TRADE AS AN ENGINE OF GROWTH AND SUSTAINABLE HUMAN DEVELOPMENT by David Luke Senior Trade Advisor and Coordinator of the Trade and Human Development Unit UNDP Geneva Office - PowerPoint PPT Presentation

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TRADE AS AN ENGINE OF GROWTH AND SUSTAINABLE HUMAN DEVELOPMENT by David Luke Senior Trade Advisor and Coordinator of the Trade and Human Development Unit UNDP Geneva Office

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Title: TRADE AS AN ENGINE OF GROWTH AND SUSTAINABLE HUMAN DEVELOPMENT by David Luke Senior Trade Advisor and Coordinator of the Trade and Human Development Unit UNDP Geneva Office


1
TRADE AS AN ENGINE OF GROWTH AND SUSTAINABLE
HUMAN DEVELOPMENT by David Luke Senior
Trade Advisor and Coordinator of the Trade and
Human Development Unit UNDP Geneva Office

2
Overview
  • Trade as an engine of growth, human development
    and poverty reduction
  • The need for policy to embrace the poor past and
    current experience in Asia insights from UNDP
    research
  • Some key issues for Central Asian countries
    national and international level

3
Trade can be good for sustainable human
development and poverty reduction if it
  • Provides employment and incomes
  • facilitates competition, transfer of technology,
    innovation, develops skills and knowledge
  • raises productivity
  • generates revenues
  • contributes to economic growth, poverty reduction
    and human development (well-being and enlargement
    of choices).

4
But it is not enough
  • There is no unequivocal conclusion on the
    direction or dynamics of trade-human development
    relationship
  • Trade liberalization does not ensure
    self-sustaining growth, poverty reduction, gender
    equality or overall human development.
  • Other important determinants for HD are
  • Initial conditions
  • Priorities for resource allocation
  • Social inclusion
  • Human development requires the enlargement of
    peoples choicesespecially for women and poor
    people
  • The current multilateral trade regime is largely
    driven by trade liberalization and market access

5
Trade is not the end
  • Trade itself can be
  • jobless, rather than job creating
  • ruthless, rather than poverty reducing
  • voiceless, rather than participatory
  • rootless, rather than culturally enshrined
  • and futureless, rather than environmentally
    sustainable
  • A policy framework for trade and
    government/private sector partnerships are
    therefore needed
  • A truly human development-oriented international
    trade regime would give governments the policy
    space to design appropriate policies and build
    the capacity to gain from trade

6
Trade and HD outcomes the Asian experience(1)
(UNDP Asia HD Report 2006)
  • East Asias miracle economies have used trade
    to boost exports and accelerate progress in other
    areas including education, health and gender
    equality.
  • Asias opening to the global market has propelled
    record economic growth and reduced income poverty
  • Cheap, labour-intensive manufacturing and
    high-tech goods have made Asia the factory of
    the world. BPO has made Asia an important
    service centre.

7
Trade and HD outcomes the Asian experience
(2)(UNDP Asia HD Report 2006)
  • Yet, trade has also exacerbated inequalities, not
    only between countries but also within national
    borders, among different areas, sectors and
    households.
  • Some of the regions most open economies
    particularly the East Asian success stories are
    experiencing jobless growth, with job creation
    lagging far behind workforce expansion.
    (employment represents the main channel for the
    effects of trade on human development)
  • The benefits of free trade have accrued more to
    highly-paid skilled workers than unskilled
    workers. In most countries, the burden of
    unemployment is especially felt on women and
    young people

8
Trade and HD outcomes the Asian experience
(3)(UNDP Asia HD Report 2006)
  • Job opportunities and working conditions for
    women in textiles and clothing in the poorer
    countries are threatened by competition stemming
    from the demise of global quotas.
  • In the face of trade barriers, subsidies, price
    distortions, and official neglect, agriculture
    has stagnated and the Asia-Pacific region has
    become a net agricultural importer, imperiling
    food security and deepening rural poverty
  • Relative inequality as measured by the Gini
    coefficient has risen significantly in
    Bangladesh, Cambodia, the Peoples Republic of
    China (PRC), Lao PDR, Nepal and Sri Lanka between
    the 1990s and 2000s (ADB Report 2007)

9
Key lessons from the Asian experience to achieve
better HD outcomes
  • Selective and sequenced opening to trade is
    crucial to successfully manage globalization that
    is more conducive to HD
  • Trade and human development have a two-way
    relationship overall, trade winners and
    losers are dependent on factors such as the
    pre-existing health, education and infrastructure
    development of a country
  • In the miracle East Asian economies, past human
    development achievements had positively
    influenced their ability to take advantage of
    trade opportunities and stimulated a more
    balanced growth
  • The overall gains from market-oriented reforms
    and international integration can be large. But
    globalization cannot embrace the regions poor
    without determined actions on the part of
    governments and public/private partnerships to
    implement agreed policies.

10
What possible lessons can be applied to the
specific challenges Central Asian countries?
  • Domestically
  • Prioritize investment in HD to produce the skills
    required by more dynamic sectors
  • Put in place sound trade facilitation and transit
    transport arrangements given ubiquitous LLDC
    constraints in the region
  • Adopt strategic trade, industrial and services
    policies with flexibility and selectivity with
    regard to the timing of liberalization of
    industries and services
  • Introduce properly sequenced tariff barriers with
    a clear timeframe for NAMA and require selective
    performance criteria for services liberalization
  • Move into higher value-added products (industrial
    and services) as a way to overcome higher
    transport costs and boost economic growth
  • Services are the fastest growing sectors in the
    world economy and do not have the same delivery
    constraints as goods (services currently account
    for over 60 percent of global production and
    employment but no more than 20 per cent of total
    trade although growing fast. In OECD countries,
    service exports and imports have been growing
    since 2000 at respectively 9.8 and 9.3  per
    year on average in current dollars (OECD
    statistics 2007) )

11
What possible lessons for the specific challenges
of Central Asian countries?
  • Internationally
  • Any Doha Round outcome should be able to deliver
    on trade facilitation and be consistent with, and
    contribute to, MDG-based national development
    strategies
  • Central Asian countries should aim at building up
    productive capacity rather than seeking highly
    imbalanced bilateral agreements with rich nations
  • Regional cooperation and integration measures
    based on production, trade and trade facilitation
    should be promoted and expanded

12
For more information, please, contact
David.Luke_at_undp.org
  • Thank you for your attention!
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