Foreign Affairs Committee on June 7th, 2016

[The Chair, Liberal, Bob Nault]

I will give you a 10-second lecture. Your time is up.

Let's go right to questions.

Mr. Kent, please.

[Peter Kent, Conservative, Thornhill, ON]

In the interests of time, I'll limit myself to one question. It is for Professor Zyla, and it continues along the lines of the terrorism-development nexus. Development has always been challenged in conflict and post-conflict, post-disaster, fragile states by political vacuums, governance vacuums, corruption and so forth.

You began to describe the new phenomenon of al Qaeda-type terrorism and its variants and replicants. With ISIS, we're now seeing copycats coming up in different parts of the world claiming to be associated with it. Perhaps they are; we don't know. We're now seeing states, for example, Libya, South Sudan, Congo, where there are not simply domestic, national terror organizations, but there are also those that are following the ideological or non-ideological lead of more successful terrorist groups in other parts of the world. We're almost getting into hemispheric cross-pollination.

I'm wondering what your conclusion or your prediction is in on how that is going to have an even further impact on share of the big development aid envelope. In other words, is every program susceptible to this new and spreading terror phenomenon?

[Dr. Benjamin Zyla]

I think the problem is not going to go away any time soon. It's not going to go away, and it's certainly spreading in the Middle East. We've heard some news over the past weeks or so that Libya is now being affected by certain terrorist organizations setting up shop in that country. Whether or not that is true, I have no idea. I'm not privy to that classified information.

I think there are some points to be learned from addressing terrorist organizations. One of them, obviously, is the need for a comprehensive approach. We can't just think of development policy addressing this issue and not think about foreign affairs and other branches of government, because obviously it's a whole-of-government problem, so it's a whole-of-government approach that needs to be taken.

One of the things I've been looking at is that civil society certainly plays a role. Civil society on the ground plays a role. Again, we have to be very careful that we don't replicate the problem that we created in Afghanistan, whereby we create a rentier state that is dependent on the foreign aid that is coming from outside. We need to think of local civil society taking charge of that because, in and of itself, that will increase aspects of legitimacy. It will provide public goods for the citizens.

Second, I know this is a very contentious issue, but we need to think about it, and certainly there is evidence out there that certain types of NGOs—I'm not generalizing that all NGOs do that or are experiencing that—have collaborated with certain types of terrorist organizations. There's evidence out there. If you read the report of the Financial Action Task Force, which came out I think a year or two years ago, you see that it clearly identifies those organizations and provides about 40 or so recommendations for what to do about them.

There are also numerous researchers who have tried to understand the poverty-terrorism nexus. In other words, does an increased level of poverty actually lead to larger occurrences of terrorism? The answer is that there clearly is no link between those. In other words, just because your country is poorer, it does not automatically mean that you experience more incidents of terrorism, and the reverse is true as well. Quite to the contrary, actually, some researchers have found that countries with higher national incomes actually experience higher amounts of terrorist incidents.

What we do see, however, when it comes to fragile states, is the correspondence between the state's fragility and the state's experience in situations of national emergency. Think about earthquakes and natural disasters and those types of things. There seems to be a strong indication that terrorist organizations have exploited these situations, these experiences, to gain momentum and to gain ground in those countries.

There's also evidence that FDI—foreign direct investment—and trade have no direct effect on the reduction of terrorism. That's contrary to what some people believe, but that seems to be where academic research is going in terms of the findings.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Zyla.

We'll now go to Mr. Levitt, please.

[Michael Levitt, Liberal, York Centre, ON]

I'll limit myself to one question so that we can go around the room. My question will be on the dynamic between human rights and our ODA and countries of focus.

We've done some work in the Subcommittee on International Human Rights of late, particularly on some of the significant human rights challenges being faced in Honduras and Myanmar. Of course, both of those countries are countries of focus for Canada.

I'm wondering if you can—you're welcome to take it on—give us some perspective on the leveraging of development assistance in trying to achieve better outcomes for human rights, such as carrots versus sticks, etc. It's something that we're mulling over right now: how to go about bringing these two things together.

There's a country like Myanmar, where, again, we have a renewed interest and a renewed relationship, and democracy is kind of starting, but we're seeing increasingly difficult human rights situations—for example, with the Rohingya population—and in fact fairly catastrophic human rights situations for them. Could we have your thoughts on those countries in particular, or just in general, as to how we bring these two things together?

[Prof. Aniket Bhushan]

Let me take a shot at that in maybe a bit of an indirect way. There's a school of thought out there, like my colleague is talking about, on the idea of sequencing and prioritization, putting the cart before the horse, what comes first sort of thing.

There's potentially a school of thought that says there is one way of looking at human rights in terms of violations of those rights and the very narrow perspective of looking at certain groups and what's happening in certain targeted areas within these contexts. Then there is a broader sense of the general trend of where these countries and societies and populations are going. Is the impeding of various rights that we are seeing something that is systemic and systematic, or is it more targeted?

I would say that in terms of the sequencing and prioritization, focusing on general approaches, that is, broad-based economic development, broad-based growth, broad-based inclusive development, in a country like Burma/Myanmar, will take it on a path where there's very little that we can do without getting into very contentious waters very quickly. If you take my premise of whether we really have the partners to be able to engage with that problem and that situation in a way that we can do something about it in a targeted and isolated manner, you're better off investing. If I were controlling the portfolio, it would be at a more aggregate level, in looking at ensuring that the country generally is moving in a direction that is in tune with where we want to see it go and to have reasonable expectations.

The other option would be to set conditionality—and that's a slippery slope. On the one hand, from a government-to-government relationship perspective, you want to be able to support the capacity of this government to get to that stage. I would tread very cautiously in taking a rights-based approach, in that narrow sense.

[Michael Levitt, Liberal, York Centre, ON]

Does anyone else want to have a quick shot at that, or is everyone in agreement?

[Dr. Benjamin Zyla]

Perhaps I can put out a think piece.

It goes like this. Development policy and foreign policy in general, depending on what sort of focus you have, is a political decision. The number of countries that need assistance, broadly speaking, is humongous. Just look at the failed states research index. It lists all of those countries. It measures those countries that experience state fragility, and I have the list here in front of me. There are at least 32 or so that you can get involved in various kinds of aspects, whether it's human rights violations, experience in certain types of fragility. At the end of the day, which countries you pick is a political decision. It's a question of where you want to put your focus as a country, or perhaps as a government.

I'd suggest to you that the countries that come to mind that perhaps are—I don't want to say more important than other countries, which is an awkward way to put it—experiencing higher fragility and a lot of problems right now are the obvious countries: Iraq, Syria, Sudan, Libya, Afghanistan, and Darfur. We used to have a strong record in Darfur. Now South Sudan seems to have fallen off the map.

The question of how much you want to be involved in those countries is a question of how much you have in your envelope. The answer is that there is never ever going to be enough in a national envelope, so you're going to have to think about strategically whether you do this country by country, or region. Whatever framework you pick, at the end of the day, it's a political decision.

[The Chair, Liberal, Bob Nault]

Thank you.

Mr. Aubin, you have the floor.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses for being here today.

I have two questions and they will be brief. Then, Mr. Chair, I will then let you manage the witnesses' time.

My first question pertains to the differentiated approach to which two of the witnesses referred.

Do the three stages of development represent obligations? For the current problem with the 25 countries of focus, is the thinking that we can't withdraw before we attain our objectives? When we help a country using a differentiated approach according to the three development stages, have we had an obligation, from the outset of our involvement, to attain the first development stage?

My second question came to mind while listening to professor Zyla discuss Afghanistan, among other things. Curiously, when we take part in an armed conflict, our action is usually multilateral. Yet when it comes time to rebuild through international development aid, our action is bilateral. Shouldn't we review this aspect and provide multilateral assistance also? In some cases, Canada could be a leader in a country and a partner in another.

[Prof. Shannon Kindornay]

I can take the first one on the obligation to see through the different stages.

From my perspective, we're talking about a relationship that has great breadth and depth. For me, if you're talking about a long-term relationship and this is also part of your premise, then it does make sense for a conversation with a country that's done quite well and is moving through the aid stage, if you will, into the transitional stage. There's a lot of logic behind following that path, keeping in mind that the end path is one in which aid isn't the main modality of co-operation at all, if there at all. Then you would just have a relationship with more investment and trade in the way we would think of having one with other high-income countries. That's the point, to a certain extent, that we're trying to work with countries to get to.

For me, I don't know if I would use the word “obligation” to follow through the stages, but there's a certain logic to doing that. It doesn't mean there aren't going to be other considerations that come up in the five to ten-year time period that we are working in with these partner countries, but I think there is a lot of logic to seeing that partnership through, especially recognizing that you are increasingly becoming more integrated or more engaged with one another by using different policy levers.

[Prof. Aniket Bhushan]

Just on that question, I agree with what my colleague already outlined.

Part of the rationale in suggesting this differentiated approach is, obviously, how do you square this dilemma of where poor countries are versus where the poor people are. I say this because there are such deep-seated pockets of poverty in ostensibly fast-growing, middle-income, emerging economies with space programs and what have you. That's where this is coming from.

In my view, in suggesting a differentiated approach, it has less to do with this idea of the obligation of being in every stage and has more to do with discipline on our end. By taking a more integrated and more differentiated approach, it will force us to think in certain ways about our engagement with those various groups of countries.

To give you one vivid example of that, we currently prioritize market access, trade relationships, and aid for trade. We give millions of dollars in our ODA aid money to countries so they can have better trading relationships with and better market access to the Canadian market. Two countries on our focus list that have been important recipients of this type of support are Indonesia and Vietnam. To give you a sense of the lack of coherence in this, I did an analysis of the data for these countries and compared the totality of what we give in aid for trade to these countries and what we collect from them by way of import tariffs from the few imports these countries are competitive with in the Canadian import market. We take away more by way of import tariffs than we give in all the aid for trade that we gave to those countries.

My point in talking about a differentiated approach is to focus ourselves and force ourselves and our department to think about a more disciplined way in how we look at engagement in a more holistic manner.

[The Chair, Liberal, Bob Nault]

Merci.

We'll go to Mr. Fragiskatos for the last question.

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

I was glad that you looked at the criteria for the countries of focus approach that have been applied so far. Obviously, it's very problematic when we look at their need, capacity, and alignment with Canadian policy interests. We've had almost no one appear before the committee who has defended that kind of an approach.

Then you pivoted to speak about the Netherlands and defended their approach as a particular example or model that Canada could look to among the alternative that exist. I'm very interested in the three types of relationships that the Dutch have as part of their development policy, in particular, their aid relationships mainly with fragile states.

Professor Bhushan, you said in your presentation that fragility can exist in contexts and not necessarily states. Prior to your testimony today, we heard from Save the Children whose witness said that there was fragility not defined by borders. I just wonder if you could speak about this and whether or not you would counsel a state like Canada to focus on regions. When you say contexts, I take that to mean regions. If you could comment on that, that would be great.

As a follow-up, are trade relationships indeed the third part of the Dutch aid policy?

[Prof. Shannon Kindornay]

It's part of their overall co-operation. Aid is a tool, but it's about international co-operation, not about development assistance per se.

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

That's what I figured. I just wanted clarification on that.

Professor Bhushan, perhaps you could turn to the first question.

[Prof. Aniket Bhushan]

As I think I put it in the longer submission, by no means is this to suggest that it's only the Netherlands. The U.K., Norway, Sweden, and several other countries have recognized the contextual specificity of fragility—let's not say the state or country or context—and the very innate, fluid nature of how the situations can change. What it means is essentially the calculus about how long and how deeply one is prepared to be engaged: as I've laid out, in terms of time frames it means 10 to 15 years. It's very easy, if you look at some of the stats that our colleagues have shared, to think that you can do something in shorter time frames. If you look at the average time frame of our engagement in terms of projects, currently, in terms of Canadian data, which is comparable to the global OECD, it's about three years. So it's a wildly different way of looking at it.

Now, to your question about states and countries and borders, the U.K., for instance, has an explicit financial target of spending 50% of its assistance budget, but they've very creatively tacked on to it that it's not just about fragile states, and it doesn't prescribe to any of these global lists, be the failed states index, be it INCAF, or be it the World Bank. It is their own understanding of fragility. It also has in it, very explicitly, the word “neighbourhood”. It is very much about fragile states and neighbourhoods, because it explicitly takes into account the recognition that the borders are very porous in these situations.

It comes back to the point I was making earlier, that the reason I think we need a dedicated fragile states strategy or fragile contexts strategy is that it would force us to think about what it means and what opportunity costs there may realistically be in engaging in these contexts versus doing development in other contexts—what the payoffs are, what the risks are, and whether we have credible partners to work with.

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

But we could make the argument that most of the international problems that exist these days, and those that are projected to exist in the future, are regional in nature and not state-specific. I worry about a state-centric approach. While it is true that states are the basis of the international system, a regional approach might be the best way forward in terms of Canada yielding the best results as far as our development assistance policy goes.

[Prof. Aniket Bhushan]

I wouldn't disagree with you. That's more in tune with where, in some ways, in a very broad-based change, one could go. I'm sort of situating this more in the context of how past-dependent things are in terms of where we are. We've always had countries of focus and country-based approaches. That's number one.

Number two is what others do. Frankly, most countries—the French, Australia, Norway—have some sort of a focus list of countries and partners. At the end of the day, part of development assistance is about dealing with another government, dealing with another state, which is confined to a state—

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

I chose to focus on the Dutch example because it was so interesting to me, and you made the case in your presentation as well.

Thank you very much.

[The Chair, Liberal, Bob Nault]

Thank you.

Colleagues, that wraps it up for today.

On behalf of the committee, we very much appreciate your coming before us today. I know it's always too short. There are lots of questions to ask and answers to get, but I think we made some progress. Thank you very much.

Colleagues, we'll wrap it up. We managed to get in our full two hours today. Considering the votes, that was commendable.

This meeting is adjourned.