Giving with one hand, taking with the other

by George Roter and Parker Mitchell
National Post, October 16, 2008

Before this week's election, without much fanfare or announcement, the Conservative government created $200-million out of nothing. They did it with a promise -- to untie all of our foreign aid by 2012.

This simple action will benefit countless communities in Africa.

Mr. Banda, a water engineer with a Malawian non-governmental organization with whom we at Engineers Without Borders work, doesn't know it, but he and the communities he works with could be among those benefitting.

A few weeks ago, he was pacing his office, fuming. "Two out of five years -- gone!" he said in despair. "We'll never get this done".

He was talking about his work trying to help the people of Malawi get clean water. Roughly one out of three people there drinks unsafe water. Two years ago, his organization received a grant to help 500 communities -- 25,000 people -- to drill wells and gain access to safe water.

By now, 10,000 people should have benefited. But to date, not a single well has been drilled.

The problem? To drill a well, one needs a drilling rig. It's pretty easy to find one; many countries have companies that manufacture them. However, the grant Mr. Banda received stipulated that the drilling rig had to be bought from the country that gave the grant. He wanted to buy a cheap model from Thailand which would have been available immediately; instead, he's still waiting for a much more expensive one to arrive. He wants to do more, but because of tied aid, his hands are tied.

What's worse? When the drill does arrive, he'll be trying to catch up on two years of missed work. Things will be rushed, corners will be cut and the sustainability of the project will be compromised. For the sake of 10 or 20,000 dollars, a million or two is being spent ineffectively.

Unfortunately, this isn't an isolated example. At Engineers Without Borders we've worked on dozens of donor projects across Africa. At least three out of four have suffered setbacks in their projects because their aid was tied.

We give with one hand, and take with the other. Here is a dollar, we say, but you have to spend it on our wheat, our consultants, our school books. You might be able to buy these in your own country, but if our aid is tied, they'll have to be shipped half way around the world to get to you. In fact, the OECD calculates that aid can be made 15-30% more effective by untying it.

Untying aid is one of the "nobrainers" that compassionate countries can do.

It might be a shock to discover that rather than leading the pack in this area, Canada is at the back -- almost last. According to the latest statistics, 40% of our bilateral aid was tied to buying goods and services from Canada. That's $800-million that is being spent ineffectively.

At Engineers Without Borders, we've been advocating and collecting signatures and staging events supporting the untying of aid for four years now -- but still progress was glacial, as politicians worried about the consequences from the small minority of companies that are benefitting from the tied aid.

But now that has changed. To their credit, the Conservatives began tackling this problem earlier this year by untying our food aid, allowing countries in crisis to have the flexibility to buy food wherever it is least expensive.

And more recently, they promised that by 2012 all of Canada's bilateral aid would be untied. With a roughly 25% increase in effectiveness of $800-million, that's the equivalent of $200-million extra in aid, every year. For nothing more than the stroke of a pen.

We Canadians might not be reading headlines about this, but we should be. It is our money that is now being spent more effectively, helping poor people as they seek to build better lives. And when aid is provided without strings, the countries that receive it appreciate the generosity -- rather than the hypocrisy of tied aid. We Canadians can hold our heads higher.

This is an important step toward making Canada a leader with the effectiveness of our aid program. However, as we all know, promises can be broken; so now that they have been re-elected, we'd like to see the Conservatives immediately flesh out the details of this one, starting with a publicly stated goal of no new tied aid contracts by 2009, and also plans to ensure that local African organizations -- usually the lowest cost providers -- will be able in practice, and not just in theory, to deliver the best programs.

In the twenty-first century, Canada needs to be a leading global citizen.

-George Roter and Parker Mitchell are Co-CEOs of Engineers Without Borders Canada.