Islands Business - WE SAY: Aid wake-up call for islands governments

NOVEMBER 2009 ISSUE

‘The self-governance model has also created inefficient, uneconomic and wasteful governance.
The model and emphasis on a plethora of regional meetings combined with UN per diems payable
to participants has created financial inducements for the region’s leaders and public servants.
They maximise their incomes by constant travelling rather than focusing on issues at home and
the delivery of services including education, health and infrastructure to their people’

One of the many fallouts of the global economic meltdown has been the tightening of their budgetary belts by the governments of Western nations. As redundancies mounted in the past three or four financial quarters and job queues and lines of people depending on the dole lengthened, these governments came in under increasing pressure from people to curb expenditure.
As the deleterious effects of the financial downturn began to unfold early this year, it was expected that these countries would begin to rationalise every avenue of their spending including international aid and we had said in these columns that the Pacific Islands having had to depend a good deal on Western aid could be affected by these tightening moves. This was besides being affected by the decreased inflows of remittances because of job losses in the Western world and, of course, a fall in the number of tourists.
While decreases in remittances and numbers of tourists visiting the Pacific Islands have indeed been registered—in some countries as much as 20 percent—there hasn’t been any notable effect on aid inflows, except in the case of some measures announced by the National government elected late last year in New Zealand that has sought to cut some of its aid budget to the islands.
Most other countries have continued without cuts but this is probably because these amounts had been committed in previous budgets. As the full blown effects of the downturn become evident and many of these countries find themselves in growing deficits that are beginning to look untenably high as in the case of New Zealand, the clamour for rationalisation in international aid is only likely to grow.
This has begun to happen in New Zealand—at least as far as the three Pacific Islands territories that are in free association with it: Tokelau, Cook Islands and Niue. Last month, John Hayes, chairman of the New Zealand Parliament’s foreign affairs, defence and trade committee was scathing of successive governments’ policy toward these islands.
In a speech to the Institute of International Affairs, he exposed several decades of the tack New Zealand’s governments had taken in their approach to these islands, which in a larger context, could be seen as criticism of the country’s aid approach towards the whole of the Pacific Islands in general.
For instance, he asked why the Pacific people were being driven from their homes to seek a better life in New Zealand. Answering that question, he places the blame firmly on poor leadership in the islands and well intentioned but misguided policies on the part of New Zealand governments. By implication, the governments in New Zealand have taken no cognizance of, or chosen to ignore the poor governance regimes in these islands.
It is hard to differ with Hayes’ clear rationale because he backs up his observations, statements and a strong sense of conviction with hard facts. In his words, “A comparison of the number of Cook Islands, Niuean and Tokelauan people living at home or in New Zealand shows unequivocally that the time has come to acknowledge that the ‘self government in free association’ model has failed to deliver New Zealand levels of income and social services though it does work for the political and bureaucratic elite.
“A significant majority of these communities have voted with their feet; over 90% in the Cooks and 98% in Niue. Yet Niue retains 20 members of parliament for a community of 1200 people. One MP was elected with six votes being cast.” If Auckland was populated with the Cooks’ ratio of MPs, then it would have 2400 members of parliament.

“No community can afford that level of repreAsentation. A core issue is that the large political and bureaucratic establishment has not delivered income or services at a level their communities want.”
And if nothing else does, it is this observation that will get the goat of most New Zealand taxpayers: The country’s government is providing almost $40 million each year in aid to less than 3000 people living in Tokelau and Niue (more than $13,000 per head). This, at a time when increasing numbers of mums and dads are finding it harder to make ends meet in New Zealand.
Hayes continues his scathing indictment: “The self-governance model has also created inefficient, uneconomic and wasteful governance.
The model and emphasis on a plethora of regional meetings combined with United Nation’s per diems payable to participants has created financial inducements for the region’s leaders and public servants.
“They maximise their incomes by constant travelling rather than focusing on issues at home and the delivery of services including education, health and infrastructure to their people.
“Cook Islands parliament passed a law making it a crime to divulge how much parliamentarians spend on travel. I understand it is around $5 million—that is 5% of the national budget.
“The model has encouraged Niue to employ around 90% of its total population from 18 and 60 years of age in the public service. For too long the region’s public servants have used aid funds to build bureaucracy.”
Although admittedly his remarks pertain to the three islands territories that are in free association with New Zealand, his severe indictment is bound to rub off on aid approaches to other Pacific Islands, at least in the common people’s minds. This is sure to add grist to the mills of the relatively small but strident lobby of anti-aid activists who have been demanding rationalisation of aid approaches.
This is a wake-up call for the governments of Niue, Tokelau and the Cook Islands. The criticism clearly exposes the way they have been squandering their mandate and the largesse they receive in a way that it hardly percolates down to the grassroot levels. Small wonder that so many people living there want to exercise the option of permanently packing their bags and living in New Zealand when they find themselves left out of the gravy train that is appropriated by elected representatives.
One fact that clearly stands out from all this is that foreign governments propping up the islands with aid do not contribute to good governance.