Aid
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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.
Denmark’s aid performance
Strengths
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High net aid volume as a share of the economy (0.85%; rank: 4)
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Large share of aid to poor and better-governed recipients (selectivity rank: 5)
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Large amount of private charitable giving attributable to tax policy (0.01% of GDP; rank 9)
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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. It also penalizes costly importation processes and restrictions against purchasing services from foreigners.
Denmark’s trade performance
Strengths
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As a member state of the European Union, Denmark imposes low tariffs on agricultural products including wheat, dairy, some meats, textiles and apparel
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Few documents required for importation (5 documents; rank: 1)
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Few days to import a shipping container (3 days; rank: 2)
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Relatively low cost to import a shipping container ($744 per container; rank: 5)
Weaknesses
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As a member state of the European Union Denmark imposes high tariffs on rice, sugar and beef
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High agricultural subsidies (equivalent to a tariff worth 16.8% of the value of imports; rank: 24)
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Finance
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Rich-country investment in poorer countries can transfer technologies, upgrade management and create jobs. Conversely, policies that permit financial secrecy of companies and banks can facilitate illicit activities and financial flows abroad. The CDI rewards policies that support healthy investment in developing countries and promote transparency in financial transactions at home.
Denmark’s finance performance
Strengths
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Political risk insurance agency provides wide coverage and screens potential projects for violations of human, labor and environmental rights
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Active participation and leadership in extractive industries transparency initiatives such as the Extractive Industries Transparency Initiative (EITI) and the Kimberley Process on blood diamonds
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Provides assistance to companies looking for investment opportunities in developing countries
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Scores above average in the Financial Secrecy Index for regulations in place to promote transparent financial transactions within its jurisdiction (rank: 1)
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Provides official support for outflows of portfolio investment
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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.
Denmark’s migration performance
Strengths
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Bears share of the burden of refugees during humanitarian crises (rank: 13)
Weaknesses
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Small share of foreign students from developing countries (52%; rank: 20)
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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.
Denmark’s environment performance
Strengths
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GDP growth exceeded growth in greenhouse gas (GHG) emissions over the past decade (average annual GHG growth rate/GDP, -3.68%; rank: 8)
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Excellent compliance with mandatory reporting requirements under multilateral environmental agreements relating to biodiversity (rank: 1)
Weaknesses
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High greenhouse gas emissions rate per capita (18.6 tons of carbon dioxide equivalent; rank: 20)
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Low gas taxes ($0.89 per liter; rank: 20)
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High fishing subsidies (rank: 20)
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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, military protection of global sea lanes, and participation in international security treaties. It also penalizes arms exports to poor and undemocratic governments.
Denmark’s security performance
Strengths
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Significant personnel and financial contributions to UN and internationally-sanctioned peacekeeping and humanitarian interventions over last decade (rank by share of GDP: 3)
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Participates in major international security treaties and regimes
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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.
Denmark’s technology performance
Strengths
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Significant government support for R&D (rank: 2)
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Provides patent exceptions for research purposes
Weaknesses
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Allows patents on plant and animal varieties
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Pushes to extend intellectual property rights in bilateral trade treaties (“TRIPS Plus” measures) that restrict the flow of innovations to developing countries
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Imposes strict limitations on anti-circumvention technologies that can defeat encryption of copyrighted digital materials
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Offers patent-like proprietary rights to developers of data compilations, including those assembled from data in the public domain
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