Title: New Zealand’s ODA – “The Paddles that Bring Growth from Afar”?
Due Monday 5th September 2011
A change of government in 2008 resulted in sweeping changes to the mission, policy settings and institutional arrangements governing New Zealand’s Official Development Assistance (ODA). The two most significant changes were a shift in focus away from poverty elimination towards economic development, and an increase in the proportion of ODA being allocated to the Pacific region. These changes aroused concern, not least within New Zealand’s aid and development NGO community. Many NGOs relied on government funds for a high proportion of their income, and were accustomed to a funding scheme that prioritised community development projects with a focus on poverty alleviation, and also emphasised partnership, participation, capacity building and gender equity. NZAID (n.d.) What We Do. However, non-economic and economic objectives for aid are not mutually exclusive, and it is not necessary to give up the former in order to advance the latter. This essay examines the Palm Project Vanuatu, run by the New Zealand Children’s Health and Education Trust [NZCHET], a community-based project that has evolved over time to encompass health, sustainable livelihoods, training and capacity building, women’s empowerment, and economic development. It provides a possible model for New Zealand NGOs who want to remain eligible to access government funding under the new policy settings, without sacrificing their original mission or principles.
The first section of this essay provides a brief outline of recent political changes to the mission, policy settings, and institutional arrangements governing New Zealand’s ODA. The second section outlines the history of the Palm Project and its achievements, and then analyses these achievements in relation to the priorities and objectives of New Zealand’s ODA, under both the former and the current regime. Finally, the third section discusses what lessons may be learned from this project regarding aid effectiveness.
Part 1: Why New Zealand Provides Official Development Assistance – Political Changes.
From 2002-2009, New Zealand’s ODA was delivered by a semi-autonomous agency, the New Zealand Agency for International Development [NZAID]. NZAID’s Policy Statement describes the agency’s vision as “A safe and just world free of poverty”, and its mission statement was “eliminating poverty through development partnerships.” Its strategic outcomes were listed as fulfilment of basic needs, sustainable livelihoods, sustainable and equitable development, safe, just and inclusive societies. In the foreword, Phil Goff, then Minister of Foreign Affairs and Trade [MFAT], linked the agency’s central focus on poverty elimination to the Government’s wish to be a “good international citizen and neighbour.” He also stated that “people and partnerships are at the heart of NZAID’s work. … The approach is inclusive.” NZAID (2002) pg 3-8.
However, a change of government in 2008 resulted in rapid and dramatic changes in the mandate and policy settings for New Zealand’s ODA. In 2009, a paper submitted to the Cabinet External Relations and Defence Committee proposed that the central focus of New Zealand’s ODA be shifted away from poverty elimination and towards “broad-based sustainable economic development …” Accordingly, the new mission statement for NZAID was to be “support sustainable development in developing countries, in order to reduce poverty and to contribute to a more secure, equitable and prosperous world.” It was also proposed that a greater proportion of ODA be directed to the pacific, and that “New Zealand’s ODA outcomes should be consistent with and support New Zealand’s foreign policy and external relations outcomes under the direction of the Minister of Foreign Affairs.” New Zealand Cabinet (2009 a) pg 2. Around the same time, another cabinet paper proposed that NZAID’s semi-autonomous status be revoked, and that the management of New Zealand’s ODA be reincorporated into MFAT, while retaining a separate vote for ODA. New Zealand Cabinet (2009 b) pg 1.
Today, the programme previously managed by NZAID has been renamed “The New Zealand Aid Programme”, and is now managed by MFAT. The New Zealand Aid Programme’s International Development Policy Statement includes the new mission statement as quoted from the cabinet paper above, and states that “as a small donor committed to effective development, the New Zealand Aid Programme will build on our comparative advantage and align with New Zealand’s approach to foreign and trade policy.” MFAT (2011) pg 2. “broad-based sustainable economic development” is presented as the means of achieving wider development goals. However, it is conceded that for economic development to yield results, improvements are also needed in the areas of education, health, governance, environment, and security. Accordingly, four priority themes are listed: “Investing in economic development, promoting human development, improving resilience and responding to disaster, building safe and secure communities.” MFAT (2011) Pg 5. It is also stated that a higher proportion of New Zealand’s ODA will be allocated to the Pacific region. The reasons given for this include the region’s poor progress towards the Millennium Development Goals, and New Zealand’s geographical, historical and cultural connections with many Pacific Island countries. MFAT (2011) Pg 3.
Part 2: Evaluation of a Project in Relation to the objectives of The New Zealand Aid Programme
Project Outline: The Palm Project – NZ Children’s Health & Education Trust [NZCHET]
The Palm Project’s website outlines the history of the project from its beginnings as a women’s collective response to a health problem, to its evolution into a successful community development project with wide spread health, social, and economic benefits. The project began in Peskarus village in the Maskelyne Islands Vanuatu in 2007, when medical teams indicated a need for an anti-bacterial, anti-fungal soap to treat skin infections, scabies and lice. In response, NZCHET arranged a workshop were 37 local women learned how to make soap from locally produced coconut oil, and imported tea tree oil. The health benefits were immediately apparent, and soon there was a demand for the soap from other villages. The Palm Project (n.d) home page & 2007 Timeline.
In 2008 NZCHET obtained just under NZ $40,000 funding from NZAID through the KOHA-PICD funding scheme to build a small soap factory. Students from the local rural Training College were employed to build the factory. They taught the NZ project manager how to reinforce concrete with bamboo, and he taught them how to utilize split coconut logs for building. The Palm Project (n.d.) 2008 Timeline. Market research indicated a demand from local hotels and resorts if a full product range could be produced in sufficient quantity (body lotion, shampoo and conditioner as well as soap). In 2009 the factory was upgraded to facilitate this, and was awarded contracts to supply resorts in Vila. The Palm Project (n.d.) 2009 Timeline. In 2010 the Palm Project began exporting its products through ACTIV, and association that promotes Vanuatu products overseas. The Palm Project (n.d) 2010 Timeline.
A KOHA-PICD project report submitted by NZCHET to NZAID in 2009 describes how the project has benefited the community in numerous ways. Prior to the project, 75% of children suffered from scabies, and the soap has almost eradicated this problem. NZCHET (2009) pg 20.The economic benefits from the projects have raised the standard of living not only for the people who work in the soap factory, but also for the families who produce coconut oil, and the builders who built and then upgraded the factory. NZCHET (2009) pg 12. Women have been empowered as their traditional skills (coconut oil production) and new skills now generate income. As the benefits of the project have become apparent, male elders who initially opposed the project have since expressed their support. In addition, a number of men have asked to be involved, and have learned soap-making from the women. NZCHET (2009) pg 20, pg 14-15. Local capacity has been built in a number of areas. Along with soap making knowledge, the villagers have acquired business skills such as developing new product ranges, price setting, market research, book-keeping and financial management. Students from the Rural Training College learned new building skills from project managers while working on the factory, and having an example of their workmanship on display has enabled them to secure other building jobs. NZCHET (2009) pg 16-18. Environmental sustainability has also been integrated into the project. The generators installed in the factory run on coconut oil which produces 50 % lower emissions than diesel, and solar panels have also been installed. The products are made without the use of harmful chemicals. NZCHET (2009) pg 22.
Analysis in relation to the NZ Aid Programme’s policies and priorities:
The Palm Project is particularly interesting because it first received government funding under the previous NZAID mandate and policy settings, yet it also appears to conform to the current policy settings and priorities of the New Zealand Aid Programme.
It is clearly a community based project which incorporates the partnership approach to development mentioned in NZAID’s 2002 policy statement. The initial purpose of the project was to meet a basic need and improve the health of the local community, but as it evolved and expanded, it began to contribute to other strategic outcomes mentioned.
Sustainable livelihoods were provided for many villagers, and the project had a real impact in terms of poverty elimination. E.g., villagers reported they were now able to buy rice and pay their children’s school fees as a result of income from the sale of coconut oil. NZCHET (2009) pg 22. It may also be argued that the project contributed to “equitable development” and “inclusive societies,” in the sense that opportunities were provided for both men and women to become involved and acquire new skills, and the economic benefits of the project were widely distributed.
Three years after the project first received funds from NZAID, the project may also be judged a success if evaluated in terms of the current priorities of the New Zealand Aid Programme. It is located within the Pacific region, the programme’s “core geographic focus” MFAT (2009) pg 3, and now has a clearly apparent economic development component. The Palm Project has resulted in a successful business which utilises readily available local resources. E.g. coconut oil, Tamanu oil (a natural antiseptic), cocoa beans, and turmeric. NZCHET (2009) pg 8. The Palm Project has expanded its product range to meet demand from the local tourism industry. The International Development Policy Statement of the New Zealand Aid Programme identifies tourism as a priority for investment, as it is perceived as a sector that has high potential for economic development MFAT (2011) pg 6. In addition, the project’s engagement with ACTIV indicates that the product range has clear export potential.
Part 3: Conclusion – Lessons Learned Regarding Aid Effectiveness
An examination of this project highlights a number of important lessons regarding aid effectiveness:
- A project is more likely to be successful if it is driven by the community it is supposed to benefit. This project began in response to a need expressed by the local community; that is, for an anti-bacterial and anti-fungal soap. When it became apparent there was widespread demand for the soap, NZCHET met with Palm Project participants, and asked them what they wanted to happen next. The Palm Project (2011) home page. The NZCHET project report (2009) pg 11-12 describes a meeting during which representatives from three villages were elected to design a new product range, workers were elected to learn more advanced soap making skills, a fair price was agreed for purchasing coconut oil from local families, and the price of the soap was re-assessed.
- The cultural and social context of a project is very important. Expatriate staff should be aware of this, and be prepared to adapt plans accordingly. In this case, gender inequality, which took the form of opposition to the project from male elders, had to be addressed with great care. A case study from the Council for International Development (CID) (2011) pg 3, describes how support was built for this project amongst the local community and the council for the Maskelynes area (a powerful, male-dominated institution) by holding public meetings, and ensuring that men as well as women were elected to the Palm Project Committee.
- Although political actors in donor countries may choose to prioritise certain strategic outcomes for ODA (e.g. meeting basic needs and equitable and inclusive development, or economic development and alignment with foreign policy), in reality, this division is somewhat artificial, as there is a high degree of interdependence between non-economic and economic outcomes. A project aimed at achieving one aid objective may have unanticipated consequences (positive or negative) for another. An integrated approach that at least takes this into consideration would be advantageous. To use an analogy, in order to bring “growth from afar”, you have to paddle on both sides of the waka (canoe).
- In order for a project to evolve and take advantage of new opportunities for economic development, it is crucial that adequate resources are provided in a timely manner. The funding received from NZAID through KOHA-PICD in 2009 allowed the Palm Project to provide training in advanced soap making and business management, design a new product range, and upgrade the soap factory to ensure reliable supply once contracts were secured in 2010. The information in the KOHA-PICD report supports NZCHET’s claim that the recipients of these funds “… made independent financial decisions that were not only correct but also fair and advantageous to their business and the community.” NZCHET (2009) pg 18. This in itself presents a strong argument in favour of aid for development.
The Council for International Development (CID) (2011) www.cid.org.nz/publications/MDGS_CASE_STUDIES.pdf Accessed 06/08/2011
NB: since this document was accessed, CID’s new website has gone live, and this document is no longer available online.
NZAID (2002) Towards a safe and just world free of poverty: The NZAID Policy Statement. Wellington: New Zealand Agency for International Development (NZAID).
NZAID (n.d.) What We Do. Retrieved 3 September 2011, from http://www.aid.govt.nz/what-we-do/archive/koha-picd.html
New Zealand Cabinet (2009 a) New Zealand Agency for International Development (NZAID): Mandate and Policy Settings. Wellington: Office of the Minister of State Services, Office of the minister of Foreign Affairs. Pg 2
New Zealand Cabinet (2009 b) New Zealand Agency for International Development (NZAID): Institutional arrangements. Wellington: Office of the Minister of State Services, Office of the minister of Foreign Affairs. Pg 1
NZCHET (written by Liane Farry) (2009) KOHA-PICD 3A: Project Report Form and Block Grant In-depth Report Form. Wellington: (NZCHET) Pg 1-22
The Palm Project (n.d.) About. Retrieved July 13, 2011 from www.palmproject.org/about
The Palm Project (n.d.) 2007 Timeline. Retrieved July 13 2011 from www.palmproject.org/about/2007-timeline.
The Palm Project (n.d.) 2008 Timeline. Retrieved July 13 2011 from www.palmproject.org/about/2008-timeline. Accessed 13/08/2011
The Palm Project (n.d.) 2009 Timeline. Retrieved July 13 2011 from www.palmproject.org/about/2009-timeline. Accessed 13/08/2011
The Palm Project (n.d.) 2010 Timeline. Retrieved July 13 2011 from www.palmproject.org/about/2010-timeline. Accessed 13/08/2011
 KOHA-PICD (Kaihono hei Oranga Hapori o te Ao – Partnerships for International Community Development) is the name of the NZAID funding scheme which allocated funds to NZ NGOs for
community development projects and programmes. The fund was abolished in June 2010, and replaced by the Sustainable Development Fund (SDF).
 The Council for International Development is an umbrella organisation for New Zealand’s aid and development NGO’s.
 This analogy is taken from the Maori name for NZAID, “Nga Hoe Tuputupu-mai-tawhiti” or “the paddles that bring growth from afar.” NZAID (2002) pg 1.