|CERES No. 105/109 - October 1985 (FAO Ceres, 1985, 50 p.)|
"Unless the domestic policy framework is supportive, aid efforts can be largely nullified."
A predecessor in your office, the Late Hon. L.B. Pearson, earlier in his life, played a major role in the drafting of FAO's constitution and chaired the founding Conference at Quebec City 40 years ago. Canadian participation in this, and other multilateral efforts, has continued to be strong. As a head of government probably regarded as representative of a new generation of political leaders, what prospects do you see for multilateral cooperation over the rest of this century, especially with regard to world food problems?
Canada is proud to have hosted the FAO Founding Conference in Quebec City 40 years ago. This country took an active part in launching the new international organization described by Lester B. Pearson as one "which sets out with so bold an aim as that of helping nations to achieve freedom from want". Throughout the years since 1945, as FAO expanded and confronted increasingly more complex tasks, Canada has maintained the same interest in and commitment to its objectives.
Canada remains a staunch supporter of the United Nations system. My Government is deeply concerned by the current "crisis of multilateralism" which we believe is sapping the effectiveness of key elements of it. During this year of the 40th anniversary of the UN, Canada has been encouraging the international community to find ways of revitalizing and strengthening the UN system. This requires, fundamentally, a renewed sense of common cause among all its members. At the recent UN Conference in Geneva on the Emergency Situation in Africa, Canada took a lead in encouraging a strong coordinating role for the UN and its system in providing relief to victims of the African famine. Canada has been similarly supportive of the World Bank's role in mobilizing support for the longer-term rehabilitation of African economies and has contributed to the Bank's recently constituted special facility for Africa.
I am convinced that multilateralism offers great potential for action on the world food problem and the other great challenges of our time. But to realize this potential the international community will need a strong and efficient UN system, one which is constantly improving its own effectiveness. Canada will look to the UN system to demonstrate its ability to act as a forum for responsible debate, to carry out sound, realistic development programmes and to ensure coordination among all agencies to achieve the best use of resources available. For their part, Canadians remain willing to do their share in this global effort.
Your government was elected last year with a very comfortable Parliamentary majority. Do you consider that this mandate reflected, among other things, a Canadian consensus supporting stronger programmes of international cooperation? And, specifically, 0.7 per cent of gross national product (GNP) as a target for official development assistance?
What Canadians want in their development assistance programme is maximum effectiveness -a sharper focus on key development issues, better management and coordination of international assistance funds, greater attention to the policy and institutional constraints on development-in short, more impact from our bilateral and multilateral cooperation. This will be an important objective for my Government.
Canada is committed to the international target of 0.7 per cent of GNP for Official Development Assistance. Domestic constraints and priorities have required that achievement of this target be postponed somewhat, but I believe that this need not lessen the impact of our development cooperation. The Canadian public is convinced, as I am, that we can achieve much more with current resources. As your question seems to imply, international assistance needs to be stronger, not merely larger.
This means that we shall be seeking development partners who are willing to work with Canada to ensure that our resources are used to maximum effect. For example, we shall expect to participate in a regular and constructive policy dialogue with the major recipients -whether with individual governments or through international forums-so that we may understand each other's perspectives and problems, work within a framework of shared priorities, and ensure that our mutual efforts are not thwarted by inappropriate policies.
There are development partners in the private sector as well, and I believe that it is time to utilize their knowledge and initiative as fully as possible. They can play a crucial role not only in providing investment and consumer goods but also in expanding the transportation, distribution and marketing networks that economic growth requires, particularly in rural areas. My Government intends to encourage closer linkages between the Canadian private sector and those of Third World countries in order to draw upon their energy and creativity for the development process.
My Government will also seek opportunities to achieve a greater complementarily and coordination of development assistance from various donors under the leadership of each recipient country. It has been heartening to observe the recent efforts of the UN system and those of the international financial institutions to coordinate their response to the African food crisis, but I believe that still better cooperation within the multilateral and bilateral donor community will enable us to respond better to the needs and challenges which face us all. There can be no exception to this more integrated approach. These are the measures that can maintain and strengthen a Canadian consensus in support of international cooperation.
Canada has been noted for generous contributions to food aid programmes, both for emergencies and for development purposes. In view of questions that have been raised regarding the impact of certain types of food aid on the agricultural production of recipient count tries, are you contemplating any reformulation of policies in this respect?
Food aid is a resource for development, and it is Canada's policy to use it as effectively as possible to contribute to long-term food security. This is not a new objective, or one unique to Canada, but it is one which my Government will pursue very seriously.
Certainly, food aid must support and complement the recipient's own agricultural strategy, not undermine the efforts of local farmers. Before making significant commitments of bilateral food aid, therefore, my Government will consider carefully its probable impact and the policy context within which it will be used. This may result in greater concentration of our food aid resources on those countries which are most willing to continue or introduce sound food and agriculture policies and programmes. We are prepared to work with other donors to assist, in a coordinated way, countries making a determined effort to reduce their "food gap" and stimulate their rural sector. As for our multilateral food aid, we shall be looking for good management, well-designed projects, and programming approaches which reflect the development concerns I have just mentioned.
My Government intends to emphasize the use of Canadian food aid to serve long-term development objectives. At the same time, I realize that emergency food aid also will be needed from time to time, although we all hope there will never be another food crisis as devastating as the one Africa has faced in recent months. Canada will do its part in providing emergency food aid, as it has in the past. But our focus will be on the long term, on using food aid in ways which will stimulate agricultural production and reduce the likelihood of future crises.
What do you consider to be the principal obstacles to renewal of meaningful multilateral negotiations on North-South issues I do not believe that ongoing North-South discussions have at any time ceased to be meaningful. We must recall that in the 1970s, the so-called North-South dialogue was characterized by a great deal of confrontation between opposing blocs. Today the dialogue is following a more pragmatic course.
My own perception is that relations between developed and developing countries are part and parcel of the international economic environment and therefore subject to its fluctuations. The economic crisis has had a very deleterious effect on the economies of all countries. The consequences have been manifold: severe hardship in many developing countries, with falling commodity prices and shrinking markets; growing debt-servicing obligations; a stagnation of aid budgets; a rise in protectionism and high levels of unemployment. The economic realities of the early 1980s were not conducive to major breakthroughs, although the recognition of interdependence grew under these adverse conditions. Both developed and developing countries are now much more aware of the extent to which their economic fortunes are interlinked, and they have begun to act on the basis of this new awareness.
I think it fair to say that the international community has reacted quickly and creatively to recent problems confronting it. This can be said of the debt crisis; it can also be said of the food crisis in Africa. On debt, clearly all problems have not been solved, but through stringent adjustment and supportive international measures on a case-by-case basis, the situations facing major debtors have been managed rather successfully over recent years. The roles of the IMF and IBRD have adapted to meet the needs of countries seriously affected by the recession. Attention is currently being focussed on the serious financial constraints of lower-middle-income countries. Canada put forward proposals at the recent Bonn Summit for a World Bank "third window" as one means of providing more concessional financing to these countries.
In response to the African crisis, we have witnessed an impressive mobilization of the international community. Canada takes satisfaction that the response of its citizens has been prompt and generous.
Another important forum for North-South discussion will be the launching within the GATT of a new trade round. We are seeking wide developing-country participation in a new round of multilateral trade negotiations because we believe that this is the best way of meeting the concerns of both developed and developing countries with respect to trade liberalization.
Multilateral institutions have a key role to play in forging a dynamic consensus on mediating economic relations between North and South. We shall spare no effort to improve their efficiency and to strengthen their role. This applies to traditional North-South forums, such as the Second Committee of the UN General Assembly, ECOSOC and UNCTAD, but it also applies to financial institutions, such as the World Bank, which need to be given the resources to play their roles effectively.
As you know, negotiations for a new international Wheat Trade Convention have been stalled for a number of years. Its importance as a component of world food security has been reiterated in a number of international forums. From Canada's point of view, as a leading cereal exporter, what are the major barriers to achieving an agreement that would include substantial economic provisions that would safeguard the interests of both exporters and importers?
In my view, the International Wheat Agreement represents a laudable example of multilateral cooperation on grain matters. It provides an extremely useful forum for examination of national policies affecting grain production and trade, and through its Food Aid Convention it makes a significant contribution to world food security. Canada has been a strong supporter of successive International Wheat Agreements, and we had the honour to host the 100th Session of the International Wheat Council in 1984.
My Government considers it important to maintain the contribution of the International Wheat Agreement to world food security and, if possible, to strengthen the Agreement in ways which would foster increased cooperation among wheat producing and consuming countries. But it is only realistic to acknowledge the difficulty of negotiating substantial economic provisions. Our experience in the late 1970s underscored the difficulty in reaching agreement on provisions such as prices and stock carrying. Since then, important changes have taken place in production and trade patterns in grains, and in the policies of governments in response to these developments. Most countries acknowledge that they must make continuous adjustments to policies if we are to achieve a balance between supply and demand and ensure that conditions for production and trade are favourable. Canada believes that efforts currently underway in the International Wheat Council, aimed at strengthening the agreement, are constructive and should foster increased cooperation and complement the important work of the Food and Agriculture Organization with respect to world food security.
Some controversy has become attached to the concept of conditionality in development assistance lending and to the prospect that financing agencies and donor governments may increasingly require recipient governments to adhere to stringent monetary and fiscal policies, including those related to agricultural prices. What is your Government's stance in this respect?
It has become increasingly clear after several decades of development activities that the policy environment in developing countries plays a critical part in the success or failure of the efforts undertaken. Unless the domestic policy framework is supportive, aid efforts can be largely nullified or wasted. At a time when aid budgets are under increasing scrutiny from the public, the Canadian Government must be able to demonstrate that its aid is being effectively used. Accordingly, Canada believes that the question is not whether recipient governments with serious structural problems will initiate adjustment programmes-but rather what is the best way of doing so. Developing countries recognize this and realize that it is in their best interest to lead this process.
Multilateral financial institutions and agencies can and should play a key role in formulating policy advice and coordinating donor approval. We do not see this so much as conditionality but as mutually agreed undertakings on the respective actions to be carried out by each of the development partners involved in a particular agreement.
In many developing countries where agriculture is by far the most important area of economic activity, policy reforms in the agricultural sector may well be critical in ensuring that agricultural productivity is enhanced and that development efforts bear fruit. However, we would echo recent FAO conclusions that "getting the prices right" is only one of the conditions for improved agricultural performance. Supporting activities such as improved distribution/marketing/credit systems, and better research and extension work, may also be required.