OECD - DAC Midterm Review of Canada

Please find below a letter written at the end of November, 2009 regarding the effectiveness of Canadian Aid. Additionally, a word version has been posted here if you would like a copy. DAC Mid-term Review of Canada: Letter from Richard Care, November 25, 2009 To: DAC Delegates Ottawa, 25 September 2009 Dear Delegates, On 25 September I visited Canada, accompanied by Karen Jorgensen and Penny Jackson, to conduct its mid-term review. We met with a broad spectrum of senior and other staff within the Canadian International Development Agency (CIDA) with colleagues in the Department of Foreign Affairs and International Trade (DFAIT), the Department of National Defence (DND), Environment Canada, Finance Canada, Treasury Board Secretariat and the International Development Research Centre (IDRC). I would like to thank officials in Canada, particularly in CIDA, who put together a helpful programme of meetings and provided a detailed matrix and memorandum. This review focused on technical issues around implementing the recommendations which the DAC made in the 2007 peer review. Overall, we found Canada is progressing well with clear progress evident for most of the recommendations. While the main purpose of the mid-term review was to focus on the implementation of the DACs recommendations, our meetings also took account of national and international developments since then. For example: I. Canada has been affected by the global recession and the government, including CIDA, is under increased pressure to find efficiency savings and to demonstrate the effective use of Canadian dollars. Canada has met its commitment to double aid to Africa. Despite the recession, Canada is also on course to double its overall international assistance by 2010-2011, over 2001-02 levels. It has achieved the increase through consistently increasing its international assistance envelope by 8% per year. II. Frequent changes in the political context led to some uncertainty around development co-operation in the past. However, the new Official Development Assistance Accountability Act has helped by setting a clearer strategic direction for Canadian development co-operation. III. Canadas significant engagement in Afghanistan in terms of development, diplomacy and military activity has increased further. Afghanistan is CIDAs biggest country programme, with the most staff in-country and the highest level of delegated authority. In Afghanistan, Canada takes a whole of government approach, decentralises staff and decision making authority to the field and takes a proactive approach to public communication at home. In this way, its engagement there provides a model for addressing such challenges accross the Canadian development co-operation system. Clear progress since the 2007 peer review. Aid untyingWe were particularly impressed by Canadas decision to untie all of its aid. This responds directly to a recommendation made in the 2007 peer review as well as the 1978 DAC recommendation on untying. It is a commendable landmark decision. All food aid has now been untied and Canada has committed to untie all other aid, to all countries, by 2012-13. The decision to untie aid has proved beneficial to all stakeholders. Parliament and tax payers appreciate the better value-for-money. For example, Canada estimates that the same volume of finance to support food aid now feeds twice as many people since money is used to procure appropriate foods at the best market rates often with less transportation costs. Meanwhile, the farming community in Canada has seen its food aid sales rise because it is competitive in the global food aid market. So the policy has been a double-win for Canada. Clearer visionThe 2007 peer review recommended that Canada set out a clear vision for development co-operation which gives proper importance to poverty reduction and aid effectiveness. The Canadian Parliament has since adopted The Official Development Assistance Accountability Act. The Act states that activities reported as Canadian ODA must contribute to poverty reduction, take into account the perspectives of the poor and be consistent with international human rights standards. The importance of the Paris Declaration on Aid Effectiveness is referenced in the preamble of the Act. Alongside this, CIDA has formally approved its vision, which is to be among the most effective and accountable development agencies in the world. CIDAs vision is a means to an end rather than the end in itself. For CIDA, demonstrating that it is an efficient organisation is central to its public support strategy, and thus has made this its overarching vision. Its mission is to lead Canadas international effort to help people living in poverty. Aid Effectiveness Action PlanThe 2007 review advised Canada to broaden its perspective on aid effectiveness. In September 2009 CIDA announced a new aid effectiveness action plan for 2009-2012. This sets out CIDAs priorities and targets for aid effectiveness objectives. The process of developing the action plan extended over nearly 18 months and involved staff at all levels of CIDA, helping to stimulate understanding and ownership throughout the agency. While the Action Plan retains a strong focus on efficiency and domestic accountability, rather than development results and mutual accountability, it does provide direction, guidance and measurable targets tailored for the Canadian context. It also includes specific objectives for its increasing engagement in fragile states. CIDA has also introduced incentives for staff to achieve aid effectiveness targets by linking individuals performance contracts to CIDAs aid effectiveness objectives. This addresses another of the DACs 2007 recommendations. Increased focusCentral to Canadas efforts to increase aid effectiveness is its decision to identify 20 countries of focus for CIDAs bilateral assistance. This responds to the DACs 2007 recommendation that Canada reduce the geographical spread of its bilateral aid. CIDA has now published its list of countries of focus and the criteria used to select them extent of need, capacity to benefit from aid, and alignment with Canadian foreign policy priorities. It will use the list as a management tool to focus its work better., 80% of CIDAs country allocable bilateral aid will go to its 20 countries of focus. In addition, CIDA will maintain a number of bilateral relationships with the remaining 20% of funds. The list of 20 countries of focus also provides CIDA with a target group of field offices for increased decentralisation of staff and delegation of authority. Such changes were recommended in the 2007 review. Canadas experience in Afghanistan has shown how a stronger field presence, with the power to make decisions, leads to a faster, nimbler and better informed Canadian contribution. Decentralisation will take place in 15 of the 20 countries of focus. The 5 failed and fragile states will be treated on a case by case basis (i.e. costs to decentralise, security and safety concerns). Decentralisation will take place in three phases, between 2010 and 2012. Having learnt from a previous unsuccessful attempt to decentralise, CIDA is trying to ensure that the process, organisational structure and human resources are in place to support decentralised operations, and will decide on the level of decentralisation in each country office on a case by case basis. Canada has also identified five whole of government thematic priorities for its international assistance: increasing food security, stimulating sustainable economic growth, securing the future of children and youth, promoting democracy and ensuring security and stability. These themes provide a structure and taken together are comprehensive rather than selective. CIDA will focus on the first three. Domestic accountabiltyCIDA works in an environment characterised by high levels of domestic reporting and accountability. With the introduction of the Official Development Assistance Accountability Act and quarterly reports to parliament on Afghanistan, corporate level accountability and reporting has increased further since 2007.At the same time, CIDA has consolidated some of its internal results based management and reporting procedures so that the way these requirements filter down to project and programme staff has been streamlined. For example, annual project monitoring reports are now, on average, a third of the length they were in 2007, because information requirements and processes are better aligned. Whole of government approaches in fragile statesIn 2007 the DAC encouraged Canada to share its good practice in whole of government approaches in fragile states. Canada has done so through its participation in the 2009 3Cs conference in Geneva (on coherent, co-ordinated and complementary approaches in fragile situations), its trilateral work with the USA and UK in Afghanistan, its monitoring of the principles for engagement in fragile states and the pivotal role it played in the 2009 Haiti meeting on this topic. The team also learned that the encouragement that Canada received from the DAC on its successful whole of government approach has helped to galvanise resolve across government to work together in fragile contexts. Multilateral supportThe DAC recommended that Canada harmonise its initiatives for assessing multilateral organisation effectiveness with joint approaches such as the Multilateral Organisation Performance Assessment Network. Although in 2009 CIDA conducted its own bilateral review of multilateral organisations it has since made a proposal to develop a joint donor approach to assessing multilateral effectiveness indicating a willingness to work jointly with other donors in the future. This proposal is being considered amongst members of the DAC Evaluation Network. Areas where further efforts are needed Future ODA Volume IncreasesIn 2007 the DAC recommended that Canada fulfil its aid volume objectives to 2010-11 and draw up a timetable for achieving 0.7% ODA/GNI. Canada is indeed on course to meet its 2010-11 target. It is still to make any commitments beyond 2011, or plot a path to achieving 0.7% of GNI levels. Policy coherence for developmentWhile policy coherence for development is still not a widely used concept amongst government departments in Canada, in some specific areas - such as on food security and bio-fuels - departments have worked together to find coherent policy positions which avoid jeopardising Canadian international development objectives. Such an approach is by no means systematic however. Therefore Canada needs to do more to implement the DACs 2007 recommendation to set out formally an approach to policy coherence for development which applies to all parts of government. Mainstreaming cross cutting issuesThere were a number of cross cutting issues highlighted in the 2007 peer review, where the DAC recommended Canada prioritise integration and mainstreaming. In particular, the need to integrate environment, disaster risk reduction and capacity development were all raised. Though there have been some changes, Canada still has some way to go in responding to these recommendations. For example, the environmental policy has still not been reviewed or updated and environmental impact assessments still focus on negative impacts to the exclusion of positive opportunities. However, a short e-learning course on environment is now mandatory for all staff. The team was told that environment has not yet been a priority in CIDA, with so many other changes taking place, but that this could be an area for future attention. Public communicationsGiven the 2007 recommendation that CIDA introduce a communications strategy, the team was pleased to see that this has taken place. However, the peer review recommended widening public understanding. The approach CIDA has chosen is to focus its communication efforts on already interested and supportive groups such as academia and the international diaspora in Canada, rather than taking a more pro-active and broader approach to public communication. However, it is now putting increased attention and effort towards communication. It intends to use Canadas role as host of the 2010 G8 (as well as co-chair with Korea of the first of the two 2010 G20 meetings) as a hook on which to hang a broader communication effort, focusing on G8 members existing commitments. There is also evidence that the high level of public communication on Afghanistan has led to a better informed public debate in Canada. Overall, Canada is on a good trajectory and has taken firm decisions that have helped, or will help, Canada to respond to most of the DACs 2007 recommendations. As one senior CIDA official told the team, staff and management now have a clear sense of where they are going and how to get there. Yours sincerely, Richard Carey Director, OECD-DAC

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Effectiveness of Canadian Official Development