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More and Better Aid

Developing countries urgently need more and better aid to provide them with the resources to reduce poverty. Well-targeted aid can help to provide basic services, spur economic growth and development, and empower poor communities to find their own paths out of poverty.

It has been estimated that to achieve the Millennium Development Goals (MDGs), which include targets such as halving extreme poverty and hunger by 2015, global aid levels will need to be doubled. Completely eliminating extreme poverty from the world will require even greater increases in aid.

In 1970, the member states of the United Nations agreed to a target that developed countries should give 0.7% of their national incomes in overseas aid. Since then, five donor countries have reached this target. More recently, many other donor countries have set timetables for reaching the 0.7% target by no later than 2015. New Zealand is now one of only six developed countries that have no such timetable.

In 2004, New Zealand’s overseas aid was 0.23% of Gross National Income (GNI), and New Zealand ranked 18th-equal out of 22 donor countries in terms of aid as a proportion of national income. Only Japan, the United States and Italy ranked below us. Our aid level has fallen from a high point of 0.52% of GNI reached in 1975. The government has said that its aid will reach 0.28% of national income by 2008, but this still falls well short of 0.7%. At the current rate of increase, New Zealand will not get to 0.7% until 2050!

The New Zealand government’s aid is focused on our Pacific neighbourhood. Some Pacific Island countries, especially those in Melanesia, are falling badly behind when it comes to achieving the MDGs, and need more assistance to achieve substantial reductions in poverty.

The New Zealand government has repeatedly pledged its commitment to the 0.7% target, but has never set a timetable for achieving it. This is out of step with our country’s international reputation as a good global citizen and a country that honours its commitments. New Zealand is a wealthy country, and we have the resources to honour our international promise while continuing to tackle poverty here at home.

The New Zealand government must fully commit to spending 0.7% of Gross National Income on overseas aid with a series of milestones for meeting the target by 2015.

Our world has never been richer, but too little of the world’s wealth is going to the people who need it most. The amount of money spent on the tools of development is tiny compared to the amount spent on the tools of destruction. Global military expenditure last year was US$1,035 billion - on average more than US$2.8 billion every day. Official aid to developing countries in 2004 was US$78.6 billion, the highest level ever but still less than 8% of what governments choose to spend on maintaining and equipping armed forces. The estimated amount of aid required to achieve all of the MDGs is fewer than twenty-five days of global military expenditure. The need for all governments, rich and poor, to reprioritise their spending to meet human security rather than military security has been agreed by United Nations member states since 1945, but has not been put into practice. If governments are serious about reducing poverty, it is time for them to act on this now.

The New Zealand government should advocate for reduction of excessive military expenditure worldwide and for the redirection of those funds to social spending that meets human needs.


Increasing aid alone is not enough – it is important that the aid is effective in improving the lives of poor people. Worldwide, too much aid serves the commercial, strategic, or other interests of donors; is poorly co-ordinated between donors; imposes harmful and undemocratic conditions on recipient countries; and is not based on the wishes of poor people themselves.

To be effective and sustainable, aid must:

  • support development strategies produced by the people of recipient countries
  • focus on key MDG targets such as achieving universal primary education, reducing child mortality, improving maternal health, and increasing the number of people with access to safe drinking water and adequate sanitation
  • foster human rights and the involvement of people in decision-making that affects their lives
  • help to build the capacity of people in developing countries to meet their own needs and to realise their own rights

Good aid is about justice, not charity; it is based on partnership, not prescription; and it leads to self-reliance, not dependence. Over time, development should make further aid unnecessary, except in emergencies.

Since the establishment of the government aid agency NZAID in 2002, there has been a significant improvement in the quality of New Zealand’s government aid programme. NZAID’s focus on poverty elimination and on mainstreaming human rights throughout its operations is strongly supported by non-government aid organisations. A peer review of New Zealand’s aid programme in 2005 by the Development Assistance Committee of the OECD found that the establishment of NZAID and the reorientation of the aid programme has been a success.

The New Zealand government’s aid programme is heading in the right direction, but in some areas there is still further to go. For example, a decreasing proportion of New Zealand’s aid money is spent on procuring goods and services in New Zealand, and NZAID should continue this trend towards making greater use of local talents and resources in developing countries. New Zealand non-government organisations have an important role to play in monitoring the aid programme to ensure that the quality is maintained.

The New Zealand government should also ensure that aid channelled through international financial institutions such as the World Bank and Asian Development Bank does not come with harmful strings attached. Developing countries should be able to determine their own economic policies, based on local needs and conditions, rather than being forced by donors to implement policies such as privatising state-owned enterprises or removing protections from local industries.

More and better aid alone is not the answer to global poverty – it must go hand in hand with trade justice, debt cancellation and the reorientation of government expenditure from military to social spending. In the long term, structural changes that create a fairer world for poor countries and peoples should make aid unnecessary. But in the short to medium term, effective aid will continue to play a vital role in making poverty history.

New Zealand government aid must:

  • focus on poverty eradication and fostering human rights
  • support poor countries’ and communities’ own plans and paths out of poverty
  • not be linked to the acceptance of economic policies like trade liberalisation and privatisation

More information

Maura’s Story

Maura Hassan lives in Tabata, a poor area of Dar es Salaam in Tanzania. Although she has water pipes connected to her home, she is unable to get any water through them. Since the water supply to the area has been privatised, she has been receiving bills for water she hasn’t used. Her last bill was for $400.

Maura is forced to buy water from a well dug by a private individual. Although this is much more expensive than piped water and she has no guarantee that it is safe to drink, she has no choice since the water connection to her house doesn’t work. Other local families can’t afford to buy any kind of water, and are forced to use the local shallow wells. People who bathe in them start to itch and those who drink from them need expensive medicines to treat their subsequent illnesses.

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