April 30, 2012

UNCTAD – A forgotten institution to some, with a key role for many (Part Two)

Yet just four years later, in Doha, another attempt has been made by the Northern members to retrench the organization—this time led by a Northern coalition styled JUSSCANZ (Japan, US, Switzerland, Canada, Australia, and New Zealand). Switzerland and the U.S. have led the pack. The group advocates “forestalling duplication of efforts among international actors in order to achieve the most efficient employment and use of scarce resources; and enhancing UNCTAD’s work by concentrating on its comparative advantages, particularly its expertise and know-how.” This is language aimed at getting UNCTAD out of the business of undertaking analytical work, for example, on the financial crisis or on issues such as alternative macroeconomic policies to recover from the crisis—subjects on which the Bretton Woods institutions are said to have a “comparative advantage”—even though the latter now admit the advice they provided to encourage further financial liberalization right up to the outbreak of the crisis is was deeply flawed.
In long, protracted and mostly closed-door negotiations the developing country bloc at UNCTAD (the Group of 77 and China) reportedly came to the defence of UNCTAD. The final outcome document, designated “the Doha Mandate”, gives guidelines for the organization’s activities for the next four years. It reaffirms work priorities agreed in Accra in 2008 at the UNCTAD XII conference, including UNCTAD’s traditional research activities in matters of trade and related development issues of concern to poor nations. It also contains the following critical passage: “…several challenges have to be met to realize development-centred globalization. In this regard, finance should support the real economy in support of sustained, inclusive and equitable economic growth and sustainable development. All countries, developed and developing alike, can pay serious political, economic and social costs from financial shocks.” In other words, UNCTAD can continue to undertake analytical work and provide policy advice in the area of global finance.
While the negotiations were going on, this writer had the pleasure and privilege of attending a number of panels and speaking as a panellist at a few. These included sessions on: Trade and Poverty Reduction—the Missing Links; Debt Crisis Prevention and Management; The World Turned Upside Down—the Rise of the South; Free Trade Agreements—Necessary but not Sufficient, Lessons from the Arab Region; New Perspectives on Industrial Policies of the South; Dynamic Developing Economies and Least Developed Countries—Integrating the South; and a panel on Development Banks. All the discussions at these sessions, including interventions from the floor, were of high quality and offered much to learn. There were reportedly other sessions that I did not attend, including a “High Level Event on Women in Development”, which were less satisfactory.
UNCTAD’s mandate has thus been reaffirmed, much to the relief of most of its developing country members. What the organization could use is additional support from its developed country members. In Canada’s case, the official position taken by Canada’s representatives in support of the JUSSCANZ coalition at UNCTAD XIII warrants public explanation and discussion. The media in Canada are silent about this organization, unlike in Europe, where the recent debate was widely reported in the press. However, academics and CSOs in Canada make extensive use of UNCTAD’s research and policy analysis, which is generally viewed to be extremely useful. Canada’s policy should recognize the value and importance of UNCTAD as a key contributor to more sustainable and equitable globalization policies.

This blog was written by Roy Culpeper, a Senior Fellow at the University of Ottawa’s School of International Development and Global Studies and Adjunct Professor at Carleton University. Prior to this, Mr. Culpeper was the President-CEO of The North-South Institute from 1995 until 2010.

April 27, 2012

UNCTAD – A forgotten institution to some, with a key role for many (Part One)

United Nations Conference on Trade and Development (UNCTAD XIII) was held in Doha, Qatar, against the backdrop of a struggle between the North and the South over the mandate and future of the organization.

UNCTAD has, since its creation in 1964, been a flashpoint of debate between North and South over the management of the global economy. In its first decade, under the leadership of Raul Prebisch, its first Secretary-General, it was at the forefront of the demand for a New International Economic Order(NIEO) —in which the rules for international trade, investment flows and aid would be designed to support, rather than undermine, developing countries’ efforts to grow, diversify their production, prosper and reduce poverty.

Nowadays the NIEO is seldom mentioned. And at the time it was viewed, at best, apprehensively, by many Northern authorities. But there were some in the North – including leaders such as Willy Brandt in Germany and Canada’s Pierre Trudeau – who embraced a “North-South dialogue” that would improve global understanding and accommodation. Many civil society organizations also actively supported the goal of an international trade, investment and aid system that would be much fairer for developing countries, many of them still newly independent.

The NIEO debate continued into the 1970s, when two major oil price shocks occurred thanks to embargoes imposed by oil-producing countries. These actions, which went far beyond talk, provoked the eventual counter-attack on UNCTAD by Prime Minister Margaret Thatcher and Ronald Reagan and others. By 1982 the North-South dialogue was dead. Financial liberalization and cross-border capital flows were being heavily promoted in its place. Then the first major debt crisis erupted in Mexico, and the era of the Washington Consensus dawned. The shoe was now definitely on the Northern foot.

Despite this, UNCTAD thrived as an organization, holding its quadrennial conferences to address the key development issues of the day. These conferences, along with the UNCTAD secretariat’s ongoing work on trade, development, and increasingly on technology, debt and finance issues, elicited growing support and appreciation from developing countries. UNCTAD has always echoed the concerns of developing countries and their desire for a policy space to promote their development goals. This was in stark contrast to the relationship developing countries had with the Bretton Woods Institutions (BWIs) - typically laden with policy conditionalities that undermined their own efforts at development and poverty reduction. While UNCTAD provided analysis and scope for dialogue on vital development issues of interest to developing countries, the World Bank and IMF talked about policy commitments, with little dialogue and even less negotiation. But with this one-sided talk came financing (and hence Bank and Fund influence) for countries with urgent needs – something that UNCTAD has neither had nor sought.

The upshot of the differences in both the mandates and lending capabilities between the BWIs and UNCTAD resulted in two sets of organizations sometimes offering parallel sets of policy advice. In particular, UNCTAD became increasingly critical of liberalization and deregulation policies and warned of the possible dire consequences, while the BWIs actively promoted such policies. Most of the time this caused annoyance in Northern capitals that a UN organization had the temerity to question the wisdom of the World Bank, International Monetary Fund, or – during the days of world trade negotiations – the GATT and eventually the World Trade Organization (WTO). (While the trade organizations didn’t dispense funding, they did offer the possibility of greater developing country access to Northern markets, and hence greater export earnings.) But since the BWIs and the GATT/WTO ultimately had decisive influence over developing country policies, UNCTAD’s dissonant voice could safely be ignored.

There have been occasions in the last two decades when the Northern members of the UN became sufficiently incensed that they sought to constrain UNCTAD’s activities or even—as in the early 1990s—to shut it down. That episode, after the fall of the Berlin Wall, provided scope for those who believed the “end of history” had arrived. In their view the world must now coalesce around the policies espoused by the victors in the Cold War—which in effect meant the industrial powers of the North, who were also the majority shareholders in the BWIs. Happily, on that occasion the developing countries rallied to UNCTAD’s defence.

The last conference held in Accra in 2008 (UNCTAD XII), as a global financial crisis was looming , affirmed an active role for UNCTAD in analysis and advice for developing countries.

Pre-financial crisis, UNCTAD’s membership had reaffirmed the institution as an agency with a purpose. Would a post global financial meltdown reaffirm their resolve?

This blog was written by Roy Culpeper, a Senior Fellow at the University of Ottawa’s School of International Development and Global Studies and Adjunct Professor at Carleton University. Prior to this, Mr. Culpeper was the President-CEO of The North-South Institute from 1995 until 2010.

April 16, 2012

Sixième Sommet des Amériques : quel rôle pour le Canada en Amérique latine ?

Article publié dans le journal EMBASSY le 11 avril 2011.

En 2007, le premier ministre Stephen Harper a ciblé l’Amérique latine comme une priorité en matière de politique étrangère. Il a nommé un ministre d’État pour les Amériques, puis entrepris une visite hautement médiatisée dans la région.

Or, le bilan indique qu’à ce jour, les actions du Canada ont visé presque exclusivement le commerce, et ce, au détriment d’un réel engagement à l’égard d’enjeux aussi importants que le développement, la sécurité, la responsabilité des entreprises, la gouvernance démocratique et les droits de la personne.

L’approche étroite du Canada risque de ne pas être  bien reçue lors du prochain Sommet des Amériques, qui aura lieu cette fin de semaine en Colombie. En effet, elle va à l’encontre de la philosophie d’un nombre croissant de gouvernements – des pays comme le Brésil, l’Argentine, l’Uruguay, l’Équateur, le Pérou, le Paraguay et la Bolivie – qui veulent répondre aux besoins de coopération et d’intégration hémisphérique à l’aide d’approches nouvelles et locales. La présence du premier ministre Harper au Sommet, auquel 34 chefs d’État sont invités, lui donne une occasion d’annoncer que le Canada est prêt à rectifier le tir.

Durant les mois qui ont précédé le Sommet, le gouvernement a consulté des douzaines d’organisations de la société civile canadienne. Ces groupes comptent des années d’expérience en Amérique latine, et ont tissé des liens à l’échelle des Amériques avec des milliers d’organisations axées sur les femmes, le travail, les droits de la personne, les agriculteurs, la religion et les autochtones. D’ailleurs, la société civile a livré au gouvernement canadien diverses recommandations dans le but d’améliorer la stratégie pour les Amériques.

À quoi ressemblerait une stratégie renouvelée pour les Amériques? Celle‑ci s’appuierait sur quatre éléments clés : le conditionnement des accords de libre-échange (ALE) au respect des normes internationales en matière de droits de la personne; la promotion active de la gouvernance démocratique; l’importance primordiale accordée à la responsabilité des entreprises; et finalement, la recherche de solutions autres que la militarisation aux problèmes de drogue et de criminalité.

Tout d’abord, le Canada s’abstiendrait de conclure des ALE avec des pays ayant un bilan négatif en matière de droits de la personne. Les ALE ont tendance à faire augmenter les types d’investissements les plus susceptibles d’engendrer la violence et les déplacements forcés; l’or, le pétrole et les plantations destinées à la production de biocarburants en sont de bons exemples. L’an dernier, le Canada a signé un ALE avec la Colombie, malgré la présence généralisée de groupes paramilitaires qui chassent par la force les gens de leurs terres pour que soient menés à bien des projets lucratifs. La Colombie est le pays plus dangereux au monde pour les dirigeants syndicaux, ce qui a un fort impact sur la capacité des travailleurs de maintenir ou d’améliorer leurs conditions de travail.

Quant à la promotion de la gouvernance démocratique, elle s’est jusqu’ici faite très discrète, même si elle figurait en 2007 parmi les trois piliers de la stratégie pour les Amériques. Prenons l’exemple du Honduras : depuis le coup d’État de juin 2009, ce sont des centaines d’opposants au régime qui ont subi de l’intimidation, fait l’objet d’arrestations arbitraires, disparu, été torturés ou tués. Plutôt que de condamner ces violations et de travailler à une amélioration notable de la situation, le Canada a fait comme si de rien n’était en signant un ALE avec le Honduras et en endossant de façon univoque sa Commission vérité pourtant fort critiquée.

Notons également que cette nouvelle stratégie pour les Amériques accorderait une plus grande importance à la responsabilité des entreprises canadiennes établies en Amérique latine. Dans cette région, les sociétés minières d’ici détiennent plus de 50 % du marché de l’exploration minérale. En tant que chef de file dans ce marché, le Canada doit aussi prendre l’initiative pour résoudre les problèmes sociaux et environnementaux que cause si souvent l’industrie extractive. D’ailleurs, la société civile recommande depuis longtemps que la responsabilité des entreprises soit encadrée par la règlementation et les lois canadiennes. Le projet de loi C-300, rejeté de justesse par le Parlement en 2010, aurait permis de faire un pas significatif dans cette direction.

Enfin, une nouvelle stratégie pour les Amériques permettrait d’analyser les causes profondes des problèmes de drogue et de criminalité dans les Amériques, en plus de reconnaître que les approches militaires nuisent souvent à la sécurité publique. Depuis 2006, année de déclaration de la guerre contre la drogue au Mexique, on note une hausse sans précédent du crime et de la violence au pays : plus de 47 000 personnes y ont connu une mort violente au cours des cinq dernières années. Chaque jour, des citoyens innocents sont pris entre deux feux, sans compter que la guerre contre la drogue devient souvent une excuse pour profiter de l’impunité et accroître la violence envers les femmes.

Le Sommet des Amériques donne une excellente occasion au Canada d’annoncer un engagement plus vaste et plus authentique envers l’hémisphère, et par le fait même, de retrouver son statut de champion international des droits de la personne. Saura-t-il  la saisir?


Beatriz Gonzalez, coprésidente du Groupe d’orientation politique pour les Amériques et chargée de projets dans le programme des Amériques d’Oxfam Canada

Rachel Warden, coprésidente du Groupe d’orientation politique pour les Amériques et coordonnatrice du programme Partenariats en Amérique latine de KAIROS

Julia Sanchez, présidente‑directrice générale du Conseil canadien pour la coopération internationale (CCCI)

Canada's regional Americas strategy at a crossroads

(First published in Embassy Magazine, April 11, 2012)

In 2007, Prime Minister Stephen Harper designated Latin America as a foreign policy priority. He appointed a minister of state for the Americas and embarked on a high-profile visit to the region.
The record of action to date has been narrowly focused on trade, at the expense of deep engagement on such important issues as development, security, corporate accountability, democratic governance, and human rights.

Canada's narrow approach probably won't be well received at the upcoming Summit of the Americas, which is to take place in Colombia on April 14 and 15. It flies in the face of a tide of governments hungry for new, homegrown approaches to hemispheric co-operation and integration including Brazil, Argentina, Uruguay, Ecuador, Peru, Paraguay, and Bolivia. Mr. Harper's trip to the summit, to which 34 heads of state are invited, is an opportunity for him to signal that Canada is willing to modify its approach.

In the months leading up to the summit, the government consulted with dozens of Canadian civil society organizations. These groups have years of experience in Latin America and, collectively, are connected to thousands of women's, labour, human rights, peasant, church, and indigenous organizations across the continent. Civil society has provided the Canadian government with an array of recommendations to improve the Americas strategy going forward.

Towards a new approach

What would a reinvigorated Americas strategy look like? It would focus on four key elements. Free trade agreements would be premised on compliance with international human rights standards. Democratic governance would be actively promoted. Corporate accountability would be a top priority. Militarization would not be seen as the solution to drug and criminality problems.

First, Canada would refrain from concluding free trade agreements with countries that have poor human rights records. Free trade deals tend to increase the kinds of investment that are most associated with violence and forced displacement, such as gold, oil, and plantations for biofuel.
Last year, Canada concluded a free trade agreement with Colombia despite the widespread presence of paramilitary groups that use violence to displace people from their lands for lucrative projects. Colombia is the most dangerous country in the world for union leaders, stifling workers' ability to maintain or improve their working conditions.

Second, although it was one of the three pillars of the 2007 Americas strategy, the promotion of democratic governance has been largely absent. In Honduras, for example, since a coup d'état in June 2009, hundreds of regime opponents have been intimidated, arbitrarily arrested, disappeared, tortured, and killed. Instead of condemning these violations and pushing for a verifiable improvement, Canada has adopted a business-as-usual approach, signing a trade deal with Honduras and unequivocally endorsing its highly criticized truth commission.

Third, a revamped Americas strategy would put more emphasis on corporate accountability for Canadian companies operating in Latin America. Canadian mining companies hold over 50 per cent of the mineral exploration market in Latin America. As a market leader, Canada must also become a leader in addressing the social and environmental ills that so often characterize the extractive sector. Civil society has long promoted the pursuit of corporate accountability through Canadian regulation and law. Bill C-300, which was narrowly defeated in Parliament in 2010, would have been a useful step in this direction.

Finally, a revitalized Americas strategy would analyze the root causes of drug and criminality problems in the Americas and recognize that militaristic approaches are often detrimental to public security. Since the war on drugs in Mexico was declared in 2006, there has been an unprecedented rise in crime and violence in the country, with over 47,000 people violently killed in the past five years. Innocent citizens are caught in the crossfire every day, and the drug war is often used as an excuse for impunity and increasing violence against women.

The Summit of the Americas is an important opportunity for Canada to signal a broader, more genuine commitment to the hemisphere and to restore its status as a global champion for human rights. Can it rise to the occasion?

Beatriz Gonzalez is the co-chair of the Americas Policy Group, a Canadian civil society policy group focused on the region, and Americas program development officer at Oxfam Canada.

Rachel Warden is the co-chair of the Americas Policy Group and the Latin America partnerships co-ordinator at KAIROS.

Julia Sánchez is the president and CEO of the Canadian Council for International Co-operation.

April 2, 2012

The morning after the night before - what future for Canadian aid?

The news of last week’s budget cuts are still sinking in. And it feels like the hangover is going to last a while.

On the one hand, it is good to finally have some clarity on what the landscape for Canadian aid – or at least the numbers – will look like over the next three to four years.

On the other hand, if you look a little closer, the landscape seems vaguely reminiscent of Vimy Ridge - field upon field pocked by massive craters where explosions have torn apart grasslands and forests.

The image may seem overly dramatic, but in the coming weeks and months, as the details of the budget roll out, the cuts are going to take shape, and the impacts on programs and priorities are going to make the numbers in this budget feel much more real.

Perhaps what is most alarming is the fact that, whereas the Liberal and then the Conservative governments both invested in rebuilding Canadian aid a decade ago after earlier spending slashes to tackle Canada’s previous deficit, there is no ambition now by the Conservatives to sustain this progress.  Canadian aid is set to decline or stagnate for the foreseeable future – the International Assistance Envelope, and with it the aid budget, will flatline again beyond 2015, but at $4,622, not the $5 billion set in 2010.

To add further doom to an already gloomy picture, Canada is following in the footsteps of some other bilateral donors, who are using aid to promote their country’s national economic interests. Last fall CIDA was putting the finishing touches on its Corporate Social Responsibility Framework for the Extractive Sector. And this fall (or sooner), on the heels of its Sustainable Economic Growth Strategy, it is set to launch its Private Sector strategy, with early indications suggesting that it may be favouring Canada’s – not partner countries’ – private sector development. 

CIDA Minister, Beverley Oda, said as much in an interview with Postmedia News in January, 2012, when asked how she separates Canada's trade and foreign policy interests from Canadian development goals. Minister Oda replied, "I really don't separate them.”

Equally telling is where issues related to aid now fall in the budget  – under a section focused on “Expanding Trade and Opening New Markets for Canadian Businesses”.

So what is the news from this section in the Budget on aid? How are things going to shake down for CIDA and for Canada’s official development assistance?
  • Over the next three years, between FY 2011/12 and FY2014/15, the International Assistance Envelope (IAE) will decline by 7.6%.
  • Between this current fiscal year (2011/2012) and FY2015/16 when the time period to reach the Millennium Development Goals will have elapsed, Canada will have reduced Canadian official development assistance (ODA) by close to $1.2 billion. This is on top of the 2010 cut of $4.4 billion to future aid that the Conservative government implemented by abandoning the annual 8% increases to aid in Budget 2010. These annual increases would have put the IAE in 2015/16 at about $7.6 billion instead of the $4.9 billion this budget now projects for that year.
  • Between the current fiscal year and next year alone, Canada’s ODA will plummet by almost 600 million, assuming no additional supplementary estimates in 2012/13. This is equivalent to CIDA pulling all of its funding for education programs ($250 million), for the Global Fund to fight HIV AIDS, Tuberculosis and Malaria ($180 million), for water and sanitation ($70 million), for the World Food Programme ($70 million) and more – although this is not necessarily where the cuts will be made.
  • Relative to FY2010/11 ($3.59 billion), for which we have the most accurate statistical information, we can say that the cut to CIDA’s own ODA disbursements in the coming year will be about 4.3%. We don’t yet know where the exact cuts will be, but given the magnitude of the cuts, it will likely have to be both to transfer flows and operational budget.
  • Perhaps more astonishingly,  Canada’s aid relative to its Gross National Income (GNI) will tumble ten points between 2010 and 2015, from 0.34% to 0.24%, assuming no supplementary estimates and GNI growth remains consistent with current levels.  Again, if aid had grown by 8% from 2010/11 to 2015/16, Canada’s performance ratio would have been 0.37% instead of an expected 0.24%.  The last time the ODA ratio performance for Canada was as low as 0.23% was in 2003/04, just as the Liberal government launched its 8% increases. This drop in ODA is set to put Canada among the lowest ODA performers (although it may also be that other donors will cut their budgets by 2015/16). Last week, both the Dutch and Spanish governments also made historic cuts to their aid budgets.

Decline in ODA over the next five years
Note that figures are in millions of dollars
FY 2010/11 and 2011/12 include supplementary estimates. Subsequent years do not.
Beyond the broad cuts, it is also interesting to note how the key Departments responsible for implementing Canadian aid are going to get hit.
  • Finance Canada (which provided $384 million to the World Bank in 2010-11) is the only significant government department that seems to be completely untouched by the cuts in the IAE. It will see no decline in its ODA transfer budget.
  • CIDA will get disproportionately hit (relative to its share of the IAE – see table below), largely compensating for no comparable decline in Finance’s budget (relative to its share of the IAE).
  • The cuts to IDRC and DFAIT are in proportion to their share of the IAE.
Percentage share of the IAE (FY 2009/2010)
Departmental cut as a percentage of the total cuts (FY2012/13)
Total dollar cuts per Department (for FY2012/13 to 14/15)
Canadian International Development Agency
$663.5 million
Department of Foreign Affairs and International Trade
$73.4 million
Finance Canada
International Development Research Centre
$44.5 million

We will have to wait another few weeks until CIDA’s Part III Report on Plans and Priorities (Estimates) are released in early April make the details of the cuts more evident.
It is only at that point that the dust will settle on the landscape, and we will better see the size of the craters and just where this budget has hit hardest.
This blog post was written by Fraser Reilly-King, Policy Analyst (Aid and International Co-operation), Canadian Council for International Co-operation, and Brian Tomlinson, Executive Director, Aid Watch Canada.
The views expressed in this blog are those of the authors and do not necessarily reflect the positions of CCIC nor its members.