Milestone Success: Tied Aid Dropped

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The Canadian government has just announced that it will completely untie aid. This is a tremendous milestone. Without increasing development spending a cent, Canada has added roughly $90-180 million to our aid spending, simply by eliminating the inefficiencies of tied aid.

In January 2008, hundreds of EWB members blitzed the Montreal Metro asking citizens to demand a STOP to tied aid. 3000 signed a petition to the federal government, and symbolically broke the string that ties Canada's official development aid to Canadian sources.

A year ago, a Malawian friend remarked to me, “where do you think this truck came from?” We were driving past field after field of golden, mature maize together in the new Toyota truck that had been purchased for his project. I was fortunate to have arrived in Malawi right before an excellent harvest and spirits were high. I’d discovered that asking anyone in Malawi about the quality of the maize harvest was like asking Canadians what sport Wayne Gretzky played. Everyone knew.

My friend’s a highly educated Malawian who’s devoted much of his life to changing his country. He’d grown up in a village and believed strongly that if his projects were going to have an impact, he needed to listen to rural farmers to understand their most current challenges and opportunities. He made good use of that truck that allowed him to get to farmers.

I didn’t know where the truck came from, so he helped me out. “Northern Europe!” he told me.

I was disappointed. I knew that South Africa – only a 1000 km drive away - manufactures vehicles and so it could have been purchased there instead of the 15,000 km by sea to northern Europe. I consoled myself with the thought that maybe they needed a high-quality, reliable Toyota which probably wasn’t made in Southern Africa.

Students at the University of Alberta chapter of EWB met with Edmonton MP Rahim Jaffer in 2006, along with hundreds of postcards signed by his constituents, asking him to untie aid. Dozens of MPs across the country were engaged about the importance of untying aid.

As we rolled up to our destination, and I could clearly see men and women in the fields, breaking large cobs of maize off the stocks, a question came to mind. I asked, “where was the truck manufactured?” A sad smile came to my friend’s face.

“South Africa” he responded.

I was incredulous. This truck was sent 15,000 km from South Africa to Northern Europe, probably purchased by that European government in a dealership, and sent right back again, 15,000 km more. This was nothing short of a complete waste. Here my friend was, surrounded by opportunities to help farmers ensure that they bring in a great harvest every year, and valuable money was instead being spent on shipping.

This is Tied Aid

Some donor governments require project funds to be spent on goods and services from their own country, and Canada has been a major culprit, tying one third of its aid up to now, and over 1 billion of its aid dollars.

This story really brought the issue to light for me. Intellectually, I’d disagreed with tied aid when I campaigned against it for years back in Canada. I remember walking into a meeting room with my MP, Rahim Jaffer, in Edmonton, in 2006. He was surprised to be met with a table stacked with hundreds of postcards signed by his constituents, asking him to untie aid.

But my reaction to my friend’s story about tied aid was a little less intellectual. I was ashamed. I thought, “Canada wastes money like this!?”

With the recent announcement, I no longer have to be ashamed about tied aid, and I have a lot of EWB members to thank for that. EWB members have been working to stop tied aid for over four years. Here are some highlights:

The second annual 'EWB Day' sent hundreds of volunteers out to talk to Canadians about tied aid. In a single day,we reached over 100,000 Canadians and encouraged them to contact their MPs about untying aid.

» We made sure our government knew about tied aid, and when there was an opportunity, we didn’t waste time. When Eileen Carroll became the Minister of International Cooperation in 2004, we immediately invited her to speak at our conference. This was her first speech as Minister, and the first question she got from the crowd of EWB members was “Why hasn’t Canada untied its aid?”

» All throughout 2005 and 2006 EWB chapters across the country promoted untying aid to thousands of Canadians and to MPs through EWB’s “Play Your Part”campaign.

» Between 2005 and 2007, George Roter and Parker Mitchell, co-CEOs of EWB met with Paul Martin when he was Prime Minister of Canada, Robert Greenhill when he was President of the Canadian International Development Agency (CIDA), and, from the current government, Finance Minister Jim Flaherty and Minister of International Cooperation Bev Oda. Every time we confronted them with that question: “Why hasn’t Canada untied it’s aid?”

At EWB’s sixth annual conference, untying aid played a key role in a massive outreach event on the streets of Calgary.

» In Montreal, in January 2008, hundreds of EWB volunteers talked to people on the streets of Montreal about tied aid. Over 3,000 people signed a stop sign saying “Stop Tied Aid” and these were sent directly to every Member of Parliament across Canada. One month later, Canada’s food aid was untied!

And now we come to September 2008. The government announced that by 2012-2013 it will untie, not just food aid, but all aid. This will allow aid recipients to purchase goods and services (such as the construction of infrastructure) from where they want and at the cheapest prices. Experts with the Organization for Economic Cooperation and Development (OECD) have estimated that tied aid is approximately 15-30% less efficient than untied aid.

This important move will make Canadian aid dollars go further.

Thank you to all our volunteers and donors for your help to make this change.

~ Danny Howard, Director of Outreach and Advocacy