There was a time when young officers of the Canadian International Development Agency (CIDA) were taught during training that “their goal, at CIDA, was to work themselves out of a job — by helping a country to develop to the point where it no longer needs aid.” 

For a time, this seemed more rhetoric than reality. But something changed along the way. 

Over the past three decades, the world has witnessed the rise of a succession of developing economies, first in Northeast and Southeast Asia, then in South and Central America and, most recently, in Africa. 

The current phase is led by the so-called BRICS economies (Brazil, Russia, India, China and South Africa), plus a next tier of mid-level emerging countries, including South Korea, Malaysia, Indonesia, Turkey, Mexico and Chile, for example. Some would add Nigeria in West Africa, and Tanzania and Kenya in East Africa.

Amid the realignment of the world economy, we are witnessing the re-mapping of global development. A number of developing countries have successfully climbed their way to middle-income status, and some are even transitioning from net recipients to net donors.[1]

This is good news. However, it also means the traditional donors need to re-evaluate the relevance of their aid programs, especially the focus of their bilateral programs — which ones should be continued, whether to exit, or more politely, “graduate” certain countries?

International Experience

Some donors ought to be commended for taking a self-conscious, strategic approach to managing their exits. The Swedish International Development Agency, for example, teamed up with the international development agencies of Denmark, the Netherlands and Norway to jointly commission five country case studies and a synthesis report on their exits in Botswana, Eritrea, India, Malawi and South Africa. The intent was to contribute to a shared international framework for ending and transforming beyond aid relationships.  

In brief, their synthesis report found that donor exits, exit strategies and good exit practices do not receive sufficient attention and are a neglected part of donor cooperation — yet the number of exits is increasing and will continue as donors concentrate their aid programs in fewer countries and sectors.

The report also found that each exit has its own features, and must be planned and implemented accordingly. For Sweden, the “why” and “when” of exiting in India, South Africa and China was related to these countries reaching middle-income status.

For Britain, the cut-off line for China was not only reaching middle-income status, but becoming a net donor. The British were particularly vocal, emphasizing that continuing to aid China meant that scarce aid resources were being diverted from “more deserving” recipients.

Ironically, the British Department for International Development (DfID) has benefited, consciously or unconsciously, from Britain’s experience in managing a long imperial decline. The lessons of decolonization have taught DfID to take a very forward-looking mindset when exiting a country, and to link the “when” and “how” to securing long-term British interests.  

DfID set up a five-year graduation for China (2006–2011), and British parliamentarians knew to ask mandarins whether strategic mechanisms were in place so that relations of “goodwill” forged using development assistance could be parlayed, under the new circumstances, into advancing British interests after DfID left.

The answer was affirmative. In the final years before 2011, DfID invested a portion of its remaining aid budget and staff into helping to establish the new one-stop shop for processing and exporting China’s own development lessons and experiences to the outside world — the International Poverty Reduction Center China (IPRCC). In return, Britain gained a seat on the advisory board of IPRCC, and a platform from which to encourage and shape China’s involvement in donor cooperation.

The Australians also decided recently that, similar to the British, they would end the bilateral program in China by 2012, but would continue to provide assistance to China via multilateral channels. The Australians see wisely that the multilateral track is one of the few remaining levers for influencing future Chinese behaviour in the delivery of global public goods, and for encouraging China’s integration with global norms, principles and standards.

In the past, CIDA took a strategic approach to exiting, for example, from Thailand and Malaysia in the early 2000s. CIDA identified which local development-related policy institutions should be strengthened in the final years of bilateral programming, and built up their organizational and policy engagement capacities so that the impact would be sustained after CIDA left.

What has our approach been in the countries that CIDA has exited recently, or is now preparing to exit?  

One such country — of major regional and global influence — comes to mind: China. How is CIDA, or more appropriately, how is Canada, approaching this important exit and transformation in relations with what is now, undeniably, a Superpower?

And there are other key recipient countries that are reaching middle-income status, for example Indonesia, and countries that have not been deemed “countries of focus,” such as Vietnam, where Canada has both domestic and international interests to ensure that CIDA manages the graduation and transformation appropriately.

The Way Forward

International experience teaches us that it would be useful to think through individual exit strategies; formulate a sound rationale for why we are exiting; organize a planned graduation, over a period of time; give sufficient warning to the soon-to-be-former recipient and communicate our rationale clearly to the main stakeholders on all sides; and devise a transition strategy where we achieve a balance of ensuring our national interests and providing some lasting developmental impact, as well as global engagement mechanisms.

This means when CIDA’s aid programs exit from a particular national context, it needs to strategize not only how to wind down on the (bilateral) aid side but also how to strengthen the other parts of the bilateral relationship, for example, upgrading diplomatic links or entering into science and technology agreements. This concern is beyond the purview of the aid agency, but is an important issue of system-wide process.[2]

Supporting lasting global impacts means disaggregating within the aid strategy between bilateral exits and maintaining ties of multilateral assistance or cooperation that can be leveraged in the service of multilateral engagement, and for standards that support openness and sustainability.

 

This commentary is a longer version of a briefing note written for CIDA’s Strategic Policy and Performance Review Branch. 

Gregory Chin joined Canada’s Department of Foreign Affairs and International Trade in 1999 as a senior analyst in the China and Mongolia Division, and in September 2001 was appointed a senior program manager in CIDA’s China and Northeast Asia Program. From 2001 to 2003, he led the design and implementation of a number of strategic policy engagement projects with China, was involved in preparing the Country Development Programming Framework for China (approved in 2004), and participated in various agency-level knowledge-building and knowledge-transfer activities as a representative of the Asia Branch. During this time, he was also a member of the Privy Council Office’s China analysis group. From 2003 to 2007, he was First Secretary (Development) in the Canadian Embassy in Beijing, China, where he was responsible for overseeing Canada’s official development assistance to China and North Korea, and liaising with international donors and counterparts in foreign governments.

Since resigning from the Government of Canada in 2008, he has been a consultant to CIDA and the International Development Research Centre. 

At CIGI, he leads the BRICS, Asia and International Monetary Reform and The Emerging Donors projects. A faculty member at York University, he teaches courses on global governance, the political economy of the BRICS and Asia, and Chinese politics and foreign policy. His research in global development is focused on the emerging donors, reform of the global development architecture and innovation in development finance, including the role of state policy banks, national development banks and sovereign wealth funds of the BRICS countries.

 



[1] For a discussion of the “net donor” concept and the transition of Brazil, India and China from net recipients to net donors, see: Gregory Chin (forthcoming 2012). “China as a ‘Net Donor’: Tracking Dollars and Sense,” Cambridge Review of International Affairs. December.

[2] The author thanks Rohinton Medhora for highlighting this consideration.