Why does New Zealand have an aid programme: Peter Adams explains the role and functions of NZAID.

• Author: Adams, Peter
• Position: New Zealand Agency for International Development - Viewpoint essay

When I was 17 I left Christchurch to fly a very long route through Australia and Papua New Guinea to Solomon Islands or, as it then was, the British Solomons Islands Protectorate. That was in 1965, and I was to be a VSA school&aver volunteer on a one-year assignment to teach at an Anglican high school. Forty-three years later in 2008, as head of NZAID, I signed the current New Zealand aid programme strategy for Solomon Islands, an independent country since 1978. NZAID also happens to be the major funding channel for VSA. So I have a sense of having come full circle.

In this article I will focus on the last decade during which New Zealand's development co-operation programme, the aid programme, underwent a major transformation. What the key drivers of New Zealand's aid programme should be was a key question a decade ago. It is still a key question today.

Back in 2000 the OECD's Development Assistance Committee--the DAC as it is known--issued a periodic 'peer review' of New Zealand's official development assistance (NZODA). Behind the polite diplomatic language, it was quite critical of the shape and management of New Zealand's aid programme.

At the same time, the newly elected Labour-Alliance government undertook a ministerial review of the aid programme as promised in the lead-up to the 1999 election. Completed in mid-2001, the review by Joseph Grossman and Annette Lees, Towards Excellence in Aid Delivery, was much blunter than the DAC. It found a 'systems failure' in the management of New Zealand's aid programme on grounds of lack of focus, out-of-date or non-existent policy and strategy, high staff churn, and little institutional memory or learning. It particularly criticised what it saw as the muddling of foreign policy and development objectives, compromising the effectiveness of the latter.

The review recommended that aid management be removed from the Ministry of Foreign Affairs and Trade (MFAT) and placed in the hands of a 'stand-alone body', with a single goal--poverty elimination--for its development work. Matt Robson, the associate minister in charge of overseas development assistance, and Phil Goff, the Minister of Foreign Affairs, proposed to the Cabinet a halfway house, creating a new agency that was to be a 'semi-autonomous body' within MFAT.

Sharper focus

The New Zealand Agency for International Development--NZAID--came into being on 1 July 2002. Last year, in May 2009, not quite seven years later, Cabinet removed NZAID's semi-autonomous status and changed some of the policy emphasis. In 2002 the Cabinet had given the agency a mandate to bring a sharper focus and distinct profile, and to produce a whole new policy framework, for New Zealand's aid programme.

What are the 'best practice' approaches to development that NZAID needed to introduce into its policies and approaches from 2002 onwards? Development ideas and theories are numerous, contentious and changeable, partly because development is such a difficult, complex area, where the success rate is not exactly stellar.

How then did NZAID go about fufilling its mandate? The important features of the greater autonomy given to NZAID in 2002 were:

* the right of the agency to report directly to ministers, so that where aid funds were being used mainly for foreign policy purposes that could be exposed for debate

* and the right for the head of NZAID to appoint the staff, so that the...