Pacific aid achieving nil, says McCully

Murray McCully says even a basic plan for Pacific countries to buy fuel in bulk had not yet been enacted. Photo / Richard Robinson

New Zealand and Australia need to expect more for the millions they pour into Pacific regional organisations such as the Pacific Islands Forum, says Foreign Minister Murray McCully.

His criticism comes on the eve of the forum leaders' meeting in Cairns, which he will attend with Prime Minister John Key.

In a speech to the Australian Lowy Institute yesterday, he said Pacific regional institutions had collected hundreds of millions of dollars from donors in the past year but little progress had been made on even the simplest of projects.

"On the big-picture issues - fishing, energy, transport services, the environment - the regional organisations charged with advancing our collective interests have too little to show for their efforts and our dollars."

Even the simplest of the projects in the forum's 2004 "Pacific Plan" - a programme for Pacific countries to club together to buy fuel in bulk to try to lower the costs - had not yet been enacted.

He also questioned how nations with rich fisheries resources were still not seeing a better return.

"If we are going to fund regional organisations to ensure co-ordinated regional progress on such important matters, we need to do better."

Some good work was being done by the forum Fisheries Agency and Secretariat of the Pacific Community. However, regional institutions needed to "lift their sights".

About $2.6 billion of fish was taken from the Pacific countries' Exclusive Economic Zones - but just $380 million had passed through the hands of those nations and a further $120 million was collected in licence fees.

Mr McCully said regional organisations should be able to ensure better returns for those countries.

Both New Zealand and Australia want the economic crisis to dominate the agenda at the Pacific Leaders' Forum this year, rather than the issue of Fiji's suspension from the forum last May after it failed to commit itself to elections this year.

Yesterday Mr Key said he was confident the forum would maintain its stance on Fiji's suspension, despite recent concerns from the Melanesian countries.

He will meet Australian Prime Minister Kevin Rudd tonight for talks which are expected to cover both nations' desire for aid funding to be better co-ordinated to ensure it is effective.

A joint New Zealand-Australia study on the impact of the downturn on the Pacific Islands will also be released to be discussed when the 15 leaders meet for the leaders' retreat on Thursday. It is expected to analyse how hard Pacific countries have been hit by drops in remittances, tourism, exports and in the value of development trust funds - major components of the island nations' economies.

It is also expected to encourage Governments to adopt good fiscal practice, undertake some economic reform to become more globally competitive and encourage trade, and ensure aid is not squandered.

ON THE TABLE
What the Pacific Island leaders will be talking about over the next three days:
* Proposals to help the island countries with the economic crisis.
* Tick off the start of negotiations with New Zealand and Australia in the Pacific Agreement on Closer Economic Relations (Pacer Plus).
* Fiji - its suspension from the forum is likely to remain but it may be included in Pacer Plus trade talks.
* Climate change adaptation measures.
* More co-operation on aid spending.

KEY'S AGENDA TODAY
* Speak at a Business Leaders' Forum lunch in Brisbane about responses to the economic downturn.
* Meet Queensland Premier Anna Bligh.
* Meet Australian Prime Minister Kevin Rudd in Cairns.