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Challenges for NZ Official Development Assistance

Hon Matt Robson
25 August 2001
Speech Notes

Challenges for New Zealand's Official Development Assistance


Speech to the Council for International Development Annual General Meeting

Royal Society House, Turnbull Street, Wellington

Saturday 25 August 2001; 9.15am

I am pleased to be, for a second time, invited to address the annual meeting of the representative body of development non-government organisations in New Zealand.

Introduction

New Zealand has a unique opportunity today to become a leader in development thinking and practice.

The comparatively small size of our aid programme is no barrier to this.

I believe the following weeks will mark the beginning of a new era in aid delivery and the philosophy behind aid in New Zealand, and I am excited as Minister to be a part of that.

The 1990s will be remembered as the decade when "aid fatigue" became a cliché all around the world.

A decade in which New Zealand's aid programme developed in a somewhat ad hoc way.

I am proud, as the Minister responsible for overseas development, that is about to change. And I am not just talking about rearranging the deck chairs.

Aid review

Last September, I commissioned a review of New Zealand's Official Development Assistance – our ODA – programme. This initiative was foreshadowed in the party manifestos of both coalition partners in the government - the Labour Party and the Alliance.

Both parties saw that serious regression during the 1990s in several Pacific Island countries demanded a reassessment of New Zealand's aid policy.

Two development-aid professionals, Joseph Grossman and Annette Lees, selected with assistance from MFAT, conducted the review. Their final report, Towards Excellence in Aid Delivery, has been completed. And it is an excellent report.

Phil Goff and I, and officials from MFAT, the Treasury and the State Services Commission, have given it careful and detailed consideration since then.

I find that the report reflects best practice in development assistance. It takes into account mainstream thinking amongst like-minded overseas aid donors. It recognises the unique nature of poverty in the Pacific.

The consultants drew from recent development literature and experiences of other countries. They looked especially at the United Kingdom and Australia, which have recently undertaken similar reviews.

They held a number of two-day meetings with stakeholders in main centres around New Zealand. They visited six Pacific Island countries, and they met with aid officials in Australia.

They talked with MFAT employees at home and abroad.

Their report draws on the views of all of those most actively involved in the design and delivery of New Zealand's ODA.

It stimulated forward thinking in MFAT. There's no doubt about that. And it has captured work in progress as the Ministry adapts to the requirements of the Labour/Alliance coalition.

You will find, too, when the report is released, which will be soon, that it also reflects their discussions with people like you – representatives of non-governmental aid organisations.

It is a work of professional integrity. Although forthright - it tells it like it is - it is balanced. It is a report that will help us move forward.

Accountability

$226 million dollars is a lot of money for the New Zealand tax payer to give, but when compared to the aid budget of other bigger countries, it is modest.

For both those reasons we must ensure that we achieve maximum returns for our investment.

We must – all of us – ask the questions: 'why do we do what we do?' - and – 'what is the impact?'

As many of you here will be aware, there have been a wide range of mini-reviews of various aspects of New Zealand aid and MFAT over the past ten years.

Each of these has been undertaken with its own scope and methodology. Each has come to its own conclusion.

But they all share a common theme – that change is needed if we are to get the best value for money from our aid dollar.


Why do we give aid?

So why do we give aid?

A recent survey of public opinion showed that there was a high level of support for government-provided aid.

71% of those surveyed supported the giving of aid – for humanitarian reasons. And that makes sense.

In our own region for example, we know that if our development aid can contribute to poverty alleviation, and good governance –

 We increase not only the well-being of people in the Pacific,
 We increase security in the region, and therefore our own security in New Zealand.
 We increase our ability to control environmental damage,
 And protect the marine resources
 And we increase our chances of preventing the spread of diseases.

Developed countries like New Zealand benefit from a more prosperous region.

Our $226 million dollars can help achieve that.

This mutual dependency – between the giver of aid and the receiver - will become even more important in the next 25 years as 2 billion people will be added to the world's population, 97% of them in developing countries.

Even more reason for us to ensure that globalisation becomes a positive force for all the world's people.

Foreign policy

Development cooperation is one of the three pillars of New Zealand's foreign policy.

That was not always so.

But in the last fifty years, development cooperation has stood alongside defence and economic matters as part of foreign policy.

Today we must ask: are the necessary goals of foreign affairs and trade compatible with the necessary goals of aid and development?

Should aid be an instrument of foreign policy?

These are the sorts of issues that we as a government are now working on.

Value for money

There is also, as I said earlier, the issue of accountability.

Traditionally, too much government spending has been based simply on the previous year's level of expenditure. I'll give you an example.

Last year's appropriation for ODA was $226.527 million. Estimated actual expenditure is within fifty or so thousand dollars of that figure. That tells Parliament, which is supposed to scrutinise these figures, a lot about the skills of our accountants and managers.

It tells us where our aid dollar is going, but not whether it is effectively used.

Sometimes, New Zealand aid may be most effectively delivered through multi-lateral channels, where delivery and accountability mechanisms are already in place. An example is the $US500 million trust fund proposed by Dr Jacques Diouf, the Director-General of the UN Food and Agriculture Organisation, to combat hunger and secure the food supply in developing countries.

But what about our bilateral aid? Are New Zealand's bilateral programmes and projects effective? Are they achieving sustainable long-term objectives? The truth is, we don't always know.

This year, exactly the same amount has been appropriated for ODA as last year. But I have to tell you that the criteria for determining whether this is a sound decision are still not well developed.

We need to put more resources into monitoring and evaluating the impact of our aid interventions.

Only that way can we learn the lessons, and apply that learning to the future.

Accountability also means getting countries off aid.

Some South Pacific nations are among the most aid-dependent countries in the world with aid to GDP ratios as high as 47% in Kiribati, 38% in Marshalls and 29% in Samoa.

Even when long term aid is essential, countries should be looking for opportunities to increase their self-reliance.

One of the reforms that I hope you will be hearing about in the next few weeks is what the Government will be doing to put more useful accountability criteria in place.

Aid as a political lever

Development cooperation since World War II has often had a political edge.

Cold War thinking shaped New Zealand's overseas aid policy over many years. Britain and the United States determined the global agenda in which New Zealand played its part.

Public opinion in New Zealand was discounted. The Government extended both development aid and military support to various repressive regimes, including that in South Vietnam.

For thirty years, New Zealand joined with others in backing the Suharto government in Indonesia – and was part of that support - and ignored the cry of the people of East Timor.

Official policy was for New Zealand to concentrate aid resources on parts of South East Asia that were near to the interface with the communist block, but policy quite overlooked developmental needs closer to home, in Melanesia.

Politics, not need, was the criterion. Development cooperation was available to partners chosen on the basis of political expediency.

But I do want to emphasise, that from the very beginning, within the prevailing policy framework, many individual New Zealanders, volunteers, NGO personnel and officials alike, showed resourcefulness and dedication in contributing to our aid programme.

Needs close to home

In the last couple of months I’ve had the opportunity to visit Vanuatu and the Cook Islands and see at first hand some of the developmental challenges facing those societies.

And different societies they are, with the Cooks rather better off, connected intimately to New Zealand as it is.

But even in the Cook Islands, there are limitations on basic-level education and teaching standards. There is an absence of income-generating opportunities especially on the outer islands. There are problems of domestic violence.

All of these present challenges to a society which is being depleted by emigration. And Vanuatu has all the same challenges except the last, exacerbated by greater absolute poverty.

Put these two peaceful societies alongside Bougainville, Solomon Islands and East Timor, where violent disruption has stretched the fabric of government and civil society to breaking point.

In these places conventional developmental approaches give way to problems of an entirely different order, the problems of crisis management and post-crisis social and political reconstruction.

Education: are we spending the money wisely?

Education is a good example to look at how we can do things better.

It's an area that has been specifically addressed in the aid review. 40% of our bilateral aid is directed at education.

90% of that has gone to tertiary education - the majority (85%) provided in New Zealand.

But many of these students do not return to their own countries. In the meantime, too many people in those developing countries still lack a basic education.

Should we re-direct aid into basic education, as Oxfam recommended in a recent report, or is there a case for continued capacity-building at the tertiary level where partner societies are often unable to train there citizens? What are other donors doing? What does the partner government want?

All these factors have to be weighed up by this government, and we will be doing this in the next few months as part of the 2002-2003 budget round.

Regression in the Pacific area

The failures where they exist (and of course there are success stories too) are failures of policy.

 I see the collapse of local communities that had long been self-sufficient.
 I see urban drift at a pace faster than many of the growing towns in the Pacific can handle.
 I see a brain drain from the Pacific that is alarming.
 I see examples of socio-economic regression at the national level.

In some cases these failures have happened because there has been a conflict of interests: trade cooperation and investment opportunities have been forced into an arranged marriage with development cooperation.

Short-term project targets may have been achieved, but some of the longer-term outcomes do not, by any standards, reflect value for money with regard to the aid dollars we have spent.

Our special relationship with the Cook Islands, Niue and Tokelau

Even in places where New Zealand is uniquely well placed to make a difference through well-targeted development cooperation, the outcome has not been what was intended.

The Cook Islands, Niue and Tokelau all have a special constitutional relationship with New Zealand. Successive New Zealand Governments have all wanted to see that these three groups of people remain politically distinct entities.

And over the years, New Zealand has extended substantial budgetary support and project aid with this outcome in mind.

We now have to question whether this is the right strategy. We have to reconsider, in the light of experience, whether that political objective is a realistic objective.

The Cook Islands, Niue and Tokelau are small enough, and their ties with us are close enough, for New Zealand to have real impact.

They should have become examples of successful development cooperation relationships. Judging by the response of so many of the people who were living there, we have failed.

The preferred choice of the majority of the people of the Cook Islands, Niue and Tokelau has been to emigrate.

What does that tell me about our aid? New Zealand has been spending around $2000 per person, annually, in Niue and Tokelau. Many of the people who have emigrated tell me that the money has not been well spent.

The fact that so many people born in our former island territories have chosen to come to New Zealand shows that they see nothing inherently wrong with New Zealand's way of doing things.

But I see it as a negative indicator of what the New Zealand Government has been able to achieve in partnership with those governments. New Zealand planners' assumptions about people's motivation, and about local social relations, have too often been wide of the mark.

Focus on the Pacific

If we are to get more bangs for our bucks, we must question if we are in fact giving aid to too many countries.

New Zealand has 63 bilateral funding relationships - 19 are with major bilateral partners - including 11 in the Pacific. Other sectoral and thematic funds and schemes, for example through the Commonwealth Secretariat, extend our reach to a total of 92 countries.

In 15 years we have nearly doubled the number of countries we give aid to.

New Zealand has a vital role to play in the Pacific. We are the largest donor in some parts of Polynesia.

And the Pacific – which for this purpose I might define as extending far enough west to include East Timor – will remain our core focus geographically.

Our geographical situation sets us apart from aid donors such as Denmark, Ireland, the Netherlands and Sweden.

In our case, the areas of need are close at hand, and the political complexities and expectations of neighbours impinge much more directly on New Zealand than, for example, the expectations of the people of Botswana impinge on Sweden.

Strengthening partnerships

Being small has led us to develop some particular strengths over time. One is building capacity, rather than building buildings. We can’t provide the resources for large scale infrastructure projects nor for large scale institution building. But we can and do provide technical assistance in niche areas.

This places a premium on two things: specialising and second, harmonising and coordinating with other donors to ensure we’re part of the overall solution.

Of course, providing aid is a partnership between, on the on hand, our resources and people, and on the other hand, the aid needs and requirements of our partner governments and societies. We cannot and should not dictate.

We do need to consult closely, and to evaluate our partners' needs against our capabilities, before deciding on what’s best.

Being small, New Zealand can get down to the right scale, to the people-to-people level, and interact effectively. Very often these days we do that via NGOs and volunteer organisations because of their on-the-ground effectiveness.

Relations between MFAT officials and the NGO sector are extensive and soundly based. Earlier this year the Prime Minister launched a Strategic Policy Framework for the relationship, a first for any government department.

A new direction

So there it is. This Labour/Alliance Coalition Government is committed to placing our stamp on the delivery of New Zealand's ODA. Both parties promised, before the last election, to re-assess our overseas aid, and the review has now been completed.

We must ensure, on behalf of all New Zealanders, that we are getting value for money.

That means having clear, focused goals for aid and development that prioritise poverty alleviation, regional development and security, and tackling aid dependency.

Achieving a higher level of development expertise

It also means having the best, most professional staff for the job.

The review raises a valid issue that we will have to examine in the coming months. Does the rotational staffing system used by MFAT suit the needs of ODA delivery?

There is a valid need to rotate MFAT staff in posts across the world and at home. But if we are to have the most professional staff on the job in aid, with stability and accountability, it may be more appropriate to have greater staff continuity in this area.

Development assistance is a profession with its own academia, literature, field experience, history and management approach. I want a highly qualified aid agency, staffed with the best and most experienced people available. Depth of experience in development cooperation is vital. We can have that in New Zealand.

In the past our ODA undoubtedly gave us access, and raised our national profile, in places where New Zealand had previously been unnoticed.

Be that as it may, there are now strong arguments in favour of sharpening up the professionalism and the focus of New Zealand's development program.

A centre-left government does not have the same agenda as the last government. That means we do not look at the developing world – and our South Pacific neighbourhood in particular – in the same way as our predecessors did. People expect us to do things differently, and that is why they voted for us in November 1999.

Targeting poverty

The Alliance election manifesto spoke of special emphasis on aid for the elimination of poverty, and I will conclude with an elaboration on that point. Targeting poverty is essential if development is to be sustainable. Unless the poor are included, development will not be sustainable.

Poverty is more than material destitution. People are entitled to lead long and healthy lives. They are entitled to be knowledgeable. They are entitled to have access to the resources necessary for a decent standard of living.

In our own Pacific region, poverty raises issues of vulnerability and opportunity. This includes lack of education, poor health, lack of economic assets, social exclusion and political marginalisation. It can lead to frustration and apathy. Like all forms of poverty, it can result in despair and violence.

Regional security in the South Pacific must be based on a growing sense of collective responsibility and support amongst all the peoples of the region. Regional security will grow as we develop greater mutual respect. I get that feeling very strongly at festivals of Pacific arts and culture. They are a celebration of so much that is good.

I am not announcing decisions on New Zealand's development today, but I am setting the stage for an announcement that the Government is planning to make early in September.

We are on the point of restructuring the delivery of our development cooperation to promote real security and development within our own region.

I am proud to be a part of that, and a part of a process which I hope will make your jobs all the more fulfilling, because I have no doubt that the work that you do, and the support we can give in government, are vital to the development and security of our region.


ENDS

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