Pagani on NZ Aid

April 28th, 2009 at 7:36 am by David Farrar

, a former Comms Manager at , writes on aid politics:

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”.

I would hope the two goals are complementary, not in opposition to each other.

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?

I would advocate that aid which provides shelter, food and water is part of economic development as you can’t have people contributing towards an economy without these things.

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”.

This is one of the things I like about Josie – she is willing to concede “silliness” rather than pretend everything is perfect with the status quo.

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.

I would hope that NZ Aid wil avoid giving money to corrupt politicians, regardless of its mission. Mind you, in the Pacific it is probably near impossible. I recall the Austrian DFAT briefing that described one Pacific Premier as having a nickname of Mr 10% as that was his cut on all government contracts.

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.

I wonder if there is not some sort of compromise here, such as an aim of “poverty reduction through economic development” as that would cover the Minister’s worry that the cirrent goal is too wide, and also cove the concerns of Pagani and others than not all economic development alleviates poverty?

UPDATE: I should point out (as should have the Herald) that Josie was No 3 on the party list for the Progressive Party at last year’s election.

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30 Responses to “Pagani on NZ Aid”

  1. barry (1,317 comments) says:

    Foreign aid is without doubt one of the most misdirected programmes in the world.

    Im involved with a church overseas aid programme and one dispairs at the stupidity of some of the targets.
    They send aid to Israel (what in the world we are sending aid there for is beyond me – its spends more on arms than most other countries and all that we achieve by sending aid there is to relieve the government their of their responsibilities),
    we send aid to africa (God – what a waste of time. The more aid that goes there, the worse the countries get – and of course most of it finishes up in swiss bank acounts that belong to the corrupt rulers)
    we send aid to places like tonga (who wasted $5million of the coronation of the idiot king tupu – and third of their annual aid budget. A half million on clothes for the coronation of the mad king) we send aid to Papua – about the only place that is worthy of it.

    McCully is right to relook at the whole subject – at the moment its simply a ‘feel good’ programme that does hardly any good at all.

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  2. MT_Tinman (3,188 comments) says:

    I take it love thy neighbour is not part of your church’s basic tenets barry.

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  3. Adolf Fiinkensein (2,903 comments) says:

    barry, if New Zealand were bounded on all sides by screaming Muslim fanatics who were hell bent on our destruction, we too might spend more than most countries on arms.

    I’m not sure whether you are referring to your church or NZ Aid when you despair at stupidity but I despair when I read of people who claim to be involved in church affairs and in the next breath take their Great Patron’s name in vain. While you’re at it, you might take some lessons in ‘their v there,’ along with the use of capitals and full stops.

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  4. stephen (4,063 comments) says:

    I would advocate that aid which provides shelter, food and water is part of economic development as you can’t have people contributing towards an economy without these things.

    Economic development is typically measured through GDP – spending a few years providing clean water projects will not raise GDP too quickly, so as long as the people demanding results don’t get too fixated on GDP as a required short term outcome…

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  5. bwakile (757 comments) says:

    Aid should just consist of 4 things

    1. Housing so the family unit is secure
    2. Access to medicene
    3. Access to education
    4 Access to water

    Provide the basics and the GDP will follow.

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  6. Hagues (703 comments) says:

    Adolf Fiinkensein (to barry) “While you’re at it, you might take some lessons in ‘their v there,’ ”

    “what in the world we are sending aid there for is beyond me” correct usage there refers to a place.
    “all that we achieve by sending aid there is..” correct usage there refers to a place.
    “to relieve the government their of their responsibilities” correct usage their is possesive, as in its the responsibility that belongs to Israel.
    “The more aid that goes there, the worse the countries get ” correct usage there refers to a place.
    “and third of their annual aid budget.” correct usage their is possesive, as in its the buget that belongs to Tonga.

    Who needs the lesson?

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  7. Piggy (66 comments) says:

    You’re on the money bwakile but unfortunately when you get politicians running the show they seem to think they know everything and that spending money to subsidise Air New Zealand or fishing companies with significant stock owned by wealthy New Zealanders is as worthy of limited aid money than supplying those basics.

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  8. JC (956 comments) says:

    Given a black and white choice between alleviating poverty and economic development in the extremely gray area of foreign aid, I’d go economic development every time.

    Dumping food on a poor population is mostly an act of substitution, ie, it frees the countries’ leaders to spend what little money they have on arms and looking after themselves and their friends.

    At least with development (and concomitant guarantee of market access) you are building a capital and labour base.

    Beyond that lies the realm of our own self interest where we might do all manner of things to protect ourselves or make a bit of money by encouraging our entrepreneurs to have a go.

    JC

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  9. davidp (3,581 comments) says:

    It is well known how to develop a prosperous economy: free markets, a fair legal system, low corruption, good governance, hard work, and education. Those are all pretty basic things and none of them, except maybe education past a certain level, require money. If a country hasn’t taken these basic steps to ensure their own well being, then aid isn’t going to achieve anything and you have to assume that they have chosen to be poor. And if they have taken those basic steps, then they’ll be booming in no time and won’t require aid.

    I see advertising for how 50c, or some other trivial sum, will buy a peasant a mosquito net and save them from maleria. Or fix a child’s eyes, or whatever. And I wonder just how much of a failure a country has to be to not be able to afford this stuff themselves. If after thousands of years of human evolution you can’t afford a well or mosquito nets, then you’re doing something fundamentally wrong and aid isn’t going to fix your problem.

    I’ve nothing against emergency aid after a natural disaster. But other aid seems to miss the point.

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  10. PhilBest (5,121 comments) says:

    Where to start on this subject?

    Two things are “must reads”.

    “Dead Aid” by Dambisa Moyo (Zambian economist).

    “The Global Index of Philanthropy”

    The only aid that does any good at all, is aid on the ground at the level of the community. Give it to a bad government, and you are making things worse, not better. Private sector aid tends to do more of the aid at the community level; Western governments desperately need to learn new tactics from the successes that are to be found in that sector. But Western governments tend to swallow up 50% (I am not exaggerating) of the money in bureaucratic costs before it even goes beyond their own borders.

    And the U.N. is worse than useless; just another layer of wasteful bureaucracy; and vested heavily in perpetuating thugocracies (of which the UN is mainly comprised).

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  11. unaha-closp (1,165 comments) says:

    Agree with what JC said.

    In unstable/inequitable societies the avenues for change are through either armed struggle or democratic reform. Democratic reform requires a strong middle class that can only be arrived at through “economic development”. Armed struggle requires large numbers of disenfranchised poor young men with free time on their hands and which is best achieved by “poverty reducing” food/medicine handouts to the very poorest.

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  12. PhilBest (5,121 comments) says:

    Mark Steyn SAID IT in a recent column:

    “……..Each year, the World Bank ranks nations by the ease with which one can start a business. The global top 10 includes countries you’d expect to find there—New Zealand, America, Britain, and even Canada—but also a couple of territories that a generation or two back you wouldn’t have: Singapore, Hong Kong. Of the bottom 10 on the list, nine are African. To start a business in Singapore involves getting over four bureaucratic hurdles, takes four days and costs 0.7 per cent of income per capita. To start a business in Canada takes one hurdle, five days and 0.5 per cent of income per capita. To start a business in the Democratic Republic of Congo takes 13 hurdles, 155 days and 435.4 per cent of income per capita. That’s why U2 Ltd. isn’t going to be relocating to Kinshasa any time soon.

    There is nothing preordained about any of this: in 1950, what was then the Belgian Congo had a higher GDP per capita than either China or India. But today it’s literally the last place in the world you’d want to start a business. Well, okay, a big chunk of the Congo’s been a war-torn hellhole for the last decade. So what about, say, Guinea-Bissau? Starting a business there requires overcoming 17 government hurdles, takes 233 days and costs 257.7 per cent of income per capita. Which is why Bono can’t put his money where his mouth is.

    A quarter-century ago at Live Aid, Bob Geldof stood on the stage of Wembley Stadium and bellowed at the developed world: “Give us yer fokkin’ money!” By the time of Live 8 in 2005, the message had evolved: the rockers were no longer demanding our money, only that we in turn beseech our governments to give more “aid” to Africa. In her new book, the Zambian economist (actually, more of an econo-babe) Dambisa Moyo takes aim at Sir Bob and Sir Bono beginning with the very title: Dead Aid. Government-to-government aid, says Miss Moyo, all but guarantees corruption and barbarism: a country that seeks private business investment will be accountable to the global markets; a country that raises public funds from taxes will be accountable to its own voters. But a government that gets “aid” from other governments is accountable to no one and nothing, and decades of easy money that make self-absorbed Western do-gooders feel swell about themselves have debauched the political culture of a continent. Which is why so much of the trillion dollars lavished on Africa since the earliest days of decolonization has wound up in this week’s president-for-life’s Swiss bank account while the conditions for domestic wealth generation improve not a whit.

    But lowering the obstacles to business formation in the Congo doesn’t have the cachet that celeb-led moral posturing does. On the face of it, listening to a bunch of leathery old rockers ululating their ancient hits would seem an unlikely way to end poverty in the world, but it does absolve one of having to think about Africa—or even about which bits of “Africa” work (Mauritius) and which don’t (Somalia), and why. The historian Niall Ferguson, who wrote the introduction to Dead Aid, says that he was left “wanting a lot more Moyo, and a lot less Bono.”…….”

    http://www2.macleans.ca/2009/04/23/what-bono-says-and-what-he-does/print/

    The whole thing is excellent; do read it. “What Bono Says, and What He Does”

    (Like most wealthy old rockers, he uses Tax Havens extensively to protect his wealth, all the while posturing about global social justice).

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  13. Rebel Heart (249 comments) says:

    Systematic western aid has essentially turned Africa into one giant welfare state. The unending stream of money has created a situation where governments aren’t accountable to their citizens: since they don’t depend on tax revenue, leaders don’t think they owe their people anything—and the people don’t expect anything from their leaders. Moreover, since the money flows virtually no matter what, tyrants like Robert Mugabe of Zimbabwe (three hundred million dollars in foreign aid was sent to often pilfer it and buy foreign goods, or stow it in foreign bank accounts where it does nothing to help the country. Furthermore, aid stamps out entrepreneurship. Take the example of an African mosquito net maker. When aid arrives in the form of a hundred thousand mosquito nets, the net-maker is out of business, and one hundred and sixty people (employees and dependents) are now aid-dependent. This is not a sustainable model.

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  14. Redbaiter (13,197 comments) says:

    “Systematic western aid has essentially turned Africa into one giant welfare state.”

    WTF?? As a Labourite, you love welfare states. You can’t get enough of them. Its a sign of how stupid you are that you can’t apply the same analysis to your damn Labour policies that you can apparently apply to aid to Africa.

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  15. PhilBest (5,121 comments) says:

    Steven Jennings’ recent excellent speech pointed out the following:

    “……..Why is economic growth taking hold in so many different types of political and economic regimes simultaneously? It is tempting to ascribe the success to the desire of very different countries to emulate the Western model, in order to be rewarded by economic success.

    It is tempting, but it is also demonstrably not the case. Singapore, Malaysia, Indonesia, China, the GCC [?], Kazakhstan, Angola, Azerbaijan and Vietnam have all experienced more explosive growth than the Western block pioneered without choosing the Western model of society or government.

    The only common thread that links most of the countries that have started to enjoy the benefits of rapid economic growth is that they have increased the domain of the market in allocating resources. A combination of allowing markets to set the price of labour, capital and goods, and a commitment to opening up to trade and maintaining a degree of fiscal and financial stability, has been enough to kick-start growth. The only other common factor all of these countries share is their diversity…..

    “………In sub-Saharan Africa a significant cross section of society is fully aware of the horrific cost of bad government on the continent and that rapid economic improvement is totally achievable. There is tremendous and mounting pressure for reform from these constituencies, and as the benefits of the first phase of reform and growth begin to flow, those pressures are both intensifying and broadening.

    Transformational Growth Stimulates Pluralism

    In fact, transformative economic growth is often the major impetus towards the development of more pluralistic societies, just as it was in the West. However, increased pluralism does not mean a move towards a modern Western state. A country’s institutions will evolve to reflect its unique economic, social and political situation. The figure who I find is most revered by African leaders today is not Nelson Mandela, but Lee Kuan Yew………

    “………….There are equally widely accepted theories as to why today’s laggards will never make it. Unfortunately their predictive power is virtually nil. In one decade we are told that Confucianism is a barrier to capitalism; in the next, experts extol the Chinese work ethic. Lazy, slovenly Russian workers suddenly become ambitious and creative. India’s colonial past goes from being a liability to an asset………

    “…….In 2000, the Economist magazine had an edition with a front cover showing a map of Africa and the title, ‘Africa, The Hopeless Continent’. In the intervening 9 years, three out of the 10 fastest growing countries in the world have been from sub-Saharan Africa. The region has grown at an average rate of 6%, three times the rate in the G7. And it’s not only natural resource producers. Ethiopia, a country which was once synonymous with disaster and aid relief, has been growing at an average of 10% per annum for the last five years. There is no reason why Africa cannot go through the same sort of economic expansion which has so revolutionized life in Asia……”

    It is a superb speech. Anyone who has not read it should do so.

    http://www.nzcpr.com/guest142.htm

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  16. PhilBest (5,121 comments) says:

    GET THAT: (From Steven Jennings)

    “……The only common thread that links most of the countries that have started to enjoy the benefits of rapid economic growth is that they have increased the domain of the market in allocating resources. A combination of allowing markets to set the price of labour, capital and goods, and a commitment to opening up to trade and maintaining a degree of fiscal and financial stability, has been enough to kick-start growth. The only other common factor all of these countries share is their diversity…..”

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  17. Rebel Heart (249 comments) says:

    # Redbaiter (5967) Vote: Add rating 1 Subtract rating 0 Says:
    April 28th, 2009 at 9:59 am

    “Systematic western aid has essentially turned Africa into one giant welfare state.”

    WTF?? As a Labourite, you love welfare states. You can’t get enough of them. Its a sign of how stupid you are that you can’t apply the same analysis to your damn Labour policies that you can apparently apply to aid to Africa.

    I was unaware that I was a Labour supporter you dumb fuck.

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  18. baxter (893 comments) says:

    Well as can be seen from the figures below the last Government was extremely generous in it’s donations to various depart ments of the United Nations Bureaucracy. I wonder how the poor benefited, and how our Nation benefited from the generosity of the Liabour government.

    According to United Nations Development Programme’s published accounts, New Zealand contributed:
    US$2 million in 2000,
    US$4 million in 2001,
    US$3.9 million in 2002
    US$5 million in 2003
    US$11 million in 2004
    US$16 million in 2005
    US$10.8 million in 2006
    US$12.5 million in 2007
    US$12.5 million in 2008

    It isn’t just the UNDP that sees similar spikes of our cash flowing into UN coffers, The UNFPA got about US$770k in 2001 but a whopping US$3.7 million in 2004 and then US$5.2 million in 2005, the figure drpped back to $2.7 million in 2006 and 2007.

    Same goes for UNICEF. US$1.6 million in 2001 and US$5 million.

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  19. Frank Ritchie (3 comments) says:

    DPF,

    Thanks for posting this. I think Pagani’s thoughts and your own are very considered and worth listening to in regards to the possible changes.

    Allow me to affirm that many of us in the NGO industry are very supportive of NZ Aid being reviewed and tweaked in order to make it better. Every organisation can benefit from reviews and changes that result in them being more efficient and better users of money, in this case it is very important because it is public money.

    Many of us are also aware of the shortfalls of NZ Aid and are supportive of the government moving towards improving the current system.

    I like the compromise you have suggested, changing NZ Aid’s aim to “poverty reduction through economic development” in order to meet the Minister’s concerns while also maintaining the integrity of the current aim.

    Discussions around effective aid are always interesting. As an aside, but probably related somehow if we look at the difference between having NZ Aid as a semi-autonomous entity as opposed to having it completely under the umbrella of MFAT, recent research has shown a large gap between the effectiveness of large scale aid efforts and smaller, more focused projects. The former tend to be engaged where governments have large control over aid efforts and the latter by independent bodies. Though, as pointed out, “silliness” can be found at every level of aid and development – but that does not negate the strength of good work, where it is done.

    Large scale aid can often have a negative flow on effect, crippling local industry and creating welfare depency (though I would affirm its usefulness in emergency situations if properly monitored and with clear goals towards “letting go”) – this is clearly visible in places like Ethiopia where large scale aid in the 80’s due to famine, crippled the local agricultural industry to the point where any near crisis now necessitates overseas assistance since the local industry is dead… couple that with reduced grain supplies from Europe and the U.S for things like biofuel and it’s easy to spot some very quickly developing, large scale problems. Sadly, there are many industries in the western world that rely heavily on that dependance and being able to export to those crippled markets. Such industries have been guilty of stifling law changes in places like the U.S where moves have been made to shift the onus towards indigenous markets. There’s a great story about President Bush moving towards a good piece of legislation that would have saved lives and strengthed local markets in areas of Africa, but that effort was sadly stifled by sections of the American industry that rely on being able to export to those crippled markets – welfare of a different kind. This sort of large scale aid is what governments generally engage in.

    By far the most effective sort of aid and development is small scale projects that support and encourage the disadvantaged to find their own solutions and then assists them towards implementation and sustainability over time. The latter is generally employed by good NGO’s (such as TEAR Fund, World Vision, Leprosy Mission etc etc) and it was this model that the government was encouraged towards and has somewhat achieved through the shift to the current NZ Aid structure. That model for the NZ government is still fairly new and has a long way to grow and develop, but in the most part it has been affirmed and cheered on by much of the international community. Many of us would despair to see that momentum lost.

    I personally affirm the Minister’s concerns and so I applaud the compromise you suggest. It gives the ability for poverty reduction/elimination to be coupled with the Minister’s philisophical approach to economic development. It would enable to continuation of support for small scale projects that operate at the bottom of communities with a clear aim that it would lead to economic development amongst those communities.

    May New Zealand continue to be a world leader in aid and community development amongst the poor and may the current discussions and whatever comes out of them enhance the effectiveness and efficiency of what we do both at a private level through the NGO community and at a government level through NZ Aid.

    Frank Ritchie
    Education and Campaigns Manager (TEAR Fund NZ)

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  20. Frank Ritchie (3 comments) says:

    ps – excuse all the typos – I was writing that fairly quickly :)

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  21. Redbaiter (13,197 comments) says:

    “I was unaware that I was a Labour supporter you dumb fuck”

    Well, that you were unaware of it of course makes you even more black hole dense (which is of course another essential for being a Labour supporter).

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  22. James (1,338 comments) says:

    “Well, that you were unaware of it of course makes you even more black hole dense (which is of course another essential for being a Labour supporter).”

    Ha…. the thug speaks……totally blind to the hypocrisy of calling RH a Labour supporter whilst advocating hangings and repression of differing opinions elsewhere on this blog.”to save the village we had to destroy it” sums up Reds attitude to freedom.

    Actually from what I have seen RH post I would think him mostly a Libertarian/Classic liberal type…..how say you RH?

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  23. Redbaiter (13,197 comments) says:

    “Ha…. the thug speaks……totally blind to the hypocrisy of calling RH a Labour supporter whilst advocating hangings and repression of differing opinions elsewhere on this blog.”to save the village we had to destroy it” sums up Reds attitude to freedom.”

    Whatever, I don’t make a habit of stalking someone with totally fabricated allegations, unintelligent attempts to construct straw men, and totally incorrect interpretations of their point of view in order to make some dumb fuck point regarding pseudo-liberal doctrine.

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  24. Redbaiter (13,197 comments) says:

    “Actually from what I have seen RH post I would think him mostly a Libertarian/Classic liberal type…..”

    Oh, no, he’s not another damn queer is he, just using the Libertarian party as a Trojan Horse (like so many of them do)?

    To me he just seems like a typical numb nutted leftist sniping from the sidelines and with nothing much to say about anything. A try hard whose witless attempts at humour even exceed in their ability to induce boredom, the ponderous and long rubbish he writes when he’s actually trying to elucidate a point.

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  25. unaha-closp (1,165 comments) says:

    4 freaking hours:

    WTF?? As a Labourite, you love welfare states. You can’t get enough of them. Its a sign of how stupid you are that you can’t apply the same analysis to your damn Labour policies that you can apparently apply to aid to Africa.

    Whatever, I don’t make a habit of stalking someone with totally fabricated allegations, unintelligent attempts to construct straw men, and totally incorrect interpretations of their point of view in order to make some dumb fuck point regarding pseudo-liberal doctrine.

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  26. Rebel Heart (249 comments) says:

    You know Redbaiter, I am actually extremely interested to meet you in person to see if you’re as psychotic as you are on the message forums. If so let me take you out on a date and maybe we can have some anal sex later. Hit me up on rebelheartmusic@gmail.com.

    [DPF: 35 demerits]

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  27. dad4justice (8,222 comments) says:

    “If so let me take you out on a date and maybe we can have some anal sex later.”

    What a sewer comment. What a sicko!

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  28. Rebel Heart (249 comments) says:

    Frank Ritchie… Are you the same Frank Ritchie who used to work at LifeFM… If you’re the same person and am the same person as you were back then damn I hate your conservative views on Christianity.

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  29. Rebel Heart (249 comments) says:

    James… Are you the same James who used to comment on Aaron Bhatnagar’s blog… It’s me, stan, I think we go way back… Like, to when Rodney still had his old blog format before he started campaigning from Epsom… I don’t think we ever got along either, LOL.

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  30. Frank Ritchie (3 comments) says:

    Rebel,

    Yes, that would be me. My thoughts are changing and evolving all the time, so it would depend on how far back you are talking about. I still host Life FM’s talkback on Sunday nights.

    You’re the first person to describe me as “conservative”, though I am sure many people would – just not your average Christian who is against Civil Unions, supports Israel, thinks we are in the “end times”, disagrees with evolution, would never vote Labour or Green etc etc – to those people I am not conservative at all. That’s why terms such as “liberal” and “conservative” are problematic.

    Saying that, I’m sure there is probably much that you and I disagree on and I’m fine with that. Diversity of thought has much value if handled well and in an atmosphere where people are able to offer mutual respect. It would be extremely boring if we all agreed on everything. :)

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