commissioned to have third parties give them the unvarnished view of what was working and what wasn't working every six months. That's very unusual, but it was felt to be necessary. There was a learning curve. That's what was used to find criticisms, but that's the kind of approach one needs in order to succeed.

This will only work if it isn't a Liberal or whatever government initiative doing development, but a Canadian initiative with cross-partisan parliamentary support. If we're going to make a real difference in Afghanistan or Haiti, things will go wrong, so there'd better be strategic support for us to be engaged, or else we shouldn't try.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I like witty quotes, but this one was wonderful: “It's the states, stupid.” I agree with you. States are so critical to this. When states break down, we see what we see in Afghanistan and in Syria and beyond.

What about regions? We've heard from witnesses here at the committee that by focusing exclusively on states, by having a state-centric approach, we might be hampering an opportunity to be nimble, to be flexible. If we're concentrated in a limited number of states, what happens when a regional issue breaks out? It could be an issue around refugees as a result of some humanitarian crisis or a war or something related.

What do you think about that? Is a state-centric focus potentially hamstringing us, Mr. Greenhill and Mr. Werker?

[Robert Greenhill]

A number of issues, such as infrastructure and economic security, are regional, but the base is the state. When Pascal Lamy, the former head of the WTO, was asked what he had learned, he said he used to think we needed global solutions to national problems, but he now realized we need national solutions to global problems. You need to build the building blocks.

Take West Africa; you need regional approaches, but boy, it was great to help stabilize and improve Ghana and Senegal because they then became pathfinding nations for anglophone and francophone West Africa. If we're going to focus, regional engagement is good, but country focus is essential.

[Eric Werker]

What about sub-national entities? If we're going to approach places such as India or Peru, being able to move that needle would necessitate working at the sub-national level.

To come back to the fragile state question, I think the fundamental problem in places such as Haiti and Afghanistan is that the business and political elite benefits to some extent from the status quo—at least enough of them do—so that in terms of simply doing good projects as part of a regional approach—good projects that trickle into countries here and there—without being involved in the backroom conversations around individual investments, individual reformers, and rising technocrats in different ministries, it's impossible, I think, to change the dynamics of those elite interests.

Of course, trying to do so is perhaps a bit of a challenge. In my work in Liberia, there was only one country that was able to have those conversations, and that was the United States, for historical reasons and of course for reasons of size. They were present in the entire spectrum of Liberia's development challenges. Not coincidentally, they were also the ones able to respond most vigorously to Ebola, which came completely out of left field. They had the credibility and the relationships, including at the social level between the ambassador and the president, to be able to tackle the challenges of a relatively weak state. Even with the presence of Ebola, it has seen fairly sustained economic growth.

[The Vice-Chair, Conservative, Dean Allison]

Thank you.

Thank you very much, Mr. Fragiskatos.

We're going to go to our last round. We have time for two more questioners. We'll make it probably four minutes for each round, just so we can get in under the time.

We're going to turn it over to you, Mr. Saini.

[Raj Saini, Liberal, Kitchener Centre, ON]

First of all, thank you very much for being here.

I want to switch the channel a bit.

Mr. Werker, there's something you wrote in that report that I found fascinating and that I don't think has been discussed a lot. One of the things you talk about is the corporate responsibility when it comes to international aid. In your report, you highlight that. You give the example of UN Global Compact, an endeavour in which 8,000 firms are involved. Out of those, only 54 firms are Canadian. You wrote about these firms making up 0.065% of global membership, although we have 2.3% of global GDP, 2.5% of global trade, and 4% of global FDI, as compared to other countries such as Australia, with 74 involved, the Netherlands with 86, and Sweden with 194.

You also highlighted something about the ecosystem and how important it is to have an ecosystem, but part of that ecosystem also governs or includes corporate responsibility, especially when investing in other countries. As a background, how do you see the government harnessing the talents of the private sector and business in order to advance Canada's aid goals?

[Eric Werker]

I want to be quick in order to turn this over to Robert, who is really our key informant on this question.

Ultimately, it has to come from the companies themselves. The government can facilitate this to the extent that it signals that it's important, but this is a chance for Canadian companies to take leadership, whether it's through reporting and accounting or investments.

Part of the way the government can do it is through the institutions, such as the pension investment funds, which are huge and enormous actors in the private sector, and through the banks, which are heavily regulated, and then of course through the regulation of companies, such that if there were the desire to be world-leading on reporting, for example, the Canadian regulators would be able to work with them. It also suggests that a lot of people who aren't in this room would need to be part of that conversation.

Let me turn this over to Robert.

[Robert Greenhill]

It's a critical issue. I was actually on the board of the UN Global Compact for a number of years. We're working right now on how we can increase Canadian engagement.

There are a couple of concrete things. One is that Global Canada did a workshop with the Global Compact, a number of Canadian businesses, and the Business Council of Canada two weeks ago on how we get them to hard-wire the sustainable development goals into their strategic planning and their risk review processes. Using that framework of 17 indicators, 17 SDGs, for opportunities and risks, it starts building it into their mindset.

The second is that there are specific issues. Pensions are a great way for Canada to play a role globally. Minerals—resources—are another, and construction is a third. We need to get better at having constructive conversations among the different stakeholders so that we can raise our game in that space. For example, if resource companies want to make a difference, they need to step up, become members of the Global Compact, and engage with NGOs. Then NGOs and government here will meet them halfway and they can work together. Historically, we haven't done a lot of that. I think there's a chance for us to do more of that collectively.

[Raj Saini, Liberal, Kitchener Centre, ON]

I have a quick follow-up. You mentioned mining. It seems for us that mining and insurance or financial services are the two biggest, but infrastructure is also important. What are your comments on infrastructure? Do you think that's something we should focus on also?

[Eric Werker]

It is an area in which they do invest. Our largest pension funds are among the best long-term investors in the world. This comes from my Harvard Business School alumni circle. We do this really well. We can invest for 25 or 50 years. From that perspective, there's an enormous possibility to be leading the way and doing responsible long-term infrastructure investment, partnering with the private sector, which is ultimately the way it has to go.

What do they need to get there? Maybe they'll be able to answer that question.

[The Vice-Chair, Conservative, Dean Allison]

Thank you very much. Thank you, Mr. Saini.

We're going to finish off with Mr. Genuis.

You have four minutes, sir.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Mr. Chair.

Thank you, both, for absolutely fascinating testimony. I probably have more than four minutes of questions here, so I'm going to talk as fast as possible.

Mr. Werker, it's great to hear about the work you're doing with LSE, which happens to be my alma mater. I was curious to know what impact the British government's emerging interest in happiness measurement and the interest in the subject of happiness, in particular at the LSE, has on the discussion around development in the U.K.

[Eric Werker]

Not much, to my knowledge. I also had a colleague at Harvard Business School, who was one of the world's leading scholars on that. It's not, I'd say, mainstreamed in development practice. Maybe it should be.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Right.

We've had some discussion at this committee about the question of how aid interacts with Canada's strategic interests. We've certainly had some witnesses who don't want to see any contamination of our aid discussion with Canada's strategic interests. I thought it was interesting, though, Mr. Greenhill, how you talked about South Korea, and how the intersection of an aid opportunity with western strategic interests created the political capital to be involved there in an effective way and to be involved there for a long term. It seems to me that in any event there's some value in trying to kill two birds with one stone by trying to address poverty at the same time that we advance what may be very good and noble strategic interests.

I wonder if you can talk a bit more about how we should think about Canada's strategic interests in the context of the broader aid discussion.

[Robert Greenhill]

I guess it comes back to the system.

We have a very complicated interdependent world, which is in danger of failing at various places. Our health care system is only as strong as Liberia's health care system or Brazil's health care system, because Zika and Ebola drug-resistant bacteria are all coming from developing countries with poor health care systems. The safety of our people is only as safe as that of other countries around the world, because of the link with international criminality and terrorism.

I think the strategic case isn't that we're going to help this country because we're necessarily going to do business with this country; we're going to help this country because stabilizing that country means they become a positive, responsible member of that region, which leads to a more stable and prosperous world that we all benefit from. That's a strategic case we have to make. It is a little more complicated as a narrative, but I believe it's the reality.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

That's a great point: regardless of whether or not we're considering commercial interests, we have to think about strategic interests because they're very much connected to our aid objectives.

I want to pursue your comments about Afghanistan and Haiti and pick up on what my colleague was talking about, but in the context of Afghanistan, I guess one of the unfortunate things is that there are ongoing issues of human rights. I hear about very dire circumstances facing religious minorities, Sikhs and Hindus in particular, and that's a concern to people across parties. We've put a lot of money in Afghanistan and we still have these human rights issues, so how do we do that? How do we engage for the long term and try to have an impact while at the same time drawing some clear lines and saying we don't want to be positively engaged with governments that are doing things that are deeply at odds—

[Robert Greenhill]

You don't want to be complicit to the abuses.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Exactly. We don't want to be complicit. In fact, we want to be the opposite: we want to be fixing human rights problems at the same time that we address development issues.

What are your thoughts on that, in Afghanistan or other spots?

[Robert Greenhill]

Ethiopia is a great example. Under Prime Minister Meles Zenawi, great development took place, but there have also been real issues of human rights abuse and restrictions of journalists.

I came across this twice, once as president of CIDA when there had been a very bad election in Ethiopia, and then another time as the managing director of the World Economic Forum when we were deciding whether we should do an event in Ethiopia when two Swedish journalists had been put in prison at that time.

I asked the opinion of a very thoughtful Ethiopian Canadian, Bekele Geleta, who is a political refugee from the Meles regime who came to Canada and ended up becoming the global head of the International Federation of Red Cross and Red Crescent Societies. His view was to engage, shed light, and open up the space, so that's what we did.

We had the conversation with Meles. We said we were going to come in, going to be respectful, and going to talk about whatever people wanted to talk about. He said he couldn't imagine an issue not worth discussing, and he was good to his word. Now, did abuses stop the next day? No. But did things move in the right direction? I think yes.

Again, one of the challenges when we're looking at a fragile state is not just judging where it is but where the direction is, and whether there is a way we can be a positive force while recognizing it will not be in the place we would like it to be today, or tomorrow, or next year, but that if we work together, in 30 years there may be great success. If we're involved in stabilizing in the meantime, we're helping people there as well as around the world.

That again is part of the challenge of these things.

[The Vice-Chair, Conservative, Dean Allison]

Thank you very much. Thank you, Mr. Genuis.

To our witnesses, thank you very much for great testimony and some very thought-provoking ideas for us.

We're going to suspend for two minutes and bring our new witnesses in, and then we'll start the second round.

Thank you.

[The Vice-Chair, Conservative, Dean Allison]

Welcome back, and thank you, everyone, for getting back to your seats so quickly.

We have a couple of guests with us. I'm going to get you both to introduce yourselves and give a bit of your background before you speak.

Evelyne, you have been here before. It's great to see you.

Wendy, you have as well. It's great to have both of you back as we talk about this focus.

I'm going to start with you, Ms. Harris. Please introduce yourself and give a bit of your background, and then you can get right into your presentation. You have 10 minutes each, and then we'll get a chance to have our members ask some questions over the following 56 minutes.

Thanks.

[Wendy Harris, President and Chief Executive Officer, Canadian Executive Service Organization]

Thank you very much.

I'm Wendy Harris, president and CEO of the Canadian Executive Service Organization.

My background is in the private sector. I'm a chartered professional accountant. I bring that lens to international development. I got involved with CESO seven years ago, and believe in the power of wisdom, experience, and strong business fundamentals to catalyze transformative change.

Thank you, Mr. Chair.

Thank you also to the honourable members of the Standing Committee on Foreign Affairs and International Development for inviting us here today. We are delighted to participate in the international aid policy review and to provide our perspective with you today.

CESO is an international economic development organization dedicated to sustainably reducing poverty and stimulating economic growth in many countries around the world and within indigenous communities in Canada. Our main focus areas are private sector development and institutional strengthening.

Because we work in both national and international settings where we leverage key learning and best practices from both programs, we hope to bring a unique perspective to the committee today, one that helps to connect the dots between Canadian international aid and development efforts and those here at home, a challenge posed by Prime Minister Trudeau to the Canadian aid and development community on May 9, 2016.

At CESO, we live and breathe these connections every day, and we look forward to sharing our experiences with you. Importantly, our work is locally driven, and our main responsibility is to our clients and partners; everything we do moves through this lens. Our expert volunteers transfer their knowledge and skills to our clients, who then develop the tools they need to break the cycle of poverty to become not only the owners but the creators of their own long-term prosperity. This approach contributes to their self-sufficiency and resiliency long after our work is done.

As an organization dedicated to sustainable poverty reduction, we emphatically support the new global agenda and the main goal of eradicating all poverty by 2030. As many of my colleagues and peers have mentioned in testimony previously, this goal, and all 17 sustainable development goals more generally, represents a substantial commitment on the part of the international community to address the biggest issues and challenges faced by the world's most vulnerable in every country, including Canada. It also provides the opportunity for the many stakeholders around the globe, including local partners, to collaborate, communicate, and innovate in ways that have not necessarily been intuitive within the development and trade environments so far.

It is an exciting time to look at solving these complex problems with fresh eyes, fresh approaches, and fresh partnerships. We also firmly support and applaud the new government's related focus on the poorest of the poor, on fragile states, and on women and girls.

Seen through the lens of economic development, helping to break the cycle of poverty and closing the wealth gap extends beyond the individual. Systems and institutions, whether in low- or middle-income countries, must have the capacity to provide and manage adequate social and economic programming to ensure that the opportunities and supports for all individuals are not only present but also working, both equitably and well.

It is CESO's position after nearly 50 years of experience that generating economic value and developing a strong economic infrastructure lie at the heart of sustainable change and growth, including the eradication of poverty. We commend both the previous government and the current government for acknowledging the role economic development plays in these objectives and we strongly advocate for a deep commitment to furthering this thematic focus area in the revised international assistance framework. However, it's important to recognize the interconnectedness between economic and social development, and the critical need to address both focus areas in reality.

This connection is not always obvious. Often social and economic efforts are considered, and even approached, either separately or as competing priorities. From CESO's perspective and lengthy history in working in both international and national contexts, we know how inextricably intertwined they really are. This link is perhaps most visible and obvious in our work with Canadian indigenous communities.

In many of these communities, simply addressing economic activity A or social development activity B isn't sufficient. Often, a more holistic approach of addressing multiple issues simultaneously is required. On the side of economic stimulation, the stronger the economic infrastructure is—including well-operating, transparent institutions and governing structures, job creation opportunities, a diversified economy, etc.—the greater will be the ability for an individual, community, country, or region to invest and reinvest in both social and economic initiatives.

In fact, Minister Bibeau recently commented:

Economic growth is not only about creating jobs for individuals: it can also generate revenues for governments to help provide inclusive social programs and services for their citizens, such as education and health care.

CESO's work in strengthening tax and audit efforts in Guyana is a great example of this ability to generate revenues that can then be applied to ensuring that additional economic and social programs are created and sustained.

On an individual level, the opportunity to plan ahead and move beyond daily survival is critical. When people have a relatively stable and predictable income, they can begin to invest in other important areas, such as their children's education, food and nourishment, preventive health care, and reliable housing or shelter.

The other consequence, which is often overlooked, is that they begin to engage in consumer-oriented activities, such as buying goods and services from local micro, small, and medium-sized businesses, thus injecting much-needed stimulus into the local community and economy. In turn, these individuals can use their predictable income to improve their families' health and well-being and to contribute to the community's economy. This is the multiplier effect. Research shows that this individual and community reinvestment occurs at a higher rate when women are economically empowered.

The most obvious and immediate beneficiaries of these investments are children and youth, not only because their quality of life improves but also because opportunities to improve their future become increasingly available. Stability and predictability lead to resiliency, adaptability, and the ability of individuals and institutions to recover quickly from shocks or disasters, whether they are natural, economic, political, or social.

On the side of social development, the stronger the social infrastructure—including health, education, and equality measures—the greater the ability for individuals, communities, and institutions to participate in the economic activities around them.

As my colleagues before me have pointed out, over 70% of the world's poorest live in middle-income countries. This jarring statistic points to a variety of complex causes and issues that often occur simultaneously, including limited economic opportunity, gross levels of inequality, and the various consequences of climate change. It also points to weaknesses at both institutional and systemic levels. This goes back to the interconnectedness between social and economic development. These two focus areas must work in tandem to achieve sustainable poverty eradication.

Considering the knowledge and experience we've accumulated over our history, we ask the Canadian government to consider the following three recommendations relating to international aid assistance.

First, we strongly recommend that local perspectives play a bigger role in the identification and direction of Canadian development priorities. By elevating the role of local contributions, we ensure that development efforts are truly addressing local needs, regardless of the framework of prioritization or delivery. This is also necessary in similar work with indigenous communities in Canada. We can't emphasize enough the value of local collaboration. For sustainability to take hold, local ideas, processes, and approaches must be organically incorporated along each step of Canadian intervention so that beneficiaries are not simply recipients of the impacts, but co-creators and owners.

Second, we often assume innovation is all about new ideas and ways of doing things. However, sometimes innovation simply comes from applying previous successes in new contexts in ways that yield positive change. In a development context, programmatic success should be leveraged as much as possible to replicate impacts when it makes sense to do so. We would also recommend that the Canadian government consider opportunities to fund replication models based on thematic orientation, even when they're outside current countries of focus.

As an example, our work in e-governance in the Philippines is highly sought after by many of our other program countries, including Tanzania, Ecuador, and Senegal.

In brief, the e-governance program uses technology to streamline government systems, increase transparency and efficiencies, reduce government corruption, increase tax revenues, and give many more benefits. With some locally or regionally oriented adaptations, this type of innovative program could easily be replicated in many different countries and regions.

Finally, the world is opening up, and in many ways frontiers are dissolving. Many of the complex challenges discussed today aren't constrained by territorial borders. Likewise, looking at issues only in terms of individual country impacts inhibits the potential for innovative solutions generated from multiple collaborators with different perspectives and experiences. I would be happy to expand on an example of our work in West Africa relating to regional food security and agriculture.

We strongly encourage the Canadian government to consider addressing regional thematic issues in broader ways than by country alone.

Thank you for the opportunity to contribute to the review process. I look forward to your questions.