Netherlands is tops on helping poor nations

August 15, 2006 - 0:0
WASHINGTON (Reuters) -- The Netherlands leads the world's 21 wealthiest nations when it comes to promoting policies that help poor countries, according to a new report by the Washington-based Center for Global Development.

The center's annual Commitment to Development Index (CDI) rates rich countries on aid, trade, investment, migration, environment, security and technology.

This year the Netherlands, which previously topped the index in 2004, scored the highest overall points followed by Denmark and Sweden, while Japan trailed last.

The index showed that wealthy countries are contributing more aid to Africa but are less giving when it comes to reducing trade barriers and promoting policies that encourage investment in poor countries. "Overall, the new scorings show a slow but steady improvement in the commitment of rich countries to growth and poverty reduction in poor countries, said CGD President Nancy Birdsall, adding, "But they fall far short of leaders' soaring rhetoric in 2005, the so-called 'Year of Development."'

Last year, the world's eight industrialized nations promised to reduce the debt of 18 impoverished countries, more than double aid to Africa by 2010 and cut agricultural barriers under the Doha round of global trade talks.

While the Group of Eight delivered on debt-relief promises and have increased aid, the CDI showed that trade barriers to some goods that poor countries are best at producing, including crops and animals, have largely stayed in place.

The CDI ranked the Netherlands top on aid and the quality of its foreign aid programs. It also scored high for its policies that promote productive investment in poor countries and a strong environmental record.

But the country ranked poorly for its agricultural trade policies, which make it harder for poor farmers to escape poverty.

Denmark, which has historically been among the index's best performers, registered the largest drop in overall score since 2003, the first year of the index, mostly because its foreign aid spending was reduced.

Japan kept its place at the bottom of the index because of a combination of high trade barriers, low aid and its small contribution to peacekeeping in developing countries.

"Japan is dead last, not only by a little bit, it's far behind all the other countries," said David Roodman, a research fellow at the CGD and main author of the report.

The United States ranked 13th overall on the CDI, with low scores on foreign aid and the environment. However, its barriers against developing-country agricultural exports are lower than those of most wealthy countries, while some of its policies promote healthy investment in poor countries.

Britain scored high for its investment policies toward developing countries and the best environmental record, but it was near to last for security because of its arms sales to undemocratic governments and immigration policies.

The CDI gave New Zealand top marks for its least restrictive trade barriers to developing countries' products. For its size, the country also contributes significant funding toward security in poor countries but falls on the scorecard for its small foreign aid programs, poor donor practices and weak policies toward investment in poor countries.

Roodman said rich nations were missing an opportunity to help poor countries by failing to reach an agreement on cutting farm subsidies at the stalled Doha Round of trade talks.

"They've gone nowhere with that," said Roodman. "I'm not optimistic about that changing," he added, quoting a separate CGD study last year that found lowering trade barriers would lift 200 million out of poverty.