Waylaid Dialectic

April 28, 2017

Murray McCully’s lessons for all of us

Filed under: Random Musings — terence @ 2:32 pm

This post was published on NZ’s excellent foreign affairs blog Incline. I’m posting here to keep tack of my posts. But please go and read it on their site.

The end of an error, or two

Murray McCully’s time as New Zealand’s foreign minister is at an end. On 1 May he’ll be replaced by Gerry Brownlee. It’s hard to know what Mr. Brownlee will mean for New Zealand’s approach to foreign aid, but it’s easy to assess Mr. McCully’s legacy. He brought change, and he claims to have brought development when before there was only pseudo-expertise and waste. But the changes he made were either unneeded or harmful, and the development achievements he claims either haven’t occurred or can’t be attributed to him.

McCully will be remembered for reintegrating New Zealand’s semi-autonomous aid agency into the foreign ministry for no good reason. But the smaller injuries he inflicted on New Zealand aid were every bit as important. He took a well-functioning humanitarian emergency fund for NGOs and replaced it with one that was only able to get money out the door when stories of its dysfunction made it into the media. He killed off a similarly efficient fund for non-emergency NGO work. McCully’s botched humanitarian emergency fund was eventually repaired. But, as the latest OECD review pointed out, New Zealand still wants for an effective general NGO funding tool.
McCully changed the ethos of New Zealand aid. Outside of the Pacific, an increased share of aid was geared to bringing economic or geopolitical benefits to New Zealand. There were cows without borders. There were training programmes that brought young businessmen and women from Southeast Asia to New Zealand for the explicit purpose of strengthening business ties. And, when they were surveyed in 2015, most stakeholders–including private sector stakeholders–thought New Zealand aid was more focused on bringing benefits to New Zealand than it was on helping the poor (see pages 12 and 13 here).

There were also odd undertakings, which mightn’t have been solely about helping New Zealand, but which still didn’t seem like the actions of a country focusing its aid on need or effectiveness. There was, for example, training the Royal Hashemite Court of Jordan so it could run a private, non-profit air ambulance service (p. 44). And aid to St Lucia to develop geothermal energy. (In 2015, both Jordan and St Lucia had per capita GDPs above $10,000 in purchasing power parity adjusted dollars. By way of comparison, Samoa’s PPP GDP per capita was $5,934; Solomon Islands’ was $2,200.)

Foreign Minister McCully micromanaged the Aid Programme too, he derided aid expertise, and made captain’s calls. Most disastrously, he decided to use aid to upgrade the Munda Runway in Solomon Islands to meet requirements for emergency international runway status. The rationale was that an emergency runway in Munda would allow international flights to Honiara to carry less fuel and, as a result, charge less. And cheaper fares would mean more tourists. But international airfares aren’t a binding constraint on tourism in the Solomons. Worse still, the spending wouldn’t help at all unless the Solomons government did its bit. Predictably, it didn’t. And so the runway lies, refurbished by New Zealand companies, costing nearly NZ$20 million, and doing little for tourists.

Minister McCully didn’t mention the Munda runway in his farewell address to the New Zealand Institute of International Affairs. Instead he claimed as “shining examples” of his aid successes, “the huge turnaround in the fortunes of Niue, where tourism numbers have nearly trebled, and in the Cook Islands, where they have increased by 50%…” When he talks of aiding Niue, McCully presumably means the Matavai resort, which according to Radio New Zealand, was refurbished and extended with New Zealand aid money in the early days of McCully’s tenure (more money has been spent on it since). Although it brought controversy, the hotel may be a reasonable idea. Yet I challenge you to look at these economic data for Niue (the most recent available) and show me any “huge turnaround” in the country’s fortunes. As for Cook Islands, it’s true that tourist numbers have risen by about 50% since 2009, but as this spreadsheet shows, the increase was simply a continuation of long run trends. It’s not anything the minister can claim. (If you’re wondering about the 2016 up-tick, it was caused by Jetstar starting to serve Cooks, not aid.)

As he lorded over New Zealand aid, Murray McCully made a lot of noise, brought change, and achieved little.

There’s a lesson in this for future foreign ministers. Mr. McCully’s energy and his desire to improve things were admirable. But giving good aid is hard. Intentions matter, there’s a lot to be learnt, and a role for expertise. Had he recognised this, Murray McCully might have translated his energy into a genuine legacy of positive change.

There are lessons for New Zealand’s broader development community too. Bad Ministers are part of politics. Maybe Brownlee will be better. Maybe this year’s election will bring someone better still. Or maybe not. We need to be better at pushing back against bad aid. We need to properly fund our advocacy, and we need to learn how to win political fights. Until we get this right, New Zealand’s aid will never live up to its potential. Or if it does, the gains will be fleeting ones.

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