Foreign aid has not achieved its goals



    MONTREAL, Feb. 13 /CNW Telbec/ - Canada's aid programs need to be
radically changed to respond effectively to new global conditions in an era of
failed or failing states in the poorest parts of the world. Unfortunately,
overseas development assistance is dying under the weight of its own red tape.
This is the essence of the message to be delivered today by John Watson,
president of the humanitarian organization CARE Canada from 1987 to 2007, in a
speech presented by the Montreal Economic Institute (MEI) in collaboration
with the Montreal Council on Foreign Relations.
    Mr. Watson will examine the crisis of confidence involving the current
international aid model and will propose structural changes for improvement,
placing greater emphasis on market mechanisms led by the business and
voluntary sectors rather than by government bureaucracies.
    The speech, titled "Foreign Aid: What Should We Do?", will be given on
Wednesday, February 13, from 11:45 a.m. to 2:00 p.m. at the Marriott Château
Champlain Hotel. Mr. Watson will meet with journalists from 2:00 p.m. to
3:00 p.m.

    Publication of a study on the same topic

    At the same time, the MEI is releasing an Economic Note titled
International Aid: How to Encourage Development in Poor Countries?.
Nathalie Elgrably, the study's author, states that "international aid has not
met its goals. Even though African countries have received $830 billion in the
last five decades, most countries in sub-Saharan Africa have experienced a
drop in living standards."
    To start with, much of the aid that has been provided does not reach the
communities most in need and instead is diverted due to corruption. Moreover,
governments often invest in projects that are not financially viable and thus
do not contribute to sustainable prosperity.
    Economic freedom and a greater opening to trade are essential to
development, and it is these aspects that Canada's international assistance
should encourage. Advanced countries and developing countries alike should
eliminate protectionist measures, especially in agriculture. There is a need
to establish an economic context that is favourable to private enterprise and
to commercial exchanges that enable everyone to show a spirit of initiative,
to enjoy the fruit of their success and to assume responsibility for their
failures.
    East Asian countries such as Singapore, Taiwan and Kong have succeeded in
emerging from misery by liberalizing their international trade. In 1960,
South Korea was as poor as Ghana or Zambia. Today, it is among the wealthier
countries and devotes a portion of its GDP to development assistance.
    The promotion of healthy governance is also needed to strengthen
institutions, make public spending transparent and improve legislative and
judicial functions. Microcredit should be encouraged as well as private sector
participation in the construction of infrastructure. Above all, there is a
need to guarantee the rule of law, particularly the application of clearly
defined property rights.

    The Economic Note, titled International Aid: How to Encourage Development
in Poor Countries, was prepared by Nathalie Elgrably, an economist with the
Montreal Economic Institute.

    The full document is available at www.iedm.org

    The Montreal Economic Institute is an independent, non-partisan,
non-profit body that takes part in public policy debate in Quebec and across
Canada, offering wealth creation solutions on matters of taxation, regulation,
and reform of health and education systems. Its publications since 2000 have
included the Report Card on Quebec's Secondary Schools. In 2004 it won a
Templeton Freedom Award for Institute Excellence for the quality of its
management and public relations.




For further information:

For further information: interview requests: André Valiquette, Director
of Communications, Montreal Economic Institute, (514) 273-0969, ext. 2225,
Cell: (514) 574-0969, avaliquette@iedm.org


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