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Development assistance and humanitarian aid

by John Overton

New Zealand’s reasons for giving aid to poorer countries have varied over time. Some governments have focused on alleviating poverty and humanitarian ends, while others aimed to foster political stability and benefit trade interests. Aid efforts have often targeted countries in the Pacific.


Increasing aid, 19th century to 1970s

Assistance up to the 1940s

From the 19th century missionaries provided schooling and medical care in the Pacific. The New Zealand government had a colonial relationship with its territories (Cook Islands, Niue, Western Samoa and Tokelau) from the early 1900s and directly funded some of these administrations, investing in education, health and infrastructure. The money was not seen as ‘aid’, but as part of New Zealand’s colonial responsibility.

After the Second World War, when European colonies in Africa, Asia and the Pacific started to become independent nations, New Zealand adopted the idea emerging worldwide that ‘development’ could be engineered by rich countries providing financial and material resources and technical assistance to poor countries. However, New Zealand’s financial commitment was limited and there was little public support for financial aid.

Government and non-government aid

In Europe two post-war assistance efforts influenced the western world’s (including New Zealand’s) approach to aid. The Marshall Plan, funded by the US, sought to reconstruct war-torn Western Europe through government aid and industrialisation. The political aims were to stabilise Europe and counter the threat of communism.

During the war non-government relief agencies such as Oxfam had arisen in Europe. Following the war they continued to appeal directly to the public for money, clothing and food to help communities in need.

Pacific decolonisation and development

The South Pacific Commission, created in 1947, coordinated social and economic development activities. In the mid-1960s its total budget was around £345,000. New Zealand contributed around 16% – $1.87 million in 2010 terms. The council’s name changed to the Pacific Community in 1997.

Western Samoa was the first former New Zealand territory to become independent, in 1962, followed by self-government in free association with New Zealand – virtual independence – for the Cook Islands in 1965 and Niue in 1974. The British colony of Fiji became independent in 1970, and New Zealand began to take a more direct interest in it. In these countries development assistance from New Zealand began to take the place of direct budget support. It took the form of projects such as agricultural advice, forestry development, road building and educational support.

Aid rises in the 1970s

Most aid in this era was bilateral aid (given by one country to another). The Norman Kirk-led Labour government of 1972–75 boosted aid, with greater support for Pacific Island countries and South-East Asia. New Zealand’s role shifted from a primarily military one (in the Malayan Emergency, Vietnam War and South-East Asia Treaty Organisation) to one that supported economic development in countries such as Singapore, Malaysia and Thailand.

From the early to mid-1970s government aid spending increased from $13.3 million to $59.7 million. New Zealand committed itself to the goal of devoting 1% of its gross national income to aid, and achieved 0.52% in 1975. The global oil crises and economic decline slowed growth and for the next 20 years New Zealand aid declined as a proportion of its gross national income.

‘What am I doing here?’

Don Crump, a young agricultural economist, worked from 1970 to 1972 at Khon Kaen in north-east Thailand as a Colombo Plan adviser. He managed to convince authorities that Western-style ranching of cattle was not a good idea in that area. ‘There were times I thought, “Heck what am I doing here and what can I do to make things go better?” I guess I was lucky to have been able to get a few things done.’1

The Colombo Plan

The Colombo Plan was an initiative of the British Commonwealth (later joined by other countries). It sought to raise living standards in South-East Asia through aid provision. From 1951 New Zealand supported some projects in Asia – mainly through education, training and supplying technical experts. More importantly it funded students from Asian countries to attend New Zealand universities and other training courses.

Non-government aid

CORSO

Founded in 1944, the Council of Organisations for Relief Services Overseas (CORSO) raised funds and sent assistance throughout the world. Its early focus was on humanitarian relief. From the 1970s it also supported development aid, and questioned strategies that did not directly target poverty. More controversially, it raised questions about poverty in New Zealand. This more radical approach saw its former broad-based political support collapse, and it lost funding from the Robert Muldoon-led National government. As CORSO declined, other agencies appeared, including Trade Aid.

VSA

Volunteer Service Abroad (VSA) – inspired by US President John F. Kennedy’s Peace Corps – was founded in 1962 and initially sent mainly younger New Zealanders off to work with communities in the Pacific, South-East Asia and Africa (from 1986). Over time volunteers with a wider range of ages and experiences were chosen. The average age of a VSA volunteer in the 2000s was 48.

Footnotes
  1. Quoted in The Colombo Plan at 50: a New Zealand perspective: 50th anniversary of the Colombo Plan 1951–2001. Wellington: Ministry of Foreign Affairs and Trade, 2001, p. 23. Back

Declining aid, 1980s and 1990s

A market-led approach

Following the election of the David Lange-led Labour government in 1984 the country underwent a radical process of reform that cut public-sector expenditure and deregulated the economy. At first, aid was not directly affected, but in the early 1990s the aid budget was reduced by a National government. In 1996 it was 0.21% of gross national income.

Aid programmes shifted from government-supported activities to those that worked more with civil-society organisations (such as community and professional associations) or the market. The sharp reduction in aid for recipient governments was used to encourage public-sector reform in countries such as Samoa and the Cook Islands.

Low-level support

New Zealand aid shrank so much during the 1980s that by the end of the decade its aid contributions were the second-lowest of all the OECD countries (the Organisation for Economic Co-operation and Development, whose members were developed wealthier nations). It didn't matter which political party was in power – aid fell under both Labour and National governments.

Trade and aid

More aid was directed towards specific projects with limited objectives and time horizons. The emphasis shifted away from poverty elimination and towards activities that both encouraged development through the growth of markets and provided prospects for New Zealand companies to trade. New Zealand’s aid programme was a matter of ‘doing well out of our doing good’, as Don McKinnon, minister of foreign affairs and trade, said in 1995.1

While aid declined in this era, the distinctive style of New Zealand’s overseas assistance was retained. This focused on recipient needs, targeted rural areas and emphasised technical assistance. Most projects funded were small (80% were under $150,000). During the 1990s around 75% of New Zealand aid was bilateral (given by one country to another).

Growth of non-government agencies

A large number of non-government development agencies began to appear or expand their operations during the 1990s. Some were local branches of international organisations, such as Oxfam, Tear Fund, World Vision, Save the Children and UNICEF. The aid they distributed around the world is termed multilateral aid as it came from many different governments and other sources.

Although these agencies often had different mission statements (for example World Vision is a Christian organisation), in effect they competed for public donations and government support. Some, such as World Vision, were successful in appealing for public support through campaigns such as child sponsorship and 40-hour famines. Many engaged in raising money for relief after natural disasters (cyclones in the Pacific or famines in Africa). Some also acted as sub-contractors, delivering government-funded projects through their overseas networks.

Focus on poverty elimination

In this market-driven era of aid, New Zealand followed global trends but did so slowly. There was a major international change of direction in aid, beginning in the early and mid-1990s. This new direction resulted from questioning of the market-driven model, which had debilitated governments and their ability to deliver basic services. It was also influenced by coverage of devastating famines in Ethiopia and resultant worldwide fundraising campaigns.

Global institutions, including the World Bank and bilateral aid agencies in Western Europe, began to explicitly focus on poverty elimination. There was also a recognition that governments had to be supported more effectively to deliver basic services to their people in a democratic and transparent manner. The focus on poverty was reflected in the United Nations Millennium Development Goals of 1999. One goal was to halve acute poverty in the world by 2015.

Footnotes
  1. Quoted in 'NZODA review: overseas aid benefits everyone.' Development Business 6 (October 1995), p. 1. Back

Poverty agenda, early 2000s

NZAID

Although New Zealand was slow to adopt the new worldwide focus on poverty elimination, in the early 2000s there was a fundamental change. A 2001 review of the aid programme led to the formation of a new government agency, NZAID, in 2002. NZAID was largely separated from the diplomatic concerns of its host ministry (Foreign Affairs and Trade), and it set about recruiting new staff and reviewing its programmes. Funding increased and it was given a clear mandate to concentrate on poverty alleviation.

Aid moved from former Polynesian territories (Samoa, Cook Islands), where development indicators were relatively good, to Melanesian countries (Papua New Guinea, the Solomon Islands, Vanuatu), where basic literacy, infant and maternal mortality and gender equity were far worse. These countries, along with Indonesia, became the main recipients of New Zealand aid over the 2000s. Money was channelled away from discrete projects into longer-term initiatives, often funded through government programmes such as primary education and health care.

Aid increased significantly, from $212.7 million in 1999/2000 to over $484 million 10 years later. Government funding for humanitarian relief also increased, notably in response to natural disasters such as the Asian tsunami of 2004.

Depending on aid

In the 2000s Tokelau's overseas aid (most of it from New Zealand) was considerably larger than its GDP. Economic development was very difficult, due to isolation, a tiny, scattered population and a lack of resources apart from the fishing grounds. Agriculture was at subsistence level, as there was little soil on the coral atolls, and most food was imported from Samoa. The public service was the largest employer, followed by the village workforce, and the main revenue streams were from sales of postage stamps, souvenir coins, handicrafts and fishing licences for yellowfin tuna.

Multilateral aid increases

Non-government aid agencies’ relationships with NZAID deepened as they secured contracts to deliver programmes in countries where NZAID did not have strong bilateral relationships with governments, or where it sought a closer direct link to communities and local institutions. More of New Zealand’s aid was channelled through agencies such as the World Bank, Asian Development Bank, United Nations Development Programme and World Food Programme. This saw multilateral aid increase to a third of New Zealand’s total aid.

Non-government aid agencies expanded, mainly as a result of this increased government support but also because of greater public donations. Their activities widened and some, such as Oxfam, took on greater advocacy and campaign roles, supporting moves to combat climate change or promote fair trade, or lobbying for Third World debt relief.

Security and self-interest

Following the terrorist attacks in New York in 2001, and, closer to home, the Bali bombings of 2002, aid was seen as critical in supporting the security and stability of states. In the Asia–Pacific region the risk to states arose less from terrorism, and more from internal conflict and the apparent inability of some governments to cope.

In the 1990s New Zealand sent military forces and aid to East Timor and Bougainville (in Papua New Guinea) in response to civil conflict and economic collapse. Aid became an instrument in efforts to promote political stability. In 2003 the Solomon Islands appeared on the brink of collapse as a result of regional conflict. Following a request for help, a regional assistance mission was sent and New Zealand was a part of this. Police and military personnel went first, soon followed by a large and long-term aid commitment.


Aid and politics

Changes since 2008

The John Key-led National government elected in 2008 made further changes to the aid sector. It brought NZAID back under the direct control of the Ministry of Foreign Affairs and Trade (MFAT), arguing that it should not have an independent mandate but should be guided more by New Zealand’s wider economic and political interests. The government also pushed for a greater focus on long-standing ties with Polynesia (Samoa, the Cook Islands, Niue, Tokelau and Tonga) and less on Africa and Asia.

The mission of New Zealand’s aid programme changed from poverty alleviation to a less well-defined concept of promoting sustainable economic development. The government also signalled a different role for non-government agencies. Direct funding of non-government agencies for development projects and humanitarian relief ceased and MFAT assumed greater decision-making power. Despite these major changes, aid allocations in gross terms continued to rise. The 2010 aid budget of $525 million, although at 0.34% a smaller percentage of gross national income than the 1975 aid budget, was larger in real terms than at any other time.

Multilateral and bilateral aid

Aid often comes with strings attached. Bilateral aid is usually shaped by the national politics and foreign policy objectives of the donor country. Recipient countries may be required to fulfil specific political conditions or to purchase goods from the donor country. Multilateral aid is not tied in this way. It also increases coordination of aid, and reduces the administrative burden on the recipient country. But multilateral organisations are very powerful – they may bring their own agenda to bear, and impose their way of operating rather than adopting local systems and processes.

Enduring themes in New Zealand aid

Unlike other countries where public donations and private philanthropy were important, in the early 2000s New Zealand’s government was still by far the largest source of aid – even if some of this was then allocated to non-government agencies for distribution. It seems likely that government policies will continue to be the major influence on New Zealand’s contribution to overseas development aid.

There was an ongoing tension between the need to align with international agreements and practices and the need to define a particular New Zealand identity and approach to aid. Typically this tension meant addressing the key question as to how much aid to allocate bilaterally (with strings attached and greater control by the donor country) or multilaterally (fewer strings attached and less control by the donor country).

Aid policy has also varied depending upon the international political situation. For example, from the 1950s the Colombo Plan was seen as a way to increase security in the region and halt the spread of communism.

In the 1970s and 1980s aid was an important part of the country’s approach to foreign policy and was given primarily for political rather than humanitarian reasons.

Public support for aid

In a 2005 survey 76% of the New Zealand public were supportive of giving aid while 24% did not support giving aid and judged it a failure. It was a big shift from the early 1950s, when there was limited political or public support for giving financial aid.

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Different governments have had different underlying ideologies driving aid policy. Left- and right-leaning governments have debated the extent to which aid should be guided by principles such as the country’s economic trade interests, its foreign policy objectives, international or regional security concerns, or poverty alleviation.

A major issue has been how MFAT’s mission to promote and defend New Zealand interests fits with its mission to provide overseas aid – which promotes and defends the interests of the world’s poor. Over the 1990s and 2000s left-leaning governments have made these missions more distinct while right-leaning governments have brought them closer together. There have also been disagreements over where aid should be distributed – to the Pacific or elsewhere.


Hononga, rauemi nō waho

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How to cite this page: John Overton, 'Development assistance and humanitarian aid', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/mi/development-assistance-and-humanitarian-aid/print (accessed 18 September 2019)

Story by John Overton, published 20 Jun 2012