3
2009
A Response to Comments from Murray McCully
An article by 
The New Zealand Herald ran an article this morning on an issue that many in the NGO sector are aware of, namely a proposed shift in how the organisation that facilitates New Zealand government foreign aid is structured.
At the moment, the budget for foreign aid is facilitated through an entity called NZAid. I do not wish to go into the details of how NZAid is structured, its history and the proposed future, what I do want to address is two sentiments the Foreign Minister, Murray McCully, expressed in the article.
Mr McCully referred to the aim of “Poverty Elimination” as being too broad. He then referred to the current mode of distribution of foreign aid via NZAid as being a “hand out rather than a hand up”. With these two things in mind he was quoted as saying:
You could ride around in a helicopter pushing hundred-dollar notes out the door and call that poverty elimination.
This view is extremely simplistic and betrays a lack of understanding about how foreign aid is largely understood in New Zealand, especially within the ranks of NZAid and partner organisations like CiD (Council for International Development). My hunch is that Mr McCully is not that simplistic and is employing language and phrases that will endear the public towards whatever plan he has.
It is true that the aim of poverty elimination is broad, but it would be easy to note that the aim is broad because the problem is broad. To leave it at that though would betray the strict criteria by which foreign aid is distributed. No government organisation exists without criteria on how it will meet its objectives. NZAid has very strict principles by which it operates to achieve its mission. Joe Public can get a brief overview of this strict criteria by looking at the NZAid website.
On their website, amongst other things, you can view such things as:
- International targets
- Priorities
- How aid is delivered
- How they make aid work
- Evaluation at NZAid
A cursory glance through the above will quickly reveal that NZAid’s broad mission is backed up by a strong foundation of best development practice.
Since its establishment in 2002, NZAid has done an outstanding job of focusing the money our government spends on foreign aid. It has reduced the number of projects our taxpayer dollars are engaged in and it has brought more effectiveness to every dollar spent.
New Zealand gives 0.3% of our GDP to foreign aid and development, we are still 0.4% short of our UN commitment to 0.7%. What many Kiwis might not be aware of is the fact that whilst that is all we give, our current structure means that our administration of that money is one of the most effective in the world. There are countries that give more than that, but because of how those funds are structured, the money is nowhere near as effective as the current NZAid system. For that reason, there are many in the development sector around the world who look at New Zealand with a certain amount of envy.
With the criteria of NZAid distribution of funds in mind, their use of best development practice, the recognised effectiveness of New Zealand aid as compared to other countries that give more, Mr McCully’s comment likening current practices to throwing money out of a helicopter simply falls short of the reality and can only find an audience within people who look no further than the sensationalism of such a comment. I trust that the New Zealand public is smarter than that.
To state that the use of the funds has become more like a hand out rather than a hand up is also simply reverting to populist language to further a predetermined cause. The current government effectively campaigned on reducing needless spending within government ranks. They broadcast the idea that the last government was wasting money and propping up people who did not need to be propped up. This may have been true in many instances, but the use of tax payer money through NZAid to assist in community development amongst the poorest of the poor around the world (with a focus on the Pacific region), was not one of those instances.
The current government, including Mr McCully would rightly have a high view of trade, but it is clear that the effect of trade only goes so far and in most instances it does not reach the poorest of the poor in the developing world because such people people are marginalized and have no way of accessing the positive flow on effects of global trade. Any approach to assisting the poor and marginalized must be two prong.
A common understanding of trade involves a “trickle down effect” where the benefits “trickle down” throughout society, but a good approach to development amongs the poorest of the poor must involve lifting them to a place where they can access that which “trickles down”. Thus trade and development go hand in hand. Good development, as undertaken by the current structure of NZAid does exactly that, it facilitates the lifting of communities and far from simply throwing money out of a helicopter in the hope that it might make a difference, it engages the best development practices currently available to us in order to move poor communities towards self sustainability. If it does not act as a “hand up” then it falls short of NZAid’s criteria.
In light of all this I urge the Minister to truly examine the effectiveness of development aid prior to the establishment of the current NZAid structure, compare it to now and rather than pursuing a pre-thought agenda, engage the sort of developmental approach that good NGOs operate under – assume ignorance on your part, listen to the community whom you will be working with, hear their solutions, find a common ground and resource an effective way forward. Don’t rely on simplistic understandings to inform change since lives around the world literally depend on this. Any impact analysis will reveal that change of any sort will have a negative impact on communities we are engaged with globally – are we willing to count the cost in actual human lives?
To the public, I urge you to go beyond the populist, simplistic, and sensationalistic speak that has a pre-thought agenda behind it and do the investigating. If you do so, you will find a robust system of foreign development and aid within the New Zealand structures, a system that is the envy of the world.
Frank Ritchie
Education and Campaigns Manager (TEAR Fund NZ)
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About the Author: Frank Ritchie
Frank is the Education and Advocacy Manager for TEAR Fund NZ. Frank is a licensed Minister in the Wesleyan Methodist Church of New Zealand and has a keen interest in biblical perspectives of Justice and how this connects to service to, with and for the poor, disadvantaged and marginalized people of the world.
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http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10559626
You were missing a link to that article ^.^
Mouse over the first few words of the article.
So as I understand it.
NZaid pretty much works with the NGOs in New Zealand such as TEARfund, Worldvision, Oxfam and CWS to which it dishes out the 0.3% tax. This is obviously overly simplified.
I have also heard before this is an envied system although I am unsure how others work, I’m guessing less involvement with NGOs.
Now since I don’t know much about the structure of NZAid and how it was in the ministry of trade and how it is now.
I won’t really comment on that.
But I am interested in his comment on giving more to the Pacific.
53% currently of NZ’s aid goes to the pacific.
To quote him directly “Mr McCully said New Zealand’s aid policy would shift from NZAid’s current focus on ‘poverty elimination’ to one closer to the Government’s policy aims, such as economic development in the Pacific.”
I am of the persuasion that the problem is far to big for what is currently going in. And at an extreme, educating a child is no use if they have no healthcare and die.
Can our aid be considered to broad?
Bringing in a greater focus on our neighbours in the pacific could be a good thing.
However it all depends on how Mr McCully defines “economic development”
Totally broad term, as Frank pointed out I would question whether this will give any focus on issues of trade to ensure that money is given and invested where it is needed.
NZAid have done a great job of refining how our aid is used.
Your statement:
NZAid funds are focused in the Pacific. 53% focused in one area is significant. In terms of breadth where it may refer to the points within a community that it deals with, yes, this is broad since good community development engages as many points of need. You’re right, if a child gets to go to a school, but there is no development in any other area, it is a waste of time – currently, any money used in development and aid from New Zealand tax payers takes that into account.
To answer the first query, no, the whole fund is not administered through New Zealand NGO’s. There are specific funds that fit that purpose – KOHA and HAF. They are part of the budget.
Hopefully that helps a little, Benjamin.
KOHA that’s familiar, I’ve been on NZAids website once before.
Also something that I forgot to add as I trailed off somewhere else then came back
[quote]Bringing in a greater focus on our neighbours in the pacific could be a good thing.[/quote]
But this shouldn’t be made expecting something in return, nothing should be forced upon for this aid. But I’m sure that basis is covered, but the more you give the more they feel indebted I guess, as long as its there own feeling that’s okay I guess
Poverty elimination and sustainable economic development should never be painted as opposites. Ideally they should both be part of the same thing. You will not get sustainable economic development without some level of direct poverty elimination programmes; you will not get anywhere with poverty elimination without providing paths for sustainable economic development. It does of course depend on what you are defining as ‘poverty elimination’ and what is defined as ‘sustainable economic development’. If ‘poverty elimination’ is throwing money out the door of a helicopter, then yes, bring on economic development. If ‘economic development’ is bringing in the big corporations, then no way! Economic development requires healthy people with increasing levels of education. Health and education are the core poverty elimination programmes. These are the balances that all of us in development work with all the time.
Hi Paul, thanks for your input. Those are great thoughts.
frank have you emailed the minister? It would be interesting to know his response to your comments. I will try and get a chance to put this to our local mp (Deputy PM and Finance Min) to see what he might say
I have not emailed him yet.
Any effort to talk to politicians would be great.
A copy of my email to Murray McCully:
You can email him from here:
http://www.parliament.nz/en-NZ/Email.htm?e=zlCXYaiuZ23rigxbxUKk3%2bJXiXqouixO%2fOceWN9PyuH5&n=zlCXYaiuaW3rigxbxUI%3d
Dear Sir,
I read with some concern your comments on NZAid as reported in the NZ Herald (March 4).
I have just returned from a fact-finding trip to the Philippines, visiting development projects delivered by local NGOs supported by TEAR fund, some of which were partly funded by NZAid.
We visited a wide range of projects from Micro-credit programmes in Manila to community and economic development in rural communities.
The quality of planning, implementation, effectiveness and accountability of these projects was outstanding as was the competence and commitment of the NGOs. I saw no evidence of a culture of handouts, let alone of ‘hundred dollar notes pushed out the window of a helicopter’. I saw highly effective and well audited development assistance giving these, our neighbours, the chance to build their own economic security.
NZAid’s model of economic and social development funding delivery is highly regarded internationally – and rightly so. Its strategic planning, criteria for funding and auditing processes are rigorous and well grounded in best development practice.
I would strongly urge you to ensure that any review of NZAid is undertaken with an open mind and with broad consultation with those parties who have knowledge and experience of delivering the effective aid that New Zealand has become known for. The independence afforded NZAid by its current structure is a valuable part of the way our aid is deployed. I would not want to see this compromised without strong and well debated evidence for a change.
I believe that poverty elimination is not too broad a goal – the problem is broad and so must the response be. Poverty elimination and economic development are not competing interests – they are rather two sides of the same coin.
As a taxpayer and voter, I desire that my contribution to global development through New Zealand overseas development assistance is delivered in the most effective way possible and in a way that reaches the poorest of our neighbours. I believe that this is the mark of a compassionate society – and that is what I want this country to be known for.
Yours faithfully,
Chris Mason-Battley