Global Policy Forum

By Jim Lobe

Of the world's 21 wealthiest developed countries the United States ranks 20th, just ahead of Japan, for its policies aimed at reducing poverty in poor countries, according to a new index released Monday by the Washington-based Center for Global Development (CGD) and the Carnegie Endowment for International Peace.

The index, published in the latest edition of the Carnegie Endowment's Foreign Policy magazine, concluded that the policies most likely to alleviate poverty in the developing world are being pursued mainly by smaller donor countries. The Netherlands, Denmark, Portugal, New Zealand, and Switzerland ranked as the world's five most helpful rich nations.

And, of the members of the Group of Seven Western powerhouses, which give the most aid and engage in the most trade with poor nations, only Germany was found to be among the ten most helpful in the fight against poverty. The other six--Britain (11), France (14), Italy (15), Canada (18), the U.S. (20), and Japan (21)--all ranked lower in the "Commitment to Development Index."

"[T]he G-7 are not leaders," according to the report. "By virtue of their sheer size, the G-7 engage in more trade, more aid giving, more peacekeeping, and more pollution than any other group of nations. They have the greatest power to help developing countries, but, with the exception of Germany...they generally use their enormous potential the least."

To obtain the rankings, the authors of the report gave equal weight to six categories of policies pursued by the 21 wealthiest nations that have an impact on world poverty. The categories included aid, trade, investment, immigration, peacekeeping, and the environment. Using various criteria for each set of policies, the authors awarded a raw score of between zero and 10 to each country's performance in that category and then calculated the average for all seven.

The aid score, for example, measured foreign assistance as a percentage of the country's gross domestic product (GDP (news - web sites)), but also assessed the quality of that aid by discounting the amount of the aid that was "tied" to the purchase of goods and services from the donor country or that was devoted to administrative costs and debt repayments for past aid. In addition, aid to poorer countries received greater weight, as did aid to countries with less corruption and more democratic decisionmaking processes.

Similarly, the trade score considered the rich nations' barriers to exports from poor countries and the amount they actually imported from poor countries. Wealthy countries earned extra points if they imported from the world's poorest countries and if they imported manufactured goods, which generally carry higher value than raw commodities.

The migration category weighed the number of legal migrants admitted by rich countries each year as a percentage of the receiving country's population and how much aid and assistance they provided to refugees from poor countries, while peacekeeping considered financial and personnel contributions to international peacekeeping operations as a percentage of GDP.

The environment category measured each rich nation's depletion of the shared commons, such as greenhouse gas emissions, per capita consumption of ozone-depleting substances, and fishing subsidies as a percentage of GDP, as well as contributions to international environmental initiatives and government support for clean-energy technologies.

The highest-ranking country, the Netherlands received a final average of 5.6, while the worst-performing, Japan, received a 2.4--slightly below Washington's 2.6 score.

Ironically, although the U.S. and Japan provide the greatest amount of foreign aid to poor countries in nominal terms, they received the two lowest scores in the aid category. This was because U.S. aid as a percentage of GDP ranks in the cellar among the 21 wealthiest countries, and because the quality of the aid from both countries is regarded as particularly poor. Much of both countries aid is "tied;" in the late 1990s, the U.S. Agency for International Development (USAID) told Congress that almost 80 percent of its resources were used to buy U.S. goods and services.

Yet the United States got the best score of all 21 countries--a 7.7--in the trade category. But its average score was dragged down by low scores for peacekeeping, environment, and aid.

Conversely, Norway, which, along with the other Nordic countries has long been considered a leader in Third World development, ranked number 10 overall, largely because its trade policies were considered the worst by far of the 21 wealthiest countries ranked.

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