Lifting trade barriers will help poor

Hafiz A. Pasha, Jakarta

As high-ranking representatives from 53 Asia-Pacific countries gather here today to review progress toward the global anti- poverty goals, we must recall that our ambitions -- upon which the lives of hundreds of millions of people depend -- cannot be achieved without the opening up of international trade.

Nowhere is this more necessary than in our region, where the widespread extreme poverty of the 14 Least Developed Countries, or LDCs, is masked by a "tyranny of averages" that focuses on the rising prosperity of China, India and the East Asian "tigers."

In the region's poorest countries, however -- a group that includes Timor-Leste, Afghanistan and Nepal -- almost half the overall population lives below national poverty lines, and their potential for reaching the eight Millennium Development Goals (MDGs) by 2015 is seriously compromised.

To meet the Goals, ensuring that the poorest countries have something to sell -- and enjoy better market access -- must be an integral part of an enhanced global partnership for development. These countries, which comprise about 40 percent of the global population in LDCs, compete with a distinct disadvantage: In the textiles and clothing export sector, for example, the average tariffs faced by Asia-Pacific LDCs are higher than those by their counterparts, often outweighing the bilateral aid they receive.

Likewise, market access preferences have been less favorable for Asia-Pacific LDCs than for comparable countries in other regions. A particular area in which labor-abundant Asia-Pacific LDCs need wider market access is for their overseas workers, especially those at the lower end, with low skills. After earnings accruing from merchandise exports, remittances are the second-largest source of private financial flows that could provide an additional means of tackling poverty.

Remittance income also contributes to the Goals of health and education when beneficiary households have more money to access improved health services, better schooling, protected water and better housing. Thus, like countries in Africa and the Caribbean, Asia-Pacific LDCs also must benefit from preferential trade schemes comparable to the Cotonou Agreement of the European Union.

The LDCs themselves have spoken on this. Necessary policy actions recommended by these countries and endorsed by the United Nations Special Body on Least Developed and Landlocked Developing Countries are highlighted in a report being launched regionally today at the Ministerial-level meeting here.

To ensure the success of the global partnership, national policies must focus on mainstreaming trade into overall development plans and the poorest countries must carefully examine the social impact of various trade liberalization options.

In addition, it calls for better aid harmonization, coordination and efficiency at the national level. When made part of an overall development strategy, all this will contribute to higher incomes, reduce dependence on aid and debt relief, and increase financing for development.

At the same time, developing countries of the region need to re-examine their own structure of protection, which often has weighed most heavily on exporters from the LDCs. And industrialized countries must ensure policy coherence to avoid negative social effects on the "losers" of trade, such as displaced female workers, or real wage decreases, which risk pushing people into deeper poverty.

The World Summit 2005, for which this week's gathering in Jakarta is a key prelude, offers a crucial forum to acknowledge the special needs of Asia-Pacific LDCs. Ongoing negotiations under the Doha Development Agenda and the forthcoming World Trade Organization (WTO) Ministerial Conference in Hong Kong also provide a unique window of opportunity for developed nations to reaffirm commitments to provide duty-free access, relax rules of origin and strengthen supply-side capacity of institutions.

Without action, achieving poverty reduction among Asia- Pacific's poorest countries will be daunting indeed. But if we strengthen the political will, we can shore up perhaps the best sources of future trade and investment growth in the world's fastest-growing economic region -- and future dynamism for the global economy.

The writer is Assistant Secretary-General of the United Nations and Regional Director for Asia and the Pacific of the United Nations Development Programme (UNDP).