Q: How much of a priority should it be to give overseas aid when we are in the teeth of a global recession?
A: Even more of a priority than normal…when it is predicted the same recession will drive 100 million people into extreme poverty this year.
You might think overseas aid should get cut, along with pay equity, public sector jobs, research and technology, superannuation, public transport and so much else in these straitened times. You might think that. Especially if your name is Murray McCully or Bill English. But is it right?
I say no. The poor in developing countries are far more vulnerable than we are in times of global recession because they don’t have the safety nets we do. Which is why the World Bank and IMF are urging rich countries like us to accelerate our promised increases in aid. But last Thursday’s budget has the Government slamming on the brakes, stripping $194 million out of the next three years’ of aid spending. They are still increasing the aid budget in real terms but much more slowly than the multi-year commitments made by Labour.
Why does this matter? I think it is because we have a responsibility to people in our Pacific neighborhood who are worse off than us. No matter how grim the recession is for us right now, it is nothing compared to the extreme poverty felt by people in say Papua New Guinea who have much less ability to weather the storm. In the Pacific the financial crisis could well squeeze income from remittances and tourism. On top of shrinking aid budgets that could make life very tough. The other thing is that we have made international commitments to fight extreme poverty in the poorest countries. This goes beyond the year by year ups and downs in our own national circumstances.
With these Budget cuts National has walked away from a 30 year commitment by successive New Zealand governments to the international spending target on overseas aid which is 0.7% of Gross National Income per capita. Instead of reaching 0.35% of GNI as planned, New Zealand’s aid spending will stall at 0.31% for the next three years. This is a setback. New Zealand gives less as a percentage of our national income per head than almost any other developed nation. If we are going to meet our international responsibilities we must commit to staged increases year on year.
McCully professes not to pay much heed to the 0.7% target. Notes in the Budget documents confirm it is no longer a priority for this Government.
Readers may have heard Radio NZ report today that papers released under the OIA show Treasury did not think McCully had a strong case for getting rid of NZAID’s semi-autonomous status and warned of risks around the loss of transparency that would occur as a result of McCully putting the agency back into the foreign affairs ministry. There is plenty more where that came from but I will save it for another post.