Give Victim Countries of Climate Change Grants, Not Loans Says Foreign Minister

The Foreign Minister of Bangladeshi, Dr. Dipu Moni declared that member states attending the UN Climate Change Conference soon to be held in Copenhagen must give grants–not loans–to countries that are victims of the consequences of global climate and environmental change.

Addressing the Climate Vulnerable Forum in the Maldives, Begum Moni said “River erosion, land slide, soil degradation, deforestation, and salinity intrusion in the coastal areas are the other forms of impact we are suffering,”

“We have been running from meetings to meetings, seminars to symposiums for many years now. The series of meetings has so far eluded us of a just and equitable solution.”, she said.

The Daily Star reports that Foreign Minister Moni said:

 “the Copenhagen outcome must include provisions for assured, adequate, predictable and easily accessible funding mechanism for adaptation and transfer of green technology to the Least Developed Countries, low-lying coastal and island states and other climatically vulnerable countries at an affordable cost.”

“She said the climate vulnerable countries were not the polluters, but sufferers of global warming. Bangladesh spent over $10 billion to build structures such as coastal polders and embankments to fight natural calamities.”

Claiming that Bangladesh needed more resources to dredge rivers and reclaim flooded land, Minister Moni said, “such activities will entail huge costs and, therefore, I call upon the international community to underwrite these expenses.”

Everything turns on whether donor countries think the issue is one of prospective political development in which case, like student loans, funding through bilateral loans is a bet on a greater economic development and better policy and socio-economic pay-offs in the future.  If, however states view the funding issue as an unsecured debt paid out as a consequence of rapid industrialization in China, India and other countries, then it makes more sense to think of foreign aid and grant funding as an ameliorative approach to foreign aid.

However, I think that there’s only approach to foreign aid that makes credible sense.  And that’s Bruce Bueno de Mesquita’s argument that foreign aid is an exchange of goods for policy concessions. Leaders in donor countries make foreign aid contribution if it increases their tenure in office, say in the next election cycle.  Though Bangladesh as a recipient country  fits the parameters of the model Professor Bueno de Mesquita ascribes to the political game, most donor countries would not fit into the model so described.  This is because the leaders of most donor countries think the consequences of global climate change are too dispersed to affect their political survival.  At most, even if donor countries acceded to treaties capping  emissions at the level required, nevertheless, they are not likely to pay  for ameliorative foreign aid for economic and infrastructure development.  After all, ameliorative foreign aid, of the kind that Begum Moni claims Bangladesh deserves does not involve policy concessions.

Hence, if  aid funds are appropriated for victim countries like Bangladesh, much of it will be donated as loans, not grants.  Nevertheless, I want to point out that the  stronger moral opinion sides with Begum Moni.