3 May 2012

Business role proposed in new NZ aid delivery plans

10:49 am on 3 May 2012

Consultations over the New Zealand government's plans to allow private businesses to compete for foreign aid funding close this Friday.

The aid community has raised concerns that the proposed NZ Partnerships for International Development could end up benefitting companies in this country rather than the intended recipients in developing countries.

Don Wiseman reports:

The new scheme would be contestable by non-government organisations, the state sector and private businesses, which fits with the government's commitment to sustainable economic development.

But spokesperson for New Zealand Aid and Development Dialogues, Jo Spratt, says while expanding the private sector in developing countries is crucial to alleviating poverty, the government has to ensure the money allocated goes to helping poor people, not assisting New Zealand businesses.

"What the aid programme has to guard against in firming up this fund, if it does go ahead, is making sure that if private sector organisations, private businesses, do engage in aid work, they are doing so to help advance the opportunities of poor in countries that receive our aid, rather than bouncing back to New Zealand to help New Zealand businesses."

The head of development studies at Victoria University in Wellington, Professor John Overton, says the scheme seems geared to ensure New Zealand companies get a bigger slice of the aid budget.

He says he is against the fund in its present form and is concerned the likely oversight panel has a strong business background but little involvement in aid and development.

And I think that really reflects current policy which is using the New Zealand Aid Programme to pursue an overall strategy of business development first and foremost.

The NGO, Oxfam, says a key consideration is that the proposed scheme makes sense in development terms.

Oxfam's executive director, Barry Coates, says it can't depend on decisions being made in offices in Auckland and Wellington.

He says the only way the aid will be sustainable is if Pacific people and institutions own the developments with support from New Zealand.

And Mr Coates says Oxfam wants to ensure the aid goes to the people who really need it.

We want to make sure that instead of concentrating on the kind of economic development that makes rich people richer in the Pacific, actually it has got to help through being inclusive, because the world is going through a process at the moment where there are increasing inequalities between people who are haves and people who are have nots, and the Pacific is no exception to that and we want to make sure that this is really a helping hand for the people who need the help the most.

Oxfam's executive director, Barry Coates.

New Zealand businessman, Gilbert Ullrich, whose company Ullrich Aluminium has long links to the Pacific, sees no conflict if the scheme goes ahead.

Big business must make a profit and re-invest and repay its loan money. Everything is not set up to be a foundation or something like that. I think the Pacific Islands people are pretty profit-conscious themselves and if it can make a not a large profit but a medium-sized profit it's a good idea.

Oxfam's Barry Coates says such a move is an uneasy fit but he says there are a number of companies with strong values that want to put something back, citing horticultural companies bringing in Pacific Islanders for seasonal work.

There are other examples of companies that operate ethically or with a social motive so we shouldn't categorise all business as being exactly the same in terms of profit maximisers. There are some very interesting business models out there where companies really want to be able to pursue social objectives while doing good business.

The New Zealand aid programme's office says they won't know how much money will be made available through the contestable fund until the consultations are concluded