VZCZCXRO5207
OO RUEHPB
DE RUEHWL #0350 1240614
ZNR UUUUU ZZH
O 040614Z MAY 07
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4221
INFO RUEHBY/AMEMBASSY CANBERRA 4826
RUEHPB/AMEMBASSY PORT MORESBY 0653
RUEHSV/AMEMBASSY SUVA 0591

UNCLAS WELLINGTON 000350 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EAP/ANP TVAJDA AND KMCKELLOG 
 
E.O. 12958: N/A 
TAGS: PREL NV XV
SUBJECT: NZAID: CONTINUING TO EXPAND AID TO THE PACIFIC 
 
REF: 06 WELLINGTON 462 
 
¶1. (SBU) Summary:  Since the establishment in 2002 of New 
Zealand's International Aid & Development Agency (NZAID) as a 
semi-autonomous agency of the Ministry of Foreign Affairs and 
Trade (MFAT), the GNZ has steadily increased its nominal 
overseas development assistance (ODA) to the Pacific region 
as well as the share of Pacific aid in NZ's overall aid 
program.  While New Zealand's total aid will remain a low 
0.27 percent of gross national income (GNI), contacts at 
NZAID tell us that the 2007/2008 budget, to be announced 
later this month, will include increased ODA to the Pacific 
with a greater focus on Melanesia.  The anticipated step-up 
will build on increases over the last five years, as GNZ 
seeks to raise direct ODA to the Pacific to 50-percent of New 
Zealand's overall aid program.  Foreign Minister Winston 
Peters, who also holds portfolio responsibility for NZAID, 
has cited NZ's "development cooperation with the Pacific 
Islands region as the centerpiece of New Zealand's fight 
against poverty and hardship."  End summary. 
 
Background 
---------- 
¶2. (U) Later this May, GNZ will announce its 2007/2008 
budget, which will include an overall increase in ODA and 
continue a gradual shift in allocation that will target 50 
percent of ODA directly to the Pacific region.  New Zealand 
currently directs 45 percent of its ODA to the Pacific with 
additional allocations through multilateral organizations 
bringing the amount to 55 percent (reftel).  New Zealand's 
ODA is centered on 18 countries, with 11 of those in 
Melanesia and Polynesia.  Funding growth will be principally 
focused on Melanesia.  Also in May, New Zealand's 
International Aid & Development Agency (NZAID) will submit to 
Cabinet its proposal to guide New Zealand's development 
program in the Pacific Islands region: "Pacific Strategy 
2007-2015: Tackling Poverty in Our Region."  The strategy 
will emphasize sector-focused aid on poverty reduction, as 
opposed to funding specific projects.  It will focus on four 
areas:  strengthening governance, broader-based growth and 
livelihoods, improving education & health, and reducing 
vulnerability.  The new strategy is designed to address the 
Pacific's failure to meet the poverty reduction and 
development targets agreed to under the UN's Millennium 
Development Goals (MDGs). 
 
Pacific-focused assistance program 
---------------------------------- 
¶3. (SBU) On April 3, the OECD Development Assistance 
Committee (DAC) reported that its 22 members provided 5.1 
percent less aid in 2006 than in 2005.  At 0.27 percent of 
gross national income (GNI), NZ's 2006 aid fell well short of 
the United Nations target of 0.7 percent, prompting NZ media 
to criticize NZ's low funding levels.  However, Craig Hawke, 
Director of NZAID's Pacific Group, told Poloff that while 
NZ's overall ODA remains low compared to the United Nations 
target, New Zealand has exceeded the target of 0.25 percent 
to which it agreed during the Monterey International 
Conference on Financing for Development in 2002.  Hawke could 
not disclose how much ODA to the Pacific will be increased in 
this year's budget, but noted that since 2002, New Zealand 
has nearly doubled its Pacific aid program, from NZD 90 
million (USD 67.5 million) in fiscal year 2001/2002  to NZD 
173 million (USD 130 million) for 2005/2006 (reftel).  This 
contribution makes New Zealand the fourth largest DAC donor 
to the region, behind Australia, the United States and France. 
 
Donor coordination 
------------------ 
¶4. (SBU) Hawke will represent New Zealand at the Pacific 
Islands Conference of Leaders (PICL) meetings in Washington 
from May 7 to 9, and says the GNZ's general objective is to 
improve donors' strategic coordination in the Pacific. 
Previously, Hawke told Poloff that he would like to explore 
opportunities for U.S.-New Zealand cooperation in the region 
(reftel).  Hawke is also interested in meeting in Millennium 
Challenge Corporation (MCC) officials, having remarked to 
Poloff that New Zealand was a "bit surprised" when MCC 
announced its USD 65 million award to Vanuatu in January 
¶2005.  Hawke has said the Pacific is an over-aided region, 
suggesting that it would be more useful for the U.S. to use 
its weight and influence to promote policy dialogues 
(reftel).  In this regard, the PICL fits the bill. 
McCormick