Who really is helping the poor
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Who really is helping the poor
A new index rates the development policy performance of rich nations
By Wolfgang Hein
This time, Germany is the front-runner among the world's top industrialised nations. Germany scores better than any other G7 member and is rated sixth in a field of 21 donor countries by a new index which ranks the rich nations' development policies. The Netherlands are number one while giants Japan and USA end up at the bottom of the list.
Conventional wisdom has, so far, measured the 'one-world correctness' of advanced countries by the proportion of GDP they spend on development aid. This method, however, does not present a full picture, because other policy areas also directly affect how poor countries fare. Now, the Washington-based Center for Global Development and the magazine Foreign Policy claim to have filled the gap. They have come up with a Commitment to Development Index (CDI) which attempts to evaluate several aspects of this highly complex matter on an integrated scale.
In addition to quantity and quality of aid, the creators of the index take interest in five other factors they consider relevant for development. These include
- openness to exports from developing countries,
- volume of direct investment in poorer parts of the world,
- willingness to accept migrants,
- contributions to peacekeeping efforts,
- environmental commitment.
The prototype of the new index has been published in the May/June issue of Foreign Policy under the headline Ranking the Rich.
The CDI ranking contains a number of surprises. Norway, for example, loses its image as an international trail-blazer. This is due to the Scandinavians' rigid policies in the fields of trade and immigration. Moreover, the Norwegians are no model environmentalists. Their eastern neighbours also only win a mid-field slot. The Swedes are miserly when it comes to direct investment and they drag their heels over participation in multilateral peacekeeping missions.
Denmark, however, once again emerges as one of the front-runners. Like Norway and Sweden, this country has traditionally been known for generous expenditure on development. This time around, it only suffers low marks for investment. Overall, it comes in second just behind the Netherlands. That Portugal should win the bronze medal, is yet another surprising twist. While this small country on Europes south-western fringes does not look good on aid and immigration, it does score many points for its relatively high investment (especially in Latin America) and for its generous peacekeeping contributions.
Germany is the only G7 member to make it into the top third of the donor nations. The Federal Republic is pegged just ahead of Spain which, like Portugal, owes its prominent position mainly to investment on the other side of the Atlantic. One of Germany's special strengths lies in its climate-friendly commitment to renewable energies, another in its good import figures. The jurors also judge Germany to be migrant-friendly. Its asylum and immigration policy a highly controversial issue within the country itself is not only generous by international standards but also enhances development.
Switzerland also gets a surprising number of points for its immigration policy despite the country's reputation of xenophobia. The Swiss certainly make it hard for immigrants to acquire their nationality, but the Center for Global Development considers their high level of foreign labour as more important. Employment in a rich country is regarded as a key criterion because it generates money which is transferred to relatives back home, because it lessens pressure to work under demeaning conditions in the homeland and because it provides opportunities to gain technological and organisational skills. The CDI authors do see a risk of brain drain in the sense of well educated experts migrating from poor to rich societies. Nonetheless, they argue that we live an era of dynamic globalisation in which many Indian computer scientists do not necessarily settle in California for good but are just as prone to start new businesses in their home country.
Advanced nation governments will have to get used to these ratings. Their academic critics in the US capital state they intend to repeat these computations regularly, publish the results annually and, in the mean time, continue to refine their methodology. They know how questionable such a scale with precise numerical ratings can be and this is particularly so when they attempt to rank security policies. Arms expenditure is ambivalent, because the weapons which one country acquires for its defence are seen as threatening by that countrys neighbours. The invasion of Iraq by US and British forces is not discussed in the current study, but the authors of the Commitment to Development Index describe the pre-war debate as a "clear example" of how one country's "security enhancement" can turn out to be another's "destabilising intervention".
Despite such complications, the index creators did not shy away from awarding marks for security policy. They categorically state that positive development is not possible without peace. For the time being, they use the expenditure and the number of troops the rated countries commit to multilateral peacekeeping missions as indicators. In order to make these figures comparable, they have weighted the absolute numbers by setting them against GDP and population size. As a matter of fact, the data for all six policy areas have been put into proportion like this. After all, the authors do not claim to measure the donor countries influence in the world but rather their political effort.
The indicators are thought through thoroughly. Development aid linked to the acquisition of products or services from the donor country counts for less than untied aid. The assessment of trade policy takes into account the duties as well as the subsidies with which rich countries shield domestic suppliers from competition.
Mathematically, the innovative index considers all six policy areas (aid, trade, investment, migration, peacekeeping, environment) as equally important. Publicly available data (provided by the UN, the OECD, the World Bank, and the IMF as well as by national governments) serve as the statistical basis. Each country is awarded a mark between 0 and 9 in each discipline and the overall mark results from the arithmetic average of these indicators. The highest achievable mark 9 signals optimal development policy performance; 0 indicates a total failure to make any contribution whatsoever.
Of course, the span of country ratings is nowhere near as wide. After all, there is some policy convergence due to multilateral co-ordination (e.g. by the OECD, WTO or EU). Best-performer Netherlands (with an overall rating of 5.6) only scores little more than twice as high as least-achiever Japan (with an overall rating of 2.4).
Generally speaking, small nations rank higher than big ones. Foreign Policy states flatly: "The G7 are not leaders". And even top scorer Netherlands is not really a model global citizen in the eyes of the critics. With only 5.6 of a possible 9 points, the Dutch don't even reach the two-thirds mark on the scale of developmental policy coherence.
"Developing countries have been ranked for years, on all kinds of measures from their spending on girls' education to their level of corruption", says Nancy Birdsall, director of the Center for Global Development. "The index finally puts the spotlight on the rich world's policies" (something which, incidentally, Transparency International has already done with its Bribe Payers Index). Ministers in rich countries have long been preaching to their counterparts in disadvantaged regions of the world that they need to change their policies. Now, the Commitment to Development Index tells them where they face reform needs themselves.
The results of Ranking the Rich can also be found at www.foreignpolicy.com
Dr. Hans Dembowski is a freelance writer and former long-serving editor of Frankfurter Rundschau and Deutsche Welle. His PhD thesis dealt with civil society and legal conflicts of urban development in Calcutta.