The age of choice: Fiji and Vanuatu in the new aid landscape

Research reports and studies
September 2014
Annalisa Prizzon and Maya Schmaljohann

This report reviews the experiences of Fiji and Vanuatu in managing non-traditional development assistance (NTDA) flows as part ODI's 'The age of choice' project. This project examines the challenges and opportunities developing governments experience in managing the new aid landscape, and the growth of NTDA.

Overview

Strengths

  • Fiji is not an aid-dependent country. Its ODA only accounts for about 2% of gross national income (GNI) and 6% of the total government budget.
  • Despite its political situation, the island state remains a diplomatic hub in the Pacific for most regional donors and organisations.
  • As a result of western withdrawal, Fiji has been strengthening its relationship with China since the coup. China provided about 30% of Fiji’s development assistance in 2012.

Weaknesses

  • After its last military coup in 2006, Fiji – a middle-income country – was ruled by an interim government until September 2014. The political situation led to the discontinuation of new lending by multilateral development banks and the severance of diplomatic relations with traditional donors such as Australia, New Zealand and the EU.
  • Fiji’s volatile economy has experienced low levels of growth since the 2000s.
  • Government priorities for the terms and conditions of development assistance.
  • Fiji’s main priorities are increased aid flows, technical assistance and aid for trade.
  • In order to strengthen its ownership over foreign aid, Fiji’s government prefers flexible and quickly disbursed funds that are provided without conditions and which address the country’s development priorities.
  • Due to capacity constraints, line ministries have expressed a preference for donor-managed implementation units

Arenas for negotiations.

  • The Budget and Aid Coordination Committee is in charge of managing Fiji’s development assistance from both traditional and non-traditional partners. Development assistance from China and Taiwan is managed by a separate office, which sits within the Office of the Prime Minister.
  • There is no formal coordination mechanism between the central government and the development partners. This is partly due to the absence of diplomatic relations between most traditional development partners and the government since the coup. In 2013, the government invited traditional and non-traditional sovereign development partners to a donor consultative forum for the first time in years.
  • At the sectoral level, only the health sector working group seems to be active.

Outcomes – Did the government achieve its goals?

  • Technical assistance makes up a reasonable share of Fiji’s aid (almost 16% in 2012).
  • The difficult relationship between the interim government and traditional donors has limited the government’s ability to assume ownership of development assistance.