Is the Ministry really that fat?

Gareth MorganEconomics, Fisheries Management

MFAT generates value in AntarcticaCost cutting at the Ministry of Foreign Affairs and Trade has sparked debate.

Is this tax dollar really better left in our pocket or does MFAT really offer a return on its spending?

Offering a full cost benefit of something like MFAT is a huge undertaking, and beyond what we can achieve here.

Mfat may well need restructuring, but it seems that the debate has focused very much on the costs of our foreign service and not the benefits.

On our recent trip to Antarctica we got to see a slice of the value Mfat generates for New Zealand, and in this article we hope to give some insight to that.

Mfat officials are certainly a breed unto themselves.

Diplomacy is somewhat akin to a dark art, mysterious and best practised in the shadows.
Thus for a long time they have remained outside public scrutiny. Now they are being thrust into the public eye and forced to justify their existence, and first impressions are not always positive.

At first diplomats may seem obtuse and downright unhelpful, qualities which might be behind what has got up Minister Murray McCully’s nose.

Yet we argue that there is some reason to their rhyme.

As one sails south from New Zealand, the economic benefits of New Zealand diplomacy quickly become obvious. Through international negotiations (on the law of the sea, UNCLOS) we have the fifth biggest Exclusive Economic Zone in the world, a zone that contains a $4 billion fishery asset and a $1.9 billion per annum oil and gas industry, with potentially more oil and even phosphate to come.

In 2008 our diplomats added to that around 1.7 million sq km of extended continental shelf. The benefits of this investment may not be realised until well into the future.

But it is in Antarctica where Mfat’s added value starts to exceed our attempts at quantification.

In the early part of last century international powers (New Zealand included) were laying claim to bits of Antarctica and by the 1950s there was every prospect that the White Continent could become another pawn in the Cold War.

This would clearly have been a major threat to our national security, and our diplomats did everything to stop that from happening.

New Zealand was instrumental in crafting the Antarctic Treaty, a masterpiece of the sort of bureaucratic doublespeak that McCully probably loathes, but very much makes the world go around.

Under this treaty the signatories agreed to disagree over the recognition of their claims.

As a result we still claim the Ross Dependency, but other nations have the right to not recognise our claim.

No new claims can be made while the treaty operates.

At first glance it seems like a bizarre state of affairs, but it has worked for 50 years so far in maintaining peace. What price do you put on national security?

This treaty now operates on the basis of consensus, so all issues remain a matter of international negotiation. This means that our diplomats continually walk the tightrope, balancing our national interests by maintaining our claim over the Ross Dependency, while keeping a consensus among treaty partners to preserve this peaceful arrangement.

Of course, diplomacy is also behind our estimated $20 million fishing industry operating in the region. Our diplomats not only negotiate to ensure this fishery is well managed, they also work with our defence force to ensure the scourge of illegal, unregulated and unreported fishing is eradicated from the area.

This is no easy task, as the murky world of international law will attest, and Mfat have fought many prolonged battles on our behalf. Of course the toothfish fishery is not without its critics, hence the calls for a Marine Protected Area (MPA).

This stoush is another area where our diplomats don’t really get a fair hearing.

For starters the MPA scenario worked up by officials covers almost all of what we think of as the Ross Sea. Most of the disagreement is actually over protecting the wider Ross Sea region as far north as 60 degrees south.

Despite what the NGOs may campaign for, New Zealand cannot proclaim an MPA in the Ross Sea; it requires our diplomats to earn the hard-won agreement of our Antarctic partners.

In this light, the current New Zealand MPA proposal would actually be a triumph if it succeeds. The campaign by NGOs is at best a side show, a distraction from the real business, naive in the extreme because it invites at least some of the fishing nations that belong to the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR) to veto such a proposal.

A repeat of the standoff that has occurred at the International Whaling Commission because of intransigence would delay, maybe even prevent, any MPA there at all. That would be tragic.

The list of intangible benefits from Mfat activity is even longer. Thanks to the ministry the standing of New Zealand is clearly very strong, at least in Antarctic circles.

We are well regarded for our science and diplomacy, and regularly show up our “bigger brothers” in Australia.

Foreign players will attest to us having a huge bang given our paltry budgets in the region. Partly that is because of the logistics contribution that Christchurch allows for, but part of this is also due to Mfat’s contribution.

One example. On the Our Far South voyage we heard about the Andrill programme – a major international scientific and diplomatic undertaking. With the Germans, Americans and Italians, New Zealand drilled under the Ross ice shelf to unlock the secrets of the past Antarctic climate.

The findings were profound; it was discovered that the last time CO2 levels reached those we see today, the West Antarctic Ice Sheet had melted, adding 3.5m to the global sea level. That gives you pause for thought as we wrangle over cutting emissions. This project reaped huge diplomatic and scientific rewards, had New Zealand plastered all over it, and wouldn’t have happened were it not for the ministry.

Having seen the breadth and depth of Mfat undertakings first hand, many of the Our Far South crew were definitely impressed.

It doesn’t follow that McCully is wrong to trim their sails, but there is little doubt Mfat has been giving a false picture to the outside world – an image of a New Zealand that is far more advanced than we really are.

The proposals for MPAs in the Ross Sea region are streets ahead of anything we have in our own waters.

The management of toothfish under CCAMLR is also far more advanced than the management of the fish stocks in our own EEZ. We don’t deserve the international reputation we have, Mfat has promulgated policy standards through CCAMLR far superior to those the politicians have managed back here in New Zealand.

Perhaps that alone justifies its sails being trimmed. We can’t have such prescience getting ahead of the more sluggish political reality at home can we? It might show us up as preaching on a whole different level than we practice.

Is the Ministry really that fat? was last modified: December 15th, 2015 by Gareth Morgan
About the Author

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.