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Foreign Aid

Foreign Aid. Official Development Assistance (ODA). Also called Foreign Aid or International Assistance Most comes from the 30 members of the Development Assistance Committee (DAC). Background of Foreign Aid.

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Foreign Aid

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  1. Foreign Aid

  2. Official Development Assistance (ODA) • Also called Foreign Aid or International Assistance • Most comes from the 30 members of the Development Assistance Committee (DAC)

  3. Background of Foreign Aid • Since the 1950s Canada has been distributing cash, goods and services to poorer nations around the world. • There is considerable debate about both the effectiveness of foreign aid and whether it should be used for: • purely humanitarian purposes • for economic development purposes • or to further Canada's strategic and commercial interests abroad • Foreign aid has its roots in post-Second World War Reconstruction • The success of the Marshall Plan when the USA sent resources to war-torn Europe convinced Western leaders that a similar transfer of resources to newly independent countries in Asia and Africa would likewise lead to rapid development. • Canada's aid program began in this period of prevailing optimism.

  4. Canada’s History of Foreign Aid • In 1968, three significant events occurred: • The Canadian International Development Agency(CIDA) was formed • Pierre Trudeau, who was very interested in international development, became prime minister • Former PM Lester Pearson headed an international commission to examine the results of 20 years' of development assistance, and to propose policies for improvement. They called for donor countries to provide foreign aid equal to 0.70 % of their GDP • Canada accepted this target in 1970 but has never hit Pearson’s 0.70% target • In 2013 Stephen Harper merged CIDA into the new Department of Foreign Affairs, Trade and Development

  5. Who’s Giving It Who Gives the Most (as a % of their total GNI) 1. Sweden – 1.40% 2. Norway – 1.05% 3. Luxembourg – 0.93% 4. Denmark – 0.85% 5. Netherlands – 0.76% 6. United Kingdom – 0.71% 7. Finland – 0.56% 8. Switzerland – 0.52% 9. Germany – 0.52% 10. Belgium – 0.42% 11. France – 0.37% 12. Ireland – 0.36% 13. Austria – 0.32% 14. Canada – 0.28% Who Gives the Most (actual amount) • European Union – $86.66 billion • US – $31.55 billion • UK – $17.88 billion • Germany – $14.06 billion • Japan – $11.79 billion • France – $11.38 billion • Sweden – $5.83 billion • Norway – $5.58 billion • Netherlands – $5.44 billion • Canada – $4.91 billion • Australia – $4.85 billion

  6. The UN set out a goal for countries to reach giving 0.7% of their GNI (Gross National Income) to foreign aid • Only the countries in green are hitting the UN’s target

  7. How Much Are We Giving • Canada’s ODA never close to UN target of 0.7% • 0.5% in 1986–1987 under Mulroney • 0.2% in 2000 • 0.34% in 2009-2010 • 0.31% in 2012 • 0.25% in 2015-2016 • 0.26% in 2016-2017 ($ 5.6 billion)

  8. Bono Encourages Trudeau to Give More • U2 frontman Bono has urged Justin Trudeau give more foreign aid, even though the Liberal government has deemed it too ambitious to hit the 0.7% UN goal • The Irish rock star praises Canada for showing an openness to the world at a time when many countries have been retreating deeper into isolation. • Bono is co-founder of ONE Campaign, a global organization dedicated to ending extreme poverty and preventable diseases

  9. Trudeau’s Spending • In his first month in office he sent around $3billion in foreign aid • The Liberal Party tends to pay much more in foreign aid than the Conservative Party, but they have been going against this trend in the past few years

  10. Types of foreign aid

  11. Bilateral Aid • one government directly transfers money or other assets to a recipient country. • E.G. Japan gives a grant to Syria for the construction of a hospital. • Normally provided not in cash but in Canadian goods and services • wheat and flour • railway locomotives • equipment for hydroelectric generation and transmission • fertilizer, seeds and farm implements

  12. Multilateral Aid • Similar to bilateral aid, except it is provided by many governments instead of one. • Cash flows from Canada to many international quasi-government organizations, which undertake their own activities. • Multilateral aid accounted for about 66% of Canada's aid budget in 2011. • The largest recipients were the World Bank and other multilateral development banks, and the specialized agencies of the United Nations such as the World Food Programme and the United Nations Children's Fund.

  13. Where Does the Rest of It Go? • Aside from bilateral and multilateral spending, the remainder of Canada's foreign aid goes to: • Dozens of Canadian NGOs in developing countries • The International Development Research Centre • A crown corporation to fund research on the needs of developing countries

  14. Focused Foreign Aid • Humanitarian aid e.g. natural disasters • Charitable aid e.g. scholarships • Fund projects that work closely with Canadian businesses overseas • e.g World University Service Canada partnered with Rio Tinto Alcan at its mines in Ghana

  15. Who’s Getting It

  16. Largest Recipients of Our Aid • 43.8% of our international assistance goes to Africa • 38.7% goes to Asia • 14.2% goes to the Americas • 2.8% goes to Europe • The largest single country recipients in 2017 were: • Afghanistan (CAD$233 million) • Ethiopia (CAD$193 million) • Jordan (CAD$157 million) • Haiti (CAD$127 million) • Mali (CAD$126 million)

  17. Canadian Partnerships That Make a Difference Canadian Organisations • Aga Khan Foundation Canada - education, food security, economic opportunity • Micronutrient Initiative - Helps vulnerable populations receive vitamins/minerals • CARE Canada - Improves basic health, education , economic opportunity Multilateral Organisations • World Food Programme • UNICEF • World Health Organization International and Global Partners • Global Fund – prevents and treats HIV/AIDS, tuberculosis and malaria. • International Committee of the Red Cross – helps people affected by armed conflict and other situations of violence. • Helen Keller International – Combats the causes and consequences of blindness in Africa and Asia.

  18. Canadian Response to International Humanitarian Crises • Canada gave $857 Million in total in 2013-2014 • Since the start of the Syrian crisis, Canada has committed $403.5 million in humanitarian assistance for Syrians affected both in Syria and those who have sought refuge in neighbouring countries • Food assistance to more than 6 million people • 25 million children received polio vaccination

  19. Improving Maternal, Newborn and Child Health • This is Canada’s top development priority, with Canada committing $3.5 billion in funding from 2015 to 2020. • Canada is committed to working with a range of partners toward ending the preventable deaths of mothers, newborns and children under the age of five.

  20. Pros & Cons of giving foreign aid

  21. PROS Supports global human development & reduces poverty Helps areas affected by war and natural disaster Helps reduce risk of conflict and terrorism

  22. PROS • Creates jobs • Enhances foreign trade. Creates market for Canadian goods. • A lot of aid is “tied aid”: Receiving country must spend the money in Canada.

  23. PROS • Develops good international relations • Develops military alliances

  24. Bill and Melinda Gates and Warren Buffet formed the Giving Pledge in 2010, enlisting billionaires to commit at least half of their wealth to philanthropy. • http://givingpledge.org/ • WARREN BUFFETT, one of the world's wealthiest people said, • "If you're in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.""It's class warfare; my class is winning, but they shouldn't be."

  25. CONS Burdens taxpayers The situation in Canada should be improved first Some say that If you're worried about Canada's reputation, there's nothing stopping you from donating your own money to any cause you wish. They say Canadian tax dollars should only be spent on Canadians.

  26. CONS • Aid causes the receiving country to become poorer as it tries to pay off the loans. • A lot of foreign loans never get repaid.

  27. CONS • Local businesses suffer since they cannot compete with free or discounted goods. • Creates dependency, not independence. • Some say “Give a man a fish and you will feed him for a day. Teach him how to fish and you will feed him for life.”

  28. CONS • Sometimes foreign aid gets spent in the wrong areas: the military and not on the poor. • Have to be careful that aid does not create bitterness or enemies by helping one country and not another.

  29. CONS • Difficulties with selection: which countries deserve aid; what causes should receive aid • Why give aid to India? They can afford nuclear weapons and a space program • Canada provides aid to the BRICS: Brazil, Russia, India, China, South Africa ...Why exactly are we helping the fastest growing economies of the world?

  30. CONS • A lot of problems remain unsolved in Canada (e.g. Native communities)

  31. Aid and Africa Zambian-born economist, Dambisa Moyo has authored a book titled "Dead Aid" in which she writes that foreign aid actually stifles African self-sustainability and innovation.She says, "Between 1970 and 1998, when aid flows to Africa were at their peak, poverty in Africa rose from 11% to a staggering 66%." Is Aid Killing Africa? Dambisa Moyo talks about Dead Aid on ABC https://www.youtube.com/watch?v=HIPvlQOCfAQ Bill Gates’ rebuttal https://www.youtube.com/watch?v=5utDdxveaJc

  32. DEBATE: ODA Does More Harm Than Good • In a world where over 3 billion people live on under $2 a day, where economies and threats are globally interconnected, and where only small amounts of aid are given, should wealthy nations do more? • Or, given the poor track record of aid, the support it provides to dictators and tyrants, and the actual need for individual entrepreneurialism and free markets, should we focus our limited resources elsewhere? • http://www.munkdebates.com/debates/foreign-aid

  33. Just a thought • Instead of comparing how much foreign aid is given, it is also important to compare how much countries spend on their home soil aiding refugees who seek asylum in their countries.Canada used to accept more refugees per capita than any country in the world. Now we are far behind several other countries such as Germany, Finland, Norway. • If one country is doing more than its fair share in accepting refugees on a permanent basis and incurring all of the costs , then should it also be expected to contribute as much per capita in aid outside of the country as those who take in fewer refugees per capita on a permanent basis and provide them with less than Canada does?

  34. https://www.taxpayer.com/media/$15%20Billion%20in%20Foreign%20Aid.pdfhttps://www.taxpayer.com/media/$15%20Billion%20in%20Foreign%20Aid.pdf • https://globalnews.ca/news/4051779/federal-budget-2018-bono-canada-foreign-aid/ • https://www.theglobeandmail.com/canada/article-oecd-report-urges-canada-to-increase-spending-on-foreign-aid/ • https://www.thestar.com/opinion/editorials/2018/01/15/its-time-for-canada-to-do-better-on-foreign-aid.html • https://www.cbc.ca/news/politics/canada-foreign-aid-budget-1.4556537

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