Thursday, February 03, 2005

Selfish and dishonest

There was an excellent piece in this morning's Dominion-Post by Rae Julian of the Council for International Development on international aid. While we like to think of ourselves as a generous country, New Zealand spends only 0.23% of gross national income on international development assistance. This puts us in the bottom third of the OECD rankings in this area, between Spain and Greece. Other comparisons rank us even more poorly; New Zealand comes dead last in the aid component of the Foreign Policy / Center for Global Development's ranking the rich commitment to development index. While part of this is due to the weighting against small projects, it is also due to our low overall level of spending.

Worse, we have failed to keep our promises to the developing world. Four years ago, New Zealand (along with other rich nations) committed to increasing our level of aid to 0.7% of GNI in order to meet the UN's Millenium Development Goals. Yet spending has not increased, and a Parliamentary question today revealed that the government has "no specific timetable" for doing so.

"Selfish and dishonest" is not how most New Zealanders like to think of themselves, yet that is how our government is painting us. And it will continue to do so until we tell it to stop. To that end, the CID is organising a publicity campaign centered around a petition demanding that the government

...honours its promise to increase its contribution towards the struggle against global poverty by committing to a timetable for achieving the United Nations target of giving 0.7% of Gross National Income in overseas aid by 2015

(PDF downloadable here).

I'll be signing it. What about you?


Surely the quality of the aid dollars is more important than the quantity. What is often forgotten is that the liberalisation of the NZ economy and the low or no tariff barriers enable many a developing or poor economy to export their produce and products to us. Not that I am in the "trade, not aid" camp but both issues are important.

Posted by Hans Versluys : 2/04/2005 11:02:00 AM

It certainly counts for something, and NZ's aid spending is pretty good in that regard. It's all gifts, rather than loans, and none of it goes to buy tanks and guns. And the elimination of trade barriers to products from developing nations is important. At the same time, we could certainly be doing a lot more than we are.

Posted by Idiot/Savant : 2/04/2005 12:04:00 PM

I think ranking the rich has a point - our aid probably IS spent inefficiently due to a lack of scale. AND it is probably less effective due to the spending on various island nations (making it more expensive per "unit of good").

So the question is the "good will" bought (from us) by aid dependant on how much good it does or by how much it costs the country involved. if it is the later it encourages inefficiency and situations like the US giving aid to israel (not exactly a third world country) if it is the former it shames small countries who direct their own aid.

If the UN wants to set a level of aid required it should also set the destinations for that aid and distribute it fairly and with economies of scale.
Of course I am probably expecting to much of the world for them to be able to do things fairly and efficiently.

> It's all gifts, rather than loans

Surely none of these methods compare gifts with loans that is ridiculous. loans do however contain an oportunity cost which is thus the equivilent of the "gift" component - I expect any sensible person would compare them in that manner.

Posted by Genius : 2/04/2005 12:24:00 PM

Unfortunately there's no way around the scale problem with island nations. They have small populations and low population densities, meaning that aid is constrained to come in small packages.

The UN is ponting out where aid is needed - sub-Saharan Africa, mostly - but we tend to fund the needy countries in our own backyard first. Two-thirds of our development aid goes to the Pacific. I'm not sure if that counts spending on Tokelau or not (it's under NZ administration, and everyone there is an NZ citizen)

"Ranking the rich" discounts aid given as loans by the amount returned as interest payments. And rightly so, IMHO.

Posted by Idiot/Savant : 2/04/2005 12:36:00 PM