NZ: Aid not a final
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NZ: Aid not a final answer to problems
Deputy Prime Minister Don McKinnon’s visit to the Cook Islands, Niue, Western Samoa and Tonga in September was important for several reasons.
The Cooks and Niue are self-governing in free association with New Zealand and their peoples are New Zealand citizens.
New Zealand has a Treaty of Friendship with Western Samoa and long-standing ties with Tonga based on a shared
Polynesian heritage.
Following McKinnon’s visit to Melanesia last year, the trip reaffirmed New Zealand’s interest in maintaining links with the Pacific Island states at a very high level and made it clear they would not be ignored despite this country’s drive to expand ties with Asia.
But it was left to an 18-year-old high school student who accompanied McKinnon to put his finger on the key relationship issue between New Zealand and the island states.
“New Zealand should be there to guide these fledgling countries into their own niche within the world arena,” Jonathan Marinus, of the Hutt International Boys’
School, near Wellington, wrote in an essay that won him a seat on the minister’s air force plane for the nine-day trip.
It summed up New Zealand’s policy towards all the island nations as they strug gle to modernise their economies and raise living standards.
But the dilemma remains: how best to do that? It’s a question that vexes Australia, the World Bank, the International Monetary Fund, the Asian Development Bank and other international
organisations.
It vexes New Zealand most, perhaps, as what McKinnon calls “a strong family friend” with a long-time sense of responsi bility to the islands and its own fast-grow ing Pacific Island population.
McKinnon himself described his trip as “recognition of the active interest we take in our nearest neighbours as they develop
their rightful political and economic place
in the region”.
New Zealand’s interest is demonstrated in real terms by the fact that the four coun tries receive about half its total aid budget to the South Pacific.
It was essentially a goodwill visit and
McKinnon took along Jonathan and three other prize-winning essay writers from high schools, five members of parliament, a senior navy officer and a handful of NGO representatives to give a spectrum of New Zealand society a first-hand look at the islands and their problems.
The goodwill was strained, however, at the first port of call, Rarotonga, when McKinnon felt obliged to read the Riot Act to Cook Islands’ Prime Minister Sir Geoffrey Henry, both men acknowledging that the bilateral relationship was at a low point.
Cause of the dispute is Henry’s refusal to co-operate with the New Zealand Commission of Inquiry into financial transactions by a number of New Zealand companies using the Cook Islands’ tax haven provisions which had reduced their tax liability in New Zealand.
Henry insisted that to release the infor mation New Zealand wants would infringe Cook Islands law. McKinnon said the Cooks had an obligation not to harm the New Zealand tax base and shenanigans over the transactions in the 1980 s and last year’s letters of guarantee fiasco had cast a “dark cloud” over Rarotonga and its inter
national credibility.
While McKinnon gave Henry a dress ing down, saying he was sorely testing New Zealand’s goodwill to the Cook Islands, he made it clear New Zealand would not retaliate by cutting aid or
restricting Cook Islanders’ citizenship
rights, as some had demanded.
He has, however, frozen talks on Henry’s late 1994 approach to develop the
Cook Islands international personality within the free association framework by seeking full Commonwealth and United Nations membership. McKinnon won’t say so, but it’s clearly difficult for New Zealand to sponsor its ward on the world stage with that black cloud over its head.
Although it is a narrow issue, it repre sents New Zealand’s broader concerns about the islands.
As McKinnon said later: “They are vul nerable to fast-talking con-men and crooks, who have always got ‘a good deal’ to offer the gullible. None of this is good economics and it’s not good for the Pacific Islands.”
While island leaders remained suscepti ble to shady approaches, they were not concentrating on the real task of improving their economies and their peoples’ incomes and living standards, he said.
New Zealand, naturally, has a real interest in seeing the Pacific Island states get their act together.lt’s something of a worry that Cook Islanders and Niueans, for instance, have per capita incomes per haps a tenth lower than New Zealanders, which encourages them to move to New Zealand. Their educational levels are low by New Zealand standards and they don’t have access to the same health care.
Big migration flows are not in New Zealand’s interest and not in the interests of the islands which need to retain their people to help develop their economies.
McKinnon admits there is not much New Zealand can do apart from encourage the efforts of international organisations like the World Bank to diversify the islands’ fragile economic bases.
The only direct incentive it can offer is to scale back its budgetary support - as it is doing for the Cook Islands and Niue and try to ensure that its aid goes to pro
ductive development projects.
After his trip, McKinnon professed optimism with what he had seen, particu larly noting Niue’s Matavia Resort devel opment and Western Samoa’s recovery from two cyclones.
Most important, he did not get one request for more aid money for his tour and that’s a first. “I think they are begin ning to see that aid is not the final answer to their problems,” he said. ■