Politics and aid don’t mix: Oxfam

Oxfam New Zealand is calling for the Foreign Minister, Murray McCully, to ensure that New Zealand’s aid dollars continue to be managed well and benefit the poor. Proposed changes to NZAID, the government's aid programme, threaten to tie aid to a political agenda and throw away past investments that have built a world-class institution.

“After eight years of investment, New Zealand now has an aid agency that we can be proud of – one of the best in the world. Its work in the Pacific is starting to make a real difference in tackling the problems of poor education and health care, inadequate water supply, poor governance and weak economic growth. This investment should not be thrown away lightly. There has not been the evidence and justification to do so,” says Oxfam New Zealand’s Executive Director, Barry Coates.

Mr McCully has initiated two quick reviews of New Zealand aid, intended to be finished in a few weeks. He has made it clear that he wants to see the government semi-autonomous agency, NZAID, re-absorbed by the Ministry of Foreign Affairs (MFAT). The review of the structure of New Zealand’s aid programme will be undertaken by the State Services Commission, and the review of the mandate for aid undertaken by MFAT and NZAID. The Minister has stated that there are no plans for broader public consultation.

By contrast, there have been three extensive reviews of this issue over the past seven years - the 2002 study that led to the establishment of NZAID, a Peer Review by the OECD in 2005 and a review ordered by Cabinet, completed by Dr. Marilyn Waring in 2005. Each of these reviews was based on a thorough review of the evidence and the input of a wide spectrum of government officials from different departments, development charities, Pacific governments, experts and other political parties.

“Three comprehensive reviews of the status of NZAID came to the same conclusion – that NZAID should be allowed operating autonomy from MFAT to build a coherent and effective aid programme,” says Coates.

“The weight of this evidence should not be discarded for a cursory review that does not look at the effectiveness of the spending of taxpayers’ funds. There needs to be evidence, transparency, consultation and Parliamentary scrutiny that includes the views of experts and those that have had direct experience of NZAID’s work.”

Coates said the risks of re-integrating aid into MFAT are illustrated by the experience prior to the establishment of NZAID. The 2002 review identified a major problem being one of mixed agendas: aid is about helping people work their way out of poverty, whereas foreign policy is about pursuing New Zealand’s interests abroad. As the review stated, these two missions are not only fundamentally different, but can sometimes be in conflict. The lack of focus on professional aid management resulted in programmes that were characterised by the 2002 review as ‘disorganised, unstructured, haphazard and arbitrary’.

Oxfam New Zealand is calling for the mandate and focus of the New Zealand aid programme to continue to be on poverty reduction.

“A poverty reduction aim is important for the accountability of aid. Most government aid agencies around the world have a focus on poverty reduction to ensure the benefits get to those who need them. Otherwise, funds spent on promoting economic growth are all too easily captured by powerful elites in developing countries. For example, instead of supporting a road to get the produce from impoverished farmers to market, aid money is spent on a road to the Prime Minister’s house. Without a poverty reduction aim, aid is more likely to be spent to gain political favours and fuel corruption.”

The Minister for Foreign Affairs has argued that economic growth should be the aim of the aid programme, not poverty reduction. It is true that most of the Pacific has suffered from poor economic performance over the past decade, and that economic development is important. But a poverty reduction focus is not inconsistent with supporting economic development. In fact, economic development is vital for poverty reduction. Countries need strong agricultural production, fisheries, manufacturing and service sectors in order to provide jobs and generate income.

The problems of poor economic performance in the Pacific are often caused by a lack of government accountability to their people and misguided policies pushed by donors. These problems are likely to be made worse by the proposed focus on economic growth and making aid subservient to New Zealand’s foreign policy interests.

Coates concluded: “The provision of aid by the New Zealand government should be for the benefit of people living in poverty - those without access to adequate food, water, housing and livelihoods. New Zealand taxpayers are not supporting aid because it will benefit rich elites in developing countries. Nor are they supporting aid to be used as a sweetener to persuade other governments to accept our political agendas. Aid is to help those less fortunate than ourselves. It is vital that poverty reduction remain the overriding goal for the New Zealand aid programme.”

Notes:

1. Even before the conclusion of the review, the Foreign Minister has said that he is seeking changes in the NZAID structure to bring it closer to MFAT and to change the mandate for poverty elimination.

2. The OECD supports the adoption of poverty reduction for its members’ aid programmes and many of the OECD countries have done so. Countries including Australia, Britain, US, Canada and The Netherlands have a similar structure to NZAID’s semi-autonomous status.

3. The OECD Peer Review of NZAID in 2005 concluded that “the reorientation of New Zealand’s development co-operation has been impressive”.

4. The Foreign Minister was quoted in the NZ Herald on March 3, 2009 saying, “You could ride around in a helicopter, pushing hundred dollar notes out the door and call that poverty elimination.”

However, this statement is incorrect and misleading. NZAID has built a credible platform of strategies and policies to ensure that aid benefits the poor. The programme is managed by skilled professionals and is widely regarded as world class. Their work focuses on poverty reducing programmes for basic education, primary health care, clean water and sanitation, livelihood opportunities and good governance. Throwing dollar notes around does not qualify as contributing towards poverty elimination.

ENDS

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