Canada is a wealthy nation in a world of increasing inequality.

Future Directions

Ending or at least reducing global inequality and creating a more peaceful and equitable world challenges the power and privileges of the rich. If the poor countries found in Africa, the Americas, Asia, and the former Soviet bloc, are to become more equal with wealthy countries of the global north, like Canada, this means that richer countries must be prepared to reduce some of their dominance in the world (that is, wealth and power). Are the wealthy countries ready to commit to alleviating global inequality and if so, what actions need to happen to make that commitment real?

Deciding on what Canada's contribution should be is not about finding the correct technical solution - our decisions and actions should reflect Canadians' beliefs, values and assumptions. In the final section of the discussion guide, four value-based approaches are presented as a starting point for your discussions on what actions you think that Canada should take in lessening global inequality. Accompanying a brief overview for each approach are some arguments in favour and against each, which reflect different viewpoints in society on the approach.

These approaches are not exhaustive, definitive or mutually exclusive. They are meant to stimulate your thinking about the most important steps to take, the choices you are prepared to commit to and why. You are not being asked to pick one approach. Rather, we invite you to use these approaches as a starting point for considering other options or combinations of approaches.

Approach One

Increase aid and cancel debt. 

The first approach would cancel the debt load of global south and increase the quantity and quality of aid. Canada would increase its Official Development Assistance (ODA) to the global south, committing to a firm timetable to reach the 0.7% target. The ODA we provide would not be made conditional on also advancing our economic and corporate interests. The aid we provide would not be one dimensional - it would come in different forms, including: direct cash donations to the governments of countries in the global south; financing the work of community-based groups; supporting micro credit loans to poor entrepreneurs; providing overseas technical and technological expertise (people); and funding Canadian development projects and programs within countries in the global south.

Canada would also pass the Better Aid Bill (C293) that promises to greatly improve the quality of aid to poor countries by freeing aid from political motivations.

Canada would also work to wipe out all the bilateral debt owed to us by countries of the global south. We would pressure institutions like the World Bank and the International Monetary Fund to cancel multilateral debt (loans made from multiple sources to countries in the global south channeled through larger institutions).

Arguments in favour

√  Development aid is needed to fill the huge gaps in basic health care, education and social services. These services are absolutely essential to the creation of conditions needed for the growth of democracy and healthy communities.

√  Aid for the global south not only benefits poor populations, but also simultaneously works towards sustaining the global market economy, worldwide prosperity and security that will benefit Canadians in the long run.

√  Countries in the global north must accept responsibility for their legacy of colonization and exploitation in the global south, which did much to create our current global inequality. Canada should lead by example (for instance, by increasing aid and canceling debt) and apply diplomatic pressure on former colonial powers to take responsibility for their past actions.

Arguments against

× Too much aid money is misused and abused by unstable and corrupt politicians, governments and business people. Also because of poor coordination among different donors in the delivery and use of aid, too much money leaks away before it ever reaches those who need it. Other tools may be more effective in addressing global inequity, e.g. trade and investment.

× It is not practical or sensible to think that we can separate aid from national and corporate self-interest. Untied and unconditional aid is impractical. We should be looking for win-win approaches that provide needed aid and advance our trade and investment interests.

× Aid is a blunt instrument that continues to foster a relationship of dependency between countries of the global south and northern countries instead of empowering them to stand on their own. It is a patronizing form of international development.

Questions

1.     Are Canadians willing to increase the Overseas Development Assistance budget? Does it mean increased taxes or reduce spending in other priority areas like health, defense, education or research?

2.    Is the issue about providing more money or just spending the money we use now more wisely? Can we reduce the money we spend in Canada in administering our aid budget and ensure more goes overseas?

3.    Can we target our aid specifically to eradicating poverty rather than using our aid to advance more political ends?

4.    Do developed countries like Canada have a responsibility to make reparations for things done in the past - like the colonization of Africa and the Americas? And should these reparations be made by channeling them money?

Approach Two

Emphasize trade not aid.

Canada would take steps to encourage countries in the global south to change their protectionist policies and help them integrate more completely in the global economic market. This offers better prospects for reducing poverty, as Asian countries, like China and India have demonstrated. By increasing their international trade many Asian countries have experienced unprecedented economic growth, which has led to significant poverty reduction. Increased trade will go a long way to solving the problems of poverty and inequality. The opportunities that come with increased trade and open markets, and the resulting increases in productivity would enable the global south to solve its own problems. 

Canada would open up its markets to countries in the global south, giving them opportunities to sell their products. We would lower our protectionist barriers - especially our tariffs on agricultural imports. Canada would push hard at the World Trade Organization for fairer trade agreements for poor countries. Our commitment to fair trade would be evident in our bilateral trade agreements with countries in the global south. We would also provide supports like technological and export assistance to businesses in the south and we would work with the governments and business sector to promote safe and fair labour standards and skills training. Canada would continue to provide generous humanitarian aid as required to help developing countries deal with catastrophes.

Arguments in favour

√  Focusing on helping countries in the global south integrate into the global market by increasing their international trade rather than simply donating aid, treats countries in the global south as equals rather than victims.

√  Trade and market-based approaches work: (‘a rising tide raises all boats') - as capitalist growth increases, global inequality will diminish. With fair access to international markets, people in the global south will have more opportunities to find markets for their goods.

√  Integrating the global south into international trade gives them access to foreign technology, science and research that will increase their productivity and competitiveness. This offers better prospects for wealth creation that can lead to a better standard of living for all.

Arguments against

×  International free trade is extremely competitive. The structure of the global market is stacked against the global south because so much capital is held by a relatively small number of transnational corporations that are situated within the global north. A wholesale opening of markets in countries in the global south will devastate domestic business as they will be unable to compete against transnational corporations.

×  Free trade may benefit the rich and the powerful, and even the middle-class within countries in the global south, but the very poor run the risk of being left even further behind. Trade alone is unlikely to solve problems of inequality between and within countries.

×  Capitalism is based on exponential growth, and an integrated international market has accelerated this growth. This is problematic. We need sustainable practices that take into account costs to local, national, regional and the global ecosystems not more of the same.

Questions

1.    If other developing countries develop as quickly as China will our environment be able to sustain the global level of industrialization and international trade? On the other hand, do the rich Northern countries have any right to dictate how poor countries develop their economies?

2.    By focusing on trade instead of aid, are we avoiding our responsibility to poor countries?

3.    During their development stages, many of the world's rich countries used protectionist policies to develop domestic business and increase wealth. Why should the global south not have this protection as well? On the other hand does today's globalization make protectionist policies a thing of the past?

Approach Three

Rebuild fragile states and promote democracy.

The World Bank's Global Monitoring Report 2007 warns that to reach the MDGs by 2015 more international effort must be directed towards stabilizing the ‘fragile states'. This approach would prioritize support for these fragile states, which have "weak governance, institutions, and capacity"  . This approach suggests that it makes most sense to start with those countries in greatest need - those in conflict zones, post-conflict zones, or suffering from natural disasters. If these countries are ignored, they may become the biggest obstacle to achieving the MDGs. These states account for "27 % of the extreme poor, and nearly one-third of all child deaths".

Under this approach Canada would commit to rebuilding these countries, by focusing on creating more stability and security, enhancing democratic development and good governance. This would mean more investment in the work of CIDA's Office for Democratic Governance (promoting "freedom and democracy, human rights, the rule of law and open and accountable public institutions in developing countries").  Under this approach, these fragile states (like Afghanistan and Haiti) would receive the largest amount of Canadian aid.

Arguments in favour

√  When people feel their lives are at risk, it is difficult to make development gains. This approach puts the emphasis on creating a stable and secure environment, which is a prerequisite for reconstruction and development.

√  Neither aid nor trade alone is going to reduce poverty in an unstable country. By making good governance a priority, Canada can make a real contribution towards a reducing global inequality, meeting the MDGs, and creating a more stable world.

√  Rebuilding countries and promoting democracies ensures that the development process includes the most marginalized and vulnerable sectors of the population

Arguments against

×  Direct intervention in fragile states is controversial and the motivations behind the intervention are often suspect. Poor countries should be allowed to build their own institutions and government systems on their own timetable. We have no business imposing our value system on them.

×  Open-ended interventions by Canada in fragile states can lead to deployment of troops or police forces. We are not well equipped to undertake such interventions, that may be needed for years.

×  Poor countries and fragile states need to focus on economic development, increasing productivity and trade. Democracy will evolve once conditions of life have improved and people have time and energy to deal with more than survival.

Questions

1.    Canada's involvement in fragile states like Afghanistan and Haiti is controversial.  Do we really know what we are getting into and that our efforts are going to make a difference? Are we clear about what our purposes and motivations for intervention?

2.    In extremely fragile states fraught with violence and/or humanitarian disasters, what ways, other than direct intervention, can we help them to stabilize and rebuild?

3.    By trying to forcefully establish democracies in fragile states, are we imposing our Western standards on a different culture?

Approach Four

Focus on support for community-based groups.

This approach would focus on connecting the local with the global (walking the talk around "think global, act local").  With less emphasis on the national level, this approach would promote grass roots, bottom-up strategies as a way of reducing poverty and inequality. Success is much more likely to result when projects are led by leaders who are part of the communities being targeted for help. Canada would empower community-based groups - enabling them to lead the way in international development by providing support and helping them to build alliances with other groups across cultures and countries.

Key actions for this approach would include expanding programs like CIDA's 2003 pilot project - the Indigenous People's Partnership Program. This program is designed to create beneficial partnerships between indigenous peoples in Latin American countries and Aboriginal people in Canada. Its focus is on poverty reduction among Latin American indigenous people and an increased international role for Canadian Aboriginal people. The requirement that the Latin American partner group must be "community or stakeholder driven and/or have the strong support of its community"  is one that would be replicated in other aid programs. So far the program has had great success due to the many community based groups who have formed cross-country partnerships with each other. Other actions would include financial and technical support for community-based groups (e.g., sporting clubs, agricultural and production cooperatives, women's groups).

Arguments in favour

√  This approach to development doesn't patronize nor condescend but rather empowers. Instead of treating the poor as victims or undermining their culture, this approach recognizes the central role of local communities in designing their own development.

√  Community members understand the needs of the community far better than foreign organizations. They are best equipped and well positioned to reach the poorest of the poor and to organize themselves to advocate for changes within their countries.

√  Bottom-up, locally based development strategies promise to be sustainable and effective ways of reducing inequality. They don't need to wait for international agreements, which are cumbersome and slow. They put their energy into local action that delivers tangible results in people's lives.

Arguments against

×  Each local community group has specific values and interests and sets its own priorities, which can be quite different. Without a policy framework and coordination at the national level, these groups would be pursuing their own individual activities. It would be much more difficult to build alliances in order to address global inequality.

×  Focusing on the local can be limiting. It is difficult for community groups to combine a focus on improving local conditions and playing a role at the national and international levels. It is asking them to spread limited resources too thinly and runs the risk of failing at both tasks. It would also be difficult for Canada to monitor and determine progress and results when funding community based groups from a distance.

×  It is unrealistic and naïve to expect local community based groups to have the expertise, training and resources to engage in such complex work independently. Tackling global inequality requires a concerted and coordinated strategy that must collaborate with national governments and international institutions.

Questions

1.    How can we balance giving control to community-based groups to set their own priorities with the need to be accountable to Canadian taxpayers?

2.    Is it realistic to think that local community based groups have the capacity, even with support, to engage in policy advocacy?

3.    How can development aid make the most difference at the local level? Are we prepared to accept that there will be mistakes made and that some projects will fail? How would we define acceptable success and failure rates?

4.    Community-based organizations can get caught up in political struggles whose outcomes are not predictable. For those organizations we fund, what parameters for political involvement at the local level may need to be in place?

Conclusion

So now, it's your turn.  What do you think? As we have noted above, the information and the approaches outlined in this discussion guide offer a starting place for your discussions. They are intended to stimulate questions, help you consider options and develop your own views on how to best position Canada in addressing global inequality in the current context.

This issue, like any foreign policy issue, is complex.  The conditions within the international arena are always changing and it is often difficult to navigate the best course for Canada.  We can decide not to do anything and get swept up in the current or we can set sail in a direction that we have mapped out and defined.

Are you proud of Canada's role in the world related to global inequality? Concerned? Join the conversation in our discussion forums.