Economics assignment report writing on: New Zealand’s Aid Policy And Institutions
Summary:
The National Party formed a new government in 2008 in New Zealand and by early 2009 the government rescinded the Semi Autonomous Body (SAB) status of the New Zealand government aid program. The policy settings of the aid program were also changed from poverty elimination to a focus on achieving economic development and growth. In this paper we shall to try to examine these changes along with a brief history of NZAID and also the way this agency looked like before these changes in relation to structure, policy and audits.
New Zealand had been providing ODA after the end of Second World War in three areas which include the aid to Pacific Island countries, bilateral aid to Asia as well as multilateral aid (Fry, 2009 p.77 4). The foundation of the present a program of New Zealand lies in the beginning of the 20th century when New Zealand acquired the colonial era responsibility of Cook Islands and Niue. It went on to develop similar relationships with Tokelau and Western Samoa. Since then the focus of New Zealand on South Pacific region has increased significantly and this increase has been particularly noteworthy since the 1980s.
The New Zealand Agency for International Development (NZAID) had undertaken a wide range of activities throughout the Asian region adopted a strategy which would provide a framework for the New Zealand’s Official Development Assistance (NZ ODA). Such a strategy was considered useful for increasing the focus of the aid program and also for the development of a shared understanding among its staff. Country Program Strategies (CPS) which were developed immediately after 2004 were aligned closely or were based on the strategic. It was used as a briefing document for the staff which was being posted in Asian countries and also provided input to the evolutions and strategies of NZAID. It also provided some direction to the decision-makers. However a weakness was also pointed out by many in the strategy. The newly established agency (NZAID) has been using the strategy to differentiate itself from the New Zealand Ministry of Foreign Affairs and Trade (MFAT) which has wider powers. However the present strategy does not place the aid program of New Zealand in the context of wider interests of the community of the country in Asia (Templeton1995 ,95).
When in 2008, there was a change in the government in New Zealand, NZAID was reintegrated into MFAT and the semi-autonomous status granted to it was withdrawn. A revised mandate along with the policy focus on the aid program of New Zealand was introduced in 2009 which laid more emphasis on the economic development. The present strategy did not show these changes in its focus. By reintegrating NZAID into the MFAT, the need for the strategy of New Zealand’s aid program to consider the interests of New Zealand community was highlighted. It is required that the strategy considers the maintenance of the balance between the humanitarian interests and the strategic and commercial interests of the country. It should also be able to provide guidance to the persons responsible for managing the NZ ODA programs in different parts of the world.
They then Minister for Foreign Affairs And Trade, McCulley revealed his perspective regarding the creation of NZAID during his speech at the New Zealand Institute of International Affairs in 2009. He wished to remind that the semiautonomous structure of NZAID was the creation of politics way back in 2002. However the decision was not purely political as there were clear signs that the aid program of New Zealand required a change and this requirement was highlighted by external reviews also. In 2001, NZ ODA was a part of the wider culture of MFAT and the Secretary of Foreign Affairs and Trade started an independent review of the culture and management system of MFAT which was conducted by an Australian firm called Advanced Dynamics. This review revealed the presence of an elitist culture which hampered the process of learning and engagement with broader policy thinking. Like some other external reviews, this review also questioned the use of rotational system of staffing and highlighted the need for specialist staff in vital areas (Schwass 2006,73).
After its creation the mission of NZAID was quite clear which was to remove poverty through the development of strategic partnerships which was in accordance with the vision of NZAID which was to work for a secure and just world which was free from poverty. The policy document titled “Towards a Safe and Just World…..” underlined four objectives of NZAID which were the realization of basic needs, providing sustainable livelihoods, providing sustainable and just development and also providing equitable and inclusive societies which were safe too. An elaborate set of policies guiding the work of NZAID complemented the high level policy settings which encompassed areas like health, education and trade through economic growth. Poverty has been defined clearly by NZAID which included a global understanding of the factors that constituted poverty as well as being relevant to the Pacific region. These included basic poverty and vulnerability to poverty and poverty of opportunity. NZAID made efforts to ensure that issues which were present in all fields of development like addressing different needs of men and women, Human rights were included in all the activities undertaken by the aid program. It designed tools which could help staff in guiding in the process of analyzing and integrating these issues at all the stages of the life cycle of the program like feasibility check, designing, implementing and evaluation. With the evolution of global thinking regarding aid, NZAID also redefined its operating principles especially for implementing the Paris Declaration and the Accra Agenda for Action (Hoadley 2002 ,93).
Particularly in relation to the Pacific region, the Pacific Strategy 2007-15 of NZAID developed a comprehensive approach regarding the work of NZAID in the region as this region had the main geographical focus of the agency. This strategy mentioned that NZAID would work for strengthening the governance and achieving a wide spread economic growth in the South Pacific region. Other goals articulated in the strategy were to improve health and education, building resilience and reducing vulnerability. The Pacific strategy 2007-15 also mentioned that the agency will work for supporting lesser but larger activities for a longer period of time (MFAT, 2009 p87).
NZAID was created for managing the priorities of aid and non-aid foreign policy which had becomes somewhat blurred. The focus of NZAID was on the long term development vision so that a safe and just world which is free from poverty could be created. On the other hand the activities of MFAT were to protect and promote the interests of New Zealand off shore and also to promote the trade and economic interests of New Zealand (MFAT 1993, 24). Within these clear aid and non-aid goals of the foreign policy, NZAID set up a system of interaction with MFAT which was aimed at the achievement of good policy alignment between these two goals of the foreign policy (McKinnon 2009, 43).
NZAID achieved considerable success in aligning the non-aid foreign policy goals with the aid goals which ensure that the non-aid foreign policy goals of New Zealand did not over ride the interests of developing countries. The policy adopted by NZAID of harnessing international trade for achieving development was designed after consultation with MFAT and other concerned ministries. The agency worked with the ministry of foreign affairs and trade to develop a common position on trade issues like the WTO’s Doha round. It also worked with MFAT to make sure that the development issues were paid required attention during trade discussions which included the Pacific Island Countries Trade Agreement (PICTA), Asia Pacific Economic Co-operation (APEC) and the Pacific Agreement on Closure Economic Relation (PACER) (Kennaway and Henderson 1991,76).
Various reasons were forwarded by the government and minister McCully for introducing major changing in the structure and policy setting of the aid program of New Zealand government. There is a problem in finding a clear set of reasons behind these changes as there was a lack of specificity in the foreign affairs policy of the National Party and the absence of terms of reference in the internal assessment conducted by government agencies. A number of reasons were given during media coverage and speeches. Five main reasons emerge from their perusal which includes the concerns in the foreign affairs policy of the National Party that the major problems identified by the 2005 Warring Ministerial Review have not been addressed previously. Other reasons included the perception that NZAID had been in effected and the idea that economic growth should be the focus for government aid rather than poverty elimination or reduction (Grossman and Lees 2001, 47). The need for better alignment of aid and non-aid foreign policy and the concerns regarding the financial management and accountability with a focus on NZAID audit report 2007 and the SAB structure were also the reasons behind the changes in NZAID.
Conclusion:
Economic development and economic growth have generally been treated as being the same thing because economic development is measured through economic growth which results in a change in GDP over a period of time. The Cabinet decision of May 2009 agreed that the mandate of the aid program of New Zealand would be on supporting sustainable development in the developing nations so that poverty can be reduced in these countries and the program could contribute in the making of over world more secure, prosperous and equitable. However the core focus of the aid program was agreed to be the achievement of sustainable economic development in these countries.
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