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Development -- how committed are you?
Wednesday, 03 December 2008 08:02

Rich country governments have made numerous promises to provide financial assistance to developing countries, most notably at the G8 Summit in 2005 at Gleneagles.  These promises have not yet been kept, and may never be.

But there is more to helping developing countries than just giving financial aid.  Rich and poor countries are connected in many other ways, like through trade, investment, migration, the environment, security policies and technology. This is why the Washington-based Center for Global Development developed the "Commitment to Development Index" (CDI).  It ranks 21 rich-country governments on how the full span of their policies and actions affect the developing world.  Indices like the CDI can never measure everything, but they can be useful for having a deeper look at an issue like development.  So what does the 2007 estimates for the CDI show?

Financial aid is of course important, but quality is just as important as quantity.  When aid is tied, requiring recipients to spend aid on projects from the donor nation, it usually raises project costs and can also push developing countries to undertake projects which are not high priority.  And aid to corrupt governments is often politically motivated and has very little positive development effect.  The country aid ranking gives high marks to the development good guys like Denmark, Sweden, the Netherlands and Norway -- while Japan and the US come in at the bottom of the list.

Openess to imports from developing countries is crucial.  While developed country trade barriers are now very low, they still remain high in areas of most interest to developing countries, like agriculture and labour-intensive processed goods.  If rich countries dropped all remaining trade barriers, it would lift some 200 million people out of poverty.  On trade openess, Canada, the US, Australia and New Zealand come top.  The development good guys do less well, particularly Norway which is second last, caught Switzerland (the worst scorer) and Japan.

Rich country promotion of foreign investment is important.  When rich country governments provide political risk insurance, it helps investment, particularly if such insurance is not offered to environmentally harmful projects.  The countries with the most development-friendly investment policies are the UK, the Netherlands and Canada, while Ireland and New Zealand are at the bottom of this score.

The CDI index rates positively open migration policies.  Migrants usually enjoy a better life.  They acquire new knowledge and skills.  And they send home remittances.  Austria and Switzerland come top on this score -- they both accepted many migrants from the former Yugoslavia.  Of the bigger countries, Japan and France score poorly.  The US score was only mediocre -- although the number of migrants is high, their proportion in the population is not so high.

Rich country environment policy affects poor people in many ways.  Climate change will disproportionately affect people in poor countries.  Exploiting the global commons, like forests and fish, also adversely affects poor people.  Norway, Ireland and Finland top the environment standings, while the US and Spain are at the bottom of this list. 

The CDI security component rewards contributions to global security efforts, such as peacekeeping and safe sea lanes, and penalises certain types of arm sales.  Norway and Australia take the top two spots.  Norway makes steady contributions to peacekeeping operations, while Australia scored high for its UN-approved action in 1999 to stop Indonesia oppression of East Timor. 

Policies that intensify the creation and dissemination of technology -- like the Internet, mobile phones, vaccines, antibiotics and high yielding grains -- from rich to poor countries get the high points in the CDI. France, Canada and Japan top this indicator.  While the US does well, it loses points for being tough on IPR which restricts poor country access to products like HIV/AIDS drugs. 

So what's the bottom line?  The development good guys, the Netherlands, Denmark, Sweden and Norway come out on top. The US is ranked 14 out of the group of 21 countries, much higher than its score for official development assistance alone.  Japan, the rich country which is geographically closest to developing countries, comes in last!

The CDI measures how rich country policies and actions support poor countries' efforts to build prosperity, good government and security.  This index reminds us that: rich country policies matter for development; development is more than aid; aid is more than money; coherence matters; partnerships are powerful; and no-one is perfect.

At the same time, it is important to look at the experiences of countries which are succeeding in their development, especially in East Asia.  While rich country policies and actions are important, good domestic policies in developing countries are ultimately what matter most.


Reference: www.cgdev.org/cdi

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