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Talking business

by Anthony Haas


Japanese ODA and private sector could help Pacific business development

May 1, 2009

Japan’s Foreign Minister, Hirofumi Nakasone, is promoting policies that would bring a mix of official and private enterprise development assistance to Pacific islands.

This official Japanese hint of a mixed approach coincides with New Zealand’s official interest in sustainable Pacific economic development, announced by NZ Foreign Minister McCully Friday, May 01, 2009, and messages coming out of other Pacific Islands Forum countries.

“As indicated prior to the election, National has long held concerns about the effectiveness of New Zealand’s aid spending,” Mr McCully said.

“Following a review process, the government has decided to change the mandate of NZAID, the government’s aid agency, to focus on sustainable economic growth.

“Lifting people out of poverty depends directly on increasing economic growth and strengthening trade. No country in the world has achieved one without the other.

“The new mandate also puts the Pacific at the forefront of our efforts, with a greater share of the budget, although not to the total exclusion of other regions.

“Given that the objective of our aid should be to reverse the negative trends we see in the Pacific, current policies are clearly failing. Our money has generally done little to build strong economies providing jobs and the promise of a brighter future” Mr McCully said.

He seeks “a greater sense of alignment with our overall foreign policy goals. Most important in this respect will be our ability to align aid policy with trade policy within our region”.

For that reason, Trade Minister Tim Groser and Mr McCully have adopted a joint strategy, along with their Australian counterparts, “”designed to achieve sustainable economic growth in the Pacific through an alignment of trade and aid policies”.

The two New Zealand ministers met jointly with those Australian counterparts a few weeks ago and will host a meeting of Pacific trade ministers in the coming weeks in order to make progress.

The Japanese thinking also coincides with Tongan and New Zealand business interest in a joint venture scheme reminiscent of a past New Zealand Pacific Islands Industrial Development scheme. The Japanese thinking was revealed during Mr Nakasone’s brief visit to New Zealand late last month.

Mr Nakasone, who worked previously in business assignments that led him to spend several months in New Zealand timber industry circles based around the Hawkes Bay, held ministerial talks on 29 April 2009 with Prime Minister Key and Foreign Minister Murray McCully. The Wellington talks included issues to come up at the 22-25 May fifth triennial Japanese meeting of Pacific leaders, in Hokkaido.

The new development assistance package being designed by the Japanese government for the Pacific Islands was revealed in an exclusive briefing for Asia Pacific Economic News (APEN) by the Japanese Ministry of Foreign Affairs deputy press secretary Yasuhiro Kawamura who was travelling with Mr Nakasone.

Japanese Prime Minister Aso recently announced (though muted because the ASEAN conference in Thailand was cancelled) the initiative to invest $US20 billion to Asean, Pacific Island and SE Asian countries towards infrastructure, low carbon initiatives, education and more with significant emphasis on Pacific islands as recipients.

Mr Kawamura later explained that details of the Pacific island allocation were not final adding that one of the three planks of the upcoming Pacific leaders Hokkaido meeting (or Palm 5) will be overcoming the vulnerability of the current global economy.

He said the Pacific islands region is vulnerable, and needs human security, particularly in health, water supply and education.

Japan is scheduled to double its Official Development Assistance (ODA) for Africa in four years while in Asia the ODA and other financing will amount to $US200 million.

“For the Pacific islands we need to come up with more concrete proposals, not necessarily limited to ODA,” he said.

Meanwhile, Mr Kawamura said the Palm 5 conference is going ahead and “while all past nations which attended previous meetings have been invited, the status of Fiji is still being questioned”.

He explained that the Palm 5 conference would be mainly concerned with broader environmental and financial issues rather than individual countries. The three key objectives of the upcoming Palm5 meeting are:
- Creating a Pacific environmental community with region-wide cooperation in areas such as climate change and finding ways for Pacific island communities to strengthen their own efforts;
- Overcoming vulnerabilities and promoting particularly in such areas as health, water supplies and education; and
- People-to-people exchanges (the Kizuna Plan) with Japan.

APEN alerted Mr Kawamura that NZ’s National Party foreign minister favoured policies leading to sustainable Pacific economic development. Mr Kawamura said he would investigate Japan’s approach and communicate further on this issue.

In the past Japan used its summit meetings for general relationship building, but now it recognises the sustainability challenge. “We now need to see what the public and private sectors can do,” Mr Kawamura said. “Compare Japan’s approach in Asia. The government previously focused exclusively on ODA, but now it includes the private sector.”

Mike Regan, APEN Parliamentary Press Gallery correspondent, also contributed to this report.




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