AID VERSUS DEVELOPMENT 1

Aid Versus Development - A Band-Aid Fix or Long Term Solution?

Alexandria Asselbergs

Global Perspectives

Mr. Toole

May 10th 2013

AID VERSUS DEVELOPMENT 2

Preface

The question of providing aid versus development is frequently found in today’s headlines: should we give financial aid, or help build up an economic system within other countries? Which provide the most benefits to the country in need? Financial assistance is a popular aid method. Aid programs are often developed by Westernized first world countries for non-failed state countries (i.e. ), in an attempt to relieve economic, agricultural, or medical stress. Aid has been defined in the Oxford Dictionary as, “provid[ing] support for or relief”1 to countries or people. NGOs (non-governmental organizations) and IGOs (international government organizations) provide aid by giving generous amounts of money, food, and medical supplies to countries in need. They also provide projects to assist in the building of institutions such as schools and hospitals.

Development, on the other hand, is defined in the Oxford Dictionary as, “developing; growth or evolution; stage of advancement, product…”2. Often the countries that choose to provide development do so to encourage third world countries to create a sustainable economic system, which includes the creation of a job market, trade partnerships, resource development, and education. This report will examine which countries offer development, which countries would prefer to receive development, and the results development has provided to countries such as Bangladesh and Haiti.

1Aid [Def. 1]. In Oxford Dictionaries, Retrieved March 13, 2013, from http://oxforddictionaries.com/definition/english/aid.

2Development [Def. 1]. In Oxford Dictionaries, Retrieved March 13, 2013, from

http://oxforddictionaries.com/definition/english/development?q=development

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The role of corruption is important to consider within the discussion of aid versus development. Many countries receiving aid or development have a corrupt government and infrastructure, leading to misappropriation of financial aid funds as well as funds derived from their developing economic systems. Countries providing aid and development are often aware of some level of corruption, yet very little decisive action is taken to ensure proper use of the assistance provided. The corruption that takes place not only ensures that the receiving country obtains a continuous supply of financial aid, but it also hinders any potential economic growth.

This report will also examine how aid and development were conceived, who provides it and why, and who receives it. Aid is often touted as a band-aid solution, whereas development is promoted as a long-term investment. It is important to compare these two solutions to third world dilemmas because they impact not only the country receiving them, but also the country providing them. Often the benefit of delivering aid is only felt by the donor country instead of the country in need, which can influence the manner of assistance delivered. The following report will examine in detail the pros and cons of financial relief and development for both the donor and recipient countries. By discussing the foreign aid and progress being given to Haiti,

Mali, and Bangladesh, it shall become apparent that indeed a long-term developmental solution provides more benefits to the receiving country, and long-term global economic benefits. Conversely, financial assistance only provides recognition and financial value to the country providing it. In the end, the continuing results from development outweigh the band- aid solution of financial assistance.

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Summary

This report will bring into light the major differences between monetary aid and development. It will also look at the role of control and corruption of the recipient countries, the failed states, and those making donations. Case studies in Haiti, Mali, and Bangladesh will be examined to determine the effects aid has had in either prolonging the poverty or assisting the country in escaping destitution. Information for these case studies was obtained from a variety of sources, such as: newspaper articles, internet articles, books specializing in aid and development, and interviews. Furthermore, this broad spectrum of sources was obtained to ensure consistency of information, validity, and provide a multitude of opinions on the subject matter. The involvement of in the matter of international aid and development will also be addressed as a separate case study via examination of CIDA documents, reports, and articles.

Opinions of three experts of this particular topic (Muhammad Yunus, Dambisa Moyo, and Jeffery Sachs) shall be utilized. Interviews with Aileen Carroll, Patrick Brown, and Bob Black shall be used to corroborate the information provided by the experts. The interview with

Aileen Carroll was particularly important because, as the former Canadian Minister of

International Cooperation, she provided a first-hand look into the role of a donor country versus the country receiving assistance.

This report will also describe some possible solutions to the issue of aid versus development. The sub-topics of humanitarian aid and systemic aid will not be reviewed in this paper.

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Background

The of America and Canada were the first to introduce foreign aid to other countries in the aftermath of World War II. The first aid projects began because much of

Europe was decimated and millions of families were displaced from their homes: “From 1945 through 1947, the United States was already assisting European economic recovery with direct financial aid.”3 This assistance was a large part of the Marshall Plan, which was geared towards helping the Allies rebuild Europe. The main goal of the Marshall Plan - named after George

Marshall, appointed as the Secretary of State by President Truman - was to send (US) $13 billion (today’s equivalent of (US) $100 billion) to fourteen European countries in the effort to rebuild their nations. This money was used to send shipments of food staples, fuel, and machinery from the United States and Canada to Europe4. Eventually, “[s]ixteen nations, including Germany, became part of the program and shaped the assistance they required, state by state, with administrative and technical assistance provided through the Economic

Cooperation Administration (ECA) of the United States”5. The nations were assisted greatly by forming trade relations, leading to the North Atlantic Treaty Alliance. Economic prosperity was led by coal and steel industries, which helped to shape the European Union.

3 George C. Marshall Foundation (2009). The Marshall Plan. George C. Marshall Foundation. Retrieved from

http://www.marshallfoundation.org/TheMarshallPlan.htm).

4 Schwartz, T.A. (2013). The Marshall Plan. Encylcopedia.com, 1-2. Retrieved from http://www.encyclopedia.com/doc/1O126-

TheMarshallPlan.html

5 Schwartz, T.A. (2013). The Marshall Plan. Encylcopedia.com, 2-3. Retrieved from http://www.encyclopedia.com/doc/1O126-

TheMarshallPlan.html

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The overall funding for the Marshall Plan ended in 1951.

According to Dambisa Moyo “[t]he tale of aid begins in earnest in the first three weeks of July 1944, at a meeting held at the Mount Washington Hotel…”6. Moyo claims that 700 delegates from 44 different countries gathered, and established a global system of financial and monetary management. From this gathering, international aid as well as development would be born7. The 1960’s were considered the years of industrialization, during which time (US)

$100 million was sent to Africa to boost its industrial economy. It was assumed that the private sector would never give the money required for aid to Africa, so there were fundraising events and charity work through the years to acquire the amount needed. By the 1970s, focus shifted from industrialization to poverty issues8. Financial aid continues to focus on a quick and easy fix as the solution to the issue of poverty.

The roots of aid began in the 20th century, and since then there have been two events in the history of the United States overseas aid program that altered financial aid policy. In 1929, the Colonial Development Act allowed loans and grants to be use for infrastructure and was explicitly viewed as a means to obtain information and resources for British manufacturing.

Later, in 1940, the Colonial Development and Welfare Act was expanded that allowed for the funding of social sector activities. This was despite the statement from the Minister of Food,

“that by one means or another, by hook or by crook, the development of primary

6Moyo, D. (2009). A Brief History of Aid. Dead Aid, p. 10.

7 Moyo, D. (2009). A Brief History of Aid. Dead Aid, p. 11.

8 Moyo, D. (2009). A Brief History of Aid. Dead Aid, p. 15.

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production of all sorts in the colonial area... is... a life and death matter for the economy of the country”9. A Labour MP even called for “the rapid development of the colonies” so that the US could be independent from the United Kingdom10. It is these moments in history that demonstrate the tension between relief and assistance programs, and thus development policies were born.

The United States were the first to use financial aid and development assistance in

Europe to help rebuild infrastructure and the economy after World War II (using both of these tactics is called a bilateral approach)11. Europe approved of the notion of development assistance and aid because of the positive effects development had on European countries.

The economy in Britain rose, and the rebuilding of cities and infrastructure throughout Europe were completed within a few years12. There are some who believe the word development is simply another name for aid and another way to apply aid. Jonathan Glennie, a reporter for the

Guardian UK, says there is no difference between aid and development as they are implemented by the same countries13.

9, 10 (2009). History of the Marshall Plan. George C. Marshall – European Centre for Security Studies. Retrieved from

www.marshallcenter.org/mcpublicweb/

11McGill, H. (2012). Canada Among Donors: How Does Canadian Aid Compare? Struggling for Effectiveness: CIDA and

Canadian Foreign Aid, p. 27.

12OECD. (2013). History. OECD – Better Policies for Better Lives. Retrieved from www.oecd.org/about/history/

13Glennie, J. (2013, May 2). UK should revisit its decision on South Africa and its concept of aid. The Guardian, Retrieved from

www.guardian.co.uk/global-development/poverty-matters/2013/may/02/uk-revisit-decision-south-africa-aid

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Public opinion on development is often low because of misconceptions through poor media coverage:

“…media’s coverage of development scandals has shaken the public’s faith in

international development… [there was] a negative spotlight on the development

industry’s ‘inept bureaucrats,’ as well as ‘corrupt governments’ and ‘victimized poor’ in

recipient countries. … International development’s negative and simplistic portrayal in

the media only serves to widen the gap between the public’s understanding of

development and field-level realities”14

The negative views of development serve only to hamper its application within the countries vying for developmental aid. These types of reports often do not reflect the reality of assisting third world countries develop their own economies.

Today, development is a new way of helping third world countries that results in giving fewer monetary loans and grants to help build economies. By the year 2000, the international community via the UN set what they called “Millennium Development Goals” for third world countries receiving aid and development assistance. These goals included not just tracking the

14Heyer, H.D. (2012). Untangling Canadian Aid Policy: International Agreements, CIDAs Policies, and Micro-policy Negotiations

in Tanzania. Struggling for Effectiveness: CIDA and Canadian Foreign Aid, p. 196-197.

15Collier, P. (2007). Falling Behind and Falling Apart: The Bottom Billion. The Bottom Billion: Why The Poorest Countries are

Failing and What Can Be Done About It, p. 11.

16Collier, P. (2007). An Agenda For action. The Bottom Billion: Why The Poorest Countries are Failing and What Can Be Done

About It, p. 189.

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poverty of the bottom 5 billion people on the planet, but also tracking the increase of girls receiving an education, health reforms, and other goals generally deemed worthy until the year

2015 15, 16. A full list can be seen in Appendix III, entitled Millennium Development Goals, p.

124, and their progress by 2012 in Appendix IV, p. 126. Eradicating poverty and developing a global partnership for development are both included in the list, but as Paul Collier notes, there is a lack of emphasis on independent economic growth16. Both aid and development experience a range of criticism from national and international groups.

16Collier, P. (2007). An Agenda For action. The Bottom Billion: Why The Poorest Countries are Failing and What Can Be Done

About It, p. 189.

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Role of Control

The role of control is a leading cause for controversy between monetary aid and development. It is important to know who exactly has control so that the public and the international community understand what is happening within governmental and non- governmental organizations, who is in a position to implement aid or development, and who can receive it. To assess the role of control in greater detail, one must examine laws, policies, and their implementation.

A large drawback to foreign aid organizations and the laws that govern them is that there is no clear international law or directive. Often, the money is given as aid and lost in the infrastructure, either taken by corrupt officials or spent unwisely17. Furthermore, the financial aid is often delivered with “strings attached”, meaning that the agency requires the receiving country to comply with certain conditions. The World Bank and IMF in particular have been criticized for their policies often resulting in increased poverty and debt in developing countries:

“Their programs have been heavily criticized for many years for resulting in poverty. In

addition, for developing of third world countries, there has been an increased

dependency on the richer nations. This is despite the IMF and World Bank’s claim that

they will reduce poverty.”18

17 Moyo, D. (2009). The Silent Killer of Growth. Dead Aid, pp. 48-49.

18Shah, A. (2008). Structural Adjustment a Major Cause of Poverty, p. 1.

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The high interest rates, and policies requiring increased privatization and reduced spending on health care and education often work against the goals of the developing country18.

The policies and or laws that are attached to foreign aid and development assistance are normally made by the donor countries. Often, it is Canada and the United States that are creating and applying the laws and policies. One of these conditions is tied aid, which has been used in many cases of financial assistance, and this condition requires the recipient to buy products singularly from the particular donor. Some of the public might view this as “…fair and

‘balanced’, because the donor gets something out of the relationship as well” even if the poorer country can lose valuable resources while buying products19. Tied aid also requires the recipient to reduce control and decision making abilities regarding how the money is spent.

There are also hidden policies within organizations such as CIDA. Within CIDA there are

“hidden or invisible structures that influence policy” when bills or proposals are passed through the levels of administration20. It has been said that CIDA has been shaped as a result of cross- pressures in the Canadian aid ecosystem which has resulted in a sparse, out-dated, and inconsistent policy framework21.

19Shah, A. (2012). Foreign Aid for Development Assistance, p. 36

20Heyer, M.D. (2012). Untangling Canadian Aid Policy: International Agreements, CIDAs Policies, and Micro-policy Negotiations

in Tanzania. Struggling for Effectiveness: CIDA and Canadian Foreign Aid, p. 205.

21Heyer, H.D. (2012). Untangling Canadian Aid Policy: International Agreements, CIDAs Policies, and Micro-policy Negotiations

in Tanzania. Struggling for Effectiveness: CIDA and Canadian Foreign Aid, p. 197.

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At one time, the United States decided to sell rice for an extremely low price in Haiti, which put the Haitian rice farmers out of business. It was necessary for the to buy the rice from the United States. Soon after, the United States government declared that they were no longer going to sell rice to Haiti because Haiti had failed to act within policy guidelines set by the United States. The Haitian rice farmers had sold their farms and the United States were not selling the Haitian government any more rice, causing widespread hunger22. Similar policies have been implemented by many international governmental and non- governmental organizations throughout history.

During the Southern Famine in Ethiopia, food aid was significantly mismanaged.

Ethiopia had received vast quantities of food relief, but 70% went to the Wollo and Tigray tribes, even though they had almost fully recovered. Only 8% went to the Harar and Ogaden tribes, who at the time were under much greater duress. The lack of vision and cooperation within the government is partially due to the Emperor’s opinion claiming that Ogaden was difficult, yet a large portion of the army had already been dispatched there23.

It is said that “…one of the root causes of poverty lies in the powerful nations that have formulated most of the trade and aid policies today…”24 in order to, “maintai[n] power

22Katz, J.M. (2013). The Big Truck That Went By: How The World Came to Save Haiti and Left Behind a Disaster, p. 112.

23Keneally, T. (2011). Villains: Ethiopia. Three Famines: Starvation and Politics, pp. 114-115.

24 Shah, A. (2012). Foreign Aid for Development Assistance, p. 36.

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…over others in various ways”24. It has also been stated that “the U.S. cheat[s] poor countries around the globe out of trillions of dollars by lending them more money than they could possibly repay and then take over their economies”25.

Through an examination of the role of control, one can now see that regardless of developmental or financial aid, the misappropriation of money and power results in very little if any benefit to needy citizens. Most notably, the “quick fix” monetary solutions can result in long-term poverty. By understanding the distribution of power, it is possible that a more effective long-term solution be reached.

24 Shah, A. (2012). Foreign Aid for Development Assistance, p. 36.

25Hasselberger, S. (2005). Third World Economy: Is Foreign Aid Destructive? p. 1

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Experts

Muhammad Yunus

Muhammad Yunus was born June 28, 1940 in Bangladesh. He is now a banker, economist, and Nobel Peace Prize recipient. Yunus and Grameen Bank received the Nobel

Peace Prize in the year 2006 for, “their efforts through microcredit to create economic and social development from below”26. Yunus has also received several other awards nationally, and internationally.

Muhammad Yunus has had a long career working with higher education. In 2012, he was appointed Chancellor of Glasgow Caledonian University in Scotland, serving in this capacity as the university's titular head27. He is also a member of the advisory board at Shahjalal

University of Science and Technology in Sylhet, Bangladesh, where he had previously been a professor.

Yunus was also a professor of economics at Chittagong University, Bangladesh, where he developed the concepts of microcredit and microfinance. Microcredit loans are given to entrepreneurs who are too poor to qualify for traditional bank loans28. With these loans, the

26 (2013). The Nobel Peace Prize 2006 - Muhammad Yunus, Grameen Bank. NobelPrize.org, retrieved from

http://www.nobelprize.org/nobel_prizes/peace/laureates/2006/press.html

27Day, R. (2012). Muhammad Yunus made Chancellor of Glasgow Caledonian University - Glasgow Caledonian University

announces new chancellor. The Journal, p. 1.

28Yunus, M. (2007). Microcredit Revolution. Creating a World Without Poverty – Social Business and the Future of Capitalism,

p. 46.

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small business entrepreneurs are able to start their own businesses and create their own wealth and income by utilizing a loan small enough to pay back.

Yunus is also a distinguished author and philanthropist. He wrote Banker to the Poor, and has written two more books on social business models. He is also a founding board member of Grameen America and Grameen Foundation. Grameen Intel is just one of hundreds of public and private partnerships now mediated by Youth & Yunus. In early 2007, Yunus showed interest in launching a political party in Bangladesh named Nagorik Shakti (Citizen

Power), but later discarded the plan. He is one of the founding members of Global Elders29.

Yunus currently serves on the board of directors of the United Nations Foundation, a public charity created in 1998 with entrepreneur and philanthropist Ted Turner’s historic

$1 billion gift to support UN causes. The UN Foundation builds and implements public-private partnerships to address the world’s most pressing concerns, and broadens support for the

UN30.

In March 2011, after months of attack from the government, the Bangladeshi government controversially fired Yunus from his position at Grameen Bank, citing legal violations and an age limit on his position31. Bangladesh's High Court affirmed the removal on

29 (2013). Biography. NobelPrize.org, retrieved from http://www.nobelprize.org/nobel_prizes/peace/laureates/2006/yunus-

bio.html

30 (2012). Muhammad Yunus. United Nations Foundation, retrieved from http://www.unfoundation.org/who-we-

are/board/muhammad-yunus.html

31 (2011). Bangladesh: Muhammad Yunus disputes Grameen sacking. BBC News – South Asia, retrieved from

http://www.bbc.co.uk/news/world-middle-east-12619580

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March 8, 2011. Yunus and Grameen Bank are appealing the decision, claiming Yunus' removal was politically motivated.

His long and distinguished career in the realm of local and global finance makes

Muhammad Yunus an excellent source for information on monetary aid, poverty stricken countries, and potential solutions.

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Dambisa Moyo

Dambisa Moyo was born 1969 and grew up in Lusaka, Zambia until she and her family moved to America where her parents attended university. Moyo has not only received a university education in the United States, she has a Bachelor’s Degree in chemistry, an MBA in finance from Washington D.C’s American University, an MBA from Harvard University in

International Development, and her Doctorate in Economics from Oxford University. After

University, Moyo has worked as a consultant for the World Bank, as a debt capital marketer at

Goldman Sachs, and as an economist in the Global Macroeconomics Team32, 33.

Not only is Moyo a renowned author, speaker, and visionary, but she also serves on the board of Barclays Bank, SABMiller, and Barrick Gold. Moyo has presented at many conferences and engagements which include the OECD, the World Bank, the IMF, the Council on Foreign

Relations, the American Enterprise Institute, and the 2009 Munk Debates. Moyo has also presented in many of the G7 countries and at TEDxBrussels. Because of her economic and aid expertise, Moyo is a regular contributor to journals such as the Financial Times and the Wall

Street Journal. Her television appearances include appearing as a guest on CNN, CNBC,

Bloomberg, BBC, and Fox Business33.

Moyo is the author of three books including Dead Aid: Why Aid is Not Working and How

32 (2013). Biography of Dambisa MOYO. African Success – People Changing the Face of Africa, retrieved from

http://www.africansuccess.org/visuFiche.php?id=746&lang=en

33 (2013). Biography. Dambisa Moyo, retrieved from http://www.dambisamoyo.com/biography/

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there is a Better Way for Africa. Two years ago, Moyo spoke at the annual Observance

Ceremony to mark Commonwealth Day. This Observance took place in Westminster Abbey,

March 14, 2011, discussing the topic “Women as Agents of Change”. The same month, Moyo was selected by The Daily Beast as one of “150 Extraordinary Women Who Shake the World”.

The next year Moyo published her third book titled Winner Take All: China's Race for Resources and What It Means for the World34.

Dambisa Moyo is a very influential woman who has many experiences with foreign aid and how it has failed. Because of Moyo’s experiences and her skills with economic understanding, she is asked by many organizations to speak about why aid is failing and what

IGOs and NGOs can do to determine a solution. Moyo’s book Dead Aid holds possible solutions as to how the failure of aid can be reversed and what can be done to make sure citizens and governments, in both first and third world countries, do not fall into the aid trap again. Her extensive knowledge and active participation in aid for poverty stricken countries reflects her status as an expert on the topic of aid versus development.

34 (2013). Dambisa Moyo – Economist and author. Speakers Associates, retrieved from

http://www.speakersassociates.com/Dambisa-Moyo.aspx

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Jeffrey D. Sachs

Jeffrey D. Sachs, author of The End of Poverty: Economic Possibilities for Our Time, was born in Detroit, Michigan 1954. Sachs attended Harvard University and in 1976 received his BA, summa cum laude. Two years later he received his MA in economics from Harvard University as well. Another two years later, Sachs joined the Harvard faculty as an Assistant Professor after receiving his doctorate in economics. He was further promoted to Associate Professor and then Full Professor from 1982-1983 at the young age of 2835.

Sachs is now a world-renowned economics professor, a leader in sustainable development, a senior UN advisor, a bestselling author, and a syndicated columnist with monthly newspaper columns published in more than 80 countries. Time Magazine named

Sachs one of the “100 Most Influential World Leaders” and “the world’s best known economist”35. He was also identified as “probably the most important economist in the world” by the New York Times35. Sachs is the Professor of Health Policy and Management, the Director of the Earth Science Institute, and Quetelet Professor of Sustainable Development at Columbia

University35. He is Special Advisor to United Nations Secretary-General Ban Ki-moon on the

Millennium Development Goals, having held the same position under former UN Secretary-

General Kofi Annan. He is co-founder and Chief Strategist of Millennium Promise Alliance, is

35 Full BIO: Jeffrey D. Sachs. The Earth Institute – Columbia University, retrieved from

http://www.earth.columbia.edu/articles/view/1770

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director of the Millennium Villages Project, as well as Director of the UN Sustainable

Development Solutions Initiative35, 36.

Sachs is considered to be a leading expert on the fight against poverty and his work on fighting poverty includes promoting economic growth, fighting hunger and disease, and promoting sustainable environmental practices. This has taken him to 125 countries, and for more than 25 years he has advised dozens of heads of state and governments on economic strategy in the , Europe, Asia, Africa, and the Middle East. Sachs’ book The End of

Poverty: Economic Possibilities for Our Time is used in this report to help explain opposing views of aid to Moyo’s views on economic aid, and to show a potential different strategy to utilizing aid and development. As a world leader in economics and development goals, Jeffrey

Sachs adds a level of expertise unparalleled in any other35, 36.

35 Full BIO: Jeffrey D. Sachs. The Earth Institute – Columbia University, retrieved from

http://www.earth.columbia.edu/articles/view/1770

36Biography. Leigh BureauSM – W. Colston Leigh, Inc, retrieved from http://www.leighbureau.com/speakers/jsachs/

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Religious Aspects

It has been known that religious organizations are often some of the most recognizable

NGOs. The organizations are frequently the most advertised and recognizable with regards to foreign aid programs. They participate in foreign aid or charities because of their religious beliefs. Some religions, such as Christianity or Islam are instructed to be charitable through their written religious texts as it is considered holy work and necessary for believers37. These organizations receive assistance through charitable donations, which are then transferred to foreign aid programs. Faith-based aid tends to favour groups of people of the same faith as the donor. It can have a large impact on the monetary aid destination and on those who receive it.

It is in this manner that faith-based assistance plays a role in the aid versus development issue.

Religious charitable organizations generally derive funding through television commercials, radio advertising, sermons, cold-calling, or religious edicts. For example, according to Muslim Law, Muslims are expected to donate at least 20% of their income to charities38. With these charitable donations the religious organizations send money and volunteers, build hospitals and schools, send out mission trips and medical assistance, as well as build churches. Faith-based aid groups often participate in fundraising and charitable works.

37 Matthew 25: 44-45 The King James Bible.

38 (May 20, 2012). Personal communication.

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They organize and run mission trips, and send people out to convey the message of their deity(ies) through their work39. In faith-based aid, the money sent is usually spent on building or expanding religious facilities and institutions. Some religious groups attempt to include members of all faiths where assistance is needed. One such group is the Islamic Aid group40.

However, the largest faith-based organizations with the largest fundraising efforts have shown to be selective about the recipients of their assistance, and are very limited in their developmental efforts. Therefore, faith-based aid is not considered a strong supporter of the necessary development required in recipient countries. While religious selectivity may be important to a religious aid program, this view does not allow all the needy to benefit from the aid. The selectivity that becomes a part of international monetary aid inhibits broad based development and ensures that very little development will be done, as it does not provide immediate recognition or benefit for the religious group41. Some religious monetary aid foundations include the Christian Children’s Fund of Canada. Other faith-based charitable organizations include Muslim Aid, Al-Hakim Foundation, Islamic Aid, and Actions by Churches

Together International41,42.

39 (2005). Religious aid groups try to convert victims. The Guardian, retrieved from

http://www.guardian.co.uk/world/2005/jan/16/tsunami2004.internationalaidanddevelopment1

40 Overview – What We Do. Islamic Aid, retrieved from http://www.islamicaid.com/what-we-do/what-we-do-overview-2/

41 Marshall, K. (2010). Faith-Based Conversion. The Washington Post, retrieved from

http://newsweek.washingtonpost.com/onfaith/georgetown/2010/02/aid_plus_religion_a_tense_standoff.html

42 (2005). Faith Based Charities. Charity Wire, retrieved from http://www.charitywire.com/faith-based.html

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Muhammad Yunus has also mentioned selectivity within faith-based aid organizations in his writings43. One extreme case is the 1974 Southern Ethiopian Famine where areas heavily populated with Christians received more aid than those areas with the majority of Muslim faith.

While this was tentatively blamed on geographic location, there is no evidence to prove that location hindered the delivery of aid to areas such as Ogaden (an area known for its Muslim community)44.

Along with people being neglected by faith-based aid, there is also the pressure to convert. Missionary and religious aid donors and employees often believe that they must convert as many people as possible to their religion in an attempt to save their souls:

“'We prefer to address the physical needs first,' said William Suhanda, an

Indonesian whose Christian group, 'Light of Love for Aceh', is helping distribute food

in Banda Aceh and hopes to bring 50 children to a Christian orphanage in Jakarta.

'We also want to expose them to Christian values... so they can see the other side,

45 that we're about the love of Christ,' he said.”

43 Yunus, M. (2007). The Battle Against Poverty – Bangladesh and Beyond. Creating a World Without Poverty – Social Business

and the Future of Capitalism, pp. 124.

44 Keneally, T. (2011). Villains: Ethiopia. Three Famines: Starvation and Politic, pp. 114-115.

45 Burke, J. (2005). Religious aid groups try to convert victims. The Guardian, retrieved from

http://www.guardian.co.uk/world/2005/jan/16/tsunami2004.internationalaidanddevelopment1

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Another example of faith based selectivity occurred when President Bush launched an overseas

HIV/AIDS project. The aid workers were not allowed to hand out condoms nor talk about safe sex since it is contrary to the Conservative point of view46. As a result of this Christian United

States perspective, the aid recipients were not educated regarding the prevention of the spread of the virus, thus perpetuating the spread of HIV/AIDS in Africa.

Faith-based organizations benefit from the aid they send through media coverage, public relations, and donations. The receiving countries benefit from the money given and the structures built, and can potentially guarantee the safety of their soul (depending on the religion delivering assistance). However, the aid given often does not address the long-term development needs (i.e the AIDS in Africa scenario) of the recipients. Therefore, religious aid may hinder the development process. Thus faith-based organizations have both pros and cons, yet it is evident that these organizations need to learn to appreciate the benefits of allowing countries to develop on their own terms.

46 Forde, C., personal experience, March 15, 2013.

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Logic of Evil

The logic of evil is understood to mean that people in authority convince themselves that what they are doing is for the benefit of the majority and the actions are completely justified. The aid system is based on the interests of donors instead of the needs of recipients and can make development assistance inefficient as too little aid reaches countries that most desperately need it. An example of this is when the US directs monetary aid to regions where it has concerns related to its own national security, such as the Middle East, as well as Central

America and the during the Cold War.

Sweden has been shown to target aid to “progressive societies”. Specifically, Sweden has “used tariffs, subsidies, cartels, and state support for R&D to develop key industries, especially textile, steel, and engineering”47. By targeting progressive societies, Sweden advances its own interests through the provision of aid to other countries. has sought to promote the maintenance, preservation, and propagation of the French culture, language and influence, especially in West Africa. This is done through making classes part of the mandatory school curricula for all grades in countries such as Mali. At the same time, France gives disproportionate aid to those who have expensive commercial ties with them48. Japan has also heavily skewed aid towards those in East Asia with extensive commercial relations, which ensures Japanese control over foreign economies, forcing

47Chang, H.-J. (2002) Kicking Away the Ladder. Post-Autistic Economics Rreview, (15). Retrieved from

http://www.paecon.net/PAEtexts/Chang1.htm

48 York, G., Waldie, P. (2013). Why Mali matters to the West. The Globe and Mail, retrieved from

http://www.theglobeandmail.com/news/world/why-mali-matters-to-the-west/article7347113/

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those governments to purchase Japanese goods, such as technological products. All too often, aid is wasted on overpriced goods and services from donor countries. For example, US brand name drugs cost about (US) $500 to produce, but are sold for (US) $10 00049. Subsidies such as farming grants are placed on exports to developing countries. These subsidies are financial assistance given by the government to farmers to continue the production of specific goods.

The United States has an annual farm subsidy of about (US) $15 billion, and the restrictive trade embargoes placed on other countries because of these subsidies gives the majority of control to the United States50. Canada’s aid philosophy is also based on this style of selection51. The interest accrued during the period of loan disbursement to the country in need seems completely justifiable to the organizing country when they consider administrative costs.

There are several types of aid. Two examples are debt relief and food aid. Debt relief is categorized by donor countries sending out monetary assistance as a grant instead of a loan which means that the money does not need to be paid back. This allows for a country to develop its own economic system and also allows the country to pay off existing debt to other countries52. IMF debt relief to Bolivia is an example of this type of grant. Bolivia was bankrupt and unable to payback the full amount of debt, and after some argument the IMF “finally

49 Sachs, J.D. (2005). The Voiceless Dying. The End of Poverty – Economic Possibilities for Our Time, p. 206

50 Moyo, D. (2009). Let’s Trade. Dead Aid, p.115.

51 Carroll, A., personal communication, March 15, 2013

52 Collier, P. (2007). Aid To The Rescue?. The Bottom Billion: Why The Poorest Countries are Failing and What Can Be Done

About It, p. 102.

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acknowledged that Bolivia was truly broke, and needed to have its debt written down if it was going to get back on its feet”53. The international banks wanted to veto debt cancellation and also wanted to determine the debt strategy of Bolivia. As a result, the international banks that had lent money to Bolivia would continue to profit from interest.

Food aid disposes of agricultural surpluses resulting from government subsidies. For example, Senegal had an abundance of groundnuts, the mainstay of the economy, being purchased globally. Senegal also donated a large portion of this abundance to other African countries, giving them food aid. Sometime later, American farmers started to produce groundnuts of their own and the American farmers became subsidised. The price of ground nuts dropped and Senegal lost its groundnut business, plunging the country deeper into poverty54.

Monetary aid can take the form of payments for care and education of refugees that have fled to donor countries. It can also take the form of technical cooperation grants (which pay for the services of nationals of the donor countries), and grants to NGOs and to domestic agencies to support emergency relief operations55. With the disbursement of monetary aid,

53 Sachs, J.D. (2005). Bolivia’s High-Altitude Hyperinflation. The End of Poverty – Economic Possibilities for Our Time, pp. 100-

101.

54 Shah, A. (2008). Structural Adjustment a Major Cause of Poverty, p. 8.

55 Tupy, M. (2009). Is Aid Working?. CATO Institute, retrieved from http://www.cato.org/publications/commentary/is-aid-

working

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other factors must be considered: immigration related spending, excessive administration costs, and tied aid. Tied aid can be seen within the re-villagization program, which sought to take people out of their towns and force their relocation to larger populations in cities. Such programs were carried out in South Vietnam and Indonesia with the help of the World Bank.

The re-villagization programs were often funded by the World Bank, although the World Bank was often unaware that these programs had been put in place. During the Ethiopian civil war,

Frances (last name unknown) was confined to the city of Lalibela. At that time, Lalibela was completely cut off from Addis Ababa, the capital of Ethiopia. Frances’ wife and children were stranded in Addis Ababa for many years and because of a lack of communication between them

Frances did not know the fate of his children and vice versa. Consequently, his wife married another man, which Frances only discovered at the end of the civil war56. Personal casualties such as this are frequent when governments justify their actions: in this case the Ethiopian government’s choice to segregate and confine their people through re-villagization. While it was not necessarily aid or development that resulted in the outcome, the logic of evil is apparent in the justification of governmental actions. These examples illustrate how governments apply policies with the intention of helping themselves before helping others.

The government’s top priority is their own gain.

The logic of evil, as mentioned previously, is understood to be the justification which authority figures use to convince themselves that the projects or programs they implement are for the betterment of their society. Monetary aid is currently flooding countries such as Haiti, the Sudan, and Somalia. This aid has detracted from these countries’ ability to create or uphold

56 Frances of Lalibela, personal communication, November 10, 2011.

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a stable economy. The spending without a focus on economic development is wasteful57. The aid has also been paying the wages of government officials, who are often corrupt. One example is Haiti where, of the (US) $10 billion raised, more than 40% of the money went towards the government’s salaries58. Bob Black corroborates this information by stating that

“AID [sic] should be avoided except for emergency relief as it creates dependence”59. If we were to stop giving foreign financial aid and assisted with economic development, it may result in the cessation of paying government salaries: “Of course, we might not get that warm and fuzzy feeling. But we might actually do some good”, said reporter Margaret Wente of the Globe and Mail about aid and our continuous giving58.

Citizens of wealthy Western nations are often pressured to give donations to aid organizations to help the poor of the world. The governments are doing this as much for publicity as to help the people of these poor or fail-states. “Soon, poverty will be solely an

‘African problem.’ To prevent that from happening, Africans must be treated not as hopeless recipients of charity but people equal to everyone else in ability”60 . The people receiving monetary aid will soon solely be Africans and we need to stop treating them as less equal or

58 Wente, M. (2013). Aid to Haiti: Are we nuts?. The Globe and Mail, retrieved from

http://www.theglobeandmail.com/commentary/aid-to-haiti-are-we-nuts/article7144023

59 B. Black, personal communication, March 18, 2013

57 Sachs, J.D. (2005). Why Some Countries Fail to Thrive. The End of Poverty – Economic Possibilities for Our Time, pp. 59 - 60

57 Sachs, J.D. (2005). Why Some Countries Fail to Thrive. The End of Poverty – Economic Possibilities for Our Time, pp. 59 - 60

60 Tupy, M. (2009). Is Aid Working?. CATO Institute, retrieved from http://www.cato.org/publications/commentary/is-aid-

working

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incapable of “fending for themselves”. The dependence on aid does not allow for countries receiving money to become self-sufficient.

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Haiti

Haiti has recently been labeled a fail-state, which means that no matter how much aid goes to Haiti it will never rise above the poverty line. In 1804, Haiti declared itself independent and became the first black-led country in the world. Haiti shares the Caribbean Island of

Hispaniola with La Republique Dominicano () and has a population of just over 9 million people. Since declaring independence, Haiti has experienced extreme economic failure because of poor management of natural resources and governmental corruption61. 80% of Haitians live under the poverty line with the country surviving on a GNP (Gross National

Product) of $657 US a year. Only one percent of Haitians own half of the wealth within the country, the other half is owned by outside proprietors. Haiti has rich deposits for many resources such as bauxite, copper, calcium carbonate (diamonds), gold, marble, and hydropower. These resources could potentially be traded but Haiti has a very corrupt government which makes the balanced and responsible use of the resources next to impossible.62

A full 40% of the aid money sent to Haiti ends up providing a salary for the government.

Between 1990 and 2003, $4 Billion of foreign aid had been sent to Haiti – this excludes the money raised for the earthquake – and the largest amount of aid money comes from the

United States. This is followed closely by Canada and then the European Union. As a result of the earthquake, almost $10 billion dollars of aid monies have been pouring into Haiti. Even

61 (2013). Haiti. Encyclopedia of the Nations, retrieved from

http://www.nationsencyclopedia.com/economies/Americas/Haiti.html

62 (2013). Haiti. World Vision, retrieved from http://www.worldvision.org/our-work/international-work/haiti/

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before the earthquake, Haiti had been receiving building materials and food as forms of foreign aid. The global public had been contemplating and reviewing the effectiveness of this aid because of the impoverished state of the country.63

A large reason for aid being ineffective in Haiti is the corruption of the government. The government in Haiti, as previously mentioned, takes 40% of the foreign aid coming into the country to pay the politicians. Transparency International Canada has ranked Haiti as the fourth most corrupt country out of the 71 surveyed64. Research has shown the corruption in

Haiti to follow all levels of government and continues to be one of the most corrupt countries in the world. It has been shown that the little aid that does trickle through the government is very hard to disperse because of the level of poverty within the country. As a result of the many natural disasters that have taken place in Haiti, getting the resources and the aid to the needy parts of the country is very hard65. Due to the difficulties with transportation, produce grown in the local or nearby fields is usually rotten or no longer in good condition once it has finally reached the market. This also means that the farmers would rather keep their produce so the food rarely, if ever, reaches the more urban areas of Haiti.66

63 Wente, M. (2013). Aid to Haiti: Are we nuts?. The Globe and Mail, retrieved from

http://www.theglobeandmail.com/commentary/aid-to-haiti-are-we-nuts/article7144023

64 Transpaarency International (producer). (2012). 2012CPI [short video].

65 (2010). Haiti Earthquake Disaster. Mail Online, retrieved from http://www.dailymail.co.uk/news/article-1244386/Haiti-

earthquake-disaster-U-S-resorts-risky-air-drops-transport-bottlenecks-aid-survivors.html

66 (2013). Key Issues on – An Introduction. The Haiti Support Group, retrieved from

http://www.haitisupportgroup.org

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Haiti can be considered a religious state; “Religion is professed by almost all Haitians:

According to the CIA World Factbook, the religious demographics of Haiti is as follows: Roman

Catholic 80%, Protestant 16% of this Baptist 10%, Pentecostal 4%, Adventist 1%, other 1%, other 3%, and 1% of the population professes no religion”67. This statistic indicates that there is a great amount of faith-based aid heading to the Haitians. The faith-based aid to Haiti is not only to help the people, it is as much for public relations and “look at me” opportunities: “But while they’re certainly playing a vital role on the ground, looks are important too. It’s not just about delivering aid. [Operation Blessing] brought its own media operation to document the work that it’s doing here [in Haiti]”, said one reporter for Al Jazeera News English68. The faith based organizations are sending aid and are playing a critical role in helping the Haitians but the publicity is not just to help the people, it is also to help the donor groups. Whether or not it is to gain donations, volunteers, or some other form of help, it can be safely said that faith-based aid also serves as a publicity boon for organizations.

Many serious issues in Haiti have been connected to foreign aid, one of which is economic failure. Haiti has not been able to develop a functioning economy of its own because of all the aid entering the country. In addition, the infrastructure in Haiti is almost non-existent.

A study done by Texan engineers stated that “[the Haitians] focused on essential infrastructure

— hospitals, government buildings, telecommunications centers — that were necessary

67 (2013). Haiti. The CIA World Factbook, retrieved from https://www.cia.gov/library/publications/the-world-

factbook/geos/ha.html

68 (2010). Faith factor in Haiti aid effort. Aljazeera, retrieved from

http://www.aljazeera.com/news/americas/2010/2010/01/201012681754924191.html

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to get recovery efforts organized and functioning and the Haitian government operational again”69. This statement shows that Haiti’s infrastructure is terribly frail and ineffective and there is more help going towards the government than the people. Whether or not it is understood by organizations how corrupt the government is, it is taking the bulk of the aid arriving in Haiti.

Haiti’s fiscal report stated that “Poverty, corruption, and poor access to education for much of the population are among Haiti's most serious disadvantages”70. The labour force of

Haiti equals 4.81 million of 9 million people. There is a shortage of skilled labour and there is an over-abundance of unskilled labourers. The occupations and the percentage of workers are as follows: agriculture workers account for 38.1% of workers, industry workers account for 11.5%, and service workers account for 50.4%. There is a very high rate of unemployment in Haiti.

Approximately 40.6% of the possible labourers are unemployed and more than two-thirds of the labour force do not have formal jobs.

Agricultural products such as coffee, mangoes, sugarcane, rice, corn, sorghum, and wood are produced in Haiti. There are also industries that make textiles, refine sugar, mill flour, make cement, and have light assemblies based on imported parts. Haiti also exports a few commodities such as apparel, oils, cocoa, mangoes, sugar cane, and coffee. These

69 (2012). Examining Haiti’s infrastructure post-quake. Know, retrieved from

http://www.utexas.edu/know/2012/01/12/examining-haitis-infrastructure-post-quake/

70 (2013). Economy Overview. index mundi, retrieved from http://www.indexmundi.com/haiti/economy_profile.html

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commodities are usually exported to the United States which accounts for 83.9% of Haiti’s export partners70. The skewed trade is an example of the effects of tied aid. As well as exporting, Haiti also imports a variety of commodities such as food, manufactured goods, machinery and transportation equipment, fuels, and raw materials. The import partners are as follows: Dominican Republic (31.5%), United States (25%), Netherlands Antilles (8.6%), and

China (7.1%)70.

The abundance of problems in Haiti could be rectified as long as aid giving organizations and governments let the country build itself up and create its own economy. With the present problems in Haiti, aid has been detracting from the island’s ability to build up its own economic standards. It is difficult to foresee if aid or development will ever help Haiti, or if it will just continue to plunge the country into deeper poverty. Haiti is considered a failed-state with little to no options for saving the economy or infrastructure. Consequently, many Western countries have given up on Haiti.

70 (2013). Economy Overview. index mundi, retrieved from http://www.indexmundi.com/haiti/economy_profile.html

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Mali

In the past, Mali has been part of several Empires. Chiefly, Mali was part of the Empire of Mali and the Songhai Empire. The base of the Songhai Empire was considered Timbuktu, which was developed by the Moroccans. There have been a series of kings such as King

Sundiata and Mansa Musa, and a series of dictators namely Modibo Keita and Moussa Traore.

Now, Malians are living in a country with a democratic government run by a President, Alpha

Konare, and a Prime Minister, Ousmane Issoufi Maiga. The Malian government officially became a democratic government in the year 1992 after many years of being a dictatorship71.

Most recently, the Malians have been trying to stop the al Qaeda and Junta groups that are trying to uphold Sharia Law practices within the country. Sharia Law is practiced by the far extreme right of Islamic religion and amongst others, dictates that all music, dancing, smoking, drinking, and associating with the opposite sex outside of the home be outlawed. Sharia Law also dictates that men must run society. Women are not allowed to be seen by men outside of the home. In some extreme cases, the women are not even fully seen within their own homes.

This was a catalyst for the start of the current war in Mali and for the military aid they are receiving72.

Mali has been sent military aid from France, as France has a vested interest in Malian

71 (2013). The role of governance and aid in Mali's crisis. Aljazeera, retrieved from

http://www.aljazeera.com/indepth/opinion/2013/03/201331412468880930.html

72 (2013). Sharia law ban and Muslim wives. Aljazeerai, retrieved from

http://www.aljazeera.com/indepth/opinion/2013/02/201321174724878286.html

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culture, as well as in the mines and oil resources. One of the positive consequences resulting from of the French military aid, is the attempt to free Malian cities that were taken by al Qaeda and Jihadists trying to impose Sharia Law upon the people73. Forcing Sharia Law is similar to the attempts made by the West to force Christianity upon those viewed as following heathen, pagan practices74.

To understand the religious aspect of the war in Mali, one must understand the differences between Muslims and al Qaeda. There are many branches of Islam. One of these more extreme branches is the Jihadists. The Jihadists are those who would impose Sharia Law upon all of Mali including public punishment to women and children. The cities of Gao,

Timbuktu, Bamako, and Kidal have most recently been attacked and taken over by Jihadists aligned with Al-Qaeda75.

Jihadism describes a renewed focus on armed Jihad in Islamic fundamentalism and is often a controversial topic. The Jihad is a particular teaching within the Qur’an describing that the word of Muhammad be told “by sword or by fire”76. The Jihadists take this meaning literally

73 York, G., Waldie, P. (2013). Why Mali matters to the West. The Globe and Mail, retrieved from

http://www.theglobeandmail.com/news/world/why-mali-matters-to-the-west/article7347113/

74 Felix, B. (2012). ECOWAS warn Mali and Bissau Juntas, prepares troops. Islam.ru, retrieved from

http://islam.ru/en/content/news/ecowas-warn-mali-and-bissau-juntas-prepares-troops

75 Morgan, A. (2012). Mali’s Tuareg Rebellion. The Global Dispatches, retrieved from

http://www.theglobaldispatches.com/articles/malis-tuareg-rebellion

76 Gorka, S. (Dr.) Jihadist Ideology: The Core Texts. Westminster Institute, retrieved from http://www.westminster-

institute.org/articles/jihadist-ideology-the-core-texts-3/

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just as the followers of the Westboro Baptist Church have taken the word of the Bible as literal.

Jihadists are a sect of Muslims, and all Jihadists are Muslim but not all Muslims are Jihadists.

Also, all members of al Qaeda are Jihadists but not all Jihadists are al Qaedans. Most of Malians are Muslims and many of those Muslims are not Jihadists nor are many of them al Qaedan. The

Western misunderstanding of Muslims, Islam and the sub-Islam terrorist groups such as al

Qaeda has resulted in the stereotyping of all Muslims as terrorists. This renders delivering aid to non-extreme branches of the Muslim faith difficult.

The French are offering aid to Mali in hopes of retaining French culture as part of Malian heritage, keeping rights to the uranium mines up in northern Mali, and keeping the terrorist threat of al Qaeda at bay77. The members of al Qaeda, as aforementioned, have been imposing

Sharia Law upon the people of Mali. The French have been asked to help because the Malian army did not have the resources to undertake such a large military action. It is rumoured that the United States is taking similar action as the French to stop al Qaeda terrorist activities, as well as in an attempt to control Malian mineral and oil deposits. Mali was once known as the cultural center of Africa, but after the attacks by extremist Islam groups, Sharia Law was enforced which has stunted and limited the rich Malian culture77.

The Malians have received aid in previous years from multilateral and bilateral aid organizations. The multilateral donors include the International Monetary Fund (IMF), World

77 York, G., Waldie, P. (2013). Why Mali matters to the West. The Globe and Mail, retrieved from

http://www.theglobeandmail.com/news/world/why-mali-matters-to-the-west/article7347113/

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Bank, African Development Bank, Arab Funds, and European Union. The bilateral donors include France, the United States, Denmark, Canada, the Netherlands, The People’s Republic of

China, Russia, and Germany. In 2001, foreign aid to Mali was estimated at $596.4 million US and in 2003 the estimate totalled at $44.2 million US78. As the economic reforms pass, governments are hoping to move from budgetary and balance of payment assistance to social development aid in Mali. Until a year ago, Mali was a country with very little geopolitical value, whereas now its North is a haven for Islamist radicals. These radicals had originally crossed the border from Algeria and became a kidnapping threat. There is one group that is affiliated with al Qaeda became financially powerful from kidnappings and trafficking operations. Two

Canadian victims were diplomats Robert Fowler and Louis Guay, both of whom had been abducted in Niger, December of 2008. They had been held hostage in northern Mali for 130 days by Al-Qaeda in the Islamic Maghreb (AQIM). The north has become a stronghold for these

Islamist groups, which has triggered concerns from the United States and several European countries79.

The war in Libya in 2011 can be said to have started the civil unrest in Mali because of the defeat of Moammar Gadhafi. Thousands of Moammar’s African recruits returned to their home countries, including Mali, bringing with them a heavy arsenal of weapons which provided renewed strength for the Tuareg separatists and the Islamic radicals. In the beginning of 2012,

78 (2013). Mali. African Economic Outlook, retrieved from http://www.africaneconomicoutlook.org/en/countries/west-

africa/mali/

79 York, G., Waldie, P. (2013). Why Mali matters to the West. The Globe and Mail, retrieved from

http://www.theglobeandmail.com/news/world/why-mali-matters-to-the-west/article7347113/

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the separatists had launched a major attack and by April of that year, they captured northern

Mali and routed the Malian army. Later, the Islamist fighters pushed aside the Tuareg rebels and the Islamists ended up with control of the major towns and cities in northern Mali80.

Governments such as Canada have previously commended Mali for being an ideal of

African stability and democracy. Events during this previous year have exposed Mali as a weaker and less democratic country than previously thought. In March of 2011, some Malian military officers started a coup. This coup toppled Mali’s unpopular government and formally handed power back to an interim government, though the military still continued to run the country from behind the scenes81. In December of 2011, the military showed off its muscle and forced the Prime Minister of Mali to resign. This particular coup, coupled with separatist victories in northern Mali exposed the military and political infrastructure as weak, out of favour, muddled, and corrupt. This had been shown to be a popular breeding ground for

Islamist radicals who usually thrive in the northern part of the country.

Mali is a example where aid and development are both part of the solution to help resolve the war. The desertification fight has also been taken on as part of aid to Mali in hopes of freeing the people from the rebels and al Qaedan troops. Mali is not a fail-state and

80 (2011). The History of Sustainable Development in the United Nations. United Nations, retrieved from

http://www.uncsd2012.org/history.html

81 Lewis, D., Diallo, T. (2012). Renegade Mali soldiers seize power in coup d’etat after government’s failure to quell rebellion.

The National Post, retrieved from http://news.nationalpost.com/2012/03/22/renegade-mali-soldiers-seize-power-in-

coup-detat-after-governments-failure-to-quell-rebellion

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it is not a success story. Mali’s success or failure has not yet been determined and many wait to see what will become of this African country.

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Bangladesh

In this case study, aid and the history of aid to Bangladesh will be examined through multiple sources to create a base understanding of how aid can affect countries all over the world. The history of the country and of the aid given to it forms a large part of understanding aid today. Multiple sources will be used to form a concise and well-rounded history and current economic plight of Bangladesh.

Bangladesh is a Middle Eastern country almost completely surrounded by India. The country is situated on the Bay of Bengal in the Indian Ocean. Some well-known aspects about

Bangladesh are the low standards of life, the poverty rate, and the economy. The poverty rate in Bangladesh is one of the highest in the world aside from Bernina and Burkina Faso, with

43.25% of the total population living on less than (US) $1 a day. The economy of Bangladesh is also one of the most delicate in the world82. Bangladesh has groups of tribes that have populated it for thousands of years and the country has a rich history.

History specialists have claimed that the Bangladeshi civilization, near the area of Bengal dates back more than four thousand years. It is also argued that this was occupied first by the Dravidian peoples, along with the Tibeto-Burman civilizations and some Austro-

Asiatic tribes83. There is minimal evidence with regards to the origin of the word “Bengal”

82 (2013). Bangladesh. The CIA World Factbook, retrieved from https://www.cia.gov/library/publications/the-world-

factbook/geos/bg.html

83 Szczepanski, K. (2013). Bangladesh – Facts and History. About.com, retrieved from

http://asianhistory.about.com/od/bangladesh/p/bangladeshprof.htm

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but among specialists it is thought that it is derived from the Dravidian language (the Dravidians are rumoured to be the first tribe to settle in the area) dating back to around 1000 BC. The first kingdom of Bangladesh is thought to have appeared in the 7th century BC, uniting with Bihar under different empires. These empires were the Nanda, Mauryan, Sunga, and Madadha.

Furthermore it is thought that Bengal became part of the Harsha Empire and the Gupta Empire from the 3rd to the 6th centuries84. During the Middle Ages, the area around the mouth of the

Ganges would be called paradise by many Europeans. At this time, Bengal was said to be the most flourishing part of the continent by the Caspian Sea.

Bangladesh is one of the world’s most densely populated countries housing around

150.5 million people in one of the smaller countries in Asia (twice the size of New Brunswick).

Because of the large population and lack of room, Bangladesh’s population pressures are great.

It is heavily dependent on foreign aid of which parts are spent on the war in the Chittagong

Hills85. The financial aid is also used in the socio-economic changes to fight one of the highest poverty rates in the world. Bangladesh spends $125 million on the foreign aid debts and 15% of the budgets for military and defense expenses in the Chittagong Hills85.

Some of the largest aid donors to Bangladesh are Japan, the United States, Europe, and

Middle Eastern countries. It is said that the donors tie most of their aid to Bangladesh with

84 History of Bangla. Freethinkers, retrieved from http://mukto-mona.net/new_site/mukto-

mona/bengali_heritage/bengal_history.htm

85 (2011). Foreign Aid to Bangladesh. Care about Bangladesh, retrieved from http://www.carebd.org/con_coff.php

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conditions that do not always respect human rights within the country. If the international donors were to stop the aid supply until Bangladesh were to enforce the human rights policies, women and children’s rights would be very different86. Aid is one of the main sources of income for the poorest of families living in the slums in the urban areas, or in the underdeveloped rural areas. It is argued that the international community continuously ignores the issue of abject poverty of the people while still supplying aid whereby countries like

Bangladesh use the money to operate a large military force in the war zones. Thus, the aid supports war, not the people. It is felt that this presence of military will make the war with

Pakistan continue exponentially even as human rights and medical care, which are basic human rights, are constantly ignored.

Human rights violations account for one of the biggest national problems in Bangladesh.

Bangladesh is receiving aid to rectify these problems from UNICEF, the World Health

Organization, the Australian Development Assistance Bureau, the Swedish International

Development Agency, the Asian Development Bank, as well as many others. These donors do not consult with the people of Bangladesh before giving the donations regarding how the aid would best be spent to benefit the people.

It is a popular thought that the people in need should have a voice in deciding how the government spends the aid money a country receives because many of the governments are often corrupt and misuse the funds. Without the common citizens’ input, the money is usually used to pay the government’s salary or pays for military activities86.

86 (2011). Foreign Aid to Bangladesh. Care about Bangladesh, retrieved from http://www.carebd.org/con_coff.php

AID VERSUS DEVELOPMENT 45

Bangladesh was listed as the 22nd largest recipient of humanitarian aid in 2012 and it received 1.4% of its gross national income (GNI) in aid money87. Many governments and organizations around the world are implored by the people of Bangladesh to think about where the aid money they are sending over really goes. Unfortunately, these pleas are not answered as Bangladesh is seen as a state that has financially succeeded with the donations of aid money.

Bangladesh is important to the aid versus development debate because of all of the monetary aid given. The country has risen above low economic standards and has become a world trade partner, it has a growing economy, and it is decreasing the percentage of people living under the poverty line. Bangladesh currently has more than 50% of its population above the poverty line which is a large improvement over the previous years88. Bangladesh is also a country that has continued to grow because of the continuous donations of aid money and loans given by other governments.

However, aid continues to be requested. An article written by in the Globe and Mail Asif

Farooq describes the collapse of the Joe Fresh plant in Bangladesh and how aid needs to be sent to help the families who lost their main income earners. As a result, it is estimated that there are 10 000 to 16 000 people are now destitute. The article also describes the internal

87 Bangladesh. Global Humanitarian Assistance retrieved from

http://www.globalhumanitarianassistance.org/countryprofile/bangladesh

88 Bangladesh Economy. Discovery Bangladesh, retrieved from http://www.discoverybangladesh.com/meetbangladesh/economy.htm political strife occurring within the

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country, as the Bangladesh political parties are quick to blame each other for not taking enough action sooner regarding the collapse.

Even so, there is hope that the country will have forced itself into new economic ventures to better the country89. Mr. Farooq writes that Bangladesh has the potential to be an economic power in the world and, in this case, this aid has led towards the development of the country. Bangladesh is shown to be a success story with regards to aid versus development as the assistance has given the country an opportunity to develop and sustain this development even though corruption still takes place with the aid funds.

Overall, the summary of the article shows that Bangladesh is indeed a success story for aid leading into development. There may be some bias in the article though as one of the countries giving aid to Bangladesh is Canada: the facts may be skewed in Canadian favour. The main issue, when dealing with aid in Bangladesh, is that the people do not believe that the aid is directly doing them any good. Other governments around the world believe that Bangladesh is succeeding but the people living in Bangladesh do not agree. Yet, aid has helped Bangladesh because the government has managed the money well, which in turn caused both the economy has risen and the standard of living has also risen. The people currently living under the poverty line are fewer than 40%.

89 Farooq, A. (2013). The garment disaster is no time to abandon Bangladesh. The Glove and Mail, retrieved from http://www.theglobeandmail.com/commentary/the-garment-disaster-is-no-time-to-abandon-bangladesh/article11628206/

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On the other hand, arguments have been made that the people should have more control over the distribution of the aid money. This would allow the money to be allotted to where the people believe it would do the most good.

If aid is going to be considered successful by the people of Bangladesh, the money is going to have to be distributed more visibly to the people so that they can see the changes happening themselves. As well, the citizens will need to be made aware of the changes in the country’s infrastructure so that should complaints and protests will, they will occur with and informed basis. Even though Bangladesh is currently considered a success story by the donating governments the Bangladeshi do not agree. Changing this view through more government accountability to the people is the best way for Bangladesh to be completely free of the aid trap.

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International Organizations

Throughout the decades, a number of government organizations as well as non- governmental organizations have been born to cope with the growing number of impoverished countries. In Canada, CIDA (Canadian International Development Agency) is responsible for delivering funds to countries it deems worthy of supporting. CIDA is an “organization of official development assistance”90. These countries are chosen “based on their needs, their capacity to manage development programs, and their alignment with the Canadian foreign policy priorities”91. Basically, CIDA is meant to provide funds to allow a country to develop its own economy and infrastructure to the benefit of its citizens.

However, the success of CIDA is not clear and there is great criticism of CIDA’s spending, their selection of countries, and the effectiveness of the aid CIDA delivers. Nilima Gulrajani criticized CIDA’s “[l]imited concentration in its sectorial and geographic programs, high administrative costs, unmotivated staff, inadequate accountability, lack of results, [and] poor policy coherence”92. These problems lead to in an inefficient and ineffective aid organization.

Moreover, new partnerships between CIDA and the private sector cause concern as some of these new partners include mining companies that are often criticized for their impact on

90 (2013). CIDA’s Aid Effectiveness Agenda. Canadian International Development Agency, p. 1, retrieved from http://www.acdi- cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/FRA-825105226-KFT

91 McGill, H. (2012). Canada Among Donors: How Does Canadian Aid Compare?. Struggling for Effectiveness: CIDA and

Canadian Foreign Aid, p.27.

92 Guljarani, N. (2012). Improving Canada’s Performance as a Bilateral Donor: Assessing the Past and Building for the Future.

Struggling for Effectiveness: CIDA and Canadian Foreign Aid, p. 53.

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the environment as well as, disregard of human rights in some countries93. Furthermore, the focus on the private sector detracts from efforts being made to develop new programs in countries benefitting from CIDA intervention. However, it should be noted that CIDA has made some progress such as the Micronutrient Initiative:

“the Micronutrient Initiative provide[d] more than 267 million children with Vitamin A

supplements (to prevent blindness and reduce the risk of death from severe infection)

328 million people had iodized salt (to prevent brain damage in children and

miscarriages in pregnant women), [and] distributed 5.6 million zinc tablets to children

(to prevent stunted growth)”94.

The benefits of the initiative cannot be disputed, but when compared with the shortcomings, it becomes apparent that the pros are not necessarily outweighing the cons, and that CIDA has room for much improvement.

Similar to CIDA is USAID, an independent American based financial aid organization.

USAID arose in 1961 after President Kennedy “signed the Foreign Assistance Act into law and created USAID by executive order”95, and focuses on bringing capital and industrial assistance to needy countries. The agency experienced many changes and developments, including

93 Mackrael, K. (2012). Canada’s foreign aid doesn’t exist to keep NGOs afloat, Fantino says. The Globe and Mail, retrieved from http://www.theglobeandmail.com/news/politics/canadas-foreign-aid-doesnt-exist-to-keep-ngos-afloat-fantino- says/article5751774/ p.3

94 (2013). Increasing Food Security. Canadian International Development Agency, retrieved from http://www.acdi- cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/FRA-101515656-QEV p.2

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a shift to nutrition, health, and education, then to sustainable development, and most recently to rebuilding governments and infrastructure. USAID has given assistance to a number of foreign countries such as those in Africa and states of the former Soviet Union. Both CIDA and

USAID share similar policies and guidelines, and face similar challenges in Western society96.

Like CIDA, USAID has many critics. Jeffrey Sachs called USAID an “employment agency for consulting firms. Virtually, no single serious analysis has come out of USAID for a decade, despite a tradition of excellence”97. His criticism paints USAID as a directionless firm, helmed by incompetents. Paul Collier has commented on USAID becoming a means for commercial ends in the United States, with congress divvying up the budget to support American exporters and ignore African needs98. The good that was once the focus of USAID has been lost, it seems, to capital gain for the donor country. Similarly to CIDA, USAID also lacks a clear focus and direction now, resulting in the misappropriation of budgetary funds and efforts. When coupled with laws passed by the Bush government, as discussed under Religion and Spirituality, the effectiveness of USAIDS initiatives becomes hindered by secondary motives. Thus, even the best intentions cannot overcome the overwhelming hamstringing by USAID’s corrupt policies and officials.

95 (2012). USAID History. USAID, retrieved from www.usaid.gov/who-we-are/usaid-history

96 Black, D. (2012). Between Indifference and Idiosyncrasy. Struggling for Effectiveness: CIDA and Canadian Foreign Aid, p. 253.

97 Sachs, J.D. (2008). Rethinking Foreign Policy. Common Wealth, p. 284.

98 Collier, P. (2007). Aid To The Rescue?. The Bottom Billion: Why The Poorest Countries are Failing and What Can Be Done

About It, p. 110.

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The United Nations also has a similar agency, and in the international community the

World Bank and IMF (International Monetary Fund) are responsible for delivering financial assistance to countries in need, and to encourage development99. A more in depth review on the policies of these agencies has discussed within Role of Control, page 10. The IMF and

World Bank both subject potential recipient countries to policies requiring the recipient country to reform its economic system. At times when the recipient countries lack the ability and knowledge to successfully transform their system, this can be welcome advice, but at other times the conditions included in policies can hinder growth99. The World Bank has also been shown in some studies to provide economic freedom and a positive impact, whereas the IMF has been routinely shown to have a negative impact and have no effect on economic freedom whatsoever100.

In other reports, both the IMF and World Bank have been scrutinized for their roles in increasing debt and poverty, and preventing economic growth and development within third world countries. The Structural Adjustment Program (SAP) used by the IMF and World Bank to reform the recipient countries has “failed to achieve their goals. They have not created wealth and economic development as unregulated markets did not benefit the poor and failed to protect the delivery of social services”101. The actual goals achieved were liberalisation,

99Boockmann, B., Drehers, . (2003). The contribution of the IMF and the World Bank to economic freedom. European Journal

of Political Economy, p. 2.

100Boockmann, B., Drehers, . (2003). The contribution of the IMF and the World Bank to economic freedom. European Journal

of Political Economy, p. 5.

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privatisation of public services and companies, de-regulations of labour, and improving competitiveness – all of which service the upper echelons of the recipient country but more obviously line the pockets of IMF and World Bank officials102. As James Bovard states, the

World Bank often does far more damage than good103. Some reasons for the corruption and policy flops that seem to plague both agencies is the lack of research scientists, research agencies that are usually not concerned or liable for international issues, and unequal cost- sharing from the donor groups104. The list of potential reasoning behind the lacklustre results from both IMF and World Bank initiatives could be endless, but it is clear that issues span across borders and organizations, and major steps need to be taken to ensure a successful future.

Some agencies that follow the development format are Organization for Economic Co- operation and Development (OECD) and the United Nations Development Programme. The

United Nations Development Programme was created in 1966. The Programme partners with developing countries to utilize monetary aid more effectively to promote “poverty reduction and achieve the Millennium Development Goals (MDGs); democratic governance; crisis

101Boockmann, B., Drehers, . (2003). The contribution of the IMF and the World Bank to economic freedom. European Journal

of Political Economy, p. 5.

102 Boockmann, B., Drehers, . (2003). The contribution of the IMF and the World Bank to economic freedom. European Journal

of Political Economy, p. 6-9.

103 Bovard, J. (1987). Policy Analysis: The World Bank vs. The Poor. CATO Institute, p. 1, retrieved from

www.cato.org/pubs/pas/pa092.html

104 Sachs, J.D. (2008). Achieving Global Goals. Common Wealth, p. 304.

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prevention and recovery; environment and sustainable development”105. The OECD is an international organization created in 1948 to implement the Marshall Plan and is currently

“promot[ing] policies that will improve the economic and social well-being of people around the world”106. It comprises of a number of unified countries contributing to initiatives the OECD puts into place. However, it seems that even development-based organizations are not without their own levels of corruptions. On the one hand, the OECD is credited with providing $650 billion in development assistance107. On the other hand, according to Dambisa Moyo the OECD spent “US $300 billion on agricultural subsidies… almost three times the total aid from OECD countries to all developing nations”108. Recently, the OECD voted to make bribery of any government official in recipient countries an offense, and to explore partnering with NGOs to overcome governmental constraints109.

105 (2013). A world of development experience. United Nations Development Programme, retrieved from

http://www.undp.org/content/undp/en/home/operations/about_us.html

106 (2013). The Organisation for Economic Co-operation and Development. OECD Work on Health, p. 3, retrieved from

http://www.oecd.org/health/health-brochure.pdf

107 Maathai, W. (2009). Aid and the Dependency Syndrome. The Challenge for Africa, p. 65.

108Moyo, D. (2009). Let’s Trade. Dead Aid, p. 115

109 Collier, P. (2007). An Agenda for Action. The Bottom Billion: Why The Poorest Countries are Failing and What Can Be Done

About It, p. 185.

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It is possible that if more legislation was made to assist the development of countries and render issues such as bribery an offense, that development could truly ease the burden of economic development of the poorer countries.

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Connections to Canada

Canada is a large part of the aid giving community and has been ranked among the top aid donors in the world. Canada’s role in the aid community started just after the Second

World War when the rebuilding of Europe took place. Canada is home to CIDA, the Canadian

International Development Agency, which is geared towards giving aid and development assistance to countries around the world. There is a process to the selection of the countries which includes human rights enforcement, ability to use aid money wisely, and the overall poverty of said country. CIDA is the Canadian version of USAID from the United States and works towards similar goals.

In respects to giving aid, Canada is a bilateral donor whereas many organizations are multilateral. This past year, Mr. Fantino, Minister of Aid and Development, had elected to stop sending aid to places like Haiti because the aid is preventing the rise of the Haitian economy.

Also, the Minister for Aid and Development has stated that NGO’s are not paid by the government to stay afloat; it is up to the NGOs to find the money themselves110.

In the drought in Africa during the 1990s, food aid from CIDA eventually reduced the production and buying of local foods. The aid took away the farmers ability to sell their crops and make a living because the food was being given out for a much lower price or for free in the drought stricken areas. While Canadians may think that what they are doing is helping

110 Mackrael, K. (2012). Canada’s foreign aid doesn’t exist to keep NGOs afloat, Fantino says. The Globe and Mail, retrieved

from http://www.theglobeandmail.com/news/politics/canadas-foreign-aid-doesnt-exist-to-keep-ngos-afloat-fantino-

says/article5751774/

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everyone, they failed to see what it would do to the farmers and the local vendors111.

In Colombia, CIDA started an aid program to help farmers regain more crop land. It was tied aid, however, and CIDA started procuring goods and opening markets for Canadian products112. The middle class was then helped by said programs and the poor were left to stay poor. The project has circumvented and is believed to still be in place today where it should have only been a twelve year program to begin with112.

In Ghana, the program for water aid was said to have had two major flaws. First, the chosen pump emphasized Canadian aid serving Canadian self-interest. Second, CIDA sent volunteers to Ghana who knew nothing of the local culture and understood nothing of the style of living in the area. This is a theme repeated throughout projects not just by CIDA113.

The policies implemented may be implemented with good intentions, however in reality they hinder the growth of economies, help keep corrupt governments in power, and help keep a country in extreme poverty. One can only assume CIDA did not mean for their policies to end up causing countries to fall farther into the aid dependency trap or to help fund the governments’ salaries in many countries.

111 McGill, H. (2012). Canada Among Donors: How Does Canadian Aid Compare?. Struggling for Effectiveness: CIDA and

Canadian Foreign Aid, p.26.

112 (2011). Conclusion of the Project IIN-CIDA in Colombia. Retrieved from http://proyectoiinacdi.org/noticias-colombia-iin-

acdi/cierre-del-proyecto-iin-cida-en-colombia-y-guatemala/?lang=en

113 Cote, D., Caouette, D. (2012). Land and Food Security Policies. Struggling for Effectiveness: CIDA and Canadian Foreign Aid,

p. 166.

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CIDA, in 2012, was a leader in the maternal and child health G8 Summit where $1.1 billion dollars was given by Canada. When asked by the media, the programme initiatives remained undisclosed and it has also not been clear about where the funding would derive from114. As well, CIDA has been part of many United Nations initiatives and has also started a fair amount of these initiatives. Some of these initiatives include the Food and Agriculture

Organization which was started in in 1945[115].

Many of the countries that are part of the G8 are also part of the United Nations. While

Canada has started and taken part in many organizations (i.e Food and Agriculture

Organization) within the United Nations, they have also pulled out of some of these initiatives.

One such example is Canada pulling out of the anti-desertification project. This project was meant to help civilians in times of drought (i.e Somalia) to find enough water for crops, bathing, and drinking. This action was taken because, as a spokesman for Julian Fantino (International

Co-operation Minister for Canada) stated, “membership in this convention was costly for

Canadians and showed few results, if any, for the environment”116. It has also been said by

Stephen Harper, that the anti-desertification convention was “too bureaucratic, and not worth

114 Cote, D., Caouette, D. (2012). Land and Food Security Policies. Struggling for Effectiveness: CIDA and Canadian Foreign Aid, p. 159.

115 (1997). UNA Fact Sheet. UNA-Canada, retrieved from http://www.unac.org/en/link_learn/fact_sheets/role.asp

116 Mackrael, K. (2012). Canada’s foreign aid doesn’t exist to keep NGOs afloat, Fantino says. The Globe and Mail, retrieved from http://www.theglobeandmail.com/news/politics/canadas-foreign-aid-doesnt-exist-to-keep-ngos-afloat-fantino- says/article5751774/

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the $350, 000 contributed each year”117.

Canada is faced with the same challenges as any donor country. Who does one give to?

How much does one give? And how does one apply the donations? While Canada has made some headway through certain initiatives, it is clear that Canada needs to be more involved in organizations as well as make better policies to assist countries more effectively and efficiently.

Canada has, through the involvement in organizations, proven to take more of a role in giving aid rather than development assistance. Canada has the ability to be a leader in developmental aid and yet has not stepped up to the challenge. A full list of potential solutions can be found in the section Possible Solutions.

117 Blanchfield, M. (2013, March 30). Canada’s move ‘regrettable,’ UN says. The Globe and Mail, p. A9

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Possible Solutions

There are many possible solutions to the issue of aid versus development. Some include stopping aid loans and grants, teaching the people of the country how to help themselves, stopping the flow of aid to corrupt governments, starting micro-credit foundations, and using more of the countries’ own resources to help them grow. These strategies will allow the countries to develop their own stable government and economic policies.

By stopping aid loans and grants, organizations and governments would be decreasing the amount of debt owed by poverty stricken countries. This would help debt stricken countries because their governments could focus money and attention where it is truly needed in helping bring the people out of poverty118. Since many of the world’s poor live in corrupt governments, restrictions on what can be done with the aid money can also be used as a means to stop the flow of loans and grants into corrupt hands119. Governments will not want to invest in aid loans/grants with too many “strings attached” and they will have to learn to become sustainable spenders. By creating a global agenda, it could be possible to achieve realistic goals for the global economy120. This will be met with many challenges but is a goal worth pursuing.

Teaching the people to help themselves would result in self-sufficiency and less

118 Moyo, D. (2009). Making Development Happen. Dead Aid, p. 145.

119 Collier, P. (2007). Laws and Charters. The Bottom Billion: Why The Poorest Countries are Failing and What Can Be Done

About It, pp. 136 – 138.

120 Yunus, M. (2007). Putting Poverty in Museums. Creating a World Without Poverty – Social Business and the Future of

Capitalism, p.227.

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dependence on foreign aid. As is agreed by William Easterly, Greg Mortenson, David Oliver

Relin, and Wangari Maathai, education is a means of helping others help themselves, and is a major solution in the monetary aid trap. In this manner, people will have the knowledge to create their own businesses, have their children vaccinated against diseases such as Malaria, and also to have the knowledge to prevent the spread of diseases such as HIV/AIDS121, 122, 123.

Ceasing monetary aid flow into these countries would stop the corrupt governments from using the money to pay their own salaries, invest more in their military, and would result in assisting the economies to stabilize124. The poorest of the poor are getting little to no aid money or help because it is being trapped by the governments and used for the government’s own personal gains. Keeping the aid from the governments would help by forcing the people to start their own businesses to keep the money circulating through the country. Stopping aid could help stop corruption of governments, could help circulate money, and could help bring countries such as Haiti out of their poverty ditch125.

Another way of solving the aid versus development problems are micro-credits. Micro- credits are defined in the Oxford Dictionary as “the lending of very small amounts of money at

121 Easterly, W. (2007). Homegrown Development. The White Man’s Burden, p. 343.

122 Mortinson, G., Relin, D.O. (2006). The Enemy is Ignorance. Three Cups of Tea, p. 300.

123 Maathai, W. (2009). Aid and the Dependency Syndrome. The Challenge for Africa, p. 65.

124 Moyo, D. (2009). Dongo Revisited. Dead Aid, p. 143.

125 Easterly, W. (2007). Homegrown Development. The White Man’s Burden, p. 347.

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low interest, especially to a start-up company or self-employed person”126. Micro-credits allow for businesses to build themselves up without worrying about extraneous amounts of debt and interest to repay since many would never be able to repay large debts. These credits also make sure that there are no subsidies on third world food products, since subsidies hurt the growing economy more than help it127. Micro-credits are well thought-out solutions that are praised by

Dambisa Moyo and by Muhammad Yunus as exemplary solutions in the form of development.

A fifth way of helping countries such as Mali and the Republic of Congo could be the greater use of internal resources to create a stable economy. These countries are rich in resources such as precious metals and gems, which could be sold or traded for other resources such as food staples128. Greater public awareness would be an asset to generating interest and developmental assistance to countries. Thomas Keneally’s book, Three Famines, discusses how informed decisions can lead to informed donations and appropriate use of monetary aid129.

Two authors, Jeffery Sachs and Thomas Keneally, both write about how more resource management and public awareness would be valuable in developmental assistance.

It would be ineffective to follow the example of International Co-operation Minister of

Canada, Julian Fantino. Fantino shifted the focus of aid to align foreign aid with trade and

126 Microcredit [Def. 1]. In Oxford Dictionaries, retrieved May 5, 2013, from

http://oxforddictionaries.com/definition/english/microcredit?q=microcredit

127 Yunus, M. (2007). Microcredit Revolution. Creating a World Without Poverty – Social Business and the Future of Capitalism,

pp. 68-70.

128 Sachs, J.D. (2005). A Global Family Portrait. The End of Poverty – Economic Possibilities for Our Time, p. 15.

129 Keneally, T. (2011). Relief: Ethiopia. Three Famines: Starvation and Politic, p. 269.

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commercial businesses. This does not help alleviate poverty because the focus is taken off of the people and placed on Canada’s own corporations130. No matter how much aid money is spent, under these circumstances it can never do any good. Aid never reaches the needy citizens of monetary aid receiving countries, because the aid-dependant, corrupt governments steal the money for themselves. Aid is funding these corrupt governments, and regardless of public opinion, monetary aid donations need to cease to assist these countries to survive in the modern economic world. If no solutions are found and implemented soon, nations may find themselves at conflict with each other, such as the nuclear conflict between North Korea and the United States131.

Canada can take a leading role in helping to find these solutions if more action is taken by CIDA and the Ministry of Foreign Affairs, and more thought was given to policy making for third world situations. Canada has the potential to lead this fight but action must be taken soon to avoid conflicts with trade partners and with those whom we wish to help.

130 Mackrael, K. (2013, March 22). Agency rebranding shifts control to PMO. The Globe and Mail, p. A10.

131 MacKinnon, M. (2013, March 12). War talk mounts as N. Korea scraps armistice. The Globe and Mail, p. A3.

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Conclusion

The issue of financial aid versus economic development is often seen in today’s headlines. There are billions of dollars each year being sent as financial aid. These funds are often misappropriated, misused, and are often loaned with high interest rates. It has been argued that development could be a more effective means of stabilizing foreign economies. At the present, there are a number of developing countries that are unable to pay back the funds loaned to them. Some countries are threatened with bankruptcy which will affect not only trade relations with other nations, but will also affect the everyday citizen who depends on their government for a stable economy and infrastructure. The countries that are most often monetary aid donors are members of the G8, members of the United Nations, USAID, CIDA, and a number of NGOs. Those receiving financial assistance are often sub-Saharan African countries, Latin American countries, and Middle to Near Eastern countries. These nations can be characterized as failed-states or developing/third world countries.

Monetary aid has seen a number of successes and failures. The Marshall Plan was the first success from giving monetary aid to foreign countries. The Plan was a success because the countries receiving the funds were already developed and therefore did not need to reform their infrastructure. More recently, success has been seen in both cases of Bangladesh and

Mali where the monetary assistance given has improved the economic structure of these countries. In Bangladesh, the government used the monetary aid given to them to fund education systems, small and medium sized businesses, and had also started businesses to increase trade partnerships on a global scale. Mali is utilizing its monetary aid effectively by funding refugee camps. Food staples and an education system for the refugees have also been

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implemented. It is interesting to note that the refugees include both Malian and Somalian war refugees. Mali has also applied monetary aid to fund its military arm, an act considered justifiable during war times. In these cases, financial aid was successful however, it is questionable whether these cases are representative of the norm. Studies have shown that much of foreign aid is paying for the salaries of corrupt governments. Much of the funding never reaches the citizens who need it most. Furthermore, monetary aid has been shown to have policies attached such as subsidies, tied aid, and the high interest rates placed on the debts owed. These policies are not usually formed for the benefits of the recipient countries but for the benefit of the donor countries. Lastly, the inefficient use of monetary aid can often result in increased power for ruling dictatorships. It can be determined from the evidence shown that the disadvantages of foreign monetary assistance outweigh the advantages.

Developmental assistance started, like monetary aid, with the Marshall Plan. The main goal of development is to assist citizens of developing countries to take control of their own financial situation and build their own economy. One developmental success can be seen in

Ethiopia which avoided failed state status with developmental aid. India experienced a similar decline towards a failed state status before developmental assistance allowed for the creation of a sub-economy. This sub-economy has strengthened the already existing global economy and has raised the status of living in India. But, as can be seen in the failed development of

Haiti, developmental aid does not always prove to be useful. Haiti’s lack of infrastructure and established economy, coupled with the government’s lack of political will to achieve financial independence has hindered development efforts. As with aid, there is often corruption within development and as development is not as well-known as monetary aid, public opinion is often

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low. As well, often the difference between monetary and developmental assistance goes unknown. Nevertheless, developmental assistance has been shown to reliably stabilize economies and infrastructure, increase global trade partnerships, and create chances for goodwill and stability on a global scale.

Canada plays a major role in foreign aid with its work through CIDA, the G8, and the UN.

Canada has taken part in many of the initiatives created by the G8 and the UN to develop countries in many regions around the world. One area that has received Canadian assistance is the Democratic Republic of the Congo which benefited from Canadian political advice. Overall,

Canada prefers to implement financial aid rather than developmental assistance. The results have been mixed, showing sporadic successes and failures within the financial aid system. It is important for Canada to review the financial aid and development programs it has in place in order to ameliorate foreign relations and assistance programs. In particular, Canadian assistance programs would benefit from increasing public awareness, setting realistic targets, and placing restrictions on how recipient countries spend the financial aid.

On a global scale, it can be seen that developmental aid provides more long-term benefits than financial “band-aid” solutions. There are still many issues prevalent within developmental programs, and more research and global efforts need to be utilized in order to achieve true success.

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APPENDIX I – INTERVIEW TRANSCRIPTS

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APPENDIX I - A: Patrick Brown (via email)

1. What is Canada’s current aid philosophy and how has it developed?

The mission statement of The Canadian International Development Agency (CIDA) is to lead Canada's international effort to help people living in poverty. With this, our government aims to reach the mandate of managing Canada's support and resources effectively and accountably to achieve meaningful, sustainable results and engage in policy development in Canada and internationally, enabling Canada's effort to realize its development objectives. This agency has helped countless men, women and children suffering from disease and poverty in countries all around the world.

Prior to the creation of CIDA in 1968, Canadian foreign aid was primarily managed in the form of contributions to the United Nations. However, this component of Canadian foreign policy was also managed by the Economic and Technical Assistance Bureau and the Department of External Affairs (now the Department of Foreign Affairs and International Trade) for some time. CIDA was initially created as a unique, single-purpose agency aiming to satisfy the growing needs of developing countries. While CIDA has already made a great deal of progress in the international community, Canadians can rest assured that Canada will continue to provide humanitarian aid and promote sustainable development around the world.

2. What type of projects have been most successful and which ones have failed?

In order to assure that CIDA`s efforts in developing countries are sustainable, legitimate and worthwhile, researchers and policy analysts are constantly monitoring Canada`s development projects. With this, the people who manage these projects are able to make changes when an initiative appears to be going in the wrong direction. This process has allowed for a great deal of success with CIDA`s various project in developing countries. Some examples of these successes are outlined below.

EITI & EITAF Initiatives - Success

Canada is contributing $10 million (2012-2016) to the International Extractive Industries Technical Advisory Facility (EITAF) to assist developing countries gain negotiation skills and expertise in implementing policy and regulatory frameworks to manage mining, oil and natural gas industries responsibly and transparently.

On October 14, 2012, Prime Minister Harper announced $20 million over four years in new support for the Extractive Industries Transparency Initiative (EITI) and Extractive Industries Technical Advisory Facility (EITAF). The support, which was announced on the margins of the 14th Summit of La Francophonie in Kinshasa, Democratic Republic of Congo, will help

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developing countries manage their natural resource industries in a responsible and transparent manner. The announcement supports the theme of this year’s Francophonie Summit – Environmental and Economic issues in Global Governance.

Canada’s contribution is being provided through the Canadian International Development Agency (CIDA).

Country Planning and Analysis Fund - Success

This project allows the Canadian International Development Agency (CIDA) to have a more effective and sustainable CIDA Program in Ethiopia by making resources available for continuous analysis, assessment, knowledge development, policy dialogue and coordination efforts in support of Canada's development objectives in Ethiopia. Key activities in this project consist of conducting or supporting specialized analysis and program-related research, capturing and disseminating lessons learned on best practices in CIDA programming in Ethiopia, and undertaking or engaging in a variety of knowledge-related events designed to deepen the understanding of development realities in Ethiopia.

Agriculture Finance and Insurance System in Haiti - Success

This project aims to increase food security by improving the productivity of Haiti's agriculture sector. It supports an agricultural credit financing and insurance system that encourages commercial and co-operative banks to lend to viable agricultural enterprises and help farmers manage risk and uncertainty. It also helps the and Haitian financial institutions build the legislative and regulatory framework needed for the Agriculture Credit Bureau to manage a system of credit and insurance services for small and medium agricultural producers.

The project is implemented by a consortium led by Développement international Desjardins that includes the Financière agricole du Québec (Développement international) and the Inter-American Institute for Cooperation on Agriculture.

Vietnam Skills for Employment Project - Success

The project aims to support Vietnamese efforts to improve their technical and vocational education and training (TVET) system through two closely linked project components: establishing two high-level training centres for leaders of TVET institutions, and improving the quality of TVET delivery through partnerships between provincial authorities and community colleges in three focus provinces.

Promoting Effective Partnerships for Local Development – Colombia - Success

The Andean Regional Initiative aims to provide access to resources and capacity, building for regional and local governments and communities to identify, plan, and manage development projects that address the social and environmental dimensions of the

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extractive sector and create sustainable economic development, while producing empowered communities, improved public service delivery and the sustained economic well-being of communities. It also aims to provide an opportunity to promote partnership arrangements between extractive sector companies and other stakeholders aimed at socio- economic development and support to governance.

3. Why do you think these particular projects have failed or succeeded?

A key priority of CIDA in its international efforts is to ensure that all projects are effective and sustainable. In order to do this, projects must be closely monitored and backed by a great deal of research. As mentioned, policy analysts and researchers are frequently performing these tasks both within Canadian borders and abroad. While this process has been largely successful throughout CIDA`s history, there have been instances where development programs have not reached their intended targets. In these cases, disappointing outcomes have often been the result of extenuating circumstances where the dynamics of a developing country were not fully understood. For this reason, CIDA will continue with its ambitious agenda to maximize the effectiveness of Canada`s foreign aid.

4. Do you think Canada should be spending more money on international aid?

While Canada upholds our compassionate reputation, it is also important to ensure that tax dollars are making a real difference in the lives of the people they are intended to help. That being said, our government aims to maximize the effectiveness and efficiency of Canada`s international aid programs rather than simply channelling more money into them. In recognizing the grave necessity of assistance in many developing countries, our government believes that improving aid productivity with a results-based approach is the best way to achieve prosperity in Canada and abroad.

5. Do we put strings on our international aid? Such as when Canadians sent electoral observation mission to the Ukraine, do you think that was a condition of international aid from Canada?

In 2008, the Honourable Beverley J. Oda, Minister of International Cooperation announced the Government's plan to fully untie Canada's development assistance by 2012-13. In doing so, the government is fulfilling its promise for effectiveness and greater efficiency in its international assistance. This significant step means that those who need our help will get the most value from Canada's contributions. The reason for this is that tied aid is not cost effective and is inefficient. It undermines the ability of developing nations to produce or buy goods for themselves and delays the assistance from reaching the people who so desperately need it.

With regards to your question about Canadian electoral observation in the Ukraine, we believe Canada should continue to be committed to advocating for freedom, democracy, human rights and rule of law for everyone in the international community. In the Ukraine, the

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recent elections have shown that the country`s democratic process has several concerning ambiguities. In response to these undemocratic practices, Canada has sent a total of 500 election observers to the Ukraine, one of the largest deployment of observers that Canada has ever sent to monitor elections overseas. While some may consider these actions to be conditions on international aid, our government strongly believes in promoting democracy abroad. Furthermore, we remain committed to untying all foreign aid by sometime this year.

6. How does CIDA choose its ten countries to give aid to?

As part of its Aid Effectiveness Agenda, the Government of Canada announced in 2009 that it will be focusing 80 percent of bilateral resources in 20 countries of focus. These countries were chosen based on their real needs, their capacity to benefit from aid, and their alignment with Canadian foreign policy priorities. The goal is to make Canada's international assistance more focused, more effective and more accountable.

7. How much money is allocated for aid out of the Canadian budget? Is there a percentage?

The Government of Canada will take steps to improve the effectiveness of Canada’s aid by strengthening its focus, improving efficiency and increasing accountability. In this regard, the Canadian International Development Agency will restructure its operations to reduce its operational costs and concentrate its efforts where it can have the greatest impact. The Agency and other portfolio organizations will adjust their programming in keeping with the ability of partners and regional institutions to implement programs, thus ensuring that Canada achieves sustainable results and improves the effectiveness of its aid.

The following table displays the amount of money (in millions) provided to various Canadian agencies from 2012 and into the future.

2012–13 2013–14 2014–15 Ongoing

International Assistance Envelope (IAE) 180.7 242.1 377.6 377.6

Canadian International Development Agency 152.7 191.6 319.2 319.2

Foreign Affairs and International Trade Canada (IAE only) 15.5 28.8 29.1 29.1

International Development Research Centre 6.2 15.3 23.0 23.0

Royal Canadian Mounted Police (IAE only) 1.3 1.3 1.3 1.3

Natural Resources Canada (IAE only) 5.0 5.0 5.0 5.0

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Note: Totals may not add due to rounding.

8. How much is Canadian aid influenced by other nations, countries, governments?

Canada is a member of the United Nations (UN) which inevitably has a certain influence over Canada`s foreign policy agenda on aid and development. Furthermore, collaboration with other governments is essential to assuring that developing nations are enjoying the highest degree of sustainable development. That being said, CIDA is an independent Canadian body that is financed through the Canadian government and the ultimate decisions are made within CIDA while paying attention to the pressures and influences that can come from other countries.

9. Does the UN lean on us to give aid and make donations? Is Canada paid up on its monetary dues to the UN?

Canada has been active at the United Nations since its foundation in 1945 and played a key role in drafting the UN Charter. Currently, Canada continues to uphold the UN by actively participating in the organization's activities and providing financial support. Canada is always providing pragmatic ideas and solutions to the table, from peacekeeping proposals in the 1950s, to creating the International Criminal Court and banning landmines in the 1990s. Some current goals with regards to the UN from Canada are to assist war-affected children, or to improve the UN’s management and rationalize the work of its agencies.

The UN continues to achieve a great deal in advancing Canadian policy positions. It is an indispensable global organization for an increasingly globalizing world. Through treaties, dialogue, negotiation, relationships and the capacity to implement decisions, the UN helps to preserve our sovereignty, protect our key interests and defend our values. Furthermore, it helps us to develop the mutual understanding we need to resolve our differences. It also helps us to forge compromises and agreements, and to combine our energies for the common good.

It is moreover there to help us cope with "problems without passports" - threats such as terrorism, environmental issues, contagious disease and chronic starvation, human rights, illiteracy and population displacement. The problems are the shared responsibility of the international community and cry out for solutions that, like the problems themselves, also cross frontiers.

10. Do you know where the concept of aid versus development came from?

Foreign aid is one of the various methods by which development can be achieved. However, it is not necessarily imperative to have. That being said, the debate of aid vs.

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development refers to questions of whether or not development should be approach by means other than foreign aid.

11. Do you know where our concept of international aid came from and when did we start?

Since the UN foundation in 1945, Canada has played an integral role in drafting the UN Charter. This was one of the first and most important developments for Canada and the rest of the world in regards to International aid and development. The UN was the first instance of a governing body that was created in order to provide assistance and deal with issues at an international level. Since then, Canada`s aid initiatives have been taken on by various government ministries and agencies. Today, CIDA is responsible for Canadian`s international development programs.

12. What is your perception of the Canadian public’s views on aid?

In terms of the Canadian public`s view on aid, I believe that a large majority of Canadians views coincide with those of CIDA and other agencies geared towards providing aid and assistance on a global scale. With regards to Canada`s specific foreign policies, I understand that some Canadian`s feel we could be doing better. However, with the Harper Government`s recent commitment to an ambitious agenda to maximize the effectiveness of Canada’s international aid, I am confident that these opinions will change. Furthermore, as we continue to create a difference around the world in terms of international development and aid, I believe that we will see an increase in support for such efforts to increase the well-being of individuals globally.

13. Is Canada like the US when we say we are giving x amount of dollars to Haiti?

Minister Fantino has made clear that Canada is reviewing its long-term engagement strategy with Haiti to maximize Canadian taxpayer dollars to improve the results achieved and better address the needs and priorities of the Haitian people. After the devastating earthquake, our government moved quickly to provide immediate disaster relief in Haiti and we are now supporting long-term rebuilding efforts. Canada has committed more than $1 billion to Haiti between April 2006 and March 2012. Canada remains concerned with the slow progress of development in Haiti due to its weak governing institutions and corruption. We continue to make some progress on areas of long term development that we have previously to and stand ready to offer our support for the people of Haiti in response to their emergency needs should further humanitarian crises arise.

14. Do you think that when young people go on M2W trips and other Canadians go on volentour trips, this benefits Canada? Do you think this benefits the countries these trips are in?

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I can most certainly agree with both aspects of benefit. As Canadians travel and learn about other countries possible discouraging situations, these individuals are able to see things in a different light in comparison to the mainly western lens that we as Canadians tend to view the world through. As we are subject to different points of view (which are largely increased when traveling) individuals can begin to change their particular paradigm and view the world through a new lens that will help them to see aspects of various situations that they would not have seen before. Traveling provides education through observation and first hand experiences which is a huge benefit not only to individuals, but Canada as a whole; thus allowing for unique perspectives to be taken into account regarding foreign interests.

15. Are there things that are better done by NGOs than governments? (i.e; World vision, polio plus, free the children, me to we, Rotary, Smile Foundation)

NGO`s are much more centrally focused than bodies such as CIDA. To expand upon this point, usually NGO`s such as Green Peace, for example, are much more focused around one underlying central theme such as the Environment. Green Peace would not pick a battle against human rights problems that are taking place. However, they would pick a fight against sewage being dumped into our bodies of water or some other type of environmentally focused issue. A body such a CIDA is much more generally focused opposed to having one specific interest. As an example, CIDA may show interest in providing food aid to a country but at the same time be interested in helping to develop a school or hospital in another area.

16. Does the Canadian government focus on particular projects?

As part of its Aid Effectiveness Agenda, the Government of Canada announced in 2009 that it will be focusing 80 percent of bilateral resources in 20 countries of focus. These countries were chosen based on their real needs, their capacity to benefit from aid, and their alignment with Canadian foreign policy priorities. The goal is to make Canada's international assistance more focused, more effective and more accountable.

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APPENDIX I – B: Aileen Carroll (via phone)

1. What is Canada’s current aid philosophy and how has it developed?

- CIDA minister is aligning himself with Canada’s extraction industries

- great convergence to hook up some parts of CIDA and their focus on trade

- none of the projects will be considered ODA

- nothing whatsoever with development

- has to do with the wants of the companies

- government is very closed and doesn’t make their workings transparent for public preview

- big changes were to reduce the # of countries that Canada was giving aid

- too many countries and to little aid

- bigger impact on the selected countries

- down from over 100 countries to 26

- large reduction

- reduce the areas we were giving aid

- pull back

- choose the biggest impact

- education, health, governance, private sector

- create an area of recipients in the areas in which we did aid

2. What type of projects have been most successful and which ones have failed?

- considered the lead donor country in gender equality

- lends to every project

- other donor countries asked for assistance

- has kept document produced on everything produced

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- wanted international department to come together

- IPS (international policy)

- education initiative with Britain

- provided the books and the education

- Haiti (utterly complex)

- challenges, work, , only country where American’s look to us

- we speak French they don’t

3. Why do you think these particular projects have failed or succeeded?

4. Do you think Canada should be spending more money on international aid?

- Yes

- ODA (real aid)

- no asides

- women’s health issues

- whole battle on HIV/AIDS

- proudest that Canada took on the battle

- WHO

- Steven Lewis

- microbiside

- CIDA’s finest hour

5. Do we put strings on our international aid? Such as when Canadians sent electoral observation mission to the Ukraine, do you think that was a condition of international aid from Canada?

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6. How does CIDA choose its ten countries to give aid to?

- use the numbers to the 26

- reduced further but stayed with the 26

- not sure

7. How much money is allocated for aid out of the Canadian budget? Is there a percentage?

8. How much is Canadian aid influenced by other nations, countries, governments?

- our working with likeminded donors

- WB

- UN

- current gov’t not a fan of UN

- wouldn’t stop funding

9. Does the UN lean on us to give aid and make donations? Is Canada paid up on its monetary dues to the UN?

10. Do you know where the concept of aid versus development came from?

11. Do you know where our concept of international aid came from and when did we start?

12. What is your perception of the Canadian public’s views on aid?

13. Is Canada like the US when we say we are giving x amount of dollars to Haiti?

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14. Do you think that when young people go on M2W trips and other Canadians go on voluntour trips, this benefits Canada? Do you think this will benefit the countries these trips take part in?

15. Are there things that are better done by NGOs than governments? - World vision, polio plus, free the children, me to we, Rotary, smile foundation

16. Does the Canadian government focus on particular projects?

- too many sectors

- too many countries

- basic education

Why we still need CIDA and foreign aid

- CIDA became to bureaucratic

- development happens on the ground

- lost sight of this

- too large and too cumbersome

- made a comment about how hard it is that the projects almost ground to a halt

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APPENDIX I – C : Bob Black (via email, includes PDF)

I am back in Barrie now. I'm not sure specifically what you are looking for. I am attaching a booklet on 10 principles of development that my sister wrote and that is used in orienting any volunteers working with Devxchnage. AID should be avoided except for emergency relief as it creates dependence. She gives examples of how AID actually crippled the efforts of development.

If there are specific questions or issues I can try to help, however I am not an academic just observation and experience. We do, however have a volunteer who loves research assignments. So if there is anything specific - let me know.

Thanks,

Bob

Original message From: "Alexandria Asselbergs" To: [email protected]; Dated: 15/03/2013 11:43:39 AM Subject: RE:

Thank you very much.

Would it be possible to connect next week?

Alexandria Asselbergs

Subject: Re: From: [email protected] Date: Thu, 14 Mar 2013 15:10:10 -0400 To: [email protected]

Hi I am currently travelling. Will be back Monday

Sent from my iPhone

On 2013-03-14, at 1:53 PM, Alexandria Asselbergs wrote:

Dear Mr. Black,

My name is Alexandria Asselbergs and I was forwarded your email by Ms. Carol Forde in the hopes that you may be able to asist me with a research project I am doing for school.

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I am in the Global Perspectives program with Mr. Dave Morrison and I am doing research on the topic of aid versus development in other countries. My focus is to determine which of the two may be a better approach to foreign countries and what Canada's role and policies are in both areas of aid and development. I would greatly appreciate any assistance that you may be able to offer.

Thank you for your time and consideration

Sincerely,

Alexandria Asselbergs