MAC: Mines and Communities

Canadian Capital in Asia

Published by MAC on 2006-10-08

Canadian Capital in Asia

by Harsha Wali, Zed Magazine

8th October 2006

Though not largely discussed, South Asia is a major hub of global economic interests with a massive concentration of Canadian finance capital, foreign aid, and development agencies.

Export Development Canada (EDC) is the Crown Corporation responsible for coordinating Canadian investment abroad. During 2000-2004, 27% of Canadian Foreign Direct Investment was in energy, mines, and minerals with focal points in South America and South Asia. According to Natural Resources Canada, Canadian firms have interests in 6400 mining properties around the world. Canadian-based companies conduct about 40% of all mineral exploration, representing 12% of all Canadian foreign direct investment.

One such mining operation is in India. In 1993 a consortium of private companies, including Canadian company Alcan, formed Utkal Alumina International Ltd to initiate a bauxite mine and an alumina refinery in Kashipur. Alcan is the second largest aluminum producer in the world and holds 45% of active shares in the Kashipur venture. It is estimated by the Alcan't in India Solidarity Campaign that the project will displace 60,000 people. In December 2000, 22 of 24 affected village councils passed resolutions opposing the project after three villagers were shot and killed by state police following an anti-mining community meeting.

Beginning in 2004, Canada's then Minister of International Trade Jim Peterson began negotiating a foreign-investment promotion and protection agreement with India to give Canadian companies assurances that their assets would not be nationalized and remain as free from regulation as possible. Two major Canadian firms that have ventured into India are Sun Life Financial, which has become a leading private-sector insurance firm in India, and engineering-construction giant SNC-Lavalin, until recently affiliated with SNC Technologies Inc., developer and manufacturer of ammunitions.

A booming industry in India is Indian Business Process Outsourcing, the majority of which constitutes call-centers. Statistics from National Association of Software and Service Companies from 2002-2003 reveal that the US and Canada account for 71% of total outsourcing, and according to McKinsey & Co. estimates, global corporations are generating cost savings from 40-60% by outsourcing to India. Cost-saving measures, according to India Resource Center, include infringements on labour protections such as the eight-hour workday, allowing for night-shift work, and working on statutory holidays.

The Canadian International Development Agency (CIDA) is Canada's lead development agency. Much of Canadian foreign development aid has been termed "phantom aid"- aid that does not improve the lives it is intended to- and includes spending on overpriced technical assistance and tied aid. Canadian corporate lobbies advocate tied aid because it is foreign aid that must be spent in the donor country, therefore providing them an indirect subsidy. According to Action Aid, phantom aid accounts for over 50% of Canada's aid spending and 47% of Canadian phantom aid is tied to spending in Canada. Tied aid is part of the larger objective of neo-liberalization and private sector development, one of CIDA's top five priorities: "Poverty reduction requires strong efforts to address the needs of the private sector in developing countries."

Bangladesh has been one of Canada's largest aid recipients over the last three decades. According to CIDA's Country Development Programming Framework 2003-2008 for Bangladesh, private sector development is a major program objective. As part of a multilateral global effort, Canada pushed for Bangladesh to set up Export Processing Zones in 1978, which are regulated by the Bangladesh Export Processing Zone Authority and are outside the realm of national labour laws. A CIDA-funded Local Enterprise Investment Centre facilitates local private enterprise by partnerships with foreign business, in particular in the growing garment industry valued at $5 billion worth of exports.

According to a New Age report in June 2006, Bangladesh's apparel sector employs 2.5 million, 80% of whom are women, in more than 5,000 factories. Amirul Haq Amir, Coordinator of the Bangladesh Garment Workers Unity Council, has stated that garment workers are paid "between US$14 to US$16 per month, the lowest salary in the world." From May-July 2006, around 4000 garment factories in Dhaka went on strike, resulting in major unrest and at least one striker died from police gunshots. Since 2003, the Maquila Solidarity Network has been pressuring the Retail Council of Canada to ensure that the factories they use in Bangladesh are safe and healthy workplaces.

In others parts of the world, CIDA has also come under fire for supporting governments who align with Western government and business interests. For example a July 2006 MacClean's Business report outlines CIDA's involvement in creating Colombian mining laws beneficial to Canadian companies, while in Haiti, CIDA has been criticized for political destabilization by funding agencies opposed to Aristide.

A similar situation has evolved in Nepal. Since 1964, Canada has contributed more than $213 million in development assistance for Nepal, including $10.4 million in 2004-05. Although the CIDA website boasts of "neutrality" in the civil war, it lays blame for poverty and underdevelopment on the "Maoist insurgency". CIDA's 2004 Peace and Conflict Impact Assessment acknowledges, "CIDA will need to monitor whether its projects become Maoist targets because of linkages with government programs"- the government of Nepal being King Gyanendra who first dismissed the elected government in 2002 and then proceeded to seize complete control after a royal coup in 2005. Hardly imaginable, but the small Himalayan country has become a front in the "war on terror" with U.S. M-16s, assault rifles, and over US $10 million to the Royal Nepal Army. According to Amnesty International, such "assistance has enabled an increase in grave violations of international humanitarian and human rights law" in Nepal.

Afghanistan has been the single largest recipient of Canadian bilateral aid with almost $1 billion allocated from 2001-2011, while at the same time one of the most visible manifestations of the Canadian presence in South Asia is Canada's increased military involvement in Afghanistan as part of its "War on Terror".

As written by J.W. Smith in The World's Wasted Wealth, "Politics is the control of the economy. It is the military power of the more developed countries that permits them to dictate the terms of trade and maintain unequal relationships." U.S. President Woodrow Wilson recognized this "Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed against him must be battered down."

In the spring of 2006, Canada began a major military role in "Operation Enduring Freedom", with a battle group of more than 2,300 soldiers based around Kandahar. In May 2006, Parliament voted to keep Canadian soldiers in Afghanistan for two years longer than previously planned. Rick Hillier, Canada's Chief of Defence Staff, outlined his vision for the troops "We are the Canadian Forces and our job is to be able to kill people." In May 2006, CIDA launched the "Confidence in Government" initiative in the Shah Wali Kot district of Afghanistan. In a May 22 Globe and Mail article, Lieutenant-Colonel Tom Doucette, commander of Canada's provincial reconstruction team stated "It's a useful counterinsurgency tool."

A July 10, 2006 Canadian Press report details an agreement between the Afghani and Canadian governments stipulating, "Afghan civilians who are accidentally injured or killed, or whose property is damaged by Canadian soldiers, have no legal right to compensation." According to an in-depth CBC backgrounder, Canadian Forces instructors were in Kabul to train members of the Afghan National Army. Canadian troops are also training Afghan soldiers in Kandahar and the RCMP has a commitment to train Afghan police officers. The Department of National Defence has admitted that Canada's secret special forces have been operating in Afghanistan.

On September 2, Canadian Defence Minister Gordon O'Connor publicly stated that Canadian soldiers should be working in Pakistan to fight "Taliban insurgents inside Pakistan." In an interview with the Associated Press of Pakistan, O'Conner stated, "I suggested that some Pakistan officers be stationed with our troops in Kandahar and Canadian troops be stationed on the Pakistan side." This raises an explosive issue of the presence of Canadian troops in Pakistan, which has already seen major protests at the presence of US troops along the Pakistani border.

This "War on Terrorism", with its resulting occupations in Afghanistan and Iraq, are the most extreme forms of terrorism, making a war on terrorism "profoundly self-contradictory" as stated by Howard Zinn.

Meanwhile, Canadian exports to Afghanistan has increased over 100 fold in the past five years, growing from 167,000 Cnd $ to over 19,000,000 Cnd $, according to Industry Canada statistics. Canadian corporations such as Bell Canada and CAE (one of Canada's largest defense contractors) have profited immensely: Bell won a 1 billion $ contract with the US military to supply helicopters, while CAE won a $20 million contract to supply combat simulation technology.

The CIDA-funded Women's Rights in Afghanistan Fund, established by Rights and Democracy (created by the Canadian Parliament in 1988) provides grants to grassroots women's organizations in Afghanistan. A "non-partisan" Afghanistan backgrounder on the website of the Fund highlights only the historic abuse of women by the Taliban and characterizes the current period as one of "ongoing conflict" without any mention of foreign forces in the country.

Sonali Kolhatkar, co-director of the Afghan Women's Mission, recently wrote "Despite the best efforts of the Bush and Blair administrations to convince the world that the 2001 war 'liberated' women in Afghanistan and that they continue to work in the interests of Afghan women, grassroots women activists reveal a very different picture. With the Taliban regime ousted, Afghan women have not experienced better times."

Columnist Eric Margolis has written "Afghanistan's complexity and lethal tribal politics have been marketed to the public by government and media as a selfless crusade to defeat the `terrorist' Taliban, implant democracy, and liberate Afghan women."

Gender governance programs are also funded by CIDA in Nepal, India, Bangladesh, Sri Lanka, and Pakistan. Leila Ahmed's seminal "Women and Gender in Islam" documents the co-optation of feminism by imperial and colonizing forces, revealing the contradictions of humanitarian interventions. "Whether in the hands of patriarchal men or feminists," she writes, "the ideas of western feminism essentially functioned to morally justify the attack on native societies and to support the notion of comprehensive superiority of Europe."

Vijay Prashad has characterized one of the dominant manifestations of imperialism as the manufacturing of strategically placed NGO's. "The NGO", he writes, "becomes an arm of the international bureaucracy that ends up, consciously or unconsciously, doing the work of imperialism". Other CIDA funded NGO's in South Asia include South Asia Partnership, Sri Lanka Canada Development Fund, Aga Khan Foundation, World Vision, Oxfam, and Shastri Institute.

To the people of South Asia, they represent part of a larger political phenomenon that Arundhati Roy in a commentary titled "Help that Hinders" characterized as "wealthy NGOs financed and patronised by aid and development agencies, funded by western governments, the World Bank, the United Nations and multinational corporations. Though they may not be the same agencies, they are certainly part of the same political formation that oversees the neoliberal project. NGOs form a buffer between empire and its subjects. They're the secular missionaries of the modern world."

In the face of persistent political, economic, and so-called humanitarian interventions in the region, South Asian communities are raising their voices: women in the Narmada movement physically preventing the construction of dams, local panchayats (village councils) boycotting Coca Cola abuses and environmental devastation, protests rallies greeting Bush across the region, the Loktantra Andolan (Democracy Movement) against the tyrannical rule of King Gyanendra, 50,000 farmers rallying against the WTO in Mumbai, labour strikes and riots led by Bangladeshi garment workers, and women of the region charting their own course to fight against female infanticide, Huhood Ordiances, dowry deaths, and violence. Let us strengthen our end of this resistance by demanding an end to Canadian and other Western countries projects for the corporatization, militarization, and NGOization of the people of South Asia.

Harsha Walia is a South Asian activist based in Vancouver, Coast Salish Territories.

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