the Centre for Global Development, an international mission to fight poverty, and the Foreign Policy magazine have released the second annual Commitment to Development Index (cdi) titled "Ranking the Rich 2004", which rates 21 industrialised countries for their impact on developing nations. The Netherlands is at the top of the index, while Japan is at the bottom. These two countries have retained the places they occupied last year when the first edition of cdi was released (see: 'Bond aid for the poor', Down To Earth, July 31, 2003). But Australia, Canada and the us have risen in their rankings.
The study assesses seven major domains of government action -- aid, trade, investment, migration, environment, security and technology policy -- for their effect on social and economic development in poor countries. In the aid component, for example, cdi discounts 'tied aid', in which donors require recipient countries to spend the aid on their (the donor's) goods and services. It also penalises donors if they burden recipients with tedious reporting requirements and visits by foreign aid officials.
The shifts in ranking this year are mainly due to a change in the weightage given to the indicators. Australia has surged from the 19th to the fourth position, partly because of revisions made to the categories of investment and security. The us, which ranked 20th last year, has moved up 13 slots due to the security (formerly called peacekeeping) component. The us "invasion" of Iraq has not been included in the category (and is not likely to be included next year) "because no major international body approved it".
The report also notes that at times, foreign investment can distort development and feed corruption and violence. Here, it highlights Angola's case. Its government gets large oil revenues from foreign firms, but has misspent us $4.2 billion, which is nearly 10 per cent of its annual gdp, in five years.