Growth and livelihoods
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Snapshot
NZAID is working to improve market access for rural people.
In today's increasingly globalised world economy, economic growth is a necessary precondition for the achievement of sustainable development. If growth is to benefit poor people, however, they must be participants, either directly or indirectly in the process.
Broad-based growth or growth in the particular sector on which most of the poor depend has a higher chance of benefiting the poor. In NZAID's partner countries, the majority of poor and vulnerable people continue to live in rural areas and rely on their natural resource base for subsistence food production and income generating activities. Therefore, NZAID's focus is on promoting broad-based growth, with particular, though not exclusive, attention to reducing rural poverty.
When engaging in economic development assistance activities, NZAID considers that approaches that adhere to the principles listed below are likely to be more effective in achieving appropriate and sustainable improvements to the livelihoods of poor and vulnerable groups:
- people-centred - focussed on people, especially the poor and vulnerable and their perspectives, priorities and strengths. A gender equity perspective is very important
- macro-micro linkages - macro level policy and institutions can enhance or diminish the livelihoods of the poor and vulnerable, and an understanding of the livelihoods of the poor and vulnerable is needed to inform the development of more supportive policies
- dynamic/flexible - responsive to rapid change in people's livelihoods, and helps people to strengthen and diversify their livelihoods
- holistic - pro-poor development must be integrated with other sectors to be successful
- sustainable - dimensions of sustainability include environmental, financial and institutional sustainability , as well as economic sustainability
- context specific - No single set of economic development policies or interventions are appropriate for all people or all places, they must be appropriately tailored
- coherent policies - economic development policies of both NZAID and development partners need to be consistent with and supportive of, policies across a number of other spheres and also consistent with New Zealand Government and broader international policies
- harmonisation and alignment - including alignment of donor support with partner government's national planning frameworks and processes, and delivery of donor support through partner government systems where appropriate. Also use of sector-wide approaches (SWAps)
- increased well-being - a reduction in poverty and increased well-being of people and society
- equity and managing risks - NZAID is committed to maximising the positive potential of economic development and minimising or mitigating its negative impacts. This requires a partnership approach, coupled with the careful analysis of the situation, social and environmental impacts of different policy and programme options
NZAID priorities
Economic growth is a means to an end rather than an end in itself.
Promoting pro-poor economic growth and livelihoods lies at the heart of NZAID's overall objective of sustainable development. In the areas of economic development and sustainable livelihoods, the development outcomes that would mark that objective are:
- a reduction in the number of people living on less that a dollar a day or who live with regular hunger
- increased opportunities for poor people to earn an income and improve the resilience of their livelihoods
- reduced income disparities between rich and poor countries and within developing countries.
NZAID aims to achieve these outcomes through prioritising the following programming areas:
MACRO - making globalisation work for the poor through:
- fairer international trade rules
- increasing the development benefits and reducing the development costs of migration
- improving food security.
New Zealand has one of the most open economies in the world, with minimal import tariffs and no trade-distorting subsidies. This is particularly the case for the agricultural sector, which is important to developing countries. Producer support is almost non-existent and there are no export subsidies depressing the prices given to farmers in the developing world. In addition agricultural products enter quota-free with an average applied tariff of 2.1 percent and zero for Least Developed Countries (LDCs).
Since 1981 New Zealand has been providing unilateral duty-free access for all products originating from the Pacific Forum member countries under the South Pacific Regional Trade and Economic Cooperation Agreement. In 2001 New Zealand extended that benefit to 50 of the world's poorest countries, making it one of the first developed countries to do so. New Zealand continues to advocate for duty and quota-free access for all LDCs to all developed country markets.
MACRO - creating an enabling environment through:
- promoting sound monetary and fiscal policy and a pro-poor environment
- improving institutions, the regulatory environment and competition
- strengthened infrastructure for broad-based growth
- appropriate land tenure.
New Zealand supports programmes and activities that create a positive environment for economic growth, private sector and livelihood opportunities. For example, New Zealand through its participation in the Pacific Islands Forum is encouraging the Forum Island Countries to take steps to reduce the cost of doing business and to promote sustainable economic growth, taking advantage of the opportunities offered by trade amongst themselves and with Australia and New Zealand.
MICRO - making markets work better for the poor through:
- a vibrant private sector
- improving productivity and quality
- developing skills and moving up the value chain
- support for small and micro-enterprise development.
The Fiji and New Zealand Business Council operates three NZAID funded grant schemes: business training, export enhancement, and group training. New Zealand also supports the Pacific Enterprise Development Facility, which helps with the design and delivery of business support to small and medium-sized enterprises.
NZAID on the ground
Bris Kanda project
NZAID has been working with communities near Lae in Papua New Guinea to design a smallscale, entrepreneurial public-private development project called "Bris Kanda". The name, meaning "cane bridge" in Tok Pisin, is a metaphor for building links between different groups of people: clans and tribes; different levels of government; and the public, private and civil society sectors. The term is used to symbolise local ownership and initiative.
The Bris Kanda organisation is a partnership between the provincial government and service provider organisations. The concept of focusing the activities at the local level rather than the more common provincial level provides a greater likelihood of services reaching the target group - the producers, traders and small business people or rural entrepreneurs.
The core programme has four components: natural resource development through technical support to the primary sector; business development services to micro-enterprises and commodity traders; finance for rural entrepreneurs (micro-savings and microcredit); and economic development related infrastructure development.
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