Sorry Sweden, Luxembourg is now the most generous country in the world

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Sorry Sweden, Luxembourg is now the most generouscountry in the world

We are the best. Again. We hit 1% of GNP in international development aid. Sweden 0.97%, Netherlands 0.71%, UK 0.56%, Belgium 0.47%, Germany 0.37%, Austria 0.28%, US 0.19%.

The official (voluntary) target for donors is 0.70% (United Nations Millennium Program).

Maybe I dare making three comments:

1. These programs have been going on for more than 50 years. Is there any audit of the resultats?

2. The OECD concedes that these programs are far from being efficient. One example is Norway. " The OECD suggested Norway could, though, improve its allocation of resources as it focuses on global issues “that are important for the country and the international role it plays” within, for example, peace-building, climate change and global health. The best known target in international aid proposes to raise official development assistance  (ODA) to 0.7% of donors' national income." Is there any audit on fraud?  

3. This is the more tricky part. Zealots will yell at this: why do we do this aid to this extent? To overcompensate for being called a tax haven? I would argue this should be reduced for three reasons:

- 15%, that's the number of Luxembourg people living below the poverty line, and should not get their benefits cut to subsidize the rest of the world

- The official goal of 0.7% of GNP would reduce the cost of this aid (not always efficient and often  not clean) program from roughly 450 to 315 million Euros, a savings of 135 million.

- And last but not least, public Luxembourg debt, an unknown phenomenon until recently, is creeping up and supposed to cap at 30% of GDP. Just this week Luxembourg decided sales tax increases (hurting the poor), to cope with future losses of the "tax haven", that no longer is. Talking about the poor in Luxembourg, their "national income" is their net minus their debt. If the government would be thinking that way, its national net income would be 70% of GNP only. And you could argue that the target of 0.7% would not only be reached at 315 million, but at an additional reduction of 30% representing the share of outstanding debt, for a final 220 million. Total savings: Euros 230 million.

While Luxembourg must urgently seek to reduce its spending by 1.5 billion, there is a discussion to have had, that political correctness will make difficult to have.