Foreign Affairs Committee on June 7th, 2016

[Raj Saini, Liberal, Kitchener Centre, ON]

Thank you very much for mentioning the cost, because in looking at the ingredients I know there have been some patent issues with that product. Other countries and other companies have wanted to make that product. To me, $50 seems a bit high for the ingredients in the product.

[Mark Fryars]

Yes.

[Raj Saini, Liberal, Kitchener Centre, ON]

What is the challenge for the global community? Is it to try to convince the company to reduce the price or to come up with another competing product that could be done more cheaply?

[Mark Fryars]

Well, what I can say is that there are a number of efforts—and I believe Canada has been involved with at least one of them—to produce similar products locally at a much lower cost. Often, local production isn't necessarily cheaper, but depending on volumes and market conditions, it can actually work out to be more cost-efficient.

I know that there are several initiatives globally. We have spoken with the officials in the department about at least one of them in two countries, Ethiopia and Rwanda, where they are looking to make equivalent products at a much lower cost, because while this was a very useful product when it first came out because it met a very large need, it has been recognized by the French company as well that this needs to happen. They've also entered into licensing arrangements to allow local production at lower cost as well.

[The Chair, Liberal, Bob Nault]

We're going to go to a shortened round for the second round.

Mr. Miller.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

You touched briefly on an important point, which is that Canada has a limited amount of time, money, and resources to dedicate to what is probably mankind's greatest challenge, that of eliminating or significantly limiting extreme poverty.

One of the frustrations that I think we face when we look at the countries that are selected as countries of focus is why one and not the other? For example, you look at West Africa and ask why so much goes to Mali, and why there's not enough to Burkina Faso, and then Benin, with similar and very close population numbers. Obviously, poverty doesn't stop at customs control. The question, then, is what you do with limited resources, limited involvement specialities, and, frankly, engagement in these countries.

You mentioned transitioning to thematic approaches. The issue then is where Canada can contribute its expertise. That is essentially my question for you.

Mr Fryars, you mentioned nutrition, and Ms. Riseboro, you mentioned the role of women and championing that issue. We have water issues being championed and all sorts of things where Canada can be a leader. What is your view on those three issues and on perhaps what I'm missing in that regard?

[Caroline Riseboro]

I would start by saying that we have to take a holistic approach. While nutrition is obviously a very important issue, it cannot be done in isolation. If you have children who survive to the age of five but don't have access to school, then we're not helping them break the cycle of poverty. If they don't have access to rights and they survive to the age of five but then are being married off at 12 years old, having their first child at 13, and likely dying in childbirth, that is not success.

Again, I think this is why having 20 to 25 countries of focus where we can intervene and provide assistance that takes a holistic approach will be important. We all realize that we don't have enough money to solve all of the world's issues, though, so again, I think this is where we have a unique opportunity under the SDG framework to leverage public-private partnerships and leverage ODA along with non-ODA contributions.

At Plan International, we're continuing to work on a number of innovations that bring together public and private resources to be able to amplify our impact, more recently around green technology in Kenya, where we've partnered with the largest solar provider, which is also a Canadian company, to reduce energy poverty and provide opportunities for green jobs, particularly for women and girls.

Again, I think this is where private-public partnerships can have significant opportunity.

[Mark Fryars]

With regard to what to do with limited resources, I'm taken with the suggestion that Caroline made about also looking at regions and sub-regions. You mentioned Burkina Faso, Mali, these countries in French West Africa.

One of the things we do is to say that we have a Sahel-based approach. We're looking at a small basket of countries, as it were. They're really relatively small countries and looking at the investment across those, because the opportunity particularly in the African continent and particularly in west Africa is that there are economic groupings of countries. So it is possible to work with UEMOA, the Francophone agglomeration, and ECOWAS. We've done that quite successfully.

These, I think, are opportunities that are sort of half multilateral and half bilateral, which allow Canada to intervene in a better, more flexible way according to the circumstances.

Also, to pick up on something perhaps I should explain, nutrition, while we focus on nutrition, it is nutrition within the systems and the countries, not nutrition as a sort of stand-alone thing. The problem that we face is that if you look in provincial governments, for example, in Canada you'll see the ministry of education and another to do with roads and water. You don't find ministries of nutrition. They don't exist.

Nutrition has to be integrated in a holistic way as described. We need girls and women empowered and with a rights-based approach to be able to decide on their dietary intake, for example. When they're informed and able to do that, their nutrition can improve. That's just to paint a picture of nutrition as something critical that must be integrated within a larger framework of social support. I hope that answers some of your question, but perhaps I missed one part of it.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

That's helpful.

Ms. Mondaca, go ahead, please.

[Marlen Mondaca]

Again, as I am coming in last, my colleagues here have really covered a lot of what I would say. On the issue of dealing with limited resources, which you highlighted in your question, and the issue of thematic approaches, I definitely think that leveraging public-private partnerships is key to being able to create greater resources to address the multiple issues that we deal with.

Having the opportunity to work with others is key. I also think engaging with local and national governments is a critical component of the work we do and critical to any kind of sustainability. I'll highlight one example. Save the Children has been working with bilateral programming in Colombia for a number of years. We are working with ethnic and Afro-Columbian minorities in a conflict-affected area of the country, in the northwest of Colombia.

We're working to really transform their education. Save the Children cannot do that alone. We have to work very closely with local educational authorities, who in turn allow us to work very directly with the schools, the principals and teachers, to really change the way that education is delivered to young kids, so that in fact it is not just an issue of access, but it's an issue of quality.

In order for that program to be sustainable, to really have impact, you really need to be able to engage with local actors, whether they be at the community level or at the government level. I think the goal of all organizations like ours is for governments to ultimately be able to deliver on their responsibilities, which in the case of Save the Children, are to children and youth.

[The Chair, Liberal, Bob Nault]

Thank you, colleagues.

We'll have to wrap it up there and thank our witnesses very much, short as the time was.

We appreciate your information, obviously, and advice. If there's anything else you can think of that we didn't get a chance to talk about, please feel free to write us and let us know. This subject is very important to us, so we very much appreciate your time.

Colleagues, we'll take a five-minute suspension and then go on with the next group of witnesses.

Thank you.

[The Chair, Liberal, Bob Nault]

Colleagues, we'll bring this meeting back to order.

In front of us we have a number of academics, whom I always enjoy meeting because they are more freewheeling. I get way more enjoyment out it, I have to admit.

I want to start to my left and have you introduce yourselves. We'll get right into this and hopefully get some dialogue going.

[Aniket Bhushan, Adjunct Research Professor, Norman Patterson School of International Affairs, Carleton University, and Principal Investigator, Canadian International Development Platform]

Good afternoon.

My name is Aniket Bhushan, and I am an adjunct research professor at the Norman Patterson School of International Affairs at Carleton University. I also lead a data and analytics platform at the university called the Canadian International Development Platform.

I thank you for your time.

Are we just doing introductions and then coming back?

[The Chair, Liberal, Bob Nault]

Yes. We'll come back to you.

[Shannon Kindornay, Adjunct Research Professor and Independent Consultant, Norman Paterson School of International Affairs, Carleton University, As an Individual]

Hi. I'm Shannon Kindornay, an adjunct research professor at Carleton University. I also happen to work with Aniket and am also an independent consultant. Prior to this, I was with the North-South Institute, which many of you may remember, for about five years.

[Dr. Benjamin Zyla, Professor, School of International Development and Global Studies, University of Ottawa, As an Individual]

My name is Benjamin Zyla, and I'm a professor at the School of International Development and Global Studies at the University of Ottawa. I'm also co-directing the failed states research network with the Centre of International Policy Studies.

[The Chair, Liberal, Bob Nault]

Thank you.

Professor Bhushan, you'll start, and then we'll get right into questions from there.

[Prof. Aniket Bhushan]

I should preface my remarks by saying that we have also submitted a lengthier version of the remarks. I'm coming from the background of a data and analytics person, so you might find that pervading some of my remarks here as well. The lengthier version is there for you as a resource to have at your discretion.

What I'd like to do is to really situate what I'm going to say in two segments. The first is the challenge. The second is the recommendations—what should Canada do?—if you accept my proposition in terms of the challenge.

The first thing that I think may be worth asking is, do we even really need such a thing as a country of focus list, a prioritization list? So much of assistance now is responsive. So much of what we finance is due to emergencies, which are inherently unpredictable. Do we really need such a prioritization framework?

I would argue that a disciplined commitment to long-term development, especially when budgets are stretched because we have emergencies and humanitarian situations that take up so much of the resource need, is precisely the reason why prioritization is important and precisely the reason to think about the countries of focus list.

What is the problem with the current approach? To summarize, the current approach is based on a threefold formula: the country's need, its ability to benefit from Canadian assistance and from assistance overall, and its alignment with Canadian foreign policy.

What is the problem with this approach? Well, it has been argued, and I agree, that this is way too broad and vague an approach. It leads us to a place where, in our focus on partner countries, we have 37 priorities and partners in all.

There is a lack of transparency about how the approach is actually applied. Really, any country you can think of can be put onto a focus or partner list because the criteria are so broad. In the rationale for how this links to 90% of our bilateral budget—it's actually even contestable whether it is 90% of the bilateral budget—there is no sense of a hard analysis. There is no costed sense of objectives in linking priorities and resources.

I would argue for some other reasons that there are problems with this approach. For what I call the “macro level contextual changes”, which others have talked about as well, let me go through them very quickly.

One, global agendas are getting broader and broader, so they have a tendency to want to make us go wider and thinner. The best case in point is the SDGs, the sustainable development goals agreed to last year at the UN. The COP process on climate change is another one that is an example of agendas getting broader, bigger, and demanding more resources.

Two, the rules of what counts as official development assistance are changing. We can get into this more in the Qs and As.

Three, diplomacy and geostrategic interests can have an impact on broadening and going too wide and too thin. An example of that is linking the idea of our aid allocation and our resource needs in terms of our aid budget to, for instance, winning a seat at the UN Security Council. It's a very bad idea to link those two things together.

It's easy, I would argue, to say too that we want to focus on the poorest and on fragile states, but consider this fact: since 2000, the number of LICs, low-income countries, has more than halved. We had 63 low-income countries. We now have about 31 low-income countries. The number of countries in that category has halved. Halving extreme poverty was also achieved ahead of the millennium development goal target, as others have also pointed out.

In my view, country-level analysis may be insufficient in the situation that we find ourselves. The best projections point to the fact that global extreme poverty will be increasingly concentrated in a small number of very fragile contexts—I would say “contexts” and not “states”—and in hard-to-reach pockets of deep and persistent poverty in large middle-income countries. This is all something that all of you have heard.

In the SDGs, there is also a new framing of our level of ambition, which is to end extreme poverty by 2030, that is, to leave no one behind. It also means that it is beset with a new problem and a new challenge, which is what I call the “last mile problem”. The closer you get to zero, the harder it is to reach zero. This is the context within which I'm situating the challenges we face.

I've done a quick analysis of our current lists or our current focus. I'll go through this very quickly. I hope you can ask me about it during questions. A lot of the data is there for you to refer to.

I want to point to what our analysis shows as eight generalizable characteristics across our current focus and partner countries. These are rapid population growth; rapid urbanization; serious social and economic hard infrastructure deficits; youth bulge; serious challenges surrounding gender issues, gender rights, and equality; vulnerability to climate change; limited state capacity and fragility; and endemic corruption and governance challenges.

In addition to this, our analysis takes into account a set of factors to essentially see how good at prioritization the framework is. We take into account fragility, human development, income poverty, non-income poverty and deprivation, and aid dependence. In summary of that analysis, the complete version of which you have in front of you, when I look at it on a quadrant or two-by-two axis and look at where very high and very persistent poverty is, countries that are also very highly aid-dependent and where Canadian aid is significant—that is, accounting for more than 5%, for instance, of the total assistance received by that country—I come up with only four countries. These are Haiti, Mozambique, Mali, and South Sudan. In each of these countries, Canada ranks among the top 10 donors.

You have my analysis there for other buckets of countries where I similarly do the exercise to situate all our current focus and priority countries. The conclusion is that Canada is among the top 10 donors in 15 out of the 25 focus countries and only two out of the 12 partner countries. This implies that for 20 out of our 37 focus or partner countries, we're not amongst the top 10 donors.

If we look at it from the perspective of targeting poverty and targeting fragility, Canada does reasonably well, even with these criteria, insofar as the share of assistance spent in these areas when compared with other donors. So why the whole business of a new approach? I would say that because we have a changing global context, because we need a more disciplined and transparent approach, and because a new and fresher approach to that is more disciplined, more in line with, and takes into account the changing global realities, this would make Canada a more credible and potentially a more predictable partner on the international stage.

What should we do? I have three recommendations. I'll go through these in order.

The first one, which echoes what many have said already, is the need for a long-term approach, but not only a long-term approach, but also clear, transparent, specific and, I would underscore, a disciplined and serious approach. I mention the latter because I think that is the key gap in the current approach. To reinforce a commitment to long-term development means thinking in time frames of about five years in the case of low-income countries that are not fragile, and at least 10 to 15 years in the context of fragile states. This means that aims should be linked to the time frames and our resources. We can set, and we should set, clear quantitative targets from the outset that will in turn drive discipline, transparency, and accountability. This means that we need to identify and cost key gaps, and then benchmark how much Canadian assistance can be spent in meeting those gaps.

We should remember that development outcomes, at the end of the day, are for our partners and our end beneficiaries in countries, not really for Canada. These are only achievable if we have an equally serious, disciplined, and committed partner at the other end of the table, so to speak. We should simply refrain from investing in contexts where we can't find such partners. If this principle were applied, we would get a different list, in my view.

Second, I argue that we need greater focus through a combination of what I call a differentiated approach and an integrated strategy. A differentiated approach is essentially one that is built around the realities that different countries are in. Bangladesh, for example, is no longer an LIC, a low-income country. Nobody believes there aren't serious issues to be tackled there, but it's not a low-income country. Bangladesh also benefits from market access to the Canadian market. In terms of trade, Bangladesh exports into the Canadian market about 10 times what our aid is to the same country.

This approach reflects more a reality of a graduated sense of where countries are by types of relationships. This approach is not new. It's something other donors do. For instance, the Netherlands has a very similar approach. My suggestion is that in taking such an approach, we would get three buckets, or three groups of countries: the first, fragile countries; the second, low-income, non-fragile countries; and the third, transitional countries.

The reason this approach fits with an integrated strategy is really summed up by the point that development policy in an integrated approach is bigger than just aid policy. In an integrated approach, we would ensure that both concessional and non-concessional resources are aimed toward development outcomes. We would ensure that we do not only projects, but also technical support. We would ensure there is coherence between our aid policy and trade policy.

If asked, I can give you examples of where we lack that coherence currently.

Finally, for the third suggestion, in the context of fragile states, I think we need a specific strategy. Fragile contexts and states are really in a unique situation, very context-specific, and more importantly, very fluid. Things change faster and more dramatically than we can really account for.

Absent a hard-nosed analysis of what we want to achieve and whether it is achievable given the time and the assets that we have to dedicate, investment in fragile states comes at a high opportunity cost. This is not to dissuade investment in fragile states. It's simply to set more realistic expectations and have a healthy appreciation of time frames and risks that make engagement in fragile states quite fundamentally different from engagement elsewhere in the developing world.

Let me sum up.

Applying my criteria, I get three groups: one approach for fragile states; a set of non-fragile, low-income countries; and a set of transitional partners. If you ask me what this means for the number of countries, I would hazard that for the type of budget we're looking at in terms of the current status quo, say, three and a half to four billion in bilateral assistance, or about $3.44 billion, according to the latest data on development projects specifically, it would be about 12 to 15 countries.

In this regard, I should also caution that change should not be taken lightly, as it affects partnerships, affects predictability, affects credibility, and it has real transaction costs in terms of being able to move and shift strategies. Also, it's simply the fact that most assistance, as many of you probably already know, is quite path dependent. About 30% of the budget is simply continuation of projects already in flow. So change should be taken very seriously.

I'll leave my remarks at that for now.

[The Chair, Liberal, Bob Nault]

Thank you.

We'll now move on to your next colleague.

Ms. Kindornay.

[Prof. Shannon Kindornay]

Thank you for inviting me to offer my perspective on your timely study. I'm sure that your findings will make a valuable contribution to the ongoing international assistance review policy.

I'd like to address two of the proposed questions. One was around how Canada's international assistance can be designed to work in different types of countries. In support of what Aniket has said, I will touch on the integrated differentiated approach. I'd also like to speak a bit around the question of agenda 2030 and how we can ensure that our efforts support the implementation.

One of the benefits of appearing before this committee following so many excellent contributions is that I'm afforded a chance to both emphasize some points that you've already heard but also to offer you some new perspectives.

There has been quite a bit of debate on the question of whether focusing on particular countries has merit in the first place. Some have called for Canada to focus on the poorest regardless of the countries they live in, given the changing geography of poverty. Others have noted the lack of evidence around whether the country-of-focus approach actually leads to more effective aid, but they have, of course, recognized the logic of the approach. It allows us to have greater resources, and, as such, influence in the countries in which we work, facilitates development of expert knowledge, and has the potential to reduce administrative costs.

This may not be enough to ensure aid effectiveness, but it is likely contribute to it. We have limited resources, and we need to choose to spend them wisely to reach scale and impact. However, I think it's worth further emphasizing that the focus question is not just about our perspective on the role of the donor. It's actually about the burden that's placed on our developing country partners who have to spend a significant amount of time reporting to all of the various donors that they engage with. Really, we need to make it worth their while.

I do not have a strong opinion on the number of countries that Canada should focus on. Aniket certainly knows the data much better than I do, and I would encourage you to have a look at the background document that he submitted. For me, rather, I think it's time for Canada to take an approach to international co-operation that's grounded in a recognition of the needs of partner countries and that they have changed significantly, and that it's high time we moved beyond aid in terms of how we think about international co-operation.

Like Aniket, I would argue that Canada should take a differentiated and more integrated approach to international co-operation, which articulates our objectives and the modes of co-operation that Canada will use when engaging with different types of countries. You've heard about the Netherlands example in terms of this differentiated approach. You have your aid countries, those for which the main form of engagement is around external assistance, recognizing that these are countries with less capacity and in greater need of external assistance. You have your transitional countries, your low and middle-income countries that we would call emerging, and for which co-operation might include other things like trade, investment, and aid working alongside.

In the case of the Netherlands, they actually also include another category that they call their trade relationships, which are basically the countries that they promote investment and trade in that are, of course, contributing to benefits in that country. For the committee's knowledge, Vietnam and Columbia as well as Canada fit in that trade category. That's maybe something for us to think about.

I'm not advocating that we adopt the Netherlands characterization lock, stock, and barrel, but I do think we need a similar kind of approach. I agree with Aniket that in the case of Canada, we need a separate bucket, if you will, for fragile and conflict-affected states versus those that are not experiencing conflict but have greater government capacity to absorb assistance.

The differentiated approach should be rooted in a clear set of criteria that outlines, for each type of relationship, the rationale for that approach and the countries selected therein. Moreover, there should be clarity on the kinds of tools that we are looking to use when we talk about these different relationships. For example, in aid countries, we might use a mix of traditional forms of assistance, supporting countries to reduce poverty, reach those that are being left behind, and create an improved enabling environment for trade and investment. In transitional countries, Canada might pursue enhanced trade relations but also make use of the development finance institution that we've been promised. In this context, aid becomes a very strategic input that you're using to target the poor in those countries, of course, but you're also leveraging other forms of finance and supporting your partners to raise domestic resources.

Once these relationships are selected—I think you've heard this a number of times—they need to be long term. As a country transitions from one category to another, perhaps owing to success or setbacks, that doesn't mean they should be abandoned.

Finally, the differentiated approach should work in conjunction with other forms of assistance. That's something else you've heard. We need to consider how we're working with civil society organizations, multilaterals, regional organizations, and how we're addressing global efforts to realize or address global public goods challenges, for example.

I think it's helpful to highlight the merits of this approach for your consideration.

First, the differentiated approach moves us beyond a conversation of aid alone to a more sophisticated discussion of how our development, trade, foreign policy, and other priorities intersect. The approach requires us to think about how policy levers can be used to realize mutual benefit for us and for partner countries. The Netherlands approach was the result of a major review this country underwent to look at how they engage with the world in every domain: agriculture, environment, migration, aid, and so on.

If Canada were to take this approach, I would caution that we too need to properly review how our engagement works with the world, and avoid jumping to a list of countries, based necessarily on our existing list of focus countries or the trade negotiations, though I do agree that there needs to be continuity. We would need to consider, of course, the perspectives of the partner countries themselves. Unfortunately, the international assistance review does not sufficiently capture the beyond-aid domains for this purpose.

Second, such an approach has potential to improve transparency to Canadians and to our partner countries by recognizing our multiple interests and being transparent about them, and clearly articulating a coherent approach to Canada's engagement with the world, one that I think we can expect or at least should be able to expect, given that we have the joined-up ministry that we do.

Third, a differentiated approach allows us to tackle the question of poor countries and poor people, something you've heard a lot about. It means addressing the needs of both. Rather than using strict categories of least developed, fragile, middle income, and so on to determine how we engage, we should look at the many factors in setting out this differentiated approach, one of which would be pockets of poverty. We can make provisions to target poverty in all countries, including those that may end up in any category.

I recognize that there are risks to this approach and many have talked about the need to conserve the Canadian brand, to ensure that our development assistance is guarded from other policy interests. Frankly, I don't buy that this is some kind of zero-sum game. Of course, assistance should be provided according to the ODA Accountability Act and it should target the poorest. That said, we are missing a world of opportunity if we are not better at effectively linking our interests across policy domains. We are also doing a disservice to our partners, many of whom feel it's time for this sophisticated discussion.

There's always a risk that aid will be used for commercial or security interests, but on the other hand, the differentiated approach is also about the impact for other policy domains. Last November I visited the Netherlands for a study looking at private-sector engagement in development, and I remember when I was speaking to the aid people, they of course talked about the need to bring in trade or commercial interests or work with their own companies in their development assistance, and many highlighted that this was a positive in sustainability. Perhaps we can get into that in the Q and A, if there's interest.

But then when I spoke to the “trade people”, they saw it as their remit to be bringing conversations around sustainability and development into the trade negotiations and conversations they were having with their trading partners as well as in multilateral forums.

The differentiated approach isn't about using aid in the service of other interests. It's about recognizing and working with different objectives to realize mutual benefit and maximize the outcomes of international cooperation, using all the policy levers in a coordinated way.

I'd like to end with a couple of points about agenda 2030 and our bilateral assistance programs. I understand that you're very familiar with agenda 2030. You've heard a number of people speak about the merits of that agenda. So I won't go into that. I wanted to flag a few points for us to consider.

First is one of the risks I see in how we engage on this agenda. There's a real risk that countries like Canada will reframe what they're doing to fit with the SDGs, rather than making any real changes. We saw this with the millennium development goals. The risk is greater this time because the SDGs, as you rightly pointed out, Aniket, cover everything. We could just keep doing what we're doing and say that we're doing it to meet the sustainable development goals. We need to be careful of that and we need to recognize that the goals and the principles of that agenda suggest that we need to do things differently.

Second, our approach to bilateral assistance can be informed by the targets of the sustainable development goals themselves. If I take the example of goal 17, which is on implementation, it includes things like enhancing policy coherence for development, strengthening domestic resource mobilization, and mobilizing additional financial resources for development. These are all things that we could be contributing to through a differentiated approach.

Another target, which relates to my third and final point, is actually about respecting country policy space, and the need to support countries that take leadership on their own national sustainable development plans. Canada's bilateral assistance needs to align behind our partner countries' national sustainable development plans. For me, this does not mean that Canada should get engaged in every sector, but rather that we should contribute to supporting our partner countries in the sectors where we have expertise, and according to their plans.

Our thematic focus is currently wide enough that I'm actually not worried that we would be unable to fit with national priorities in our partner countries. Rather, we should recognize the importance of ensuring that we have the appropriate expertise within government, harnessing it from across Canada, and ensuring that we're able to bring that expertise to the countries that we work in. The bottom line is that supporting the SDGs means supporting country ownership and aligning our assistance efforts as appropriate.

Thank you for your time. I look forward to your questions.

[The Chair, Liberal, Bob Nault]

Thank you very much.

Now, we'll go to Mr. Zyla.

[Dr. Benjamin Zyla]

Mr. Chairman, and honourable members of the committee, thank you very much for the invitation to appear in front of you today.

I appear in front of you today as a researcher, somebody who works on the security-development nexus, and particularly on fragile states; on questions of international peace and security; and human security, in particular.

Obviously, I'm aware of some of the discussions you've had in the past, some of them with my colleagues who have appeared before the committee.

Instead of repeating some of the points they have made, what I thought might be useful for the committee as a whole is to draw out perhaps some of the bigger questions or some of the bigger pictures that at least to me lie at the heart of the debate of Canada's development aid and where this aid should be going, and of course some of the lessons learned.

Lots of people tend to forget that we've just come out of, let's call it, a “huge development puzzle” if you wish, which is of course the operation in Afghanistan, which has been ongoing since 2001. What I thought I would do in the seven minutes or so I have left is to draw on some of those lessons or some of those points that are sticking out for me and some of those current research projects that I'm engaged in right now.

In particular, I will offer some reflections on why states fail in the first place, because most often it is those states, what we call fragile or failed states, where the majority of our development aid will actually end up and where we will end up as a country in terms of being engaged politically and militarily, and from a development point of view. In other words, we need to understand the causes of those states' experienced fragility in order to help them to get back on their feet, which, in turn has implications for where, when, and how Canada spends its development aid.

I will briefly then talk about what are fragile states, why they are important and why they have popped up, and perhaps some of the pointers of what the literature says about why and how we should deal with them.

I will also talk about—and this will nicely correlate with what my colleagues have been saying—the so-called comprehensive or whole-of-government approach; and last, but not least, the so-called terrorism-development nexus.

First, why do states fail and what do we know about why they fail? Let me start by saying a few things about conflict management in general. Development aid is certainly part of conflict management, point number one. Point number two is that conflict management is a full spectrum exercise, which lots of people tend to forget. Conflict management is not only a sectoral approach, but a comprehensive approach to overcome situations of fragility. Point number three is that Canada, obviously, is part of this full spectrum exercise. Point number four is that Canada is also engaged in conflict management as part of a multilateral undertaking. To think that Canada can do things unilaterally, on a sectoral basis or on a geographic basis, perhaps needs to be rethought. Finally, point number five is that conflict management is a practice that Canada has been involved in over the past, let's say, 15 to 20 years through two or three major international organizations—on the military side, obviously, with NATO, and on the political development side with the UN and to a lesser extent the OECD.

That said, let me take you through a quick ride of why and how fragile states are important. First, weak or fragile states are not a new phenomenon. They have been around for quite some time. If you look at the data, some people say they appeared in the 1940s, but, certainly, the decolonization period between 1940 and 1970 gave birth to a large number of financially, bureaucratically, and militarily weak states that were incapable of providing public goods for their citizens.

Obviously, the term “fragile states” or even “failed states”, has achieved importance or significance in the context of 9/11 where, of course, an American discourse was imposed on that subject.

Certainly the point is that since 9/11, fragile and failed states have been on the policy agenda, and certainly also on the academic agenda. In general, civil conflict costs the average developing country, roughly speaking—and I'm generalizing here—about 30 years' worth of their GDP growth, which is a very significant number if you have developing countries on the map. Countries in protracted crisis can fall over 20 percentage points behind overcoming poverty. So, again, this is a significant number. There is also a 0.07% drop in GDP for every neighbour that experiences conflict.

What is a fragile state, and why are fragile states important? A definition of a fragile state is a state that is “unable to meet its population's expectations or manage changes in [those] expectations and capacity through [a] political process”. This is the official definition by the OECD.

Why is this important? It's important because 25% of the global population lives in a fragile or violent state. Of the civil wars that occurred between 2001 and 2011, 90% were in countries that had already experienced a civil war within the past 30 years. Roughly 75% of the world's refugees are in neighbouring countries of fragile states. Syria, obviously, is a current example.

Let me walk you quickly through what causes a fragile state. The research on fragile states—and certainly the causal factors that lead to states experiencing fragility—is not only highly debated, it's also very context-specific. There are numerous what we academics call “variables” that can be quantitatively or qualitatively tested, which affect this process of state fragility. However, one can dissect a number of those important variables that stick out.

First of all, low GDP and high levels of political instability increase chances of civil war. Second, extreme poverty and poor social conditions facilitate conflict by providing easily motivated recruits for civil wars, often due to the lack of economic alternatives. Third, states experience fragility if there is a lack of control of natural resources; in other words, if certain parts of society engage in debates not only about who should control those resources but also about who should receive some of the benefits of those resources. Last but not least—and this can obviously be summed up by the term “greed”—there is systematic discrimination against certain societal groups, which leads to states experiencing conflict.

However, all of these variables are not sufficient for conflict or for a state to experience fragility. For that to happen, you need the social contract within states to be broken, i.e. for there to be weak social cohesion, the breakdown of state institutions, and the absence of delivery of public goods. In short, we could also say that weak states—that is, organizationally, financially, and politically weak states—are more likely to experience failure.

What obviously contributes to the failure of a social contract? That's kind of at the heart of the question here. First of all, there are weak and corrupt governments. Second, there is failure by the state to actually provide security for its people. Third, state institutions discriminate openly and deliberately against particular ethnic, religious, linguistic, and social groups. Fourth, there is a concentration of power in certain parts of society, and other groups in society feel that they've been neglected. Last but not least, there is an unjust distribution of resource wealth.

It's also interesting to note that evolving democracies—and some of my colleagues have talked about this—are more conflict- or war-prone than are autocratic states. Why is that so? It's so because there is a contestation for domestic political influence. In other words, countries that are transitioning toward becoming a democracy are highly vulnerable. They should be highly focused on their vulnerability to lapsing back to conflict and state fragility. Moreover, the odds of a civil war are 5.2 times higher in the first two years of state independence. That is often neglected in the discussion.

However, to be sure and to drive home the point very clearly, ethnic and religious diversity within a state is not by itself a sufficient contribution to cause a state to either lapse into conflict or even to fail.

Why am I drilling on this? The point here is that international interventions, and I would subsume development aid as a form of international intervention, should address rebuilding the social contract of fragile and failed states with the following aims.

First is obviously to increase the effectiveness and the accountability of the state. That is to invest in citizens' security, justice, and jobs.

Second is foster the development of good and effective local institutions of the state. Often that's been summarized under the heading of “state building”—which in turn will help the state to increase its resilience against external shocks. External shocks or resilience means the ability to cope with domestic and international changes. Some have argued in the literature it is almost more important than poverty reduction in itself or addressing poverty reduction.

Third, one should increase the legitimacy and the political governance of the state, that is the rule of law, security sector reform, etc.

Fourth, as an intervenor we need to understand the specific historic and political dynamics that are at play on the ground in fragile states. I submit to you that this is certainly something that we as Canada didn't understand, and we're not the only ones who didn't understand this, in the context of Afghanistan. This is important because if we want to rebuild this social contract, we need to understand who these groups are and how these social groups interact with one another, how they stand vis-à-vis each other and what their responsibilities are, etc.

Fifth, we should think of limited economic assistance. Here again I'm thinking of the case of Afghanistan. Canada is certainly part of this, but obviously it's not the only country that has contributed to this problem, but we have essentially created a rentier state that is highly dependent on development aid. It's not able to generate its own capacities.

Some have argued that certain types of peace operations need to help internal and external security, and certainly Afghanistan is a case in point. Some have even gone so far as to call for a UN trusteeship. I wouldn't go that far, but I'm just putting this forward.

Now obviously in this entire process to rebuild state-society relations, you need not only to address local elites that obviously have an important role in this process, but also need to understand the long-term conditions that lie behind states experiencing fragility.

Which comes first you may ask: is it security or is it development, or do both come at the same time?

The lessons from the 1990s, and here I'm thinking about the Balkans and our experience in Afghanistan, is clearly that we need both at the same time. We cannot just think in stovepipes. We need to think of security and development coming at the same time and addressing these issues at the same time.

This leads me to my second point about the so-called comprehensive approach or the whole-of-government approach. Here again, I'm drawing on a project that I'm doing right now comparing NATO member states' comprehensive approach in Afghanistan since 2001. Certainly one important lesson learned from the Afghan operation is that Canada's development, humanitarian, and peace and security programming need to be in line to be able to make an impact on a very specific country.

What we have seen too often in the past, and again Afghanistan comes to mind, but also the Balkans in the 1990s, is that each individual department—here I'm talking about the Global Affairs Canada, the Department of National Defence, and Canada's development institutions—seems to work in national stovepipes. What we actually need is an overarching approach, not only a policy framework, but to have our institutions working effectively with one another on a particular issue, on particular fragile or even failed states, to bring their expertise together, because we do have the expertise in the Canadian government. It's a question of organization. It's a question of management.

Put differently, departmental work in the individual stovepipes is not the way to go. It's something we have learned from Afghanistan, but it's something we haven't really overcome, and it is certainly one of the lessons we need to address.

At the end of the day, I suggest that leadership is vitally important here. Personalities do matter, and you need people with experience in the public service to provide this sort of overarching managerial framework.

Last but not least, I should say that obviously, the comprehensive approach or the so-called whole-of-government approach is a political process that provides a strategic imperative for any government involved in fragile states. It is precisely in this context that we observe what my colleague Stephen Brown has called the “securitization” of development aid that has taken place and has become a problem, again in Afghanistan.

As some numbers suggest, the financial spending in Afghanistan on security-related issues, that is the military police, etc., was 10 times higher than the money spent on foreign aid. There's also an argument to be made that the securitization of development was more about the security of the donor rather than the recipient country.

My third point is on the terrorism-development nexus. In the literature what we've seen is that the terrorism aspect is replacing poverty in that sort of security-development nexus. That means there's a shift in development assistance towards fighting global terrorism, and again this is something we have seen in the context of Afghanistan. Security becomes a priority over development aspects.

Contrary to the accepted wisdom in some parts of the public, terrorist organizations by and large do not reside in fragile states. Why is that? It's because even terrorist organizations need a very basic infrastructure to run their organization. So they are, and I hate to use the word “attracted”, certainly driven to fragile states, but not to failed states, because again, they need this basic infrastructure.

What, if anything, can development aid and development policy in general do to address the terrorism problem? I will put forward four or five points to you...in the question and answer period.

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Oh, oh!

[The Chair, Liberal, Bob Nault]

That's better. Thank you very much.

I know you professors are used to the hour-long lecture.

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Oh, oh!