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Development spending and UNSC: How does Canada compare with Ireland and Norway?

by Aniket Bhushan and Lance Hadley

Published: June 5, 2020

This analysis compares development spending for three countries – Canada, Ireland, and Norway – that are competing for the two available rotational UN Security Council (UNSC) seats, the outcome of which will start to emerge after June 17.

Many factors affect both development spending and UNSC bid outcomes. While a causal link between development spending and UN bids is far from conclusive, as OECD-DAC donors and significant aid providers each competitor has utilized its development strategy towards its UNSC bid.

We focus on three aspects in a comparative perspective:

  • Total ODA levels
  • Aid generosity
  • Contributions to and use of the multilateral development system

In this analysis we reflect on whether there is evidence to suggest UNSC competitors have utilized development spending in support of their bids. Since the analysis looks at multilateral channels and because contribution levels to several multilaterals (e.g. regional banks) are assessed, in part based on relative economic size, it is important to note how different the three donors are from the outset. In terms of economic size, while Canada’s GDP is approx. $1.73 trillion, Norway’s is only $417 billion, and Ireland’s is only $385 billion (IMF data, for 2019 nominal GDP).

In other words, Canada’s economic size is more than four times larger than Norway and Ireland. As a G7 member that hosted a recent summit, arguably, Canada is also, by default, more ‘visible’ on the international stage.

Have UNSC competitors increased aid spending?

Data below reflect total ODA volumes and the aid generosity (ODA/GNI) ratio from 2011 to 2019. Canada’s ODA levels are near stagnant. In fact, ODA levels in 2019 were lower than in 2011 and 2012 (in constant USD$). Since the first mandate of the present (Liberal) government ODA levels have increased but only slightly and are barely higher 2015 vs 2019.

Norway’s ODA on the other hand has increased significantly, from $3.6 billion in 2011 to over $4.6 billion by 2019. Ireland’s ODA levels have also increased significantly at least from 2015 to 2019.

While Canada has historically been a larger donor than Norway in total volume terms, this position has reversed in recent years.

In terms of aid generosity, Norway is the only donor of the three that consistently meets the 0.7 ODA/GNI UN target. In fact, Norway typically spends about 1% of its national income on aid.

Ireland’s aid spending, relative to national income, has declined in recent years. At 0.31 in ratio terms Ireland spends about a third of Norway. Canada’s ratio has also declined in recent years and is even lower at 0.27 – nearly a quarter of Norway’s.

Total ODA

Generosity ratio: ODA/GNI

How have competitors’ use of the multilateral system evolved?

As mid/small sized donors, Canada, Ireland, and Norway are significant contributors to, as well as users of, the multilateral development system. Each donor makes ‘core’ contributions to multilateral institutions, but also channels further assistance ‘through’ the multilateral system (also known as bilateralization of multilateral aid). Combined, core and non-core contributions to multilaterals, make up over 50% of total aid for all three donors.

In terms of absolute levels, the patten remains similar. Canada’s combined use of the multilateral system has remained nearly stagnant in constant dollars since 2011. Whereas absolute levels for both Ireland and Norway have increased significantly. In the case of Norway from $1.6bn in 2011 to nearly $2.4bn by 2018.

While historically Canada has been a much larger player than Norway in terms of multilateral spending, in recent years the gap has closed, and Norway is almost as large a financial backer of the multilateral system as Canada.

This trend can be seen more clearly with regards to contributions to and the utilization of the UN system. Norway’s contributions to and through UN channels, at approx. $1.3 billion (2018) are now much larger than Canada’s at approx. $1 billion. Moreover, Norway’s core contributions to UN funds, agencies, and bodies at $442mn (2018) is more than double Canada’s.

Total use of the multilateral system: ODA channeled to and through multilaterals

Share of total ODA channeled to and through the multilateral system

Total use of UN system: total ODA channeled to and through UN agencies, funds, commissions

Conclusions

This analysis compares development spending and use of the multilateral system for the three UNSC competitors, Canada, Ireland, and Norway. While all three are important aid providers, given its much larger size and membership in key global fora (e.g. the G7) Canada starts out with somewhat of a natural advantage in terms of visibility on the international stage.

That said, Canada’s aid spending has remained virtually stagnant, whereas Ireland and Norway have increased spending significantly in recent years.

Norway is the only donor out of the three that consistently exceeds the 0.7 ODA/GNI target; relative to national income Irish aid is about a third that of Norway’s and Canada’s is about a quarter.

Norway’s spending via multilateral channels has increased significantly in recent years and is now similar to Canada’s.

Norway’s spending via UN channels has increased significantly in recent years and is much higher than Canada’s. Norway provides about double the level of core support to UN agencies and funds compared to Canada, even though the Canadian economy is approximately four times larger than Norway’s.

On balance, a reasonable take-away from this surface analysis is that if Canada were to succeed in its UNSC bid, it is likely due to factors other than development spending or renewed support for the multilateral system.

Beyond financial contributions, however, Canada has led significant policy initiatives, such as the ‘friends of SDG financing’ and other informal groupings at the UN. These, alongside significant political capital invested by the Prime Minister in hosting high level multilateral events (such as the Global Fund replenishment and Women Deliver) will likely make a greater contribution to the consideration for Canada’s bid, if it is successful.

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