Aid |
Aid quality is just as important as aid quantity, so the CDI measures gross aid as a share of GDP adjusted for various quality factors: it subtracts debt service, penalizes “tied” aid that makes recipients spend aid only on donor goods and services, rewards aid to poor but relatively well-governed recipients, and penalizes overloading poor governments with many small projects.
New Zealand’s aid performance
Strengths
- Large share of aid to poor and relatively well-governed recipients (selectivity rank: 7)
- Prevents project proliferation; large average project size (rank: 7)
Weaknesses
- Low net aid volume as a share of the economy (0.26%; rank: 18)
- Large share of tied or partially tied aid (15.2%; rank: 14)
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Trade
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International trade has been a force for economic development for centuries. The CDI measures trade barriers in rich countries against exports from developing countries.
New Zealand’s trade performance
Strengths
- Low tariffs on agricultural products (0.4% of the value of imports; rank: 1)
- Low agricultural subsidies (equivalent to a tariff of 1.2% of the value of imports; rank: 1)
Weaknesses
- High barriers against apparel (14.6% of the value of imports; rank: 27)
- High barriers against textiles (7.9% of the value of imports; rank: 22)
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Investment
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Rich-country investment in poorer countries can transfer technologies, upgrade management and create jobs. The CDI includes a checklist of policies that support healthy investment in developing countries.
New Zealand’s investment performance
Strengths
- Employs foreign tax credits to prevent double taxation of corporate profits earned abroad
- Provides official support for outflows of portfolio investment
Weaknesses
- Does not provide political risk insurance through a national agency
- Does not participate in the Extractive Industries Transparency Initiative (EITI)
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Migration
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The movement of people from poor to rich countries provides unskilled immigrants with jobs, income and knowledge. This increases the flow of money sent home by migrants abroad and the transfer of skills when the migrants return home.
New Zealand’s migration performance
Strengths
- Large increase during the 1990s in the number of unskilled immigrants from developing countries living in New Zealand (rank by share of population: 4)
- Large number of immigrants from developing countries entering New Zealand (rank by share of population: 8)
Weaknesses
- Bears small share of the burden of refugees during humanitarian crises (rank: 20)
- Tuition for foreign students higher than for nationals
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Environment
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Rich countries use a disproportionate amount of scarce resources, and poor countries are most vulnerable to global warming and ecological deterioration, so the CDI measures the impact of policies on the global climate, fisheries and biodiversity.
New Zealand’s environment performance
Strengths
- No fishing subsidies (rank: 1)
- Few tropical wood imports ($6.31 per person; rank: 3)
Weaknesses
- Greenhouse gas emissions grew almost as fast as GDP over the last decade (average annual growth rate/GDP, -1.37; rank: 25)
- Low gas taxes ($0.57 per liter; rank: 24)
- High consumption of ozone-depleting chemicals per capita (rank: 24)
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Security
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Since security is a prerequisite for development, the CDI rewards contributions to internationally sanctioned peacekeeping operations and forcible humanitarian interventions, rewards military protection of global sea lanes, and penalizes arms exports to poor and undemocratic governments.
New Zealand’s security performance
Strengths
- Significant financial and personnel contributions to UN peacekeeping operations over last decade (rank by share of GDP: 2)
- Few arms exports to poor and undemocratic governments (rank by share of GDP: 3)
- Participates in major international security treaties and regimes
Weaknesses
- Provides little protection of global sea lanes that are important to international trade (rank by share of GDP: 17)
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Technology
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Rich countries contribute to development through the creation and dissemination of new technologies. The CDI captures this by measuring government support for R&D and penalizing strong intellectual property rights regimes that limit the dissemination of new technologies to poor countries.
New Zealand’s technology performance
Strengths
- No attempt to incorporate into bilateral free trade agreements “TRIPS-Plus” measures that would restrict the flow of innovations to developing countries
- Permits technologies that break encryption systems
- No government R&D expenditure on defense
Weaknesses
- Low tax subsidy rate to businesses for R&D (rank: 26)
- Low government expenditure on R&D (rank by share of GDP: 23)
- Allows patents on plant and animal varieties
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