CIDA: Canada Fully Unties its Development Aid

OTTAWA, ONTARIO, Sep 05 (MARKET WIRE) --
The Honourable Beverley J. Oda, Minister of International Cooperation,
today announced the Government's plan to fully untie Canada's development
assistance by 2012-13.

"By fully untying Canada's international development programs within 5
years means, this government is fulfilling its promise for effectiveness
and greater efficiency in its international assistance," said Minister
Oda. "This significant step means that those who need our help will get
the most value from Canada's contributions."

By fully untying Canada's aid, the Government is delivering on its
commitment in the 2006 Speech from the Throne to support "a more
effective use of aid dollars" and the 2007 Budget's promise to not only
increase the amount of Canada's international assistance envelope, but
also "to make our existing resources work more effectively".

"We welcome this important announcement which demonstrates that the
Government is serious about making aid more effective," said Karen
Takacs, Chair of the Board of the Canadian Council for International
Cooperation, a coalition of approximately 100 organizations working to
end global poverty. "Untying aid will ensure that Canada's official
development assistance can be used appropriately and more quickly, often
locally and/or regionally, to support sustainable development."

This initiative builds on the Government's announcement in April 2008 to
untie 100 percent of Canada's food aid. The Government will begin the
process of untying its development assistance, and will reach the target
of 100 percent untied aid by 2012-13, in line with the international
recommendations of the Organisation for Economic Cooperation and
Development's Development (OECD).

Moving to global procurement for bilateral development assistance will
increase efficiency by ensuring Canada gets the best value for money with
its aid dollars. Untying aid will also give developing countries greater
opportunities to be suppliers of goods and services and, in that way,
generate economic growth within their local markets.

For the full text of Minister Oda's statement, please visit the CIDA
website: www.acdi-cida.gc.ca.

BACKGROUNDER

CANADA FULLY UNTIES ITS DEVELOPMENT AID

Making Aid Dollars Go Further

One of Canada's priorities for making aid more effective is to improve
its efficiency. This means fully untying our aid in line with
international best practices.

In April 2008, the Government of Canada untied 100 percent of Canada's
food aid. To further increase the effectiveness of Canada's aid dollars,
the Government will now untie all of its development aid funding. Canada
is currently taking steps to untie its aid, and will reach the target of
100 percent untied aid by 2012-13. Canada will follow established
international practice and report its annual aid untying levels to the
Organisation for Economic Cooperation and Development's Development
Assistance Committee.

Prior to April 2008, 50 percent of Canada's food aid had to be used for
purchases in Canada. Moreover, for the past decade, over one-third of
Canada's bilateral aid (non-food) was tied in this manner. However, it
has been demonstrated that tying aid often leads to inefficiencies and
does not always benefit the intended recipients.

By untying aid we can increase the impact of Canada's development
assistance in the reduction of global poverty and the promotion of
sustainable development. Untying aid means that Canada's aid dollars will
have greater impact and demonstrates that Canada's international aid is
first and foremost about helping others:

- through faster response times during crises,

- by making aid dollars go further by purchasing goods where they are
cheapest, and

- by reducing transportation costs.

Untying aid also supports developing country economies and the
development of local markets through the purchase of local supplies when
these are available. In addition, local products are often best suited to
local consumer needs.

For Canadian firms and non-governmental organizations, untying aid will
mean greater access to development assistance contracts around the globe,
as some donors use the principle of reciprocity to open up to
international bidding. To this end, the Government's untying initiative
will also include an engagement strategy to assist Canada's private
sector to capitalize on these new international opportunities.

Contacts:
Office of the Minister of International Cooperation
Joanna Bailey
Press Secretary
819-953-6238

Canadian International Development Agency (CIDA)
Media Relations Office
819-953-6534
media@acdi-cida.gc.ca

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