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Canadian Aid or Corporate Raid?

Issue: 40 Section: Foreign Policy Geography: South Asia Afghanistan, Bangladesh, Nepal Topics: CIDA, development

October 28, 2006

Canadian Aid or Corporate Raid?

Canada's development agency in South Asia

by Harsha Walia

Police officers beat up demonstrators on February 1 2006, the first anniversary of King Gyanendra's coup on Nepal after suspending democarcay in the country. King Gyanendra's government programs benefit from CIDA funding. photo: shshrestha
Though not largely discussed, South Asia is a major hub of global economic interests with a massive concentration of Canadian finance capital, foreign aid and development agencies.

"The most significant Canadian interests in South Asia are financial capital through investment, banking, and development aid," says Dr. Hari Sharma, professor emeritus at Simon Fraser University's department of sociology and anthropology, and author of the seminal book "Imperialism and Revolution in South Asia."

"Development aid through CIDA has been known to be a form of economic raid, particularly because it operates through a politically ideological framework," continues Sharma. The Canadian International Development Agency (CIDA) is Canada's lead development agency.

Much of Canadian foreign development aid has been termed "phantom aid"-- aid that does not improve the lives it is intended to-- and includes spending on overpriced technical assistance and tied aid. Canadian corporate lobbies advocate tied aid because it is foreign aid that must be spent in the donor country, therefore providing an indirect subsidy to domestic corporations. According to Action Aid, phantom aid accounts for over 50 per cent of Canada's aid spending and 47 per cent of Canadian phantom aid is tied to spending in Canada. Critics argue that tied aid is part of the larger objective of neoliberalization and private sector development. In fact, one of CIDA's top five priorities states that, "Poverty reduction requires strong efforts to address the needs of the private sector in developing countries."

Bangladesh has been one of Canada's largest aid recipients over the last three decades. According to CIDA's Country Development Programming Framework 2003-2008 for Bangladesh, private sector development is a major program objective. As part of a multilateral global effort, Canada pushed for Bangladesh to set up Export Processing Zones in 1978, which are regulated by the Bangladesh Export Processing Zone Authority. This allows sweatshops to operate outside the realm of national labour laws. A CIDA-funded Local Enterprise Investment Centre facilitates local private enterprise by partnerships with foreign business, giving corporations from other countries access to the growing garment industry, exporting $5 billion worth of goods annually.

According to a New Age report in June 2006, Bangladesh's apparel sector employs 2.5 million, 80 per cent of whom are women, in more than 5,000 factories. Amirul Haq Amir, co-ordinator of the Bangladesh Garment Workers Unity Council, says that garment workers are paid "between US$14 to US$16 per month, the lowest salary in the world."

From May-July 2006, around 4,000 garment factories in Dhaka, Bangladesh, went on strike, resulting in major unrest and the death of at least one person by police gunfire. Since 2003, the Maquila Solidarity Network has been pressuring the Retail Council of Canada to ensure that the factories they use in Bangladesh are safe and healthy workplaces.

In others parts of the world, CIDA has come under fire for supporting governments who align with Western government and business interests. For example a July 2006 MacClean's Business report outlines CIDA's involvement in creating Colombian mining laws beneficial to Canadian companies, while in Haiti, CIDA has been criticized for political destabilization by funding agencies opposed to Aristide.

A similar situation has evolved in Nepal. Since 1964, Canada has contributed more than $213 million in development assistance to Nepal, including $10.4 million in 2004-05. Although the CIDA website boasts of "neutrality" in the civil war, it lays blame for poverty and underdevelopment on the "Maoist insurgency." CIDA's 2004 Peace and Conflict Impact Assessment acknowledges, "CIDA will need to monitor whether its projects become Maoist targets because of linkages with government programs." The "government" of Nepal is King Gyanendra who first dismissed the elected government in 2002 and then proceeded to seize complete control after a royal coup in 2005.

Afghanistan has been the single largest recipient of Canadian bilateral aid, with almost $1 billion allocated from 2001-2011. At the same time, one of the most visible manifestations of the Canadian presence in South Asia is Canada's increased military involvement in Afghanistan. There are those who see this as a contradiction and others as a convenient coincidence. As written by J.W. Smith in The World's Wasted Wealth, "Politics is the control of the economy… It is the military power of the more developed countries that permits them to dictate the terms of trade and maintain unequal relationships." Former US President Woodrow Wilson recognized this: "Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed against him must be battered down."

Canadian exports to Afghanistan have increased over 100-fold in the past five years, growing from $167,000 to over $19,000,000, according to Industry Canada statistics. Canadian corporations such as Bell Helicopters and CAE (one of Canada's largest defence contractors) have profited immensely: Bell won a $1 billion contract with the US military to supply helicopters, while CAE won a $20 million contract to supply combat simulation technology.

In May 2006, CIDA launched the "Confidence in Government" initiative in the Shah Wali Kot district of Afghanistan. In a May 22 Globe and Mail article, Lieutenant-Colonel Tom Doucette, commander of Canada's provincial reconstruction team, stated that this initiative "is a useful counterinsurgency tool."

Much of the rhetoric surrounding Canada's military presence in Afghanistan has been focused on the need to 'liberate' Afghan women. However, Sonali Kolhatkar, co-director of the Afghan Women's Mission, recently wrote that "despite the best efforts of the Bush and Blair administrations to convince the world that the 2001 war 'liberated' women in Afghanistan and that they continue to work in the interests of Afghan women, grassroots women activists reveal a very different picture. With the Taliban regime ousted, Afghan women have not experienced better times."

The CIDA-funded Women's Rights in Afghanistan Fund, established by Rights and Democracy (created by the Canadian Parliament in 1988) provides grants to grassroots women's organizations in Afghanistan. A "non-partisan" Afghanistan backgrounder on the website of the Fund highlights only the historic abuse of women by the Taliban and characterizes the current period as one of "ongoing conflict" without any mention of foreign forces in the country.

Gender governance programs are also funded by CIDA in Nepal, India, Bangladesh, Sri Lanka and Pakistan. Leila Ahmed's "Women and Gender in Islam" documents the co-optation of feminism by imperial and colonizing forces, revealing the contradictions of humanitarian interventions. "Whether in the hands of patriarchal men or feminists," she writes, "the ideas of western feminism essentially functioned to morally justify the attack on native societies and to support the notion of comprehensive superiority of Europe."

Vijay Prashad, an associate professor at Trinity College, has characterized one of the dominant manifestations of imperialism as the manufacturing of strategically placed NGOs. "The NGO", he writes, "becomes an arm of the international bureaucracy that ends up, consciously or unconsciously, doing the work of imperialism." Other CIDA funded NGOs in South Asia include South Asia Partnership, Sri Lanka Canada Development Fund, Aga Khan Foundation, World Vision, Oxfam and Shastri Institute.

"Canadians need to realize what Canadian companies and Canadian development agencies and NGOs are doing in South Asia," says Sharma. "CIDA-funded agencies and NGOs, as a whole, uphold corporate interests and serve the overall objective of pacification within an institutionalized neoliberal framework. This is an issue that all Canadians should be gravely concerned with and deal with."

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The Dominion is a monthly paper published by an incipient network of independent journalists in Canada. It aims to provide accurate, critical coverage that is accountable to its readers and the subjects it tackles. Taking its name from Canada's official status as both a colony and a colonial force, the Dominion examines politics, culture and daily life with a view to understanding the exercise of power.

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