Mr. Muhammad Abu Eusuf in his presentation Trade Liberalization and Poverty: The Bangladesh Experience discussed the negative and positive aspects of trade liberalization in Bangladesh. While the incidence of poverty was seen to decline, the inequality of the distribution of trade gains had not been measured. Moreover, profit margins for some producers saw a decline in the liberalized trade regime, and some local industries were seen to suffer, as imports were more competitive. The informal sector became a victim of trade liberalization with unskilled and low-skilled workers hard-hit by it. He concluded that Bangladesh had not achieved the higher level of growth it could have achieved if these factors had been taken into consideration while pursuing a liberalization policy. Muhammad Abu Eusuf suggested that a trade policy alone could not guarantee benefits and institutional reforms must also be undertaken for a trade policy to be fully effective. A trade policy has to be carefully designed, monitored and evaluated for sufficient gains.
Shandana Gulzar from the International Institute of the WTO and Trade Laws presented Athar Mehmood's paper on Trade, Development and Poverty . The paper aimed to discuss the efficacy and shortcomings of the Poverty Reduction Strategy Paper (PRSP) for Pakistan. She discussed the shortfalls on the ‘calorific definition' of poverty by the Government of Pakistan—based as it is on the dietary and nutritional intake. She said her research shows that employment and trade-generation alone, are not answers to poverty. Therefore, the measures undertaken by the WTO are insufficient to address Pakistan's poverty problem.
While poverty in Pakistan has stabilized and has not deteriorated since 2000, 32% of the population is still living below the poverty line. The development of rural markets, and export markets for agricultural produce, as well as the strengthening of social safety nets were identified as measures that would help poverty reduction. The economy needs to be guarded against inflationary pressures and external shocks. The most crucial element, Ms. Gulzar emphasized, was that domestic reforms need to be made along with policy reforms, and trade policy should be liberalized sequentially to boost investor confidence.
Dr. Abid Suleri from SDPI, in his presentation TDP Initiatives: Ways to maximize Policy Coherence shed light on the gaps between the perceptions of donors and recipients. Citing results from the stakeholder survey of the International Institute of WTO he said that the proponents of trade liberalization and its opponents have at the moment taken a rigid stance on the issue. There are significant gaps between how aid donors, recipient communities, and governments perceive the issue, as well as a lack of trust between the North and the South—giving rise to issues like aid money still not being used for human capital development. Thus, any form of aid fails to address the core problem of poverty alleviation. He proposed that instead of following a growth policy, a pro-poor growth policy should be devised and followed to actually reduce poverty. Donors in turn should streamline their efforts so that maximum results can be achieved. However, to achieve this, true democracy should ensure that the voices of the poor are actually heard at the policy-formulation level. A paradigm shift is required to start regarding people as assets so that investment in them can be made for longer term growth. He added that civil society should act as the watchdog and the bridge between the people and policy-makers.
Haroon Sharif from DFID, Islamabad, chaired the session. Jan J. Vandermoortele from the UNDP was the discussant for the panel. He was of the view that trade ensures development and thus, the reduction of poverty. According to him, economic history shows trade following development, and not vice versa. Moreover, he felt that the ‘one-size fits-all' philosophy of free trade propagated by the WTO is not the answer to developing countries' concerns about poverty. The WTO cannot be regarded as the answer to all trade- and growth-related problems.
In the discussion session, participants discussed how poverty or development has not been defined consistently. Even if the same project was implemented in different countries simultaneously, it was implemented through different organizations and the stakeholders' definition of poverty was accepted in order to avoid time-consuming debates on setting a uniform definition.
Shandana Gulzar was asked about the validity of the ‘calorific definition' of the poverty line and linkages between trade and environment. She replied that though a calorific definition of poverty' was inaccurate, it was a definition chosen by the Government of Pakistan, and had to be used since it was the Government's prerogative to choose a definition. She said that it was necessary to explore the link between trade and environment as it is a known fact that trade flourishes at the expense of natural resources. Abu Eusuf explained how enterprises were seen to flourish despite narrowing profit margins in Bangladesh. As large and medium enterprises benefited from trade liberalization, but smaller enterprises suffered. Towards the end of the discussion intellectual property rights and the TRIPS agreement were discussed.
Reported by Azka Tanveer
| Email Article |  |
Print Article | |
Next Article |
PDF Format
