Oxfam New Zealand Comments on the NZAID Pacific Strategy ...

<strong>Oxfam</strong> <strong>New</strong> <strong>Zealand</strong>
<strong>Comments</strong> on the NZAID Pacific Strategy Consultation draft
<strong>Oxfam</strong> <strong>New</strong> <strong>Zealand</strong> (<strong>Oxfam</strong>) appreciates the opportunity to comment on this
consultation draft. We welcome NZAID’s focus on the Pacific – it is also the
focus for <strong>Oxfam</strong>’s work. We have developed rights-based programmes in
PNG, Solomon Islands, Vanuatu, Fiji and Samoa, and have relations with civil
society organisations in other Pacific Island Countries (PICs) on Pacific
regional issues and advocacy.
We also appreciate NZAID’s focus on the reduction of poverty and hardship in
the draft strategy. The inclusion of civil society as an important actor in the
region is well-recognised in the strategy, and there is a welcome emphasis on
the need to support education and awareness-raising on people’s rights as a
foundation for good governance.
The following a major issues where we consider that the draft strategy
document and the strategy itself should be strengthened.
The Gap in Analysis
There is a worrying gap between the outline of the development challenges
faced by the PICs and the strategy itself. The missing level is a sufficient
analysis of the causes of poverty, hardship, conflict, poor governance and
other development challenges. This is important for two reasons:
1. Presentational - it is difficult to justify the expenditure of large amounts of
public funding in the Pacific if there is no justification in terms of analysis of
what has worked in the past, what has not worked and what will be done
differently in the future. Without this analysis, the strategy becomes an
easy target for those who can point to ineffective practices in the past and
argue that aid is going to be wasted in the future.
2. Substantive – <strong>Oxfam</strong> is aware that in some areas NZAID has
incorporated new thinking in its strategy, including the need for a clearer
focus on poverty and hardship, and the need for a strong civil society as a
foundation for improved governance. However, in other areas, we do not
believe that there has been sufficient analysis of the failures in aid policy in
the Pacific over the past decade, and therefore we have concern that, in
some areas, NZAID will continue to support policies that are likely to
undermine the aims of the Pacific strategy.
For example, <strong>New</strong> <strong>Zealand</strong> government trade policy has, over the past
decade, aimed to open up access to foreign investors in key sectors in PICs
such as forestry, fisheries and tourism. Yet there is considerable weight of
evidence from the Pacific and other regions showing that it is dangerous to
deregulate natural resource sectors in the absence of enabling conditions
such as a sound system for regulation and enforcement. Otherwise, the

esults are likely to be unsustainable resource exploitation, a lack of local
benefits, corruption, local resentments and conflict.
The PICs have suffered from these impacts. The results have been
experienced in sectors such as mining (most notably in Bougainville), forestry
and to some extent in tourism and fisheries.
The question for the strategy is what will change that will prevent these
problems from occurring in future and to ensure that future development
benefits the poor and vulnerable people of the Pacific, rather than creating
further hardship. <strong>Oxfam</strong> is concerned that there has not been the analysis to
understand the adverse impacts in the past and that the basic economic
policy prescriptions have not changed.
If the strategy was built on a strong analysis of the problems (eg. poor
regulation of corporate activity resulting in unsustainable resource use and
corruption) it would adopt a different set of policies in the future. For example,
the governance section of the Strategy puts the entire onus on failures of the
State (and by implication, failures of Pacific people to demand better
governance) without recognising the role for stronger and more transparent
regulation of business (para 19).
Similarly, the section on economic growth only talks about “supporting better
economic management” and “mechanisms to assist private sector
development” (para 21), rather than adoption of regulation to ensure that
private sector activity contributes to pro-poor growth rather than undermining
it.
ONZ recommends that, where there is credible analysis of the causes of
development challenges, it should be included in an Annex to the
Strategy, and cross-checked with the proposals in the Strategy to
ensure there is coherence.
Where such analysis does not exist, the commitment in the strategy to
“sound, evidence-based analysis” should be operationalised through a
commitment to prior assessment of major policy positions that would
affect Pacific peoples. This should apply to all significant policies of
NZAID or any other part of the <strong>New</strong> <strong>Zealand</strong> government. Such poverty
and social impact assessments are an integral part of the basis for
policy coherence and are increasingly used by agencies such as the
World Bank. They should be a part of NZAID’s ongoing policy
formulation and review processes.
The lack of Policy Coherence, especially Trade Policy
The paper is silent on trade policy, as one of the major policy issues that will
affect the development prospects of the PICs. In other contexts (eg.
negotiations in the WTO Doha Round, accession negotiations with countries
such as Tonga and Samoa, and in the Pacific Plan), the <strong>New</strong> <strong>Zealand</strong>

government is saying that trade liberalisation is vital for the future of the
Pacific. It is seen to have huge benefits for development prospects in the
region.
Others, including <strong>Oxfam</strong> agree that trade is likely to be important in the
economic future of the Pacific and trade policy is crucial for achieving
equitable and sustainable patterns of development. However, we emphasise
the potential risks of adverse development impacts that are likely to result
from poorly designed trade liberalisation, implemented too rapidly, at an
extremely early stage in the development path of PICs, sequenced before
PICs have a sound regulatory framework in place, with little or no consultation
and public education. The lack of these necessary prior conditions and the
severe structural disadvantages of the Pacific nations (some of which are
referenced in para 8) are likely to mean that trade liberalisation carries major
risks for the poor and vulnerable people of the Pacific.
While <strong>Oxfam</strong> and MFAT do not agree on appropriate policies for the Pacific,
we do agree that there will be profound development impacts. Therefore, it is
not credible for the draft strategy to ignore the likely impact of these trade
negotiations. It is especially surprising that these are not central to the
strategy since the <strong>New</strong> <strong>Zealand</strong> government is deeply involved in promoting
these policies (as opposed to many of the other issues in the strategy which
are primarily determined from within the PICs).
It should also be recognised that the outcomes of trade negotiations will also
affect the ability of PICs to achieve a number of the development outcomes
that are incorporated into the Strategy. For example, the ability of PIC
governments to institute policies that would increase value added (last bullet
point in para 21) will be influenced by the outcome of negotiations in the
WTO, WTO accession agreements, EPA negotiations and PACER
negotiations. In the WTO, agreements on subsidies, Trade Related
Investment Measures and the General Agreement on Trade in Services have
the potential to limit the scope and type of policies that governments can use
to subsidise certain kinds of economic activity, require conditions of investors
or provide incentives for developments such as processing raw materials.
These issues were, for example, part of the demands made by the WTO
Accession Working party (including <strong>New</strong> <strong>Zealand</strong>) during Tonga’s accession,
and Tonga gave up the right to provide incentives for companies to undertake
value added processing activities in its WTO accession agreement.
In some areas, the draft strategy recognises the lack of capacity of civil
society to hold their governments to account, for example in combating
corruption or the delivery of essential services. However, the strategy has no
corresponding recognition of the urgent need for civil society capacity building
in order to contribute to sound policy making on trade or to hold their
governments to account on trade policy. This lack of capacity has been
previously identified as a problem by NZAID and others and should be part of
a coherent policy towards trade and development issues in the Pacific.

The lack of inclusion of trade policy in the Pacific strategy is surprising in the
light of the recent Ministerial Review of Progress in Implementing 2001
Cabinet Recommendations establishing NZAID (the Waring review). While the
findings of the review have only recently been made public, they were
presumably known to NZAID during the formative stage of preparing this draft
consultation.
The Waring Review concluded that “NZAID’s effectiveness in the Pacific
region is inhibited by the lack of coherence strategy covering all <strong>New</strong> <strong>Zealand</strong>
agencies operating in the region.” (page 25).
The review’s recommendation 12 states:
“That a programmed and inclusive strategic process, directed at coherence,
operational sustainability and effectiveness of delivery, which recognises the
Pacific strengths of NZAID, be established as a matter of urgency for the
Government as a whole, with reliable regular mechanisms of accountability
and reporting to enable a cohesive multi-agency process for Pacific
engagement.” (page 25).
NZAID has a clear mandate to work on trade in the Pacific. NZAID’s policy
‘Harnessing Trade for Development’ calls for critical factors to be in place for
trade to contribute to development. It is clear that these factors are not in
place in the Pacific.
Therefore a relevant question for this strategy is whether NZAID will apply its
influence to change put in place the necessary conditions, implying a slow
pace of negotiations, or question the appropriateness of the trade
liberalisation initiatives to the Pacific.
<strong>Oxfam</strong> considers that it is vital that NZAID’s Pacific strategy does not duck the
challenge of policy coherence. Trade policy is important to the Pacific, it is
important to the achievement of the aims of this strategy and it is important
that NZAID play an active role in shaping <strong>New</strong> <strong>Zealand</strong>’s trade policy so that it
supports poor and vulnerable people in the Pacific.
We therefore recommend that the strategy include two additional NZAID
programme areas to:
• Support the Pacific governments to build their capacity, and that
of civil society, to be able to undertake objective and independent
research and assessment, to develop alternative policy options
(as part of the commitment to “sound, evidence-based policy”),
and to build a basis for wide consultation and public education
(as part of the commitment to good governance)
• Strive for policy coherence towards the Pacific within the <strong>New</strong>
<strong>Zealand</strong> government and with multilateral agencies, including
trade policy (extend Para 59). This programme area should be
explicit about NZAID’s own capacity building needs and the ways
in which the <strong>New</strong> <strong>Zealand</strong> government could be engaging with

civil society and demonstrating that it is putting into practice the
principles of evidence-based policy making, transparency of
information and prior informed consent.
The Missing Opportunity on Labour Mobility
Similarly, the draft Strategy is virtually silent on one of the other major
potential influences over the development prospects for the Pacific – labour
mobility. ONZ considers that the current policy frameworks for the movement
of labour fail to deliver on the potential benefits for the PICs, for <strong>New</strong> <strong>Zealand</strong>
and for the Pacific workers themselves.
ONZ considers that the strategy could play a key role in initiating the
development of an improved framework that addresses the problems such as
the recruitment of experienced professionals from the Pacific, thereby
contributing to ‘brain drain’, the shortages of labour at key times for the <strong>New</strong>
<strong>Zealand</strong> agriculture and horticulture sector, concerns over the potential for
workers to overstay their visas, and social problems caused when men or
women leave their families and communities to work overseas.
ONZ believes that addressing these problems has the potential to create a
framework that could provide more benefits to all parties. Substantial
improvement towards a so-called ‘win-win’ framework is possible. We have
forwarded documents on seasonal movement of labour, written by Nic
Maclellan of <strong>Oxfam</strong>’s Pacific Programme, to NZAID’s Pacific Group Director
following the recent consultation meeting on the draft Pacific strategy.
<strong>Oxfam</strong> recommends that the Strategy includes a section that seeks
engagement with PIC governments, NZ government departments and
civil society in <strong>New</strong> <strong>Zealand</strong> and the Pacific, including trade unions, to
develop an improved framework for migration and seasonal labour
mobility.
Strengthening NZAID’s Understanding of Pro-Poor Growth
“Is the reason we talk about growth so much that we understand so little about
it?” Dani Rodrik, Growth Strategies, Harvard University 2004.
We agree with the inclusion in the strategy of a need for policy dialogue that is
“conducive to pro-poor and broad-based growth” (para 55). However, there
are many different understandings of pro-poor growth and the strategy does
little to define what is meant by these terms. There is new analysis emerging
on the policy basis for pro-poor outcomes, not only from economic historians
like Ha-Joon Chang of Cambridge University, or leading academics such as
Deepak Nayyar (Delhi University) and Dani Rodrik of Harvard University (cited
above), but also new thinking from the more pro-liberalisation institutions,
such as the recent World Bank report “Economic Growth in the 1990s:
Learning from a Decade of Reform”.

While we have reservations with some of the analysis in the World Bank
report, it usefully moves away from a one-size-fits-all approach to identify the
need for stronger research and understanding on the complexities within each
society. This is a process that we hope NZAID will engage in, together with
governments of those countries and civil society. Such an approach would
support detailed analysis to understand the causes of poverty and hardship,
ensure there are consultations with a wide range of stakeholders (including
the poor) to identify policy options, and to support real democratic debate on
the decisions to be taken. In our experience, this is far from the current ways
in which policy dialogue is undertaken.
While civil society organisations do not have any claim to know the answers,
we would welcome a dialogue with NZAID on these issues. The base of
evidence that we use tends to be different to that used by governments. We
would be pleased to provide some of the titles and a summary of the research
to inform NZAID’s views on appropriate pro-poor growth strategies for small
island states. We would also be interested to see the research and evidence
that NZAID is using to inform its views of what constitutes pro-poor growth.
Many of the policies that have been promoted to PICs in the past are
contested. Over the past decade, donor governments and multilateral
institutions have changed the language they use to describe their policies.
However, the specific policies have been far slower to change and donors and
multilateral institutions have continued to press for a relatively standard set of
policy prescriptions, including trade liberalisation, privatisation, deregulation
and fiscal austerity.
These policies have all been advocated strongly in the Pacific, even though
there is growing evidence (some of it from the multilateral institutions
themselves) questioning whether these policies should be applied uniformly
across all societies, raising issues of sequencing, appropriateness for less
developed and vulnerable states, their impact on inequality and their
environmental sustainability.
Donors have an extremely powerful role in the Pacific, and their influence in
policy formulation has extended far beyond being one of many inputs into a
policy making process. This power and influence carries with it the
responsibility that donors will only advocate a particular policy when they have
very strong evidence that it will work for the poor.
It would be helpful if the current NZAID strategy could make it clear that
NZAID will seriously invest in evidence-based policy analysis, derived from
detailed assessment of the reality of policy impact rather than on economic
models, ensure there is adequate examination of policy alternatives and
ensure there is transparency and consultation in policy-making.
Therefore, <strong>Oxfam</strong> recommends that the Strategy:
• Includes a clear statement that NZAID is in a supporting role to
PIC governments and will review the prescriptive policy advice

that the <strong>New</strong> <strong>Zealand</strong> government has given in the past,
particularly with regard to economic policy
• Includes the statement that NZAID does not support inappropriate
economic conditionality such as trade liberalisation, privatisation,
financial liberalisation or fiscal austerity, and will work within the
<strong>New</strong> <strong>Zealand</strong> government to influence regional and multilateral
institutions to refrain from applying prescriptive policy advice
and/or aid conditionality.
• Includes a statement that NZAID will develop an evidence base for
its policy dialogue, to include social and environment impact
assessment, wherever possible, including the full participation of
groups within society that will be affected by the policy.
Principles for military intervention
The Regional Assistance Mission to Solomon Islands (RAMSI) has been a
significant regional initiative. But as NZAID sets out its strategy in coming
years, there is an urgent need to set clear objectives and end dates for the
regional intervention, and return relations with the Solomon Islands to regular
bilateral and multilateral linkages.
RAMSI derived much of its early legitimacy, particularly in the eyes of
Solomon Island citizens, from being a “law and order” or a “peace and
security” intervention, and the fact that it was invited in to achieve these aims.
Today it is evident that RAMSI has become a “state-building” intervention.
The legacy of a successful initial intervention, restoring ‘law and order’, is
being used to limit discussion of the more complex, open-ended, and less
tangible phase of building government capacity. The issues of lack of
participation, communication and accountability are impacting upon the
essential dynamic of legitimacy or social contract between RAMSI and the
local population. There is a tension between RAMSI’s self image as a
successful external assistance mission, compared with many Solomon
Islanders’ more critical perceptions of RAMSI as a de facto government.
RAMSI needs to do more to engage with civil society and communities,
harnessing the knowledge and skills that exist within these groups.
In cases of regional intervention, <strong>Oxfam</strong> recommends that NZAID’s
strategy support Pacific Islanders to address issues that go to the heart
of conflict and address the challenge of creating a lasting peace: land
disputes, resource extraction, benefit sharing, opportunities for youth
and community-based violence.
More broadly, the strategy should recognise the important role for <strong>New</strong>
<strong>Zealand</strong> to ensure that projects like RAMSI are truly regional, rather than
Australian-driven, and reflect the interests of all members of the Pacific
Islands Forum.

NZAID role in Pacific land tenure reform
<strong>Oxfam</strong> questions whether it is appropriate for NZAID to adopt a programme
aims such as ‘supporting appropriate land tenure’ (para 21). The question of
what is ‘appropriate’ is contentious, particularly when part of a foreign donor
strategy. The context is that the EU, the Australian government and others
have called for privatisation of land and fewer restrictions on ownership by
foreigners. For example, the EU has included a request for greater foreign
ownership of land in its requests of two Pacific nations under current WTO
GATS negotiations.
The inclusion of land tenure reform in the section that relates to economic
growth indicates that <strong>New</strong> <strong>Zealand</strong>’s interests are also driven by economic
considerations. This is a dangerous approach, given that land is not only an
economic asset but is central to the identity of many Pacific peoples and
potentially a source of bitter conflict.
The solution is not just to shift land tenure into another section of the strategy,
but to question why NZAID should be involved. It is not enough to identify that
land tenure is an important issue for the Pacific. As is clear from the NZAID
Strategy, donor funds are a small part of the overall funding available to PIC
governments and there need to be good reasons why donors should be
involved. In this area, there are very good reasons why donors should not be
involved and a real question over <strong>New</strong> <strong>Zealand</strong>’s value added.
<strong>Oxfam</strong> recommends that the Strategy does not include support for land
tenure.
The role of the Pacific Plan
The Pacific Plan was agreed by the Forum leaders in Port Moresby, but is by
no means a document that is widely supported or understood by Pacific
people. At last year’s Civil Society Forum in Port Moresby, organisations from
across the Pacific reported that few people were even aware of the Pacific
Plan’s existence.
The principles of good governance should require that civil society and the
public are involved in the preparation of a Plan that purports to provide a
roadmap for regional cooperation. This is by no means the case, and Pacific
society has made it clear on many occasions that the public information and
consultations processes in the process of preparing the Pacific Plan were
woefully inadequate.
Further, there are a number of provisions in the Pacific Plan that do not
accord with NZAID’s draft strategy. For example, the section of economic
growth lacks a framework that would prioritise pro-poor growth, and instead
merely talks about economic growth as an aim in itself. From <strong>Oxfam</strong>’s
analysis, the formulation of the Plan was strongly influenced by Australia and
<strong>New</strong> <strong>Zealand</strong>, and includes a rapid and deep trade liberalisation. The

inclusion of these policies was unsupported by research, assessment, public
consultation or transparency of public information. This is contrary to good
practice in policy-making and contrary to NZAID’s own policies and the
approach adopted in this strategy.
<strong>Oxfam</strong> recommends that the Strategy does not include the Pacific Plan
as one of the bases for NZAID’s engagement (para 51).
A consolidated approach to Water and Sanitation
ONZ considers that the proposed NZAID programme fails to recognise the
key role water and sanitation plays in underpinning development. There is a
serious risk that water and sanitation will not be given adequate recognition
amongst the other development outcomes presented.
Access to safe water and sanitation is vital to reduce preventable diseases,
avoiding the need for costly treatment and to ensure that treatment, when
given, is hygienic. The health gains and time savings from access to safe
water and sanitation have been shown to improve a wide range of health
indicators, provide opportunities for women to participate in other activities,
improve childcare and education opportunities, and contribute to better
livelihoods.
For example, <strong>Oxfam</strong>’s work in schools in PNG has shown that freedom from
the burden of water collection and sanitation has not only improved school
enrolments but also improved students learning through a reduction of
intestinal worms that sap energy and reduce concentration in class.
In the disaster-prone Pacific, progress on improving access to safe water is
met with constant setbacks as a result of natural and man-made disasters.
This means that a disaster management approach to water and sanitation is
necessary to reduce vulnerability and support sustainability.
Lastly, but perhaps most importantly, progress on water and sanitation is
hampered by weaknesses in governance. In addition to the overall
governance issues outlined in the NZAID draft strategy, the water and
sanitation sector has a unique problem in that responsibility is held by multiple
government bodies, none of which tend to view water and sanitation as a
main priority for their agency. Responsibility for water and sanitation is
usually shared between Ministries of Health, Public Works, Private Sector and
the communities themselves where water competes for funding alongside
basic healthcare, roads, company profits and daily subsistence respectively.
As a result, and despite its recognised place as a fundamental human right,
water and sanitation is too often neglected.
The NZAID draft strategy also adopts a fragmented approach to water and
sanitation. It mentions water and sanitation under several outcomes but
without a real focus. This approach has been a common failing amongst
international donors, and consequently water and sanitation often falls

through the cracks as outlined above. Recently, however, some government
development agencies such as DFID have developed a specific water policy
and action plan that draws together the governance, health, education,
livelihoods and disaster aspects of the water issue as a starting point to
combating this structural problem.
We therefore recommend that NZAID includes a separate outcome in the
Pacific strategy devoted to water and sanitation that draws together
references under each of the existing outcomes into a coherent and
focused approach. This will help ensure that water and sanitation
becomes one of the foundations for delivering on other outcomes.
Inclusion of Delegated Management
ONZ supports the inclusion in the Strategy of a strong push for harmonisation
of aid across donors in the Pacific. However, we are concerned about the
delegation of <strong>New</strong> <strong>Zealand</strong> ODA activities to other donors. For example, we
do not consider that the political direction of the <strong>New</strong> <strong>Zealand</strong> and Australian
aid programmes are harmonised, and we consider that there are major risks
to <strong>New</strong> <strong>Zealand</strong>’s aims if aid management is delegated to the Australian
government.
ONZ recommends that delegating management of <strong>New</strong> <strong>Zealand</strong> ODA
management be approached with caution and every effort made to
achieve harmonisation through other approaches.