Foreign Affairs

Rethinking how NZ spends its overseas aid

The Government’s “Pacific reset” and a $714 million boost to our foreign aid programme was big news earlier this year, but the first review of our aid policies in nearly a decade hasn’t made the same headlines. Sam Sachdeva reports on why it’s taking place, and what NGOs, academics - and Winston Peters - want from it.

The news in May of a nearly billion-dollar boost boost to New Zealand’s foreign affairs budget resulted in a predictably polarised response along political lines.

The Government, led by Foreign Affairs Minister Winston Peters, hailed the decision as an essential increase after years of neglect, while the National opposition accused it of “putting diplomats ahead of doctors”.

The largest piece of the package was $714.2 million over four years to increase New Zealand’s official development assistance (ODA) budget, money which would lift out spending as a proportion of gross national income (GNI) from 0.23 percent to 0.28 percent.

It transpired the decision came despite Treasury officials recommending an “informed assessment” of where and how any extra assistance should be spent before the cash was handed over.

It was a nice idea, Peters said, “but the reality is these things can’t wait: we were losing our character, our footprint, we weren’t playing our full game, we weren’t pulling our weight so to speak”.

As it turns out, while Peters got his aid, a review of New Zealand’s aid and development policy is still taking place, with the Ministry of Foreign Affairs and Trade accepting submissions until the end of the month.

Any changes will be the first made since 2009, the first year of the last National government.

NGOs, academics and Peters himself agree a reassessment is well overdue - but what do they think needs to change?

The Pacific is one area where New Zealand has delivered aid well for some time, Terence Wood says.

The bulk of the new aid seems set to go to the Pacific, following Peters’ “Pacific reset” and a pledge to increase both diplomatic efforts and aid to the region.

Terence Wood, a research fellow at the Australian National University’s Development Policy Centre who previously worked on New Zealand’s aid programme, says it’s worth distinguishing how New Zealand has historically given aid in the Pacific from its work in the rest of the world.

While he credits the current Government for its Pacific reset and desire to refresh its work there, Wood says many of its predecessors have focused on the region and given aid in a positive way.

Elsewhere, he believes the last government began to use aid as a way to benefit New Zealand’s own interests (such as its successful bid for a seat on the UN Security Council).

Aid decisions should be made more altruistically, he says, and there are already signs that could be the case under this Government.

“We need to make sure we refocus our aid so it’s all about helping other countries, not helping ourselves.”

One of Wood's concerns is that New Zealand finds itself in a foreign aid “bidding war” - similar to what took place during the Cold War - which results in the quality of aid projects and provision deteriorating.

There is good reason to question just how altruistic the Pacific reset is, however.

China’s growing presence and influence in the region,highlighted in the Government’s defence policy statement, seems a clear influence, with Peters warning of “an increasingly contested strategic space, no longer neglected by Great Power ambition”.

Wood says it’s hard to assess the significance of China’s rising role in the Government’s decisions, with different messages coming from different ministers and departments.

“Your guess is as good as mine, although it would be logical New Zealand is paying at least some attention to China’s role in the Pacific.”

One of his concerns is that New Zealand finds itself in a foreign aid “bidding war” - similar to what took place during the Cold War - which results in the quality of aid projects and provision deteriorating.

A chance for genuine partnership

Council for International Development director Josie Pagani, whose organisation serves as an “umbrella agency” for international development organisations in New Zealand, sees the Pacific reset as a chance for the country to lead the world in how it does development.

“If you look at the language around the reset, it’s about moving away from the traditional aid relationship where you’ve got beneficiaries and donors to something where you’re looking at what’s the mutual benefit, and what’s our shared destiny - we’re all in the Pacific.”

Rather than “doing development to others”, Pagani says, we should be working with local community groups in the countries as a genuine partnership, pointing to the way New Zealand responds to cyclones and other natural disasters as an example where things could change.

“If we can built in resilience and skills and capacity for local people to respond in the Pacific themselves, rather than us flying in like Superman and Superwoman to do it for them, that’s a really positive thing.”

“What you would be spending your aid budget on is things like building the resilience of local communities, not only to respond to a cyclone themselves but even to the extent of thinking, if we’re sending over shelter kits and wash kits...and tarpaulins and so on, why aren’t those things being produced even in the Pacific so you’re supporting local businesses?

“If we can built in resilience and skills and capacity for local people to respond in the Pacific themselves, rather than us flying in like Superman and Superwoman to do it for them, that’s a really positive thing.”

Another area of contention has been the last government’s decision, led by Murray McCully, to focus on economic development projects.

Former foreign affairs minister Murray McCully's emphasis on aid projects which benefited economic development has been criticised in the sector. Photo: Lynn Grieveson.

Unicef NZ’s executive director Vivien Maidaborn says her concern is not that economic development projects aren’t valuable, but that they do not represent a complete strategy.

“For example, if 30 percent of the children in your country have stunted development, physical and mental development as a result of not good water sources, poor nutrition, poor sanitation, then it doesn’t matter how much you invest in economic development, it’s never going to be integrated into the whole population.”

Pagani agrees, and says signs of a shift under the new Government are “music to the ears of the NGO sector”.

“Of course economic development is important and the Pacific deserves to have the benefits of economic development like New Zealand, but you can’t for example just build a runway and hope the tourists will come if you haven’t also spent the money to ensure those local communities are skilled to service those tourists.”

Everything on the table - Peters

There are other areas where some want change: Maidaborn believes we should increase the amount of aid and assistance we deliver in South East Asia, a region of great relevance to us with important trading partners and shared interests.

That would help to address concerns about a flood of aid coming into the Pacific without the capability for local agencies on the ground to use it well, she says.

Maidaborn also believes the historical focus on poverty reduction should be tweaked slightly to inequality, with some traditional aid recipients close to becoming middle-income countries but the income data hiding those who are still suffering.

Pagani says there needs to be much better collaboration on aid and development, with a seat at the table for businesses, NGOs, the Pacific diaspora and others along with government officials and politicians.

For his part, Peters seems open to all suggestions, saying: “Every precept should be reviewed as to whether it’s working or not and we’ll wait and see what the consultation process delivers.”

She’s also concerned about a separate review of how MFAT funds NGOs to deliver aid, warning against any “unintended consequences” which incentivises organisations to compete against each other.

As Wood points out, the UN’s Sustainable Development Goals - which New Zealand has signed up to, and MFAT says will be part of the aid review - aid another layer of complexity to be addressed.

For his part, Peters seems open to all suggestions, saying: “Every precept should be reviewed as to whether it’s working or not and we’ll wait and see what the consultation process delivers.”

MFAT says Cabinet will consider a “refreshed” policy before the end of the year: it seems unlikely to make huge headlines, but could make a significant change to how and why we deliver aid around the world.

This article was first published on Newsroom Pro on Friday, September 14 at 5.50 pm. Subscribe to Newsroom Pro here.