Perpetuating Poverty by Robert Carty, Virginia Smith (review)

Canada, promote exports, and facilitate political influence. On all three counts, the use of aid is considered relatively inefficient. Job creation would have been greater and less costly with other government programmes than with aid expenditures; export promotion is also considered inefficient under "tied aid" when compared to traditional export programmes ; and it appears that political influence has fostered the choice of recipients that do not really require the injection of aid. Wyse proposes an alternative aid system. Bilateral aid would be noninterventionist and provided only to a limited number of countries according to criteria of need and ability to use aid for improving conditions of the poor. The latter would be determined by the political power held by the organized poor and the encouragement they received from the government to organize, speak, and act for and by themselves through representative organizations . Third World countries would also benefit from a non-interventionist bilateral system of aid; they would decide which goods and services would be purchased in Canada with aid resources, basing their decisions on their actual needs and competitive Canadian prices. The changes outlined above along with others - such as the disbanding of interdepartmental committees and the establishment of a Crown corporation to develop and administer aid policy and programmes - would provide new opportunities for aid programmes which would go a long way towards a more appropriate approach to international development. This is one set of options that Canada could follow, in spite of the ties that bind. The proposals in both books reject reducing Canadian aid to relief aid or redirecting it exclusively to nations with a free enterprise system. They are directed to benefit those who suffer poverty and exploitation. 132 DANIEL POWELL Trent University PERPETUATING POVER TY. Robert Carty and Virginia Smith. Toronto: Between the Lines, 1981. Pp. 212. Although now three years old, Perpetuating Poverty represents a valuable contribution to the growing literature on Canada's aid relationship with the Third World. In this volume, the authors effectively introduce the topic of aid as a potential obstacle to development, and systematically review Canada's development assistance programme since its inception in 1950. The book is divided into five parts with much emphasis being placed on the bilateral and food aid programmes of the Canadian International Development Agency (CIDA). Multilateral aid is also examined, although not as comprehensively . The authors explain throughout the work that problems associated with Canadian development assistance go much further than the journalistic reports that have complained about how CIDA "throws away" the taxpayer's money on less developed countries (LDCs). Rather they suggest that Canadian aid is meeting first and foremost the economic needs of the donor country, and not necessarily those of the recipients. For example, 80 percent of CIDA's bilateral assistance must be spent on procuring goods and services within Canada. Contracts for development projects in LDCs are therefore given to Canadian corporations which may or may not be as competitive as other firms. This has meant in effect that CIDA has subsidized Canadian private enterprise (albeit through the back door) in order to help these corporations compete in international markets. Similarly, CIDA's food aid programme has often helped the Canadian economy more than it has met the needs of LDCs. The purchase of surplus Canadian food that would otherwise have been stockpiled substantiates this point. The authors estimate that, because of tied aid requirements and the false "costs" of food aid as well as other hidden deductions from CIDA's budget, the real cost of aid to Revue d'etudes canadiennes Vol. 19, No. 4 (Hiver 1984-85 Winter) the government in 1977-78 was $255 million, or one-fifth of its stated official assistance. Carty and Smith further argue throughout the book that aid is used as a means of reinforcing Canadian foreign policy which is closely linked to that of the United States. Aid as an extension of foreign policy has tended to reinforce disparities between developed and less developed countries while also perpetuting inequalities within LDCs by building up local elites. The authors conclude that CIDA's aid programme must be totally reworked if it is to truly assist Third World countries. In...