The road of my house, April 2003.
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The Center for Global Development is an independent, non-partisan, non-profit think tank dedicated to reducing global poverty and inequality through policy oriented research and active engagement on development issues with the policy community and the public. A principal focus of the Center's work is the policies of the
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News from near and far
Founded in 1970 by Samuel Huntington and Warren Demian Manshel, FOREIGN POLICY is the premier, award-winning magazine of global politics, economics, and ideas. Our mission is to explain how the world works—in particular, how the process of global integration is reshaping nations, institutions, cultures, and, more fundamentally, our daily lives.
To help bridge the digital divide, a group of researchers at the Massachusetts Institute of Technology have designed a simple Internet search engine specifically for developing countries with poor infrastructure. Unlike current applications, which are built for speed, the TEK, or “Time Equals Knowledge,” (tek.sourceforge.net) search engine capitalizes on the developing world’s most reliable resource: time.
By FOREIGN POLICY Magazine and the Center for Global Development
In a groundbreaking new ranking, FOREIGN POLICY teamed up with Center for Global Development to create the first annual CGD/FP Commitment to Development Index, which grades 21 rich nations on whether their aid, trade, migration, investment, peacekeeping, and environmental policies help or hurt poor nations. Find out why the Netherlands ranks first and why the world’s two largest aid givers—the United States and Japan—finish last.
Political leaders in the world’s richest nations regularly proclaim their fervent desire to end poverty worldwide. At high-profile meetings and summits, politicians push developing countries to tackle corruption, reduce inflation, and slash budget deficits. These leaders also boast of their spending on foreign aid—currently about $58 billion a year—even while they regularly call on each other to spend more.
These objectives and efforts are praiseworthy, no doubt. But cash transfers to poor nations are far from the only or even the most important way rich countries affect poor countries. Indeed, the finger-wagging over foreign aid has actually obscured the critical influence other rich countries’ policies have on the development of poor nations. Until now, that is. The first annual CGD/FP Commitment to Development Index (CDI), created by the Center for Global Development and FOREIGN POLICY magazine, ranks some of the world’s richest nations according to how much their policies help or hinder the economic and social development of poor countries. The CDI looks beyond mere foreign aid flows to encompass trade, environmental, investment, migration, and peacekeeping policies. In this inaugural edition of the index, the CDI ranks 21 nations: Australia, Canada, Japan, New Zealand, the United States, and most of Western Europe.
In ranking these countries’ commitment to development, the CDI rewards generous aid giving, hospitable immigration policies, sizable contributions to peacekeeping operations, and hefty foreign direct investment in developing countries. The index penalizes financial assistance to corrupt regimes, obstruction of imports from developing countries, and policies that harm shared environmental resources. Although the governments and leaders of poor nations are themselves ultimately responsible for responding to the many challenges of development, rich countries can and should change their policies to spur economic growth and social development in poorer nations. The CDI highlights and ranks the rich countries’ policies themselves, not their final impact. This approach emphasizes what each rich country—regardless of size and reach—can do to improve opportunities for development throughout the world.
The results of the first annual CDI cast traditional assumptions about the most development-friendly countries in a new, unexpected light. For example, the two countries providing the highest absolute amounts of foreign aid to the developing world—Japan and the United States—bring up the rear in the index. Japan ranks last overall, with low marks in migration and aid. The United States ranks high in trade policy but finishes second to last overall due to particularly poor performances in environmental policy and contributions to peacekeeping. By contrast, the Netherlands emerges as the top-ranked nation in the index, thanks to its strong performance in aid, trade, investment, and environmental policies. Two other small countries, Denmark and Portugal, follow in second and third place, respectively. Norway, which is usually regarded as a model global citizen and a force for peace worldwide, comes in a disappointing 10th, mainly due to its poor trade performance. And though New Zealand is not noted for its particularly generous aid giving, that country finishes fourth overall thanks to a strong showing in migration and peacekeeping policies.
The CDI results are critical for two reasons. First, helping impoverished people worldwide build better lives is the right thing to do, and this index can educate policymakers, provoke public discussion, stimulate research, and guide activists seeking that goal. The hard truth is that even the best-performing nations in the CDI have a long way to go to make their policies as helpful as possible for poor families in developing countries. The Netherlands, even though it ranks highest, averages merely 5.6 points on the 10-point scale. Second, what rich countries do to and for the rest of the world comes back to affect them—poverty and instability do not respect borders. Surely the United States would benefit if Mexico were as stable and prosperous as Canada. Surely West European nations would benefit from an economic resurgence in Poland, Hungary, and the Czech Republic. Call it trickle-up economics: When the poor become better off, so do the rich.
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I have previously indicated that changes would be made to planned future programme allocations for middle income countries over the next two years. This results from decisions taken on financing for
As reported in the Department's 2003 Annual Report, we are planning to increase significantly total bilateral allocations for DFID's country and regional programmes over the next two years from this year's estimated total of £1.429 billion to £1.762 billion in 2004/05 and £2.078 billion in 2005/6. This includes meeting the Prime Minister's commitment to increase our spending for
As set out in the 2003 Departmental Report, responding to changes in circumstances is an integral part of DFID's work, and financial allocations for future years are subject to change. We had already planned to reduce the overall allocation to middle income countries in order to allow an increase in spending on the poorest countries.
Over the next two years, funding for the reconstruction of
The total effect of these changes will be a reduction in planned bilateral spending in middle income countries in 2004/5 and 2005/6 of around £100m. Funding for programmes in middle income countries during the current financial year will not be affected. Our budget for humanitarian activities will remain as planned.
We will continue to provide substantial support to middle income countries through our contributions to multilateral institutions. In 2001/2 this amounted to some £600m, of which some £350m was for middle Income developing countries; and the rest was for middle income countries in transition.
These changes in planned bilateral allocations will involve withdrawal from programmes, earlier than we had previously decided, from a number of middle income countries, which are less dependent on
We will be continuing with our bilateral programmes, with some reduction in spending levels and in some cases an adjustment of focus in the following countries/regions:
I also propose to increase, from 2005/6, our partnership funding for NGOs, including those working with middle income countries and
My officials are in touch with all of the countries affected by these changes in plans. We are also talking to the multilateral agencies and some other bilateral donors about the scope for increasing our cooperation with them. This will be reflected in the new middle income country strategy that the Department is preparing in consultation with other Departments in
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