Tied Aid

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Tied Aid

  1. 1. Tied Aid University of British Columbia September 2005 G-1
  2. 2. Tied Aid: What is it? <ul><li>Practice of requiring that aid funds be used for purchases in donor countries. </li></ul>G-3
  3. 3. A Policy Statement on Strengthening Aid Effectiveness <ul><li>Concerns with Tied Aid: </li></ul><ul><li>Cost of procurement (15 to 30% higher) </li></ul><ul><li>At odds with promoting local ownership and capacity building </li></ul><ul><li>Complex administrative controls </li></ul><ul><li>Constraint on donor coordination </li></ul>G-16
  4. 4. Canadian Record Relative to Other Donors <ul><li>In 2000, Canadian bilateral aid was reported as 66% tied </li></ul><ul><li>Third highest behind Spain and USA </li></ul><ul><li>In 2003, Canadian bilateral aid was reported as 47% tied </li></ul><ul><li>Third highest behind Spain and USA </li></ul>G-16
  5. 5. Theoretical Efficiencies: Can they be achieved? <ul><li>Corruption </li></ul><ul><li>Capacity of Developing Countries to manage ICB </li></ul><ul><li>Experience of World Bank and Regional Development Banks </li></ul>G-16
  6. 6. <ul><li>International Policy Statement </li></ul><ul><li>April 2005 </li></ul><ul><li>Maximize the contribution to be made by Canada and Canadians </li></ul><ul><li>Advance Canadian values of global citizenship, equity and sustainability, as well as our interests re: security, prosperity and governance </li></ul><ul><li>Match Canadian niches with developing country needs </li></ul><ul><li>Mobilize Canadians in dialogue and participation to build our capacity to contribute to global proverty reduction </li></ul>
  7. 7. <ul><li>Are the two policy statements at odds? </li></ul><ul><li>What is more important: untied aid or participation by Canadians? </li></ul><ul><li>What is right balance? </li></ul><ul><li>Can a highly untied program sustain Canadian taxpayer support? </li></ul><ul><li>Untied aid: does it jeopardize reaching the 0.7% target or is it essential to achieving it? </li></ul>Questions to consider

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