Nearly three years after announcing $1.5-billion in new financing programs for foreign aid, Ottawa has disbursed only a tiny fraction of the promised money: just $120,000 so far.<\/p>\n
The Trudeau government won praise from aid agencies in February, 2018, when it announced $1.5-billion for two new financing tools \u2013 an International Assistance Innovation Program (IAIP) and a Sovereign Loan Program (SLP).<\/p>\n
Ottawa touted the new programs as groundbreaking approaches to development assistance, allowing the use of private-sector methods such as equity investments, guarantees and conditionally repayable contributions to bring new funding to developing countries.<\/p>\n
Today, however, the Global Affairs department acknowledges that the programs have been stalled by \u201coperational constraints\u201d and other factors, including the COVID-19 pandemic.<\/p>\n
Independent analysts say the financing programs were well-intended but were hindered by poor strategies, inadequate preparations and a lack of bureaucratic appetite for risk.<\/p>\n
\u201cTwo years without disbursing any funds is a gross underperformance,\u201d said Boris Martin, chief executive officer of the Canadian branch of the non-profit aid group Engineers Without Borders, an early supporter of the programs.<\/p>\n
\u201cIt is a shame that while support is most dearly needed, these programs aren\u2019t ready to deploy anything,\u201d he told The Globe and Mail.<\/p>\n
Stephen Brown, a University of Ottawa political scientist who studies international aid, said it seemed that Global Affairs had \u201cbit off more than it could chew\u201d in the new financing programs \u2013 or was given a responsibility it was not ready for.<\/p>\n
\u201cInnovative approaches are a lot easier to announce than to implement, especially in a very bureaucratic and risk-averse institution such as Global Affairs Canada,\u201d he said.<\/p>\n
The government, unveiling the two new programs in its February, 2018, budget, proclaimed that they would ensure that Canada \u201cremains at the leading edge of development financing.\u201d<\/p>\n
The financing tools would \u201cincrease the impact of Canada\u2019s international assistance by allowing the Government to explore new and innovative ways to engage internationally,\u201d the budget said.<\/p>\n
The money for the two programs, to be reallocated from existing foreign-aid funds, would become an \u201cessential part\u201d of the government\u2019s feminist international assistance policy, it said.<\/p>\n
The promise of $1.5-billion for the new programs over a five-year period, combined with a separate increase of $2-billion in Canada\u2019s foreign-aid spending in the same federal budget, was enthusiastically welcomed by advocacy groups and aid agencies.<\/p>\n
Irish pop star Bono, founder of the anti-poverty advocacy group known as the ONE Campaign, praised the 2018 Trudeau budget as \u201csmart, women-centred policy\u201d and \u201cleadership in action.\u201d He added: \u201cWords alone can be cheap, but words written into budgets are worth their weight in lives saved.\u201d<\/p>\n
Engineers Without Borders said it was \u201cthrilled\u201d by the new financing programs. The Canadian Council for International Co-operation, a coalition of development organizations, said the programs would \u201cadd a new tool\u201d to the government\u2019s \u201cdevelopment financing toolbox.\u201d<\/p>\n
But after the budget announcement, delays soon began to creep into the two programs.<\/p>\n
The IAIP, with about $900-million allocated to it, was not formally launched until July, 2019, and has spent almost nothing since then.<\/p>\n
\u201cIn this early stage, limited funds (approximately $120,000) have been disbursed,\u201d said John Babcock, a spokesperson for Global Affairs Canada, in an e-mailed response to questions from The Globe.<\/p>\n
\u201cGiven that this is a new line of business for the department, it has taken time to develop and test these tools, build internal capacity and refine the governance and processes needed to responsibly administer them,\u201d he said.<\/p>\n
The SLP, with about $600-million allocated to it, has not disbursed any funds at all, the department says.<\/p>\n
\u201cDeveloping this new line of business has taken more time than anticipated,\u201d said Patricia Skinner, another departmental spokesperson, in response to questions from The Globe.<\/p>\n
Potential sovereign loans have been identified for the program, but they are \u201cstill under consideration for approval,\u201d she said.<\/p>\n
The department identified \u201cearly lessons\u201d and refined its processes during the first six months of operations, Ms. Skinner said.<\/p>\n
\u201cHowever, beginning in March 2020, the COVID-19 pandemic forced a significant and additional re-think that further slowed down implementation \u2013 both because of operation capacity limitations, and because of new macro-economic realities and market disruptions.\u201d<\/p>\n
Despite the delays, innovative financing tools such as IAIP and SLP are \u201cmore relevant than ever, given global post-COVID recovery needs,\u201d she said.<\/p>\n
Asked about possible future IAIP spending, Mr. Babcock cited Ottawa\u2019s announcement of $12.5-million for the African Guarantee Fund for African women, announced at the Group of Seven summit in August, 2019. \u201cDue diligence and approvals are currently being finalized,\u201d he said.<\/p>\n
Prof. Brown noted that the G7 summit took place only a month after the IAIP was formally launched and therefore the guarantee fund announcement could not have gone through the IAIP\u2019s regular approval process.<\/p>\n
Another source of delay was the department\u2019s request for \u201cconcept notes\u201d from IAIP funding applicants. \u201cTo date, a majority of concept notes have not met the criteria established for the IAIP,\u201d Mr. Babcock said.<\/p>\n
\u201cOperational constraints, as well as adjustments related to the COVID-19 pandemic, have led to delays in both assessing concept notes submitted to the IAIP and in proactively seeking out investment opportunities,\u201d he said.<\/p>\n
At the top of the IAIP\u2019s official website, a note warns that there could be \u201csignificant delays\u201d in decisions on the latest submissions by applicants.<\/p>\n
But the IAIP still \u201cremains a priority\u201d for the department, Mr. Babcock said.<\/p>\n
Prof. Brown, commenting to The Globe on the delays in the IAIP, questioned why it took nearly 18 months to formally launch the program after the budget announcement.<\/p>\n
\u201cIt could be that the government\u2019s expectations and criteria were unreasonable or based on some faulty assumptions,\u201d he added.<\/p>\n
\u201cTo what extent can investments be profitable while also promoting gender equality, helping the poorest, etc.? These are not normally private-sector priorities. The evidence from blended finance elsewhere is not encouraging in terms of poverty reduction or empowering women.\u201d<\/p>\n
Mr. Martin, from Engineers Without Borders, said the IAIP made a \u201cserious mistake\u201d by signalling \u201ca risk appetite and ambition for innovation that was way higher than the actual level of risk it ended up being allowed to take.\u201d This led to the rejection of most applications, damaging the fund\u2019s credibility, he said.<\/p>\n
\u201cIf IAIP ends up doing safe investments that every other investor is making, then what\u2019s the point?\u201d he asked.<\/p>\n
Creating the IAIP was a bold and crucial step, but the program was stalled even before COVID-19 arrived, with applicants often waiting nine months for responses, Mr. Martin said.<\/p>\n
For example, he said, the program is reluctant to invest in funds with inexperienced managers, but this makes it difficult to create funds with female managers in Africa, despite Ottawa\u2019s gender-equality goals.<\/p>\n
Mr. Martin\u2019s organization had proposed a seed-stage fund, managed by a Kenyan woman who would have been among the first African women to manage such a fund. But after deliberating for nine months, IAIP declined the proposal. \u201cCanada lost a great opportunity for impact and partnership,\u201d he said.<\/p>\n
By The Global and Mail : 08-10-2020.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
Nearly three years after announcing $1.5-billion in new financing programs for foreign aid, Ottawa has disbursed only a tiny fraction of the promised money: just $120,000 so far. The Trudeau government won praise from aid agencies in February, 2018, when it announced $1.5-billion for two new financing tools \u2013 an International Assistance Innovation Program (IAIP) […]<\/p>\n","protected":false},"author":1,"featured_media":1240,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[49],"tags":[],"class_list":["post-1239","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development-actors"],"_links":{"self":[{"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/posts\/1239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/comments?post=1239"}],"version-history":[{"count":1,"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/posts\/1239\/revisions"}],"predecessor-version":[{"id":1242,"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/posts\/1239\/revisions\/1242"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/media\/1240"}],"wp:attachment":[{"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/media?parent=1239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/categories?post=1239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rise-global.info\/en\/wp-json\/wp\/v2\/tags?post=1239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}