International Development Future Directions Vancouver North Shore CESO Club May 17, 2016

Recent Trends Progress Achieved/Work that Remains Canada’s Place Among Donors Possible Future for Canada’s Development Assistance Program

RECENT TRENDS Changes in level and distribution of economic activity mobility of companies and jobs freer flow of trade developing & emerging countries accounting for increasing share of global economic activity increasing number of “developing countries” are becoming donors as well as recipients

Changing composition and importance of Financial Flows ODA from DAC countries rose to $ 137 bn in 2014 but ODA now accounts for only 24% of net financial flows from DAC countries direct private sector investment alone reached $ 190 bn in 2014 remittances reached $ 440 bn in 2014 traditional sources and types of aid are expected to become of relatively minor importance to the 130 emerging middle income countries in the years ahead (Kharas and MacArther, 2015)

Changing composition and importance of Financial Flows (cont..) companies, foundations, South-South cooperation and governments themselves … will likely play increasingly important roles (AidData) many development agencies and partners are moving away from direct service delivery and focusing on policies and institutional collaborations greater focus on reforming laws, policies, institutions, and regulations

PROGRESS ACHIEVED/WORK THAT REMAINS Millennium Development Goals (2015 end date) Glass half full extreme poverty ($1.25/day) dropped from 47% in 1990 to 14% in 2015; from 1.9 bn to 836 mn people out-of-school children of primary school age dropped from 100 mn in 2000 to 57 mn in 2015 under 5 mortality rates declined from 90 to 43 deaths per 1000 live births between 1990 and mn people living with HIV were receiving antiretroviral therapy in 2014 versus 800,000 in 2003

Glass half empty 836 mn people still live in extreme poverty water scarcity affects 40% of people in the world, and is expected to get worse maternal mortality is 14 times higher in developing than in developed regions global emissions of carbon dioxide increased by more than 50% since million hectares of forest were lost in 2010 over 880 million people are estimated to live in slum-like conditions in developing region cities

Sustainable Development Goals (post MDGs) agreed to in September 2015, adopted by 193 countries, runs to goals and 169 targets; goals are largely aspirational, e.g. end poverty in all its forms, everywhere; end hunger, achieve food security; promote…full and productive employment and decent work for all different from MDGs in that they apply to all countries that signed the agreement, and targets are more tailored to context of each country

CANADA’S PLACE AMONG DONORS Canadian influence with donors and developing countries has probably declined in recent years ODA/GNI ratio has declined from.50% in 1988 to.24% in 2014 (16 th out of 24 DAC countries) below the DAC average of.3% analysis by NYU and Mississippi State U, using 2012 data, placed Canada in middle of major DAC donors; ahead of Australia, Germany, Japan and USA, but trailing France, New Zealand, Norway, Sweden and UK separate study showed Canada lagging significantly behind most donors in terms of perceived influence

Concerns expressed in 2012 DAC Peer Review: drop in ODA expenditures need for clear, simple and consistent vision need to improve policy coherence, streamline systems and increase predictability of aid need to avoid confusion between development priorities and commercial interests POSSIBLE FUTURE FOR CANADA’S INTERNATIONAL DEVELOPMENT PROGRAM

Possible Directions for Canada’s International Development Program (contd) Likely to be driven by: foreign policy interests and responses to major events decision to compete for UN Security Council seat in 2020 or 2021 desire to keep administrative costs down priority placed on development assistance by Canadian public evolving needs and interests of developing countries

Clues to Possible Future Directions Mandate Letter for Minister of International Development Goal: lead Canada’s efforts to provide humanitarian assistance to help reduce poverty and inequality Priorities: - refocus development assistance on helping the poorest and most vulnerable, and supporting fragile states - consult Canadian stakeholders and international aid organizations to create a new policy and funding framework to guide Canada’s aid decisions

Mandate Letter (cont) - support implementation of the SDGs - ensure Canada’s focus on Maternal, Newborn and Child Health is driven by evidence and outcomes and not ideology - make Canada a leader in development innovation and effectiveness including examining current and new aid delivery mechanisms and partnerships - Provide assistance to countries vulnerable to the effects of climate change

Clues to Possible Future Directions (cont.) 2016 Federal Budget Commitment to refocusing international assistance on the poorest and most vulnerable, with priorities focused on poverty reduction over the next year, review Canada’s international assistance policy framework, which includes consultation with Canadians and international aid organizations this will inform the 2017 Budget and take into account the Government’s international priorities and domestic considerations

Allocations Highlighted in 2016 Federal Budget IAE envelope will hover around $ 5 bn in each of the next two years $ 2.65 bn by 2020 to address climate change in developing countries more than $ 1.6 bn over three years for security, stabilization, humanitarian and development assistance to Iraq, Syria, Jordan, and Lebanon

Allocations Highlighted in 2016 Federal Budget $ 678 million over 6 years to respond to the Syrian refugee crisis and aid in resettlement of 25,000 Syrian refugees over the next three years $ bn of unallocated money will go toward renewal of peace and security programs: - $ 450 mn for the Global Peace and Security Fund - $ mn for International Police Peacekeeping and Police Operations program; - $ 30 mn for the Counter-Terrorism Capacity Building Program – Sahel Envelope

Should we be optimistic? commitment to open consultations, a review of the aid policy framework and a renewed focus on poverty reduction are all positive very difficult to know, based on the 2016 Budget, how much funding will actually go to poverty reduction and to low income countries we may see a renewed commitment to funding Canadian civil society organizations on a longer term basis

What might we see in the future (contd.) likely a preference for funding humanitarian assistance, multilateral organizations and global funds in medium term, possible return to higher levels of funding for civil society organizations and perhaps for smaller Canadian CSOs as well return to more open consultation, greater responsiveness to public’s interests and priorities return to large bilateral assistance programs unlikely more nuanced approach to private sector involvement

Sources of Information Global Affairs Canada OECD/DAC The McLeod Group AidData