Friday, July 14, 2006

Bob Geldof is right; we are pathetic

Bob Geldof has called the government's official development assistance "pathetic". And he's right; we are. A comparison of 2005 official development assistance spending [PDF; sortable version here] shows that we rank second lowest in the world in absolute terms, and 18th out of 22 OECD countries by percentage of GNI. While the former is understandable, most of the other countries being richer than us, the latter is not. As Bob Geldof said, this surely does not represent the spirit of the electorate.

As for Winston's response - claiming that Geldof has his facts wrong - that is even more pathetic. Geldof was entirely right: we spend a miniscule amount on aid, and far less than we have promised. Notoriously, the government won't even set a timetable to achieve that promise, and with the miniscule increase in the last budget, has effectively reneged on its own somewhat pathetic target of increasing aid to 0.35% of GDP by 2010. As for remittances and peacekeeping, these are not aid - and to argue otherwise corrupts the very idea (what next? The US counting the destruction of Iraq as "aid"? Or maybe the tanks and guns they give to Israel to murder Palestinian children?)

The one good point is that New Zealand's aid is, in fact, aid - rather than a disguised corporate welfare programme for New Zealand businesses, and that we have kept our promises to the world's poor on access to our markets. But that's not enough. We've promised 0.7% by 2015, and we should keep that promise.

As for what we can do about it, the Point Seven campaign's advice is good: write to your MP, and tell them you want to see New Zealand keep its promises. Stuff has also asked for feedback on Geldof's comments, so filling out the form here would also help. Previous comment from Labour party activists has been that the government needs to see a strong show of support from the public in order to commit to a substantial increase, and this is an opportunity to provide one.


Percentage of GDP is misleading means of measuring overseas aid contribution for two reasons. 1) It doesn't include exported personnel and 'human resources'. 2) It doesn't take into account that Government revenue as a percentage of GDP is a lot lower in New Zealand than many other OECD countries.

Perhaps New Zealand should give more aid. But it's a bit too simplistic to take aid contributions as a percentage of GDP as a point of comparison.

Posted by Anonymous : 7/15/2006 11:18:00 AM

Firstly, the government didn't seem to think so when it promised to meet the 0.7% benchmark by 2015. And secondly, our government's slive of GDP may be slightly lower - but its not that much lower. We're not the US or Texas here...

Posted by Idiot/Savant : 7/15/2006 11:36:00 AM

Here's another crack at arguing that it's fine for NZ to give lower percentages than most of the OECD... we're poor.

Paying 20% tax on 20K per annum hurts more than paying 20% on 40K let alone 20% on 200K - the diminishing marginal utility of money is utterly real (even if it can't explain risk aversion as M. Rabin recently proved) - hence we shouldn't and don't have flat tax, i.e., since what matters is that the distutility burden of the cost of govt be shared out approximately equally. (And yes interpersonal utilities can be compared...)

So the poor should pay lower average tax rates....

Similarly then if Norway or whomever pay .7% GDP to overseas aid their disutility hit is *nothing* compared to the hit we'd take for paying the same percentage. Probably we should pay only .1% to get the same effect/be making the same sacrifice as Norway since they're on twice our per capita GDP.... (that's a quick back o' envelope calculation).

In sum, if you accept progressive taxation then you should reject flat percentage contribution schemes for foreign aid.

Remarkably it's almost impossible to find anyone on the political spectrum who is consistent about this. i/s is hopeless, but so is everyone else.

NZ was stupid to agree to .7% in the first place *except insofar* as it was thereby heroically agreeing to do much more than most other OECD members with its slenderer resources. (Was that what NZ thought it was doing?)

Finally... Geldof... well at least he's (finally) right about trade but the money/aid bandwagon is just a hopeless mess. A Paul Theroux op-ed I've linked to before explains why.

Posted by Anonymous : 7/15/2006 05:59:00 PM

maybe the answer to that is to stay out of peacekeeping.
We could save money by only having an army useful for "last ditch defence" and thus have more money free for donations.

Posted by Genius : 7/15/2006 06:46:00 PM

I think the main argument is that NZ agreed to something (I assume this is strictly true) and it isn't delivering on that.

Or I would say the UN took a commitment and isn't enforcing it.

That agreement was in the sense you look at it pretty generous and disadventageous to those at the bottom of the OECD - but I think I/S would probably argue the rate should be progressive AND much higher for everyone (if he thought about it).

Posted by Genius : 7/15/2006 06:54:00 PM

I think the main argument is that NZ agreed to something (I assume this is strictly true) and it isn't delivering on that.

Well... it depends whether the agreement was sensible/fair/rational to begin with, which I argued that it isn't (assuming NZ wasn't being heroic).

So, is it "pathetic" not to keep ones crazy pledges or to only already be making a much bigger sacrifice in the name of foreign aid than richer countries generally are? I think not.

Also, surely there just is a problem of basic coherency here: the NZ people want .7% spent on foreign aid but they also want 100% of spending on everything else. (You, Genius are exceptional for suggesting giving up on peace-keeping to pay for the aid...)

They want a friggin' free lunch.... Since that doesn't exist and they're just being big babies (as usual) to ask for it, the question is only which of the various pledges made in their name etc. will be broken; that at least *one* will be is a given. Thus it may as well be the one we *know* for a fact is crazy (assuming the original aid pledge wasn't heroic).

And all of this is *before* one brings up the general objections to the aid/money bandwagon.

I think I/S would probably argue the rate should be progressive AND much higher for everyone (if he thought about it).

Well, that would be a substantial shift in ground - .7% for us, 3.5% for Norway and so on. – a standard relative to which everybody would currently be judged pathetic (but New Zealand still would be less pathetic than most). A veritable triumph.

Posted by Anonymous : 7/16/2006 01:25:00 AM

Another point is that the UN measure never takes into account private aid donations, which may make NZ look better. Remember also that those pushing for the government to do more, could do worse than give from their own pockets to aid organisations themselves.

Posted by Libertyscott : 7/16/2006 12:16:00 PM

BTW you seem to bring a new and inciteful perspective (at least compared to most) on all sorts of topics. Good to have you around.

Posted by Genius : 7/16/2006 12:45:00 PM

Liberty scott you're completely wrong on this one.

The UN target is 1% : 0.7% from Government and 0.3% in private donations.

I don't know if private aid is at that level, but I doubt that it makes up the shortfall

Posted by Anonymous : 7/16/2006 01:05:00 PM

genius, thanks, you're very welcome. I appreciate your general constructiveness too.

Posted by Anonymous : 7/16/2006 11:43:00 PM