David Roodman, Research Fellow, Center for Global Development
Gareth Thomas MP, Under Secretary of State for International Development, DFID
Faizel Ismail, Head, South African Delegation to the WTO, Geneva
Rt Hon John Battle MP, Chair, APGOOD
John Battle MP, in the chair, introduced the speakers and noted that the Commitment to Development Index (CDI) has been launched annually since 2003, by the Washington-based Center for Global Development (CGD). Its aim is to rank the policies of 21 donor nations in terms of their compatibility with the goal of promoting development. The UK was ranked 12th out of 21 in 2006, and scored best on investment but poorly on security. Today, the UK's 2007 ranking would be revealed for the first time.
David Roodman, Research Fellow, Center for Global Development.
In describing the aims of the CDI, David Roodman explained that development assistance is usually analysed in terms of ODA levels as a percentage of GNI, however it is also important to look also at how aid is spent. In aaddition, rich and poor countries are linked in many ways, so an assessment of other policy areas is also necessary.
After describing how each of the indicators is constructed, Roodman presented the UK's scores out of ten for each of the seven policy areas covered by the index:
- Environment: 7.5
- Aid: 4.8
- Trade: 5.5
- Investment: 8.1
- Migration: 3.0
- Security: 5.2
- Technology: 4.3
- Overall: 5.5
Overall, the UK is ranked ninth out of 21 countries. The Nordic countries and the Netherlands came top, due to substantial aid giving, investment and peacekeeping efforts. With regard to aid giving, the US and Japan are at the bottom. Focussing on the UK, Roodman said there was not a lot to note regarding trends over the last four years, but the UK has improved marginally, mainly due to investment and its leadership of the extractive industries' transparency initiative, to combat bribery in the mining industry.
The US ranked poorly overall and Roodman said it was disappointing that it had not chosen to assume the role of a global leader. It fared particularly badly in the aid and environment categories. Roodman also pointed out that five of the G7 countries are in the bottom half of the table, with the UK and Canada being the exceptions to this. The UK was exemplary, he said, and other countries should look to emulate its performance.
Roodman explained that correlating a country's performance in the CDI with its level of democracy, shows that those who did well in the CDI also tended to be the 'most democratic' countries. This was definitely the case for Sweden, Denmark, Norway and the Netherlands.
Gareth Thomas MP, Under Secretary of State for International Development, DFID.
Gareth Thomas MP started by stating that launching the UK's 2007 CDI rankings in London provided an opportunity for a wider and broader discussion amongst the international development community about the importance of non-aid policies in development. In the UK, this discussion is more advanced than in many other countries because of the requirement for DFID to report more rigorously on non-aid policies.
Thomas highlighted a number of areas covered by the CDI where the UK is already making progress or taking action. For example, on climate change, the UK has committed nearly £800m for the Environmental Transformation Fund and a further £74m to build developing countries own capacities to understand the effects of climate change. On trade, as well as pressing for progress in the Doha round and for pushing for better terms for developing countries in relation to Economic Partnership Agreements, the government has also reformed internally to build policy coherence by sharing trade issues across DFID and the Dept for Business, Enterprise and Regulatory Reform (BERR), as well as forming a new cabinet committee which will oversee government work on trade. On security, Thomas noted that the ranking reflects the security of the state rather than the security of the individual. He felt that security is a pre-requisite for development and that when ordinary people feel threatened, development slowed down or even reversed. The UK has therefore increased the development budget at DFID and in other, related departments
Thomas noted in conclusion that the key message of the 2007 CDI was the need for stronger partnerships between rich and poor countries. The EU is a key partner to many developing countries, but there is still a need to strengthen EU development efforts, both centrally, and at the country-level. There is also a need to bring together the issues of security and development and to reignite enthusiasm to make progress on the MDGs. 2008 offers many opportunities to make this case even more strongly than in 2005.
Faizel Ismail, Head, South African Delegation to the WTO, Geneva.
Mr Ismail explained that his presentation would start with his interpretation of the meaning of 'development'; then place this in the context of the WTO and trade; and then extend it to the other areas examined by the CDI.
Drawing his inspiration from Amartya Sen's description of development as 'the removal of unfreedoms', Ismail observed that there are four areas where trade policy must be improved in order to promote development:
- Fair trade: This is the provision of developing countries with opportunities to export to rich countries.
- Capacity building: All parties have the responsibility to ensure that developing countries have the capacity to produce and export and to ensure poorest countries benefit from opportunities.
- Balanced rules: The rules of the international trading system need to be balanced.
- Good Governance: The participation of developing countries should be ensured so they engage in negotiating rules in a fair and democratic manner.
Ismail then extended the first concept - fair trade - to three of the policy areas examined by the CDI: migration, the environment and security:
a. Fair trade and migration: The temporary movement of people is on the WTO trade negotiation agenda. Remittances are providing greater resources than ODA in many cases. Of the 20 countries receiving substantial remittances, this accounts for up to 10% of GDP, and in the case of Lesotho, remittances account for 25%. The CDI can be used as a tool to analyse the broader effects of migration for many countries.
b. Fair trade and the environment: High levels of trade which act to distort agricultural subsides degrades the environment in developed countries. Moreover, high levels of poverty in poor countries is a major cause of unsustainable livelihoods and degradation of the environment.. The US, for example, has high tariffs on bio fuels. Negotiations offer an opportunity to advance the demands of developing countries for technology transfer rather than continuing dependence on technologies from rich countries. The CDI could be used as a tool to raise awareness for the need for greater policy coherence with regard to this specific issue.
c. Fair trade and security: Ismail observed that increased opportunities for trading can lead to peace and security between countries, whereas protectionism can lead to conflict. The post World War II Marshall Plan was partly instigated to ensure that Western Europe engaged in multilateral trade rather than protectionism. The CDI could be used to facilitate further discussions about coherence between trade, aid and security policies.
On, balanced rules for trading, Ismail stated that the demands of foreign investors for access to developing country markets should be mediated by Corporate Social Responsibility standards, technology transfer and empowerment of local entrepreneurs. These issues were on the agendas of fora such as World Economic Forum (WEF). This was another area where the CDI could be used to promote greater policy coherence.
On good governance Ismail highlighted that the 1944 Bretton Woods conference, which created the World Bank (WB) and International Monetary Fund (IMF), and envisaged an International Trade Organisation, but this never came to fruition. Ironically today after its formation in 1995, the WTO can boast a greater amount of participation and inclusiveness from developing countries in decision-making than either the IMF or WB. This makes developed country demands for better governance in developing countries sound hollow. The CDI could extend its current range of policy areas to include commitment to democracy and good governance, both at home and within international institutions.
The discussion covered a wide range of issues, most relating to the methodology of the index itself. For example, answering a question about the methodology used to build the CDI, Roodman noted that most of the indicators that are used are quantitative, and are taken from standard data sources such as the World Bank and OECD. Very little data is based on judgement alone. The index was also criticised for not penalising countries which undertake unilateral military interventions. Gareth Thomas mentioned that the number of countries involved in international military and humanitarian interventions is few and that the US contribution in Afghanistan and Iraq was crucial to improve security in those areas. In relation to whether an EU index would be developed, Roodman noted that while it might make sense in an area like trade in terms of policy coherence, but on migration, for example, member states formulate their own policies.
The Commitment to Development Index (produced annually since 2003 by the Washington-based Center for Global Development) ranks the policies of 21 donor nations in terms of their compatibility or coherence with the goal of promoting development in the Global South. In the 2006 CDI, the UK came twelfth out of 21 countries, scoring best on investment and worst on security. The 2007 Index will be launched on 10 October.
Aid matters, and is part of the Index, but the scope of the ranking extends beyond aid to include policies relating to trade, investment, migration, the environment, security and technology. The Index is intended to stimulate debate about policies, and ultimately to lead governments in the developed world to make their policies more coherent around development objectives. It poses challenging questions for governments about priorities and the best ways to ensure cross-departmental working.
This briefing on the day of the launch of the 2007 Commitment to Development Index provided an opportunity to discuss the 2007 results with the Index designers and key figures from the UK and international policy arenas.