The Truth About Canada (34 page)

In America, the Euro area and Japan, total wages have fallen to their lowest share of national income in decades, whereas the share of profits has surged. In their eagerness to applaud the benefits of globalization to economies as a whole, economists were strangely reluctant to admit that in recent years
the average real pay of rich-country workers has stagnated or fallen.
⁷

Two months later, the same conservative publication had this to say:

A Marxist would say this is a classic case of big business exploiting the workers. Funnily enough, some out-and-out capitalist economists would agree. They argue that profits in America, for example, are at a 40-year high as a percentage of GDP precisely because capital is winning at the expense of labour. Globalization has brought the Indian and Chinese workforces into the world economy, which has kept the lid on wage costs.

Some will argue that increased GDP proves the success of globalization. But GDP figures by themselves can be misleading. If increased GDP doesn’t translate into a better standard of living and quality of life for the majority, then are the built-in inequities of globalization so harmful that alternate strategies must be considered? Increasingly, more and more people around the world are coming to this conclusion.

One obvious and very important impact of globalization is that corporate tax rates have been driven down from averages of 37.5 percent in 1996 in the richer OECD countries to only 31 percent in 2003 and are headed even lower now. Even more obvious is the lower share of total income tax that corporations now pay in most countries, an OECD average of only 9.6 percent in 2004.
⁸

Meanwhile, the world’s richest countries continue to maintain trade barriers to the exports of some of the world’s poorest countries. While they provide aid to the poor countries, their enormous agricultural subsidies go far beyond the levels of all aid, destroying the markets and livelihoods for producers in poor countries around the world.

Paul Hellyer, in his book
One Big Party
,
⁹
had this to say about globalization:

Under its benevolent wrapping it is a plan to strip elected representatives at all levels of government of their power to legislate on behalf of ordinary people, and to transfer that power to unelected, unaccountable international bureaucrats implementing rules laid down by the globalizers. It is a plan to end popular democracy as we know it, and substitute a plutocracy of the wealthy elite.

Not too different, I think, from the intent of both the FTA and NAFTA, and the plans of the gang of deep-integrationists that met at the Banff Springs Hotel, about which you will read more in the conclusion of this book.

PART SEVEN

31

FOREIGN AID

BREAKING PROMISES AND BREAKING HEARTS

“A scandalous betrayal”

“A disaster as avoidable as it is predictable”

B
efore we go on to examine Canada’s truly dismal foreign aid record, let’s consider what needs to be done and what adequate levels of foreign aid can accomplish. We all know about the almost 3,000 people who were killed in the tragic destruction of the World Trade Center’s twin towers. But the world-famous American development economist Jeffrey Sachs says that every morning our daily newspaper should report: More than 20,000 perished yesterday of extreme poverty.

Or let me suggest a different headline: Twenty-eight thousand children under the age of five will die today of easily preventable causes.

Or, how about: Tomorrow, every 30 seconds, a child whose life could have been saved will die from malaria. In Africa, 3,000 children will die tomorrow from malaria, while many more will be left with lifelong brain damage or paralysis.
¹

Or perhaps: More than 6.5 million children will die this year from hunger, an average of some 18,000 every single day.

Jeffrey Sachs knows, in the words of
The New Yorker
writer John Cassidy, that “every year millions of children perish in infancy. In the face of this ongoing catastrophe, this year the American government will extend to poor countries … a tiny fraction of the Pentagon budget and about an eighth of one percent of the gross domestic product.”
²

Don Gillmore, in reviewing Sach’s book
The End of Poverty
, writes: “In
2002, the U.S. gave $3 toward each sub-Saharan African. After taking out the administrative costs, consultant fees, emergency aid, and the money used to service debt, the donation amounted to 6 cents per person.”
³

Unicef, in their superb publication
Child Poverty in Rich Countries
, 2005, said that the proportion of children living in poverty in the developed world had increased in 17 of the 24 OECD nations for which data are available. Without question, “No matter which of the commonly-used poverty measures is applied, the situation of children is seen to have deteriorated over the last decade.”

The 2006 Unicef Canada report said that some 10.6 million children will die globally each year from pneumonia, diarrheal disease, which kills 3,900 under the age of five every day, or 1.6 million children annually, and measles, which kills more than 500,000 children a year.

A few months after the Unicef study was released, it was reported that Canada, which, more two years earlier, had promised to become a major supplier of inexpensive drugs to Africa, had in fact failed to supply a single pill under the proposed program. When the aid was promised it was described as a major step of global leadership. Stephen Lewis, the former United Nations special envoy for HIV/AIDS in Africa, called it “a stunning breakthrough.”
⁴
In June 2006, Lewis termed the global aid shortfall “a scandalous betrayal.… For heavens sakes, live up to your commitments.” Finally, in August 2007, after lengthy disputes, a small breakthrough allowed shipments of an AIDS drug to go to Rwanda. Critics say that the agreement will likely not be repeated. Meanwhile, some 8,000 people die of AIDS in Africa every day.

Unicef Canada tells us that of all the deaths today of children under five years, the underlying cause of 53 percent is undernutrition. Many thousands of children die every day because of the lack of aid money and the lack of political will and public commitment. Eliminating or controlling the leading causes of child deaths is possible, but somehow the plight of vulnerable children is not on our politicians’ rader screen.

Unicef reports that, in 2003, “only about 39 percent of the children suffering from acute respiratory infection in sub-Saharan Africa were taken to see a health provider. That means that some 14 million children
in sub-Saharan Africa and South Asia were not treated.”
⁵
Unicef goes on to say that “every year, measles is directly responsible for the deaths of a half million children. Even when it does not result in death, measles is often responsible for blindness, malnutrition and deafness.” In addition, “by 2010 there will be up to 25 million children orphaned by AIDS in the world, with the majority living in sub-Saharan Africa.”

In sub-Saharan Africa only 5 percent of those infected with HIV/AIDS have access to life-saving drugs.

Now consider this. Some 70 to 80 percent of Canadians believe Canada is “very generous” when it comes to helping poor countries.
⁶
But are we?

In both 2004 and 2005, in a list of 22 OECD countries, Canada was down in 14th place in donor assistance as a percentage of gross national income (GNI), far behind other countries, some of which contributed more than the stated and commonly agreed-to goal of 0.7 percent of GNI. In 2006, we slipped further down the list, to 16th place.

In 2004, despite so much hand-wringing and rhetoric year after year in Ottawa, Canada stood at a poor 0.34 percent of GNI. Sweden and Norway were at 0.94 percent, the Netherlands and Luxembourg were at 0.82 percent, and Denmark was at 0.81 percent. Bringing up the rear was the United States at only 0.22 percent, Portugal at 0.21 percent, and Greece at 0.17 percent.

In 2004 per-capita terms, measured in U.S. dollars, Canada gave $81, compared to $524 for Luxembourg, $477 for Norway, $377 for Denmark, and $302 for Sweden.

As Neil Brooks and Thaddeus Hwong have pointed out, “Nordic countries give an average of 0.71 percent of their GNI, more than double that of the Anglo-American countries.”
⁷

In May 2005, the European Union announced that its members would double their aid to poor countries by 2015, agreeing that by 2010 they would all be contributing at least 0.51 percent of GDP (which is slightly smaller, of course, than GNI), and that this would increase to the long-established target of 0.7 percent by 2015.

According to Oxfam, “The EU’s bold announcement leaves the U.S. with nowhere to hide. If they fail to step up to the mark and pay their
share, they will be responsible for derailing an historic deal on aid that would lift millions out of poverty.”
⁸

In January 2005, Jeffrey Sachs pointed out that the target of 0.7 percent of GDP represented about $150-billion (U.S.) a year, “half of which is from the United States alone. The missing aid would save millions of impoverished people this year from imminent death.”
⁹
The United States, in 2005, spent 30 times as much on its military as it did on aid. And in June 2005, the U.S. Congress slashed U.S. aid by $2.5-billion, in a move supported by both Republicans and Democrats, leaving U.S. development assistance down 20 percent in real terms for 2006.

Meanwhile, polls show that a majority of Americans believe that U.S. foreign aid should be reduced.

And us? At one time, Canada was near the top of the list in our assistance to poor countries, although we never once reached the 0.7 percent target set by Prime Minister Lester Pearson in 1969. In 1975, we were at 0.5 percent of GNI. The year before Paul Martin became Finance minister, Canada’s assistance as a percentage of gross national income was 0.46 percent. Then Martin went to work. The man whose plaintive pleas for the world’s poor permeated his political career cut our aid all the way down to only 0.22 percent of GDP.

Late in 2005, the Irish rock star and anti-poverty crusader Bono, referring to Paul Martin’s failure to live up to his promises regarding foreign aid, said, “I’m personally not just disappointed — I’m crushed.” Earlier in the year, Martin refused to commit Canada to meeting the 0.7 percent Pearsonian goal even though, as mentioned above, five countries had long passed the objective, and seven others had promised to reach it by 2015 (the United Kingdom, Spain, Ireland, Germany, France, Finland, and Belgium). In June 2007, Bono said, “I can’t believe that Canada has become such a laggard.”

As Jeffrey Sachs and John MacArthur have pointed out, Canada’s aid share to GDP

is actually much less than it was in the 1980s when Canadian incomes were roughly 20 percent lower than they are today.

Canada’s shortfall vis-à-vis 0.7 percent (approximately $5-billion this year) would be enough to fund an entire global initiative to control malaria in Africa, a disease that needlessly kills more than two million children a year.
¹⁰

The 1993 Liberal election Red Book promised 0.7 percent aid. Instead aid fell dramatically. So much for Liberal promises.

In the summer of 2006, Oxfam described the quantity of Canada’s foreign aid as “abysmal.” Moreover, some of our aid is “tied aid,” which, as the University of British Columbia’s David R. Boyd says, “forces recipient nations to purchase Canadian goods and services, often at inflated or uncompetitive prices.”
¹¹
The 2005 United Nations
Human Development Report
puts it bluntly: “Tied aid remains one of the most egregious abuses of poverty.”

The United Nations estimates the cost of tied aid at $2.6-billion a year for low-income countries. According to the UN, “Much of what is reported as aid ends up back in rich countries, some of it as subsidies that benefit large companies. Perhaps the most egregious undermining of efficient aid is the practice of tying financial transfers to the purchase of services and goods from the donating countries.”
¹²

The United States tops the tied-aid list, with almost 85 percent of its aid tied. Canada is at more than 40 percent. In contrast, all the following countries are below 10 percent in tied aid: Switzerland, Belgium, Finland, Ireland, and the United Kingdom. Norway and Sweden are under 2 percent.

According to the United Nations, foreign aid from the well-to-do contributing countries is much lower now as a percentage of gross national income than it was back in 1990. Moreover,

Since 1990, increased prosperity in rich countries has done little to enhance generosity: per capita income has increased by $6,070, while per capita aid has fallen by $1.

Yet, for every $1 that rich countries spend on aid, they allocate another $10 to military budgets.

Currently spending on HIV/AIDS, a disease that claims 3 million lives a year, represents three days worth of military spending.

The $7 billion needed annually over the next decade to provide 2.6 billion people with access to clean water is less than Europeans spend on perfume.… This for an investment that would save an estimated 4,000 lives each day.
¹³

The United Nations 2005
Human Development Report
puts it this way: