Missing Pieces: Commitment to Development, Global Inequality, and More
October 22, 2012
Brazil's President Dilma Rousseff (R) greets Denmark's Prime Minister Helle Thorning-Schmidt after a meeting during the Rio+20 United Nations Conference on Sustainable Development summit in Rio de Janeiro, Brazil, June 22, 2012 (Courtesy Reuters).
Charles Landow covers topics ranging from foreign aid to corruption and from inequality to governance in this edition of Missing Pieces. I hope you enjoy the selections.
- Commitment to Development: The Center for Global Development last week released its 2012 Commitment to Development Index. The index measures wealthy countries “on their dedication to policies that benefit the 5.5 billion people living in poorer nations.” These include the quantity and quality of foreign aid, openness to trade and migration, promotion of investment in developing countries, environmental policies, contributions to peacekeeping and other security efforts, and more. The familiar Scandinavian trio of Denmark, Norway, and Sweden leads the way, followed by Luxembourg and Austria. The index’s only two Asian countries, Japan and South Korea, come in last, with several eastern and southern European states also faring poorly. The United States finishes nineteenth of twenty-seven. It scores well on trade but poorly on aid since, according to the index, it gives little aid relative to its GDP and favors “corrupt or undemocratic governments in Iraq, Jordan, Afghanistan, and elsewhere.”
- Global Inequality: An Economist special report examines global inequality. For decades, the report says, income within industrialized countries became more equal while inequality between countries grew. However, “around 1980 both these trends went into reverse. Globally, poorer countries began to catch up with richer ones, and within countries richer people began to pull ahead.” Asia’s rising giants are now growing more unequal, partly because of globalization (which favors “the skilled and educated”) and partly because of “cronyism,” policies that hinder job creation, and other ills. The United States, too, has yawning income gaps. Latin America is the big exception, with inequality falling thanks to such factors as secondary education, social spending targeted at the poorest, and overall job-creating expansion. The report concludes with ideas for reducing inequality while fueling growth. These include measures to “curb cronyism and enhance competition, particularly in emerging markets;” to prioritize spending for young and low-income citizens (through education, for example) instead of older and wealthier ones (such as through entitlements); and to boost tax efficiency and fairness.
- China’s Gravy Train: In July 2011 I wrote about the crash of two high-speed trains in Wenzhou, China. Now a New Yorker article explores the disaster and the spectacular corruption in China’s rush to crisscross the country with rail. “China’s most famous public-works project,” the article says, “was an ecosystem almost perfectly hospitable to corruption–opaque, unsupervised, and overflowing with cash.” Sham procurement procedures and kickbacks were widespread and quality controls subpar. One result was faulty equipment; a signal developed by a state-owned firm failed in the Wenzhou disaster. As the article reports, Liu Zhijun, who oversaw the high-speed rail bonanza as railways minister for eight years, was fired for corruption even before the crash in 2011. Overall, the piece suggests, corruption could be simply “part of the ambitious transition from Socialism to a free market.” Or it could send China’s Communist Party the way of the Soviets.
- Ibrahim Announcements: The Mo Ibrahim Prize for Achievement in African Leadership offers millions to outstanding African leaders who were “democratically elected” and “served only their constitutionally mandated term” before stepping down. Last week, for the third time in four years, the Mo Ibrahim Foundation announced that it had found no such leader. The foundation also released its Ibrahim Index of African Governance. Mauritius, Cape Verde, Botswana, the Seychelles, and South Africa lead the way; the Central African Republic, Eritrea, Chad, the Democratic Republic of the Congo, and Somalia come in last. While governance in Africa has improved in recent years, the index says, it has worsened in such “powerhouses” as Egypt, Kenya, Nigeria, and South Africa. CFR’s John Campbell says “it is striking that the successful states tend to be small in population” while more populous countries lag behind. Reflecting on the prize and the index, Mo Ibrahim writes, “I am delighted to see the positive trends highlighted by this year’s index. Africa is on the move. But I am also proud of the decision of our prize committee. We still have a way to go.”
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