Lifting trade barriers will help poor

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).