The Good Country Index scores nations on their contribution to the rest of the world. Photo: Getty
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Does your nation free-ride on the planet or benefit humanity?

The Good Country Index scores nations on their beneficent contributions to the world. Its creator hopes it will encourage governments to think globally rather than nationally.

Britain ranks seventh in the world for its contribution to humanity, according to a new global index of “good” nations published for the first time this summer.

The UK claimed the top spot in science and technology and scored highly for its contribution to global health, prosperity and culture, but fell in the bottom quartile of nations for “international peace and security”.

After the results of the Good Country Index were published last month, national media around the world reported on their countries’ respective rankings; Ireland celebrated its premier position, while Doha reflected on its lowly ranking at 110th.

Finland, Switzerland and the Netherlands scored the highest marks after the Emerald Isle, while Iraq, Vietnam and Libya were ranked the least “good” nations in the world.

I spoke to the index’s creator Simon Anholt, an independent policy advisor, about the aims behind the project.

Speaking over the phone, he explained that it is “the first to measure exactly how much each country contributes to the planet and to humanity.”

The index comprises the “national balance sheets” of 125 countries. They are measured across seven categories, from their contribution to climate change and the planet, through prosperity and equality, to their promotion of world order.

The ambitious goal of the scorecard, said Anholt, is to compel governments to give greater thought to their ultimate responsibility to humanity worldwide, not just citizens at home.

While it may seem a worthwhile aim to encourage voters and politicians to think beyond their national self-interest and about the greater good of the world, his project is undoubtedly ambitious.

Anholt maintains that his research has shown that citizens around the world do care about nations’ benefaction to humanity.

“People like good countries,” he said. “They admire nations that are powerful, beautiful, large, but the thing that counts most of all is the perception that it contributes something to the rest of the world that we all live in. This finding filled me with joy.”

He believes the Great Recession of 2009 has contributed to a collective desire for deeper and more meaningful contributions on the part of states. As the world economy lay in tatters, the hollowness of materialism and selfishness of national interest became increasingly apparent and prompted people to question the foundations of the concepts, he said.

“The Washington consensus and aggressive Anglo-Saxon capitalism has been the presiding model for a very long time. But even before the recession, it was already beginning to get to the stage where people were asking ‘Is this really it? Is this really the best model?’.”

For his index, Anholt harvested data from 35 global, accurate and up-to-date surveys, including from the World Bank, United Nations and other multinational agencies.

“Although it’s theoretically true that the choice of data is subjective, in reality it isn’t a choice, it’s just all there is,” he claims.

He wants the index to serve as more than a piece of research. “It’s more an act of public diplomacy than statistical analysis.  This is not to say I don’t stand by it, I think it’s a good piece of work. But in the end there isn’t enough data to give a definitive account of what every country on earth contributes to humanity – partially because that isn’t really measurable.”

He added: “The reason I wanted to do it is to find every way possible to bring this topic alive to people and make them ask these kinds of questions.”

Anholt contends that globalisation has made our gravest and most complex problems global.

If nations continue to act only in their own interest, then borderless challenges such as climate change, economic instability, pandemics, terrorism, inequality, overpopulation and migration will become insurmountable.

He said: “The United Nations and other multinationals have very little power to solve problems, so unless countries start collaborating more, we’re going to get nowhere.”

One of the most controversial parts of the index is the international peace and security criterion, which is calculated “to everybody’s astonishment and a certain amount of outrage”, said Anholt, by counting the number of people a nation has killed and debiting that number from the country’s scorecard.

It seems a potentially reductive approach. After all, a nation may engage in a military mission to protect civilian populations or maintain peace and security rather than destroy it.

Anholt was unrepentant about his methodology: “I take a simplistic view of this – I think killing people is wrong.”
This method explains why the US ranked only 21st in the index. Americans were outraged. Anholt claims that more than 10,000 emails, blog posts and Tweets were written by Americans in response to the results, all “furious that America doesn’t come out on top”.

A Brit himself, Anholt is ambivalent about the UK’s contribution to humanity: “proud” of some parts and “ashamed” of others.

“We’re like a lot of western democracies,” he said. “We give an awful lot and we steal an awful lot.” Among the UK’s greatest contributions are “the amount of overseas development and aid we do; we accept a lot of migrants and students; our cultural relations are good and active; we send doctors to Médecins Sans Frontières, we pay our dues to the United Nations.”

While Britain scores highly in the Good Country Index, Anholt hopes that delineating the country's contributions to the world will prompt further beneficent action.

His aims, while noble, are highly ambitious to the point of being unrealistic. But perhaps this idealistic project has come at the right time. In a period when the Middle East seems torn by strife, and internal conflict rages in Ukraine, thoughtful consideration of the external impact that countries have can only be a good thing.

Lucy Fisher writes about politics and is the winner of the Anthony Howard Award 2013. She tweets @LOS_Fisher.

 

Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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