TORONTO, Nov. 27, 2013 /CNW/ - Canada's foreign aid could be more
effective, were strategies in place that addressed the problem of weak
host-country governance, which currently renders aid inefficient or
even counter-productive, according to a report released today by the
C.D. Howe Institute. In "Diplomacy, Trade and Aid: Searching for
"Synergies," author John Richards proposes a mix of corporate social
responsibility for Canadian firms engaged in trade with low-income
countries, diplomatic involvement in aid projects, and aid projects
designed to address problems of "weak" host-country governance.
"The dilemma of weak host-country governance belongs front and centre in
our aid strategy," commented John Richards, "This approach would
combine better corporate social responsibility on the part of Canadian
companies with better tactics in the delivery of aid." Such an approach
would be complementary to the federal government's new Global Markets
Action Plan, released November 27, 2013.
The Canadian International Development Agency's (CIDA's) aid strategies
have been criticized by the Auditor General - and many others - as
being too broad, with results that are difficult to measure, noted
Richards. CIDA's merger with the (renamed) Department of Foreign
Affairs, Trade and Development, announced last spring, presents an
opportunity for improvement by involving diplomats in the design and
implementation of projects.
The death of 1,100 workers in a collapsed Bangladesh garment factory
early in 2013 is a prominent example of poor host-country government
safety regulation. In the past, major garment importers from Canada and
other high-income countries largely ignored regulatory failures in
Bangladesh. In the last six months Canadian firms, notably Loblaw, have
played a prominent role in new initiatives to improve worker safety.
Using Bangladesh as an example, Richards discusses the potential for
corporate social responsibility in a context of weak host-country
governance. He asks: How can aid be made to work in countries with weak
governance? How can firms engage in trade with such countries in a
When it comes to trade, promoting corporate social responsibility by
companies is an essential part of the solution. The potential for aid
and trade "synergies" is greater, Richards argues, in the manufacturing
than in the resource sector.
"Given its new mandate and the present crisis in the Bangladesh garment
sector, CIDA could, for example, support reputable garment importers or
those working within the Bangladesh government, and construct a
credible industrial safety regime," said Richards.
The author recommends three development-aid tactics to address weak
host-country governance: delivery of aid via NGOs as opposed to host
governments; cash-on-delivery aid, which focuses on flexible contracts
and aid for high-level, medium-term outcomes; and high-profile
monitoring of the quality of health and education services by civil
For the report go to: http://www.cdhowe.org/diplomacy-trade-and-aid-searching-for-synergies/23591
SOURCE: C.D. Howe Institute
For further information:
John Richards, Professor, School of Public Policy, Simon Fraser University and Fellow-in-Residence, C.D. Howe Institute, 778-782-5250; or Finn Poschmann, Vice President, Research, C.D. Howe Institute. 416-865-1904.