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It’s done: NZAID is merged back into the Ministry of Foreign Affairs and Trade, and the key focus statement is changed from ‘poverty alleviation’ to ‘sustainable economic growth’.
However, perhaps the Government did listen to some of our protests. Although NZAID is merged back into the ministry, we are assured that it will not be the same as in the days before its establishment. NZAID will continue to exist as an organisation within MFAT, with specialist staff, its own budget, and its own priorities (although these will have to be aligned with overall foreign affairs policy). Initially at least, the changes are designed to ensure budget savings by rationalising management and financial systems through the whole Ministry. While we continue to oppose the use of development aid as a foreign policy tool, the promise of continued budget increases is welcome. If the saving achieved by the merger means that the total amount of money goes further, then we will all be cheering!
The new statement of NZAID priorities, while, as promised, putting economic growth at the top, continues to include the basic poverty oriented development principles:
"Through its development assistance, NZAID supports activities that encourage economic growth; help to create safe, just and inclusive societies; fulfil basic needs; achieve environmental sustainability; and reduce hardship."
NZAID Currents magazine, April 2009
Economic growth and poverty elimination are two sides of the same coin. They are not opposites, and Mr McCully is right in saying that economic growth is necessary to enable the governments of poor countries to do more for their own people.
If NZAID programmes can produce economic growth that creates “safe, just and inclusive societies; fulfils basic needs; achieves environmental sustainability; and reduces hardship” then no one will be objecting.
Economic growth should be “safe, just and inclusive”, but history shows that free markets are not the way that happens. The developing countries have discovered this to their cost, which is why many of them are now baulking at the WTO Doha Round trade negotiations. “Free Trade” has not been free, and has worked to the advantage of the wealthy partner. There are too many examples where economic growth has either bypassed, or worse still, been at the expense of the poorer communities of a developing country.
It will not be enough for Mr McCully to use trade and tourism statistics as the objective measure of the success or failure of his approach. Both trade and tourism can be used to either help or to exploit the poor. Large scale, up-market tourist resorts on Pacific Islands look good and make big profits for their owners while injecting very little into the local economy.
How should we address the Pacific trade deficits that Mr McCully rightly points out are unconscionably in New Zealand’s favour? Do we stop importing South American bananas and promote the development of large scale banana plantations in the Pacific? The history of corporate ownership of banana plantations is ugly reading, containing stories of land-grabbing and serious exploitation of workers (see Fair Trade's banana campaign).
Economic growth as a development tool is do-able. However it will not happen just by opening opportunities to the private sector. It must be focused to being pro-poor. It must enable and empower the poor, rather than exploiting them.
We have just had Fair Trade fortnight, and the principles of the Fair Trade movement have been promoted. Fair Trade has to move out from being just a niche market with a feel good factor like organics. Rather Fair Trade principles have to become the foundation for the mainstream economy. Pro-poor business can be based on standards of corporate social responsibility that respect the rights and needs of producers and workers in the developing countries. Growth does not have to be through sweat-shop production!
The real measure of the success of Mr McCully’s economic growth policy for development aid will be in the extent to which that growth reaches the poorest communities. We have yet to hear how he intends to make that happen, but we are ready to work with him if he shares the vision for pro-poor growth.
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