Worldwide inroads

Canadian companies generate business and promote their expertise, technology and goodwill in the world’s trouble spots. Continued support for such initiatives by the federal government makes the opportunities greater

By John Cooper

Tim Horton’s may be Canada’s most high-profile export to Afghanistan. But outside of the coffee and Timbits served at the Canadian military’s Kandahar Airfield, the country is strictly off limits to most Canadian companies. Due to security precautions, this has been the case for several months, according to Andrew Hannan, a spokesperson with International Trade Canada. However, this won’t always be the case.

In March, the federal government’s Canadian International Development Agency (CIDA) announced that Canada will maintain development funding for Afghanistan at $100 million for 2006-2007; it was welcome news to many who recognized the need for Canada to maintain a presence in that war-torn country. It brought the Canadian commitment to more than $650 million for 2001-2009, and in the long-term it will also mean business for Canadian companies that will have a role in reconstruction efforts. In addition to keeping the peace, Canadians will be involved in rebuilding in more than 11,000 Afghan villages.

“We are funding large programs like the Afghan Stabilization Program, which is a vehicle by which the government seeks to extend its administrative presence into the provinces by building up the government infrastructure, government buildings and courthouses, training civil servants and building their capacity to develop and design provincial development plans down the road,” said CIDA spokesperson Yannick Hingorani.

Support from first responders

But elsewhere, Canadian-based companies are making major inroads into worldwide trouble zones — including India, Sri Lanka, Haiti and Indonesia — generating business and promoting Canadian expertise, technology and goodwill.

Banda Aceh is an example. Located on the northern tip of the island of Sumatra, it was struck by the earthquake-generated tsunami that occurred on December 26, 2004. Banda Aceh was the hardest hit of all Asian jurisdictions, recording 200,000 deaths and the displacement of more than 430,000 citizens.

Canada responded quickly and “very rapidly programmed CDN $47 million in emergency relief and CDN $40 million in reconstruction projects in Aceh,” said Canadian Ambassador H.E. Randolph Mank. “Our reconstruction strategy is focused on rebuilding local governance and restoring livelihoods.”

And in Haiti, Canada pledged $33 million for reconstruction efforts. Projects include the building of Haiti’s public institutions, which has drawn on the skills of 250 Canadians, as well as projects involving clean drinking water, environmental protection and health care.

Canadian companies looking to bring their goods and services to international centres of crisis are encouraged by the federal government to work through the United Nations (UN). The UN takes the lead role as a first-responder in situations of natural disaster (floods, earthquakes and hurricanes) or complex emergency (arising from violent political conflicts that create economic and social upheaval — both often displace large populations).

The UN coordinates development efforts and humanitarian assistance and spends more than US$7 billion annually on goods and services through 20 agencies, many of them high-profile, like the United Nations Children’s Fund (UNICEF), the United Nations Development Programme (UNDP) and the United Nations Educational, Scientific, and Cultural Organization (UNESCO).

Options available

Canada’s Trade Commissioner Service (CTCS) offers assistance to Canadian companies to help them market goods and services to UN agencies. It provides reports on foreign markets and industry sectors, business contacts, advice on business challenges and assistance in organizing international business trips.

According to officials with CIDA and CTCS, the federal government works with the international aid community to take fast action in the event of a disaster. The key is to understand the needs of the area hit by a disaster and respond with speed and efficiency, getting help to people as quickly as possible; rebuilding takes place after the region is stabilized. The federal government works with six UN agencies, 200 international non-government organizations (NGOs) and other governments. According to CTCS, the international aid market is valued at US$4 billion; up to 70% of the money is spent in or close to the disaster areas.

Federal government organizations include:

• Foreign Affairs Canada’s Stabilization and Reconstruction Task Force (START). START gauges the extent of international crises and consolidates the government’s response;
• The Department of Foreign Affairs and International Trade (DFAIT), which acts as a liaison between works in the disaster area, the media and the community;
• The Canadian International Development Agency (CIDA). CIDA delivers funding to NGOs in the disaster area; and
• The Department of National Defence (DND), which coordinates delivery of relief items.

Last November, a Canadian delegation visiting Banda Aceh saw the results of reconstruction efforts spearheaded by the British Columbian government’s Forestry Innovation Investment Ltd. (FII). The organization, representing major wood products manufacturers, sponsored the building of 10 wood-frame homes for displaced residents of Banda Aceh, demonstrating Canadian home-building technology and assisting in the efforts to speed up housing reconstruction in the area.

In 2005, FII CEO Ken Baker led a delegation of FII officials and industry representatives to get a sense of what the industry could provide to the area. After consulting with the federal government and hiring an expert to put together a program, the team found an opportunity to showcase Canadian woodframe technology.

“We met with quite a number of Indonesian government officials and a number of representatives on the ground with the big aid agencies,” said Baker. FII was able to overcome local uncertainty about woodframe technology — most believed concrete to be stronger — by citing the positive experiences of woodframe home buyers in earthquake-prone areas of Japan.

In Banda Aceh, FII and its member companies built precut, foolproof-assembly demonstration homes, demonstrated the technology and trained people on the ground in how to assemble woodframe homes.

An MOU was signed and “the training offer was the ‘sweetener’ that sealed the deal,” said Baker. “This sweetener has proven as important as the materials themselves. They want to be able to learn the skills to build structures that will last. We’ve put enormous amounts of engineering expertise into developing the technology and the standards for woodframe homes.”

The fact that Indonesia has a robust economy and virtually no woodframe housing opens up possibilities for FII’s members, said Baker. “The tsunami reconstruction is short-term. We have a very strong interest in creating a woodframe culture in Indonesia and creating a demand pull. The market there depends on demand pull, not supply push. We’re making them aware of the attractiveness of our product.”

Business management support

Also in Banda Aceh, Canadian Manufacturers & Exporters (CME) created a Private Enterprise Participation (PEP) project — a $10-million initiative — to target reconstruction. PEP created a microfinance program and business development centre to support small and medium-sized businesses, specifically those run by women entrepreneurs.

According to CME spokesperson Sol Kimsa, the initiative involved $1 million of seed funding from CIDA, a $120,000 contribution from Manulife Indonesia and the opening of a Business Development Centre, “plus funding for the necessary technical assistance (business management, marketing, engineering and accounting) to build the businesses back up and address issues of a changing marketplace. The PEP team has been able to leverage circle participants with a good business management   history to access more funding in the region to assist the dynamic business growth.”

In conjunction with CME, Canadian consulting engineering firm McElhanney Consulting Services Ltd. provided support to two medium-sized companies in the building sector.

“McElhanney is involved in land management aspects in Aceh, as part of the recovery/resettlement program,” said John Blair, McElhanney’s vice-president, geomatics. “We have been there for approximately (seven) months and look to have a continual presence for some time.”

And in Afghanistan? Though donuts and coffee will definitely be on the menu for soldiers, “International Trade Canada is not currently actively promoting Afghanistan as a business destination for Canadian companies,” said Hannan. But that will change once the country is stabilized.

John Cooper is a Whitby, Ont.-based freelance writer.

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