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As my colleague David Roodman pointed out, the financial crisis does not bode well for foreign aid to poor countries. In the early 1990s, aid from the four donor countries experiencing financial crises dropped between 10 and 62 percent in the aftermath.
This week, history may have begun to repeat itself. The Irish government became the first major European donor country to announce it would cut its overseas aid budget due to shrinking resources. (Hat tip to Duncan Green and Owen Barder for alerting us).
The Government has taken the difficult decision to reduce the total budget provided for Ireland's Overseas Development Assistance in 2009 from €891million to €796 million. […] We should not overlook the fact that our aid programme remains at a historically high level - €796 million in 2009 compared to €255 million in 2000. Ireland remains the sixth most generous donor internationally in per capita terms.
As the statement points out, Ireland has been a strong donor, scoring 5th of 22 rich countries on the aid component of the Commitment to Development Index. But if Ireland's GNP holds constant, the ODA cut will be from 0.56 percent to 0.53 percent as a share of GNP, raising doubts about whether Ireland will fulfill its commitment to give 0.7 percent of GNP by 2012. Is this the start of a new trend?
There are two good reasons to harness the market power of iconic brands. First, policymakers and researchers with evidence-based arguments on migration are struggling to combat the hateful rhetoric of the tabloids. Second, the private sector has an important role to play in ensuring global economic prosperity. Among other things, it should use its power to fight the misinformation, ignorance, and hate directed towards the world’s most vulnerable people.
Rory Stewart MP gave a wise speech about how Britain can play a role in global peace and stability. In my brief response to the Minister, I suggested twelve policies which are within our control which would help create conditions for stronger, more peaceful, more prosperous countries to thrive, and so reduce the risks of future conflict and instability. Here they are.
Emerging market currencies have seen a lot of action over the last few months. India’s rupee has fallen 20% against the dollar, the Indonesian rupiah and the Brazilian real are floundering after falling 15%, and Turkey’s lire has slipped 10%. I invited CGD senior fellows Liliana Rojas-Suarez and Arvind Subramanian to explain what’s driving the fluctuations. Since these economies have mosty been performing pretty well—consistently growing faster than the rich countries—to the untrained eye, the currency slides seem dramatic and unexpected.