Foreign Minister Murray McCully is close to announcing a u-turn in New Zealand's aid. He wants to move our aid away from its goal of reducing extreme poverty, back towards a less defined goal of "economic development".

The difference between "poverty alleviation" and "economic development" in some of the poorest countries is not a bright line. How are you meant to set up your own business and trade your way out of poverty when you can't read and write, and you have no clean water and no roof over your head?

Today, a billion people still live in conditions that we would equate with life in 14th century Europe. These people are alive right now, living in the same world where some of us are driving to work in the 21st century.

This proposed change in our aid represents misguided politics. It has been pitched by Mr McCully as a struggle between the non-government organisations like Oxfam and World Vision, who want the focus to remain on poverty reduction; and those who support business, and economic development instead.

This is a false dichotomy.

It's true, there is some silliness in the aid community. Some aid experts don't believe in growth - that's why you end up with incomprehensible policy areas called "pro-poor-growth".

Some in the aid community promote something called "sustainable livelihoods", which as far as I can see means your right to wear traditional clothing, and fish with a traditional rod to feed your family.

But what about your right to set up a billion-dollar international fishing business, like Sealords, and "develop" your whole community? Unfortunately Murray McCully's proposed changes to NZAID do nothing to curb this kind of silliness.

Instead, he has taken aim at global best practice in aid and development and at the tested systems introduced to hold governments accountable for what they do with aid dollars.

It took years of political effort to make poverty reduction the focus of aid. The goal holds rich countries accountable.

For example, it stops countries like Portugal or France using aid to protect the Portuguese or the French language in their former colonies. That might be a great idea, but it isn't aid.

But Mr McCully couldn't say that encouraging the French language in Cote d'Ivoire isn't contributing to economic development. The focus on poverty also holds the governments of poor countries accountable for using aid to actually reduce poverty. Signing up to a goal of "poverty reduction" is more likely to prevent the kind of situation in Ethiopia a few years ago - then, Prime Minister Meles Zenawi used funds to set up a trucking business ("economic development") to deliver food across the country.

The company was owned by his own family, and tended to deliver food only to Zenawi's home region of Tigray, while other parts of Ethiopia went hungry.

An international treaty called the Paris Declaration on Aid Effectiveness was signed in 2005. It set up commitments from governments to make aid more effective, and encouraged governments to sign agreements called Poverty Reduction Strategies. These hold both donor and recipient countries accountable for doing something with the proceeds of growth to reduce poverty and increase basic education and access to healthcare.

New Zealand has Poverty Reduction Strategies with Papua New Guinea, Solomon Islands and other countries. That's because we were one of the first to sign the Paris Declaration of Aid Effectiveness.

I worked with many New Zealanders at the OECD, the World Bank and the UN who helped to write the declaration. Today they continue to use the Paris Declaration to hold countries across the world accountable for reducing poverty.

That is who the minister is pitting himself against in dissolving NZAID and changing the focus away from poverty reduction.

We give aid because we are good global citizens, doing our part to make a difference for the most desperately poor in the world.

Mr McCully should keep the focus strongly on poverty reduction, and keep NZAID as a dedicated agency with an undiluted focus on doing our bit towards that very important goal.

* Josie Pagani is a former manager at the OECD where she worked on aid and development issues. Before that she was NZAID's first communications manager.