All tied up

I have 100 dollars for you. It's my way of helping you out through some tough times. I know you haven't been able to go to school or afford your medical bills so here's something to make things a little easier.

There are a few conditions though.

Of that 100 dollars you have to spend it where I tell you to. You have to go to school at U Windsor and you can only take business classes. Also, the meds you need? You have to get them from Dr Nick and fill the prescription at a specific pharmacy- the one my family owns.

Nothing is free right? Right. We're all caught up in red tape.

Similar situations are found with foreign assistance. Often aid is tied and this creates stipulations for the country accepting the loan. Instead of spending the money locally (on local consulting firms, local machinery, and local companies) they are forced to spend it wherever the donor country sees fit. This is often in the country itself. As a result, the money is less effective and doesn't provide as much assistance as it potentially could.

It's kind of like those coupons you get in the mail that you can only use on certain days of the week, between certain hours, at certain locations, and it's expired.

I'm sure you could be thinking, "but what a great opportunity for the lending country." But really it isn't. The fraction of money the country receives is so small it doesn't make that much of a difference. 200 dollars will go a lot farther in a developing country like Namibia than in a developed country like Canada. Just compare their differing Gross Domestic Product(GDP) per Person; in Namibia it is $7,500 while in Canada it is $35,700. Who do you think will benefit more from the money?

How much money does Canada give to foreign assistance anyway?

According to Make Poverty History we are contributing 0.33% of our GDP. The ideal target with the United Nations' Millenium Development Goals is 0.7%.

So far Sweden, Norway, Netherlands, Denmark, Luxembourg, France, the United Kingdom, Finland, Spain and Belgium are either committing to 0.7% or have set a timetable to reach this goal. Canada has not even set an agenda.





It's almost as if the graphs are inverted. It's quite the shock.

When we think back to the 100 dollars example, really we're only giving other countries $0.33 dollars. And of that money we're making them spend about half of it in Canada.

Is it really assistance when the only people we seem to be helping are ourselves?