‘….aid agencies and their policies have been criticised time and again for what has come to be known as ‘boomerang aid’, whereby a significant quantum of the committed aid is returned to the country as fees and wages paid to the huge army of consultants


Two developments in the past month are indicative of the turn New Zealand’s policies in the Pacific Islands neighbourhood are likely to take in the coming months and years.
One is overseas aid, valued at about half-a-billion dollars, which after the review ordered by the National Party-led government’s Minister for Foreign Affairs Murray McCully is widely expected to be integrated into the foreign affairs ministry.
This move has come in for much criticism from several of the country’s organisations working in the humanitarian aid sector, as well as the media.
While saying that a better focus on aid was desirable, the New Zealand Herald in an editorial after the announcement of the review that is perceived as a ploy to get more political control over the considerable aid budget that has been independently handled by aid agency NZAID, criticised the politicisation of aid.
It said, “Overall, that sharpening of focus seems reasonable enough. It does not, however, require the reintegration of NZAID into the Ministry of Foreign Affairs and Trade to achieve this. This should be rejected, as should any linking of aid to this country’s political ambitions. Aid works best when it is a regarded as a humanitarian gesture. Government tampering serves only to debase it.”
From the government’s point of view, the obvious argument at work here is that most aid giving countries have some sort of strings attached to further their political or commercial ambitions. Many times there is a discernible quid pro quo connection between aid provided and favours returned, however much both donor and recipient countries may refute this.
However, the donor countries may emphasise that aid is purely on a humanitarian basis and it is hard not to see some element of the quid pro quo equation. That equation could operate in many ways: ensure support and votes at the UN and other conventions dealing with politically and environmentally sensitive issues such as the International Whaling Commission, better negotiate commercial terms for the exploitation of natural resources within countries—and exclusive economic zones in the case of the Pacific islands nations.
While much of the aid from Asian economic powerhouses, at least, in the Pacific can be surmised to be on a quid pro quo basis no matter how well disguised, aid from the ANZAC nations has had a tradition of being handled independently by professional organisations without political or commercial interests.
But then, these aid agencies and their policies have been criticised time and again for what has come to be known as ‘boomerang aid’, whereby a significant quantum of the committed aid is returned to the country as fees and wages paid to the huge army of consultants and aid workers who are their own nationals.
Aid from Western nations, unlike that from the Asian countries, has also been dependent on the political developments in recipient nations.
Fiji is a classic example. While curbs have been put on its aid programmes by Western nations ranging from New Zealand and Australia through the European Union to the United States, Asian countries have steadfastly refrained from linking their aid programmes to its internal political situation.
Japanese and Chinese aid continues unhindered. In fact, there are several indications that China may actually be stepping up its aid to Fiji as its economic situation faces greater pressure. In the past month alone, there have been a number of new financial assistance packages destined for Fiji in several sectors.
Many Pacific Islands countries have also submitted or are in the process of submitting proposals for obtaining a part of the US$600 million fund announced some time back by the Chinese government for aid and assistance programmes in the Pacific Islands region.
It is quite obviously the far more politically and commercially pragmatic tactic that has long been the practice of Asian nations in their aid programmes the world over that has triggered a rethink in New Zealand’s approach to aid.
However much the government may try to soft pedal on this aspect, it would find it hard to completely refute the undercurrent of political and commercial strings the new arrangement as part of the foreign affairs ministry would afford its aid programmes.
Meanwhile, even before the review was released, McCully took his knife to the Pacific aid budget and excised the annual $1.95 million funding for a Pacific Islands based development programme.
It has been revealed that the minister cut funding for the Foundation of the South Pacific International (FSPI), a regional non-government organisation working in as many as nine Pacific countries.  
The country’s main Opposition Labour Party criticised the move saying it was a case of government interference. But the ministry has clarified that almost $1.2 million of the $1.95 million budget was being spent on salaries and wages for those employed in the programme, leaving little for the actual programme itself.
The other development that signals a change is the New Zealand government’s decision to scrap the Pacific Division of its Ministry of Immigration following revelations of a whole wide range of problems—from huge processing backlogs of applications from its Pacific Islands offices and poorly trained staff to injudicious use of departmental credit cards.
The most significant allegation being that its chief, Mary Anne Thompson, ran the division like her fiefdom. She resigned in the middle of last year under a cloud when investigations revealed that she did not have the qualifications she had said she did and for allegedly favouring relatives with their immigration applications.
Though the inefficiency of the Pacific Division of the ministry caused delays for Pacific Islanders in the processing of their immigration papers and the filling of country wise quotas, at least they had an office that they could relate to.
The government has announced no alternative as yet to the Pacific Division after it is dismantled. Which means that Pacific Islanders would be on par with any other applicant in the world, amply indicating that New Zealand’s long-held friendly, neighbourly ties with the islands that conferred a kind of special status on them is all set to change.