Experiences and Prospects of International Development Agencies New Zealand Agency for International Development NZAID July 2006

About NZAID  New Zealand’s Aid and Development Agency  Aid volume – approx. $US0m annually  Central focus on poverty elimination  Core focus on the Pacific

Agency Role  Established in 2002 (semi-autonomous agency within Ministry of Foreign Affairs and Trade)  Contestability of advice – direct reporting to Ministers  policy coherence with national interest objectives  Focus on policy and strategy  Professional understanding on development issues  Aid Effectiveness - impact  Whole of government approaches – aid, trade, debt, immigration

Where do we work  18 core partners – Pacific and South-East Asia  10 multilateral partners  The big six – Papua New Guinea, Solomon Islands, Vanuatu, Fiji, Indonesia, Vietnam  11 countries in the Pacific  Support regional objectives in the Pacific

Principles of good aid delivery  Ownership and led by partner  Focus on good governance  Transparency and accountability – on partner budget or through budget processes  Support stable policy making/settings for pro-poor growth  Environmental sustainability – natural resources  Harmonisation and alignment

Paris Declaration on Aid Effectiveness  OECD DAC donors – signed in Key principles:  Strengthen partner countries development planning capability  Align support with partners systems and procedures  Enhanced accountability of citizens and parliaments  Eliminate duplication of efforts  Reform and simplify donors policies and procedures

The Importance of the Millennium Development Goals  MDG’s Provide basis for measuring impact  Pacific second only after sub-Saharan Africa as less likely to achieve the MDG’s by 2015

Implications for NZAID  Changing our business model  “Fewer, bigger, deeper” activities  Stronger focus on policy dialogue  5 year strategies; high level consultations, rolling three year programmes

The Pacific Islands Region  Small, vulnerable island economies  Development performance mixed – slow growth  Fragile states  Donor behaviour can have a major influence (positive or negative) on governance  Major donors are AusAID, NZAID, EU, Japan, France, China, Taiwan, WB, ADB  Pacific workshop on Aid Effectiveness

Working in Fragile States  Take context as a starting point  Establish state building as a central objective  Align with local policy and systems  Recognise the political- security-development linkages  Promote coherence between donors

Delivering Aid  Major change in way we are delivering support  Less project-based approaches  Focus on sector-wide approaches  Sector programmes  Budget support, Trust Funds, multi-donor projects

Examples of NZAID Engagement  Solomon Islands Education – Sector Wide Approach; Budget Support - $7m p.a.  Papua New Guinea – Health Sector Improvement Programme  Pacific Plan – regional approaches

The Challenge of Visibility  good aid builds the best relationships  Donors can still have visibility within sector or multi- donor approaches  partner ownership  letting go – reducing branding

Working with other donors  Non-DAC Donors  NZAID committed to working with other donors  Sharing collective experiences  Progress harmonisation  Focus on development and stability in the Pacific