Boosting international trade for the world's poorest countries has not led to any real reduction in poverty in those countries, the United Nations said on May 27. Releasing its two-yearly report on the world's least-developed countries, the United Nations Conference on Trade and Development (UNCTAD) said many of these LDCs were more integrated into the world economy than their rich counterparts but had seen trade balances worsen as they have liberalised trading. The report will act as a warning to the European Union and other World Trade Organisation members who argue that opening up markets will benefit all countries.
UNCTAD does not argue against free trade, but says it is not sufficient on its own. "Trade is the fuel for growth but not the engine", said UNCTAD's least-developed countries specialist Michael Herrmann. "The current approach is for trade-led growth, but we need development-led trade policies", he added. The key reason why there was little direct link between trade and poverty was that trade rarely increased the incomes of the people in the world's 50 least-developed countries - many of whom are surviving on less than Euro 1 a day, half the level of subsidy given to EU cows.
On present trends, far from halving the proportion of people living in extreme poverty by 2015, as called for by the UN's millennium development goals, numbers will rise from 334 million in 2000 to 471 million in 2015. This will make the LDCs the locus of global poverty in the future, UNCTAD said.
WTO chief appeal.
Meanwhile, WTO Director-General Supachai Panitchpakdi urged African Trade Ministers on May 27 to respond positively to the EU's offer to remove a key stumbling block to a deal on farm trade. "This is the time to seize the gains and move forward", he told a one-day gathering of more than 20 African trade Ministers at a conference in the Rwandan capital, Kigali. Earlier in May, the EU said it could discuss a timetable for ending export subsidies, a key demand of food exporters such as Australia and developing countries. "The outcome of this meeting will, I believe, be pivotal in determining whether the Doha Development Agenda will take a substantial step forward by the end of July or whether it will be consigned to the back burner for the rest of this year and probably much of next year as well."European Report:
