Aid landscape set to widen

Thursday May 10, 2018 Written by Published in Politics
Finance minister Mark Brown. 18050915 Finance minister Mark Brown. 18050915

Finance minister Mark Brown says Pacific countries will continue to develop relations with emerging partners such as China, despite significant increases in foreign aid to the region from New Zealand and Australia.

This week, in their budgets for the next financial year, New Zealand and Australia announced their commitment to increase aid to Pacific island countries.

This move is seen by many as a way to counter China’s growing influence in the Pacific.

New Zealand has increased its foreign aid by $714 million, representing a 30 per cent increase, primarily for the Pacific, over the next four years. New Zealand is increasing support for multilateral and humanitarian agencies.

In its federal government budget, Australia also announced increased aid to the Pacific, with the region set to receive $1.4 billion over the next two years.

While welcoming the new commitment from both countries, Brown said Pacific countries would continue to develop relations with newer, emerging development partners such as Japan, India, Korea and China. 

He said this would only complement their long-standing partnership support arrangements with New Zealand, Australia, the European Union and other more established development partners.

“Pacific countries have been the recipients of development assistance from China for a number of years. Particularly for the bricks and mortar type of infrastructure development that New Zealand and Australia have not been involved in (for some time),” Brown said.

“The expectation has been that if New Zealand and Australia want Pacific countries to reduce development assistance from China, then they must find a way to fill the gap. It looks like they are now putting their money to back up their statements.

“I would say that the world is increasingly becoming a smaller globalised community.”

According to Radio New Zealand, a significant boost in New Zealand’s foreign aid budget has been heralded as part of a transformative shift in the country’s relations with Pacific islands.

New Zealand’s foreign minister Winston Peters said it was time to reverse the pattern of under-investment in the Pacific which over the past nine years left New Zealand open to criticism that it had abandoned its neighbourhood.

Peters said more money had been earmarked for responding to climate change and other emergencies.

Australia’s commitment to the region represents 30 per cent of their total foreign aid which is worth about $4.5b. The $1.4b to the Pacific is Australia’s largest contribution to the region.

Brown said the announcement by the New Zealand government was a confirmation of their commitment to the “Pacific Reset” that prime minister Jacinda Ardern and her deputy Winston Peters spoke about during their Pacific tour to the Cook Islands.

He said it may mean that the Cook Islands and other Pacific countries can expect to see an increase in their New Zealand development assistance budgets.

“This will no doubt be part of our current ongoing discussions on the next three-year allocation of development assistance,” Brown said.

“We do have some areas where we expect to see a continued support such as health and education, as well as tourism. But I would expect New Zealand to also look at areas of climate change and carbon emission reductions, as it is one area of priority for the New Zealand government.”

Meanwhile Brown said New Zealand’s aid support to the Cook Islands would not be affected by the country’s probable graduation to developed status next year.

New Zealand had made a commitment that it would not reduce its commitment to development assistance to the Cook Islands if the country graduated under the Organisation for Economic Co-operation and Development (OECD) criteria, he added.

“Australia has yet to make a statement to that effect and they also have a much lower development assistance profile in the Cook Islands, which is harmonised with New Zealand funding,” Brown said.

“However Australia has confirmed that the Cook Islands will be a recipient of a new patrol boat replacement, regardless of our graduation status.”

Official Development Assistance from New Zealand in the 2017/18 financial year was worth about $40.2m.

Australia’s ODA grant to the Cook Islands in the same period was $226,591. 

Leave a comment