UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

CIDA and the aid-trade linkage MacKay, Edward Grant 1987

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Item Metadata

Download

Media
831-UBC_1987_A8 M32_7.pdf [ 7.05MB ]
Metadata
JSON: 831-1.0097246.json
JSON-LD: 831-1.0097246-ld.json
RDF/XML (Pretty): 831-1.0097246-rdf.xml
RDF/JSON: 831-1.0097246-rdf.json
Turtle: 831-1.0097246-turtle.txt
N-Triples: 831-1.0097246-rdf-ntriples.txt
Original Record: 831-1.0097246-source.json
Full Text
831-1.0097246-fulltext.txt
Citation
831-1.0097246.ris

Full Text

C I D A AND THE A I D - T R A D E L I N K A G E by EDWARD GRANT MACKAY B . A . , Q u e e n ' s U n i v e r s i t y , 1985 T H E S I S SUBMITTED I N P A R T I A L F U L F I L L M E N T THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n THE F A C U L T Y OF GRADUATE S T U D I E S D e p a r t m e n t o f P o l i t i c a l S c i e n c e We a c c e p t t h i s t h e s i s a s c o n f o r m i n g t o t h e r e q u i r e d s t a n d a r d THE U N I V E R S I T Y OF B R I T I S H COLUMBIA F e b r u a r y 1987 © E d w a r d G r a n t M a c k a y / 1987 I n p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l l m e n t o f t h e r e q u i r e m e n t s f o r a n a d v a n c e d d e g r e e a t t h e U n i v e r s i t y o f B r i t i s h C o l u m b i a , I a g r e e t h a t t h e L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e a n d s t u d y . I f u r t h e r a g r e e t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r p o s e s may be g r a n t e d by t h e H e a d o f my D e p a r t m e n t o r by h i s o r h e r r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . D e p a r t m e n t o f P o l i t i c a l S c i e n c e The U n i v e r s i t y o f B r i t i s h C o l u m b i a 2075 W e s b r o o k M a l l V a n c o u v e r , C a n a d a V6T 1Z4 Date: February 22, 1987 A b s t r a c t The C a n a d i a n f o r e i g n a i d p r o g r a m i n c r e a s i n g l y h a s b e e n l i n k e d t o t r a d e a n d o t h e r c o m m e r c i a l o b j e c t i v e s - How a n d why h a s t h i s h a p p e n e d ? Has t h i s b e e n a s u c c e s s f u l l i n k a g e ? What a r e t h e i m p l i c a t i o n s f o r C a n a d a a n d i t s f o r e i g n a i d p r o g r a m o f t h i s p u r s u i t o f t h e a i d - t r a d e l i n k a g e ? T h i s t h e s i s a t t e m p t s t o a n s w e r t h e s e q u e s t i o n s by e x p l o r i n g t h e o r i g i n s a n d e v o l u t i o n o f C a n a d a ' s a i d p r o g r a m , t h e p o l i t i c a l a n d b u r e a u c r a t i c s t a t u s o f C a n a d a ' s a i d a g e n c y , t h e C a n a d i a n I n t e r n a t i o n a l D e v e l o p m e n t A g e n c y ( C I D A ) , a n d t h e v a r i o u s p o l i c i e s a n d p o l i c y i n s t r u m e n t s e m p l o y e d i n t h i s r e c e n t o r i e n t a t i o n o f a i d . I t i s h e r e a r g u e d t h a t i n t h e p r a g m a t i c o r i g i n s o f C a n a d a ' s a i d e f f o r t s , b e g i n n i n g w i t h t h e C o l o m b o P l a n o f t h e 1 9 5 0 s , l a y t h e s e e d s f o r t o d a y ' s a i d - t r a d e p o l i c y l i n k a g e . T h e s e o r i g i n s e n a b l e d t h e i n t e r e s t s and o b j e c t i v e s o f o t h e r f e d e r a l g o v e r n m e n t d e p a r t m e n t s t o i n t r u d e o n a n d o f t e n s u p e r s e d e d e v e l o p m e n t a l c o n s i d e r a t i o n s i n C a n a d i a n d e v e l o p m e n t a s s i s t a n c e . A s a r e s u l t , t h e c r e a t i o n o f a s t r o n g c e n t r a l a i d a g e n c y h a s c o n s i s t e n t l y b e e n i m p e d e d , a n d t h e n e e d s o f T h i r d W o r l d n a t i o n s c o n s i s t e n t l y o v e r s h a d o w e d b y d o m e s t i c c o n c e r n s . E x a c e r b a t i n g t h i s s i t u a t i o n was t h e f i s c a l r e s t r a i n t a n d d o m e s t i c r e c e s s i o n o f t h e l a t e 1 9 7 0 s a n d e a r l y 1 9 8 0 s . The p r e s s u r e s s t e m m i n g f r o m t h e s e t w i n p r o b l e m s g a v e t h e f i n a l i m p e t u s f o r t h e i n c r e a s i n g i n t e g r a t i o n o f a i d a n d c o m m e r c e . W h i l e i t i s q u e s t i o n a b l e w h e t h e r l i n k i n g a i d w i t h commerce s e r v e s C a n a d a ' s p o l i t i c a l a n d e c o n o m i c i n t e r e s t s , i n e i t h e r t h e s h o r t t e r m o r t h e l o n g t e r m , t h e f e d e r a l g o v e r n m e n t seems i n t e n t o n c o n t i n u i n g t h i s p o l i c y t r e n d . I n d e e d , t h e a i d - t r a d e l i n k a g e s u p e r f i c i a l l y r e s o l v e s a number o f a d m i n i s t r a t i v e p r o b l e m s f o r C I D A , a n d e n t h u s i a s t i c a l l y i s p r o m o t e d a s a b r i g h t new o p p o r t u n i t y f o r C a n a d a a n d i t s d e v e l o p m e n t p a r t n e r s . C o n v e r s e l y , e f f o r t s t o r e v e r s e t h i s p o l i c y t r e n d f a c e many o b s t a c l e s i n t h e C a n a d i a n p o l i t y a n d s o c i e t y . I n t h e a b s e n c e o f d e c i s i v e p o l i t i c a l l e a d e r s h i p o n t h i s i s s u e , t h e n , a i d - t r a d e l i n k a g e i s l i k e l y t o c o n t i n u e . i v TABLE OF CONTENTS A b s t r a c t i i P r e f a c e 1 Chapter I 9 INTRODUCTION 9 Chapter I I A SELECTIVE HISTORY o f CANADIAN DEVELOPMENT ASSISTANCE 15 Chapter I I I A SURVEY o f COMMERCIALLY-ORIENTED POLICES 34 3.1 I n t r o d u c t i o n 34 3. 2 Food A i d 38 3.3 E x t e n s i o n o f A i d To Middle-Income LDCs 41 3.4 L i n e s Of C r e d i t : P a r a l l e l F i n a n c i n g And Mixed C r e d i t s 45 3.5 B i l a t e r a l - M u l t i l a t e r a l Debate 49 3.6 Aid-Trade Fund 52 3.7 I n d u s t r i a l C o o p e r a t i o n Program 55 3.8 The T y i n g Of A i d 60 3.9 C o n c l u s i o n s 68 Chapter IV EVALUATING THE AID AND COMMERCE CONNECTION 70 4.1 I n t r o d u c t i o n 70 4.2 I n Support Of The Aid-Trade C o n n e c t i o n 70 4.3 The Case A g a i n s t The Aid-Trade C o n n e c t i o n : U t i l i t y .... 75 4.4 The Case A g a i n s t The Ai d - T r a d e C o n n e c t i o n : P r o p r i e t y .. 87 4.5 C o n c l u s i o n s 93 Chapter V EXPLAINING THE "COMMERCIALIZATION" OF CANADIAN AID 95 5.1 I n t r o d u c t i o n 95 5.2 C r i t i c a l P e r s p e c t i v e s On The Aid-Trade C o n n e c t i o n 96 5.3 Towards An A l t e r n a t i v e E x p l a n a t i o n I l l 5.3.1 Why Has The Aid-Trade C o n n e c t i o n Become P o l i t i c a l l y C u r r e n t ? 112 5.3.2 Why I s CIDA So S u s c e p t i b l e To Domestic P r e s s u r e s ? 123 5.3.3 Why I s Canada's Response To The T h i r d World So T r a n s i t o r y ? 127 Chapter VI CONCLUSIONS 137 BIBLIOGRAPHY 146 1 PREFACE In a t h e s i s d e a l i n g with the l i n k i n g o f a i d and trade o b j e c t i v e s i n Canada's development a s s i s t a n c e program, the p r i n c i p a l concerns, n a t u r a l l y , are examining and e x p l a i n i n g the p o l i c i e s and p h i l o s o p h i e s which c o n s t i t u t e the a i d - t r a d e l i n k a g e . Accounting f o r the emergence of t h i s p o l i c y l i n k a g e , and even a s s e s s i n g i t s c o s t s and b e n e f i t s , may seem a p u r e l y t e c h n i c a l or o b j e c t i v e endeavour, but i t i s not. The e n t i r e e x e r c i s e invokes normative que s t i o n s and valu e s . C r i t i c i s m s are made, and p o l i c y p r e s c r i p t i o n s forwarded, on the b a s i s of s u b j e c t i v e judgments about what should be and what could be. A c c o r d i n g l y , i t i s necessary i n t h i s s e c t i o n to e l u c i d a t e the p r i n c i p a l values and b e l i e f s which guide the subsequent a n a l y s i s . F i r s t , i t i s important to d i s c u s s the meaning of the term "development". Development i s o f t e n equated with growth, e s p e c i a l l y per c a p i t a Gross N a t i o n a l Product (GNP) growth; i n d u s t r i a l i z a t i o n i s another synonym, as i s wealth. The p o s i t i o n taken here i s t h a t development need not mean any one t h i n g , or be based on any one model; the peoples and s o c i e t i e s of the world are f a r too v a r i e d to admit of j u s t one i n t e r p r e t a t i o n o f development. A s u f f i c i e n t l y broad d e f i n i t i o n might be as f a l l o w s : ... a process by which s o c i e t i e s change so tha t they are able to meet the b a s i c needs of t h e i r p o p u l a t i o n s , i n a way that i s s u s t a i n a b l e i n the long term and i s based 2 l a r g e l y o n i n d i g e n o u s r e s o u r c e s a n d v a l u e s . 1 F u r t h e r : T h e r e i s no u n i f o r m a p p r o a c h ; t h e r e a r e d i f f e r e n t and a p p r o p r i a t e a n s w e r s d e p e n d i n g o n h i s t o r y and c u l t u r a l h e r i t a g e , r e l i g i o u s t r a d i t i o n s , human and e c o n o m i c r e s o u r c e s , c l i m a t i c a n d g e o g r a p h i c t r a d i t i o n s , a n d p o l i t i c a l p a t t e r n s o f n a t i o n s . 2 I n s h o r t , t h e m e a n i n g o f d e v e l o p m e n t c a n n o t e a s i l y be p i n n e d d o w n . I t i s f o r t h i s v e r y r e a s o n t h a t f o r e i g n - a i d a g e n c i e s a n d r e c i p i e n t c o u n t r i e s h a v e h a d and w i l l c o n t i n u e t o h a v e s u c h d i f f i c u l t i e s i n a g r e e i n g o n a p p r o a c h e s t o d e v e l o p m e n t , i n s e t t i n g a t t a i n a b l e t a r g e t s , a n d i n r e a c h i n g t h o s e t a r g e t s . D e v e l o p m e n t i s a v e r y r i s k y p r o c e s s , b u t t h i s s h o u l d n o t i n a n y way d e t r a c t f r o m t h e u t i l i t y o f d e v e l o p m e n t c o o p e r a t i o n . I n d e e d , d e v e l o p m e n t i s f i r s t a n d f o r e m o s t a human p r o c e s s , a n d w i t h o u t maximum human i n p u t , a n t i c i p a t e d d e v e l o p m e n t q u i c k l y c a n become i n e v i t a b l e s t a g n a t i o n . B u t w h a t r o l e c a n d e v e l o p m e n t a s s i s t a n c e , o r f o r e i g n a i d , p l a y ? I t i s w o r t h n o t i n g t h a t many c r i t i c s , o n t h e l e f t a n d r i g h t a l i k e , c h a r g e f o r e i g n a i d w i t h i m p e d i n g d e v e l o p m e n t . On t h e l e f t , c r i t i c s c o n t e n d t h a t f o r e i g n a i d p e r p e t u a t e s d e p e n d e n c y a n d u n d e r d e v e l o p m e n t by s o l i d i f y i n g t h e p o s i t i o n o f o p p r e s s i v e e l i t e s , b y r e i n f o r c i n g e x p l o i t a t i v e , r e s o u r c e - b a s e d p a t t e r n s o f p r o d u c t i o n , a n d by i m p o s i n g a l i e n a n d i n a p p r o p r i a t e v a l u e s a n d t e c h n o l o g i e s o n t r a d i t i o n a l s o c i e t i e s a n d e c o n o m i e s . C r i t i c s o n 1 C a n a d i a n I n t e r n a t i o n a l D e v e l o p m e n t A g e n c y ( C I D A ) , A n n u a l  R e p o r t , 1 9 8 4 - 8 5 , p . 6 2 I n d e p e n d e n t C o m m i s s i o n on I n t e r n a t i o n a l D e v e l o p m e n t I s s u e s ( W i l l y B r a n d t , C h a i r m a n ) , N o r t h - S o u t h : A P r o g r a m m e f o r  S u r v i v a l , p . 24 3 the r i g h t , on the o ther hand, view development a s s i s t a n c e as e x c e s s i v e l y was te fu l and b u r e a u c r a t i c , s t i f l i n g n a t i o n a l i n i t i a t i v e and the free r e i n o f market f o r c e s . Thus , development a s s i s t a n c e i s o f t e n viewed as a b a s i c cause o f p o v e r t y and underdevelopment , r a t h e r than as a s o l u t i o n . T h i s t h e s i s r e f u t e s such a n a l y s e s . A d m i t t e d l y , f o r e i g n a i d can produce some of the aforementioned d i s t o r t i o n s , i f p o o r l y planned or a d m i n i s t e r e d . The c u r r e n t i n t e n t and p r a c t i s e o f development a s s i s t a n c e are c l e a r l y far from p e r f e c t . N e v e r t h e l e s s , ev idence from over t h i r t y - f i v e y e a r s o f such r e s o u r c e t r a n s f e r s suggests that f o r e i g n a i d can be a " s u p p o r t i n g and c a t a l y t i c element i n the complex o f f a c t o r s " which generate deve lopment .3 I t i s i l l u s o r y to draw s imple s t a t i s t i c a l r e l a t i o n s h i p s between a i d and economic growth, or even between a i d and the development o f one s ec tor o f one c o u n t r y . 4 R a t h e r , the r o l e o f f o r e i g n a i d v a r i e s from country to c o u n t r y , and over t ime , and must be seen as a supplement to o t h e r domes t i c and i n t e r n a t i o n a l r e s o u r c e s and p o l i c i e s . As one source puts i t , development a s s i s t a n c e can " . . . r e l i e v e some key c o n s t r a i n t s and , i n a p p r o p r i a t e combinat ions with a r e c i p i e n t c o u n t r y ' s r e s o u r c e s , a c c e l e r a t e and broaden i t s economic and s o c i a l p r o g r e s s .5 Development a s s i s t a n c e , t h e n , does have a c r i t i c a l r o l e to p l a y i n the development p r o c e s s , as d i f f i c u l t as i t i s to d e f i n e t h a t 3 O r g a n i z a t i o n for Economic C o o p e r a t i o n and Development (OECD), Twenty -F ive Years o f Development C o o p e r a t i o n : A Review, p. . 280 4 I b i d . , p. 201 5 I b i d . , p. 14 4 r o l e or that process. But, i t might now be asked, why should the i n d u s t r i a l i z e d c o u n t r i e s help developing c o u n t r i e s at a l l ? Should r i c h c o u n t r i e s be a i d i n g f u t u r e competitors? Should r e s o u r c e s be t r a n s f e r r e d to the T h i r d World when s e r i o u s problems remain unsolved at home? In s h o r t , what i s the b a s i s f o r the p r a c t i s e o f development a s s i s t a n c e , and more g e n e r a l l y f o r i n t e r n a t i o n a l economic cooperation? C o n s t r u c t i n g a case i n favour of c o n t i n u i n g f o r e i g n a i d i s almost as d i f f i c u l t as agreeing on the means and ends of development. The r i s k s are high; the c o s t s are q u i t e c o n c e n t r a t e d and appa r e n t l y l a r g e ; and the b e n e f i t s are o f t e n long term or i n t a n g i b l e . The f a i l u r e s of f o r e i g n a i d seem to be more p u b l i c i z e d than the successes. Nevertheless, a compelling case f o r development a s s i s t a n c e , and indeed f o r broader North-South c o o p e r a t i o n , can be fashioned on three p i l l a r s : moral, p o l i t i c a l , and economic. M o r a l l y , development a s s i s t a n c e i s demanded and j u s t i f i e d because of the absolute l e v e l s of poverty, d i s e a s e and i l l i t e r a c y p r e v a i l i n g i n many p a r t s of the developing world. In a world o f grea t abundance, such human s u f f e r i n g i s i n t o l e r a b l e . F u r t h e r , the huge r e l a t i v e d i s p a r i t i e s i n wealth, power and standards o f l i v i n g between the i n d u s t r i a l i z e d world and the developing world are u n j u s t i f i a b l e . In times past, such r e l a t i v e and ab s o l u t e d i s p a r i t i e s would go unnoticed and untouched; today, i n a world made i n c r e a s i n g l y s m a l l e r by technology, these gaps r e p r e s e n t human f a i l u r e on a massive s c a l e . P o l i t i c a l l y , programs of a s s i s t a n c e to the developing world 5 are conducive to the s h o r t and long term i n t e r e s t s of both the i n d u s t r i a l i z e d n a t i o n s and the i n t e r n a t i o n a l community as a whole. The a l l e v i a t i o n of poverty and disease removes one b a s i c cause of i n s t a b i l i t y and v i o l e n c e . Genuine North-South c o o p e r a t i o n helps maintain an a l l - i m p o r t a n t i n t e r n a t i o n a l d i a l o g u e , promoting p e a c e f u l r a t h e r than v i o l e n t s o l u t i o n s to seemingly i n t r a c t a b l e problems. And North - South c o o p e r a t i o n , i n c l u d i n g development a s s i s t a n c e , helps c r e a t e new i n t e r n a t i o n a l p o l i t i c a l and economic r e l a t i o n s h i p s , thus a c c e l e r a t i n g the pace of interdependence and l e s s e n i n g the s i g n i f i c a n c e of East-West c o n f 1 i c t . Economically, development a s s i s t a n c e can provide s h o r t and long term gains f o r both donor and r e c i p i e n t . Donors t y p i c a l l y r e c e i v e back a l a r g e p r o p o r t i o n of_ t h e i r own f o r e i g n a i d funds, through measures such as the t y i n g of a i d and l i n e s of c r e d i t . More importantly, f o r e i g n a i d can be a cornerstone of a more f r u i t f u l two-way economic r e l a t i o n s h i p between donor and r e c i p i e n t . F u r t h e r , the i n t e r n a t i o n a l community as a whole stands to g a i n from development a s s i s t a n c e . S e c u r i t y of supply of raw m a t e r i a l s , r e d u c t i o n of unemployment, e l i m i n a t i o n of trade b a r r i e r s : a l l are h i g h l y d e s i r e d o b j e c t i v e s which can be f a c i l i t a t e d by the economic s t a b i l i t y , s o c i a l p r o g r e s s , and i n t e r n a t i o n a l understanding engendered by development a s s i s t a n c e . As one source puts i t : "Whoever wants a bigger s l i c e of an i n t e r n a t i o n a l economic cake cannot s e r i o u s l y want i t to become 6 s m a l l e r . " 6 The forces o f economic in terdependence , t h u s , d i c t a t e the need for more i n t e r n a t i o n a l c o o p e r a t i o n , o f which development a s s i s t a n c e must be a v i t a l p a r t . In s h o r t , without downplaying the important c o n f l i c t s and d i v e r g e n t out looks which s t i l l s eparate North and South , the i n t e r e s t s of both l i e i n g r e a t e r i n t e r n a t i o n a l c o o p e r a t i o n . The case for development a s s i s t a n c e , then , i s based on a r e c o g n i t i o n o f "en l ightened and c o n s t r u c t i v e s e l f - i n t e r e s t " , or the a b i l i t y o f n a t i o n a l governments to move beyond a narrow and r e s t r i c t i v e i n t e r p r e t a t i o n of n a t i o n a l i n t e r e s t s . 7 I t s t i l l remains , however, to o u t l i n e the components o f an e f f e c t i v e f o r e i g n a i d program for Canada. For i t i s abundant ly c l e a r , from t h i s case study and o t h e r s , t h a t f o r e i g n a i d i s a l l too o f t e n employed for reasons o ther than promoting development , n o t w i t h s t a n d i n g i t s p o t e n t i a l . How might Canada a v o i d the p i t f a l l s and c o n t r i b u t e c r e a t i v e l y to T h i r d World p r o g r e s s through i t s development a s s i s t a n c e program? To b e g i n , Canada shou ld commit i t s e l f i n t e r n a t i o n a l l y to r e a c h i n g p r o g r e s s i v e l y an a i d t a r g e t o f , say , 0.7 per c e n t o f GNP. Of c o u r s e , many such commitments have been made b e f o r e , and then postponed. At the very l e a s t , f a i l u r e to meet such a commitment would b r i n g i n t e r n a t i o n a l c e n s u r e . One way to honour such a commitment would be to agree to a b u i l t - i n " a u t o m a t i c i t y " , whereby Canadian a i d funds would be c h a n n e l l e d a u t o m a t i c a l l y 6 Independent Commission on I n t e r n a t i o n a l Development I s s u e s . op. c i t . , p. 21 7 Commission on I n t e r n a t i o n a l Development ( L e s t e r B. P e a r s o n , Cha irman) , P a r t n e r s i n Development, p. 9 7 through an a p p r o p r i a t e i n t e r n a t i o n a l o r g a n i z a t i o n . As the Independent Commission on I n t e r n a t i o n a l Development Issues put i t : At present, the amount of a i d depends on the u n c e r t a i n p o l i t i c a l w i l l of the c o u n t r i e s g i v i n g i t , and i s s u b j e c t to the s h i f t i n g p r i o r i t i e s of annual a p p r o p r i a t i o n s , and the v a g a r i e s of l e g i s l a t u r e s ... Automatic forms would not evade or a v o i d the p o l i t i c a l process; but once there i s the i n i t i a l w i l l to s e t -up the i n t e r n a t i o n a l arrangements, annual r e i t e r a t i o n w i l l be unnecessary. There i s mutual i n t e r e s t i n making a i d continuous and p r e d i c t a b l e . 8 Another measure which should be taken i s a c o r p o r a t e and p o l i t i c a l s t r e n g t h e n i n g of Canada's p r i n c i p a l a i d agency, the Canadian I n t e r n a t i o n a l Development Agency (CIDA). This would be to ensure that i t spends Canada's a i d funds more e f f e c t i v e l y , and that i t can more o f t e n avoid succumbing to the demands of other f e d e r a l government departments, while e f f e c t i n g some r e c i p r o c a l i n f l u e n c e over t h e i r a c t i v i t i e s . What i s u r g e n t l y needed i s a s t r o n g e r CIDA capable of o p e r a t i n g on a very long term h o r i z o n ; the i n t e r n a t i o n a l " a u t o m a t i c i t y " would c o n t r i b u t e to t h i s . A s t r e n g t h e n i n g of CIDA would r e q u i r e not so much a "removal from p o l i t i c s " or f u l l autonomy as a f o r c e f u l r e - e n t r y i n t o p o l i t i c s . One p o s s i b l e way to e f f e c t t h i s would be to r e - d e s i g n a t e CIDA as a s e n i o r m i n i s t r y , l e d by an e n e r g e t i c and capable s e n i o r Cabinet m i n i s t e r . 8 Independent Commission on I n t e r n a t i o n a l Development Issues, op. c i t . , p. 244 8 F i n a l l y , C a n a d a ' s a i d e f f o r t w o u l d b e n e f i t f r o m a t h o r o u g h c l a r i f i c a t i o n a n d r e - o r d e r i n g o f o b j e c t i v e s a n d p r i o r i t i e s . The o b j e c t i v e o f f o s t e r i n g s u s t a i n a b l e d e v e l o p m e n t i n t h e T h i r d W o r l d mus t be r e - a f f i r m e d a s p a r a m o u n t , a n d r e n d e r e d o p e r a t i o n a l i n a l l f a c e t s o f C I D A a c t i v i t y . S p e c i f i c a l l y , t h e p r o m i n e n c e o f c o m m e r c i a l g o a l s i n C I D A p r o g r a m s m u s t be l e s s e n e d . A l l o f t h e a b o v e r e c o m m e n d a t i o n s w o u l d r e p r e s e n t f o r m i d a b l e c h a l l e n g e s t o a n y f e d e r a l g o v e r n m e n t . T h e y w o u l d r e q u i r e a l s o a t t e m p t s t o b u i l d a l a r g e r a n d more v o c a l d o m e s t i c c o n s t i t u e n c y f o r T h i r d W o r l d i n t e r e s t s . T h e y w o u l d l i k e l y h a v e t o be a c c o m p a n i e d b y a f a r g r e a t e r p u b l i c a w a r e n e s s o f W o r t h - S o u t h d i s p a r i t i e s a n d t h e f u n c t i o n s o f d e v e l o p m e n t a s s i s t a n c e . A b o v e a l l , h o w e v e r , t h e y w o u l d demand d e c i s i v e a n d f i r m p o l i t i c a l l e a d e r s h i p a n d c o u r a g e f r o m a g o v e r n m e n t w i l l i n g a n d a b l e t o a d o p t a l o n g t e r m p o s i t i o n o n C a n a d a ' s r e l a t i o n s w i t h t h e d e v e l o p i n g w o r l d , a n d a l s o w i l l i n g t o s u f f e r t h e p o l i t i c a l c o s t s f o r do i n g ( so . I n sum, t h e p r o p o s a l s made h e r e may seem u t o p i a n , a n d a r e c e r t a i n l y i d e a l i s t i c . R e a l i s t i c a l l y , i t may be n a i v e t o e x p e c t s u c h f u n d a m e n t a l c h a n g e s i n a t t i t u d e s a n d i n s t i t u t i o n s when t h e i m m e d i a t e i n c e n t i v e s t o c h a n g e a r e n o t g r e a t . N e v e r t h e l e s s , s u c h p r o p o s a l s a n d t h e o b j e c t i v e s t h e y embody do p e r f o r m a m o s t v i t a l f u n c t i o n : t o p r o v i d e a s t a n d a r d b y w h i c h t o j u d g e C a n a d i a n a i d p r a c t i s e a n d a s e t o f g o a l s t o w o r k t o w a r d . 9 I . INTRODUCTION F o r e i g n a i d o r d e v e l o p m e n t a s s i s t a n c e h a s b e e n d e s c r i b e d a s t h e " s o f t o p t i o n " i n t h e i n d u s t r i a l i z e d w o r l d ' s r e l a t i o n s w i t h t h e d e v e l o p i n g w o r l d . 9 C e r t a i n l y , w h i l e l a r g e i n t h e a g g r e g a t e . O f f i c i a l D e v e l o p m e n t A s s i s t a n c e ( O D A ) I O f r o m t h e " N o r t h " t o t h e " S o u t h " s t i l l c o n s t i t u t e s b u t a s m a l l f r a c t i o n o f t h e o v e r a l l r e s o u r c e n e e d s o f L e s s D e v e l o p e d C o u n t r i e s ( L D C s ) . l l F u r t h e r , p o s i t i v e a c t i o n b y i n d u s t r i a l i z e d n a t i o n s o n many " n o n - a i d " 9 R o g e r Y o u n g , C a n a d i a n F o r e i g n A i d P o l i c i e s : O b j e c t i v e s ,  I n f l u e n c e s a n d C o n s e q u e n c e s , p . 6 10 ODA h a s b e e n d e f i n e d a s : " . . . t h o s e f l o w s t o d e v e l o p i n g c o u n t r i e s a n d m u l t i l a t e r a l i n s t i t u t i o n s p r o v i d e d by o f f i c i a l a g e n c i e s , i n c l u d i n g s t a t e a n d l o c a l g o v e r n m e n t s , o r by t h e i r e x e c u t i v e a g e n c i e s , e a c h t r a n s a c t i o n o f w h i c h m e e t s t h e f o l l o w i n g t e s t s : a ) i t i s a d m i n i s t e r e d w i t h t h e p r o m o t i o n o f t h e e c o n o m i c d e v e l o p m e n t a n d w e l f a r e o f d e v e l o p i n g c o u n t r i e s a s i t s m a i n o b j e c t i v e , a n d b) i t i s c o n c e s s i o n a l i n c h a r a c t e r a n d c o n t a i n s a g r a n t e l e m e n t o f a t l e a s t 25 p e r c e n t . " O E C D , T w e n t y - F i v e Y e a r s o f D e v e l o p m e n t  C o o p e r a t i o n : A R e v i e w , p . 171 11 To i l l u s t r a t e t h e m a r g i n a l i t y o f ODA t o t h e r e s o u r c e n e e d s o f m o s t d e v e l o p i n g c o u n t r i e s , c o n s i d e r t h e f o l l o w i n g O D A / G N P r a t i o s f o r d e v e l o p i n g r e g i o n s i n 1 9 8 2 - 8 3 : A s i a - 0 . 8 p e r c e n t ; S u b - S a h a r a n A f r i c a - 4 . 5 p e r c e n t ; N o r t h A f r i c a a n d t h e M i d d l e E a s t - 1 .3 p e r c e n t ; A m e r i c a s - 0 . 5 p e r c e n t . A n o t h e r way o f m a k i n g t h e p o i n t i s t o c o n s i d e r t h e same r a t i o f o r d e v e l o p i n g c o u n t r i e s g r o u p e d a c c o r d i n g t o i n c o m e : L e a s t - D e v e l o p e d C o u n t r i e s - 1 0 . 5 p e r c e n t ; L o w - I n c o m e C o u n t r i e s ( e x c l u d i n g C h i n a ) - 3 . 3 p e r c e n t ; L o w e r - M i d d l e I n c o m e C o u n t r i e s - 1.4 p e r c e n t ; U p p e r -M i d d l e I n c o m e C o u n t r i e s - 0 . 5 p e r c e n t . What t h e s e f i g u r e s r e v e a l i s t h a t w i t h t h e e x c e p t i o n o f some e x t r e m e l y a i d - d e p e n d e n t c o u n t r i e s , s u c h a s B a n g l a d e s h , S r i L a n k a , S o m a l i a , T a n z a n i a , Z a i r e , E t h i o p i a , J o r d a n , a n d H a i t i , m o s t d e v e l o p i n g c o u n t r i e s a r e g e n e r a t i n g r e s o u r c e s f r o m s o u r c e s o t h e r t h a n ODA. F o r more d e t a i l s , s e e : O E C D , o p . c i t . , p p . 1 2 1 - 1 2 2 10 i s sues - such as commodity p r i c i n g agreements, debt r e s c h e d u l i n g , and t rade l i b e r a l i z a t i o n - would l i k e l y have more o v e r a l l impact on problems o f development than c o u l d ever be hoped f o r from ODA. In s h o r t , f o r e i g n a i d i s no longer the most c r i t i c a l i s sue on the "North - South agenda. " At the same t ime, however, i s sue s a s s o c i a t e d wi th development a s s i s t a n c e w i l l remain i n d e f i n i t e l y on tha t agenda. While sma l l i n r e l a t i o n to d e v e l o p i n g count ry re sou rce needs, t o t a l ODA i s s t i l l o f a magnitude ($35-75 b i l l i o n i n 1984)12 to warrant government i n t e r e s t on both s i d e s o f the development p a r t n e r s h i p . F u r t h e r , the p o t e n t i a l o f ODA to make v i t a l developmenta l c o n t r i b u t i o n s , on both sma l l and l a r g e s c a l e s , cannot be d i s p u t e d , thus e n s u r i n g i t remains a concern f o r r e c i p i e n t governments and, perhaps , fo r donor governments. The h i g h - p r o f i l e nature o f many a i d p r o j e c t s a l s o he lp s to ensure that p o l i t i c a l i n t e r e s t , a ga i n on both s i d e s o f the p a r t n e r s h i p , i s ma in ta ined . F i n a l l y , development a s s i s t a n c e has had a c a t a l y t i c and h i s t o r i c r o l e i n the e v o l u t i o n of b i l a t e r a l and m u l t i l a t e r a l r e l a t i o n s between the deve loped and d e v e l o p i n g wor ld s ; i f f o r i n e r t i a a l o n e , f o r e i g n a i d shou ld con t inue to p l a y a h i g h l y v i s i b l e and c o n t r o v e r s i a l r o l e i n f u tu re Nor th -South r e l a t i o n s . As Wood no te s , i n the case o f Canada: For a count ry l i k e Canada, even i f ' a i d ' i s s u b s t a n t i a l l y l e s s important than other r e l a t i o n s h i p s , i t i s s t i l l the most important ins t rument e x p l i c i t l y concerned with promoting or s u p p o r t i n g development i n the 12 I b i d . , p. 162 11 T h i r d W o r l d . F u n d a m e n t a l s h i f t s i n t h e C a n a d i a n a p p r o a c h t o t h e q u a n t i t y o r q u a l i t y o f ' a i d ' may t h e r e f o r e s i g n a l v i t a l t r e n d s i n T h i r d W o r l d - C a n a d a r e l a t i o n s g e n e r a l l y . 1 3 F o r a l l o f t h e s e r e a s o n s , f o r e i g n a i d w i l l r e m a i n a s u b j e c t i n n e e d o f g r e a t e r u n d e r s t a n d i n g . F o r a n o t h e r r e a s o n , t o o , c o n t i n u i n g s t u d y i s w a r r a n t e d . I n a n y f o r e i g n p o l i c y i s s u e a r e a , t h e q u e s t i o n o f i n t e r e s t s a n d o b j e c t i v e s i n e v i t a b l y s u r f a c e s . F o r e i g n a i d i s no d i f f e r e n t . T o d a y , few o b s e r v e r s b e l i e v e t h a t f o r e i g n a i d i s t r a n s f e r r e d s o l e l y f o r h u m a n i t a r i a n o r p h i l a n t h r o p i c r e a s o n s ; i n d e e d , many q u e s t i o n t h e v e r y e x i s t e n c e o f s u c h m o t i v a t i o n s . I n s t e a d , m o s t a g r e e t h a t f o r e i g n a i d i n c r e a s i n g l y f u l f i l l s a number o f f u n c t i o n s , r e s p o n d i n g t o d i v e r s e i n t e r e s t s i n p u r s u i t o f d i v e r s e o b j e c t i v e s . A l o n g l i s t o f s u s p e c t e d o b j e c t i v e s c a n be a s s e m b l e d : d e v e l o p m e n t a l , h u m a n i t a r i a n , p o l i t i c a l , c o m m e r c i a l , i d e o l o g i c a l , c u l t u r a l , m i l i t a r y . B u t i s t h i s c o m b i n a t i o n o f i n t e r e s t s a n d o b j e c t i v e s a s a t i s f a c t o r y m i x ? How d o e s d e v e l o p m e n t a s s i s t a n c e become s a d d l e d w i t h t h e b u r d e n o f b a l a n c i n g t h e s e o f t e n c o n f l i c t i n g i n t e r e s t s a n d o b j e c t i v e s ? What a r e t h e e f f e c t s o n t h e s u p p o s e d l y p r i m a r y d e v e l o p m e n t a l o b j e c t i v e s ? S u c h q u e s t i o n s h i n t a t t h e c o m p l e x i t y a n d f o r e i g n p o l i c y s i g n i f i c a n c e o f f o r e i g n a i d , a n d s u g g e s t t h a t a s t u d y o f f o r e i g n a i d o b j e c t i v e s may r e v e a l much a b o u t t h e 13 B e r n a r d W o o d , " C a n a d a a n d T h i r d W o r l d D e v e l o p m e n t : T e s t i n g M u t u a l I n t e r e s t s " , i n R o b e r t C a s s e n , R i c h a r d J o l l y , J o h n S e w e l l a n d R o b e r t Woods ( e d s . ) . R i c h C o u n t r y I n t e r e s t s a n d T h i r d  W o r l d D e v e l o p m e n t , p . 1 2 0 12 l a r g e r p i c t u r e o f N o r t h - S o u t h r e l a t i o n s . A c c o r d i n g l y , t h i s t h e s i s w i l l examine the i n t e r e s t s , p r e s s u r e s and o b j e c t i v e s which have i n f l u e n c e d the e v o l u t i o n and c u r r e n t p r a c t i c e o f Canada's program o f development a s s i s t a n c e , as a d m i n i s t e r e d by the Canadian I n t e r n a t i o n a l Development Agency (CIDA). S p e c i f i c a l l y , i t w i l l address the i n c r e a s i n g importance o f commercia l o b j e c t i v e s w i t h i n the a i d program. The a t t e n t i o n devoted to p u r s u i n g the " a i d - t r a d e l i n k a g e " , o r , as CIDA c a l l s i t , the " a i d - t r a d e i n t e r f a c e " , i s o f p a r t i c u l a r i n t e r e s t h e r e . At i t s most g e n e r a l , the a i d - t r a d e l i n k a g e r e f e r s to a p r o c e s s whereby a i d p r o j e c t s or programs generate (or can be made to generate ) t rade ga ins for the donor c o u n t r y . Hence, a i d can be c o n c e i v e d as a means for p r o t e c t i n g o l d or opening new commercia l markets i n the d e v e l o p i n g w o r l d . The presumed b e n e f i t s a c c r u i n g to the donor c o u n t r y from a i d - t r a d e l i n k a g e may be e i t h e r s h o r t term or long term i n n a t u r e , and may be secured e i t h e r i n t e n t i o n a l l y , through w i l l f u l m a n i p u l a t i o n o f a i d p l a n n i n g and p r o j e c t s , or as a f o r t u i t o u s b y p r o d u c t , f or i n s t a n c e as a r e s u l t o f commendable performance on an a i d p r o j e c t . The l i n k a g e may a l s o be pursued and consummated through a l a r g e number o f p o l i c y in s t ruments or c h a n n e l s . Needless to s a y , the i n c r e a s i n g prominence o f the a i d - t r a d e l i n k a g e i n Canadian a i d has become a h i g h l y c o n t e n t i o u s i s s u e , r a i s i n g q u e s t i o n s about the e f f e c t i v e n e s s o f CIDA and i t s programs, and l a r g e r q u e s t i o n s about the a b i l i t y and w i l l i n g n e s s o f the Canad ian government to c o n f r o n t problems o f T h i r d World 13 u n d e r d e v e l o p m e n t s q u a r e l y , e s p e c i a l l y i n t h e f a c e o f i n c r e a s i n g p r e s s u r e f r o m d o m e s t i c i n t e r e s t s . M o r e o v e r , s i n c e o t h e r members o f t h e D e v e l o p m e n t A s s i s t a n c e C o m m i t t e e (DAC) o f t h e O r g a n i z a t i o n f o r E c o n o m i c C o o p e r a t i o n a n d D e v e l o p m e n t (OECD) f a c e d o m e s t i c a n d i n t e r n a t i o n a l p r e s s u r e s a n d c o n s t r a i n t s s i m i l a r t o t h o s e o f C a n a d a , a n e x a m i n a t i o n o f C a n a d a ' s p u r s u i t o f t h e a i d - t r a d e l i n k a g e s h o u l d be h e l p f u l i n r e a c h i n g a n u n d e r s t a n d i n g o f l a r g e r N o r t h - S o u t h d y n a m i c s . The t h e s i s w i l l be o r g a n i z e d a s f o l l o w s . C h a p t e r 2 w i l l p r o v i d e a b r i e f h i s t o r i c a l o v e r v i e w o f C a n a d i a n f o r e i g n a i d . H e r e , t h e f o c u s w i l l be o n t h e a d h o c e v o l u t i o n , t h e m u l t i p l i c i t y o f o b j e c t i v e s , a n d t h e p h i l o s o p h i c a l f l u x w h i c h h a v e c h a r a c t e r i z e d C a n a d i a n a i d , a n d C I D A , o v e r t h e y e a r s . C h a p t e r 3 w i l l e x a m i n e a number o f p o l i c i e s and p r o g r a m s w h i c h h a v e b e e n p r o m p t e d p r i m a r i l y o r i n p a r t ( b u t n o t n e c e s s a r i l y e x c l u s i v e l y ) by e c o n o m i c s e l f - i n t e r e s t . T h i s c h a p t e r , i n s h o r t , s e e k s t o e s t a b l i s h t h e s a l i e n c e o f a " c o m m e r c i a l i m p e r a t i v e " i n C a n a d i a n f o r e i g n a i d . C h a p t e r 4 r e p r e s e n t s a n a t t e m p t t o e v a l u a t e t h e m e r i t s a n d t h e f a u l t s , i n b o t h t e c h n i c a l a n d m o r a l t e r m s , o f c o u p l i n g a i d w i t h c o m m e r c e . Does t h e a i d - t r a d e c o n n e c t i o n a c t u a l l y w o r k , a n d i s i t i n C a n a d a ' s s h o r t t e r m a n d l o n g t e r m i n t e r e s t t o p u r s u e i t ? C h a p t e r 5 t u r n s t o a n e x p l a n a t i o n f o r t h e " c o m m e r c i a l i z a t i o n " o f C a n a d i a n a i d . Why h a s t h e a i d - t r a d e l i n k a g e become so e n t r e n c h e d i n a i d p r a c t i c e ? To t h i s q u e s t i o n no s i m p l e , s i n g l e e x p l a n a t i o n c a n be a d d u c e d ; i n s t e a d , t h e e x p l a n a t i o n o f f e r e d w i l l be b a s e d u p o n a n a p p r e c i a t i o n o f t h e 14 t y p e s o f p r e s s u r e s t o w h i c h weak s t a t e a g e n c i e s a r e s u b j e c t e d , t h e r o l e o f d e c i s i o n - m a k i n g s t r u c t u r e s i n t h e s t a t e i t s e l f w h i c h r e i n f o r c e t h o s e p r e s s u r e s a n d t h a t w e a k n e s s , a n d t h e d e t r i m e n t a l i m p a c t o f t h e a b s e n c e o f c l e a r a n d c o n s i s t e n t p h i l o s o p h i c a l b e l i e f s a n d d e v e l o p m e n t a l m o d e l s a t C I D A . I n a d d i t i o n , a s t u d y o f t h e a i d - t r a d e i s s u e s u g g e s t s l a r g e r q u e s t i o n s a b o u t C a n a d a ' s r e l a t i o n s w i t h t h e d e v e l o p i n g w o r l d , a n d i n d e e d a b o u t t h e e v e n l a r g e r i s s u e s a s s o c i a t e d w i t h N o r t h - S o u t h r e l a t i o n s i n t h e i n t e r n a t i o n a l s y s t e m . The f i n a l c h a p t e r w i l l s u m m a r i z e t h e m a i n a r g u m e n t s p r e s e n t e d , p r o v i d e a few c o n c l u d i n g t h o u g h t s , a n d , i f f o r t h e s a k e o f a r g u m e n t a l o n e , p r e s e n t a number o f p o l i c y p r e s c r i p t i o n s a i m e d a t i m p r o v i n g t h e d e v e l o p m e n t a l i m p a c t o f C a n a d i a n t a x d o l l a r s . 15 I I . A SELECTIVE HISTORY OF CANADIAN DEVELOPMENT ASSISTANCE With the Colombo P l a n o f the 1950s as the o r i g i n o f invo lvement , Canada has been a c t i v e i n i n t e r n a t i o n a l development a s s i s t a n c e for over 35 y e a r s . In t h a t t ime , a g r e a t many p e o p l e , p o l i c i e s , p o l i c y rev iews and programs have i n f l u e n c e d Canadian f o r e i g n a i d . To do j u s t i c e to t h e i r r e s p e c t i v e i n f l u e n c e s would r e q u i r e a t e x t we l l beyond the purview o f t h i s t h e s i s , a task i n any case performed e l sewhere .14 Hence, t h i s chapter w i l l p r o v i d e a b r i e f and s e l e c t i v e review o f some o f the more s i g n i f i c a n t events i n the h i s t o r y o f Canadian a i d . Canadian development a s s i s t a n c e to the d e v e l o p i n g wor ld a c t u a l l y began be fore the Colombo P l a n . In 1949, Canada began a program o f modest a s s i s t a n c e to the U n i t e d N a t i o n s ' t e c h n i c a l a s s i s t a n c e program, t a r g e t e d a t newly independent c o u n t r i e s . 1 5 D u r i n g the 1940s, however, Canadian a i d f lowed e x c l u s i v e l y through the U . N . , and Canada never c r e a t e d a c e n t r a l o f f i c e or agency to r e c e i v e a n d . p r o c e s s a i d r e q u e s t s . 1 6 14 The p a u c i t y o f l i t e r a t u r e d e a l i n g wi th the o r i g i n s and e v o l u t i o n o f Canada's programs o f O f f i c i a l Development A s s i s t a n c e c o n t i n u e s to be a problem. To d a t e , the bes t sources a r e : K e i t h S p i c e r , A Samar i tan S t a t e ? E x t e r n a l A i d i n Canada's F o r e i g n  P o l i c y ; Thomas C. Bruneau , Jan J . J o r g e n s e n , J . O . Ramsay, CIDA:  The O r g a n i z a t i o n o f Canadian Overseas A s s i s t a n c e ; J e f f r e y S teeves , The Canadian I n t e r n a t i o n a l Development Agency: The  P o l i c y Proces s and the T h i r d W o r l d , 1968-1979; and Pe ter Wyse, Canad ian F o r e i g n A i d i n the 1970s: An O r g a n i z a t i o n a l A u d i t 15 Robert C a r t y , V i r g i n a Smith and LAWG, P e r p e t u a t i n g  P o v e r t y : The P o l i t i c a l Economy o f Canadian F o r e i g n A i d , p.28 16 S p i c e r , op. c i t . , p . 93 16 Canada' s e n t r y i n t o the f o r e i g n a i d f i e l d i s more commonly l i n k e d to the J a n u a r y , 1950 Colombo Conference i n C e y l o n . At the C o n f e r e n c e , the "Colombo P l a n for Economic Development i n South and South E a s t A s i a " was i n i t i a t e d by Canada, G r e a t B r i t a i n , A u s t r a l i a , New Z e a l a n d , I n d i a , conce econo frame p r o g r hoc a foremost was the b e l i e f t h a t a i d P a k i s t a n and C e y l o n . O r i g i n a l l y to the newly independent A s i a n i v e d as a s h o r t term response to p o l i t i c a l upheaval and mic t r o u b l e s i n A s i a , i t s u b s e q u e n t l y became the p r i n c i p a l work f o r Canadian a i d to A s i a . As a f o r e r u n n e r o f a i d ams today , however, the P l a n seems i n r e t r o s p e c t q u i t e ad nd u n s o p h i s t i c a t e d . As H a r r i s o n n o t e s : I t r e a l l y amounted to a c o - o p e r a t i v e and c o -o r d i n a t e d s tudy o f a number o f economic s i t u a t i o n s , too v a r y i n g as to s tages and p a t t e r n s o f growth, and too immense i n the aggrega te , to be c o n s i d e r e d amenable to any c e n t r a l l y p lanned and d i r e c t e d scheme o f development .17 What were Canada's i n t e r e s t s i n the Colombo P lan? F i r s t and c o u n t r i e s c o u l d f o r e s t a l l what seemed to be an o n s l a u g h t o f communism i n the r e g i o n . As the M i n i s t e r for E x t e r n a l A f f a i r s , L e s t e r B. P e a r s o n , e x p l a i n e d i n P a r l i a m e n t : . . . t h e f o r c e s o f t o t a l i t a r i a n expans ion i sm c o u l d not be s topped i n south A s i a and south e a s t A s i a by m i l i t a r y f o r c e a l o n e . . . I f south e a s t A s i a and south A s i a are not to be conquered by communism, we o f the f r e e d e m o c r a t i c w o r l d , i n c l u d i n g the A s i a n s t a t e s themselves which are f r e e , must demonstrate t h a t i t i s we and not the R u s s i a n s who s t a n d for n a t i o n a l l i b e r a t i o n and economic and 17 W . E . C . H a r r i s o n , Canada i n World A f f a i r s 1949 to 1950, p . 231 17 s o c i a l p r o g r e s s . 1 8 A l s o i m p o r t a n t , to Canada at l e a s t , was the b e l i e f t h a t the a s s i s t a n c e p r o v i d e d through the Colombo P l a n would s t r e n g t h e n the v a l u e o f the Commonwealth i n the eyes o f the r e c i p i e n t c o u n t r i e s . 1 9 While Pearson a l s o a r t i c u l a t e d Canada' s broad economic i n t e r e s t s i n expanded trade with A s i a and economic s t a b i l i t y i n the r e g i o n , Canada's p a r t i c i p a t i o n i n the Colombo P l a n p r i m a r i l y r e f l e c t e d p o l i t i c a l i n t e r e s t s , " . . . w i t h v i r t u a l l y no p o l i c y aim beyond a l i v e l y ant i -Communis t i n s t i n c t and an e x h i l a r a t i n g v i s i o n o f a f r e e , m u l t i - r a c i a l Commonwealth."20 The Canadian commitment to the Commonwealth was e v i d e n t a g a i n i n the 1958 i n i t i a t i o n o f a f u l l program o f a s s i s t a n c e for the Commonwealth C a r i b b e a n , and the e x t e n s i o n of p iecemeal a i d to Commonwealth A f r i c a i n 1959. A f t e r 1960, the A f r i c a n r e c i p i e n t s were funded under a f u l l program, the S p e c i a l Commonwealth A f r i c a A s s i s t a n c e Program (SCAAP). D e s p i t e the Commonwealth l i n k i n both the C a r i b b e a n and the A f r i c a n programs, however, Ottawa s t i l l had not begun to view such a s s i s t a n c e as p a r t o f a l a r g e r commitment to the T h i r d World . R a t h e r , much l i k e t h e i r 18 L e s t e r B. P e a r s o n , i n the House o f Commons, F e b r u a r y 22, 1950. For a l engthy e x p o s i t i o n o f P e a r s o n ' s views on the Colombo C o n f e r e n c e , see: O f f i c i a l Report o f D e b a t e s : ; House o f Commons, Second S e s s i o n - T w e n t y - F i r s t P a r l i a m e n t , V o l . 1, 1950 19 B a r r i e M. M o r r i s o n , "Canada and South A s i a " , i n Peyton V. Lyon and Tareq Y. Ismael ( e d s . ) , Canada and the T h i r d W o r l d , p . 15 20 S p i c e r , op. c i t . , p . 3 18 p r e d e c e s s o r , t h e C o l o m b o P l a n , t h e s e new p r o g r a m s w e r e s e e n a s " r e a c t i o n s t o s p e c i a l c i r c u m s t a n c e s , a n d w e r e h a n d l e d t h r o u g h a d h o c , p a t c h w o r k a d m i n i s t r a t i v e s t r u c t u r e s . " 2 1 I n d e e d , t h e i n a b i l i t y o r u n w i l l i n g n e s s o f t h e f e d e r a l g o v e r n m e n t i n t h e 1 9 5 0 s t o d e v e l o p a l o n g r u n v i e w o f a i d a n d i t s a d m i n i s t r a t i o n was t h e " c e n t r a l a n d d e c i s i v e f a u l t i n C a n a d a ' s e a r l y p r o g r a m m e . " 2 2 S p i c e r a r g u e s t h a t t h e r e w e r e no o f f i c i a l a t t e m p t s t o s y s t e m a t i c a l l y a s s e s s u n d e r d e v e l o p m e n t a s a new c h a l l e n g e , no s u c h a t t e m p t t o f i x a t t a i n a b l e g o a l s f o r C a n a d i a n a i d o r t o s t u d y i t s p o s s i b l e i n t e g r a t i o n w i t h o t h e r i n s t r u m e n t s o f f o r e i g n p o l i c y , a n d no o f f i c i a l r e c o g n i t i o n t h a t f o r e i g n a i d m i g h t become t h e p r i m a r y i n s t r u m e n t o f C a n a d i a n f o r e i g n p o l i c y i n t h e d e v e l o p i n g w o r l d . I n s t e a d , C a n a d i a n p o l i c y - m a k e r s w e r e a t t r a c t e d b y i m m e d i a t e a n d v i s i b l e r e s u l t s f r o m p o l i t i c a l l y " p h o t o g e n i c " c a p i t a l p r o j e c t s . 2 3 E x a c e r b a t i n g t h i s p h i l o s o p h i c a l v o i d was t h e c o n t i n u i n g p r a c t i c e o f d i v i d i n g p o l i t i c a l r e s p o n s i b i l i t y f o r a i d b e t w e e n t h r e e m i n i s t r i e s : E x t e r n a l A f f a i r s , t h e p o l i t i c a l s p o n s o r ; T r a d e a n d C o m m e r c e , w h i c h h a n d l e d d a y - t o - d a y a d m i n i s t r a t i o n ; a n d F i n a n c e , w h i c h c o n t r o l l e d t h e a i d b u d g e t . 2 4 A l t h o u g h c l o s e p e r s o n a l r e l a t i o n s h i p s b e t w e e n t h e v a r i o u s p e r s o n n e l f r o m t h e 21 C a r t y , S m i t h a n d LAWG. o p . c i t . p . 28 22 S p i c e r , o p . c i t . , p . 103 23 I b i d . , p . 103 24 R o b e r t C a r t y , " G i v i n g f o r G a i n - F o r e i g n A i d a n d C I D A " , i n R i c h a r d S w i f t a n d R o b e r t C l a r k e ( e d s . ) . T i e s t h a t B i n d :  C a n a d a a n d t h e T h i r d W o r l d , p . 15 3 19 three departments made the h a r m o n i z a t i o n o f depar tmenta l i n t e r e s t s e a s i e r , c o n f l i c t s n e v e r t h e l e s s emerged. As S p i c e r r e c o u n t s : . . . i n t r i n s i c d i f f e r e n c e s i n o u t l o o k and a s p i r a t i o n s s t i l l d i v i d e d these m i n i s t r i e s , and l e d each to r e t a r d or c o m p l i c a t e the work o f the two o t h e r s . E x t e r n a l A f f a i r s . . . r i g h t l y wie lded a supreme veto i n s p i r e d by d i p l o m a t i c m o t i v e s . . . Trade and Commerce n a t u r a l l y b e l i t t l e d both p o l i t i c a l and budgetary f a c t o r s i n favour o f t e c h n i c a l - and commercial - exped ience . And F i n a n c e , f or i t s p a r t , i n v a r i a b l y brought to bear on i t s c o l l e a g u e s ' p r o p o s a l s a q u e s t i o n i n g r e s t r a i n t , untempered by f i e l d e x p e r i e n c e i n the unkind p o l i t i c a l and t e c h n i c a l r e a l i t i e s o f a i d e x e c u t i o n . 2 5 Cons tant r e o r g a n i z a t i o n o f p o l i c y - m a k i n g bod ie s and i n t e r d e p a r t m e n t a l committees , and g r e a t p e r s o n n e l i n s t a b i l i t y , s i g n a l l e d a growing mala i se i n the Canadian a i d b u r e a u c r a c y . By 1960, the a i d a d m i n i s t r a t i o n was " d i v i d e d , confused and deep ly d e m o r a l i z e d . " 2 6 In 1960, the f e d e r a l government a c t e d to r e c t i f y the damage wrought by a decade o f m a l a d m i n i s t r a t i o n by c r e a t i n g the E x t e r n a l A i d O f f i c e (EAO), a c c o u n t a b l e to the M i n i s t e r o f E x t e r n a l A f f a i r s . The c r e a t i o n o f EAO s i g n i f i e d a r e c o g n i t i o n by the government o f the "growing s i g n i f i c a n c e and c o m p l e x i t y o f programmes o f economic and t e c h n i c a l a s s i s t a n c e . " 2 7 I t a l s o s i g n i f i e d , a c c o r d i n g to S p i c e r , t h a t " . . . t h e C a b i n e t r e c o g n i z e d 25 26 27 37 S p i c e r , op. c i t . , pp. 105-106 I b i d . , p. 106 Report o f the Department o f E x t e r n a l A f f a i r s , 1960, p . 20 a i d as a momentous a c t i v i t y o f l o n g - r a n g e Canad ian d ip lomacy ."28 Trade and Commerce s t i l l ma in ta ined i n f l u e n c e , however, through the E x t e r n a l A i d B o a r d , an i n t e r d e p a r t m e n t a l committee e s t a b l i s h e d to c o o r d i n a t e a i d p o l i c y . 2 9 In c o n t r a s t to the 1950s, the 1960s was a p e r i o d o f r e l a t i v e calm and a d m i n i s t r a t i v e s t a b i l i t y a t EAO. A modest program of b i l a t e r a l a s s i s t a n c e to Francophone A f r i c a was i n i t i a t e d i n 1961, expanding ( a l b e i t s l o w l y ) throughout the decade. Many o b s e r v e r s have argued t h a t t h i s i n c r e a s i n g a t t e n t i o n to Francophone A f r i c a d e r i v e d p r i m a r i l y from domest ic p o l i t i c a l o b j e c t i v e s : to promote the r e a l i t y o f Canadian b i l i n g u a l i s m , and to thwart Quebec's a s p i r a t i o n s f o r a l a r g e r r o l e i n Francophone A f r i c a . 3 0 Canada a l s o began e x t e n d i n g a s s i s t a n c e to L a t i n America i n 1964, through the I n t e r - A m e r i c a n Development Bank, o f $50 m i l l i o n over f i v e y e a r s . S p i c e r contends t h a t a major f a c t o r beh ind t h i s a i d was the u n r e l e n t i n g U . S . p r e s s u r e on Canada i n the e a r l y 1960s to j o i n the O r g a n i z a t i o n o f American S t a t e s (OAS). The m u l t i l a t e r a l a i d , t h e n , was Canada's compromise o f f e r , a "concrete g e s t u r e o f h e m i s p h e r i c s o l i d a r i t y . " 3 1 28 S p i c e r , op. c i t . , p . 107 29 C a r t y , Smith and LAWG, op. c i t . , p . 30 30 For example, see L o u i s S a b o u r i n , "Canada and Francophone A f r i c a " , i n Lyon and I s m a e l , op. c i t . ; and Gregory Armstrong , " A i d P o l i c i e s as a R e f l e c t i o n o f Canadian Domest ic C o n c e r n s " , i n I n t e r n a t i o n a l P e r s p e c t i v e s , J a n u a r y - F e b r u a r y 1975 31 K e i t h S p i c e r , "Clubmanship Upstaged: Canada ' s Twenty Years i n the Colombo P l a n " , i n I n t e r n a t i o n a l J o u r n a l , Winter 1969-70, p . 27 21 Other i n f l u e n c e s were at work, d u r i n g the decade. The U . N . ' s 19G0 announcement o f the " F i r s t Development Decade", and i t s r e l a t e d c a l l for a i d to reach 1 per cen t o f each d o n o r ' s Gross N a t i o n a l P r o d u c t (GNP), were r e f l e c t e d i n EAO's expanding budget . 32 Canadian ODA rose from . 1'9 per cent o f GNP i n 1960, to .33 per cen t i n 1966, to .42 per cent i n 1970.33 A l t e r n a t i v e l y , the e x t e n s i o n o f Canadian a i d to an i n c r e a s i n g number o f c o u n t r i e s r e f l e c t e d the c o n t i n u i n g i n f l u e n c e o f E x t e r n a l A f f a i r s over the a i d program.34 The c r e a t i o n o f CIDA out o f the EAO i n 1968 i s a landmark event i n Canadian development a s s i s t a n c e h i s t o r y . The d e c i s i o n r e f l e c t e d a growing b e l i e f tha t Canada's r o l e i n i n t e r n a t i o n a l development had to be broadened beyond a i d . As the CIDA Annual Review f o r 1967-1968 put i t : . . . d i r e c t a i d i s on ly one o f a complex o f f a c t o r s by which Canada can i n f l u e n c e the development o f the l e s s - d e v e l o p e d c o u n t r i e s . A i d must t h e r e f o r e i n c r e a s i n g l y be complemented and supplemented by o ther measures i n the f i e l d o f t r a d e , f i n a n c e , tax and s c i e n c e and t e c h n o l o g y . The r e o r g a n i z a t i o n and r e o r i e n t a t i o n o f the E x t e r n a l A i d O f f i c e i s des igned to take a l l t h i s i n t o a c c o u n t . . . 3 5 G i v e n the i n t e r e s t o f new Prime M i n i s t e r P i e r r e Trudeau i n T h i r d 32 C a r t y , i n S w i f t and C l a r k e , op. c i t . , p . 155 33 F r a n c i s X. C o l a c o , Economic and P o l i t i c a l C o n s i d e r a t i o n s  and the Flow o f O f f i c i a l Resources to D e v e l o p i n g C o u n t r i e s , p. 15 34 C a r t y , i n S w i f t and C l a r k e , op. c i t . , p. 156 35 Canadian I n t e r n a t i o n a l Development Agency (CIDA) , Annual  Review 1967-1968, p. 2 22 World i s s u e s , and the energy and enthus iasm o f CIDA's f i r s t P r e s i d e n t , Maurice S t r o n g , i t was w i d e l y a n t i c i p a t e d t h a t CIDA would command a l a r g e r budget and a l a r g e r v o i c e i n government than had EAO. The former has h e l d t r u e ; the l a t t e r , f or the most p a r t , has n o t . One o f the f i r s t comprehensive s tatements o f the Trudeau government 's p o l i c y on development a s s i s t a n c e appeared i n the 1970 f o r e i g n p o l i c y r e v i e w . F o r e i g n P o l i c y for C a n a d i a n s . In the b o o k l e t e n t i t l e d " I n t e r n a t i o n a l Development", the government a s s e r t e d t h a t the p r i m a r y o b j e c t i v e o f the Canadian a i d program was to : . . . s u p p o r t and f o s t e r the growth and e v o l u t i o n o f the s o c i a l , e d u c a t i o n a l , i n d u s t r i a l , commercia l and a d m i n i s t r a t i v e systems o f the d e v e l o p i n g c o u n t r i e s i n such a way t h a t t h e i r people can improve t h e i r own o r g a n i z a t i o n and c a p a c i t y to produce , d i s t r i b u t e and consume goods and s e r v i c e s , and thereby improve the q u a l i t y o f l i f e i n t h e i r c o u n t r i e s . 3 6 D e s p i t e t h i s ex tremely broad and vague i n t e r p r e t a t i o n o f "economic and s o c i a l development", the b o o k l e t suggested a s e r i e s o f c o n c r e t e g o a l s f o r Canadian a i d : to i n c r e a s e ODA as a percentage o f GNP; to "unt ie" a i d as much as p o s s i b l e ( i . e . , to remove r e s t r i c t i o n s r e q u i r i n g CIDA funds to be spent on Canad ian goods and s e r v i c e s ) ; to i n c r e a s e m u l t i l a t e r a l a i d ( i . e . , a i d c h a n n e l l e d through m u l t i l a t e r a l development and f i n a n c i a l i n s t i t u t i o n s , such as the World Bank or U . N . a g e n c i e s ) ; to 36 Canada, " I n t e r n a t i o n a l Development", i n F o r e i g n P o l i c y  for C a n a d i a n s , p. 12 23 attempt g r e a t e r a i d c o o r d i n a t i o n with o ther donors ; and to c o n c e n t r a t e funds on a s e l e c t number o f LDCs. Such g o a l s seemed to h e r a l d a new and long overdue c l a r i t y o f o b j e c t i v e s for Canad ian development a s s i s t a n c e . T h i s c l a r i t y , however, was obscured by the presence i n the document o f a l o n g l i s t o f mot ives supposedly prompting Canada's involvement i n development a s s i s t a n c e : to r e a f f i r m the importance o f the i n d i v i d u a l ; to f u l f i l l Canada's o b l i g a t i o n for membership i n the world community; to generate sympathy for Canadian i n t e r e s t s or suppor t for Canadian p o l i c i e s ; to c o n t r i b u t e to the e v o l u t i o n o f an i n c r e a s i n g l y i n t e r d e p e n d e n t i n t e r n a t i o n a l system; to f a c i l i t a t e Canada's e x t e r n a l r e l a t i o n s , p a r t i c u l a r l y w i th d e v e l o p i n g c o u n t r i e s ; to h e l p i n the s h o r t run and long r u n promot ion o f Canadian e x p o r t s ; to c o n t r i b u t e to a g e n e r a l expans ion o f world trade i n which Canada would o b t a i n growing markets; and to p r o v i d e an "outward- look ing e x p r e s s i o n o f the b i l i n g u a l c h a r a c t e r o f Canada", thus c o n t r i b u t i n g to "our sense o f i n t e r n a l u n i t y and purpose ."37 The promise o f a new e r a f o r Canadian a i d was s t r o n g , but the c o n t i n u i n g i n t r u s i o n o f i d e o l o g i c a l , p o l i t i c a l , c u l t u r a l and economic o b j e c t i v e s b e l i e d the s i n c e r i t y and v i a b i l i t y o f t h i s promise . The e a r l y 1970s was a p e r i o d o f r a p i d expans ion i n Canadian ODA. T o t a l ODA grew from $346 m i l l i o n i n 1970-71, to $507 m i l l i o n i n 1972-73, to $742 m i l l i o n i n 1974-75 (or .4%, .48%, and 37 I b i d . , p . 10 .52% o f GNP, r e s p e c t i v e l y ) . 3 8 T h i s e x p a n s i o n may have stemmed f r o m d o m e s t i c s o u r c e s s u c h a s t h e g e n e r a l e x p a n s i o n o f f e d e r a l e x p e n d i t u r e s d u r i n g t h i s p e r i o d , and t h e L i b e r a l g o v e r n m e n t ' s a p p a r e n t e n t h u s i a s m f o r d e v e l o p m e n t a s s i s t a n c e . I t may a l s o have b e e n due i n p a r t t o e x t e r n a l s t i m u l a e : f i r s t , t h e p r e s s u r e s e x e r t e d by t h e OECD's DAC f o r i t s members ( C a n a d a i n c l u d e d ) t o i n c r e a s e a i d s p e n d i n g t o .7 p e r c e n t o f GNP; a n d , s e c o n d , t h e i n f l u e n c e o f t h e 1969 R e p o r t o f t h e C o m m i s s i o n o n I n t e r n a t i o n a l D e v e l o p m e n t , e n t i t l e d P a r t n e r s i n D e v e l o p m e n t , and t h e l o b b y i n g by t h e C o m m i s s i o n ' s C h a i r m a n , e x - P r i m e M i n i s t e r L e s t e r B. P e a r s o n , o n t h e L i b e r a l g o v e r n m e n t . 3 9 Whether t h e p o s i t i v e C a n a d i a n r e s p o n s e t o s u c h e x t e r n a l p r e s s u r e s i n d i c a t e d a g r e a t e r r e s p o n s i v e n e s s t o LDC n e e d s o r a c o n t i n u i n g s e a r c h f o r l e g i t i m a c y amongst f e l l o w DAC members i s s t i l l an o p e n q u e s t i o n ; i n a l l p r o b a b i l i t y , b o t h c o n s i d e r a t i o n s i n f l u e n c e d t h e g o v e r n m e n t ' s e f f o r t s . The n e x t m i l e s t o n e f o r CIDA was t h e p u b l i c a t i o n i n 1975 o f i t s S t r a t e g y f o r I n t e r n a t i o n a l D e v e l o p m e n t C o o p e r a t i o n 1 975-1980. The S t r a t e g y m arked t h e f i r s t ( a n d s t i l l t h e o n l y ) C a n a d i a n a t t e m p t t o a n a l y z e c o m p r e h e n s i v e l y t h e n a t u r e o f t h e d e v e l o p m e n t c h a l l e n g e , t o r e v i e w and a s s e s s CIDA p o l i c i e s , a n d t o f o r w a r d p r o p o s a l s f o r p o l i c y c h a n g e s . To i t s c r e d i t , CIDA a r g u e d f o r a " c o m p r e h e n s i v e and o r g a n i c " a p p r o a c h t o d e v e l o p m e n t c o o p e r a t i o n , 38 CIDA, S t r a t e g y f o r I n t e r n a t i o n a l D e v e l o p m e n t C o o p e r a t i o n  1 9 7 5 - 1 9 8 0 , p. 41 39 B r u n e a u e t a l . , op. c i t . , pp. 12-13 25 and proposed a host o f p o l i c i e s and p o l i c y changes which were based on sound development p r i n c i p l e s . 4 0 CIDA was p r o m i s i n g a more f o r t h r i g h t and comprehensive a i d program. The q u e s t i o n was: c o u l d i t d e l i v e r on t h i s promise? For a number o f r e a s o n s , CIDA d i d not and has not d e l i v e r e d on i t s promise . To b e g i n w i t h , d e s p i t e i t s u n d e n i a b l e m e r i t s , the S t r a t e g y c o n t i n u e d to e v i n c e the l o n g - s t a n d i n g Canadian c o n c e r n for p o l i t i c a l and economic " t r i c k l e back" b e n e f i t s . I t argued for c o o p e r a t i o n with the E x p o r t Development C o r p o r a t i o n (EDC) , i n d i r e c t expor t promot ion through the a i d - t r a d e i n t e r f a c e , and a c o n t i n u i n g commitment to food a i d , which many o b s e r v e r s r e g a r d as be ing based more on "surp lus d i s p o s a l " for Canadian farmers than on T h i r d World food needs .41 The document a l s o noted t h a t Canadian ODA shou ld be "compat ible w i th the broad g o a l s o f the Government's f o r e i g n p o l i c y " 4 2 and wi th "general 40 Among i t s more important p o l i c y p r o p o s a l s were: to i n c r e a s e t r i p a r t i t e and m u l t i p a r t i t e c o o p e r a t i o n ; to c o n t i n u e support for i n t e r n a t i o n a l i n s t i t u t i o n s ; to i n c r e a s e a i d to .7 per cen t o f GNP; to g i v e p r i o r i t y to the p o o r e s t c o u n t r i e s ; to i n c r e a s e the geograph ic c o n c e n t r a t i o n o f a i d ; to l i b e r a l i z e a i d t y i n g r e g u l a t i o n s ; to focus on r e g i o n a l c o o p e r a t i o n ; and to suppor t c e n t r e s o f r e s e a r c h and i n n o v a t i o n . See the 21 P o i n t s i n the S t r a t e g y , pp. 18-39 41 For more d e t a i l e d e x p o s i t i o n s o f t h i s argument see: Theodore Cohn, "Canadian A i d and Trade i n Skim M i l k Powder: Some Recent I s sues" , i n Canadian P u b l i c P o l i c y , S p r i n g 1978; Cohn, Canad ian Food A i d : Domestic and F o r e i g n P o l i c y I m p l i c a t i o n s ; and Suteera Thomson, Food for the Poor : The Role o f CIDA i n  A g r i c u l t u r a l , F i s h e r i e s and R u r a l Development. T h i s i s s u e w i l l a l s o be addressed more e x p l i c i t l y i n Chapter 3. 4 2 CIDA, S t r a t e g y , p. 23 26 Canad ian i n t e r e s t s . " 4 3 Once a g a i n , the presence o f numerous economic and p o l i t i c a l o b j e c t i v e s , however vague, suggested t h a t CIDA had not f reed i t s e l f from the burden of accommodating n o n -deve lopmenta l c o n c e r n s . Such a burden has c l e a r l y reduced CIDA's a b i l i t y to d e l i v e r a "comprehensive and o r g a n i c " development c o o p e r a t i o n e f f o r t . J u s t as important i n t h i s r e g a r d , however, was CIDA's i n a b i l i t y to i n f l u e n c e the p o l i c i e s o f o t h e r f e d e r a l departments and agenc i e s whose a c t i v i t i e s i n v o l v e d r e l a t i o n s w i th the d e v e l o p i n g w o r l d . While CIDA was f o r c e d to accommodate the v a r y i n g i n t e r e s t s and o b j e c t i v e s o f o t h e r f e d e r a l government o r g a n s , i t was not a b l e to e f f e c t a r e c i p r o c a l i n f l u e n c e . As the N o r t h - S o u t h I n s t i t u t e p o i n t s o u t , Canada's t r a d e , monetary and o t h e r p o l i c i e s i n the l a t e 1970s were s e t wi th l i t t l e , i f any, r e g a r d for t h e i r e f f e c t s on d e v e l o p i n g c o u n t r i e s . 4 4 . . . d e s p i t e the importance o f r e l a t i n g a i d and n o n - a i d p o l i c y i n s t r u m e n t s , and the b u r e a u c r a t i c mechanisms put i n p l a c e to e f f e c t t h a t r e s u l t , the i m p r e s s i o n i s one o f f r u s t r a t i o n on CIDA's p a r t . An i n t e g r a t e d development p o l i c y f a i l e d to m a t e r i a l i z e . 4 5 F i n a l l y , s u b s t a n t i v e p r o g r e s s towards a "comprehensive and o r g a n i c " development c o o p e r a t i o n s tance was h i n d e r e d by the c l i m a t e o f f i s c a l r e s t r a i n t which s e t t l e d on Ottawa i n the l a t e 43 I b i d . , p . 27 44 N o r t h - S o u t h I n s t i t u t e , In the Canad ian I n t e r e s t ? T h i r d  World Development i n the 1980s, p. 7 45 S tand ing Committee on E x t e r n a l A f f a i r s and I n t e r n a t i o n a l T r a d e , D i s c u s s i o n Paper on Issues i n Canada's O f f i c i a l  Development A s s i s t a n c e P o l i c i e s and Programs, p . 7 27 1970s. A l though ODA as a percentage o f GNP f l u c t u a t e d up and down (.54 i n 1975, .46 i n 1976, .50 i n 1977, .52 i n 1978, .46 i n 1979, .42 i n 1980),46 the o v e r a l l t r e n d i n the l a t e 1970s was s l i g h t l y downward, and c e r t a i n l y nowhere near the .7 per cent promised i n the S t r a t e g y . In r e a l terms, too , ODA spending s u f f e r e d d u r i n g t h i s p e r i o d : from $1.06 b i l l i o n (U.S) i n 1978, i t d e c l i n e d to $1,026 b i l l i o n i n 1979, a d e c l i n e due main ly to the r e d u c t i o n i n budgetary a i d a p p r o p r i a t i o n s s i n c e the 1975-76 f i s c a l y e a r , and to the d e c i s i o n i n 1978 to ho ld down a l l p u b l i c e x p e n d i t u r e s . 4 7 A f l u r r y o f media c r i t i c i s m o f CIDA i n t h i s p e r i o d a l s o s e r v e d to p o i n t out some of the agency ' s f l aws , and perhaps p r o v i d e d the r a t i o n a l e for slowdowns or c u t - b a c k s i n CIDA appropr i a t i o n s . As w e l l , problems i n d i s b u r s i n g a l l o f i t s funds l e d to an a c c u m u l a t i o n o f monies a t CIDA. T h i s " c a r r y - o v e r " o p t i o n was withdrawn i n 1977-78, however, wi th a new c o n d i t i o n t h a t a l l a l l o c a t e d funds had to be spent i n the year or e l s e they " lapsed" (became u n a v a i l a b l e ) . 4 8 S t r o n g ' s s u c c e s s o r as P r e s i d e n t o f CIDA, Paul G e r i n - L a j o i e , w i d e l y c o n s i d e r e d a s t r o n g spokesman for T h i r d World i n t e r e s t s i n Ottawa, was a l s o c o n s i d e r e d "wool ly-minded and 46 OECD, Development C o o p e r a t i o n : E f f o r t s and P o l i c i e s o f  the Members o f the Development A s s i s t a n c e Committee, 1981 Review, p. 174 47 OECD, 1980 Review, p. 109 48 Task Force on Canada' s O f f i c i a l Development A s s i s t a n c e Program, Study o f the P o l i c y and O r g a n i z a t i o n o f Canada' s  O f f i c i a l Development A i d , p. 57 28 c a r e l e s s about f inances" and " i l l - s u i t e d to a regime o f penny-p i n c h i n g " 4 9 ; as a r e s u l t , perhaps , he was r e p l a c e d i n 1977 by M i c h e l Dupuy, a c a r e e r b u r e a u c r a t , who had a c l e a r mandate to e s t a b l i s h sound f i n a n c i a l management and c o n t r o l . 5 0 And a s t r o n g l y c r i t i c a l A u d i t o r G e n e r a l ' s Report on CIDA's a d m i n i s t r a t i v e p r a c t i c e s i n 1979 l e d to s i g n i f i c a n t manager ia l and f i n a n c i a l s t r i n g e n c i e s . 5 1 In s h o r t , whi le CIDA managed to s u r v i v e the r e s t r a i n t e r a w i t h i t s a i d program s t i l l s t r o n g i n many r e s p e c t s , e s p e c i a l l y r e l a t i v e to the programs o f some o t h e r DAC d o n o r s , i t was not immune to the p r e s s u r e s o f f i s c a l r e s t r a i n t . The c l i m a t e o f the l a t e 1970s and e a r l y 1980s can bes t be c h a r a c t e r i z e d as be ing dominated by the twin p r e s s u r e s o f domest ic r e c e s s i o n and f i s c a l r e s t r a i n t . R e s p e c t i v e l y , they have r e s u l t e d i n a g r e a t e r a t t e n t i o n to s e c u r i n g domest ic r e t u r n s from the a i d program, and slowdowns (and a c t u a l decreases ) i n a i d spend ing . While the c u r r e n t C o n s e r v a t i v e government remains committed , r h e t o r i c a l l y a t l e a s t , to r e a c h i n g , p r o g r e s s i v e l y , a i d t a r g e t s o f . 5 , .6 and .7 per cen t o f GNP, these t a r g e t s are c o n t i n u a l l y pushed f u r t h e r i n t o the f u t u r e . The c u r r e n t a i m , announced i n the F e b r u a r y , 1986 budget , i s to remain a t .5 per cent u n t i l 1990/1991, to r e a c h .6 per cen t by 1995, and to r e a c h .7 per cen t by 2000. 49 C a r t y , Smith and LAWG, op. c i t . , p . 34 50 S t e e v e s , op. c i t . , p . 14 51 Task. F o r c e , op. c i t . , p . 61 29 Canad ian ODA i n 1984-85 was over $2.1 b i l l i o n , or .49 per cent o f GNP (a .04 per cent o f GNP i n c r e a s e over 1983-84); CIDA expends about $1.7 b i l l i o n o f t h i s amount. C u r r e n t s e c t o r a l emphases are a g r i c u l t u r e ( i n c l u d i n g f i s h e r i e s and f o r e s t r y ) , energy , and human r e s o u r c e development.52 A long l i s t o f c r i t e r i a i s used i n e s t a b l i s h i n g e l i g i b i l i t y f o r Canadian a s s i s t a n c e : l e v e l o f need, commitment to development , a b s o r p t i v e c a p a c i t y , human r i g h t s r e c o r d , Canadian f o r e i g n p o l i c y o b j e c t i v e s , commercia l p o s s i b i l i t i e s , and s p e c i a l c r i s i s s i t u a t i o n s . 5 3 C l e a r l y , the i n t e r p l a y o f i n t e r e s t s and o b j e c t i v e s so long endemic to CIDA c o n t i n u e s to t h i s day. What l i e s ahead i n the s h o r t term for Canadian ODA? C e r t a i n l y , i n s p i t e o f a l l the c o u n t e r v a i l i n g p r e s s u r e s for r e s t r a i n t and domest ic r e t u r n s , Canada w i l l c o n t i n u e to fund an a i d program t h a t i s r e l a t i v e l y l a r g e and r e l a t i v e l y generous by most DAC s t a n d a r d s . However, g i v e n the Mulroney government's r e s o l v e to cu t the f e d e r a l budget d e f i c i t , i t i s q u i t e l i k e l y t h a t even the r e v i s e d date for r e a c h i n g the .7 per cen t t a r g e t , 2000, w i l l i t s e l f be r e v i s e d . S i m i l a r l y , the government 's d e s i r e to i n c r e a s e the i n t e r n a t i o n a l c o m p e t i t i v e n e s s o f Canad ian b u s i n e s s might r e s u l t i n even g r e a t e r a t t e n t i o n to s e c u r i n g domest ic economic g a i n s from the a i d program. I f the p a s t 35 years o f Canad ian involvement i n development a s s i s t a n c e are any 52 CIDA, Annual R e p o r t , 1984-85, p. 9 53 CIDA, Elements o f Canada's O f f i c i a l Development  A s s i s t a n c e S t r a t e g y , p. 38 30 g u i d e , i t i s a l s o l i k e l y tha t s e c t o r a l emphases w i l l s h i f t , new models o f development w i l l emerge, and CIDA w i l l remain the v e h i c l e for the promot ion o f a g r e a t many d e v e l o p m e n t a l , commercia l and p o l i t i c a l o b j e c t i v e s . One t h i n g w i l l remain c o n s t a n t : the f e d e r a l government's s t r o n g r h e t o r i c a l commitment to T h i r d World development . What l e s s o n s can be l e a r n e d from t h i s b r i e f h i s t o r i c a l overview o f Canadian f o r e i g n a i d ? F i r s t , Canad ian development a s s i s t a n c e began and e v o l v e d i n an ad hoc manner. Second, the i n f l u e n c e o f o t h e r f e d e r a l departments over a i d p o l i c y has always been a major f a c t o r i n Canadian ODA. T h i r d , the deve lopmenta l o b j e c t i v e s o f Canadian a i d have never a c h i e v e d the pr imacy a t t r i b u t e d to them i n r h e t o r i c ; i n s t e a d , they have always c o -e x i s t e d and competed with o ther o b j e c t i v e s , f a c i n g p r e s s u r e s from many c o r n e r s , and ye t somehow s t i l l managing to r e t a i n some i n f l u e n c e over a i d p o l i c y . F i n a l l y , t h i s b r i e f h i s t o r y u n d e r l i n e s the c o m p l e x i t y o f the a i d "bus iness" , and a l s o the d i f f i c u l t y i n d i f f e r e n t i a t i n g r e a l o b j e c t i v e s from a f t e r - t h e - f a c t r a t i o n a l e s . Care must be taken i n a p p r o a c h i n g such a t a s k . Before p r o c e e d i n g to examine more e x p l i c i t l y the "commercial i m p e r a t i v e " i n Canad ian f o r e i g n a i d , i t i s neces sary to d i s c u s s b r i e f l y the s i g n i f i c a n c e o f the m u l t i p l i c i t y o f i n t e r e s t s and o b j e c t i v e s which have for so long c h a r a c t e r i z e d C a n a d i a n a i d . For i s i t not p o s s i b l e tha t a number o f o b j e c t i v e s c o u l d c o - e x i s t harmonious ly? That i s , the mere e x i s t e n c e o f m u l t i p l e o b j e c t i v e s by i t s e l f does not n e c e s s a r i l y c r e a t e c o n f l i c t s or c o n t r a d i c t i o n s 31 i n p o l i c y . H o w e v e r , m u l t i p l e o b j e c t i v e s c r e a t e t h e p o s s i b i l i t v o r 1 i k e l i h o o d o f c o n f l i c t , a n d t h u s t h e n e e d f o r c o m p r o m i s e s a n d t r a d e - o f f s i n a i d p o l i c y . I t i s f o r t h i s r e a s o n t h a t a n a i d p r o g r a m s a d d l e d w i t h t h e d i f f e r i n g o b j e c t i v e s o f d i v e r s e i n t e r e s t s i s so w o r r i s o m e . F o r i n s t a n c e , a n a i d r e g i m e p r e m i s e d e n t i r e l y o n h u m a n i t a r i a n g r o u n d s w o u l d have a s t r o n g r e l i e f o r e m e r g e n c y o r i e n t a t i o n , p r e s u m a b l y w o u l d f o c u s o n t h e p o o r e s t p e o p l e , i n t h e p o o r e s t c o u n t r i e s , w o u l d p r o v i d e f u n d s u n t i e d t o p r o c u r e m e n t i n t h e d o n o r c o u n t r y , a n d w o u l d l i k e l y e m p h a s i z e " b a s i c n e e d s " a n d " s e l f - r e l i a n c e " o r i e n t a t i o n s . 5 4 D e v e l o p m e n t a l c o n s i d e r a t i o n s , s i m i l a r l y , m i g h t i n c l u d e t h e u n t y i n g o f a i d , a n d m i g h t a l s o i n c l u d e a s t r o n g b a s i c n e e d s / s e l f - r e l i a n c e c o m p o n e n t , b u t w o u l d n o t be r e s t r i c t e d t o t h i s o r i e n t a t i o n . I n c o n t r a s t t o r e l i e f a n d e m e r g e n c y a s s i s t a n c e , s u c h a i d w o u l d s e e k t o g e n e r a t e s e l f -s u s t a i n i n g e c o n o m i c a n d s o c i a l d e v e l o p m e n t i n r e c i p i e n t c o u n t r i e s , a c c o r d i n g t o t h e i r own d e v e l o p m e n t p r i o r i t i e s . C o m m e r c i a l c o n c e r n s , h o w e v e r , c o u l d l e a d t o a i d f u n d s b e i n g d i s b u r s e d t o c o u n t r i e s o f f e r i n g t r a d e o r i n v e s t m e n t g a i n s ( i n a l l l i k e l i h o o d t h e m i d d l e a n d u p p e r - i n c o m e L D C s ) , w o u l d p r o b a b l y 54 " B a s i c n e e d s " r e f e r s t o f o o d , s h e l t e r , c l o t h i n g , h e a l t h a n d e d u c a t i o n . A s s i s t a n c e u n d e r a " b a s i c n e e d s " r e g i m e m i g h t a i m a t a g r i c u l t u r a l a n d r u r a l d e v e l o p m e n t ; t r a i n i n g a n d human r e s o u r c e d e v e l o p m e n t ; e n e r g y , h e a l t h a n d s o c i a l d e v e l o p m e n t . C I D A h a s s a i d t h i s o f " s e l f - r e l i a n c e " : " . . . i t d o e s n o t n e c e s s a r i l y mean " s e l f - s u f f i c i e n c y " , o r t h e r e j e c t i o n o f e x t e r n a l c o n t r i b u t i o n s b u t , f i r s t a n d f o r e m o s t , a r e l i a n c e o n o n e ' s own h u m a n , n a t u r a l a n d f i n a n c i a l r e s o u r c e s , a n d a n a b i l i t y t o a d j u s t a n d c o n t r o l e x t e r n a l a s s i s t a n c e i n a c c o r d a n c e w i t h o n e ' s own p r i o r i t i e s a n d n e e d s . " See C I D A , R u r a l D e v e l o p m e n t a n d R e n e w a b l e  R e s o u r c e s : S e c t o r a l G u i d e l i n e s , A - 1 5 32 argue for the t y i n g o f a i d , and might emphasize l a r g e - s c a l e c a p i t a l p r o j e c t s because o f t h e i r t rade p o t e n t i a l . P o l i t i c a l l y -o r i e n t e d f o r e i g n a i d , a l t e r n a t i v e l y , would l i k e l y be d i s b u r s e d to as many c o u n t r i e s and i n t e r n a t i o n a l i n s t i t u t i o n s as p o s s i b l e . I t might a l s o r e v e l i n h i g h l y v i s i b l e (but perhaps e c o n o m i c a l l y dubious) a i d p r o j e c t s and programs, c a t e r i n g to the i n t e r e s t s o f LDC e l i t e s r a t h e r than needy groups . P o l i t i c a l o b j e c t i v e s would a l s o l i k e l y demand a c o n t i n u a l l y expanding a i d budget , even i f the a i d agency r e s p o n s i b l e for d i s b u r s i n g the funds c o u l d not do so e a s i l y . The p o t e n t i a l for c o n f l i c t s between these v a r y i n g o b j e c t i v e s i s m a n i f e s t . In examining CIDA and Canadian f o r e i g n a i d , i t i s c l e a r t h a t such c o n f l i c t s have deve loped over the y e a r s . At t imes the p o l i t i c a l i n t e r e s t s c a r r i e d the day (as i n the e a r l y Commonwealth and Francophone programs) ; i n o ther c a s e s , commercia l o b j e c t i v e s ga ined and r e t a i n e d paramountcy (as i n the p e r s i s t e n t r e f u s a l to u n t i e more Canad ian a i d ) . While o f t e n the most e a s i l y d i s c a r d e d or v i o l a t e d i n a p o l i t i c a l and b u r e a u c r a t i c environment c h a r a c t e r i z e d by both c o n f l i c t and e n f o r c e d compromise,55 the supposed ly pr imary deve lopmental o r i e n t a t i o n has not been d e s t r o y e d , r e f l e c t e d for i n s t a n c e i n the h i g h c o n c e s s i o n a l i t y 5 6 55 Roger Young, "Canadian F o r e i g n A i d : F a c i n g a C r i s i s o f i t s Own?", i n J o u r n a l o f Canadian S t u d i e s , Winter 1984-85, p. 33 56 C o n c e s s i o n a l i t y i s a measure o f the "sof tness" o f a l o a n , measured by the g r a n t element o f a l o a n . I t i s c a l c u l a t e d on the b a s i s o f i n t e r e s t r a t e , grace p e r i o d ( i n t e r v a l to f i r s t repayment) and m a t u r i t y ( i n t e r v a l to f i n a l repayment) . S p e c i f i c a l l y , the g r a n t element i s the d i f f e r e n c e between the face v a l u e o f the l o a n and the d i s c o u n t e d (at 10 per cent ) 33 of Canadian a i d and i n the Canadian support f o r many i n t e r n a t i o n a l development i n s t i t u t i o n s . I t i s very u n l i k e l y t h a t t h i s l a t t e r o r i e n t a t i o n w i l l disappear e n t i r e l y . U n f o r t u n a t e l y , though, the c o - e x i s t e n c e of these v a r y i n g o b j e c t i v e s can only f u r t h e r a m p l i f y the c o n f u s i o n and i n c o n s i s t e n c i e s i n the a i d program. And, as Carty e x p l a i n s : The end r e s u l t i s a batch with the c o n f u s i n g f l a v o u r o f too many r a t i o n a l i z a t i o n s , served up to f a r too many r e c i p i e n t c o u n t r i e s , using a f u l l , i f not c o n t r a d i c t o r y , spectrum of a i d u t e n s i l s . I t i s a c o n c o c t i o n c a l c u l a t e d to s u i t every audience or season and s a t i s f y none.57 present value of the s e r v i c e payments to be made by the borrower d u r i n g the l i f e t i m e o f the loan, expressed as a percentage o f the face value. CIDA, Annual Report, 1984-85, p. 96 57 Carty, i n S w i f t and C l a r k e , op. c i t . , p. 170 34 I I I . A SURVEY OF COMMERCIALLY-ORIENTED POLICIES 3.1 I n t r o d u c t i o n The p r e v i o u s c h a p t e r o u t l i n e d the broad h i s t o r i c a l development o f the Canadian a i d program, and i n p a r t i c u l a r s t r e s s e d i t s ad hoc o r i g i n s , i t s p r e c a r i o u s p o l i t i c a l and a d m i n i s t r a t i v e s t a t u s , and i t s s u s c e p t i b i l i t y to numerous domest ic and i n t e r n a t i o n a l p r e s s u r e s . T h i s c h a p t e r w i l l be concerned wi th examining i n some d e t a i l the v a r i o u s p o l i c i e s and programs which have been prompted p r i m a r i l y by economic s e l f -i n t e r e s t . I t w i l l a im, then , a t e s t a b l i s h i n g the i n c r e a s i n g s a l i e n c e o f the "commercial i m p e r a t i v e " i n Canad ian f o r e i g n a i d , wi th p a r t i c u l a r r e f e r e n c e to the r i s i n g p o l i t i c a l p o p u l a r i t y o f the a i d - t r a d e l i n k a g e . Be fore p r o c e e d i n g to examine these v a r i o u s p o l i c i e s and programs, i t i s necessary f i r s t to d e f i n e and d i s c u s s the a i d -trade l i n k a g e , as i t i s c l e a r l y c e n t r a l to an u n d e r s t a n d i n g o f c o m m e r c i a l l y - o r i e n t e d a i d . S ince CIDA never e x p l i c i t l y d e f i n e s or d i s c u s s e s the l i n k a g e i n i t s o f f i c i a l p u b l i c a t i o n s , however, i t i s somewhat d i f f i c u l t to know e x a c t l y what i s meant by the term, and p r e c i s e l y what i t s o b j e c t i v e s are deemed to be. A c l e a r e r p i c t u r e o f the a i d - t r a d e l i n k a g e , t h e n , w i l l have to be b u i l t upon fragments o f i n f o r m a t i o n and i n s i g h t s from a v a r i e t y o f s o u r c e s . A u s e f u l way to b e g i n to unders tand the a i d - t r a d e l i n k a g e i s to t h i n k o f i t i n terms o f three l e v e l s . The f i r s t l e v e l i s the most g e n e r a l , and d e s c r i b e s i n c r e a s e d t r a d e as a f o r t u n a t e . 35 i n a d v e r t e n t and long term b e n e f i t stemming from a i d , but not as a neces sary or c o n s c i o u s l y p lanned r e s u l t . CIDA i t s e l f p r o v i d e s a summary o f t h i s p e r s p e c t i v e : From the economic v i e w p o i n t , Canada b e l i e v e s i n the expans ion o f i n t e r n a t i o n a l t rade and i n s u p p o r t i n g those d e v e l o p i n g c o u n t r i e s t h a t he lp t h e m s e l v e s . . . we are l i v i n g i n an i n c r e a s i n g l y i n t e r d e p e n d e n t w o r l d . . . t h e s t a b i l i z a t i o n o f i n t e r n a t i o n a l economic mechanisms i s c r u c i a l to our economy. Canadian e f f o r t s to promote independent growth i n d e v e l o p i n g c o u n t r i e s w i l l be rewarded by new o u t l e t s for Canadian raw m a t e r i a l s and f i n i s h e d p r o d u c t s and by new sources o f supply for imported goods and commodit ies .58 T h i s f i r s t l e v e l , then , d e s c r i b e s Canada's g e n e r a l i n t e r e s t i n expanded world trade and i n T h i r d World development , but does not r e q u i r e the e x p l i c i t i n t e g r a t i o n o f commercia l concerns wi th a i d p o l i c y . The second l e v e l d e s c r i b e s a more c o n s c i o u s p o l i c y o f i n t e g r a t i n g a i d wi th commerce, and may be termed "commerc ia l ly r e l e v a n t a i d " . Here , commercia l c o n s i d e r a t i o n s may enter the a i d p o l i c y - m a k i n g a r e n a , b u t , a c c o r d i n g to o f f i c i a l s ta tements , not to the d e t r i m e n t o f the r e c i p i e n t c o u n t r i e s . A d i s c u s s i o n paper by E x t e r n a l A f f a i r s a p t l y summarizes t h i s p o s i t i o n : P r o v i d i n g a i d merely to advance the f o r t u n e s o f p a r t i c u l a r Canadian e x p o r t e r s would be to mi scons true the purpose o f a i d . I t would be e q u a l l y u n f o r t u n a t e to g i v e out a i d i n a form t h a t den ie s the p r o s p e c t o f c r e a t i n g f u t u r e markets for Canadian goods and s e r v i c e s . T h i s means t h a t Canada sh ou ld not f o i s t a i d on d e v e l o p i n g c o u n t r i e s i n the form o f goods and s e r v i c e s t h a t are Canadian but not 58 CIDA, P a r t n e r s i n Development, p. 2 36 c o m p e t i t i v e on commercia l markets (which would be an abuse o f t i e d a i d ) , but r a t h e r use a i d as a pump pr imer for c o m p e t i t i v e Canadian goods and s e r v i c e s . 5 9 The above passage draws a t t e n t i o n to s e v e r a l important f e a t u r e s o f the c o n v e n t i o n a l view o f the a i d - t r a d e l i n k a g e : the p r o v i s i o n o f c o m p e t i t i v e goods, the d e s i r e to secure f u t u r e e x p o r t markets , and the r e c i p r o c i t y o f b e n e f i t s . For t h i s l e v e l , t h e n , commercia l concerns may enter p o l i c y d e c i s i o n s , e s p e c i a l l y i n terms o f the s e l e c t i o n o f p r o j e c t s , programs and r e c i p i e n t c o u n t r i e s to be f i n a n c e d . In s h o r t , a i d i s used i n ways t h a t c o n c u r r e n t l y s a t i s f y commercia l o b j e c t i v e s . F i n a l l y , the t h i r d l e v e l d e s c r i b e s a s i t u a t i o n where a i d i s p r i m a r i l y or e x c l u s i v e l y o r i e n t e d towards commercial o b j e c t i v e s . N a t u r a l l y enough, n e i t h e r CIDA nor any o ther f e d e r a l department o f f i c i a l l y r e c o g n i z e s or d i s c u s s e s t h i s l e v e l , as i t r e p r e s e n t s a c l e a r v i o l a t i o n o f the p r i n c i p l e s behind ODA. N e v e r t h e l e s s , a number o f i n s t a n c e s w i l l be c i t e d i n t h i s c h a p t e r i n which the a i d - t r a d e l i n k a g e was pursued at t h i s l e v e l . The p r i m a r y i n t e r e s t o f t h i s t h e s i s i s wi th the l a t t e r two l e v e l s o f a i d - t r a d e l i n k a g e , i n which commercia l o b j e c t i v e s are most e x p l i c i t . The f i r s t l e v e l i s too g e n e r a l to warrant i t s d i s c u s s i o n as "commercial a i d " or as p a r t o f a s t r a t e g y o f l i n k i n g a i d and t r a d e . N e v e r t h e l e s s , i n a i d p r a c t i s e and i n o f f i c i a l r h e t o r i c , i t i s o f t e n d i f f i c u l t to d i f f e r e n t i a t e between 59 Department o f E x t e r n a l A f f a i r s , Canadian Trade P o l i c y  for the 1980s: A D i s c u s s i o n Paper , pp. 34-35 37 these l e v e l s or to draw c l e a r l i n e s between them. Indeed, many p o l i c i e s and p o l i c y ins truments seem to operate on more than one l e v e l . The c o m p l e x i t y o f the a i d - t r a d e l i n k a g e thus s h o u l d not be obscured by t h i s s imple t h r e e - l e v e l model . What domest ic b e n e f i t s are expected to a c c r u e from the a c t i v e p u r s u i t o f the l i n k a g e ? C l e a r l y , e x p o r t growth i s one g o a l . P r e s e r v i n g e x i s t i n g expor t markets may be another o b j e c t i v e . Concern f a r a d e t e r i o r a t i n g ba lance o f payments may be yet another m o t i v a t i o n for f o s t e r i n g e x p o r t s through the a i d program. The a i d - t r a d e l i n k may a l s o be c o n c e p t u a l i z e d as a means to d i v e r s i f y the d i r e c t i o n o f Canad ian t r a d e , or the c o n t e n t o f e x p o r t s . 6 0 S i m i l a r l y , the g o a l s o f n a t i o n a l economic growth , job c r e a t i o n , i n d u s t r i a l development , and t e c h n o l o g i c a l advancement may have an i n f l u e n c e over a i d p o l i c y on t h i s q u e s t i o n . U n f o r t u n a t e l y , as wi th so many o ther government p o l i c y o r i e n t a t i o n s , i t i s very d i f f i c u l t to d i s t i n g u i s h between p r i m a r y and s u b o r d i n a t e b e n e f i t s . On the o ther hand, i t i s f a i r l y easy to i d e n t i f y p o l i c i e s , p o l i c y i n s t r u m e n t s , or "models" wi th which the a i d - t r a d e l i n k a g e i s p u r s u e d . In t h i s c h a p t e r , the t h e s i s i d e n t i f i e s food a i d , the d i sbursement o f a i d to r a p i d l y growing LDCs, l i n e s o f c r e d i t , the I n d u s t r i a l C o o p e r a t i o n Program (INC) and a i d t y i n g as c u r r e n t e f f o r t s to f a c i l i t a t e the a i d - t r a d e c o n n e c t i o n . Others may a l s o 60 M i c h a e l C . Webb and Mark W. Z a c h e r , "Canadian E x p o r t Trade i n a Changing I n t e r n a t i o n a l Environment" , i n Denis S t a i r s and G i l b e r t R. Winham ( e d s . ) , Canada and the I n t e r n a t i o n a l  Po l i t i c a l / E c o n o m i c Env ironment , p. 86 38 f u l f i l l t h i s f u n c t i o n , but perhaps l e s s e x p l i c i t l y . The p r o v i s i o n o f t e c h n i c a l a s s i s t a n c e may a c q u a i n t d e v e l o p i n g c o u n t r i e s w i t h Canadian goods and t e c h n o l o g i e s ; the use o f Non-Governmental O r g a n i z a t i o n s (NGOs) i n CIDA programs may p e r f o r m the same f u n c t i o n . Even f i n a n c i n g the e d u c a t i o n o f f o r e i g n s t u d e n t s i n Canada may, v e r y i n d i r e c t l y , be c o n c e i v e d i n terms o f the a i d - t r a d e l i n k a g e . E s s e n t i a l l y , a lmost a l l o f Canada's ODA i n s t r u m e n t s , i n c l u d i n g the I n t e r n a t i o n a l Development Research C e n t r e (IDRC) and the Petro-Canada I n t e r n a t i o n a l A s s i s t a n c e C o r p o r a t i o n (PCIAC), have the p o t e n t i a l to promote Canadian goods and s e r v i c e s . In s h o r t , the a i d - t r a d e l i n k a g e c o u l d be i n t h e o r y (and sometimes i s , i n p r a c t i c e ) pursued t h r o u g h an enormous number o f p o l i c y i n s t r u m e n t s and c h a n n e l s . And, as mentioned, each i n s t r u m e n t may be pursued a t v a r y i n g l e v e l s o f a i d - t r a d e l i n k a g e . For the most p a r t , though, a l i m i t e d number o f p o l i c y i n s t r u m e n t s are employed e x p l i c i t l y to t h i s end. I t i s t o an a n a l y s i s o f these i n s t r u m e n t s t h a t the t h e s i s now t u r n s . 3.2 Food A i d Canada has l o n g been an e x t e n s i v e s u p p l i e r o f food a i d . I n 1984-85, the food a i d program was composed o f $385.9 m i l l i o n i n c o m modities, r e l a t e d t r a n s p o r t c o s t s , and c a s h c o n t r i b u t i o n s . T h i s makes Canadians the w o r l d ' s l a r g e s t per c a p i t a donors o f food a i d . Such a i d i s extended b i l a t e r a l l y , t h r ough m u l t i l a t e r a l i n s t i t u t i o n s (the l a r g e s t b e i n g the World Food Program), and 39 through NG0s.61 The p r i n c i p a l commodit ies i n the program are wheat, f l o u r , v e g e t a b l e o i l s , p u l s e s , m i l k powder and f i s h . A c c o r d i n g to CIDA, food a i d i s d i s b u r s e d p r i m a r i l y for h u m a n i t a r i a n and deve lopmenta l r e a s o n s . I t s v a r i o u s f u n c t i o n s a r e : to i n c r e a s e the q u a n t i t i e s o f food a v a i l a b l e i n food d e f i c i t c o u n t r i e s ; to a c c e l e r a t e the pace o f development by f r e e i n g f o r e i g n exchange and g e n e r a t i n g domest ic r e s o u r c e s for development; to p r o v i d e supplementary food for n u t r i t i o n a l l y v u l n e r a b l e groups ; and to o f f e r b a s i c s u b s i s t e n c e d u r i n g emergency r e l i e f and r e h a b i l i t a t i o n s i t u a t i o n s . 6 2 CIDA i s q u i c k to n o t e , however, t h a t as the second l a r g e s t s i n g l e component o f d i r e c t a s s i s t a n c e ( a f t e r d i r e c t , government-to-government a i d ) , food a i d c o n t r i b u t e s g r e a t l y to the Canad ian a g r i c u l t u r a l , f i s h e r y , and d a i r y s e c t o r s . Between 80 and 85 per cent o f the food a i d budget i s spent on Canadian procurement , wi th the remainder c o v e r i n g t r a n s p o r t a t i o n c o s t s and cash c o n t r i b u t i o n s to the World Food Program.63 While acknowledging the obv ious need for food a i d i n emergency s i t u a t i o n s , some o b s e r v e r s have q u e s t i o n e d whether CIDA's i n t e r e s t i n food a i d i s not determined by the p o l i t i c a l p o p u l a r i t y o f these " t r i c k l e back" b e n e f i t s , r a t h e r than by any a l l e g e d h u m a n i t a r i a n i m p u l s e s . Conn has argued t h a t C I D A ' s food 61 CIDA, Annual R e p o r t , 1984-85, p. 35 62 CIDA, Elements o f Canada' s O f f i c i a l Development  A s s i s t a n c e S t r a t e g y , p . 28 63 I b i d . , p . 28 40 a i d program i s u l t i m a t e l y based on the g o a l o f " s u r p l u s d i s p o s a l " . The food a i d e f f o r t began i n the 1950s w i t h the g o a l o f d i s p o s i n g o f Canada's a g r i c u l t u r a l s u r p l u s e s , e s p e c i a l l y wheat. T h i s g o a l s t i l l s u r v i v e s today, he a r g u e s , as " s u p p l y management t a k e s precedence over food r e q u i r e m e n t s o f hungry LDCs."64 F u r t h e r , he a s s e r t s , food a i d can become an e f f e c t i v e model f o r a i d - t r a d e l i n k a g e by a l t e r i n g or c r e a t i n g consumer p r e f e r e n c e s i n the r e c i p i e n t c o u n t r y , t h u s f u l f i l l i n g a "market p e n e t r a t i o n " f u n c t i o n . 6 5 The f u n c t i o n s o f s u r p l u s d i s p o s a l and p o s s i b l e market p e n e t r a t i o n a l s o ensure p o l i t i c a l s u p p o r t f o r the food a i d program from the Canadian a g r i c u l t u r a l , f i s h e r y and d a i r y s e c t o r s , and t h e i r p o l i t i c a l r e p r e s e n t a t i v e s i n the Department o f A g r i c u l t u r e , the Wheat Board, the M i n i s t r y o f F i s h e r i e s , and the Canadian D a i r y Commission. Thomson r e v e a l s a s t a t i s t i c a l t r e n d which appears to s u p p o r t Cohn's b a s i c p r e m i s e . D e s p i t e i t s h i g h p r i o r i t y commitment to a g r i c u l t u r a l development, Canada gave o n l y $506.7 m i l l i o n f o r a g r i c u l t u r a l and f i s h e r i e s development over the p e r i o d 1967-68 to 1977-78, w h i l e g i v i n g $1,549 b i l l i o n i n food a i d over the same p e r i o d . And m u l t i l a t e r a l food a i d c o n t r i b u t i o n s were o n l y one q u a r t e r o f 64 Cohn, Canadian Food A i d : Domestic and F o r e i g n P o l i c y  I m p l i c a t i o n s , p. 27 65 Cohn c i t e s the example o f Canadian skim m i l k powder a i d to Japan i n the e a r l y post-war p e r i o d . When the Japanese economy began t o improve, Japan began i m p o r t i n g Canadian skim m i l k powder c o m m e r c i a l l y . Presumably, consumer p r e f e r e n c e s had been i n f l u e n c e d by the Canadian a i d . See Cohn, i n Canadian P u b l i c  P o l i c y , op. c i t . , p. 219 41 b i l a t e r a l food a i d c o n t r i b u t i o n s over t h i s p e r i o d ; 6 6 the a b i l i t y o f the b i l a t e r a l channe l and the i n a b i l i t y o f the m u l t i l a t e r a l channe l to promote Canadian commercia l food expor t s may have been a major f a c t o r behind t h i s trend.67 Far these reasons , then , i t i s tempt ing to agree with Conn ' s e x p l a n a t i o n o f Canadian food a i d : D e c l i n i n g p ro spec t s fo r commercia l expor t can c o n t r i b u t e to the development o f s u r p l u s e s i n Canada; domest ic and e x t e r n a l p r e s s u r e s may then l ead to i n c l u s i o n o f these s u r p l u s e s i n Canada ' s food a i d program.68 3.3 E x t e n s i o n Of A id To Middle- Income LDCs By 1984-85 Canadian development a s s i s t a n c e was extended b i l a t e r a l l y to over 90 d e v e l o p i n g c o u n t r i e s . (Many a i d ob se rve r s argue t h a t t h i s f i g u r e i s too h i g h , and tha t to ach ieve maximum a i d e f f e c t i v e n e s s Canada shou ld c o n c e n t r a t e i t s a i d funds on a much s m a l l e r group o f c o u n t r i e s . ) I nc luded i n t h i s l i s t are c o u n t r i e s f a l l i n g i n t o a number o f Un i ted Nat ions c a t e g o r i e s : " l e a s t deve loped c o u n t r i e s " (LLDCs), " lower - income c o u n t r i e s " , and "midd le - income count r ie s ."69 While the e x t e n s i o n o f a i d to 66 Thomson, op. c i t . , p. 219 67 C a r t y , Smith and LAWG, op. c i t . , p. 127 68 Cohn, Canadian Food A i d : Domestic and F o r e i g n P o l i c y  I m p l i c a t i o n s , p. 45 69 A g rea t many schemes are used to c l a s s i f y or c a t e g o r i z e d e v e l o p i n g c o u n t r i e s . One commonly accepted scheme i s as f o l l o w s : 1) LLDCs are d e f i n e d as those w i th a low income, a low 42 c o u n t r i e s c l e a r l y r e f l e c t s the d i p l o m a t i c o b j e c t i v e s o f ( i . e . , the o b j e c t i v e o f m a i n t a i n i n g an a i d ny c o u n t r i e s , thereby c o n t r i b u t i n g to Canada's so many E x t e r n a l A f f a i r s "presence" i n ma b i l a t e r a l p o l i t i c a l p r e s t i g e ) , i t a l s o p r o s p e c t s i n some o f W o r l d . CIDA j u s t i f i e s t h a t they are s t i l l C a n a d i a n a s s i s t a n c e , more commercia l forms: r e l a t i o n s h i p s and g e n e r a l i n t e r n a t i o n a l may r e f l e c t a d e s i r e to enhance commercia l the f a s t e r growing markets o f the T h i r d i t s a i d to middle - income LDCs on the grounds d e v e l o p i n g n a t i o n s , and thus s t i l l need but t h a t such a s s i s t a n c e may take new and . . . s o c a l l e d "middle- income c o u n t r i e s " . . . are s t i l l "deve lop ing c o u n t r i e s " and have c o n s i d e r a b l e needs which must be met from e x t e r n a l sources i n o r d e r to ensure t h e i r c o n t i n u i n g development and the i n t e r n a l t r a n s f o r m a t i o n o f t h e i r r e s p e c t i v e s o c i e t i e s . These needs r e l a t e to the concerns o f a c o u n t r y a t the economic t a k e - o f f p o i n t : t r a n s f e r s o f t echno logy and s c i e n t i f i c know-how; p r o v i s i o n o f s e l e c t i v e manager ia l and t e c h n i c a l c a p a b i l i t y ; t r a n s f e r s o f c a p i t a l on more or l e s s commercia l terms.70 The d e s i r e to e s t a b l i s h "true" economic r e l a t i o n s h i p s (based on r e c i p r o c a l t rade and inves tment , as opposed to the t r a d i t i o n a l l i t e r a c y r a t e (20 per cen t or l e s s ) , and a low share o f m a n u f a c t u r i n g i n t o t a l o u t p u t (10 per cent or l e s s o f GNP); c u r r e n t l y there are 36 L L D C s . 2) Lower-income c o u n t r i e s had a per c a p i t a annual income o f l e s s than $600 ( U . S . ) i n 1980. 3) M i d d l e - i n c o m e c o u n t r i e s had a per c a p i t a annual income o f more than $600 i n 1980. See OECD, World Economic Interdependence and  the E v o l v i n g N o r t h - S o u t h R e l a t i o n s h i p , p . 67 70 CIDA, I n d u s t r i a l C o o p e r a t i o n wi th D e v e l o p i n g C o u n t r i e s :  Report on an I n t e r n a t i o n a l C o n s u l t a t i o n on I n d u s t r i a l  C o o p e r a t i o n , p . 19 4 3 d o n o r - r e c i p i e n t development a s s i s t a n c e r e l a t i o n s h i p ) i s a l s o seen as an o b j e c t i v e i n t h i s r e g a r d for CIDA. Thus , CIDA j u s t i f i e s i t s a i d to such c o u n t r i e s l a r g e l y on a deve lopmenta l b a s i s : t h a t o f chang ing deve lopmenta l needs i n growing LDCs. But i t a l s o e x p l i c i t l y acknowledges the commercial p o t e n t i a l o f these c o u n t r i e s , u s i n g terms such as "mutual i n t e r e s t s " and " r e c i p r o c a l b e n e f i t s " as catchwords for t h i s p h i l o s o p h y o f " e n l i g h t e n e d s e l f -i n t e r e s t " . The comments o f one h i g h - r a n k i n g CIDA o f f i c i a l c o n c i s e l y c a p t u r e the s p i r i t o f t h i s p h i l o s o p h y : The middle income c o u n t r i e s , and indeed some o f the lower- income c o u n t r i e s , are a l s o v i t a l p r o s p e c t s f o r l o n g - t e r m commercia l r e l a t i o n s h i p s wi th Canada. C o n s e q u e n t l y , c o n c e s s i o n a l a i d i n these cases can be j u s t i f i e d on commercial as w e l l as deve lopmenta l grounds . Through the a i d program, we i n t e n d to s e i z e the o p p o r t u n i t i e s f o r complementar i ty o f deve lopmenta l and commercia l g o a l s and to e l e v a t e the t r a d i t i o n a l a i d r e l a t i o n s h i p s to a more s o p h i s t i c a t e d form of c o o p e r a t i o n which are ( s i c ) d e s i r e d by our p a r t n e r s as w e l l as o u r s e l v e s . 7 1 A d m i t t e d l y , the w e a l t h i e r LDCs are more l i k e l y to b e n e f i t from the i n t e g r a t i o n o f a i d and commerce than are the L L D C s . N e v e r t h e l e s s , w i thout deny ing the p o s s i b i l i t y o f a c o m p a t i b i l i t y between deve lopmenta l and commercial g o a l s , i t i s j u s t as l i k e l y t h a t they w i l l c o n f l i c t . With Canadian a s s i s t a n c e c o n c e n t r a t e d on low-income . LDCs (Canada c u r r e n t l y p ledges to commit .15 per cent o f GNP to LLDCs and 80 per cent o f b i l a t e r a l funds to low 71 G l e n S h o r t l i f f e , A s i a P a c i f i c R e g i o n , p . 5 Canadian Development P o l i c y and the 44 income LDCs72), a s s i s t a n c e to the w e a l t h i e r d e v e l o p i n g c o u n t r i e s can o n l y be m a r g i n a l t o t h e i r o v e r a l l r e s o u r c e needs. On the o t h e r hand, though, even m a r g i n a l a s s i s t a n c e may g e n e r a t e e x p o r t and i n v e s t m e n t o p p o r t u n i t i e s f o r Canadian f i r m s , thus f a c i l i t a t i n g the a i d - t r a d e l i n k a g e . And w h i l e t h e r e i s some c o i n c i d e n c e o f commercial and de v e l o p m e n t a l i n t e r e s t s i n the s e c o u n t r i e s , p a r t i c u l a r l y i n t h e i r i n d u s t r i a l and e x p o r t s e c t o r s , t h e r e remains a g r e a t d e a l o f p o v e r t y , i l l i t e r a c y , r u r a l d e p o p u l a t i o n and e c o l o g i c a l d e s t r u c t i o n i n a l l o f thes e c o u n t r i e s , s e v e re problems not e a s i l y s o l v e d by " i n d u s t r i a l c o o p e r a t i o n " o r l a r g e c a p i t a l p r o j e c t s . These problems i n s t e a d ought t o be addr e s s e d through a g r i c u l t u r a l development f u n d i n g , e d u c a t i o n and a b a s i c needs o r i e n t a t i o n , a c t i v i t i e s which do not e a s i l y f i t i n t o the a i d - t r a d e mould. CIDA may have d i s c o v e r e d a way to c l o s e t h i s c o m m e r c i a l -d e v e l o p m e n t a l d i v i d e , a t l e a s t p a r t i a l l y . Rudner has argued t h a t , thus f a r i n the 1980s, the annual i n c r e a s e s i n CIDA e x p e n d i t u r e s a r e b e i n g c o n c e n t r a t e d on h i g h e r - g r o w t h , low income LDCs, " . . . i n which the i n c i d e n c e o f p o v e r t y , economic performance and commercial o p p o r t u n i t i e s seem to come t o g e t h e r e s p e c i a l l y p r o p i t i o u s l y . " 7 3 ( T h i s does n o t , o f c o u r s e , s o l v e the problem o f f i n d i n g the p r o p e r b a l a n c e between f u n d i n g "modern" o r i n d u s t r i a l a c t i v i t i e s on the one hand, v e r s u s b a s i c needs or r u r a l 72 CIDA, Elements, p. 38 73 M a r t i n Rudner, "The E v o l v i n g Framework o f Canadian Development A s s i s t a n c e P o l i c y " , i n B r i a n W. T o m l i n and Maureen M o l o t ( e d s . ) , Canada Among N a t i o n s : 1984, p. 135 45 a c t i v i t i e s on the other.) In CIDA's defence, t h i s expenditure trend may be due to a l a c k of "a b s o r p t i v e c a p a c i t y " 7 4 i n the LLDCs and other low income LDCs; but, j u s t as probably, i t i s due to p r e s s u r e s on b e h a l f of the a i d - t r a d e l i n k a g e . Whether CIDA w i l l achieve a reasonable balance i n these c o u n t r i e s between t h e i r "modern" and " t r a d i t i o n a l " s e c t o r s remains to be seen. 3.4 L i n e s o f C r e d i t : P a r a l l e l F i n a n c i n g And Mixed C r e d i t s L i k e many other OECD n a t i o n s , Canada has sought to generate export markets i n the developing world through the p r o v i s i o n o f c o n c e s s i o n a l export c r e d i t s . Such l i n e s of c r e d i t , i n which c o n c e s s i o n a l ODA funds are blended (or o f f e r e d s e p a r a t e l y but i n tandem) with more commercial f i n a n c i n g , are presumed to enhance export p o t e n t i a l because they o f f e r loans on extremely f a v o r a b l e terms, provided the funds are spent on donor country goods and s e r v i c e s . For Canada, two p r i n c i p a l farms of c o n c e s s i o n a l export c r e d i t s stand out. The f i r s t , " p a r a l l e l f i n a n c i n g " , i s an arrangement whereby CIDA w i l l f i n a n c e one component o f a p r o j e c t , while another Canadian ( u s u a l l y the Export Development Cor p o r a t i o n ) or i n t e r n a t i o n a l agency f i n a n c e s a separate 74 "Absorptive c a p a c i t y " r e f e r s to the c a p a c i t y o f a dev e l o p i n g country to absorb a i d funds i n p r o j e c t s and programs without wasting or m i s a l l o c a t i n g these funds. 46 component o f the same p r o j e c t , or a s eparate but r e l a t e d p r o j e c t . 7 5 A c c o r d i n g to CIDA: "In a l l c a s e s , s epara te but i n t e r d e p e n d e n t agreements are s i g n e d wi th the T h i r d World p u r c h a s e r . P a r a l l e l f i n a n c i n g i n v o l v e s two s epara te agenc i e s a c t i n g independent ly i n f u l f i l l m e n t o f t h e i r d i f f e r e n t mandates."76 From 1981 to 1983, CIDA d i s b u r s e d about $150 m i l l i o n i n p a r a l l e l wi th EDC f i n a n c i n g . 7 7 S ince 1978, seventeen p r o j e c t s have been c o - f i n a n c e d , w i th about $750 m i l l i o n expec ted to flow back, to Canada i n procurement . 78 I t has been e s s e n t i a l l y an ad hoc f a c i l i t y but has proven v e r y u s e f u l i n a number o f cases where deve lopmenta l and commercia l i n t e r e s t s have c o i n c i d e d . T h i s mechanism has had the e f f e c t o f " s t r e t c h i n g " a i d d o l l a r s and o f improv ing the c o s t s o f f i n a n c i n g . . . These arrangements have a l s o he lped CIDA a c h i e v e i t s v o l u m e - r e l a t e d deve lopmenta l o b j e c t i v e s . 7 9 P a r a l l e l f i n a n c i n g , i t i s a r g u e d , generates a g r e a t e r flow o f f i n a n c i a l r e s o u r c e s to the d e v e l o p i n g wor ld than would o t h e r w i s e be the c a s e . The second p r i m a r y in s t rument i n t h i s c a t e g o r y i s "mixed 75 To i l l u s t r a t e , the EDC might p r o v i d e a l o a n f o r a cement p l a n t whi l e CIDA funded the development o f a d j a c e n t p o r t f a c i l i t i e s . CIDA i s a l s o i n v o l v e d i n p a r a l l e l f i n a n c i n g w i t h o ther b i l a t e r a l donors and m u l t i l a t e r a l f i n a n c i a l and a i d a g e n c i e s , such as the World Bank and Arab/OPEC a i d a g e n c i e s . See CIDA, E l e m e n t s , pp. 43-44 76 I b i d . , p . 43 77 Canada, E x p o r t F i n a n c i n g : C o n s u l t a t i o n Paper , p . 17 78 CIDA, 1985-86 E s t i m a t e s , p. 22 79 Canada, E x p o r t F i n a n c i n g , p. 16 c r e d i t s " , which i n v o l v e s the b l e n d i n g o f ODA wi th commercia l e x p o r t c r e d i t s . 8 0 Canada began t h i s p r a c t i c e i n 1981, s t r i c t l y on a "matching" b a s i s , meaning Canadian e x p o r t e r s c o u l d o b t a i n f i n a n c i n g t h a t matched c o m p e t i t o r s ' c o n c e s s i o n a l o f f e r s . To d a t e , EDC's mixed c r e d i t packages have not been used a c t i v e l y to seek out new markets .81 Not s u r p r i s i n g l y , both the government at l a r g e and CIDA i n p a r t i c u l a r defend the use o f c o n c e s s i o n a l e x p o r t f i n a n c i n g , s t r e s s i n g the c a p i t a l needs o f r e c i p i e n t c o u n t r i e s , the r e c i p r o c i t y o f b e n e f i t s a c c r u i n g from such arrangements , a n d , sometimes, the domest ic b e n e f i t s o f e x p o r t p r o m o t i o n . Not a l l t h i r d p a r t i e s are s a t i s f i e d by such a s s u r a n c e s , however. The DAC has adopted g u i d e l i n e s which seek to l i m i t the use o f " a s s o c i a t e d f i n a n c i n g " ( i . e . , mixed c r e d i t s ) . Such p r a c t i c e s , i t i s a r g u e d , c r e a t e " . . . t h e r i s k t h a t through a s s o c i a t e d f i n a n c i n g s c a r c e ODA r e s o u r c e s are d i v e r t e d from d e v e l o p m e n t - o r i e n t e d uses i n poorer r e c i p i e n t s to t rade and c o m p e t i t i o n - o r i e n t e d purposes and p r o j e c t s i n these c o u n t r i e s or from these c o u n t r i e s to m i d d l e -income c o u n t r i e s . " 8 2 Even the Department o f F i n a n c e , which endorses c o n c e s s i o n a l e x p o r t f i n a n c i n g , concedes t h a t such 80 Canada does not i n c l u d e the "soft l o a n " p o r t i o n s o f i t s mixed c r e d i t f i n a n c i n g packages i n i t s ODA, a l t h o u g h many o t h e r DAC c o u n t r i e s do so . I n s t e a d , the c o n c e s s i o n a l p o r t i o n s are p r o v i d e d by EDC through i t s S e c t i o n 31 Canada A c c o u n t . See E x p o r t F i n a n c i n g , p. 17 81 I b i d . , pp. 19-20 82 OECD, T w e n t y - F i v e Years o f Development C o o p e r a t i o n , p. 245 48 f i n a n c i n g c r e a t e s the p o s s i b i l i t y o f t r a d e - o f f s between deve lopmenta l and commercia l o b j e c t i v e s : While these i n t e r e s t s w i l l o f t e n c o i n c i d e , there are s i g n i f i c a n t d i f f e r e n c e s i n the c r i t e r i a for the s e l e c t i o n o f r e c i p i e n t c o u n t r i e s , s e c t o r s and i n d i v i d u a l p r o j e c t s which would make i t d i f f i c u l t to r e a l i z e f u l l y both o b j e c t i v e s . 8 3 In s p i t e o f these c r i t i c i s m s and s e l f - d o u b t s , however, Canada c o n t i n u e s to make e x t e n s i v e use o f such f a c i l i t i e s . A c c o r d i n g to the DAC, Canada i s one o f the worst " v i o l a t o r s " i n u s i n g a s s o c i a t e d f i n a n c i n g . A f t e r F r a n c e , which s u p p l i e s f u l l y 52 per cen t o f the DAC t o t a l o f a s s o c i a t e d f i n a n c i n g , Canada ranked second i n 1983-84, wi th 14 per c e n t . 8 4 Canada a l s o ranked h i g h i n terms of i t s share o f the DAC t o t a l o f ODA used i n a s s o c i a t e d f i n a n c i n g (12%) and i n i t s p r o p o r t i o n o f ODA used for a s s o c i a t e d f i n a n c i n g (10%).85 I n t e r e s t i n g l y , i n terms o f p r a c t i s e s which are "economica l ly s i m i l a r " to a s s o c i a t e d f i n a n c i n g , such as t i e d and p a r t i a l l y u n t i e d s i n g l e ODA loans wi th a g r a n t element o f l e s s than 50 per c e n t , Canada r e c e i v e s s t r o n g p r a i s e . The average g r a n t e lement i n C a n a d i a n ODA commitments i n 1983-84 was 98.9 per c e n t , w e l l above the DAC average o f 90.7 per c e n t . 8 6 The very generous c o n c e s s i o n a l i t y o f C a n a d i a n l oans i s c o n t r a s t e d wi th Canada ' s more hard-headed use 83 Canada, E x p o r t F i n a n c i n g , p . 17 84 OECD, T w e n t y - F i v e Years o f Development C o o p e r a t i o n , p. 85 I b i d . , p . 246 86 I b i d . , p . 106 49 o f a s s o c i a t e d f i n a n c i n g , s u g g e s t i n g the r e s p e c t i v e i n f l u e n c e s o f contend ing o b j e c t i v e s and i n t e r e s t s w i t h i n the a i d program. 3.5 B i l a t e r a l - M u l t i l a t e r a l Debate The debate over the r e s p e c t i v e m e r i t s o f b i l a t e r a l ( i . e . , government to government) and m u l t i l a t e r a l ( i . e . , through i n t e r n a t i o n a l i n s t i t u t i o n s ) a i d channe l s has l o n g been a f e a t u r e o f Canadian development a s s i s t a n c e . The F o r e i g n P o l i c y f o r  Canadians b o o k l e t o f 1970 committed Canada to i n c r e a s i n g i t s share o f ODA t r a n s f e r r e d m u l t i l a t e r a l l y . S i m i l a r l y , the 1975 CIDA document. S t r a t e g y f o r I n t e r n a t i o n a l Development C o o p e r a t i o n  1975-1980 aimed at a m u l t i l a t e r a l t a r g e t o f 35 per cent o f ODA. These t a r g e t s have been met. A c c o r d i n g to the l a r g e s t DAC s t a t i s t i c s , Canada ranked very c l o s e to the top o f the 17 DAC members i n terms o f the p r o p o r t i o n o f ODA channe led m u l t i l a t e r a l l y , at 40.6 per c e n t . 8 7 However, the c u r r e n t P r e s i d e n t o f CIDA, Margare t C a t l e y - C a r l s o n , favoured a r e d u c t i o n i n Canada' s m u l t i l a t e r a l / b i l a t e r a l r a t i o when she was a V i c e -P r e s i d e n t i n the l a t e 1970s and e a r l y 1980s. A c c o r d i n g l y , i t can be expected t h a t the debate w i l l c o n t i n u e . The debate r e v o l v e s around a l a r g e number o f c o n c e r n s : CIDA's problems i n d i s b u r s i n g a l l o f i t s funds; the a d m i n i s t r a t i v e e f f i c i e n c y and deve lopmenta l e f f e c t i v e n e s s o f the r e s p e c t i v e c h a n n e l s ; the p o l i t i c a l i m p l i c a t i o n s o f e i t h e r 87 I b i d . , p. 147 50 s u p p o r t i n g or "abandoning" m u l t i l a t e r a l i n s t i t u t i o n s ; and the degree o f " v i s i b i l i t y " o f a i d p r o j e c t s . Not s u r p r i s i n g l y , the debate a l s o i n v o l v e s c o n s i d e r a t i o n s o f a commercial nature, though i t cannot be s a i d t h at these dominate the terms of d i s c o u r s e . The primary focus of such commercial concerns i s the apparent lack, of commercial c o n t r o l over and r e t u r n s from funds d i s t r i b u t e d m u l t i l a t e r a l l y . For the most p a r t , Canadian m u l t i l a t e r a l funds cannot be t i e d to procurement i n Canada; b i l a t e r a l funds, on the other hand, are h e a v i l y t i e d . Instead, c o n t r a c t s i n such i n t e r n a t i o n a l f o r a are awarded f o l l o w i n g a process of c o m p e t i t i v e i n t e r n a t i o n a l b i d d i n g . Herein l i e s the Canadian concern. Canada's r e c o r d of winning c o n t r a c t s i n such c o m p e t i t i v e c o n t e s t s i s r e l a t i v e l y poor, e s p e c i a l l y f o r c a p i t a l equipment s u p p l i e r s . However, t h i s may not always be due to uncompetitive b i d s as a r e s u l t of high p r i c e s , poor q u a l i t y or the l a c k of export f i n a n c i n g . As the North-South I n s t i t u t e p o i n t s out: ...the i s s u e of Canadian competitiveness i n m u l t i l a t e r a l c o m p e t i t i v e b i d d i n g has been inadequately t e s t e d because the numbers of Canadian b i d d e r s has been so extremely low. I t i s well-known that when Canadian companies have b i d , they have enjoyed a very high r a t e of success.88 88 North-South I n s t i t u t e , T h i r d World Markets and Export  F i n a n c i n g : Onto a Sounder F o o t i n g , p. 6. For other good d i s c u s s i o n s of Canada's m u l t i l a t e r a l b i d d i n g r e c o r d and the v a r i o u s c o n s t r a i n t s to success, see: Jane Chudy, "Why Canadian Business i s not G e t t i n g More World Bank C o n t r a c t s " , i n Development D i r e c t i o n s , August/September 1978; and James H. Adams, O i l and Water: Export Promotion and Development A s s i s t a n c e 51 D e s p i t e t h i s r a t h e r impor tant f a c t , a number o f c a l l s have been made for Canada to reduce i t s m u l t i l a t e r a l a s s i s t a n c e because o f t h i s apparent l a c k o f s u c c e s s . T y p i c a l o f t h i s p e r s p e c t i v e i s the p o s i t i o n taken i n the Hatch Report o f 1979: " . . . C a n a d a has p e r s i s t e d i n a p o l i c y o f e x t e n s i v e f u n d i n g o f a l a r g e number (60 or so) o f m u l t i l a t e r a l agenc i e s from which r e l a t i v e l y l i t t l e b e n e f i t has f lowed to Canada."89 A c c o r d i n g l y , the Report argues for a r e d u c t i o n i n m u l t i l a t e r a l a i d , w i th a g r e a t e r focus for the remainder on " . . . f e w e r agenc i e s .with p r e f e r e n c e to those engaged i n development f i n a n c i n g . Canada shou ld seek to improve i t s s t a f f i n g and i t s e x e c u t i v e r e p r e s e n t a t i o n i n these agenc i e s i n order to promote a b e t t e r r e t u r n on i t s c o n t r i b u t i o n s . " 9 0 P r o p o s a l s such as these have drawn c o n s i d e r a b l e c r i t i c i s m from those concerned wi th the apparent d r i f t o f Canadian development a s s i s t a n c e towards a p o s i t i o n o f narrow s e l f -i n t e r e s t . Adams s u p p l i e s one p e r s p e c t i v e : . . . t h e a p p r o p r i a t e Canadian response shou ld be to seek to improve Canada's performance and , mare s p e c i f i c a l l y , to i n c r e a s e the l e v e l o f Canada's p a r t i c i p a t i o n i n the m u l t i l a t e r a l b i d d i n g game, r a t h e r than to withdraw t i m i d l y . 9 1 Another N o r t h - S o u t h I n s t i t u t e p u b l i c a t i o n echoes a s i m i l a r 89 E x p o r t Promot ion Review Committee (Roger H a t c h , C h a i r m a n ) , S t r e n g t h e n i n g Canada A b r o a d , p . 35 90 I b i d . , p . 36 91 Adams, op . c i t . , p . 26 s e n t i m e n t , h i g h l i g h t i n g the h i g h l y l u c r a t i v e ($20 b i l l i o n a n n u a l l y ) na ture o f c o n t r a c t s tendered by the w o r l d ' s i n t e r n a t i o n a l f i n a n c i a l i n s t i t u t i o n s ( I F I s ) : . . . t h e goa l o f a f a r more e n e r g e t i c and s u c c e s s f u l Canadian performance i n winning e x i s t i n g and f u t u r e m u l t i l a t e r a l l y - f i n a n c e d b u s i n e s s i n the T h i r d World i s so overwhelmingly important t h a t i t c o u l d w e l l be the key o b j e c t i v e i n b u i l d i n g our e x p o r t s to new markets .92 R e g a r d l e s s o f the p o t e n t i a l b e n e f i t s stemming from I F I c o n t r a c t s , i t would be u n f o r t u n a t e i f CIDA d e c i s i o n s on the proper b a l a n c e between b i l a t e r a l and m u l t i l a t e r a l channe l s were made p r i m a r i l y on the q u e s t i o n o f economic r e t u r n s to Canada, though t h a t i s what appears to be happening . I n s t e a d , such d e c i s i o n s ought to be made p r i m a r i l y on the b a s i s o f the deve lopmenta l e f f e c t i v e n e s s and a d m i n i s t r a t i v e e f f i c i e n c y o f the r e s p e c t i v e c h a n n e l s , wi th o t h e r concerns s u b o r d i n a t e . 3.6 A i d - T r a d e Fund One o f the most e x p l i c i t a t tempts ever made by Canada to e x p l o i t the a i d - t r a d e l i n k a g e was the proposed " A i d - T r a d e Fund" o f 1984. In h i s F e b r u a r y , 1984 budget . F i n a n c e M i n i s t e r Marc La londe announced the p o s s i b i l i t y o f a new fund which would 92 N o r t h - S o u t h I n s t i t u t e , T h i r d World Markets and E x p o r t  F i n a n c i n g , p. 7 53 absorb up to 50 per cent o f the annual i n c r e a s e i n ODA: The d e v e l o p i n g c o u n t r i e s o f f e r many expor t o p p o r t u n i t i e s for our p r i v a t e s e c t o r . However, many o f these c o u n t r i e s are e x p e r i e n c i n g u n u s u a l l y s e r i o u s ba lance o f payments problems which are impeding t h e i r development e f f o r t s and thus t h e i r c a p a c i t y to import . T h e i r d e c i s i o n s to undertake investments and c a p i t a l p r o j e c t s o f t e n hinge on the a v a i l a b i l i t y o f e x t e r n a l f i n a n c i n g on c o n c e s s i o n a l terms. To respond to these needs, f or our own b e n e f i t as w e l l as t h e i r s , we s h a l l r e q u i r e c l o s e r c o o r d i n a t i o n o f our development a s s i s t a n c e and our export f i n a n c i n g p o l i c i e s . . . [The fund i s ] to p r o v i d e f i n a n c i n g for p r o j e c t s which have h i g h p r i o r i t y i n r e c i p i e n t c o u n t r i e s ' development p l a n s , for which Canadian f i rms are c o m p e t i t i v e and for which development a s s i s t a n c e f i n a n c i n g i s r e q u i r e d . . . The o b j e c t w i l l be to he lp Canadian f i rms to p r o v i d e a d d i t i o n a l goods and s e r v i c e s i n support o f T h i r d World development and to i n c r e a s e the Canadian share o f procurement i n m u l t i l a t e r a l development p r o j e c t s . 9 3 The new C o n s e r v a t i v e government s h e l v e d the idea for the Fund, but r e s u r r e c t e d i t i n the May, 1985 budget i n the gu i s e o f a "Trade and Development F a c i l i t y . " F i n a l l y , i n the F e b r u a r y , 1986 budget , the government d e c i d e d not to c r e a t e the F a c i l i t y . The very e x i s t e n c e o f such p r o p o s a l s , however, suggests an ongoing i n t e r e s t i n a i d - t r a d e l i n k a g e , c r e a t e d c o n s i d e r a b l e c o n t r o v e r s y . Wright argues tha t the b r i e f p r o v i d e s important i n s i g h t s i n t o funds . A c c o r d i n g to W r i g h t , the And, not s u r p r i s i n g l y , they h i s t o r y o f the A i d - T r a d e Fund b u r e a u c r a t i c c o n f l i c t s over a i d idea for the Fund sprang from 93 Marc L a l o n d e , i n the House o f Commons, F e b r u a r y 15, 1984. See House o f Commons Debates: O f f i c i a l R e p o r t , Second S e s s i o n - T h i r t y - S e c o n d P a r l i a m e n t , V o l . 2, 1984 54 the Department o f F i n a n c e ' s i n t e r n a t i o n a l programs d i v i s i o n . D i s s a t i s f a c t i o n with the C a b i n e t ' s l a c k o f p o l i c y i n awarding mixed c r e d i t s to Canadian e x p o r t e r s , and a b e l i e f t h a t CIDA would not be a b l e to spend a l l o f the p r o j e c t e d i n c r e a s e s i n a i d funds , were key f a c t o r s behind the Department ' s p r o p o s a l . F i n a n c e ' s o r i g i n a l p l a n was a l t e r e d c o n s i d e r a b l y be fore the Budget Speech, main ly owing to o p p o s i t i o n from E x t e r n a l A f f a i r s , which saw the fund as r e p r e s e n t i n g a c l e a r breach o f Canada's p o l i c y o f a l l o c a t i n g 80 per cent o f b i l a t e r a l funds to low-income LDCs.94 The upshot o f a l l the changes was t h a t " . . . t h e fund was p a i n t e d as a new t h r u s t i n a i d p o l i c y , a c o m m e r c i a l l y r e l e v a n t a s p e c t o f the a i d program, whereas F inance had c o n c e i v e d o f i t as a way to use p a r t o f the a i d program to ach i eve commercia l o b j e c t i v e s . " 9 5 In terms o f the l e v e l s o f a i d - t r a d e l i n k a g e , i t appears the Fund moved from the t h i r d to the second l e v e l i n the course o f the p o l i t i c a l n e g o t i a t i n g and t r a d e - o f f s . C l e a r l y , the ep i sode r e v e a l s l a r g e d i f f e r e n c e s o f o p i n i o n w i t h i n government as to the purpose o f the a i d program. H e l l e i n e r sees the Fund i n a s l i g h t l y d i f f e r e n t l i g h t , as a t h r e a t to the very p r i n c i p l e s and g u i d i n g p o l i c y p o s i t i o n s b e h i n d Canad ian a i d : 94 G e r a l d W r i g h t , " B u r e a u c r a t i c P o l i t i c s and Canada ' s F o r e i g n Economic P o l i c y " , i n Denis S t a i r s and G i l b e r t R. Winham ( e d s . ) . S e l e c t e d Problems i n F o r m u l a t i n g F o r e i g n Economic P o l i c y , p . 42 95 I b i d . , p . 42 The announcement i n the e x p e n d i t u r e s w i l l be 1984 budget t h a t a i d i n c r e a s e d by an " a i d -55 t rade" Canadian expor t fund s i g n a l s the i n c a p a c i t y o f the e x i s t i n g system to f u l f i l l the p o v e r t y - a l l e v i a t i n g tasks for which i t was c r e a t e d ; formal commitments to h igher a i d e x p e n d i t u r e s toge ther with f a i l u r e , under e x i s t i n g p o l i c y c o n s t r a i n t s , to move funds to those c o u n t r i e s and p r o j e c t s t h a t r e a l l y need them has genera ted a p r e d i c t a b l e governmental response - the programme w i l l h e n c e f o r t h d i r e c t more a i d to those c o u n t r i e s and p r o j e c t s t h a t can use Canadian i m p o r t s , t h a t i s , those t h a t are b e t t e r o f f and do not r e a l l y r e q u i r e as much a s s i s t a n c e . 9 6 An e x a m i n a t i o n o f these a i d - t r a d e f a c i l i t i e s p r o v i d e s a number o f key i n s i g h t s i n t o a i d p o l i c y - m a k i n g i n Ottawa. The p e r m e a b i l i t y o f the a i d p o l i c y - m a k i n g arena to the i n t e r e s t s and o b j e c t i v e s o f o t h e r f e d e r a l government departments i s c l e a r ; so too i s the i n t e r d e p a r t m e n t a l c o n f l i c t over the d i r e c t i o n o f a i d p o l i c y . The c l o s e i n t e r - r e l a t i o n s h i p and c o m p a t i b i l i t y between CIDA's a d m i n i s t r a t i v e ( i . e . , d i sbursement) problems and the p u r s u i t o f the a i d - t r a d e l i n k a g e i s a l s o e v i d e n t from t h i s e p i s o d e . F i n a l l y , the s l i g h t but s i g n i f i c a n t d i f f e r e n c e between "commerc ia l ly r e l e v a n t " a i d and e x p l i c i t l y u s i n g a i d to a c h i e v e commercia l ends i s uncovered . These are a l l themes to be addressed l a t e r i n the t h e s i s . 3.7 I n d u s t r i a l C o o p e r a t i o n Program CIDA has always c o n s i d e r e d i t s e l f more than j u s t an " a i d " 96 G . K . H e l l e i n e r , "Canada, the D e v e l o p i n g C o u n t r i e s and the I n t e r n a t i o n a l Economy: What Next?" , i n J o u r n a l o f Canadian  S t u d i e s , Winter 1984-85, p . 19 56 agency: i t i s , r a t h e r , a "development" agency.97 A c c o r d i n g l y , i t has sought to i n c r e a s e and improve the v a r i o u s channe l s o f c o o p e r a t i o n between Canada and d e v e l o p i n g c o u n t r i e s , a iming to go w e l l beyond the t r a d i t i o n a l d o n o r - r e c i p i e n t a i d r e l a t i o n s h i p . One such channe l has been l a b e l l e d "business c o o p e r a t i o n " or " i n d u s t r i a l c o o p e r a t i o n " , which are e s s e n t i a l l y euphemisms f o r a p o l i c y o f e n c o u r a g i n g the Canadian p r i v a t e s e c t o r to become more a c t i v e i n the T h i r d W o r l d , e s p e c i a l l y through j o i n t v e n t u r e i n v e s t m e n t s . Canada e n t e r e d the bus ines s c o o p e r a t i o n f i e l d i n 1971 by i n i t i a t i n g a program o f a s s i s t a n c e for f e a s i b i l i t y and s t a r t e r s t u d i e s f o r Canadian companies w i s h i n g to expand or e s t a b l i s h a c t i v i t i e s i n the T h i r d Wor ld . In 1978, i t launched a new and e n l a r g e d program o f a s s i s t a n c e , the I n d u s t r i a l C o o p e r a t i o n Program ( I N C ) , wi th an i n i t i a l budget o f $460,000. In r e c o g n i t i o n o f the growing p o t e n t i a l o f such b u s i n e s s l i n k a g e s , the INC was expanded i n 1984 to become the o p e r a t i n g arm o f the newly formed B u s i n e s s C o o p e r a t i o n Branch .98 The INC i s the most important component o f t h i s new B r a n c h . I t p r o v i d e s f i n a n c i a l a s s i s t a n c e f o r p r e - f e a s i b i l i t y , f e a s i b i l i t y and s t a r t e r s t u d i e s , o r g a n i z e s and f i n a n c e s t rade and t echno logy 97 S h o r t l i f f e , op. c i t . , p. 28. T h i s i s s i m i l a r to the q u a l i t a t i v e and q u a n t i t a t i v e d i s t i n c t i o n between development a s s i s t a n c e and development c o o p e r a t i o n , the l a t t e r b e i n g b r o a d e r , i n c l u d i n g c o o p e r a t i o n on t r a d e , inves tment , monetary p o l i c y , e d u c a t i o n e t c . 98 CIDA, Canadian Bus ines s and the T h i r d W o r l d : A Growing  P a r t n e r s h i p , pp. 3-9 57 s e m i n a r s , m i s s i o n s and e x h i b i t i o n s , and p u b l i s h e s investment g u i d e s , a l l f o r the b e n e f i t o f Canadian f i r m s s e e k i n g investment o p p o r t u n i t i e s i n the d e v e l o p i n g w o r l d , e s p e c i a l l y i n j o i n t v e n t u r e s . I t a l s o a d m i n i s t e r s the Canadian P r o j e c t P r e p a r a t i o n F a c i l i t y ( C P P F ) , a fund aimed at improv ing the chances o f C a n a d i a n f i r m s b i d d i n g f o r IFI c o n t r a c t s , and s e v e r a l o t h e r such f a c i l i t i e s . 9 9 F i n a l l y , the INC m a i n t a i n s networks o f b u s i n e s s a s s o c i a t i o n s i n Canada and throughout the d e v e l o p i n g w o r l d . Thus , the INC a d m i n i s t e r s a broad a r r a y o f ins truments wi th the goal o f i n c r e a s i n g the p a r t i c i p a t i o n o f Canadian b u s i n e s s i n the T h i r d W o r l d , p a r t i c u l a r l y for the t r a n s f e r o f t e c h n o l o g y . The INC's a c t i v i t i e s , however, are d e c i d e d l y one-way: l i t t l e a t t e n t i o n i s p a i d to improv ing the t rade p r o s p e c t s f o r T h i r d World b u s i n e s s i n Canada. In d e f e n d i n g i t s p r a c t i c e o f "business c o o p e r a t i o n , " CIDA p o i n t s to s e v e r a l f a c t o r s . The r e c i p r o c a l b e n e f i t s theme i s a c o n s t a n t i n CIDA p u b l i c a t i o n s . A c c o r d i n g to CIDA: The purpose o f the I n d u s t r i a l C o o p e r a t i o n Program (INC) i s to s t i m u l a t e i n c r e a s e d p a r t i c i p a t i o n by the Canad ian p r i v a t e s e c t o r i n the i n d u s t r i a l development and growth o f the T h i r d W o r l d , and to do so through j o i n t v e n t u r e s and o t h e r forms o f b u s i n e s s i n i t i a t i v e s b e n e f i c i a l to d e v e l o p i n g 99 Two o ther l e s s prominent funds a r e : the Canad ian Technology T r a n s f e r F a c i l i t y , " . . . d e s i g n e d to a l l o w for the t e s t i n g and a d a p t a t i o n i n d e v e l o p i n g c o u n t r i e s o f a proven t echno logy a l r e a d y i n use i n d u s t r i a l l y as a p r e l u d e to l o n g - t e r m b u s i n e s s c o o p e r a t i o n " ; and the Canad ian Renewable Energy F a c i l i t y , which " . . . s u p p o r t s the t e s t i n g and a d a p t a t i o n o f Canad ian t e c h n o l o g y i n d e v e l o p i n g c o u n t r i e s , e s p e c i a l l y i n the f i e l d o f renewable e n e r g y . " CIDA, Canadian Bus ines s and the  T h i r d W o r l d , p . 17 58 c o u n t r i e s and Canada.100 The j o i n t p a r t n e r s h i p s f o s t e r e d i n i n d u s t r i a l and b u s i n e s s development are s a i d to he lp i n the c r i t i c a l t r a n s f e r o f t e c h n o l o g y , which i n t u r n can l e a d to i n c r e a s e d employment and import s u b s t i t u t i o n , improved f o r e i g n exchange e a r n i n g s , and expanded human r e s o u r c e development.101 The d e v e l o p i n g c o u n t r y i s thus presumed to b e n e f i t . But so too i s Canada, as such j o i n t v e n t u r e s promise immediate s a l e s o f t e c h n o l o g y , equipment and s e r v i c e s , and p o s s i b l e l o n g term market p e n e t r a t i o n . To d a t e , no s y s t e m a t i c and comprehensive a n a l y s i s has been under taken ( o r , a t l e a s t , r e l e a s e d for p u b l i c consumption) on the INC and i t s success i n f o s t e r i n g i n d u s t r i a l c o o p e r a t i o n . N e v e r t h e l e s s , a number o f c r i t i c i s m s have been d i r e c t e d a t CIDA for t h i s i n n o v a t i v e program. Langdon, f or one, argues t h a t C I D A ' s investment i n c e n t i v e s schemes ought to be abandoned because the " i n s t i t u t i o n a l i z e d r e l a t i o n s h i p " of i n v e s t o r s to CIDA may g i v e d e v e l o p i n g c o u n t r y o f f i c i a l s f e a r s tha t these Canad ian f i r m s might use t h e i r CIDA c o n n e c t i o n s to i n f l u e n c e a i d d o n a t i o n s . 1 0 2 The f a c t t h a t the INC responds to the i n i t i a t i v e s o f C a n a d i a n b u s i n e s s and not to the i n i t i a t i v e s o f d e v e l o p i n g c o u n t r i e s may l e n d credence to Langdon's view. In ye t another r e p o r t by the u b i q u i t o u s N o r t h - S o u t h I n s t i t u t e , Adams argues t h a t 100 I b i d . , p . 4 101 I b i d . , p . 5 102 Steven L a n g t o n , Canadian P r i v a t e D i r e c t Investment and  Technology M a r k e t i n g i n D e v e l o p i n g C o u n t r i e s , p. 45 59 the INC r e p r e s e n t s a v i o l a t i o n o f the s p i r i t o f C I D A ' s b a s i c mandate: The c r i t i c i s m o f CIDA's p a r t i c i p a t i o n s h o u l d . . . have l e s s to do wi th the debate over the deve lopmenta l c o n t r i b u t i o n o f f o r e i g n investment - which i s e s s e n t i a l l y a d e c i s i o n to be made by the host c o u n t r y - than wi th the p r o p r i e t y o f f o s t e r i n g Canadian f o r e i g n i n v e s t m e n t s , a l b e i t i n j o i n t v e n t u r e s , by means o f the development a s s i s t a n c e program.10 3 F u r t h e r , as i n any government i n c e n t i v e s scheme, there i s the p o s s i b i l i t y t h a t the a s s i s t a n c e rendered w i l l a c h i e v e no p o s i t i v e r e s u l t s a t a l l , o r , worse y e t , t h a t i t w i l l be accepted for u l t e r i o r m o t i v e s , such as g a i n i n g p u b l i c l y - s u b s i d i z e d market i n f o r m a t i o n about a d e v e l o p i n g c o u n t r y . For example, a f i r m might a c c e p t CIDA a s s i s t a n c e to e x p l o r e the o p p o r t u n i t i e s for a j o i n t venture i n a d e v e l o p i n g c o u n t r y , hav ing d e c i d e d a l r e a d y t h a t the j o i n t venture format i s too u n w i e l d y , and opt i n s t e a d for a f u l l y - o w n e d d i r e c t inves tment . In such a c a s e , CIDA would s i m p l y have s u b s i d i z e d the Canadian f i r m ' s inves tment ; and the deve lopmenta l impact o f the l a t t e r form o f inves tment , a l l t h i n g s b e i n g e q u a l , i s l e s s b e n e f i c i a l to the hos t c o u n t r y than a j o i n t venture inves tment . Thus , d e s p i t e the many p o s i t i v e p o t e n t i a l i t i e s o f the b u s i n e s s c o o p e r a t i o n i d e a l , INC may be more 103 James H. Adams, " T r a n s n a t i o n a l Investment i n the T h i r d W o r l d : I s sues for Canada", i n N o r t h - S o u t h I n s t i t u t e , In the  C a n a d i a n I n t e r e s t ? T h i r d World Development i n the 1980s, p. 151 60 a p p r o p r i a t e l y w i t h i n t h e p u r v i e w o f DRIE.104 A l l t h e s e c r i t i c i s m s n o t w i t h s t a n d i n g , CIDA c o n t i n u e s t o g i v e t h e INC g r e a t a t t e n t i o n a s one o f t h e most i n n o v a t i v e m o d e l s f o r t h e a i d - t r a d e 1 ink-age. 3.8 The T y i n g Of A i d F o r C a n a d a , a i d t y i n g r e p r e s e n t s t h e s i n g l e most i m p o r t a n t c o m m e r c i a l c omponent i n t h e a i d p r o g r a m , t h e l e a d i n g i n s t r u m e n t f o r t h e a i d - t r a d e l i n k a g e . C u r r e n t C a n a d i a n p o l i c y s t i p u l a t e s t h a t 80 p e r c e n t o f b i l a t e r a l a s s i s t a n c e ( e x c l u s i v e o f t r a n s p o r t a t i o n c o s t s ) must be s p e n t on C a n a d i a n g o o d s a n d s e r v i c e s , w i t h a t l e a s t t w o - t h i r d s C a n a d i a n c o n t e n t . 1 0 5 D e s p i t e numerous o f f i c i a l p l e d g e s p r o g r e s s i v e l y t o u n t i e C a n a d i a n a i d ( a s , f o r e x a m p l e , i n t h e S t r a t e g y o f 1 9 7 5 ) , C a nada r e m a i n s among t h e DAC l a g g a r d s i n t e r m s o f t h e p r o p o r t i o n o f i t s ODA w h i c h i s t i e d , s e c o n d o n l y t o A u s t r i a . The t y i n g o f a i d f u n d s t o p r o c u r e m e n t i n t h e d o n o r c o u n t r y h a s l o n g b e e n one o f t h e most c o n t r o v e r s i a l and m a l i g n e d p r a c t i s e s i n d e v e l o p m e n t a s s i s t a n c e . Many s c h o l a r s m a i n t a i n t h a t 104 A s i m i l a r p r o p o s a l i s made by K a t h r y n M c K i n l e y a n d R o g e r Young, i n T e c h n o l o g y a n d t h e T h i r d W o r l d : The I s s u e s a n d  t h e R o l e f o r C a n a d a , p. 77 105 T h e s e f i g u r e s a p p l y t o t h e o v e r a l l b i l a t e r a l b u d g e t ; i n d i v i d u a l p r o j e c t s may h a v e more o r l e s s C a n a d i a n c o n t e n t . CIDA, E l e m e n t s , p 11 61 a i d t y i n g reduces the deve lopmenta l va lue o f a i d , d i s t o r t s r e c i p i e n t c o u n t r y p r i o r i t i e s , and d i s r u p t s normal t r a d i n g p a t t e r n s . The DAC c o n t i n u e s to t r y to o b t a i n c o l l e c t i v e agreement on measures to u n t i e b i l a t e r a l a i d . And many independent s t u d i e s argue that a i d t y i n g does not generate s i g n i f i c a n t donor c o u n t r y b e n e f i t s , p a r t i c u l a r l y g i v e n i t s h i g h c o s t s . N e v e r t h e l e s s , the t y i n g o f a i d c o n t i n u e s . U n l i k e i t s e x p l a n a t i o n s for o ther c o m m e r c i a l l y - o r i e n t e d a i d p o l i c i e s , i n which i t assumes the o f f e n s i v e wi th p h i l o s o p h i c a l or deve lopmenta l f a c t o r s , the f e d e r a l government's case f o r the t y i n g o f a i d seems e s s e n t i a l l y to be d e f e n s i v e . A d m i t t e d l y , one o f C I D A ' s arguments i s t h a t t i e d a i d c o n t r i b u t e s to a l a s t i n g economic r e l a t i o n s h i p wi th Canada, one o f the p r i m a r y o b j e c t i v e s o f the a i d program. "To r e a c h t h i s goa l i n v o l v e s c o n t a c t s w i th and knowledge o f our t e c h n i c a l s e r v i c e s , our commodi t i e s , and o f course an o p p o r t u n i t y to e x p o r t to us , as w e l l as to buy."106 However, most o t h e r e x p l a n a t i o n s seem focussed on n o n -deve lopmenta l f a c t o r s . A common theme i s t h a t a i d t y i n g generates economic b e n e f i t s for Canada ( j o b s , e x p o r t s ) , which i n t u r n generate the p o l i t i c a l and p u b l i c suppor t f o r ODA which i s s a i d to be c r i t i c a l to the s u r v i v a l o f the Canadian a i d program. In t h e i r more c a n d i d moments, CIDA o f f i c i a l s might acknowledge t h a t a i d t y i n g ensures t h a t a i d funds are spent p r o p e r l y , or t h a t a i d t y i n g f a c i l i t a t e s the d i sbursement o f a i d funds , which has 106 Ben M a l k i n , "The Debate over U n t y i n g Canada' s A i d Funds", i n Development D i r e c t i o n s , August /September 1978, p . 14 been a major problem for CIDA. The p o l i t i c a l d e s i r e to a c h i e v e h i g h v i s i b i l i t y f o r a i d p r o j e c t s i s another reason for t y i n g a i d , though i t i s seldom p u b l i c l y a r t i c u l a t e d . The premise t h a t Canada cannot take measures toward u n t y i n g u n t i l o t h e r DAC c o u n t r i e s do so i s another defence o f t i e d a i d . As a "non-a id" committee , the E x p o r t Promot ion Review Committee had no qualms about e x p r e s s i n g t h i s p o s i t i o n : "For Canada to take the i n i t i a t i v e i n u n t y i n g would undoubtedly r e s u l t i n more C a n a d i a n a i d money b e i n g spent i n o t h e r c o u n t r i e s wi thout an i n c r e a s e i n t h e i r a i d b e i n g spent i n Canada i f o ther n a t i o n s f a i l e d to f o l l o w s u i t . " 1 0 7 F i n a l l y , to cap a l l these p o i n t s , CIDA can s i m p l y s t a t e t h a t the case a g a i n s t t i e d a i d i s a r e d h e r r i n g , as CIDA spending i s focussed on s e c t o r s and p r o j e c t s i n v o l v i n g C a n a d i a n e x p e r t i s e , and because CIDA o f t e n t enders i t s c o n t r a c t s i n Canada, thus e n s u r i n g c o m p e t i t i v e s u p p l i e r s . Very few c r i t i c s are s a t i s f i e d wi th t h i s seemingly r a t i o n a l p e r s p e c t i v e , nor wi th the o ther defenses o f t i e d a i d . Many argue t h a t C I D A ' s p r o c e s s o f s e l e c t i o n i s not c o m p e t i t i v e , r e s u l t i n g i n a " . . . r e p l a c e a b l e form o f expor t s u b s i d y b e n e f i t t i n g a very s m a l l number o f f avoured f i rms ."108 A 1976 T r e a s u r y Board s tudy o f the p o s s i b l e e f f e c t s on the Canadian economy o f an u n t y i n g o f b i l a t e r a l a i d seemed to concur wi th t h i s assessment: a l a r g e 107 E x p o r t Promot ion Review Committee, op. c i t . , p . 36 108 C a r t y , Smith and LAWG, op. c i t . , p . 103 63 percentage o f CIDA d i s b u r s e m e n t s , a c c o r d i n g to the s t u d y , went to f i r m s h e a v i l y dependent on CIDA c o n t r a c t s . 1 0 9 F u r t h e r , many of C I D A ' s main c a p i t a l equipment s u p p l i e r s a l s o r e c e i v e d E x p o r t Development C o r p o r a t i o n (EDC) f i n a n c i n g : s e v e n - t e n t h s were on the l i s t o f the E D C s 30 main bene f i c i a r i e s . 110 T h i s may r e f l e c t a h e a l t h y d e s i r e on the p a r t o f these f i r m s to e x p l o r e expor t o p p o r t u n i t i e s ; but i t may a l s o r e f l e c t an unhea l thy dependence on p u b l i c s e c t o r expor t f i n a n c i n g , i n which case CIDA's t i e d a i d p r o v i s i o n i s not s e r v i n g as a "pump p r i m e r " for c o m p e t i t i v e goods and s e r v i c e s . As the T r e a s u r y Board warned: "CIDA cannot p ledge to p r o v i d e a c a p t i v e market f o r c e r t a i n i n d u s t r i e s or f i rms on a r e g u l a r b a s i s . " I l l Some o b s e r v e r s contend t h a t t i e d a i d e x i s t s p r i m a r i l y to suppor t weak i n d u s t r i e s or f i r m s . As Reuber argues : . . . a s o f t e n as not the reason for emphas iz ing e x p o r t promot ion through a i d i s to t r y to p r o v i d e markets abroad for p r o d u c t s where Canada i s not c o m p e t i t i v e i n t e r n a t i o n a l l y and 109 T r e a s u r y B o a r d , The Economic E f f e c t s o f an U n t y i n g o f  C a n a d i a n B i l a t e r a l A i d , p. 26 110 I b i d . , p . 47 A c c o r d i n g to the s t u d y , the major l o s e r s from an u n t y i n g o f b i l a t e r a l a i d would be f i rms b u i l d i n g r a i l w a y s t o c k ; t e l e c o m m u n i c a t i o n s , c o n s t r u c t i o n and some motor v e h i c l e f i r m s ; f l o u r m i l l s and rapeseed m i l l s ; and the phosphate f e r t i l i z e r and n y l o n t i r e c o r d i n d u s t r i e s . While the s tudy s t i l l c o n t a i n s important i n s i g h t s , i t s 1976 p u b l i c a t i o n date f o r c e f u l l y p o i n t s out the p r e s s i n g need f o r an updated s tudy o f t h i s i s s u e . I l l I b i d . , p . 47 64 shows l i t t l e p r o s p e c t for becoming so.112 I s l a m , s i m i l a r l y , argues t h a t f o r e i g n a i d programs t y p i c a l l y suppor t e x p o r t i n d u s t r i e s wi th s u r p l u s c a p a c i t y and s l u g g i s h demand a t home and overseas .113 Thus , l i k e food a i d , the t y i n g o f a i d may perform a " s u r p l u s d i s p o s a l " f u n c t i o n i n a d d i t i o n to i t s "market p e n e t r a t i o n " o b j e c t i v e . Even i f the t y i n g p r a c t i c e was rendered more c o m p e t i t i v e , a number o f c o s t s s t i l l emerge. Bhagwati contends t h a t " . . . s o u r c e -t y i n g o f a i d w i l l g e n e r a l l y impose c o s t s , i n c l u s i v e o f ' m o n o p o l i s t i c ' p r i c i n g by s u p p l i e r s even when i d e a l procurement p o l i c i e s are fo l lowed."114 Among such c o s t s are the r e d u c t i o n i n the va lue o f a i d , by up to 20 per c e n t , owing to h i g h e r - c o s t s u p p l i e r s ( i n some c a s e s , but not a l l ) ; the b i a s i n g o f t e c h n i q u e s and p r o j e c t s i n favour o f imported i n p u t s and t e c h n o l o g i e s , e s p e c i a l l y i n the case o f l a r g e - s c a l e c a p i t a l p r o j e c t s ; the p o s s i b l e d i s t o r t i o n o f r e c i p i e n t government deve lopmenta l p r i o r i t i e s ; a b i a s towards p r o j e c t s wi th e x p o r t p o t e n t i a l ; d i scouragement o f r e g i o n a l economic c o o p e r a t i o n ; and an i n c r e a s i n g r e l u c t a n c e to coopera te and c o o r d i n a t e a i d a c t i v i t i e s 112 Grant L . Reuber , "The T r a d e - O f f s Among the O b j e c t i v e s o f C a n a d i a n F o r e i g n A i d " , i n I n t e r n a t i o n a l J o u r n a l , Winter 1969-70, p. 131 113 N u r a l I s l a m , " I n t e r e s t Groups and A i d C o n d i t i o n a l i t y " , i n J u s t F a a l a n d ( e d s . ) . F o r e i g n A i d , p . 263 114 J . Bhagwat i , "The T y i n g o f A i d " , i n J a g d i s h Bhagwati and R i c h a r d S. Eckaus ( e d s . ) . F o r e i g n A i d , p. 263 65 wi th o t h e r d o n o r s , who may be seen as c o m p e t i t o r s i n the s e a r c h for c o m m e r c i a l l y " i n t e r e s t i n g " p r o j e c t s . 1 1 5 And, f i n a l l y , i t i s argued t h a t t i e d a i d p r e v e n t s the r e a l i z a t i o n o f CIDA's own o b j e c t i v e s i n r u r a l development and b a s i c needs: The s m a l l - s c a l e and r u r a l development s c h e m e s . . . cannot be e f f e c t i v e l y f i n a n c e d through t i e d a i d , s i n c e they r e q u i r e above a l l , l o c a l m a t e r i a l s , l o c a l l a b o u r , and s imple t e c h n i q u e s r a t h e r than imported goods and s e r v i c e s . 1 1 6 As wi th the INC, then , many c r i t i c s see t i e d a i d as a v i o l a t i o n o f CIDA's mandate for development . A f i n a l r eason to be c r i t i c a l o f a i d t y i n g , a t l e a s t i n the Canadian c a s e , i s the l i k e l i h o o d tha t i t has not g r e a t l y enhanced expor t performance through market p e n e t r a t i o n . For many, t i e d a i d i s an i n e f f e c t i v e , c o s t l y and i n a p p r o p r i a t e v e h i c l e for e x p o r t p r o m o t i o n , e s p e c i a l l y s i n c e nobody " . . . h a s ever been a b l e s e r i o u s l y to c l a i m t h a t t y i n g has s erved to i n t r o d u c e c o m p e t i t i v e Canadian goods and s e r v i c e s i n t o u n f a m i l i a r markets and thereby b u i l d m u t u a l l y - b e n e f i c i a l l o n g - t e r m trade r e l a t i o n s h i p s . " 1 1 7 I f 115 For more d e t a i l e d a n a l y s e s o f the types o f c o s t s c r e a t e d by the t y i n g o f a i d , and t h e i r consequences , see: OECD, T w e n t y - F i v e Years o f Development C o o p e r a t i o n , pp. 241-242; Bhagwat i , op. c i t . ; C a r t y , Smith and LAWG, op. c i t . ; Commission on I n t e r n a t i o n a l Development ( L e s t e r B. P e a r s o n , C h a i r m a n ) , P a r t n e r s i n Development; P a t r i c i a Adams and Lawrence Solomon, In  the Name o f P r o g r e s s : The Unders ide o f F o r e i g n A i d ; and C o l a c o , op. c i t . 116 G . K . H e l l e i n e r , " I n t e r n a t i o n a l Development E i g h t Years On", i n I n t e r n a t i o n a l J o u r n a l , S p r i n g 1978, p. 399 117 N o r t h - S o u t h I n s t i t u t e , " C o n c e s s i o n a l Development A s s i s t a n c e : " A i d " i n P e r s p e c t i v e " , i n A Balance Sheet o f T h i r d  World /Canada R e l a t i o n s , p. 6. t i e d a i d was e f f e c t i v e a t e x p o r t p r o m o t i o n , i t might be harder to c r i t i c i z e ; s i n c e very few o b s e r v e r s p e r c e i v e i t to be e f f e c t i v e , though, s e r i o u s c r i t i c i s m s are r a i s e d as to whether the l a r g e deve lopmenta l c o s t s foregone are worth the m a r g i n a l domest i c b e n e f i t s g a i n e d . While a i d t y i n g may not always succeed i n promot ing e x p o r t s ( f o r reasons to be d i s c u s s e d i n the next c h a p t e r ) , i t does g i v e the appearance o f d o i n g so , and thus can e a s i l y be promoted as d o i n g so . The r e a l va lue o f a i d t y i n g , then , might l i e more i n appearances than i n r e a l i t y . C o n s i d e r i n g the r e l a t i v e o r d e r s o f magnitude i n v o l v e d , i t i s improbable t h a t a i d t y i n g p r o v i d e s s i g n i f i c a n t macroeconomic b e n e f i t s to any d o n o r ' s domest ic employment or b a l a n c e - o f - p a y m e n t s aggrega te s . The case f o r t y i n g i s e s s e n t i a l l y p o l i t i c a l r a t h e r than macroeconomic: to m a i n t a i n p u b l i c suppor t for development c o - o p e r a t i o n i n t imes o f h i g h unemployment by demons tra t ing domest ic b e n e f i t s o f a i d . 1 1 8 The "buying" o f p o l i t i c a l suppor t wi th measures such as a i d t y i n g may seem a v i t a l f u n c t i o n when the a i d program i s b e i n g s u b j e c t e d to p r e s s u r e s f o r f i s c a l r e s t r a i n t . C e r t a i n l y , whether i n the p u b l i c - a t - l a r g e or i n the C a b i n e t , p o l i t i c a l s u p p o r t i s very i m p o r t a n t . U n f o r t u n a t e l y , though, the "s tra tegy" o f b u y i n g suppor t r a i s e s some p o t e n t i a l problems . As long as the government i n g e n e r a l and CIDA i n p a r t i c u l a r b u i l d p o l i t i c a l c o n s t i t u e n c i e s for ODA on the b a s i s o f l a r g e l y u n t e s t e d 118 OECD, T w e n t y - F i v e Years o f Development C o o p e r a t i o n , p . 241 67 assumptions about the a i d - t r a d e i n t e r f a c e , CIDA w i l l have a very hard time f a s h i o n i n g c l e a r and c o n s i s t e n t development s t r a t e g i e s . Indeed, i t w i l l run the r i s k that i t s p u r e l y deve lopmenta l o b j e c t i v e s " w i l l be overshadowed by the domest ic p o l i t i c a l p o p u l a r i t y " o f the a i d - t r a d e l i n k a g e . 1 1 9 T h i s can o n l y confuse even f u r t h e r CIDA's o b j e c t i v e s . F i n a l l y , buy ing support for the a i d program through a i d - t r a d e measures such as a i d t y i n g may p r e c l u d e attempts by the government, and e s p e c i a l l y CIDA, to e x p l a i n to the Canadian p u b l i c the g r e a t d i f f i c u l t i e s and r i s k s i n v o l v e d i n t r y i n g to f o s t e r v i a b l e development i n the T h i r d Wor ld . An u n d e r s t a n d i n g by the p u b l i c o f such r i s k s i s , u l t i m a t e l y , the o n l y sound b a s i s upon which support can be based . 119 Adams, O i l and Water , p. 2 3 68 3.9 C o n c l u s i o n s T h i s b r i e f survey o f CIDA p o l i c i e s and programs has focussed on the commercia l o b j e c t i v e s i n Canadian f o r e i g n a i d . A d m i t t e d l y , i t i s a somewhat s e l e c t i v e e x a m i n a t i o n : v i r t u a l l y every a i d p o l i c y has some commercial u n d e r p i n n i n g , however s m a l l or i n d i r e c t . T h i s s u r v e y , however, has t r i e d to i d e n t i f y those p o l i c i e s and programs which are most e x p l i c i t l y commerc ia l i n o r i e n t a t i o n , or which admit themselves most e a s i l y to m a n i p u l a t i o n for commercial ends. In such an e x a m i n a t i o n , i t i s r e a d i l y apparent t h a t commercia l concerns are never the s o l e de terminant o f a i d p o l i c y ; i n s t e a d , they c o - e x i s t and compete wi th a d m i n i s t r a t i v e p r e s s u r e s , d i p l o m a t i c and p o l i t i c a l g o a l s , and deve lopmenta l p h i l o s o p h i e s . To be s u r e , CIDA should never be c o n s i d e r e d s imply as ye t another f e d e r a l expor t promot ion agency. T h i s s a i d , however, i t i s e q u a l l y e v i d e n t t h a t s h o r t r u n expor t promot ion and the l o n g e r term p u r s u i t o f the a i d - t r a d e l i n k a g e have become c e n t r a l f e a t u r e s o f the Canadian a i d l a n d s c a p e , pursued a t s e v e r a l l e v e l s o f l i n k a g e and through a v a r i e t y o f p o l i c i e s and p o l i c y i n s t r u m e n t s . Canada's involvement i n the development o f T h i r d World n a t i o n s now seems to r e q u i r e as j u s t i f i c a t i o n some c o n c e r n for domest i c r e t u r n s from a i d . U n f o r t u n a t e l y , t h i s i n c r e a s i n g l y s a l i e n t "commercial i m p e r a t i v e " o f t e n c o n f l i c t s w i th C I D A ' s o t h e r o b j e c t i v e s , and prevent s the emergence o f c l e a r and c o n s i s t e n t development s t r a t e g i e s . The i n c r e a s i n g prominence o f the 69 " t r i c k l e back" p h i l o s o p h y thus r a i s e s many t r o u b l i n g q u e s t i o n s about the u t i l i t y o f C I D A ' s development a s s i s t a n c e e f f o r t s , and the a b i l i t y and d e s i r e o f the f e d e r a l government to f i n a n c e an e f f e c t i v e a i d program. A c c o r d i n g l y , the next two c h a p t e r s w i l l a d d r e s s , r e s p e c t i v e l y , the u t i l i t y and wisdom o f the aid-commerce c o n n e c t i o n , and the u n d e r l y i n g causes o f t h i s d r i f t towards an a i d program premised on narrow economic s e l f - i n t e r e s t . 70 IV. EVALUATING THE AID AND COMMERCE CONNECTION 4.1 I n t r o d u c t i o n The p r e v i o u s chapter examined a number o f CIDA p o l i c i e s and programs whose common denominator i s a s t r o n g commercia l f o u n d a t i o n . The e x i s t e n c e o f these commercia l " t h r u s t s " i n a i d p o l i c y conf i rms that CIDA o f f i c i a l s (or a t l e a s t some o f i t s more i n f l u e n t i a l personne l ) b e l i e v e i n the u t i l i t y and wisdom o f l i n k i n g a i d and t r a d e . U n f o r t u n a t e l y , however, to date no s y s t e m a t i c a n a l y s i s o f the u t i l i t y o f t h i s s t r a t e g y has been under taken . T h i s chapter w i l l at tempt to b r i d g e that gap. Without a much more comprehensive and l eng thy economic study o f the i s s u e , no o b j e c t i v e or d e f i n i t i v e c o n c l u s i o n s can be reached as to when the l i n k a g e might work, wi th which p r o d u c t s , and under what c o n d i t i o n s . I n s t e a d , t h i s c h a p t e r w i l l examine a number o f f a c t o r s which are l i k e l y to a f f e c t the u t i l i t y o f the a i d - t r a d e l i n k a g e for Canada. The p r o p r i e t y o f the a i d - t r a d e c o n n e c t i o n w i l l a l s o be addressed i n t h i s c h a p t e r ; h e r e , though, a c o n c l u s i v e ( i f s u b j e c t i v e ) assessment can be made. 4.2 In Support Of The A i d - T r a d e C o n n e c t i o n F i v e arguments support the case for both the g e n e r a l u t i l i t y and the p o l i t i c a l p r o p r i e t y , f or Canada, o f p u r s u i n g commercia l o b j e c t i v e s through a i d . The f i r s t , and the most a p p e a l i n g , i s t h a t the a i d - t r a d e l i n k a g e has an i n h e r e n t l o g i c a l p l a u s i b i l i t y 71 which i s c o n v i n c i n g . T h i s i s so for a v a r i e t y o f r e a s o n s . A f o r e i g n s u p p l i e r working under the a u s p i c e s o f an o f f i c i a l a i d agency ought to have an immediate advantage i n p e n e t r a t i n g the p a r t i c u l a r LDC market and i n s e c u r i n g a d d i t i o n a l expor t s a l e s . Exposure to the f i r m ' s t e c h n o l o g y , p r o d u c t s , p e r s o n n e l and t e c h n i q u e s may very w e l l induce the L D C s government or p r i v a t e s e c t o r to purchase a d d i t i o n a l goods and s e r v i c e s . P a r t i c u l a r l y i n LDC economies dominated by the s t a t e , the c r e d i b i l i t y and r e s p e c t stemming from involvement i n o f f i c i a l a i d p r o j e c t s c o u l d be d e c i s i v e i n l a n d i n g f u r t h e r c o n t r a c t s ; an o u t s t a n d i n g performance o f the a i d - r e l a t e d d u t i e s can o n l y f u r t h e r h e l p . And, as I s lam notes , the p e r s o n a l and p r o f e s s i o n a l a c q u a i n t a n c e s made abroad may l e a d to a d d i t i o n a l commercia l s a l e s : p u b l i c o f f i c i a l s , f a m i l i a r wi th c e r t a i n f o r e i g n s u p p l i e r s , might lobby on t h e i r b e h a l f . Such patronage may have a sound economic r a t i o n a l e , as sav ings c o u l d accrue to the LDC i n terms o f t r a i n i n g , r e p a i r s and replacement p a r t s ; on the o t h e r hand, i t c o u l d be a patronage o i l e d by c o r r u p t i o n . 1 2 0 F i n a l l y , the b a s i c f a c t o f b e i n g o p e r a t i o n a l i n a d i s t a n t market , l a r g e l y a t p u b l i c expense , i s an i n h e r e n t c o m p e t i t i v e advantage g i v e n the c o s t s a f i r m would o t h e r w i s e have to i n c u r to d u p l i c a t e such an o p p o r t u n i t y . A g g r e s s i v e f i r m s c a n , and do, use t h i s o p p o r t u n i t y to the f u l l e s t , to f e r r e t out a d d i t i o n a l b u s i n e s s i n the r e c i p i e n t c o u n t r y and nearby . In theory a t l e a s t , t h e n , the a i d -trade l i n k a g e has a t e c h n i c a l p l a u s i b i l i t y which i s q u i t e sound. 120. I s l a m , op. c i t . , pp. 55-56 Moreover , the a c t i v e encouragement o f the p r i v a t e s e c t o r s o f both donor and r e c i p i e n t i n the development process s i g n a l s a long overdue r e c o g n i t i o n i n the deve lopmenta l b e n e f i t s t h a t p r i v a t e bus ines s can p r o v i d e . P r i v a t e companies i n the i n d u s t r i a l i z e d world are h i g h l y e f f e c t i v e agents for t r a n s f e r r i n g technology and t e c h n i c a l know-how; p r i v a t e companies i n the d e v e l o p i n g world may prove to be the most e f f i c i e n t agents for maximiz ing the b e n e f i t s from such t e c h n o l o g y , and f o r p r o v i d i n g the i n n o v a t i o n and e f f i c i e n c y upon which s u s t a i n e d economic development must be founded. A l s o , l o n g - l a s t i n g , two-way economic r e l a t i o n s h i p s , so v i t a l to development i n both the Nor th and South , w i l l be b u i l t p r i m a r i l y by p r i v a t e s e c t o r t r a d e and investment a c t i v i t y . E a r l y encouragement, then , c o u l d pay d i v i d e n d s on both s i d e s o f the r e l a t i o n s h i p . In s h o r t , w h i l e "mutual i n t e r e s t s " , " r e c i p r o c a l b e n e f i t s " and " interdependence" are o f t e n the catchwords for a i d p o l i c i e s based on economic s e l f -i n t e r e s t , they do c o n t a i n a l a r g e measure o f t r u t h . The two above arguments are the s t r o n g e s t i n favour o f a c l o s e r i n t e g r a t i o n o f a i d and t r a d e , but there are o t h e r , l e s s e r p o i n t s . One i s t h a t as l o n g as CIDA ensures t h a t i t s s u p p l i e r s d e l i v e r q u a l i t y p r o d u c t s a t c o m p e t i t i v e p r i c e s , n e i t h e r the deve lopmenta l impact o f a i d funds nor the r e c i p r o c a l b e n e f i t s exchange are compromised. Indeed, a i d t y i n g does n o t , by i t s e l f , n u l l i f y any or a l l p o s s i b l e deve lopmenta l g a i n s : the d i m i n u t i o n o f ga ins depends on a hos t o f f a c t o r s , i n c l u d i n g the q u a l i t y o f s u p p l i e r s , the deve lopmenta l p r o p r i e t y o f the p r o j e c t s b e i n g 73 f i n a n c e d , and the commitment o f the r e c i p i e n t government to development . Another argument s u p p o r t i n g the a i d - t r a d e p o l i c y l i n k a g e i s t h a t p o l i t i c a l support for the a i d program i s h e i g h t e n e d , thereby p e r m i t t i n g the government to c o n t i n u e a c o n s t r u c t i v e r o l e i n i n t e r n a t i o n a l development c o o p e r a t i o n (the v a l i d i t y o f t h i s argument w i l l be as sessed i n Chapter 5 ) . A f i n a l argument (perhaps more a post hoc r a t i o n a l i z a t i o n than a de terminant o f p o l i c y ) i s t h a t even i f Canada u n t i e d i t s a i d , and i f Canadian s u p p l i e r s were ex tremely c o m p e t i t i v e , d e v e l o p i n g c o u n t r i e s s t i l l might not buy Canadian goods and s e r v i c e s ; t h i s i s because Canadian f i rms l a c k the h i s t o r i c a l and c u l t u r a l l i n k s e n j o y e d , n u r t u r e d and manipu la ted by f i rms from o t h e r c o u n t r i e s , such as F r a n c e , J a p a n , the U . S . , and Grea t B r i t a i n . As Dudley and Montmarquette e x p l a i n : . . . t h e l a r g e r donors are more l i k e l y than the s m a l l e r donors to have e x t e n s i v e economic t i e s w i th t h e i r a i d r e c i p i e n t s . For these l a r g e d o n o r s , the a i d d e a l may i m p l i c i t l y be p a r t o f a package which i n c l u d e s investment and t rade l i n k s as w e l l as development a s s i s t a n c e . The s m a l l donors may f i n d i t d i f f i c u l t to compete on these terms.121 Indeed, such c o u n t r i e s are o f t e n ab le to " t i e" t h e i r a i d without 121. Leonard Dudley and Claude Montmarquette , The Supply o f  C a n a d i a n F o r e i g n A i d : E x p l a n a t i o n and E v a l u a t i o n , p. 53 7 4 any formal t y i n g r e s t r i c t i o n s . 1 2 2 To e n t e r and compete i n these markets , the argument r u n s , Canada has l i t t l e c h o i c e but to t i e i t s a i d . In summary, the i n t e g r a t i o n o f a i d and t rade has a number o f p o i n t s to recommend i t . In p a r t i c u l a r , both the p o s i t i v e deve lopmental r o l e to be p l a y e d by the p r i v a t e s e c t o r , e s p e c i a l l y through j o i n t ventures and the t r a n s f e r o f t e c h n o l o g y , and the l o g i c a l p l a u s i b i l i t y o f the a i d - t r a d e l i n k a g e s tand out . As w e l l the mere e x i s t e n c e o f commercia l o b j e c t i v e s cannot , a p r i o r i , be assumed to undermine the deve lopmenta l m e r i t s o f a p r o j e c t . F u r t h e r , r e c i p i e n t governments are i n c r e a s i n g l y a b l e to s e l e c t donors f o r p r o j e c t s on the b a s i s o f f a i r l y a c c u r a t e p e r c e p t i o n s o f donor s t r e n g t h s and weaknesses, thus c r e a t i n g a c l o s e r f i t between commercia l and deve lopmental o b j e c t i v e s . In s h o r t , the commercia l i n t e r e s t s which have permeated a i d programs a lmost everywhere do not by themselves c r e a t e c o n f l i c t s o f o b j e c t i v e s over a i d p r o j e c t s or a i d programs; o ther f a c t o r s must en ter the c a l c u l u s . Thus , many o f the c r i t i c i s m s o f c o m m e r c i a l l y - o r i e n t e d a i d have, i n theory a t l e a s t , c o n s i d e r a b l y l e s s a p p l i c a t i o n than t h e i r proponents might care to admit . 122. Bhagwati has i d e n t i f i e d f i v e major types o f t y i n g by source ( i . e . to procurement i n the donor c o u n t r y ) : formal r e s t r i c t i o n s , where a i d i s f o r m a l l y or c o n t r a c t u a l l y t i e d ; i n f o r m a l r e s t r i c t i o n s , which may stem from h i s t o r i c a l t r a d i n g l i n k s or to the c o m p e t i t i v e n e s s o f donor c o u n t r y f i r m s , or s i m p l y to p r e s s u r e s e x e r t e d on the r e c i p i e n t LDC; i n d i r e c t r e s t r i c t i o n s , where a i d i s c o u p l e d wi th trade arrangements , or where f i n a n c i n g i s o n l y o f f e r e d for commodit ies and p r o j e c t s where the donor has a comparat ive advantage; expor t and import c r e d i t s ; and a i d d i r e c t l y embodied i n goods and s e r v i c e s . Bhagwat i , op. c i t . 75 4.3 The Case A g a i n s t The A i d - T r a d e C o n n e c t i o n : U t i l i t y In p r a c t i c e , i n the Canadian c o n t e x t , however, such c r i t i c i s m s o f t e n h o l d t r u e . Other f a c t o r s have e n t e r e d the c a l c u l u s ; the a c t u a l p u r s u i t o f the a i d - t r a d e c o n n e c t i o n by CIDA has not always f o l l o w e d the p r e s c r i b e d i d e a l model i n which c o m p e t i t i v e f i r m s use t h e i r CIDA exposure as a s p r i n g b o a r d to seek out new market o p p o r t u n i t i e s , a l l i n a s i t u a t i o n o f mutual b e n e f i t s . I t i s to an examinat ion o f some o f the f a c t o r s which impair the u t i l i t y o f a s u c c e s s f u l a i d - t r a d e s t r a t e g y for Canada t h a t the a n a l y s i s t u r n s . The f i r s t f a c t o r r e l a t e s to the c r i t e r i a e s t a b l i s h i n g e l i g i b i l i t y for Canadian b i l a t e r a l a s s i s t a n c e . In t h i s l i s t , a c o u n t r y ' s e x i s t i n g or p o t e n t i a l trade wi th Canada i s but one o f many c r i t e r i a . Commercial p o t e n t i a l i s undoubtedly impor tant i n the s e l e c t i o n o f p r o j e c t s to be f i n a n c e d , i n per c a p i t a b i l a t e r a l a i d a l l o c a t i o n s , and i n the a b s o l u t e amount o f a s s i s t a n c e c h a n n e l l e d to c e r t a i n c o m m e r c i a l l y p r o m i s i n g LDCs. But o ther c r i t e r i a - l e v e l o f need, p o p u l a t i o n s i z e . Commonwealth or l a Fra nco pho n ie membership, c r i s i s s i t u a t i o n s - i n f l u e n c e b i l a t e r a l a l l o c a t i o n s as much i f not more than a c o u n t r y ' s commercia l p o t e n t i a l . Thus , d e s p i t e Ottawa's mani fe s t i n t e r e s t i n p u r s u i n g the a i d - t r a d e l i n k , and i t s numerous p o l i c y ins t ruments d i r e c t e d toward t h i s end , i t has s t i l l not been a b l e or w i l l i n g to e l e v a t e commercia l o b j e c t i v e s to the fore i n the a l l o c a t i o n o f b i l a t e r a l funds amongst c o u n t r i e s . 76 Why i s t h i s ? One source surmises t h a t i t i s o n l y because CIDA has not ye t f i g u r e d out how to do so .123 Dudley and Montmarquette suggest a more p l a u s i b l e e x p l a n a t i o n : e l i g i b i l i t y and a l l o c a t i o n d e c i s i o n s are made a t d i f f e r e n t l e v e l s , w i t h i n s u f f i c i e n t c o o r d i n a t i o n between them.124 Another p o s s i b l e e x p l a n a t i o n i s t h a t Canada has committed i t s e l f i n t e r n a t i o n a l l y to c o n c e n t r a t e a i d funds on LLDCs and o ther low income LDCs; a move by CIDA to s h i f t a i d funds to more c o m m e r c i a l l y i n t e r e s t i n g LDCs would r i s k widespread i n t e r n a t i o n a l d i s a p p r o v a l . T h u s , " . . . t h e use o f f o r e i g n a i d to promote e x p o r t s may be d i f f i c u l t to implement, g i v e n the o t h e r o b j e c t i v e s o f Canadian f o r e i g n a id ."125 In s h o r t , the m u l t i p l i c i t y o f o b j e c t i v e s which f a c i l i t a t e d the i n c r e a s e d prominence o f commercia l i n t e r e s t i n the a i d program a l s o appears to pose an o b s t a c l e to an e f f e c t i v e a i d - t r a d e s t r a t e g y for Canada. Even i f CIDA was w i l l i n g or a b l e to make commerc ia l p o t e n t i a l the pr imary c r i t e r i o n for a l l o c a t i n g funds b i l a t e r a l l y (as i t o f t e n does i n a l l o c a t i n g funds to p r o j e c t s ) , the p r o d u c t s and f i rms CIDA i s promot ing may not always be a p p r o p r i a t e for the a i d - t r a d e l i n k a g e . The T r e a s u r y Board has argued t h a t f o r most o f CIDA's food and p r i m a r y commodity a i d , the "market p e n e t r a t i o n " f u n c t i o n has a l r e a d y been a c h i e v e d : 123. C a r t y , Smith and LAWG, op. c i t . , p. 98 124. Dudley and Montmarquette , op. c i t . , p . 103 125. I b i d . , p . 83 77 Because o f the homogeneity o f these goods, p e n e t r a t i o n o f markets on a commercia l b a s i s i s dependent on c o m p e t i t i v e p r i c e s . In a d d i t i o n , Canada's importance as a source o f supply o f these p r o d u c t s on a world s c a l e means tha t Canada's c a p a c i t i e s are wel l -known and t h a t , i n r e s p e c t o f most o f these p r o d u c t s , market p e n e t r a t i o n has a l r e a d y been ach ieved .126 Moreover , many o f the commodit ies Canada s u p p l i e s through the a i d program are produced by d e v e l o p i n g c o u n t r i e s themse lves , which reduces the p o t e n t i a l for e f f e c t i v e a i d - t r a d e l i n k a g e even f u r t h e r . M a r k e t ' p e n e t r a t i o n , the T r e a s u r y Board goes on , i s p r o b a b l y a p p l i c a b l e o n l y to the c a p i t a l goods and c o n s u l t a n c y s e r v i c e s f i n a n c e d by CIDA. For v a r i o u s r e a s o n s , many Canadian f i r m s p r o d u c i n g c a p i t a l equipment are u n c o m p e t i t i v e on world markets , e i t h e r because o f t e c h n o l o g i c a l dependence or h i g h c o s t s . Such u n c o m p e t i t i v e f i rms are u n l i k e l y to ach i eve l o n g - t e r m market p e n e t r a t i o n , even i f they have a c e r t a i n o f f i c i a l l e g i t i m a c y as p a r t n e r s i n an a i d p r o j e c t . Indeed, u n c o m p e t i t i v e n e s s may p r e v e n t an a i d p r o j e c t from ever b e i n g s t a r t e d , as Hainsworth d e s c r i b e s i n the case o f I n d o n e s i a : N o n - u t i l i z a t i o n o f a i d a p p r o p r i a t i o n s i s . . . o f t e n the r e s u l t o f C a n a d i a n c o n t r a c t o r s and s u p p l i e r s b e i n g deemed u n a c c e p t a b l e from I n d o n e s i a ' s v i e w p o i n t , e i t h e r because t h e i r b i d s are u n c o m p e t i t i v e or because they have not e s t a b l i s h e d the r i g h t c o n n e c t i o n s or demonstrated s u f f i c i e n t p r i o r commitment as 126. T r e a s u r y B o a r d , op. c i t . , p. 13 78 p a r t n e r s - i n - d e v e l o p m e n t on s i m i l a r p r o j ec t s .127 One such example was the massive Buk.it Asam c o a l mine development p r o j e c t i n I n d o n e s i a , i n which CIDA/EDC p a r a l l e l f i n a n c i n g f a c i l i t i e s remained unused because o f the u n c o m p e t i t i v e n e s s o f CIDA's proposed s u p p l i e r s . 1 2 8 The l o s s o f c o m m e r c i a l l y i n t e r e s t i n g p r o j e c t s such as t h i s as a r e s u l t o f an u n c o m p e t i t i v e s u p p l i e r or a i d o f f e r c o u l d prove very d e t r i m e n t a l to Canada ' s l ong term trade p r o s p e c t s , e s p e c i a l l y i n a huge and expanding market l i k e I n d o n e s i a . Another p o s s i b l e o b s t a c l e i s t h a t the CIDA s u p p l i e r , c o m p e t i t i v e or not , may not wish or be a b l e to m a i n t a i n a commercia l presence i n a d e v e l o p i n g c o u n t r y a f t e r i t s CIDA c o n t r a c t has e x p i r e d , and i t s work been done. The c o s t s o f m a i n t a i n i n g a permanent o f f i c e a b r o a d , or o f p r o v i d i n g for s a l e s agents and s e r v i c i n g , are o f t e n p r o h i b i t i v e l y h i g h , e s p e c i a l l y for smal l f i r m s , but are p r o b a b l y neces sary i n o r d e r to secure a l a s t i n g market presence . In such a c a s e , the CIDA s u p p l i e r may s i m p l y choose not to t r y to e x p l o i t the a i d - t r a d e l i n k a g e , t h e r e f o r e v i e w i n g the CIDA c o n t r a c t as an end i n i t s e l f r a t h e r then the means to another end. O r , i n o ther words, such a f i r m sees CIDA i t s e l f as i t s c l i e n t , not the d e v e l o p i n g c o u n t r y . U n f o r t u n a t e l y , t h i s k i n d o f o u t l o o k may become endemic to the 127. G e o f f r e y B. H a i n s w o r t h , "Innocents Abroad or P a r t n e r s i n Development? An E v a l u a t i o n o f C a n a d a - I n d o n e s i a A i d , Trade and Investment R e l a t i o n s " , i n Canada and I n t e r n a t i o n a l T r a d e :  Conference P a p e r s . v o l 2: Canada and the P a c i f i c Rim, p. 627 128. R u d n e r , o p . c i t . , p . 142 79 company, and i t may spend as much energy t r y i n g to secure CIDA c o n t r a c t s as i t does t r y i n g to improve i t s o p e r a t i o n s . One f a c t o r tha t must be c o n s i d e r e d i n t h i s r e g a r d i s the l a r g e ex ten t o f f o r e i g n ownership i n the Canadian economy. Whi le CIDA t r i e s to favour companies wi th a h i g h p r o p o r t i o n o f Canad ian ownersh ip , t h i s i s not always p a s s i b l e . F u r t h e r , many C a n a d i a n -owned f i rms are s u b s i d i a r i e s or a f f i l i a t e s o f f o r e i g n p a r e n t companies . These i n t r a - o r i n t e r - c o r p o r a t e l i n k a g e s may prove to be ye t another o b s t a c l e to the s u c c e s s f u l consummation o f the a i d - t r a d e l i n k a g e . The T r e a s u r y Board draws a t t e n t i o n to t h i s poss i b i l i t y : S ince commercia l s a l e s may be generated by the i n i t i a l p e n e t r a t i o n a t t r i b u t a b l e to t i e d a i d , i n many cases such s a l e s w i l l go to the o ther components o f these f i r m s , many of which are m u l t i n a t i o n a l , i f the Canadian a f f i l i a t e i s i n e f f i c i e n t . Canadian t i e d a i d may b r i n g about the replacement o f a t echno logy o r i g i n a t i n g i n c o l o n i a l r e l a t i o n s h i p s by a North American t e c h n o l o g y , wi thout the Canadian f i rms be ing a b l e to b e n e f i t from l a t e r commercial s a l e s generated by a i d . 1 2 9 Yet another reason to q u e s t i o n the u t i l i t y o f the a i d - t r a d e l i n k a g e for Canada i s t h i s c o u n t r y ' s poor r e c o r d i n p e r m i t t i n g access f o r d e v e l o p i n g c o u n t r y p r o d u c t s , e s p e c i a l l y for those p r o d u c t s a l s o produced by Canadian companies which are u n c o m p e t i t i v e on wor ld markets . T h i s k i n d o f p r o t e c t i o n i s m h i n d e r s the expor t growth o f LDC i n d u s t r y , thus r e d u c i n g the f o r e i g n exchange a v a i l a b l e for f i n a n c i n g Canadian i m p o r t s . I t 129. T r e a s u r y Board , op. c i t . , p. 44 80 a l s o l i k e l y reduces the r e s o l v e , p o l i t i c a l l y , to a l l o w Canad ian goods i n t o such markets . T h i s l egacy o f p r o t e c t i o n i s m i s l i k e l y to pose an i n c r e a s i n g l y s a l i e n t c o n t r a d i c t i o n for the fu ture o f the a i d / t r a d e s t r a t e g y , e s p e c i a l l y where the t h r u s t o f a i d - f i n a n c e d Canadian t rade expans ion i s r e l a t e d to expanding export p o t e n t i a l among r e c i p i e n t c o u n t r i e s . 1 3 0 Thus , " . . . C a n a d a ' s expor t s to these areas w i l l c o n t i n u e to be l i m i t e d by t h e i r r e a c t i o n to p r o t e c t i o n i s m i n Canada and o t h e r i n d u s t r i a l i z e d c o u n t r i e s . " 1 3 1 And " . . . t h e r e l a t i v e l y l a g g a r d Canadian performance i n t a k i n g up commercia l o p p o r t u n i t i e s i n the T h i r d World"132 makes i t much more d i f f i c u l t f o r Canad ian p o l i t i c i a n s to r e s i s t c a l l s for p r o t e c t i o n i s m i n Canada a g a i n s t T h i r d World p r o d u c t s . In s h o r t , Canada and the d e v e l o p i n g c o u n t r i e s may become enmeshed i n a v i c i o u s c i r c l e o f p r o t e c t i o n i s m . A f i n a l reason to be s k e p t i c a l o f the u t i l i t y o f the a i d -trade s t r a t e g y i s the i n c r e a s i n g a b i l i t y o f d e v e l o p i n g c o u n t r i e s ( e s p e c i a l l y the l a r g e r and f a s t e r - g r o w i n g LDCs) to b a r g a i n e f f e c t i v e l y wi th donors so as to o f f s e t donor economic s e l f -i n t e r e s t . Rudner e x p l a i n s : G i v e n the man i f e s t commercia l i n t e r e s t i n a i d - f i n a n c e d trade to p e n e t r a t e markets i n r a p i d l y d e v e l o p i n g c o u n t r i e s and the i n t e n s e donor r i v a l r y over p r o j e c t s w i th t r a d e - l i n k e d 130. Rudner , op. c i t . , p . 144 131. Webb and Z a c h e r , op. c i t . , p. 134 132. Wood, i n C a s s e n , J o l l y , Sewe l l and Wood ( e d s . ) , op. c i t . , p . 117 81 p r o s p e c t s i n these markets , r e c i p i e n t c o u n t r i e s have been ab le to take advantage o f t h i s t rade i n t e r e s t and donor r i v a l r y to impose l o c a l - c o n t e n t r u l e s , procurement o f f s e t s , and o ther s i m i l a r p r o t e c t i o n i s t measures to promote t h e i r own commercia l concerns i n the development a s s i s t a n c e "market". The same a i d t i e t h a t expands t rade p r o s p e c t s p a r a d o x i c a l l y a l s o exposes development a s s i s t a n c e to the c r o s s c u r r e n t s o f t rade d ip lomacy and domest ic p r o t e c t i o n i s m . 1 3 3 Hainsworth c i t e s the example o f I n d o n e s i a , which , he s a y s , has been " b a r g a i n i n g more i n s i s t e n t l y " i n o r d e r to maximize i t s a i d g a i n s . C o u n t e r - t r a d e r u l e s have been a p p l i e d , and the terms o f a i d commitments "d i sputed more l a b o r i o u s l y " ; " . . . o n e donor c o u n t r y i s be ing p l a y e d a g a i n s t another ."134 Thus, w h i l e i n d i v i d u a l f i rms may s t i l l p r o f i t from a i d - t r a d e l i n k a g e , the c o s t s to the donor c o u n t r y as a whole r i s e c o n s i d e r a b l y as a r e s u l t o f such r e c i p i e n t government p r a c t i c e s . In a s i m i l a r v e i n , the N o r t h - S o u t h I n s t i t u t e p o i n t s out t h a t a s e r i o u s s i t u a t i o n i s d e v e l o p i n g i n the e x p o r t c r e d i t s f i e l d . S o p h i s t i c a t e d i m p o r t e r s , e s p e c i a l l y i n middle - income LDCs , are i n c r e a s i n g l y p l a y i n g o f f competing e x p o r t e r s to t h e i r advantage . The r e s u l t has been a s p i r a l l i n g o f e x p o r t c r e d i t s u b s i d i e s , l e a d i n g to s o - c a l l e d " s p o i l e d markets" i n which s u b s i d i z e d e x p o r t f i n a n c i n g i s a necessary p a r t o f any s u c c e s s f u l p r o j e c t b i d . 1 3 5 The b e n e f i t s to any s u c c e s s f u l b i d d i n g c o u n t r y w i l l be f a r l e s s 133. Rudner, op. c i t . , pp. 143-144 134. H a i n s w o r t h , op. c i t . , p . 626 135. N o r t h - S o u t h I n s t i t u t e , T h i r d World Markets and E x p o r t  F i n a n c i n g , pp. 10-11 82 than a n t i c i p a t e d ; and, i n such an export c r e d i t s war, Canada cannot hope s e r i o u s l y to compete a g a i n s t the l a r g e r DAC donors . Immediate s e l f - i n t e r e s t a s i d e , moreover, there are a number o f sound reasons for Canada to r e s i s t the p r e s s u r e s toward such an expor t c r e d i t s war, and to p r e s s , m u l t i l a t e r a l l y , f o r a r e d u c t i o n i n the use o f such f a c i l i t i e s . These f a c t o r s w i l l be examined i n the s e c t i o n below, d e a l i n g wi th the p r o p r i e t y o f Canada ' s p u r s u i t o f the a i d - t r a d e l i n k a g e . In summary, whi le the a i d - t r a d e l i n k a g e has an i n h e r e n t l o g i c a l a p p e a l , Canada faces a number o f a c t u a l and p o t e n t i a l problems i n i t s p u r s u i t o f expor t markets through the medium o f the a i d program. CIDA has not been w i l l i n g or a b l e to pursue the l i n k a g e to the complete e x c l u s i o n o f i t s o ther o b j e c t i v e s . The deployment o f i n e f f i c i e n t f i rms and homogeneous goods d i r e c t l y p r e j u d i c e s the p o s s i b l e success and the very need f o r the s t r a t e g y , r e s p e c t i v e l y . P r o t e c t i o n i s m i n Canada i s a l s o a very s e r i o u s impediment to the a i d - t r a d e i d e a l . And the a b i l i t y o f c e r t a i n d e v e l o p i n g c o u n t r i e s to minimize donor c o u n t r y g a i n s draws the e n t i r e a i d - t r a d e interdependence i n t o q u e s t i o n . For a l l these r e a s o n s , the s tudy o f the a i d - t r a d e i s s u e r e v e a l s " . . . a n apparent (and comparat ive ) i n c a p a c i t y o f the Canad ian government to maximize domest ic economic b e n e f i t s from development a s s i s t a n c e . " 1 3 6 Before c o n c l u s i v e l y making such an assessment , however, i t might be u s e f u l b r i e f l y to rev iew some 136. D a v i d R. M o r r i s o n , "The Mulroney Government and the T h i r d W o r l d " , i n J o u r n a l o f Canadian S t u d i e s , Winter 1984-85, p. 6 83 p a t t e r n s i n Canada' s r e c e n t t rade performance wi th the d e v e l o p i n g w o r l d . For a v a r i e t y o f r e a s o n s , Canada's e x p o r t s to and imports from the d e v e l o p i n g wor ld have long been t a r g e t e d as need ing improvement. Whether stemming from a d e s i r e to reduce Canada ' s t rade dependence on the U n i t e d S t a t e s , to take advantage o f l u c r a t i v e and growing LDC markets , or to d i v e r s i f y the c o n t e n t o f e x p o r t s , t h i s goa l has r e c e i v e d i n c r e a s i n g p o l i t i c a l a t t e n t i o n , e s p e c i a l l y g i v e n the f a i r l y r e c e n t emergence o f the Newly I n d u s t r i a l i z i n g C o u n t r i e s (NICs) and near -NICs o f the P a c i f i c Rim. L i n k i n g a i d and t r a d e i s one o f many approaches taken to b r e a k i n g i n t o these markets . As a h i g h - r a n k i n g CIDA o f f i c i a l put i t : "There i s no doubt i n my mind t h a t o f f i c i a l a i d programmes can b r i n g about changes i n the t h i r d wor ld c o u n t r i e s t h a t w i l l l e a d to s t r o n g e r t r a d i n g p a r t n e r s for Canada and to l a r g e r markets for Canadian goods and s e r v i c e s . . . The t r a d e / a i d i n t e r f a c e s i m p l y becomes the p o i n t a t which a i d and t r a d e o b j e c t i v e s can be s i m u l t a n e o u s l y ach ieved ."137 But has t h e r e been success? Thus f a r , the t r a d e r e c o r d appears mixed. On the one hand , one source c o n t e n d s , the r e l a t i v e importance o f Canada ' s t r a d e wi th d e v e l o p i n g c o u n t r i e s i n c r e a s e d from 1970 to 1980.138 137. CIDA, E x p o r t F i n a n c i n g : The Role o f the C a n a d i a n  I n t e r n a t i o n a l Development Agency, An Address by N . E . C . Power, W i l f r e d L a u r i e r U n i v e r s i t y , W a t e r l o o , p. 8 138. N o r t h - S o u t h I n s t i t u t e , Canadian Trade wi th the A s i a - P a c i f i c D e v e l o p i n g C o u n t r i e s , B r i e f i n g P a p e r , September 1983, p . 84 Another s o u r c e , however, shows Canadian e x p o r t s to and imports from every r e g i o n o f the d e v e l o p i n g wor ld r e m a i n i n g s t a b l e or d e c r e a s i n g as a percentage o f Canada's t o t a l wor ld t r a d e from 1975 to 1984.139 Trade wi th the d e v e l o p i n g wor ld as a whole has grown i n a b s o l u t e terms, and c u r r e n t l y i s i n s u r p l u s for Canada, thus a i d i n g the Canad ian ba lance o f payments. On the o t h e r hand, though, Canada runs a t rade d e f i c i t wi th the f a s t - g r o w i n g NICs o f E a s t A s i a . 1 4 0 Thus , some doubt remains as to the i n t e r p r e t a t i o n s to be adduced from the changing p a t t e r n s o f Canadian t r a d e wi th the d e v e l o p i n g w o r l d . There i s l i t t l e doubt , however, t h a t i n the aggregate Canada's t rade wi th the d e v e l o p i n g world remains s u b o r d i n a t e i n the o v e r a l l scheme o f Canadian t r a d e . A number o f f a c t o r s c o n f i r m t h i s . H e l l e i n e r r e c o r d s tha t a l t h o u g h C a n a d i a n t r a d e wi th the d e v e l o p i n g wor ld as a percentage o f t o t a l C a n a d i a n t r a d e has improved s i n c e the 1970s, the aggregate percentages are s t i l l w e l l below the OECD averages . Thus, LDC goods c o n s t i t u t e o n l y 11.1 per cent o f Canad ian imports compared to an OECD average o f 28.2 per c e n t ; c o n v e r s e l y , the d e v e l o p i n g wor ld purchases o n l y 8.6 per cen t o f Canad ian e x p o r t s compared to an OECD average o f 4 139. U n i t e d N a t i o n s , 1984 I n t e r n a t i o n a l Trade S t a t i s t i c s  Yearbook.. v o l . 1: Trade bv C o u n t r y , p. 403 140. G . K . H e l l e i n e r , " U n d e r u t i l i z e d P o t e n t i a l : Canada' s Economic R e l a t i o n s w i th D e v e l o p i n g C o u n t r i e s " , i n John Whal ley ( e d . ) , Canada and the M u l t i l a t e r a l T r a d i n g System, p. 104 85 23.6 per cent .141 S e v e r a l au thors have contended t h a t C a n a d i a n e x p o r t s to the T h i r d World are compri sed most ly o f goods w i t h the lowest growth i n t r a d e , and are e x p o r t e d p r i m a r i l y to c o u n t r i e s wi th the s lowes t growth.142 In s h o r t , d e s p i t e the Canad ian i n t e r e s t i n s e l l i n g to (and presumably buy ing from) LDCs, Canada appears to be c o n s i s t e n t l y outperformed by f e l l o w OECD c o u n t r i e s . Such a t rade r e c o r d i s even more d i s h e a r t e n i n g i n view o f the s t r o n g support Ottawa has g i v e n to e x p o r t e r s . Based on EDC, Wheat Board and CIDA d i sbursements i n 1980, one source has e s t i m a t e d t h a t v a r i o u s programs o f f i n a n c i a l a s s i s t a n c e c o v e r e d 22 per cent o f Canadian e x p o r t s to the d e v e l o p i n g world i n t h a t y e a r . 1 4 3 S i m i l a r l y , the N o r t h - S o u t h I n s t i t u t e contends t h a t t i e d a i d accounted for over ten per cent o f Canada's e x p o r t s to LDCs between 1981 and 1983, more than three t imes the average f o r a l l member c o u n t r i e s o f DAC.144 Moreover , as Raynau ld , Dufour and Race t te argue , the s u b s i d i z a t i o n o f e x p o r t s i s not wi thout i t s c o s t s : " . . . t h e b e n e f i t s t h a t are a l l e g e d to accrue from e x p o r t s a c t u a l l y decrease i n p r o p o r t i o n to the amount o f the s u b s i d i e s g i v e n by governments to producers i n o r d e r to generate these 141. I b i d . , p . 103 142. Wendy Dobson, E x p o r t s to D e v e l o p i n g C o u n t r i e s : An  O p p o r t u n i t y for Canada, p . 6; and V i t t o r i o Corbo and 0 1 i H a v r y l y s h y n , Canada's Trade R e l a t i o n s w i th D e v e l o p i n g C o u n t r i e s :  The E v o l u t i o n o f E x p o r t and Import S t r u c t u r e s and B a r r i e r s to  Trade i n Canada, p. 76 143. A. R a y n a u l d , J . M . Dufour and D. R a c e t t e , Government  A s s i s t a n c e to E x p o r t F i n a n c i n g , p. 29 144. N o r t h - S o u t h I n s t i t u t e , T h i r d World Markets and E x p o r t  F i n a n c i n g , p . 4 86 b e n e f i t s . " 1 4 5 Hence, whi l e i n d i v i d u a l f i rms may b e n e f i t from be ing s u b s i d i z e d through the a i d program, the Canadian economy as a whole may s u f f e r , as the c o s t s to secure any b e n e f i t s have been q u i t e h i g h . At l e a s t i n terms o f the volume o f p u b l i c s e c t o r f i n a n c i n g p r o v i d e d to promote e x p o r t s , Canada has for some time been d e m o n s t r a t i n g a v i g o r o u s commitment. I f t h i s r e s u l t s i n expor t growth which has not been s a t i s f a c t o r y , i t seems r e a s o n a b l e to look beyond p u b l i c s e c t o r f i n a n c i n g f o r the e x p l a n a t i o n s . 1 4 6 T h i s t h e s i s cannot d e a l a t l e n g t h w i t h the causes o f Canada ' s l a g g a r d e x p o r t performance i n the T h i r d W o r l d . B r i e f l y , though, a number o f c o n t r i b u t i n g f a c t o r s can be c i t e d . The h i g h c o s t or poor product q u a l i t y o f some Canad ian p r o d u c e r s i s undoubted ly a f a c t o r . The f a c t t h a t Canada competes w i th LDCs i n many p r o d u c t s , and e s p e c i a l l y i n pr imary commodi t i e s , cannot be o v e r l o o k e d . The l a c k o f h i s t o r i c a l , c u l t u r a l or p o l i t i c a l l i n k s wi th the T h i r d World to r i v a l those o f o t h e r DAC donors i s p r o b a b l y to blame as w e l l . Such l i n k s may h e l p generate commerc ia l expor t s a l e s , r e g a r d l e s s o f p r o d u c t p r i c e or q u a l i t y . The e x p o r t c o n s t r a i n t s faced by Canad ian s u b s i d i a r i e s or a f f i l i a t e s o f f o r e i g n parent companies has a l r e a d y been ment ioned. F i n a l l y , the r e s e a r c h and development weaknesses and the innate c o n s e r v a t i s m o f many Canadian f i rms pose an obv ious o b s t a c l e to p r o d u c t and market ing i n n o v a t i o n , and thus to e x p o r t 145. R a y n a u l d , Dufour and R a c e t t e , op. c i t . , i x 146. N o r t h - S o u t h I n s t i t u t e , T h i r d World Markets and E x p o r t  F i n a n c i n g , p. 4 87 s u c c e s s . T h i s b r i e f o v e r v i e w o f C a n a d i a n t r a d e w i t h t h e d e v e l o p i n g w o r l d s u g g e s t s t h a t C a n a d a ' s macro t r a d e p a t t e r n s h a v e n o t c h a n g e d g r e a t l y o v e r t h e p a s t f i f t e e n y e a r s . C a n a d a ' s o v e r a l l t r a d e w i t h LDCs s t i l l c o n s t i t u t e s a s m a l l s h a r e o f t o t a l C a n a d i a n t r a d e . G i v e n t h e p o t e n t i a l l y l u c r a t i v e n a t u r e o f many h i g h -g r o w t h LDC m a r k e t s , s u c h a r e c o r d i s q u i t e d i s h e a r t e n i n g , e s p e c i a l l y c o n s i d e r i n g C a n a d a t r a i l s i t s m a i n OECD c o m p e t i t o r s i n t r a d i n g w i t h t h e T h i r d W o r l d . F u r t h e r , C a n a d a ' s c o m m e r c i a l r e c o r d i n t h e T h i r d W o r l d c a n n o t be b l a m e d on a l a c k o f p o l i t i c a l s u p p o r t : a i d - t r a d e m o d e l s a r e b e i n g p u r s u e d v i g o r o u s l y , a n d a l a r g e p r o p o r t i o n o f C a n a d a ' s e x i s t i n g e x p o r t s t o "the d e v e l o p i n g w o r l d a r e s u b s i d i z e d t h r o u g h v a r i o u s c h a n n e l s , i n c l u d i n g t h e a i d p r o g r a m . U n d o u b t e d l y , t h e a i d - t r a d e l i n k a g e h a s o f t e n p e r f o r m e d s u c c e s s f u l l y o n t h e m i c r o l e v e l , p r o v i d i n g e x p o r t g a i n s f o r many d y n a m i c C a n a d i a n f i r m s . ( U n f o r t u n a t e l y , no s e r i o u s s t u d y o f t h i s i s s u e has e v e r b e e n u n d e r t a k e n , o r r e l e a s e d f o r p u b l i c s c r u t i n y ) . H owever, a t t h e macro l e v e l , s e v e r a l d e c a d e s o f a i d - t r a d e p r a c t i c e have n o t n o t i c e a b l y o p e n e d up C a n a d i a n t r a d e w i t h t h e d e v e l o p i n g w o r l d . I s i t n o t a p p r o p r i a t e , t h e n , t o b e g i n a s s e s s i n g t h e c o s t s , t o b o t h Canada and i t s d e v e l o p m e n t p a r t n e r s , o f e m p l o y i n g t h e a i d p r o g r a m t o t h i s e n d ? 4.4 The C a s e A g a i n s t The A i d - T r a d e C o n n e c t i o n : P r o p r i e t y 88 I t has been argued here that the a i d - t r a d e l i n k a g e may not be a f r u i t f u l s t r a t e g y f o r Canada, g i v e n a number o f s e r i o u s o b s t a c l e s . The r e l a t i v e l y poor Canadian performance i n p e n e t r a t i n g LDC markets b r i n g s the u t i l i t y o f the a i d - t r a d e p o l i c y l i n k a g e even f u r t h e r in to doubt . However, succes s or f a i l u r e a s i d e , Canada s h o u l d b e g i n to d isengage i t s a i d program from such commercia l concerns as much as p o s s i b l e , f or a number o f f a c t o r s b r i n g i n t o q u e s t i o n the p o l i t i c a l and economic p r o p r i e t y o f the burgeon ing a i d - t r a d e l i n k a g e . A number o f f a c t o r s r e l a t i n g to Canada's own i n t e r e s t s deserve mention i n t h i s r e g a r d . The f i r s t concerns the sources o f Canada's e x p o r t weakness. As the N o r t h - S o u t h I n s t i t u t e p o i n t s o u t , i f p u b l i c s e c t o r f i n a n c i a l a s s i s t a n c e has not been a b l e to r e c t i f y Canada's e x p o r t t r o u b l e s , then i t i s a p p r o p r i a t e to s e a r c h for r o o t causes . U n f o r t u n a t e l y , the p o p u l a r i t y o f the a i d - t r a d e l i n k a g e and the unproven f a i t h i n i t s u t i l i t y may p r e c l u d e at tempts to get a t the s o u r c e s ; i t i s a l s o u n l i k e l y t h a t a i d - t r a d e l i n k a g e i t s e l f can he lp d i r e c t l y to a l l e v i a t e such problems . Thus , p a r a d o x i c a l l y , e f f o r t s to enhance C a n a d i a n e x p o r t performance through m a n i p u l a t i o n o f the a i d program may a c t u a l l y serve to undermine Canada's f u t u r e e x p o r t p o s i t i o n . S i m i l a r l y , the s u b s i d i z a t i o n o f i n e f f i c i e n t f i r m s , through t i e d a i d or the INC, f o r example, may slow neces sary i n d u s t r i a l adjustments and thus r e t a r d the long term i n d u s t r i a l development 89 o f the c o u n t r y . 1 4 7 Such " p r o t e c t i o n i s m " may reduce the i n c e n t i v e s to become more e n t e r p r i s i n g and i n n o v a t i v e . 1 4 8 F u r t h e r , i f CIDA s u p p l i e r s are i n e f f i c i e n t , u n c o m p e t i t i v e i n p r i c e , or u n s u i t a b l e f o r the d e v e l o p i n g c o u n t r y ' s c o n d i t i o n s , Canada's f u t u r e commerc ia l r e p u t a t i o n may be d e a l t a severe s e t b a c k . As Adams puts i t : " . . . o n e can o n l y be deep ly s k e p t i c a l o f the l o n g - t e r m wisdom o f a p o l i c y which t i e s Canada' s commercia l r e p u t a t i o n i n the r e c i p i e n t c o u n t r y to the p r o v i s i o n o f u n c o m p e t i t i v e goods.149 A d m i t t e d l y , the magnitudes i n v o l v e d i n the a i d program are not so g r e a t as to t h r e a t e n the f u t u r e o f Canadian p r o s p e r i t y i f i n e f f i c i e n t f i rms are s h e l t e r e d . The d e t r i m e n t a l impact o f the a i d - t r a d e l i n k a g e thus shou ld not be exaggerated i n t h i s r e g a r d . On the o t h e r hand, though, the a i d program does c o n c e n t r a t e on c e r t a i n a c t i v i t i e s and c e r t a i n s e c t o r s o f Canadian "competence and e x p e r t i s e " , so the r e s u l t s might be c o n c e n t r a t e d , s e c t o r a l l y and even r e g i o n a l l y . And commercia l r e p u t a t i o n , o f t e n c r i t i c a l i n p e n e t r a t i n g LDC e x p o r t markets , may very w e l l h inge on the a i d - r e l a t e d performance o f o n l y a few f i r m s . Another q u e s t i o n to be c o n s i d e r e d i s whether C I D A ' s own p o l i t i c a l and a d m i n i s t r a t i v e weaknesses ought to be addressed by 147. I b i d . , p . 10 148. Rudner, op. c i t . , p . 141. S u b s i d i z a t i o n o f dynamic f i r m s , on the o ther hand, may g i v e such f i rms the f i n a n c i a l and marke t ing " b r e a t h i n g space" needed to become more e n t e r p r i s i n g and i n n o v a t i v e , and thus s u c c e s s f u l on wor ld markets . 149. Adams, O i l and Water , p. 26 h a v i n g r e c o u r s e to p o l i t i c a l l y popu lar and a d m i n i s t r a t i v e l y l e s s onerous p r o j e c t s and programs. Should not the r o o t causes o f these problems (among them the l a c k o f a u t h o r i t y , the i n a b i l i t y to d i s b u r s e funds , and the c o n f u s i n g mix o f o b j e c t i v e s ) be addressed d i r e c t l y , r a t h e r than i n d i r e c t l y through the a i d - t r a d e l i n k a g e ? J u s t as w i th Canada's expor t t r o u b l e s , there l i e s the r i s k t h a t the p o p u l a r i t y o f the a i d - t r a d e i s s u e w i l l p r e c l u d e e f f o r t s to s t r e n g t h e n CIDA. F i n a l l y , by e l e v a t i n g economic s e l f - i n t e r e s t to such a prominent p o s i t i o n i n the a i d program, Canada c o u l d be s e r i o u s l y undermining i t s i n t e r n a t i o n a l c r e d i b i l i t y and i n f l u e n c e , p a r t i c u l a r l y with the d e v e l o p i n g w o r l d . Canada ' s r e p u t a t i o n has a l r e a d y been t a r n i s h e d f o r i t s ambiva l en t and s e l f - i n t e r e s t e d s tances on many i s s u e s o f i n t e r e s t to d e v e l o p i n g c o u n t r i e s ; a f u r t h e r b l a c k e n i n g o f t h i s r e p u t a t i o n can o n l y serve to h u r t Canada' s l ong term commercia l and p o l i t i c a l i n t e r e s t s i n the d e v e l o p i n g w o r l d . In s h o r t , Canada's commercia l and p o l i t i c a l s e l f - i n t e r e s t s do not appear to be w e l l - s e r v e d by a p o l i c y o f i n t e g r a t i n g a i d wi th commerce. B u t , on a broader l e v e l , Canada' s move towards an a i d program d i c t a t e d by commercia l concerns may have u n d e s i r a b l e consequences f o r the d e v e l o p i n g wor ld and for the i n t e r n a t i o n a l community as a whole. One such p o s s i b l e e f f e c t i s the c o n t i n u e d b l u r r i n g and c o n f u s i o n o f o b j e c t i v e s i n the Canadian a i d program. A i d and commerce can c o - e x i s t harmonious ly i n some i n s t a n c e s , but i n too many o t h e r s the at tempted i n t e g r a t i o n c r e a t e s c o n f l i c t s or c o n t r a d i c t i o n s i n p o l i c y , thus n e c e s s i t a t i n g compromises and p o l i c y r e v e r s a l s . In such a p o l i t i c a l and b u r e a u c r a t i c env ironment , deve lopmenta l o b j e c t i v e s are on a shaky f o o t i n g . The domest i c p o l i t i c a l c o n s t i t u e n c y for T h i r d World needs i s c o n s i d e r a b l y s m a l l e r and weaker than those s u p p o r t i n g o t h e r o b j e c t i v e s , and i s l e s s l i k e l y to p r e v a i l i n a p o l i t i c a l "show-down". Hence, c o n c e s s i o n s must be made, b u t , f o r the most p a r t , c o n c e s s i o n s to o ther o b j e c t i v e s reduce the deve lopmenta l v a l u e o f a i d . Thus , deve lopmenta l o b j e c t i v e s , f o r which CIDA supposed ly was c r e a t e d and for which Canadian tax d o l l a r s supposed ly are spent , s i m p l y cannot compete w i th the domest i c p o l i t i c a l p o p u l a r i t y o f the a i d - t r a d e l i n k a g e . In s h o r t , a c o n t i n u e d p o l i c y o f p u r s u i n g t h i s l i n k a g e i s l i k e l y to l e a d to f u r t h e r c o n f u s i o n and c o n f l i c t among a i d o b j e c t i v e s , and hence a l e s s than d e s i r a b l e Canadian a i d e f f o r t . S i m i l a r l y , the i n t r u s i o n o f commercia l concerns i n t o a i d p o l i c y can have the e f f e c t o f r e d u c i n g the r e a l v a l u e o f r e s o u r c e s t r a n s f e r r e d . For i n s t a n c e , t i e d a i d i s s a i d to reduce the r e a l v a l u e o f a i d by up to 20 per c e n t . Funds moved to m i d d l e - and upper middle - income LDCs may l e s s e n the amount a v a i l a b l e f o r the lower- income LDCs and the LLDCs . D e s p i t e the i n c r e a s i n g a b i l i t y o f some r e c i p i e n t governments to formula te sound, l o n g - r a n g e development p lans and to n e g o t i a t e e f f e c t i v e l y w i th d o n o r s , development p r i o r i t i e s may s t i l l be d i s t o r t e d by c o m m e r c i a l l y - o r i e n t e d a s s i s t a n c e o f f e r i n g s . B e s i d e s , not a l l 92 L D C s y e t p o s s e s s t h e a b i l i t y t o m a x i m i z e t h e i r g a i n s f r o m t h e a i d r e l a t i o n s h i p . I n a n o t h e r v e i n , money s p e n t a n f o o d a i d a s " s u r p l u s d i s p o s a l " r e d u c e s t h e l i k e l i h o o d t h a t more i m p o r t a n t p r o j e c t s a n d p r o g r a m s f o r a g r i c u l t u r a l r e s e a r c h a n d d e v e l o p m e n t w i l l be f i n a n c e d . W h i l e t h e i n t r u s i o n o f c o m m e r c i a l c o n c e r n s d o e s n o t n e c e s s a r i l y n u l l i f y t h e d e v e l o p m e n t a l i m p a c t o f a i d f u n d s a n d p r o j e c t s , t h e r e i s a g r e a t 1 i k e l i h o o d o f t h i s h a p p e n i n g , g i v e n t h e d i f f e r e n t p r i o r i t i e s o f e a c h o b j e c t i v e . A g a i n , C a n a d a ' s d e v e l o p m e n t a s s i s t a n c e e f f o r t i s l i k e l y t o be l e s s e f f e c t i v e t h a n i t c o u l d be i n t h e a b s e n c e o f s u c h c o n c e r n s . F i n a l l y , C a n a d a ' s p u r s u i t o f t h e a i d - t r a d e l i n k a g e c o u l d p r o v i d e o t h e r DAC g o v e r n m e n t s w i t h t h e j u s t i f i c a t i o n o r r a t i o n a l i z a t i o n f o r a d o p t i n g s i m i l a r p o l i c i e s . W i t h o u t e x a g g e r a t i n g t h e c a t a l y t i c r o l e C a n a d a m i g h t p l a y i n i g n i t i n g a n e x p o r t c r e d i t s w a r , o r i n p r e v e n t i n g c o l l e c t i v e a g r e e m e n t o n m e a s u r e s t o u n t i e a i d , i t i s s t i l l c l e a r t h a t C a n a d a d o e s p o s s e s s some c r e d i b i l i t y a n d i n f l u e n c e i n DAC c o u n s e l s , a n d s h o u l d be p r e p a r e d t o w i e l d i t i n a c o n s t r u c t i v e w a y . E s p e c i a l l y g i v e n t h e m a r g i n a l b e n e f i t s t h u s f a r a c c r u i n g f r o m i t s p u r s u i t o f t h e a i d -t r a d e l i n k a g e , C a n a d a h a s a g r e a t o p p o r t u n i t y t o p l a y a p o s i t i v e , i f s y m b o l i c , r o l e i n m a k i n g d e v e l o p m e n t a s s i s t a n c e more e f f e c t i v e , a n d i n e l e v a t i n g t h e i n t e r e s t s a n d n e e d s o f t h e L D C s t o g r e a t e r p r o m i n e n c e . 93 4.4 C o n c l u s i o n s T h i s c h a p t e r has at tempted to e v a l u a t e the p r a c t i c a l u t i l i t y and the l o n g e r - t e r m p r o p r i e t y o f s e e k i n g domest ic r e t u r n s from the development a s s i s t a n c e budget . I n t u i t i v e l y , the a i d - t r a d e l i n k a g e might be a b l e to f u n c t i o n e f f e c t i v e l y , g e n e r a t i n g r e c i p r o c a l b e n e f i t s f or donor and r e c i p i e n t . In such an i d e a l s c e n a r i o , r e c i p i e n t governments would g r a n t a i d p r o j e c t s to donors on the b a s i s o f a c c u r a t e p e r c e p t i o n s o f donor s t r e n g t h s and a c c o r d i n g to w e l l - b a l a n c e d , long term development p l a n s , the p r i v a t e s e c t o r s i n both c o u n t r i e s would p l a y a h i g h l y c o n s t r u c t i v e r o l e i n cement ing r e c i p r o c a l economic r e l a t i o n s h i p s , and s u s t a i n e d two-way t rade f lows would commence. U n f o r t u n a t e l y , though, theory i s always c o n f r o n t e d by the ug ly face o f r e a l i t y . And the r e a l i t i e s o f the Canadian economy, p o l i t y and development a s s i s t a n c e program suggest t h a t a g r e a t many o b s t a c l e s must be surmounted f o r the l i n k a g e to work e f f e c t i v e l y , as i n the model , f or Canada. CIDA may s i m p l y be the wrong v e h i c l e f o r promot ing t h i s l i n k a g e , and the Canadian p r i v a t e s e c t o r the wrong agent for i t s e x e c u t i o n . Thus f a r , the u t i l i t y o f the a i d - t r a d e l i n k a g e remains to be p r o v e n , a l t h o u g h the government i s de termined to proceed on the b a s i s o f u n t e s t e d assumpt ions . S i m i l a r l y , the p o l i t i c a l and economic p r o p r i e t y o f the l i n k a g e i s q u e s t i o n a b l e : i t may damage Canada' s p o l i t i c a l c r e d i b i l i t y and commerc ia l r e p u t a t i o n i n the d e v e l o p i n g w o r l d , whi le undermining the i n t e g r i t y o f Canada' s and p o s s i b l y o t h e r DAC c o u n t r i e s ' a i d programs. Thus , i t does not appear t h a t the b e n e f i t s , b r o a d l y c o n c e i v e d , stemming from Canada's p u r s u i t o f the a i d - t r a d e l i n k a g e have been worth the c o s t s , b r o a d l y c o n c e i v e d . C l e a r l y , no s imple formula can e s t a b l i s h the exac t na ture o f the t r a d e -o f f s . On a number o f c o u n t s , though, Canada's s tance i s o v e r l y s e l f - i n t e r e s t e d without a p p e a r i n g to serve Canada's i n t e r e s t s . Yet Ottawa pursues t h i s s t r a t e g y wi th i n c r e a s i n g enthus iasm. Why i s t h i s ? An e x p l a n a t i o n for t h i s c r i t i c a l q u e s t i o n i s the s u b j e c t o f the next c h a p t e r . 95 V. EXPLAINING THE "COMMERCIALIZATION" OF CANADIAN AID 5.1 I n t r o d u c t i o n The p r i n c i p a l l e s s o n s to be g l eaned from the p r e c e d i n g c h a p t e r s are t h a t the Canad ian a i d program has become the arena for a v a r i e t y o f c o n t e n d i n g i n t e r e s t s , wi th the p r e s s u r e to generate domest i c economic b e n e f i t s from ODA becoming i n c r e a s i n g l y i n f l u e n t i a l i n t h i s i n t e r p l a y o f i n t e r e s t s . The a i d - t r a d e l i n k a g e now appears to be f i r m l y e n s h r i n e d i n a i d p h i l o s o p h y , p l a n n i n g and p r a c t i s e a t CIDA. However, the c a s t s to both Canada and r e c i p i e n t LDCs appear to exceed any b e n e f i t s a r i s i n g from the a i d - t r a d e l i n k a g e . C o n s i d e r i n g the immediate c o s t s and the long term i m p l i c a t i o n s o f t h i s t r e n d , an e x p l a n a t i o n f o r i t s prominence i s indeed warranted . Why has CIDA become concerned wi th s e c u r i n g r e t u r n s from the a i d budget , i n both the s h o r t and l o n g terms? The e x p l a n a t i o n to be p r e s e n t e d i n t h i s c h a p t e r w i l l proceed as f o l l o w s . F i r s t , a v a r i e t y o f p e r s p e c t i v e s found i n the l i t e r a t u r e w i l l be examined and a s s e s s e d . G e n e r a l l y , each o f f e r s u s e f u l i n s i g h t s , but none p r o v i d e s a s u f f i c i e n t l y comprehensive e x p l a n a t i o n f o r t h i s complex q u e s t i o n . Based on the ev idence thus f a r r e v i e w e d , the i n t e r p l a y o f p r e s s u r e s , i n t e r e s t s and o b j e c t i v e s , both domest i c and i n t e r n a t i o n a l , sugges ts t h a t a mono-causal e x p l a n a t i o n w i l l be inadequate . Thus , the e x p l a n a t i o n to be o f f e r e d here w i l l draw on the s t r e n g t h s o f 96 s e v e r a l p e r s p e c t i v e s and paradigms. F i r s t , though, i t i s to an e x p l o r a t i o n o f a number o f a l t e r n a t i v e p e r s p e c t i v e s t h a t the t h e s i s t u r n s . 5.2 C r i t i c a l P e r s p e c t i v e s On The A i d - T r a d e C o n n e c t i o n The f i r s t p e r s p e c t i v e to be examined would sugges t , s t r a n g e l y enough, t h a t there i s no v i a b l e e x p l a n a t i o n for the i n c r e a s i n g " c o m m e r c i a l i z a t i o n " of Canadian a i d . The b u s i n e s s o f p o l i t i c s , the argument r u n s , i s so l a d e n wi th i n f l u e n c e s , p r e s s u r e s , events and i n t e r e s t s that p o l i c y emerges i n an ad hoc , unplanned and even random f a s h i o n . White p r o v i d e s a f i n e example o f t h i s p e r s p e c t i v e : . . . t h e a c t i o n s o f donors are determined p r i m a r i l y by the h i s t o r i c a l s i t u a t i o n s i n which they happen to f i n d t h e m s e l v e s . . . i n any g i v e n s i t u a t i o n d i f f e r i n g motives w i l l g i v e r i s e to s i m i l a r a c t i o n s . M o t i v a t i o n , i n o t h e r words, i s a minor f a c t o r , the a n a l y s i s o f which does not h e l p us i n e x p l a i n i n g what i t i s tha t donors do.150 T h i s "non-exp lanatory" p e r s p e c t i v e has problems a c c o u n t i n g for the t rends observed i n the h i s t o r y o f Canad ian development a s s i s t a n c e . I t q u i t e p r o p e r l y draws a t t e n t i o n to the g r e a t d i f f i c u l t y i n v o l v e d i n d i s e n t a n g l i n g i n f l u e n c e s from p r e s s u r e s , and o b j e c t i v e s from r a t i o n a l e s . However, t h i s s h o u l d not n u l l i f y the u t i l i t y o f such a t a s k . F u r t h e r , i f the e v o l u t i o n o f the Canadian a i d program has been gu ided p r i m a r i l y by " h i s t o r i c a l 150. John Whi te , The P o l i t i c s o f F o r e i g n A i d , pp. 34-35 97 s i t u a t i o n s " , as White would argue, why i s i t that widely d i f f e r e n t development problems i n many c o u n t r i e s have given r i s e to remarkably s i m i l a r Canadian p o l i c y responses? White's p e r s p e c t i v e a l s o suggests a d e t e r m i n i s t i c i n a b i l i t y of donor governments to f a s h i o n , pursue and achieve o b j e c t i v e s . Such a view, again, does not accord with the determined p u r s u i t by Ottawa throughout the years of v a r i o u s p o l i t i c a l , commercial and developmental o b j e c t i v e s . (Whether i t has achieved these o b j e c t i v e s i s an a l t o g e t h e r d i f f e r e n t matter). P o l i t i c s , and more s p e c i f i c a l l y the p o l i t i c s o f f o r e i g n a i d , may o f t e n be i r r a t i o n a l , pragmatic or misguided, but are j u s t as o f t e n r a t i o n a l and p r e d i c t a b l e , responding to concrete economic and p o l i t i c a l i n t e r e s t s . Trends and p a t t e r n s can be d i s c e r n e d . Moreover, while i t i s c l e a r l y true that governments develop r a t i o n a l e s f o r t h e i r a c t i o n s long a f t e r commencing those a c t i o n s , t h i s does not mean p r i o r (and u l t i m a t e l y d e c i s i v e ) o b j e c t i v e s and pre s s u r e s have not played t h e i r p a r t . In s h o r t , the a i d - t r a d e i s s u e has not become p o l i t i c a l l y s a l i e n t p u r e l y by h i s t o r i c a l chance. Another p e r s p e c t i v e , and not s u r p r i s i n g l y that adopted most o f t e n by CIDA i t s e l f , i s that the a i d - t r a d e l i n k a g e r e p r e s e n t s , p r i m a r i l y , an e v o l u t i o n i n the developmental models g u i d i n g Canada's response to T h i r d World needs, an e v o l u t i o n prompted i n l a r g e measure by the changing developmental requirements o f LDCs. Hence, the r e f e r e n c e s i n CIDA p u b l i c a t i o n s to the i n n o v a t i v e r o l e o f p r i v a t e business i n development, the n e c e s s i t y o f e f f e c t i n g 98 technology t r a n s f e r , or the growing c a p i t a l needs of LDCs are a l l suggestive both of changing needs and e v o l v i n g developmental models. Is i t not p o s s i b l e , then, that a l l these instruments f o r pursuing the a i d - t r a d e l i n k a g e are founded p r i m a r i l y upon the responsiveness of CIDA to new development needs, with the thought of " t r i c k l e back" b e n e f i t s a remote concern, p u b l i c i z e d mainly for the purpose of g a r n e r i n g p o l i t i c a l support f o r a i d spending? In CIDA's defence, t h i s argument has some merit. C e r t a i n l y , changing developmental needs and s h i f t i n g models of development have something to do with the use of more commercial or market-o r i e n t e d a i d • i n s t r u m e n t s , p r o j e c t s and programs. E x a c t l y how much i s very d i f f i c u l t to a s c e r t a i n , but s u f f i c e i t to say that responsiveness to LDC needs at CIDA headquarters i s i n p a r t r e s p o n s i b l e . On the other hand, however, i t would be erroneous to a t t r i b u t e the e n t i r e a i d - t r a d e o r i e n t a t i o n to CIDA's changing p e r c e p t i o n s of LDC needs. For one t h i n g , CIDA's r e l a t i v e l y weak p o s i t i o n i n the Ottawa h i e r a r c h y has rendered i t v u l n e r a b l e to pr e s s u r e s from other f e d e r a l government a c t o r s . Such p r e s s u r e s have played a much more s i g n i f i c a n t r o l e than has CIDA i t s e l f i n the d r i f t towards the a i d - t r a d e connection. Besides, CIDA has o f t e n (but not always) r e s i s t e d the i n t e g r a t i o n of a i d and commerce. F u r t h e r , i t i s d i f f i c u l t f o r CIDA to j u s t i f y t h i s new o r i e n t a t i o n p u r e l y on developmental grounds when i t can be shown th a t t h i s o r i e n t a t i o n produces i n c o n s i s t e n c i e s and c o n f l i c t s i n p o l i c y . For i n s t a n c e , to be true to i t s developmental mandate. 99 CIDA should adopt d i f f e r e n t p o l i c i e s f o r LLDCs and middle-income LDCs on i s s u e s such as food a i d and t i e d a i d , but i t does not. Th i s suggests that the developmental b a s i s f o r many of these a i d -trade models i s a best a subordinate i n f l u e n c e over p o l i c y d e c i s i o n s . A t h i r d e x p l a n a t i o n , perhaps p e c u l i a r l y Canadian, i s that Canada i s simply a f o l l o w e r i n DAC c i r c l e s , i t s p o l i c i e s r e f l e c t i n g those of the DAC l e a d e r s ( i . e . . U n i ted S t a t e s , France, Japan, B r i t a i n , West Germany). This p e r s p e c t i v e would contend that Canada faces very r e a l l i m i t s , both e c o n o m i c a l l y and p o l i t i c a l l y , i n i t s a b i l i t y to respond to the needs of LDCs through i t s a i d program. P o l i t i c a l l y , the main DAC donors would take g r e a t o f f e n c e i f Canada's a i d performance improved r a p i d l y ; t h e i r own a i d e f f o r t s would begin to appear l e s s generous, and thus prove to be a source of p o l i t i c a l embarrassment. Econo m i c a l l y , i t i s argued, Canada would s u f f e r g r e a t l y i f i t u n i l a t e r a l l y e l i m i n a t e d the commercial underpinnings of many of i t s a i d p o l i c i e s . For in s t a n c e , the un t y i n g o f b i l a t e r a l a i d would produce procurement l o s s e s , and the c e s s a t i o n of mixed c r e d i t s might l e a d to the l o s s of e x i s t i n g or p o t e n t i a l export markets. How can Canada u n t i e i t s a i d , or r e s i s t u s ing mixed c r e d i t s , when i t s main commercial r i v a l s are employing such t a c t i c s to penetrate T h i r d World markets? While p l a u s i b l e i n some i n s t a n c e s , perhaps, t h i s p e r s p e c t i v e v a s t l y underrates Canada's importance as an a i d donor and i t s p o t e n t i a l i n f l u e n c e i n DAC c i r c l e s . The very generous 100 c o n c e s s i o n a l i t y ( i . e . , high grant element and low i n t e r e s t r a t e s ) of Canadian loans stands out as an example of what can be done without n e c e s s a r i l y i g n i t i n g a p o l i t i c a l c o n f l i c t . C onversely, Canada's l a g g a r d performance on many other a i d i s s u e s , such as procurement t y i n g and the use of " a s s o c i a t e d f i n a n c i n g " cannot be e x p l a i n e d with r e f e r e n c e to the DAC l e a d e r s , f o r t h e i r performance on these and other is s u e s i s more commendable than Canada's. Indeed, the p e r e n n i a l l y admirable development a s s i s t a n c e programs of the Nordic c o u n t r i e s and the Netherlands r e f u t e t h i s argument almost e n t i r e l y , f o r they are much s m a l l e r and l e s s i n f l u e n t i a l i n DAC than i s Canada. The a b i l i t y o f these n a t i o n s to " i n s u l a t e " t h e i r a i d programs from the v i c i s s i t u d e s o f f i s c a l and economic p r e s s u r e s suggests that domestic f a c t o r s may be more c r i t i c a l i n shaping a i d programs than i n t e r n a t i o n a l trends and p r e s s u r e s . In s h o r t , Canada should not be exempt from blame f o r i t s i n c r e a s i n g d r i f t towards a s e l f - i n t e r e s t e d a i d program. Other observers surmise that disenchantment among a i d o f f i c i a l s and p o l i t i c i a n s with the r e s u l t s of a i d programs i s to blame f o r the aforementioned d r i f t . Colaco accounts f o r such disenchantment: A l a c k of a p p r e c i a t i o n of the long term nature of the development process combined with an i n d i s c r i m i n a t e lumping together of c o u n t r i e s with g r e a t l y d i f f e r e n t c u l t u r e s and resource a v a i l a b i l i t i e s under the m o n o l i t h i c r u b r i c o f "developing c o u n t r i e s " has w i t h i n i t the seeds of disenchantment with 101 development c o o p e r a t i o n . 1 5 1 A c c o r d i n g to the N o r t h - S o u t h I n s t i t u t e , the p o l i t i c a l f a i l u r e ( i n a b i l i t y ? ) to e x p l a i n p r o p e r l y the complex and h i g h - r i s k , nature o f the development proces s generated unreasonab le e x p e c t a t i o n s about the p o t e n t i a l o f a i d ; these e x p e c t a t i o n s have l a r g e l y not been s a t i s f i e d , which c r e a t e s d i senchantment .152 T h i s d i s enchantment , i n t u r n , makes i t more d i f f i c u l t to defend a i d spending i n an e r a o f economic r e c e s s i o n and f i s c a l r e s t r a i n t . Hence, i n c r e a s i n g a t t e n t i o n turns to s e c u r i n g domest ic r e t u r n s from a i d spending i n o r d e r to guarantee p u b l i c and i n t r a -governmental support for the a i d program, and thus to "save" ODA. A r e p r e s e n t a t i v e view i s found i n the Hatch Report o f 1979, which expresses the b e l i e f t h a t the b u s i n e s s community was d i s e n c h a n t e d wi th CIDA's " o v e r l y p h i l a n t h r o p i c giveaway a p p r o a c h . " To r e k i n d l e s h r i n k i n g p u b l i c and b u s i n e s s s u p p o r t , and to "do more f o r development", the Report a r g u e s , Canada sh ou ld more c l o s e l y i n t e g r a t e i t s a i d a c t i v i t i e s wi th i t s t rade s t r a t e g y . 1 5 3 C l e a r l y , t h i s type o f e x p l a n a t i o n p r o v i d e s s e v e r a l u s e f u l i n s i g h t s . I t draws a t t e n t i o n to the p o s i t i v e r e l a t i o n s h i p , between domest i c economic p r e s s u r e s and s e l f - i n t e r e s t i n the a i d program. T h i s " p o l i t i c a l support" h y p o t h e s i s suggests tha t even CIDA may embrace the a i d - t r a d e l i n k a g e i f i t means "sav ing" the 151. C o l a c o , op. c i t . , p. 16 152. N o r t h - S o u t h I n s t i t u t e , In the Canadian I n t e r e s t ? , p. 54 153. E x p o r t Promot ion Review Committee , op. c i t . , p. 35 102 a i d program. F u r t h e r , d i senchantment w i th the r e s u l t s o f f o r e i g n a i d b r i n g s w i th i t a q u e s t i o n i n g o f the v a l i d i t y o f the o l d approaches to u s i n g a i d , thereby f a c i l i t a t i n g the emergence o f new approaches , such as i n d u s t r i a l c o o p e r a t i o n . And, q u i t e r i g h t l y , t h i s e x p l a n a t i o n l a y s blame s q u a r e l y on governments for f a i l i n g to a p p r e c i a t e the c o m p l e x i t y o f the development p r o c e s s , and for promot ing f a l s e e x p e c t a t i o n s about the p o t e n t i a l o f a i d . To be more comple te , though, t h i s "disenchantment" h y p o t h e s i s ought to be a b l e to answer s i x q u e s t i o n s . How are the o r i g i n s o f commercia l i n t e r e s t i n a i d , which c l e a r l y preceded any p o s s i b l e growth i n d i senchantment , to be e x p l a i n e d ? Is not the f a i l u r e to meet e x p e c t a t i o n s due a t l e a s t i n p a r t to the f a c t t h a t commercia l and p o l i t i c a l i n t e r e s t s have always i n f l u e n c e d a i d p o l i c y , thus r e s u l t i n g i n poor development p o l i c y ? Why have governments been unable or u n w i l l i n g to e x p l a i n to the p u b l i c the complex na ture o f the development p r o c e s s , and the r e a l i s t i c l i m i t s o f a i d i n t h a t p r o c e s s ? I f d i senchantment i s so s t r o n g , then why are a i d programs not s imply e l i m i n a t e d ? Are not o t h e r f a c t o r s more s i g n i f i c a n t than d isenchantment i n a c c o u n t i n g for the d e c l i n e i n p u b l i c and p o l i t i c a l s u p p o r t f o r a i d ? F i n a l l y , how are c e r t a i n a i d donors a b l e to " i n s u l a t e " t h e i r programs from v e r y s i m i l a r economic p r e s s u r e s and f e e l i n g s o f d i senchantment? Such q u e s t i o n s suggest tha t d i senchantment wi th a i d may be impor tant but t h a t i t cannot assume the s t a t u s o f a p r i m a r y c a u s a l f a c t o r . Other c o n s i d e r a t i o n s must have e n t e r e d the p i c t u r e . 103 A r e l a t i v e l y l a r g e body o f l i t e r a t u r e on Canadian f o r e i g n a i d has emerged which might bes t be termed " r a d i c a l " . A n a l y s t s i n t h i s s c h o o l see the r o l e o f the s t a t e as be ing determined by the i m p e r a t i v e o f c a p i t a l a c c u m u l a t i o n . Through i t s v a r i o u s a g e n c i e s and departments , i n c l u d i n g the development a s s i s t a n c e agency, the s t a t e e x i s t s to serve the i n t e r e s t s o f p r i v a t e b u s i n e s s . Two p r i m a r y v a r i a n t s o f t h i s p e r s p e c t i v e deserve ment ion . The f i r s t sees t h i s c a p i t a l a c c u m u l a t i o n r o l e as b e i n g de termined by the s t r u c t u r a l f o r c e s which guide c a p i t a l i s m . P r a t t s u p p l i e s an example o f t h i s " s t r u c t u r a l i s t " i n t e r p r e t a t i o n o f the r o l e o f the s t a t e : "Any contemporary c a p i t a l i s t s t a t e . . . m u s t m a i n t a i n i t s u n i t y and i t must ensure the r e p r o d u c t i o n o f i t s c o n d i t i o n s o f p r o d u c t i o n . These s t r u c t u r a l r e q u i r e m e n t s determine the r o l e o f the s ta te ."154 The second v a r i a n t o f t h i s " r a d i c a l " c r i t i q u e o f the s t a t e does not see the r o l e o f the s t a t e as be ing s t r u c t u r a l l y d e t e r m i n e d ; i n s t e a d , l e a d i n g s t a t e p e r s o n n e l are p e r s o n a l l y r e s p o n s i v e to the needs o f l e a d i n g c o r p o r a t i o n s . C o n s t a n t b u s i n e s s p r e s s u r e on such p e r s o n n e l a l s o pays d i v i d e n d s , as the p o l i c i e s and programs o f the s t a t e a lmost always r e f l e c t the needs o f p r i v a t e b u s i n e s s . T y p i c a l o f t h i s " i n s t r u m e n t a l i s t " p o s i t i o n i s the f o l l o w i n g passage: . . . a s the s i z e o f the a i d program grew, and because n a t i o n a l and i n t e r n a t i o n a l economic problems caused the needs o f C a n a d i a n - b a s e d c o r p o r a t i o n s to i n c r e a s e , CIDA has been 154. C r a n f o r d P r a t t , Canadian P o l i c y Toward the T h i r d  W o r l d : The Search for a Paradigm, p. 10 104 i n c r e a s i n g l y p r e s s u r e d towards the promot ion o f Canad ian e x p o r t s and t h e r e f o r e the a c c u m u l a t i o n o f p r i v a t e p r o f i t s . 1 5 5 Whether through " s t r u c t u r a l requ irements" or a c t i v e p r e s s u r e the Canadian s t a t e i s p e r c e i v e d as the s taunch a l l y o f p r i v a t e c o r p o r a t i o n s , s k i l l f u l l y employing the a i d program and o t h e r government organs to promote p r i v a t e p r o f i t s . The s t a t e ' s own i n t e r e s t s are not seen as a major i n f l u e n c e on s t a t e p o l i c y , but are i n s t e a d seen as e i t h e r s u b o r d i n a t e or i d e n t i c a l to those o f p r i v a t e f i r m s or o f c a p i t a l i s m i n g e n e r a l . . . . f e d e r a l p o l i c y - m a k e r s are not j u s t c a j o l e d by b u s i n e s s . They a l s o f e r v e n t l y share the b u s i n e s s b e l i e f tha t e x p o r t s must expand i f Canada i s to p r o s p e r . P r i v a t e c o r p o r a t i o n s are the l e a d a c t o r s i n t h e i r e x p o r t - l e d economic s t r a t e g y , and the a i d program i s one o f s e v e r a l s u p p o r t i n g r o l e s p l a y e d by the s t a t e . 1 5 6 O f t e n termed a "neo-marxis t" or "dominant c l a s s " p e r s p e c t i v e , t h i s s c h o o l o f thought r e p r e s e n t s a f a i r l y comprehensive and c o n v i n c i n g c r i t i q u e o f the i n t e n t and p r a c t i s e o f development a s s i s t a n c e . I t thus p r o v i d e s a number o f very p e n e t r a t i n g i n s i g h t s . I t draws a t t e n t i o n to the c l o s e i n t e r r e l a t i o n s h i p t h a t e x i s t s between economic d i s l o c a t i o n i n Canada and a b r o a d , and i n c r e a s i n g f i s c a l p r e s s u r e s i n government. Hence, i t i s a b l e to show how the twin problems o f r e c e s s i o n and r e s t r a i n t have been f o r c e d onto and i n t o the development a s s i s t a n c e program i n the s earch for s o l u t i o n s to each . On 155. C a r t y , Smith and LAWG, op. c i t . , p . I l l 156. I b i d . , p . 104 105 another n o t e , such a c r i t i q u e i s q u i t e c o r r e c t i n a r g u i n g t h a t a i d has been and i s used f o r the promot ion o f e x p o r t s , and thus p r i v a t e p r o f i t s . The i n t e r e s t s and g e n e r a l economic p h i l o s o p h i e s o f the s t a t e and o f b u s i n e s s thus are o f t e n i n tandem, as " r a d i c a l " t h e o r i s t s contend . A c c o r d i n g l y , i t i s q u i t e l i k e l y t h a t the i n t e r e s t s o f the Canadian p r i v a t e s e c t o r , b r o a d l y c o n c e i v e d , and those o f more s p e c i f i c economic s e c t o r s and i n d i v i d u a l f i r m s , r e c e i v e a f a i r e r and more sympathe t i c h e a r i n g i n the c o r r i d o r s o f government than do the i n t e r e s t s and demands o f those " c r i t i c a l i n t e r n a t i o n a l l y - o r i e n t e d p u b l i c i n t e r e s t groups"157 which are i n favour o f an a i d program l e s s c o n s t r a i n e d by commercia l c o n s i d e r a t i o n s . Whi le r a d i c a l c r i t i q u e s o f Canad ian f o r e i g n a i d are commendable on a number o f p o i n t s , i t i s e q u a l l y c l e a r t h a t they ignore c e r t a i n f a c t o r s c r i t i c a l to an u n d e r s t a n d i n g o f the e v o l u t i o n and p r a c t i s e o f Canadian a i d . To b e g i n w i t h , t h e i r focus on the prominence o f commercia l o b j e c t i v e s and the i n t e r e s t s o f b u s i n e s s downplays the s i g n i f i c a n c e o f p u r e l y p o l i t i c a l c o n s i d e r a t i o n s i n the a i d program. I t w i l l be remembered t h a t the a i d program o r i g i n a t e d i n an ad hoc manner p r i m a r i l y to serve p o l i t i c a l and d i p l o m a t i c i n t e r e s t s ; i t was o n l y l a t e r t h a t commercia l concerns came to the f o r e . The o r i g i n s o f the a i d program and i t s e a r l y e v o l u t i o n , i t can be a r g u e d , were a very impor tant f a c t o r i n the r e l a t i v e ease wi th 157. C r a n f o r d P r a t t , "Canadian F o r e i g n P o l i c y : B i a s to B u s i n e s s " , i n I n t e r n a t i o n a l P e r s p e c t i v e s , November/December 1982, p. 6 106 which the commercia l i m p e r a t i v e became embedded i n a i d p r a c t i s e . And now, the i n t e r p l a y o f and c o n f l i c t between the p o l i t i c a l and the commercia l o r i e n t a t i o n s o f a i d are an e n d u r i n g f e a t u r e o f a i d p o l i c y - m a k i n g i n Ottawa. Any a n a l y s i s which s i m p l y equates p o l i t i c a l i n t e r e s t s wi th commercial o b j e c t i v e s i s o v e r l o o k i n g the c o m p l e x i t y and c o n f u s i o n which envelope C I D A ' s a c t i v i t i e s , and i s thus m i s s i n g an important f a c t o r i n an u n d e r s t a n d i n g o f the " c o m m e r c i a l i z a t i o n " o f Canadian a i d . A second c r i t i c i s m o f the dominant c l a s s p e r s p e c t i v e i s t h a t i t sugges ts tha t the Canadian s t a t e p l a y s a s u b o r d i n a t e or a t most a s u p p o r t i n g r o l e i n d e c i s i o n s over the d i r e c t i o n o f a i d p o l i c y . On the c o n t r a r y , the ev idence rev iewed p o i n t s to an ex tremely l a r g e and autonomous r o l e for the v a r i o u s organs o f the s t a t e i n the debates over the d i r e c t i o n o f a i d p o l i c y . T h i s r o l e , and the i n t e r e s t s o f the v a r i o u s s t a t e o r g a n s , cannot s i m p l y be assumed to be a t the behest or even on b e h a l f o f b u s i n e s s ; i n a number o f i n s t a n c e s , b u r e a u c r a t i c i n t e r e s t s have come i n t o c o n f l i c t wi th the e x p l i c i t demands o f the "business lobby" .158 While many p h i l o s o p h i c a l d i f f e r e n c e s between b u s i n e s s and CIDA have been e l i m i n a t e d , e s p e c i a l l y i n the pas t decade ' s p u r s u i t o f the a i d - t r a d e l i n k a g e , a number o f s i g n i f i c a n t d i f f e r e n c e s s t i l l remain i n the r e s p e c t i v e views o f CIDA and C a n a d i a n b u s i n e s s a s s o c i a t i o n s as to the proper r o l e and 158. The most t e l l i n g example o f the d i v e r g e n c e i n the r e s p e c t i v e views o f b u s i n e s s and CIDA over the d i r e c t i o n o f a i d p o l i c y i s the e n t i r e t h r u s t o f the Hatch R e p o r t , which expres sed the g e n e r a l o p i n i o n t h a t a i d and commerce s h o u l d be i n t e g r a t e d as c l o s e l y as p o s s i b l e . 107 o b j e c t i v e s o f the a i d program. In s h o r t , i n a i d p o l i c y - m a k i n g as i n many o t h e r f i e l d s , the s t a t e - b u s i n e s s r e l a t i o n s h i p might more a p p r o p r i a t e l y be termed a " p r i v i l e g e d ye t c o n f l i c t u a l r e l a t i o n s h i p " 1 5 9 or a marr iage o f convenience r a t h e r than a permanent p a r t n e r s h i p . F i n a l l y , the dominant c l a s s c r i t i q u e o f Canadian f o r e i g n a i d seems to p o r t r a y the Canad ian s t a t e as a m o n o l i t h . The ev idence rev iewed i n t h i s and o t h e r case s t u d i e s sugges t s , however, t h a t the key p l a y e r s i n a i d p o l i c y - m a k i n g i n Ottawa over the y e a r s -E x t e r n a l A f f a i r s , F i n a n c e , I n d u s t r y , Trade and Commerce, DRIE, A g r i c u l t u r e , and CIDA - a l l have w ide ly d i v e r g e n t i n t e r e s t s , c a p a b i l i t i e s and mandates. Hence, each b r i n g s a p a r t i c u l a r p e r s p e c t i v e to the t a b l e i n the proces s o f d e l i b e r a t i n g over a i d p o l i c y and Canadian p o l i c y on "non-a id" i s sues o f i n t e r e s t to the d e v e l o p i n g w o r l d . As a consequence o f these d i f f e r i n g p o l i t i c a l and b u r e a u c r a t i c i n t e r e s t s , c o n f l i c t s a r i s e over the proper r o l e and d i r e c t i o n for C a n a d i a n ODA, compromises are f a s h i o n e d , and c l e a r winners and l o s e r s o f t e n can be i d e n t i f i e d . Such a s i t u a t i o n does not appear to suppor t the n o t i o n o f a u n i f i e d s t a t e , a n o t i o n o f t e n (but not always) i m p l i e d i n n e o - M a r x i s t a n a l y s i s . I t has been a r g u e d , however, tha t such c o n f l i c t s are tantamount to c l a s s f r i c t i o n s w i t h i n the s t a t e , wi th the v a r i o u s p o l i t i c a l p l a y e r s each r e p r e s e n t i n g d i f f e r e n t f r a c t i o n s o f c l a s s 159. W i l l i a m D. Coleman, "Canadian Bus iness and the S t a t e " , i n K e i t h B a n t i n g ( e d . ) . The S ta te and Economic I n t e r e s t s 108 i n s o c i e t y . 1 6 0 While the c o n f l i c t s engendered may r e p r e s e n t , i n the a b s t r a c t , c o n f l i c t s over the proper r o l e for the s t a t e and over the " d i v i s i o n o f s p o i l s " from p u b l i c p o l i c y , they a l s o r e p r e s e n t u n i q u e l y p o l i t i c a l and b u r e a u c r a t i c c o n f l i c t s , u n r e l a t e d to any ephemeral c o n c e p t i o n o f c l a s s c o n f l i c t . The f i n a l t h e o r e t i c a l p e r s p e c t i v e to be examined i n t h i s s e c t i o n may be termed the "governmental p o l i t i c s " approach .161 A n a l y s i s under t h i s r u b r i c a t tempts to "get i n s i d e " the s t a t e , to p e n e t r a t e d e c i s i o n - m a k i n g b o d i e s , and to l o c a t e the s o u r c e s o f b u r e a u c r a t i c and m i n i s t e r i a l c o n f l i c t . The g u i d i n g r a t i o n a l e behind t h i s p e r s p e c t i v e i s that by examining the environment o f d e c i s i o n - m a k i n g , one d i s c o v e r s the r e a l source o f p o l i c y . F u r t h e r , such a n a l y s i s e x p l i c i t l y a s s e r t s t h a t the s t a t e has i n t e r e s t s o f i t s own, both b r o a d l y c o n c e i v e d and for each o f i t s many s u b - a c t o r s ; t h a t i t a c t i v e l y pursues these i n t e r e s t s , i f need be a t the expense o f the i n t e r e s t s o f s o c i a l groups or c l a s s e s ; and t h a t , f or the most p a r t , the s t a t e i s a b l e to w i t h s t a n d the p r e s s u r e s e x e r t e d by domest ic i n t e r e s t s i f t h e i r o b j e c t i v e s d i f f e r from i t s own. In s h o r t , the governmental p o l i t i c s a n a l y s i s sugges ts a r e l a t i v e l y autonomous and r e l a t i v e l y powerfu l s t a t e wi th i t s own unique i n t e r e s t s . As Nossa l puts i t : 160. L i n d a Freeman, The P o l i t i c a l Economy o f Canada' s  F o r e i g n A i d Programme 161. A very d e t a i l e d and thorough example o f t h i s p e r s p e c t i v e i s c o n t a i n e d i n G l y n B e r r y ' s Ph.D t h e s i s , B u r e a u c r a t i c P o l i t i c s and Canadian Economic P o l i c i e s A f f e c t i n g  the D e v e l o p i n g C o u n t r i e s - The Case o f the "Strategy for  I n t e r n a t i o n a l Development 1975-1980" 109 . . . t h e Canadian government's p o l i c i e s towards development are the r e s u l t not o f the p r e f e r e n c e s o f p a r t i c u l a r groups or c l a s s e s w i t h i n c i v i l s o c i e t y , nor even o f some empheral ( s i c ) n o t i o n o f Canadian s o c i e t y w r i t l a r g e . I f these p o l i c i e s serve the i n t e r e s t s o f s p e c i f i c g r o u p s , i t i s i n c i d e n t a l to the main i n t e r e s t s be ing s e r v e d : those o f the s t a t e i t s e l f . 1 6 2 The "governmental p o l i t i c s " a p p r o a c h , f u r t h e r , suggests t h a t " b u r e a u c r a t i c maintenance"163 i s an ex tremely important concept f o r u n d e r s t a n d i n g the a i d p o l i c y - m a k i n g p r o c e s s : "Crude ly p u t , i n t e r e s t i n development stems from the e x i s t e n c e o f a l a r g e agency des igned to a d m i n i s t e r a i d programmes."164 Hence, i n t e r e s t i n f o r e i g n a i d stems p r i m a r i l y from the s t a t e ; p o l i c y changes are e f f e c t e d p r i m a r i l y at the s t a t e ' s d i s c r e t i o n ; and the i m p e r a t i v e s o f p o s i t i o n w i t h i n the s t a t e and p e r s o n a l a m b i t i o n d i c t a t e how the "state" w i l l a c t . In order to unders tand Canad ian f o r e i g n a i d , the argument goes , a t t e n t i o n should focus on p o l i t i c s w i t h i n the s t a t e i t s e l f , r a t h e r than on government-b u s i n e s s r e l a t i o n s or i n t e r n a t i o n a l t r e n d s . L i k e the dominant c l a s s or n e o - M a r x i s t p e r s p e c t i v e a s se s sed e a r l i e r , the governmental p o l i t i c s approach to s t u d y i n g Canad ian f o r e i g n a i d i s ex tremely i n s i g h t f u l . In p a r t i c u l a r , i t s focus on 162. Kim R i c h a r d N o s s a l , S t a t i s m , Rea l i sm and Canad ian  P o l i c i e s Towards the T h i r d W o r l d , pp. 12-13 163. Nossa l has d e f i n e d " b u r e a u c r a t i c maintenance": " . . . u s u a l l y measured by the a b i l i t y o f s e n i o r management to s u s t a i n i f not expand budgetary and manyear a l l o c a t i o n s and to defend i f not expand the o r g a n i z a t i o n ' s p o l i c y j u r i s d i c t i o n . " I b i d . p. 5 164. I b i d . , p . 24 110 i n t r a - g o v e r n m e n t a l c o n f l i c t s , b u r e a u c r a t i c i n t e r e s t s , a d m i n i s t r a t i v e exped iency , and r e l a t i v e s t a t e autonomy are very h e l p f u l for u n d e r s t a n d i n g the s t r e s s e s and s t r a i n s o p e r a t i n g on CIDA, f o r c e s which have been very i n f l u e n t i a l i n shap ing a i d p o l i c y . On the o t h e r hand, though, the governmental p o l i t i c s approach cannot go a l l the way towards a comprehensive e x p l a n a t i o n f o r the " c o m m e r c i a l i z a t i o n " o f Canadian f o r e i g n a i d . F i r s t , i n and o f i t s e l f , i t does not p r o v i d e a sound b a s i s for u n d e r s t a n d i n g s t a t e - s o c i e t y l i n k a g e s . I n s t e a d , the s t a t e i s c o n c e p t u a l i z e d as a removed and autonomous e n t i t y , with few l i n k s to the s o c i e t y around i t ; the s o c i e t y , b r o a d l y c o n c e i v e d , s c a r c e l y e n t e r s the a n a l y s i s . T h i s s tudy o f Canadian f o r e i g n a i d r e v e a l s t h a t whi l e p u b l i c o p i n i o n and domest ic p r e s s u r e groups are not always i n f l u e n t i a l i n shap ing the d i r e c t i o n o f a i d p o l i c y , they can be and have been i n some i n s t a n c e s . A f u l l e r e x p l a n a t i o n t h e r e f o r e must p r o v i d e a b a s i s for u n d e r s t a n d i n g the r o l e o f n o n - s t a t e a c t o r s i n p o l i c y - m a k i n g and t h e i r r e l a t i o n s h i p wi th the s t a t e . Second, a governmental p o l i t i c s a n a l y s i s may exaggerate the r e a l autonomy and s t r e n g t h o f the s t a t e . A g a i n , t h i s s tudy o f C a n a d i a n development a s s i s t a n c e suggests t h a t the s t a t e and i t s v a r i o u s agenc i e s and m i n i s t r i e s are c o n s t r a i n e d by a v a r i e t y o f domest i c and i n t e r n a t i o n a l p r e s s u r e s , foremost among them economic r e c e s s i o n , f i s c a l r e s t r a i n t and the p r e s s u r e s for r e -e l e c t i o n i n a l i b e r a l d e m o c r a t i c p o l i t i c a l system. Hence, even I l l though policy decisions may be made in a r e l a t i v e l y removed p o l i t i c a l and bureaucratic environment, prior pressures and influences have always played a role. In conclusion, t h i s review of assorted theore t i c a l and explanatory analyses has served two purposes. F i r s t , a number of f r u i t f u l insights emerges in such an exercise. Second, t h i s survey has led to the conclusion that the salience of the a i d -trade linkage i n Canadian development assistance cannot be explained adequately by a single paradigm, or be attributed to one source, however large. Instead, a variety of factors has been causally involved in the evolution of the aid program and the increasing attention to aid-trade linkage: humanitarian, developmental, economic and p o l i t i c a l , on both the domestic and international l e v e l s . They must, therefore, be included i n any explanation as independent variables, and given the weight they deserve. No single paradigm, though, can account for thi s variety of influences. Accordingly, the explanation to be outlined below w i l l not be premised on a single paradigm, but w i l l borrow from many. It i s to such a "multi-t h e o r e t i c a l " analysis that the thesis now turns. 5.3 Towards An Alternative Explanation Thus far the analysis has shown how a large number of factors have influenced the evolution of the Canadian development assistance e f f o r t . The challenge, then, i s to construct an 112 e x p l a n a t i o n for the emergence to prominence o f the a i d - t r a d e l i n k a g e which can account for and accommodate t h i s d i v e r s i t y o f i n f l u e n c e s , whi l e s t i l l r emain ing s y s t e m a t i c and c o h e r e n t . One approach t h a t might be taken i s to e x p l a i n the s a l i e n c e o f the a i d - t r a d e l i n k a g e i n three s t a g e s , each s u c c e s s i v e stage b u i l d i n g upon the p r e v i o u s and each r e s p o n d i n g to q u e s t i o n s l e f t unanswered a t the p r i o r s tage . T h i s s h o u l d l e a d to an o v e r a l l e x p l a n a t i o n which can account for the a i d - t r a d e p o l i c y l i n k a g e , but which as w e l l answers some o f the l a r g e r q u e s t i o n s i n v o l v e d i n Canada' s r e l a t i o n s wi th the d e v e l o p i n g w o r l d . 5 - 3 . 1 Why Has The A i d - T r a d e Linkage Become P o l i t i c a l l y C u r r e n t ? A c c o u n t i n g f o r the emergence o f the a i d - t r a d e l i n k a g e must b e g i n f i r s t wi th r e f e r e n c e to the o r i g i n s and e a r l y development o f the Canad ian a i d e f f o r t , for they have had a c r i t i c a l impact on subsequent t r e n d s . I t w i l l be r e c a l l e d that Canada e n t e r e d the f o r e i g n a i d b u s i n e s s p r i m a r i l y for p o l i t i c a l r e a s o n s : to counter communism and to h e l p b u i l d the foundat ions for the Commonwealth. In s p i t e o f such i n t e r e s t s , however, Canada ' s e a r l y p a r t i c i p a t i o n i n the Colombo P l a n never r e s u l t e d i n a s t r o n g , c e n t r a l a i d agency, nor i n a coherent p h i l o s o p h i c a l framework by which to judge a i d a p p l i c a t i o n s , p r o c e d u r e s and p r o j e c t s . T h i s ad hoc a d m i n i s t r a t i v e and p h i l o s o p h i c a l s i t u a t i o n was f e r t i l e ground f o r the i n f u s i o n o f more o b j e c t i v e s and i n t e r e s t s i n t o the a i d program, and t h i s i s p r e c i s e l y what 113 happened. In the 1950s and 1960s, these ant i - communis t and p r o -Commonwealth impulses were j o i n e d i n the a i d program by o t h e r p o l i t i c a l o b j e c t i v e s : appeas ing Canada's Francophone p o p u l a t i o n , t h w a r t i n g Quebec's i n t e r n a t i o n a l a s p i r a t i o n s , b u i l d i n g Canada' s i n t e r n a t i o n a l p r e s t i g e , cementing p o l i t i c a l r e l a t i o n s h i p s w i t h newly independent c o u n t r i e s , acknowledging American demands for a more a c t i v e Canadian r o l e i n the A m e r i c a s , and, p e r h a p s , f i r m i n g up the Canadian n a t i o n a l i d e n t i t y through the a c t i v i s t f o r e i g n p o l i c y o f " i n t e r n a t i o n a l ism".165 H u m a n i t a r i a n impulses were s t r o n g i n these e a r l y y e a r s , or a t l e a s t were c l a i m e d to be so . Commercial i n t e r e s t s i n these e a r l y years were most ly o f a g e n e r a l n a t u r e : f o r e i g n a i d was presumed to enhance the economic s t a b i l i t y o f newly independent n a t i o n s , to se t them on a course o f economic growth, and to l e a d to a g e n e r a l expans ion o f w o r l d t r a d e , a l l o f which would c r e a t e markets for Canadian goods. The t i e d a i d p r o v i s i o n r e p r e s e n t e d a more c o n c r e t e medium f o r commercia l i n t e r e s t s . Under the p r e s s u r e s o f t h i s l e n g t h y and growing l i s t o f o b j e c t i v e s to be s erved by Canadian f o r e i g n a i d , i t was i n e v i t a b l e t h a t c o n f l i c t s would emerge between d i f f e r e n t l e v e l s o f the a i d b u r e a u c r a c y . For i n s t a n c e , a t the t e c h n i c a l l e v e l , a i d p l a n n e r s c o u l d deve lop a c l e a r se t o f deve lopmental c r i t e r i a 165. Lyon and Ismael ( e d s . ) , op. c i t . , x l v - x l v i . L e s t e r B. Pearson once noted t h a t i d e a l i s t i c i n t e r n a t i o n a l i s m and the n a t i o n a l i n t e r e s t were o p p o s i t e s i d e s o f the same c o i n . C i t e d i n Peyton V. Lyon and B r i a n W. T o m l i n , Canada as an I n t e r n a t i o n a l  A c t o r , p. 4 114 by which a i d p r o j e c t s and programs c o u l d be p lanned and judged . However, the i n t r u s i o n o f numerous non-deve lopmenta l o b j e c t i v e s from the h i g h e r reaches o f the a i d bureaucracy was bound to upset a i d p l a n n i n g and thus i m p a i r the c o n s i s t e n c y o f the approaches taken i n p r o j e c t s and programs. The d i f f e r e n c e s i n o u t l o o k between p l a n n e r s and p o l i c y - m a k e r s was (and s t i l l i s ) l i k e l y to hamper the c o n s i s t e n c y and e f f e c t i v e n e s s o f Canadian a i d . In a d d i t i o n , the f a c t t h a t f o r e i g n a i d p r a c t i s e was r e l a t i v e l y r e c e n t made such a task even more d i f f i c u l t , as the v e r y c o m p l e x i t y o f underdevelopment and the development p r o c e s s were o n l y j u s t b e i n g r e a l i z e d i n these e a r l y y e a r s . A i d agenc i e s c o u l d b a r e l y keep up wi th the f l u x i n t h e o r i e s and models o f development , and CIDA proved no e x c e p t i o n . As Steeves no te s : "The i n d u s t r i a l i z a t i o n through growth model gave way to medium-s c a l e i n d u s t r i a l development and i n f r a - s t r u c t u r a l inves tment , t eacher t r a i n i n g gave way to v o c a t i o n a l and t e c h n i c a l t r a i n i n g , development i n g e n e r a l gave way to r u r a l development and , f i n a l l y , a s t r o n g l y economic approach has been moderated by a c o n c e r n for the s o c i a l impact o f development p r o j e c t s . " 1 6 6 T h i s f l u x undoubted ly c o n t i n u e s to t h i s day, i n p a r t r e f l e c t i v e o f the chang ing needs o f LDCs but j u s t as much a r e f l e c t i o n o f the near i m p o s s i b i l i t y o f f u l l y u n d e r s t a n d i n g the development p r o c e s s . U n f o r t u n a t e l y , though, t h i s b e w i l d e r i n g v a r i e t y o f approaches to 166. S t eeves , op. c i t . , p. 7 115 u s i n g f o r e i g n a i d has impaired the coherence o f the a i d programl67 and has prevented CIDA from l i m i t i n g i t s o b j e c t i v e s and from a s s i g n i n g c o n s i s t e n t p r i o r i t i e s among them. F u r t h e r , Canadian a i d agenc ies have never been a b l e to a t t a i n any r e a l measure o f autonomy or a u t h o r i t y i n Ottawa. D e s p i t e the much-heralded a r r i v a l s o f EAO i n 1960 and CIDA i n 1968, and the s i g n i f i c a n t improvements each made i n the p r a c t i s e and image o f development a s s i s t a n c e , Canada s t i l l awai t s a c e n t r a l a i d agency which i s capable o f f end ing o f f the demands o f o t h e r f e d e r a l government a c t o r s . As long as EAO or CIDA h e l d s u b o r d i n a t e p o s i t i o n s i n the f e d e r a l government h i e r a r c h y , the r e p r e s e n t a t i o n of T h i r d World i n t e r e s t s i n o f f i c i a l Ottawa was l i k e l y to remain weak. And as long as they remained weak, more p o l i t i c a l and commercial o b j e c t i v e s c o u l d be dumped onto the a i d program, thereby c o n t r i b u t i n g f u r t h e r to t h e i r weakness. Indeed, " j u r i s d i c t i o n a l i n v a s i o n s " by E x t e r n a l A f f a i r s , F inance and Trade and Commerce had long been a f ea ture o f Canadian a i d , but i n Lhe c o n t e x t o f growing a i d budget i n the 1960s and e a r l y 1970s, and the i n c r e a s i n g interdependence o f domest ic and i n t e r n a t i o n a l a f f a i r s , the i n t e r e s t o f these powerfu l departments i n the a i d program grew. " J u r i s d i c t i o n a l i n v a s i o n s " thus c o n t i n u e d , a n d , i r o n i c a l l y , j u s t when CIDA's budget was i n c r e a s i n g i t s autonomy and i t s c o n t r o l over the budget seemed to d i m i n i s h . C e r t a i n changes i n the Ottawa d e c i s i o n - m a k i n g environment i n the 1970s served to i n c r e a s e such " j u r i s d i c t i o n a l i n v a s i o n s " , and 167. In a s e r i e s o f i n t e r v i e w s with CIDA o f f i c i a l s , Bruneau , Jorgensen and Ramsay found tha t the o f f i c i a l s f e l t tha t the l a c k o f a s i n g l e concept o f development was a major problem because p l a n n e r s and p o l i c y - m a k e r s o p e r a t e d with d i f f e r e n t v iews . Bruneau e t . a l . , op. c i t . , pp. 33-34 to weaken f u r t h e r CIDA's a b i l i t y to p l a c e p u r e l y deve lopmenta l c o n s i d e r a t i o n s f i r s t . The f i r s t such change was the i n t r o d u c t i o n by Prime M i n i s t e r Trudeau o f c o l l e g i a l or consensus d e c i s i o n -making i n C a b i n e t . T h i s was in tended to encourage broad d i s c u s s i o n o f i s sues i n C a b i n e t , and thereby to ensure more M i n i s t e r i a l c o n t r o l and b e t t e r c o o r d i n a t i o n o f p o l i c i e s between departments . One u n f o r t u n a t e r e s u l t o f t h i s change, f or CIDA a t l e a s t , was t h a t such d i s c u s s i o n aimed a t consensus p o s i t i o n s , thus n e c e s s i t a t i n g compromises. For an a i d program, however, compromises i n v a r i a b l y mean f u r t h e r water ing down o f deve lopmenta l p r i o r i t i e s to accommodate o ther i n t e r e s t s . The second change worth ment ion ing was the i n c r e a s i n g d e l e g a t i o n o f p o l i c y d i s c u s s i o n and p o l i c y - m a k i n g a u t h o r i t y to i n t e r d e p a r t m e n t a l committees .168 In t h e o r y , a c c o r d i n g to Wyse, these committees were supposed to generate w i d e - r a n g i n g o p t i o n s and v i e w p o i n t s , but the C a b i n e t wanted consensus p o s i t i o n : i t s view was t h a t a i d p o l i c y shou ld not c o n f l i c t wi th the o b j e c t i v e s o f o t h e r departments .169 C o n s e q u e n t l y , i n n o v a t i o n i n a i d p o l i c y was thwarted whi l e e x i s t i n g p o l i c y " i n v a s i o n s " c o n t i n u e d unimpeded: Consensus d e c i s i o n - m a k i n g i n the committees was not o n l y i n c a p a b l e o f we ighing p r i o r i t i e s ; i t was a l s o fundamenta l ly 168. The most impor tant o f these committees were the C a n a d i a n I n t e r n a t i o n a l Development Board (CIDB) , the I n t e r d e p a r t m e n t a l Committee on Economic R e l a t i o n s w i t h D e v e l o p i n g C o u n t r i e s ( ICERDC), and the I n t e r d e p a r t m e n t a l Committee on Development A s s i s t a n c e ( ICDA). 169. Wyse, op. c i t . , pp. 25-28 117 c o n s e r v a t i v e . On almost any i s s u e the s t a t u s quo p r e v a i l e d , u n l e s s a consensus e x i s t e d to change i t . 1 7 0 As the N o r t h - S o u t h I n s t i t u t e p o i n t s o u t , the formal invo lvement o f o t h e r departments i n d i s c u s s i o n s on a i d p o l i c y and on the broader q u e s t i o n o f "development c o o p e r a t i o n " may have seemed an i d e a l way o f f o r g i n g a more c o n s i s t e n t and b a l a n c e d Canad ian p o s i t i o n on i s s u e s o f c o n c e r n to d e v e l o p i n g c o u n t r i e s , but t h i s was not the r e s u l t : While perhaps e n s u r i n g more b r e a d t h o f p e r s p e c t i v e and e x p e r t i s e , t h i s expanded p a r t i c i p a t i o n has not s i m p l i f i e d the p r o c e s s o f d e c i d i n g on Canadian a c t i o n i n areas where depar tmenta l o b j e c t i v e s and b i a s e s d i f f e r . 1 7 1 D e s p i t e the r e p r e s e n t a t i o n o f commercia l and p o l i t i c a l i n t e r e s t s i n the a i d program through these i n t e r d e p a r t m e n t a l commit tees , CIDA never enjoyed g r e a t success i n e f f e c t i n g r e c i p r o c a l i n f l u e n c e over n o n - a i d m a t t e r s . CIDA thus has been unable to make up the p o l i c y "ground" l o s t i n development a s s i s t a n c e wi th p o l i c y i n f l u e n c e over n o n - a i d m a t t e r s . The t h i r d change which f u r t h e r weakened CIDA was the r a t i o n a l budge t ing system i n t r o d u c e d by Trudeau for the e n t i r e f e d e r a l government. Wyse argues tha t the system put i n p l a c e c r e a t e d an i n c e n t i v e for s e n i o r CIDA e x e c u t i v e s to " load" the a i d program wi th o b j e c t i v e s : the more o b j e c t i v e s , the b e t t e r the j u s t i f i c a t i o n for the a i d program and the g r e a t e r the C a b i n e t 170. I b i d . , p . 28 171. N o r t h - S o u t h I n s t i t u t e , N o r t h - S o u t h E n c o u n t e r : The  T h i r d World and Canad ian Performance , p. 37 118 support a t budget t ime.172 But i n " l o a d i n g " the a i d program wi th o b j e c t i v e s , CIDA had to permi t the departments concerned to p a r t i c i p a t e i n a i d p o l i c y - m a k i n g . In e s sence , the government's budgetary system f o s t e r e d an unequal b u r e a u c r a t i c t r a n s a c t i o n : CIDA s o l d i n f l u e n c e over the a i d program i n r e t u r n for v e r b a l suppor t a t budget t ime , wh i l e government departments a c q u i r e d i n f l u e n c e over the a i d program even though s u p p o r t i n g i t c o s t them n o t h i n g . 1 7 3 Thus , by the time the twin t r o u b l e s o f domes t i c r e c e s s i o n and f i s c a l r e s t r a i n t emerged i n the l a t e 1970s, CIDA was a l r e a d y burdened wi th t r y i n g to ba lance and accommodate a wide range o f i n t e r e s t s . The economic slowdown served g r e a t l y to i n c r e a s e the p r e s s u r e s to s a t i s f y such i n t e r e s t s . F e d e r a l departments found themselves s u b j e c t to i n c r e a s e d p r e s s u r e from t h e i r c o n s t i t u e n c i e s to produce p o l i c i e s and programs which would o f f s e t the e f f e c t s o f the r e c e s s i o n ; such p r e s s u r e , i n t u r n , was then a p p l i e d to CIDA. The g e n e r a l economic t h r u s t o f the f e d e r a l government a l s o s h i f t e d a t t h i s t ime , wi th g r e a t e r emphasis on e x p o r t growth ( ev idenced by the 1982 s h i f t o f t rade f u n c t i o n s from I n d u s t r y , Trade and Commerce to E x t e r n a l A f f a i r s ) ; not s u r p r i s i n g l y , CIDA was q u i c k l y i d e n t i f i e d as a v i a b l e v e h i c l e f o r e x p o r t p r o m o t i o n . The r e c e s s i o n a l s o he ightened the c o n c e r n for f i s c a l r e s t r a i n t i n government. One way to s u r v i v e the impact o f budget c u t s was to make the a i d program l e s s " p h i l a n t h r o p i c " and more 172. Wyse, op. c i t . , p . 29 173. I b i d . , p . 29 119 geared towards domest ic economic r e t u r n s . N a t u r a l l y enough, CIDA e x e c u t i v e s and the s m a l l " p r o - a i d " c o n s t i t u e n c y i n Ottawa were not p l e a s e d with such p r e s s u r e s , but were l i k e l y more r e c e p t i v e to the c a l l s for making the a i d program "commerc ia l ly r e l e v a n t " than they had p r e v i o u s l y been: b e t t e r to have an a i d program o r i e n t e d towards domest i c b e n e f i t s than no a i d program a t a l l . The s t r a t e g y ( i f i t may be termed such) may p a r t l y have succeeded: CIDA spending as a p r o p o r t i o n o f f e d e r a l government spending has remained f a i r l y c o n s t a n t throughout the l a t e 1970s and e a r l y 1980sl74, a l t h o u g h i t has not been immune to c u t b a c k s i n a p p r o p r i a t i o n s . Rudner c o n c u r s , a r g u i n g t h a t the i n c r e a s i n g c o n c e r n for domest ic b e n e f i t s from the a i d program " . . . e n a b l e d the ODA t a r g e t to s u r v i v e the f i s c a l s t r i n g e n c i e s o f the r e c e s s i o n more or l e s s i n t a c t . " 1 7 5 Of c o u r s e , the u t i l i t y o f "sav ing" an a i d program wi th such a mixed bag o f o b j e c t i v e s i s an open q u e s t i o n ; however, CIDA s t i l l does perform a number o f f u n c t i o n s a d m i r a b l e , so the f a c t that they s u r v i v e d may be due to gouging i n o ther p a r t s o f the program. Throughout Canada's three and a h a l f decades o f f o r e i g n a i d programs, a i d o f f i c i a l s have o f t e n attempted to r e s i s t ( u s u a l l y wi th l i t t l e success ) the i n t r u s i o n o f commercia l c o n s i d e r a t i o n s i n t o the a i d program. For a number o f r e a s o n s , though, t h i s 174. ODA as a percentage o f f e d e r a l government e x p e n d i t u r e s dropped from 2.8 (1970-72) to 2.3 (1975-77) to 2.3 (1978-80) to 2.1 (1981-83) . OECD, Twenty -F ive Years o f Development  C o o p e r a t i o n , p . 132 175. Rudner, op. c i t . , p . 128 120 r e s i s t a n c e may now l a r g e l y be a t h i n g o f the p a s t ; as i t has d e v e l o p e d , the a i d program now p r o v i d e s a number o f i n c e n t i v e s for a i d p l a n n e r s and p o l i c y - m a k e r s to embrace the commercia l o r i e n t a t i o n . The need for p o l i t i c a l s u p p o r t , stemming from the p r e c a r i o u s p o s i t i o n o f a weak s t a t e agency, has a l r e a d y been ment ioned. A d m i n i s t r a t i v e c o n s i d e r a t i o n s , t o o , b i a s a i d p o l i c y i n favour o f p u r s u i n g the a i d - t r a d e l i n k a g e . For i n s t a n c e , the e x p a n s i o n i n CIDA spending throughout the 1960s and e a r l y 1970s was not matched by a c o r r e s p o n d i n g i n c r e a s e i n p e r s o n n e l a t CIDA or i n o p e r a t i n g budgets for b i l a t e r a l programs. C o n s e q u e n t l y , severe d i sbursement problems emerged which t h r e a t e n e d the very e x i s t e n c e o f some o f CIDA's programs. The s o l u t i o n was to r e s o r t i n c r e a s i n g l y to program forms o f a i d , which r e q u i r e d fewer a d m i n i s t r a t i v e p e r s o n n e l . 1 7 6 A c c o r d i n g to a f e d e r a l task f o r c e , CIDA p l a n n e r s now favour p r o j e c t s which e i t h e r l e n d themselves to r i g i d p l a n n i n g and where the d i sbursement p r o f i l e can be p r e d i c t e d f a i r l y e a s i l y ( e . g . , l a r g e c o n s t r u c t i o n s i t e s for i n f r a s t r u c t u r e p r o j e c t s ) , or whose rhythm o f d i sbursement can q u i t e e a s i l y be sped up or slowed down ( e . g . , l i n e s o f c r e d i t , food a id )177 - t h a t i s , c e r t a i n c o m m e r c i a l l y - o r i e n t e d p r o j e c t s and programs. The t y i n g o f a i d , a l s o , may h e l p a l l e v i a t e the d i sbursement prob lem: H a r d - p r e s s e d p l a n n e r s can use t i e d a i d as j u s t i f i c a t i o n for l o c a t i n g a C a n a d i a n 176. Task Force on Canada , s O f f i c i a l Development A s s i s t a n c e Program, op. c i t . , pp. 53-54 177. I b i d . , p . 58 121 s u p p l i e r who can be engaged q u i c k l y and r e l i e d upon to d e l i v e r h i s m a t e r i a l or e x p e r t i s e with a minimum o f s u p e r v i s i o n and r e g a r d l e s s o f expense.178 P h i l o s o p h i c a l l y , too , CIDA i s l i k e l y more c o m f o r t a b l e wi th the new commercia l o r i e n t a t i o n o f some a i d p r o j e c t s and programs. The ongoing f l u x i n development models , the p l e t h o r a o f o b j e c t i v e s r e s i d i n g i n the a i d program, and the d i f f e r i n g deve lopmenta l needs o f LLDCs , low-income LDCs and MICs a l l he lped the commercia l i m p e r a t i v e to f i n d a p h i l o s o p h i c a l home a t CIDA. Such a proces s was undoubtedly f a c i l i t a t e d by d isenchantment w i th the r e s u l t s o f a i d , and by a c o r r e s p o n d i n g d i s a f f e c t i o n wi th e x i s t i n g approaches to development. In such an env ironment , some o f the a i d - t r a d e p o l i c y p o s i t i o n s may have appeared h i g h l y i n n o v a t i v e and a t t r a c t i v e . Indeed, the c u r r e n t P r e s i d e n t o f the agency, Margaret C a t l e y - C a r l s o n , i s very e n t h u s i a s t i c about the a i d - t r a d e l i n k a g e and the need to i n v o l v e the Canadian p r i v a t e s e c t o r i n the development p r o c e s s . Terms such as "mutual i n t e r e s t s " , " interdependence" and " i n d u s t r i a l c o o p e r a t i o n " are a l l g e n u i n e l y r e f l e c t i v e o f a p h i l o s o p h y o f development premised l a r g e l y on g e t t i n g the f a s t e s t - g r o w i n g LDCs onto the wor ld market and i n t r a n s f e r r i n g Canadian t e c h n o l o g y . In s h o r t , then , commercia l i n t e r e s t s , deve lopmenta l b e l i e f s and a d m i n i s t r a t i v e concerns have to a l a r g e ex tent c o i n c i d e d , 178. Bruneau, Jorgensen and Ramsay, op . c i t . , p . 39. I t i s s t i l l an open q u e s t i o n as to whether a i d t y i n g f a c i l i t a t e s the d i sbursement o f a i d funds . G l y n B e r r y has argued t h a t t y i n g may f a c i l i t a t e d i sbursement i n some i n s t a n c e s , but i n o t h e r s i t may l e a d to l a g s i n d i sbursement , r i g i d i t y , and e x c e s s i v e a d m i n i s t r a t i v e s u p e r v i s i o n . 122 f o r t u i t o u s l y , i n the p u r s u i t o f the a i d - t r a d e l i n k a g e . CIDA w i l l no l o n g e r oppose u n e q u i v o c a l l y the i n t r u s i o n o f c o m m e r c i a l l y -s l a n t e d p o l i c i e s i n t o the a i d program: the i n t e g r a t i o n o f a i d and commerce a lmost c e r t a i n l y p r o v i d e s a number o f b e n e f i t s f or the h a r d - p r e s s e d agency. In summary, the a i d - t r a d e l i n k a g e has ga ined p o l i t i c a l c u r r e n c y for a v a r i e t y o f r e a s o n s . The ad hoc o r i g i n s o f the C a n a d i a n a i d e f f o r t , the r e l a t i v e p e r m e a b i l i t y and weakness o f Canada' s a i d a g e n c i e s , and c e r t a i n a d m i n i s t r a t i v e and p o l i t i c a l arrangements have a l l h e l p e d ensure t h a t commercia l i n t e r e s t s were a b l e to p e n e t r a t e the a i d program. The domest ic and g l o b a l r e c e s s i o n o f the l a t e 1970s and e a r l y 1980s, and the ongoing p o l i t i c a l c o n c e r n about government s p e n d i n g , were the f i n a l c a t a l y s t s to the c u r r e n t merging o f a i d and t r a d e . I n i t i a l l y r e s i s t a n t to such p r e s s u r e s , i t now appears t h a t s i g n i f i c a n t e lements a t CIDA embrace the a i d - t r a d e c o n n e c t i o n for p o l i t i c a l , a d m i n i s t r a t i v e and deve lopmenta l r e a s o n s . In r e t r o s p e c t , the growing p o p u l a r i t y o f the a i d - t r a d e l i n k a g e may seem to have been i n e v i t a b l e . G i v e n CIDA's g e n e r a l l y p r e c a r i o u s p o s i t i o n , and the i n c r e a s i n g p r e s s u r e s mounted on i t as a r e s u l t o f the r e c e s s i o n and spending r e s t r a i n t , the c o n c e r n f o r s e c u r i n g b e n e f i t s from the a i d program seems a lmost p r e d e s t i n e d . However, s i n c e the a i d - t r a d e p o l i c y o r i e n t a t i o n stems i n l a r g e p a r t from such domest ic p r e s s u r e s , and from C I D A ' s b u r e a u c r a t i c v u l n e r a b i l i t y , i s i t not a p p r o p r i a t e to ask. why CIDA i s f o r c e d to accommodate so many v a r y i n g i n t e r e s t s ? That i s , the 123 r e l a t i v e weakness o f CIDA i n the Ottawa h i e r a r c h y , i t s p e r m e a b i l i t y to the i n t e r e s t s o f o ther departments , i s not an e x p l a n a t i o n , i n and o f i t s e l f , for the p u r s u i t o f the a i d - t r a d e l i n k a g e , but r a t h e r something i n need o f e x p l a n a t i o n . Hence, the p o p u l a r i t y o f the a i d - t r a d e l i n k a g e r a i s e s a l a r g e r , more fundamental q u e s t i o n to be addres sed : why i s CIDA so s u s c e p t i b l e to the i n t e r e s t s o f o t h e r government department and the p r e s s u r e s o f r e s t r a i n t and r e c e s s i o n ? I t i s to a d i s c u s s i o n o f t h i s q u e s t i o n t h a t the a n a l y s i s next t u r n s . 5 .3 .2 Why Is CIDA So S u s c e p t i b l e To Domest ic P r e s s u r e s ? Why has the f e d e r a l C a b i n e t not viewed the c r e a t i o n and maintenance o f a s t r o n g and r e l a t i v e l y impermeable development a s s i s t a n c e agency as a p o l i t i c a l p r i o r i t y ? While many f a c t o r s are undoubted ly i n v o l v e d i n t h i s l o n g - t e r m t r e n d , the fundamental r eason i s tha t the Canad ian government i n g e n e r a l , and the C a b i n e t i n p a r t i c u l a r , have not ye t r e c o g n i z e d the needs o f the T h i r d World as b e i n g o f paramount importance to Canada. A number o f f a c t o r s m i l i t a t e a g a i n s t c r e a t i n g a s t r o n g e r a i d agency even i f i t were d e s i r e d . The g r e a t p o l i t i c a l and economic d i v e r s i t y o f Canada makes i t d i f f i c u l t to f a s h i o n a c o n s i s t e n t n a t i o n a l p o s i t i o n on development c o o p e r a t i o n ; i n the absence o f c o n s i s t e n c y on t h i s broad i s s u e , the need for a s t r o n g c e n t r a l a i d agency i s seemingly l e s s e n e d . S i m i l a r l y , due to the p a r t i c i p a t i o n o f many f e d e r a l departments i n i s s u e areas o f 124 c o n c e r n to the T h i r d W o r l d , a c h i e v i n g p o l i t i c a l c o o r d i n a t i o n , e s p e c i a l l y i f t h i s i n v o l v e s s u b o r d i n a t i o n to an a i d agency, i s perhaps not p o l i t i c a l l y r e a l i s t i c . F u r t h e r , few governments are l i k e l y to r e l i s h the p r o s p e c t o f a l i e n a t i n g the b u s i n e s s community, which s t r o n g l y suppor t s the new d i r e c t i o n o f a i d p o l i c y , or o f c r e a t i n g d i s c o r d amongst v a r i o u s f e d e r a l depar tments . F i n a l l y , not even the most a r d e n t s u p p o r t e r o f more and b e t t e r development a s s i s t a n c e c o u l d r e a s o n a b l y hope or argue t h a t T h i r d World needs shou ld assume top p r i o r i t y i n C a n a d i a n p u b l i c a f f a i r s ; they w i l l n e c e s s a r i l y always be overshadowed by domest ic p r e o c c u p a t i o n s . Another important reason why CIDA i s so s u s c e p t i b l e to a s s o r t e d domest i c p r e s s u r e s i s tha t Canada l a c k s a domes t i c p o l i t i c a l c o n s t i t u e n c y o f any magnitude which i s w i l l i n g to defend T h i r d World needs i n Ottawa. Such a c o n s t i t u e n c y might be a b l e to r e s i s t the movement towards a i d - t r a d e l i n k a g e by t h r e a t e n i n g " e l e c t o r a l r e t r i b u t i o n " on the o f f e n d i n g government, or by v i g o r o u s l y l o b b y i n g key C a b i n e t m i n i s t e r s . As i t i s , though, the c o n s t i t u e n c y for the T h i r d World i n Canada i s s m a l l , u n l i k e l y to c r e a t e g r e a t a larm amongst government members. As a r e s u l t , t h e n , CIDA spending i s l a r g e l y d i s c r e t i o n a r y (even g i v e n g e n e r a l i n t e r n a t i o n a l o b l i g a t i o n s and p a r t i c u l a r b i l a t e r a l agreements ) , and i s thus e a s i l y m a n i p u l a t e d . I t i s not s u r p r i s i n g t h a t one o f CIDA's o n l y powerfu l s u p p o r t e r s , the C a n a d i a n b u s i n e s s community, s t r o n g l y endorses the a i d - t r a d e l i n k a g e . As C a r t y puts i t , Canadian b u s i n e s s " . . . l o b b i e s i n 125 favour o f c o n t i n u i n g a i d for a l l the wrong reasons and i s the l e a s t i n t e r e s t e d i n a c r i t i c a l e v a l u a t i o n o f the impact o f a i d on the T h i r d World."179 In i t s c u r r e n t s t a t u s , then , CIDA r e p r e s e n t s a unique s e t o f p o l i t i c a l and b u r e a u c r a t i c compromises: between n a t i o n a l and i n t e r n a t i o n a l o b j e c t i v e s , between the i n t e r e s t s o f CIDA i t s e l f and those o f o ther f e d e r a l departments , and between CIDA and b u s i n e s s . In s h o r t , the Canadian economy and p o l i t i c a l system p r o v i d e l a r g e o b s t a c l e s or d i s i n c e n t i v e s to the c r e a t i o n and maintenance o f a v i a b l e a i d program which can a v o i d succumbing to domest ic economic p r e s s u r e s , and thus a v o i d making such compromises . These a r e , c e r t a i n l y , very d i f f i c u l t o b s t a c l e s . What they r e q u i r e i s p o l i t i c a l a t t e n t i o n , p o l i t i c a l l e a d e r s h i p and long r u n v i s i o n , a t t r i b u t e s p r e s e n t i n some o t h e r DAC c o u n t r i e s but thus far q u i t e r a r e i n Canada. Indeed, the m a n i p u l a t i o n o f CIDA to serve commercia l o b j e c t i v e s i s somewhat congruent wi th Canada' s p o s i t i o n on a v a r i e t y o f N o r t h - S o u t h i s s u e s : they a l l r e f l e c t a s h o r t - s i g h t e d and s h o r t r u n i n t e r p r e t a t i o n o f Canada's n a t i o n a l i n t e r e s t s . Canad ian p o s i t i o n s on a v a r i e t y o f n o n - a i d i s s u e s - such as f o r e i g n investment r e g u l a t i o n , the Law o f the Sea n e g o t i a t i o n s , or commodity p r i c i n g arrangements - have been ambiguous a t b e s t , and s e l f - s e r v i n g and c o n t r a d i c t o r y a t w o r s t . 179. C a r t y , i n S w i f t and C l a r k e , op. c i t . , p . 151 126 i n r e s p o n d i n g to T h i r d World needs.180 For i n s t a n c e , Canadian t r a d e p o l i c y v i s - a - v i s the T h i r d World has been d e s c r i b e d as " c h r o n i c c r i s i s management" r a t h e r than as " p o s i t i v e and f o r w a r d -l o o k i n g . "181 The r e c e n t p a t t e r n o f p r o t e c t i o n i s m i n Canada would appear to i n d i c a t e t h a t the " n a t i o n a l i n t e r e s t " has tended to be d e f i n e d i n terms o f s h o r t - r u n , s top -gap a c t i o n s on b e h a l f o f i m p o r t - c o m p e t i n g domest ic p r o d u c e r s and p r o d u c i n g r e g i o n s . 1 8 2 C l e a r l y , the s h o r t - t e r m treatment o f many such i s s u e s d e r i v e s i n p a r t from the p r e c a r i o u s economic p o s i t i o n o f many i n d i v i d u a l f i r m s and p r o d u c i n g r e g i o n s . Such treatment a l s o i s c l e a r l y prompted by the Canadian p o l i t i c a l system i n which c o n c e n t r a t e d economic c o s t s are f a r more v i s i b l e and thus r e c e i v e f a r more a t t e n t i o n than the widespread b e n e f i t s which would l i k e l y accrue from " p o s i t i v e and f o r w a r d - l o o k i n g " p o l i c i e s . The g e o g r a p h i c c o n c e n t r a t i o n o f e c o n o m i c a l l y v u l n e r a b l e i n d u s t r i e s i n p o l i t i c a l l y c r i t i c a l e l e c t o r a l r i d i n g s i n C e n t r a l Canada, and p a r t i c u l a r l y i n Quebec, has an unden iab le p o l i t i c a l e f f e c t on the way the f e d e r a l government d e a l s wi th LDC demands f o r import a c c e s s . 180. For good treatments o f these p o s i t i o n s , see: the N o r t h - S o u t h I n s t i t u t e ' s N o r t h - S o u t h E n c o u n t e r , In the Canad ian  I n t e r e s t ? , A Ba lance Sheet , and N o r t h - S o u t h R e l a t i o n s 1980/1985:  P r i o r i t i e s f or Canadian P o l i c y ; and the Economic C o u n c i l o f Canada , For a Common F u t u r e : A Study o f Canada ' s R e l a t i o n s w i t h  D e v e l o p i n g C o u n t r i e s . 181. N o r t h - S o u t h I n s t i t u t e , N o r t h - S o u t h R e l a t i o n s  1980/1985, p. 11 182. N o r t h - S o u t h I n s t i t u t e , In the Canad ian I n t e r e s t ? , p . 127 No matter how d i f f i c u l t these p r e s s u r e s may be, however, they are not in surmountab le ; i n d e e d , o t h e r p o l i c y responses can be env i saged which c o u l d d e a l wi th the problems o f these r e g i o n s and producers wi thout s a c r i f i c i n g the i n t e r e s t s o f d e v e l o p i n g c o u n t r i e s . U n f o r t u n a t e l y , s u c c e s s i v e governments i n Ottawa have proven e i t h e r u n w i l l i n g or unable to e x p l o r e such p o s s i b i l i t i e s . T h i s , i n t u r n , suggests t h a t Ottawa's commitment to the development o f the T h i r d World does not r u n very deep, c e r t a i n l y not as deep as i t s r h e t o r i c would m a i n t a i n . R e a l i t y , though, i s q u i c k l y c a t c h i n g up wi th r h e t o r i c : . . . C a n a d a has not d e l i v e r e d on i t s s ta tesmen's r h e t o r i c ; . . . i t s " n e u t r a l " r e p u t a t i o n . . . i s now t a t t e r e d ; and i t s r e c o r d i s d e t e r i o r a t i n g . Canadians can no longer "coast" on whatever f a v o r a b l e r e p u t a t i o n Canada may have had i n the p a s t . Governmental p r a c t i s e has caught up with image.183 Why has p r a c t i s e lagged behind r h e t o r i c ? Why are the f e d e r a l government 's responses to the "cha l l enges" o f the T h i r d World a l l too o f t e n based on a s h o r t run d e f i n i t i o n o f Canada's i n t e r e s t s ? I t i s to such q u e s t i o n s t h a t the a n a l y s i s t u r n s . 5 . 3 . 3 Why Is Canada's Response To The T h i r d World So T r a n s i t o r y ? Such a q u e s t i o n may g i v e the i m p r e s s i o n t h a t Canada has done n o t h i n g o f substance to c o n t r i b u t e to the development o f the w o r l d ' s poores t n a t i o n s and p e o p l e s . Such an i m p r e s s i o n would be 183. H e l l e i n e r , i n J o u r n a l o f Canad ian S t u d i e s , p. 17 128 f lawed i n d e e d , as C a n a d i a n s , i n p r i v a t e and p u b l i c c a p a c i t i e s , have o f t e n demonstrated a c o n c e r n and a c a p a b i l i t y to he lp i n the development proces s i n the T h i r d W o r l d . The i s sue i s not so much the a b s o l u t e a b i l i t y , w i l l i n g n e s s or d e s i r e to h e l p , but r a t h e r the i n c o n s i s t e n t nature o f t h i s commitment. In i t s r e l a t i v e c o n t r i b u t i o n , Canada has not done as much as i t c o u l d or as much as i t s r h e t o r i c would c o n t e n d . T h i s suggests fundamental causes h idden i n the Canadian s o c i e t y , p o l i t y or economy. Indeed, as many o ther OECD c o u n t r i e s e x h i b i t a s i m i l a r l y s h o r t run treatment o f T h i r d World demands, a n a l y s i s ought to s earch as w e l l f o r even more fundamental f a c t o r s common to the i n t e r n a t i o n a l system. The f i r s t f a c t o r to be t a r g e t e d i s the Canadian p o l i t i c a l system. As mentioned e a r l i e r , Canada' s p a r l i a m e n t a r y democracy p e r m i t s r e g i o n a l and even r i d i n g - l e v e l g r i e v a n c e s and economic d i s l o c a t i o n s to a t t a i n n a t i o n a l prominence , and hence n a t i o n a l p o l i t i c a l a t t e n t i o n . The r o l e o f the f e d e r a l o p p o s i t i o n p a r t i e s o f t e n c o n s i s t s s i m p l y o f a t t a c k i n g the government c o n s t a n t l y , i n s t e a d o f f o r m u l a t i n g a l t e r n a t i v e p o l i c y p l a t f o r m s . A c c o r d i n g l y , the a b i l i t y o f any government to f a s h i o n an e f f e c t i v e , l o n g term response to the demands o f the T h i r d W o r l d , a response which would l i k e l y i n v o l v e "short term p a i n for l o n g term g a i n " , i s s e v e r e l y c i r c u m s c r i b e d . F u r t h e r , the Canad ian p o l i t y p r o v i d e s a number o f p o s i t i v e i n c e n t i v e s to s a t i s f y i n g the demands o f v a r i o u s C a n a d i a n r e g i o n s and i n t e r e s t groups w i t h o u t ever f o r m u l a t i n g a l o n g term n a t i o n a l s t r a t e g y for d o i n g so . C o n v e r s e l y , the p o l i t i c a l c o s t s i n v o l v e d i n a c c e p t i n g s h o r t term 129 p a i n i n Canada for the long term b e n e f i t o f both Canada and the d e v e l o p i n g wor ld are h igh indeed . S i m i l a r l y , the performance and s t r u c t u r e o f the Canad ian economy seem weighted a g a i n s t a ba lanced response to T h i r d World deve lopmenta l needs. F i r s t , Canada i s c u r r e n t l y or w i l l be s h o r t l y a c o m p e t i t o r wi th many d e v e l o p i n g n a t i o n s i n a number o f p r o d u c t s , ma in ly p r i m a r y commodit ies but a l s o i n c l u d i n g some manufactured goods. T h i s i s bound to i n f l u e n c e the Canad ian response to d e v e l o p i n g c o u n t r y demands f o r import acces s or for the f o r m a t i o n o f commodity p r i c i n g arrangements . In a d d i t i o n , Canada' s economic t i e s wi th the d e v e l o p i n g w o r l d , f or the most p a r t , are not yet very e x t e n s i v e , which might prevent the emergence o f a g r e a t e r u n d e r s t a n d i n g o f the i n c r e a s i n g in terdependence which b i n d s the economies o f the wor ld t o g e t h e r . S i m i l a r l y , the very f a c t tha t investment and t rade f lows wi th the T h i r d World are not l a r g e i n the aggregate i n v a r i a b l y means p u b l i c and p o l i t i c a l a t t e n t i o n w i l l tend to focus on l a r g e r economic r e l a t i o n s h i p s , such as wi th the U n i t e d S t a t e s and J a p a n , to the d e t r i m e n t o f o t h e r , s m a l l e r r e l a t i o n s h i p s . F i n a l l y , the Canadian r e c o r d o f p e n e t r a t i n g the f a s t e s t -growing markets i n the d e v e l o p i n g world has been r e l a t i v e l y p o o r . A c c o r d i n g to Wood, t h i s poor r e c o r d " . . . n o w s e r i o u s l y i n h i b i t s g r e a t e r r e s p o n s i v e n e s s to T h i r d World needs for import access"184, as the proponents o f l i b e r a l i z e d t rade r e l a t i o n s w i th 184. Wood, i n Cassen , J o l l y , Sewel l and Wood ( e d s . ) , op. c i t . , p . 117 130 the d e v e l o p i n g wor ld cannot p o i n t to g r e a t Canadian t rade g a i n s to c o u n t e r - b a l a n c e the l o s s e s tha t are e x p e c t e d , i n the s h o r t r u n a t l e a s t , to r e s u l t from p e r m i t t i n g g r e a t e r import access for T h i r d World goods. U n f o r t u n a t e l y , though, s h o r t term Canadian p r o t e c t i o n i s m may harm Canada's l ong term e x p o r t hopes , as i t may provoke r e t a l i a t o r y p r o t e c t i o n i s m by d e v e l o p i n g c o u n t r i e s a g a i n s t C a n a d i a n e x p o r t s . 1 8 5 T h i s " v i c i o u s c i r c l e * o f p r o t e c t i o n i s m i s not w i t h o u t i n f l u e n t i a l opponents , but i n t h e i r a t tempts to g a i n a g r e a t e r h e a r i n g for T h i r d World needs and l i b e r a l i z e d t r a d e , they face a system wi th many b u i l t - i n o b s t a c l e s . Another f a c t o r m i l i t a t i n g a g a i n s t a more s y s t e m a t i c response to the N o r t h - S o u t h d i v i d e i s the fragmented na ture o f government, b u s i n e s s and labour c o o p e r a t i o n i n Canada. Coleman has argued t h a t the system o f b u s i n e s s a s s o c i a t i o n s i n Canada i s "underdeveloped" and " c h a r a c t e r i z e d by c o n g e r i e s o f i s o l a t e d groups"186, r e s u l t i n g i n a weak c a p a c i t y to d e l i b e r a t e and e n f o r c e c o l l e c t i v e measures. S i m i l a r l y , the s t a t e i n Canada i s seen to be weak, l a c k i n g " . . . a s t r o n g s t a t e t r a d i t i o n , one t h a t g i v e s the s t a t e i d e o l o g i c a l u n i t y and an e l e v a t e d sense o f the p u b l i c i n t e r e s t . " 1 8 7 The f e d e r a l government 's a b i l i t y to forge a n a t i o n a l consensus on v i r t u a l l y a n y t h i n g , i n c l u d i n g N o r t h - S o u t h i s s u e s , i s c o n s e q u e n t l y i m p a i r e d . And, f i n a l l y , l a b o u r i n Canada i s e q u a l l y fragmented, but even l e s s i n f l u e n t i a l . The end r e s u l t 185. Webb and Z a c h e r , op. c i t . , p . 134 186. Coleman, op. c i t . , p. 272 187. I b i d . , p . 272 131 i s t h a t the g o v e r n m e n t - b u s i n e s s - l a b o u r r e l a t i o n s h i p i n Canada i s c h a r a c t e r i z e d by s u s p i c i o n , ad hoc r e l a t i o n s and weak-c o o r d i n a t i o n and enforcement o f p o l i c y p r o p o s a l s . In t u r n , the goa l o f a g r e a t e r r e s p o n s i v e n e s s to T h i r d World needs i s rendered tha t much more d i f f i c u l t . A q u e s t i o n might a l s o be r a i s e d as to what the Canadian p u b l i c t h i n k s about Canadian p o l i c y towards the T h i r d W o r l d . A f t e r a l l , the p u b l i c e l e c t s governments to f u l f i l l the p u b l i c w i l l , a t l e a s t i n t h e o r y . Does the f e d e r a l government's response to v a r i o u s i s s u e s o f i n t e r e s t to d e v e l o p i n g c o u n t r i e s not r e f l e c t widespread p u b l i c o p i n i o n ? For the most p a r t , the answer i s no. Canadian p u b l i c o p i n i o n on a i d and n o n - a i d i s s u e s i s o f t e n c o n t r a d i c t o r y or ambiguous, a c c o r d i n g to a number o f r e c e n t p u b l i c o p i n i o n surveys .188 R e g a r d l e s s o f the views o f the g e n e r a l p u b l i c , however, i t i s not a t a l l c l e a r t h a t they i n f l u e n c e a i d p o l i c y to any s i g n i f i c a n t e x t e n t . As Wyse argues : . . . p u b l i c o p i n i o n and p u b l i c o p i n i o n - m a k e r s supported f o r e i g n a i d , but d i d so p a s s i v e l y and wi th l i t t l e i n t e n s i t y . T h e i r support ensured the s u r v i v a l o f the a i d program, t h e i r p a s s i v i t y meant the f e d e r a l b u r e a u c r a c y , the C a b i n e t , and the s p e c i a l i n t e r e s t groups had a lmost a f ree hand to determine a i d p o l i c y . 1 8 9 A t t e n t i o n , then , r i g h t l y ought to focus on the a t t i t u d e s o f p o l i t i c a l d e c i s i o n - m a k e r s . One s tudy suggests t h a t " o f f i c i a l 188. For two r e c e n t s u r v e y s , see: Adcom Research L i m i t e d , A Report on C a n a d i a n s ' A t t i t u d e s Toward F o r e i g n A i d , Canadians  and A f r i c a : a n d What Was S a i d (Report by the Honourable D a v i d Macdonald) 189. Wyse, op. c i t . , p . 25 132 Ottawa" p e r c e i v e s Canada ' s r o l e i n i n t e r n a t i o n a l development to be based p r i m a r i l y on a l t r u i s m , r a t h e r than on n a t i o n a l i n t e r e s t . 1 9 0 Another a n a l y s i s argues t h a t both the p u b l i c and p o l i t i c i a n s are d i s t u r b i n g l y complacent about Canada' s a i d per formance , p a y i n g mere l i p s e r v i c e to the goa l o f g l o b a l r e d i s t r i b u t i o n . 1 9 1 S i m i l a r l y , F l e m i n g and K e e n l e y s i d e have argued t h a t the d i s c u s s i o n o f f o r e i g n a i d i s s u e s by L i b e r a l governments i n the 1970s v a r i e d d i r e c t l y w i t h the p o l i t i c a l f o r t u n e s o f these governments: . . . p e r i o d s o f domest ic p o l i t i c a l (and economic) d i f f i c u l t y seem g e n e r a l l y to have corresponded wi th a d e c r e a s i n g focus on development i n government s tatements and speeches , wh i l e i n t imes o f domest ic p o l i t i c a l s e c u r i t y the government has been more r e s p o n s i v e to e x t e r n a l p r e s s u r e to g ive more a t t e n t i o n , a t l e a s t v e r b a l l y , to the needs o f the w o r l d ' s most d i sadvantaged peop le s .192 With such opportun i sm and f l u c t u a t i n g i n t e r e s t c h a r a c t e r i z i n g the a t t i t u d e s o f d e c i s i o n - m a k e r s , i t i s l i t t l e wonder indeed t h a t Canadian p o l i c y on many a i d and n o n - a i d i s s u e s has been so d i s a p p o i n t i n g , p a r t i c u l a r l y r e l a t i v e to government r h e t o r i c . A f i n a l domest ic f a c t o r to be c o n s i d e r e d i n t h i s r e g a r d i s the r o l e o f the media i n p r e s e n t i n g i n f o r m a t i o n and p e r s p e c t i v e s 190. P . V . L y o n , R . B . Byers and D. L e y t o n - B r o w n , "How " o f f i c i a l " Ottawa views the T h i r d W o r l d " , i n I n t e r n a t i o n a l  P e r s p e c t i v e s , J a n u a r y - F e b r u a r y 1979 191. Lyon and T o m l i n , op. c i t . , p . 157 192. Pe ter F l e m i n g and T . A . K e e n l e y s i d e , "The R h e t o r i c o f Canadian A i d " , i n I n t e r n a t i o n a l P e r s p e c t i v e s , September-October 1983, p. 20 133 on development i n the T h i r d Wor ld . Apar t from i t s u s u a l p r e o c c u p a t i o n wi th d i s a s t e r s , wars and upheaval i n the T h i r d Wor ld , the Canadian media , g e n e r a l l y s p e a k i n g , have tended to adopt the same s h o r t - r u n o u t l o o k on the o p t i o n s f a c i n g Canada i n i t s economic r e l a t i o n s wi th the d e v e l o p i n g wor ld as has the f e d e r a l government. As O'Manique e x p l a i n s : . . . t h e media have p l a c e d g r e a t emphasis on Canada's " ser ious" domest ic economic problems wi th l i t t l e r e f e r e n c e to the g l o b a l economic c o n t e x t and as a r e s u l t may have i n f l u e n c e d the p r e s e n t s h o r t - t e r m measures o f the government to promote f u r t h e r growth wi thout r e g a r d to - and at the expense o f - l ong term and g l o b a l c o n s i d e r a t i o n s . 1 9 3 While f a c t o r s such as these may m i l i t a t e a g a i n s t the l i k e l i h o o d o f the f e d e r a l government becoming more r e c e p t i v e i n i t s p o l i c y p o s i t i o n s to the needs o f LDCs, there are a l s o i n t e r n a t i o n a l f a c t o r s which reduce such a l i k e l i h o o d . Many o t h e r OECD c o u n t r i e s a l s o have d i f f i c u l t y i n g e n e r a t i n g the p o l i t i c a l l e a d e r s h i p neces sary to e l e v a t e the fa t e o f LDCs to a more prominent p o s i t i o n on t h e i r p o l i t i c a l agendas. As C a s s e n , J o l l y , Math ieson and Sewel l n o t e , o f f i c i a l i n t e r e s t i n the N o r t h - S o u t h debate remains t r a n s i t o r y for a v a r i e t y o f r e a s o n s : DAC c o u n t r i e s r a r e l y p e r c e i v e t h e i r i n t e r e s t s on i s s u e s to be a l o n g N o r t h - S o u t h l i n e s ; the g l o b a l r e c e s s i o n has i n c r e a s e d c o m p e t i t i o n among OECD c o u n t r i e s , r e n d e r i n g them l e s s sympathe t i c to the needs o f the South; d i f f e r e n c e s o f i n t e r e s t i n T h i r d 193. John O'Manique , "The Response o f the P r i n c i p a l S e c t o r s o f Canadian S o c i e t y to the NIEO", i n E r v i n L a s z l o and J o e l Kurtzman ( e d s . ) , The U n i t e d S t a t e s , Canada and the New  I n t e r n a t i o n a l Economic O r d e r , p. 121 134 W o r l d / d e v e l o p m e n t a l i s s u e s e x i s t both w i t h i n and between OECD c o u n t r i e s , a g a i n r e n d e r i n g more d i f f i c u l t the task o f f o r g i n g n a t i o n a l and i n t e r n a t i o n a l p o s i t i o n s on development c o o p e r a t i o n , r e s p e c t i v e l y ; and each c o u n t r y ' s i n t e r e s t i n a p a r t i c u l a r i s s u e v a r i e s over t ime , l e a v i n g i t s f u t u r e p o s i t i o n t o t a l l y u n p r e d i c t a b l e . 1 9 4 F i n a l l y , many i s s u e s o f i n t e r e s t to the d e v e l o p i n g wor ld are p e r c e i v e d , a t l e a s t by the l a r g e r DAC c o u n t r i e s , as Eas t -Wes t or C o l d War i s s u e s , and are t r e a t e d a c c o r d i n g l y . As a consequence o f these v a r i o u s f a c t o r s , N o r t h - S o u t h i s s u e s for the most p a r t are s t i l l t r e a t e d as mat ters for p o l i t i c a l d ip lomacy - r e q u i r i n g o n l y s ta tesmen's r h e t o r i c , e a r n e s t s tatements o f i n t e n t , and promises o f more and b e t t e r a i d - r a t h e r than as i s s u e s o f economic s u r v i v a l - r e q u i r i n g immediate and c o n c r e t e p o l i c y responses on many a i d and n o n - a i d i s s u e s . 1 9 5 Mere ly acknowledging " interdependence" does not h e l p g r e a t l y i n the s e a r c h f o r a p p r o p r i a t e p o l i c y r e s p o n s e s : . . . t h e c r i t i c a l q u e s t i o n i s not 'does in terdependence between the North and South e x i s t ? ' but 'on what terms i s i t i n the i n t e r e s t s o f the North and South to pursue and f a s h i o n in terdependence between them i n the 1980s?' The acceptance o f in terdependence then becomes l e s s a d e d u c t i o n from economic f a c t s than a d e c l a r a t i o n o f economic and p o l i t i c a l w i l l . 1 9 6 194. C a s s e n , J o l l y , John Math ieson and S e w e l l , "Overview", i n C a s s e n , J o l l y , Sewe l l and Wood ( e d s . ) , op. c i t . , p. 2 195. I b i d . , p. 38 196. I b i d . , p . 37 135 R e a l i s t i c a l l y , however, u n t i l the Eas t -West C o l d War s u b s i d e s i n the minds o f Western p o l i t i c i a n s , or u n t i l the p r e s s u r e s o f economic in terdependence leave OECD n a t i o n s wi th no c h o i c e but to take T h i r d World development more s e r i o u s l y , the N o r t h - S o u t h r e l a t i o n s h i p w i l l c o n t i n u e to be dominated by n o t i o n s o f c h a r i t y , s u b m i s s i o n and ambiva lence . A d m i t t e d l y the s i t u a t i o n i s not a t a l l o n e - s i d e d , as i n s t i t u t i o n s such as the U n i t e d Nat ions and DAC, p l u s p r i v a t e academic and church o r g a n i z a t i o n s , p r o v i d e a c o n s t a n t c o u n t e r -b a l a n c e to the trends towards g r e a t e r donor s e l f - i n t e r e s t . Indeed, the ongoing donor c o u n t r y need f o r i n t e r n a t i o n a l l e g i t i m a c y , and the d e s i r e to c o n t i n u e i f not expand commercia l and p o l i t i c a l r e l a t i o n s h i p s wi th the c o u n t r i e s o f the d e v e l o p i n g w o r l d , ensure tha t a c e r t a i n minimum " f l o o r " o f genuine c o o p e r a t i o n w i l l be m a i n t a i n e d , on both a i d and n o n - a i d i s s u e s , below which the d e v e l o p i n g world w i l l not be a l l o w e d to f a l l . T h i s c e r t a i n l y r e p r e s e n t s a unique phenomenon i n w o r l d h i s t o r y : the s c a l e o f ODA t r a n s f e r r e d from North to South i s unprecedented i n the h i s t o r y o f man. In i t s c u r r e n t i n t e n t and p r a c t i s e , f o r e i g n a i d i s f a r from p e r f e c t , but a t l e a s t p r o v i d e s the promise o f and the f o u n d a t i o n for more fundamental c o o p e r a t i o n between Nor th and South . Thus f a r , however, i t i s c l e a r t h a t t h i s minimum " f l o o r " o f c o o p e r a t i o n i s not adequate to the needs o f LDCs, nor does i t s erve w e l l the long r u n i n t e r e s t s o f the c o u n t r i e s o f the deve loped w o r l d . T h i s i s why the i n c r e a s i n g r e s o r t to more 136 commercia l forms o f a i d , i n Canada and e l s ewhere , i s an a l a r m i n g t r e n d . So long as the p r a c t i s e s o f s o v e r e i g n t y and t e r r i t o r i a l i t y remain the p r i n c i p a l t ene t s o f i n t e r n a t i o n a l r e l a t i o n s , however, i t i s p r o b a b l y na ive to expect N o r t h - S o u t h r e l a t i o n s to change g r e a t l y for the b e t t e r , or to expec t much more from development a s s i s t a n c e . One i s reminded o f Morgenthau's famous d i c t u m : . . . a p o l i c y o f f o r e i g n a i d i s no d i f f e r e n t from d i p l o m a t i c or m i l i t a r y propaganda. They are a l l weapons i n the p o l i t i c a l armory o f the n a t i o n . 1 9 7 197. Hans Morgenthau, "A P o l i t i c a l Theory o f F o r e i g n A i d " , i n American P o l i t i c a l Sc i ence Review, June 1962, p. 309 V I . CONCLUSIONS 137 The purpose o f t h i s t h e s i s has been to examine, e x p l a i n and asses s the i m p l i c a t i o n s o f the i n c r e a s i n g i n t e g r a t i o n o f a i d wi th commerce i n Canada' s O f f i c i a l Development A s s i s t a n c e (ODA) program. To do so , the t h e s i s f i r s t p r o v i d e d a s e l e c t i v e h i s t o r y o f C a n a d i a n f o r e i g n a i d e f f o r t s . Here , i t w i l l be r e c a l l e d , the emphasis was on the ad hoc o r i g i n s and e v o l u t i o n o f C a n a d i a n development a s s i s t a n c e , the p e r m e a b i l i t y o f Canadian a i d a g e n c i e s to the i n t e r e s t s and o b j e c t i v e s o f o ther f e d e r a l government a c t o r s , and , f i n a l l y , the i n c r e a s i n g p r e s s u r e s stemming from f i s c a l r e s t r a i n t and domest ic r e c e s s i o n to generate domes t i c economic b e n e f i t s from the a i d program. Next , the t h e s i s a n a l y z e d a number o f CIDA p o l i c i e s and programs which share a broad commercial o r i e n t a t i o n . Among the c o n c l u s i o n s to be g leaned from t h i s c h a p t e r , s e v e r a l s tand o u t . The c o - e x i s t e n c e (and, o f t e n , c o n f l i c t ) o f c o m m e r c i a l , deve lopmenta l and p o l i t i c a l o b j e c t i v e s i s a r e c u r r i n g f e a t u r e o f a l l the p o l i c y ins t ruments s t u d i e d . As w e l l , the g r e a t d i f f i c u l t y i n d i s t i n g u i s h i n g between (and, f o r CIDA, r e n d e r i n g o p e r a t i o n a l ) the v a r y i n g l e v e l s o f commercial involvement i n a i d p r o v i d e s an important l e s s o n . The l i n e between "exports as a byproduc t" and "commerc ia l ly r e l e v a n t a i d " , or between "commerc ia l l y r e l e v a n t a i d " and "a id used for commercia l ends" i s never very c l e a r i n the case o f most o f the p o l i c y i n s t r u m e n t s 138 s t u d i e d , and i n a i d p r a c t i s e the d i s t i n c t i o n s are a lmost i m p o s s i b l e to make. Chapter 4 a t tempted to a s se s s the p r a c t i c a l u t i l i t y and the p o l i t i c a l / e c o n o m i c p r o p r i e t y , for Canada, o f i n t e g r a t i n g commercia l concerns i n t o the development a s s i s t a n c e program. While the a i d - t r a d e l i n k a g e has an innate a p p e a l , and undoubted ly f u n c t i o n s as env i saged i n many c a s e s , f or the most p a r t i t does not appear that Canada has ye t deve loped a v i a b l e s t r a t e g y f o r making the l i n k a g e work. Indeed, thus f a r , a number o f s e r i o u s o b s t a c l e s b l o c k any r e a l , l ong term s u c c e s s . S i m i l a r l y , the p o l i t i c a l / e c o n o m i c wisdom o f the a i d - t r a d e l i n k i s d u b i o u s : f o r a v a r i e t y o f r e a s o n s , Canada may be undermining i t s own l o n g term commercia l and p o l i t i c a l i n t e r e s t s i n the d e v e l o p i n g w o r l d through t h i s p o l i c y . F i n a l l y , Chapter 5 sought to account for the presence o f commercia l o b j e c t i v e s i n Canadian f o r e i g n a i d , and i n p a r t i c u l a r to e x p l a i n the c u r r e n t p o l i t i c a l p o p u l a r i t y o f the a i d - t r a d e l i n k a g e . The a n a l y s i s o f f e r e d was based on three o r d e r s o f e x p l a n a t i o n . The f i r s t at tempted to show how, through the c u l m i n a t i o n o f a s e r i e s o f e v e n t s , i n f l u e n c e s , p r e s s u r e s and weaknesses, CIDA has become i n c r e a s i n g l y r e c e p t i v e to the a i d -t rade i d e a l . But t h i s o n l y l e d to a f u r t h e r q u e s t i o n , namely: Why has CIDA been so s u s c e p t i b l e to j u r i s d i c t i o n a l " i n v a s i o n s " , b u r e a u c r a t i c weakness and p h i l o s o p h i c a l v a c i l l a t i o n ? The a n a l y s i s suggested t h a t CIDA's weaknesses were a r e f l e c t i o n o f a s h o r t r u n mindse t , w i th r e g a r d to the N o r t h - S o u t h agenda, on the 139 p a r t o f s u c c e s s i v e f e d e r a l C a b i n e t s , a mindset ev idenced a l s o i n C a n a d i a n p o s i t i o n s on o t h e r , n o n - a i d i s s u e s . B u t , a g a i n , t h i s l e d to another q u e s t i o n , namely: why has Ottawa's commitment to T h i r d World development been so t r a n s i t o r y ? Hence, the t h i r d and f i n a l o r d e r o f e x p l a n a t i o n suggested that the Canad ian p o l i t y and economy m i l i t a t e a g a i n s t e f f e c t i v e , l o n g - t e r m responses to the i n t e r e s t s and demands o f d e v e l o p i n g c o u n t r i e s . T h i s s i t u a t i o n i s worsened, i n a v i c i o u s c i r c l e of cause and e f f e c t , by the f a c t t h a t C a n a d i a n d e c i s i o n - m a k e r s do not c o n s i d e r most N o r t h - S o u t h i s s u e s to be o f p r e s s i n g importance , or do not c o n s i d e r them as N o r t h - S o u t h i s s u e s a t a l l . Both o f these f a c t o r s , i n t u r n , suggested an even more fundamental e x p l a n a t i o n : the N o r t h - S o u t h d i v i d e w i l l remain a secondary i s sue on the i n t e r n a t i o n a l agenda u n t i l the c o u n t r i e s o f the North are f o r c e d to t h i n k o t h e r w i s e , e i t h e r owing to widespread upheaval i n the T h i r d W o r l d , i n c r e a s i n g economic in terdependence , or a d r a s t i c r e - o r d e r i n g o f economic and p o l i t i c a l b e l i e f systems i n the i n d u s t r i a l i z e d w o r l d . In r e a c h i n g such c o n c l u s i o n s , and p a r t i c u l a r l y i n a r g u i n g a g a i n s t the i n t e g r a t i o n o f a i d and commerce, t h i s t h e s i s w i l l i n v a r i a b l y generate a number o f s t r o n g c o u n t e r - a r g u m e n t s . I t i s f i t t i n g , t h e n , to address these concerns i n the remainder o f the t h e s i s . The f i r s t p o i n t to be addressed i s the f r e q u e n t l y heard r e t o r t t h a t " c h a r i t y beg ins at home". A c c o r d i n g to t h i s l i n e o f t h o u g h t , Canada shou ld look a f t e r i t s own s e r i o u s economic and 140 p o l i t i c a l problems be fore " g i v i n g away" v a s t sums o f funds to o ther c o u n t r i e s . Proponents o f t h i s p h i l o s o p h y presumably see n o t h i n g wrong with Canada seek ing to maximize i t s own g a i n s from i t s a i d program; a f t e r a l l , i t i s f i n a n c e d by C a n a d i a n tax d o l l a r s . For a number o f r e a s o n s , t h i s o u t l o o k deserves to be q u e s t i o n e d . While Canada' s ODA commitments, c u r r e n t l y over $2 b i l l i o n , seem l a r g e , they r e p r e s e n t o n l y about o n e - h a l f o f one per cent o f Canada's GNP, and o n l y about 2.1 per cen t o f the f e d e r a l budget .198 C e r t a i n l y , they p a l e i n compar i son to the amount o f r e s o u r c e s devoted to r e c t i f y i n g Canada's own i n t e r n a l problems . Indeed, r e l a t i v e to the s o c i a l and economic problems o f most o f the c o u n t r i e s and peoples o f the w o r l d , Canada i s ex tremely w e l l - o f f . Is an i n w a r d - l o o k i n g and f r u g a l p o l i c y r e a l l y the way to s o l v e Canada's own problems? I t can even be argued t h a t " c h a r i t y " can be enhanced by a sagac ious and generous a i d program f a r more than by an a i d program b lemished by f a r too many domest i c o b j e c t i v e s . A d i f f i c u l t i s s u e to a d d r e s s , though, i s where e x a c t l y to draw the l i n e on Canadians s eek ing to b e n e f i t from t h e i r own a i d program. Nobody s e r i o u s l y can argue t h a t Canadians s h o u l d not t r y to b e n e f i t from CIDA programs or from the programs o f i n t e r n a t i o n a l f i n a n c i a l and development i n s t i t u t i o n s . Indeed , Canada' s development c o o p e r a t i o n e f f o r t would be s e v e r e l y 198. OECD, T w e n t y - F i v e Years o f Development C o o p e r a t i o n , p. 131 141 undermined wi thout the p a r t i c i p a t i o n o f Canad ian i n d i v i d u a l s , NGOs and f i r m s , a l l o f whom have t h e i r own p a r t i c u l a r m o t i v e s , i n c l u d i n g the p r o f i t mot ive . F u r t h e r , wi thout such p a r t i c i p a t i o n , a major b a s i s o f p u b l i c suppor t for the a i d program would be l o s t . Perhaps the o n l y v i a b l e response to t h i s p e r t i n e n t q u e s t i o n i s t h a t the m a x i m i z a t i o n o f domest ic r e t u r n s s h o u l d not be a p r i o r i t y for the a i d program, and the p o t e n t i a l for domes t i c r e t u r n s shou l d not be a c r i t e r i o n for CIDA fund ing o f p r o j e c t s . F u r t h e r , i f deve lopmental g o a l s are pursued by CIDA as c o n s c i e n t i o u s l y as p o s s i b l e , and i f Canadian i n d i v i d u a l s and f i rms adopt a p a t i e n t , l o n g term view o f the b e n e f i t s to be r e a l i z e d through the b i l a t e r a l a i d - t r a d e i n t e r f a c e , r a t h e r than s e e k i n g to maximize immediate g a i n s , then' Canadians sh ou ld have no r e s e r v a t i o n s about e x p l o i t i n g the a i d - t r a d e c o n n e c t i o n . F i n a l l y , Canada shou ld t r y to r e s t r i c t i t s p u r e l y commercia l o b j e c t i v e s to i t s m u l t i l a t e r a l c o n t r i b u t i o n s . Here , i t w i l l be r e c a l l e d , c o m p e t i t i v e n e s s i s the key to winning c o n t r a c t s . And, u n l i k e b i l a t e r a l p r o j e c t s and programs, m u l t i l a t e r a l p r o j e c t s o f f e r no o p p o r t u n i t y for Canada to d i s t o r t p l a n n i n g or i m p l e m e n t a t i o n for domest ic r e t u r n s ; r e c i p r o c a l b e n e f i t s are a s s u r e d . Another t r i c k y dilemma i s how to i n v o l v e the Canadian p r i v a t e s e c t o r more p r o d u c t i v e l y i n the development proces s w i thout compromis ing the i n t e g r i t y o f the a i d program. A g a i n , no s i m p l e answer can be g i v e n ; i t i s a q u e s t i o n CIDA p o l i c y - m a k e r s have undoubted ly g r a p p l e d w i t h . I t seems r e a s o n a b l e , though . 142 t h a t i f procurement procedures are t i g h t e n e d so as to r e c r u i t o n l y c o m p e t i t i v e f i rms (the N o r t h - S o u t h I n s t i t u t e has o f f e r e d the u s e f u l p r o p o s a l tha t f u r t h e r e l i g i b i l i t y for CIDA f i n a n c i n g be dependent on a f i r m ' s r e c o r d i n p u r s u i n g and s e c u r i n g p u r e l y commercia l or m u l t i l a t e r a l l y - f i n a n c e d b u s i n e s s i n the r e l e v a n t m a r k e t l 9 9 ) , i f the t i e d a i d p r o v i s i o n i s made more f l e x i b l e (or e l i m i n a t e d e n t i r e l y ) , and i f the o b j e c t i v e o f s e c u r i n g domest i c r e t u r n s i s rendered l e s s prominent , then the most i n n o v a t i v e and e n t e r p r i s i n g Canadian f i r m s , those most u s e f u l to the development p r o c e s s anyway, w i l l s t i l l be i n t e r e s t e d i n the a i d program. In a d d i t i o n , f e d e r a l government e f f o r t s to p u b l i c i z e more e f f e c t i v e l y f u t u r e c o n t r a c t s be ing o f f e r e d by I F I s would serve to improve the chances o f Canadian f i rms i n winning those c o n t r a c t s , and thus becoming more i n v o l v e d i n the development b u s i n e s s g e n e r a l l y . A s s i s t a n c e to Canadian f i rms i n p r e p a r i n g b i d s for these c o n t r a c t s , through f a c i l i t i e s such as the I n d u s t r i a l C o o p e r a t i o n Program's Canad ian P r o j e c t P r e p a r a t i o n F a c i l i t y , i s a s t ep i n the r i g h t d i r e c t i o n . Another p r o b l e m a t i c i s s u e i s whether Canada has the r i g h t to t e l l LDCs what k i n d o f a i d they sh ou ld or sh ou ld not r e c e i v e or what k i n d o f p r o j e c t s are b e s t . That i s , i f a d e v e l o p i n g c o u n t r y ' s government asks for a Canadian s a t e l l i t e communicat ions sys tem, or a huge h y d r o - e l e c t r i c dam, or Canad ian t r a c t o r s , i s Canada not b e i n g p a t e r n a l i s t i c and j u s t a b i t h y p o c r i t i c a l i f i t 199. N o r t h - S o u t h I n s t i t u t e , T h i r d World Markets and E x p o r t  F i n a n c i n g , p. 13 143 suggests t h a t the government should be more concerned wi th i t s r u r a l p o o r , or wi th s a t i s f y i n g b a s i c h e a l t h and e d u c a t i o n needs? U n f o r t u n a t e l y , on e i t h e r s i d e o f the q u e s t i o n p a t e r n a l i s m i s i n v o l v e d , as LDCs o f t e n premise t h e i r r eques t s on what they think. Canada w i l l be o f f e r i n g anyway. Perhaps t h i s double -edged p a t e r n a l i s m r e v e a l s the u n d e r l y i n g nature o f f o r e i g n a i d , which "has always been r e c e i v e d with deep m i s g i v i n g s " and an " i m p l i c i t sense o f h u m i l i a t i o n and dependence".200 A p a r t i a l s o l u t i o n to such m i s g i v i n g s might be to attempt to i n c r e a s e the l i n e s o f communicat ion between Canada and i t s development p a r t n e r s , as for example i n the p r o v i s i o n o f more a s s i s t a n c e , through the a i d program, to h e l p deve lop the c a p a c i t i e s o f these c o u n t r i e s to formula te v i a b l e and r e a l i s t i c development p l a n s . A f i n a l counter -argument to be addressed concerns the q u e s t i o n o f " i n s u l a t i n g " CIDA and Canadian f o r e i g n a i d from domest i c p r e s s u r e s . Is i t r e a l l y reasonab le to expect CIDA to remain impermeable to domest ic p r e s s u r e s when every o t h e r government program and f a c i l i t y i s thus a f f e c t e d ? T h i s i s , CIDA has not been the o n l y agency s u f f e r i n g the e f f e c t s o f r e s t r a i n t and r e c e s s i o n ; why shou ld i t be immune? One reason i s t h a t f o r e i g n a i d agenc i e s must operate with a long term h o r i z o n , sound p r i n c i p l e s o f development (as hard as these are to c o n s t r u c t and f o l l o w ) , and a l a r g e measure o f i n t e g r i t y and i d e a l i s m i f they are to per form t h e i r ta sks p r o p e r l y . Such t r a i t s do not e a s i l y s u r v i v e i n an atmosphere c h a r a c t e r i z e d by p o l i c y compromises and 200. N o r t h - S o u t h I n s t i t u t e , N o r t h - S o u t h E n c o u n t e r , p. 109 144 c o n f l i c t s . F u r t h e r , the very weakness o f the " T h i r d World c o n s t i t u e n c y " i n Canada, and e l sewhere , r e l a t i v e to domest i c i n t e r e s t s , i s i n i t s e l f a case for a s t r o n g e r , more v i g o r o u s development a s s i s t a n c e agency. U l t i m a t e l y , though, the case for a more " i n s u l a t e d " a i d program i s a t once a " t e c h n i c a l e f f e c t i v e n e s s " i s sue and an i n e s c a p a b l y moral one: to ensure Canada makes a b e t t e r c o n t r i b u t i o n to a l l e v i a t i n g the s o c i a l and economic problems o f the w o r l d ' s l e s s f o r t u n a t e p e o p l e s . A number o f o ther measures might a l s o c o n t r i b u t e to a more e f f e c t i v e development a s s i s t a n c e e f f o r t . CIDA spending s h o u l d be l i m i t e d to fewer d e v e l o p i n g c o u n t r i e s . Any money saved i n t h i s way shou ld go to expanding programs for r e g i o n a l c o o p e r a t i o n between LDCs. G r e a t e r a t t e n t i o n should be p a i d to c o o p e r a t i n g wi th o ther donors . As mentioned e a r l i e r , the t y i n g p r o v i s i o n shou ld be r e l a x e d or e l i m i n a t e d e n t i r e l y , p a r t i c u l a r l y for the LLDCs . F i n a l l y , and most i m p o r t a n t l y , CIDA r e q u i r e s a thorough proces s o f s e l f - e x a m i n a t i o n and a c l a r i f i c a t i o n o f o b j e c t i v e s and p r i o r i t i e s ; t h i s may not e l e v a t e deve lopmenta l c o n s i d e r a t i o n s to the f o r e , but i t would a t l e a s t e l i m i n a t e some o f the c o n f u s i o n and c o n t r a d i c t i o n s which c u r r e n t l y surround CIDA's o b j e c t i v e s . A number o f r e a l i s t i c p o l i c y p r e s c r i p t i o n s have been forwarded h e r e , i n the b e l i e f t h a t they may c o n t r i b u t e to a more e f f e c t i v e Canadian response to N o r t h - S o u t h i s s u e s . In the absence o f the neces sary p o l i t i c a l i n t e r e s t i n r e n d e r i n g such p r o p o s a l s o p e r a t i o n a l , and i n e n s u r i n g they are more than j u s t c o s m e t i c , however, i t i s d o u b t f u l whether a d m i n i s t r a t i v e changes by themselves can do much to r e c t i f y the i n c r e a s i n g l y s e l f -i n t e r e s t e d d r i f t o f Canadian development a s s i s t a n c e . 146 BIBLIOGRAPHY Adams, James. O i l and Water: Expor t Promot ion and Development  A s s i s t a n c e . Ottawa: N o r t h - S o u t h I n s t i t u t e , 1980. Adams, P a t r i c i a . ; and Solomon, Lawrence. In the Name of  P r o g r e s s : The Unders ide o f F o r e i g n A i d . T o r o n t o , Energy Probe F o u n d a t i o n , 1985 Adcom Research L i m i t e d . A Report on C a n a d i a n s ' A t t i t u d e s Toward  F o r e i g n A i d . A Study Prepared for CIDA and E x t e r n a l A f f a i r s , November 1980. A r m s t r o n g , Gregory . " A i d P o l i c i e s as a R e f l e c t i o n o f Canad ian Domest ic C o n c e r n s . " I n t e r n a t i o n a l P e r s p e c t i v e s ( J a n u a r y -F e b r u a r y 1975): 44-48 B e r r y , G l y n n . " B u r e a u c r a t i c P o l i t i c s and C a n a d i a n Economic P o l i c i e s A f f e c t i n g the Deve lop ing C o u n t r i e s - The Case o f the "Stra tegy for I n t e r n a t i o n a l Development 1975-1980". P h . D . d i s s e r t a t i o n , Da lhous i e U n i v e r s i t y , 1981. Bhagwat i , J . "The T y i n g o f A i d . " i n F o r e i g n A i d , pp. 235-293. E d i t e d by J a g d i s h Bhagwati and R i c h a r d S. E c k a u s . Harmondworth: Penguin Books, 1970. B i r d , R . M . C o n d i t i o n i n g A i d on Performance: P o s s i b i l i t i e s and  L i m i t a t i o n s . Ottawa: Economic C o u n c i l o f Canada, 1978. B r a d y , P h i l i p F . "The R u b i k ' s Cube o f Canadian I n t e r n a t i o n a l Development C o o p e r a t i o n i n the 1980s." Canad ian J o u r n a l o f  Development S t u d i e s 5(1984): 129-139. Bruneau , Thomas C . ; J o r g e n s e n , Jan J . ; and Ramsay, J . O . CIDA:  The O r g a n i z a t i o n o f Canadian Overseas A s s i s t a n c e . M o n t r e a l : Centre f o r D e v e l o p i n g Area S t u d i e s , 1978. Canada. E x p o r t F i n a n c i n g : C o n s u l t a t i o n Paper . Ottawa: 1985. . Department o f E x t e r n a l A f f a i r s . Canad ian Trade P o l i c y for the 1980s: A D i s c u s s i o n Paper . Ottawa: M i n i s t e r o f Supply and S e r v i c e s Canada, 1983. . Department o f E x t e r n a l A f f a i r s . " I n t e r n a t i o n a l Development ." i n F o r e i g n P o l i c y for C a n a d i a n s . Ottawa: Queen's P r i n t e r , 1970. . Department o f E x t e r n a l A f f a i r s . Report o f the Department o f E x t e r n a l A f f a i r s 1950. Ottawa: 1950. 147 . Department o f E x t e r n a l A f f a i r s . A Review of Canadian Trade P o l i c y : A Background Document to Canadian Trade P o l i c y for the 1980s. Ottawa: M i n i s t e r o f Supply and S e r v i c e s Canada, 1983. . E x p o r t Promot ion Review Committee (Roger H a t c h , C h a i r m a n ) . S t r e n g t h e n i n g Canada Abroad . T o r o n t o : 1979. . House o f Commons. S tand ing Committee on E x t e r n a l A f f a i r s and I n t e r n a t i o n a l Trade ( W i l l i a m C. Winegard, C h a i r m a n ) . D i s c u s s i o n Paper on Issues i n Canada's O f f i c i a l  Development A s s i s t a n c e P o l i c i e s and Programs. Ottawa: House o f Commons, 1986. . P a r l i a m e n t a r y Task Force on N o r t h - S o u t h R e l a t i o n s (Herb B r e a u , C h a i r m a n ) . A l t e r i n g the Images: Canada and  the N o r t h - S o u t h D i a l o g u e . T o r o n t o : P e r s o n a l L i b r a r y , 1981. . S p e c i a l Committee on a N a t i o n a l T r a d i n g C o r p o r a t i o n . Canada's Trade C h a l l e n g e . Ottawa: M i n i s t e r o f Supply and S e r v i c e s Canada, 1981. . S p e c i a l J o i n t Committee o f the Senate and o f the House o f Commons on Canada's I n t e r n a t i o n a l R e l a t i o n s . Independence and I n t e r n a t i o n a l i s m . Ottawa: M i n i s t e r o f Supply and S e r v i c e s Canada, 1986. . Task Force on Canada's O f f i c i a l Development A s s i s t a n c e Program. Study o f the P o l i c y and O r g a n i z a t i o n o f Canada' s  O f f i c i a l Development A i d . Ottawa: 1986. . T r e a s u r y Board S e c r e t a r i a t . E f f e c t i v e n e s s E v a l u a t i o n D i v i s i o n , P l a n n i n g B r a n c h . The Economic E f f e c t s o f an  U n t y i n g o f Canadian B i l a t e r a l A i d . Ottawa: 1976. Canad ian I n t e r n a t i o n a l Development Agency. Annual R e p o r t , 1967-68 to 1984-85. H u l l : M i n i s t e r o f Supply and S e r v i c e s Canada. . Canadian Bus ines s and the T h i r d W o r l d : A Growing P a r t n e r s h i p . Ottawa: M i n i s t e r o f Supply and S e r v i c e s Canada. . Canadian D e l e g a t i o n to the Commonwealth M i n i s t e r i a l Meet ing on I n d u s t r i a l C o o p e r a t i o n , B a n g a l o r e , I n d i a . The  C a n a d i a n Approach to I n d u s t r i a l C o o p e r a t i o n . Ottawa: 1979. . Elements o f Canada's O f f i c i a l Development A s s i s t a n c e S t r a t e g y . H u l l : 1984. E s t i m a t e s 1985-86. Ottawa: 1986. 148 . I n d u s t r i a l C o o p e r a t i o n wi th D e v e l o p i n g C o u n t r i e s : Report on an I n t e r n a t i o n a l C o n s u l t a t i o n on I n d u s t r i a l  C o o p e r a t i o n . Ottawa: 1977. P a r t n e r s i n Development. Ottawa: M i n i s t e r o f Supply and S e r v i c e s Canada, 1984. . S t r a t e g y for I n t e r n a t i o n a l Development C o o p e r a t i o n 1975-1980. Ottawa: 1975. C a r t y , R o b e r t . " G i v i n g f o r G a i n - F o r e i g n A i d and C I D A . " i n T i e s  t h a t B i n d : Canada and the T h i r d W o r l d , pp. 149-211. E d i t e d by R i c h a r d S w i f t and Robert C l a r k e . T o r o n t o : Between the L i n e s , 1982. C a r t y , R o b e r t . ; S m i t h , V i r g i n i a . ; and the L a t i n American Working Group. P e r p e t u a t i n g P o v e r t y : The P o l i t i c a l Economy o f Canadian F o r e i g n A i d . T o r o n t o : Between the L i n e s , 1981. C a s s e n , R o b e r t . ; J o l l y , R i c h a r d . ; S e w e l l , J o h n . ; and Wood, R o b e r t . E d i t o r s . R i c h Country I n t e r e s t s and T h i r d World  Development• London: Croom Helm, 1982. Chudy, Jane . "Why Canadian B u s i n e s s i s not G e t t i n g More World Bank C o n t r a c t s . " Development D i r e c t i o n s 1 (August-September 1978): 22-25. Cohn, Theodore . "Canadian A i d and Trade i n Skim M i l k Powder: Some Recent I s s u e s . " Canadian P u b l i c P o l i c y 4 ( S p r i n g 1978): 213-226. . Canadian Food A i d : Domest ic and F o r e i g n P o l i c y I m p l i c a t i o n s . Denver: U n i v e r s i t y o f Denver Graduate School o f I n t e r n a t i o n a l A f f a i r s , 1979. C o l a c o , F r a n c i s . Economic and P o l i t i c a l C o n s i d e r a t i o n s and the  Flow o f O f f i c i a l Resources to D e v e l o p i n g C o u n t r i e s . P a r i s : Development Centre o f the OECD, 1973. Coleman, W i l l i a m D. "Canadian B u s i n e s s and the S t a t e . " i n The  S t a t e and Economic I n t e r e s t s , pp. 245-289. E d i t e d by K e i t h B a n t i n g . T o r o n t o : U n i v e r s i t y o f Toronto P r e s s , 1986. Commission on I n t e r n a t i o n a l Development ( L e s t e r B. P e a r s o n , C h a i r m a n ) . P a r t n e r s i n Development. New York: Praeger P u b l i s h e r s , 1969. C o r b o , V i t t o r i o . ; and H a v r y l y s h y n , O l i . Canada's Trade P a t t e r n s wi th D e v e l o p i n g C o u n t r i e s : The E v o l u t i o n o f E x p o r t and Import S t r u c t u r e s and B a r r i e r s to Trade i n Canada. H u l l : Economic C o u n c i l o f Canada, 1980. 149 D i c k i n s o n , H a r l e y D. "Canadian F o r e i g n A i d . " i n Economy, C l a s s  and S o c i a l R e a l i t y , pp. 97-149. E d i t e d by John A l l a n F r y . T o r o n t o : B u t t e r s w o r t h , 1979. Dobson, Wendy. E x p o r t s to Deve lop ing C o u n t r i e s : An O p p o r t u n i t y  f or Canada. M o n t r e a l : C D . Howe Research I n s t i t u t e , 1979. Dudley , L e o n a r d . ; and Montmarquette , C l a u d e . The Supply o f  Canad ian F o r e i g n A i d : E x p l a n a t i o n and E v a l u a t i o n . H u l l : Economic C o u n c i l o f Canada, 1978. Economic C o u n c i l o f Canada. For a Common F u t u r e : A Study o f  Canada' s R e l a t i o n s wi th Deve lop ing C o u n t r i e s . H u l l : M i n i s t e r o f Supply and S e r v i c e s Canada, 1978. F a a l a n d , J u s t . , ed . A i d and I n f l u e n c e : The Case o f Bang ladesh . Bergen: C h r . M i c h e l s e n I n s t i t u t e , 1981. F l e m i n g , P e t e r . ; and K e e n l e y s i d e , T . A . "The R h e t o r i c o f Canadian A i d . " I n t e r n a t i o n a l P e r s p e c t i v e s (September-October 1983): 18-22. Freeman, L i n d a . The P o l i t i c a l Economy o f Canada's F o r e i g n A i d  Programme. M o n t r e a l : Canadian P o l i t i c a l S c i e n c e A s s o c i a t i o n , 1980. Gordon, She ldon . "Canadian A i d P o l i c y : What's i n i t For U s ? . " I n t e r n a t i o n a l P e r s p e c t i v e s (May-June 1976): 21-25. H a i n s w o r t h , G e o f f r e y . "Innocents Abroad or P a r t n e r s i n Development: An E v a l u a t i o n o f Canada- Indones ia A i d , Trade and Investment R e l a t i o n s . " In Canada and I n t e r n a t i o n a l  T r a d e : Conference Papers . v o l . 2: Canada and the P a c i f i c  Rim, pp. 611-710. M o n t r e a l : The I n s t i t u t e for Research on P u b l i c P o l i c y , 1985. H a r r i s o n , W . E . C . Canada i n World A f f a i r s 1949 to 1950. T o r o n t o : Oxford U n i v e r s i t y P r e s s , 1957. H e l l e i n e r , G . K . "Canada, the Deve lop ing C o u n t r i e s and the World Economy: What N e x t ? . " J o u r n a l o f Canadian S t u d i e s 19 (Winter 1984-85): 16-27. . " I n t e r n a t i o n a l Development E i g h t Years O n . " I n t e r n a t i o n a l J o u r n a l 33 ( S p r i n g 1978): 395-401. . " U n d e r u t i l i z e d P o t e n t i a l : Canada's Economic R e l a t i o n s wi th D e v e l o p i n g C o u n t r i e s . " i n Canada and the M u l t i l a t e r a l  T r a d i n g System, pp. 81-130. E d i t e d by John W h a l l e y . T o r o n t o : U n i v e r s i t y o f Toronto P r e s s , 1985. H o a d l e y , J . S tephen. "Small S t a t e s as A i d D o n o r s . " 150 I n t e r n a t i o n a l O r g a n i z a t i o n 34 (Winter 1980): 121-137. Independent Commission on I n t e r n a t i o n a l Development I ssues ( W i l l y B r a n d t , Cha irman) . N o r t h - S o u t h : A Programme for S u r v i v a l . Cambridge: MIT P r e s s , 1980. Langdon, Steven W. Canadian P r i v a t e D i r e c t Investment and  Technology M a r k e t i n g i n D e v e l o p i n g C o u n t r i e s . H u l l : Economic C o u n c i l o f Canada, 1980. L y o n , P . V . ; B y e r s , R . B . ; and Leyton-Brown, D. "How O f f i c i a l " Ottawa Views the T h i r d W o r l d . " I n t e r n a t i o n a l P e r s p e c t i v e s ( J a n u a r y - F e b r u a r y 1979): 11-16. L y o n , Peyton V . ; and I smae l , Tareq Y. E d i t o r s . Canada and the  T h i r d W o r l d . T o r o n t o : M a c m i l l a n o f Canada, 1976. L y o n , Peyton V . ; and T o m l i n , B r i a n W. Canada as an I n t e r n a t i o n a l  A c t o r . T o r o n t o : M a c m i l l a n o f Canada, 1979. M c K i n l e y , K a t h r y n . ; and Young, Roger. Technology and the T h i r d  W o r l d : The I ssues and the Role for Canada. Ottawa: N o r t h -South I n s t i t u t e , 1979. M a i z e l s , A l f r e d . ; and N i s s a n k e , Machiko K . " M o t i v a t i o n s f o r A i d to D e v e l o p i n g C o u n t r i e s . " World Development 12 (September 1984): 879-900. M a l k i n , Ben. "The Debate Over U n t y i n g Canada's A i d F u n d s . " Development D i r e c t i o n s 1 (August-September 1978): 12-16. Morgenthau, Hans. "A P o l i t i c a l Theory o f F o r e i g n A i d . " American  P o l i t i c a l Sc ience Review 56 (June 1962): 301-39. M o r r i s o n , Dav id R. "Canada and I n t e r n a t i o n a l Development ." J o u r n a l o f Canadian S t u d i e s 19 (Winter 1979-85): 133-144. . "The Mulroney Government and the T h i r d W o r l d . " J o u r n a l o f Canadian S t u d i e s 19 (Winter 1984-85): 3-15. N o r t h - S o u t h I n s t i t u t e . A Balance Sheet o f T h i r d Wor ld /Canada  R e l a t i o n s . Ottawa: N o r t h - S o u t h I n s t i t u t e , 1979. . Handle With C a r e : Skim M i l k A i d to D e v e l o p i n g C o u n t r i e s . Ottawa: N o r t h - S o u t h I n s t i t u t e , 1979. . In the Canadian I n t e r e s t ? T h i r d World Development i n the 1980s. Ottawa: N o r t h - S o u t h I n s t i t u t e , 1980. • M u l t i l a t e r a l i s m : S t i l l the F i r s t O p t i o n for Canada. Ottawa: N o r t h - S o u t h I n s t i t u t e , 1985. 151 • N o r t h - S o u t h Encounter : The T h i r d World and Canadian Per formance . Ottawas" N o r t h - S o u t h I n s t i t u t e , 1977. N o r t h - S o u t h R e l a t i o n s / 1 9 8 0 - 8 5 : P r i o r i t i e s for Canad ian P o l i c y . Ottawa: N o r t h - S o u t h I n s t i t u t e , 1980 • T h i r d World Markets and E x p o r t F i n a n c i n g : Onto a Sounder F o o t i n g . Ottawa: N o r t h - S o u t h I n s t i t u t e , 1985. N o s s a l , Kim R i c h a r d . " A n a l y z i n g the Domest ic Sources o f Canadian F o r e i g n P o l i c y . " I n t e r n a t i o n a l J o u r n a l 39 (Winter 1983-84) : pp. 1-22. . The P o l i t i c s o f Canadian F o r e i g n P o l i c y . Scarborough: P r e n t i c e - H a l l I n c . , 1985. • S t a t i s m , Rea l i sm and Canadian P o l i c i e s Towards the T h i r d W o r l d . T o r o n t o : U n i v e r s i t y o f Toronto Development S t u d i e s Programme, Working Paper A . 9, 1984. O'Manique , John . "The Response o f the P r i n c i p a l S e c t o r s o f Canad ian S o c i e t y to the NIEO." i n The U n i t e d S t a t e s , Canada  and the New I n t e r n a t i o n a l Economic O r d e r , pp. 73-139. E d i t e d by E r v i n L a s z l o and J o e l Kurtzman. New Y o r k : Pergamon P r e s s , 1979. O r g a n i z a t i o n for Economic C o o p e r a t i o n and Development. Compendium of A i d P r o c e d u r e s : A Review o f C u r r e n t P r a c t i s e s  o f Members o f the DAC. P a r i s : OECD, 1981. . Annual Reviews, 1979 to 1984. Development C o o p e r a t i o n : E f f o r t s and P o l i c i e s o f the Members o f the DAC. P a r i s : OECD. . T w e n t y - F i v e Years o f Development C o o p e r a t i o n : A Review. P a r i s : OECD, 1985. • World Economic Interdependence and the E v o l v i n g N o r t h - South R e l a t i o n s h i p . P a r i s : OECD, 1983. P a r a g g , Ralph R. "Canadian A i d i n the Commonwealth C a r i b b e a n : N e o - C o l o n i a l i s m or Development? ." Canadian P u b l i c P o l i c y 6 (Autumn 1980): 628-641. P r a t t , C r a n f o r d . "Canadian F o r e i g n P o l i c y : B i a s to B u s i n e s s . " I n t e r n a t i o n a l P e r s p e c t i v e s (November-December 1982): 3-6. . Canad ian P o l i c y Toward the T h i r d W o r l d : The Search for a Paradigm. T o r o n t o : U n i v e r s i t y o f Toronto Development S t u d i e s Programme, Working Paper A . 2 , 1983. Dominant C l a s s Theory and Canadian F o r e i g n P o l i c y : 152 The Case o f the C o u n t e r - C o n s e n s u s . T o r o n t o : U n i v e r s i t y o f Toronto Development S t u d i e s Programme, Working Paper A . 6 , 1983. R a y n a u l d , Andre . "Export Insurance and F i n a n c i n g i n C a n a d a . " In Domest ic Po l i c i e s and the I n t e r n a t i o n a l Economic E n v i r o n m e n t , pp. 111-149. E d i t e d by John W h a l l e y . T o r o n t o : U n i v e r s i t y o f Toronto P r e s s , 1985. R a y n a u l d , A . ; D ufour , J . M . ; and R a c e t t e , D. Government A s s i s t a n c e  to E x p o r t F i n a n c i n g . Ottawa: Economic C o u n c i l o f Canada, 1983. Reuber, Grant L . "The T r a d e - O f f s Among the O b j e c t i v e s o f Canad ian F o r e i g n A i d . " I n t e r n a t i o n a l J o u r n a l 25 (Winter 1969-70): 129-141. Rudner, M a r t i n . "The E v o l v i n g Framework o f C a n a d i a n Development A s s i s t a n c e . " In Canada Among N a t i o n s : 1984, pp. 125-145. E d i t e d by B r i a n W. Toml in and Maureen M o l o t . T o r o n t o : James Lor imer and Company, 1985. S h o r t l i f f e , G l e n . Canadian Development P o l i c y and the A s i a  P a c i f i c Reg ion . T o r o n t o : The J o i n t Centre on Modern E a s t A s i a , Working Paper No. 8, 1982. S p i c e r , K e i t h . "Clubmanship Upstaged: Canada's Twenty Years i n the Colombo P l a n . " I n t e r n a t i o n a l J o u r n a l 25 (Winter 1969-70) : 23-33. • A Samar i tan S t a t e ? E x t e r n a l A i d i n Canada' s F o r e i g n Po l i c y . T o r o n t o : U n i v e r s i t y o f Toronto P r e s s , 1966. S t a i r s , D e n i s . " P u b l i c O p i n i o n and E x t e r n a l A f f a i r s : R e f l e c t i o n s on the D o m e s t i c a t i o n of Canad ian F o r e i g n P o l i c y . " I n t e r n a t i o n a l J o u r n a l 33 (Winter 1977-78): 128-149 . S t eeves , J e f f r e y S. The Canadian I n t e r n a t i o n a l Development  Agency: The P o l i c y Process and the T h i r d W o r l d , 1968-1979. H a l i f a x : D a l h o u s i e U n i v e r s i t y Centre f o r Development P r o j e c t s , 1980. Thomson, S u t e e r a . Food for the Poor : The Role o f CIDA i n  A g r i c u l t u r a l , F i s h e r i e s and R u r a l Development. Ottawa: Sc i ence C o u n c i l o f Canada, 1980. T r i a n t i s , S . G . "Canada's I n t e r e s t i n F o r e i g n A i d . " World P o l i t i c s 24 (October 1971): 1-18. U n i t e d N a t i o n s . Department o f I n t e r n a t i o n a l Economic and S o c i a l A f f a i r s . 1984 Trade S t a t i s t i c s Yearbook, v o l . 1: Trade by 153 C o u n t r y . New York: U n i t e d N a t i o n s , 1986. U n i t e d S t a t e s . C o n g r e s s i o n a l Budget O f f i c e . A s s i s t i n g the  D e v e l o p i n g C o u n t r i e s : F o r e i g n A i d and Trade P o l i c i e s o f the  U n i t e d S t a t e s . Washington: Congress o f the U n i t e d S t a t e s , 1980 . Varshney , Ashutosh . " P o l i t i c a l Economy of Western A i d to the T h i r d W o r l d : A S t r u c t u r a l R e i n t e r p r e t a t i o n . " Ind i a Q u a r t e r l y 37 (Ju ly -September 1981): 359-388. W a l l , D a v i d . The C h a r i t y o f N a t i o n s : The P o l i t i c a l Economy of  F o r e i g n A i d . London: The M a c m i l l a n Press L t d . , 1973. Webb, M i c h a e l C ; and Z a c h e r , Mark W. "Canadian E x p o r t Trade i n a Changing I n t e r n a t i o n a l E n v i r o n m e n t . " i n Canada and the  I n t e r n a t i o n a l P o l i t i c a l / E c o n o m i c Env ironment , pp. 85-150. E d i t e d by Denis S t a i r s and G i l b e r t Winham. T o r o n t o : U n i v e r s i t y o f T o r o n t o : U n i v e r s i t y o f Toronto P r e s s , 1985. Whi te , J o h n . The P o l i t i c s o f F o r e i g n A i d . London: The Boadley Head, 1974. W r i g h t , G e r a l d . " B u r e a u c r a t i c P o l i t i c s and Canada's F o r e i g n Economic P o l i c y . " i n S e l e c t e d Problems i n F o r m u l a t i n g  F o r e i g n Economic P o l i c y , pp. 9-58. E d i t e d by Denis S t a i r s and G i l b e r t R. Winham. T o r o n t o : U n i v e r s i t y o f Toronto P r e s s , 1985. Wyse, P e t e r . Canadian F o r e i g n A i d i n the 1970s: An O r g a n i z a t i o n a l A u d i t . M o n t r e a l : C e n t r e for Deve lop ing Area S t u d i e s , 1983. Young, Roger . "Canadian F o r e i g n A i d : F a c i n g a C r i s i s o f i t s Own?." J o u r n a l o f Canadian S t u d i e s 19 (Winter 1984-85): 28-41. . Canadian F o r e i g n A i d P o l i c i e s : O b j e c t i v e s , I n f l u e n c e s and Consequences . T o r o n t o : U n i v e r s i t y o f Toronto Development S t u d i e s Programme, Working Paper A . 1 0 , 1984. 

Cite

Citation Scheme:

        

Citations by CSL (citeproc-js)

Usage Statistics

Share

Embed

Customize your widget with the following options, then copy and paste the code below into the HTML of your page to embed this item in your website.
                        
                            <div id="ubcOpenCollectionsWidgetDisplay">
                            <script id="ubcOpenCollectionsWidget"
                            src="{[{embed.src}]}"
                            data-item="{[{embed.item}]}"
                            data-collection="{[{embed.collection}]}"
                            data-metadata="{[{embed.showMetadata}]}"
                            data-width="{[{embed.width}]}"
                            async >
                            </script>
                            </div>
                        
                    
IIIF logo Our image viewer uses the IIIF 2.0 standard. To load this item in other compatible viewers, use this url:
https://iiif.library.ubc.ca/presentation/dsp.831.1-0097246/manifest

Comment

Related Items