What’s happening to New Zealand aid spending?

2020 wasn’t an easy year, either for the affluent world’s aid donor countries, or for aid recipients. Until now we’ve been in the dark as to what this has meant for global aid. However, last week the OECD released preliminary 2020 aid data. These data are complete for OECD government donors. Unfortunately, the data don’t cover countries like China, but they still provide a good picture of global trends.

Measuring aid is messy, as I explain in a recent Devpolicy blog post. However, even with complications taken into account, the new OECD data have some good news. As the chart below shows, global aid flows increased in 2020 – the first full year of the Covid pandemic. (If you want to understand the two different aid measures on the chart see my blog post.)

Global aid flows (aka ODA) over time

This is the picture for global aid in total. But a global increase doesn’t mean all donor governments gave more. Only just over half of OECD donor countries increased aid in 2020. And there were some notable falls, including the United Kingdom and Australia.

There were also some surprising falls. Most worryingly for us, New Zealand gave less aid in 2020 than in 2019. The difference was non-trivial too. With inflation adjusted for, New Zealand aid fell by 5% between 2019 and 2020. The fall is slightly smaller if you ignore inflation and account for currency changes affecting OECD reporting, but it remains a fall whichever way it’s reported.

Change in New Zealand ODA as Reported to OECD (inflation adjusted)

It’s a hard fall to fathom. Global need is up and New Zealand’s had an easy year compared to most donors. Also, our aid was budgeted to increase slightly in the 2020/21 financial year.

The most likely explanation for the fall, I think, is simply that the New Zealand aid programme is struggling to get money out the door because of the challenges posed to international work by the pandemic. Hopefully, the aid programme is in the process of adapting constructively and starting to spend again, and spend well. If it can’t find ways of doing this bilaterally, there’s an easy solution: give aid to multilateral organisations like the WHO.

In the meantime, here’s some good news of a sort. New Zealand has a lot of Covid-19 vaccines on order. More than we will ever be able to use. Ordering so many was prudent, but it also starts to feel a bit like hording in a world were most developing countries have little or no vaccine access. The good news is that New Zealand has announced it will donate 800,000 of its surplus vaccines to the global COVAX mechanism for helping poorer countries with vaccines. This is an excellent contribution as our planet stumbles along trying to find a global solution to a global problem. Watch the announcement in this link (starting just after 2 hours, 27 mins in.)

Parliament select committee reviews MFAT’s performance
Also, parliament’s Foreign Affairs Defense and Trade select committee recently conducted their annual review of MFAT’s performance, including in aid. You can watch MFAT present to parliamentarians and answer their questions as part of this here.

Terence for NZADDs admin