Globalization
Oxfam
There is a paradox at the heart of international trade. In the globalised world of the early twenty-first century, trade is one of the most powerful forces linking our lives. It is also a source of unprecedented wealth.
Yet millions of the world’s poorest people are being left behind. Increased prosperity has gone hand in hand with mass poverty and the widening of already obscene inequalities between rich and poor. World trade has the potential to act as a powerful motor for the reduction of poverty, as well as for economic growth, but that potential is being lost.
The problem is not that international trade is inherently opposed to the needs and interests of the poor, but that the rules that govern it are rigged in favour of the rich. The human costs of unfair trade are immense. If Africa, East Asia, South Asia, and Latin America were each to increase their share of world exports by one per cent, the resulting gains in income could lift 128 million people out of poverty. Reduced poverty would contribute to improvements in other areas, such as child health and education.
In their rhetoric, governments of rich countries constantly stress their commitment to poverty reduction. Yet the same governments use their trade policy to conduct what amounts to robbery against the world’s poor. When developing countries export to rich country markets, they face tariff barriers that are four times higher than those encountered by rich countries. Those barriers cost them $100bn a year – twice as much
as they receive in aid.
Various polite formulations can be found to describe the behaviour of rich-country governments. But the harsh reality is that their policies are inflicting enormous suffering on the world’s poor. When rich countries lock poor people out of their markets, they close the door to an escape route from poverty.
Lack of market access is not an isolated example of unfair trade rules, or of the double standards of Northern governments. While rich countries keep their markets closed, poor countries have been pressurised by the International Monetary Fund and World Bank to open their markets at breakneck speed, often with damaging consequences for poor communities.
The problem of low and unstable commodity prices, which consigns millions of people to poverty, has not been seriously addressed by the international community. Meanwhile, powerful transnational companies (TNCs) have been left free to engage in investment and employment practices which contribute to poverty and insecurity, unencumbered by anything other than weak voluntary guidelines.
The World Trade Organisation (WTO) is another part of the problem. Many of its rules on intellectual property, investment, and services protect the interests of rich countries and powerful TNCs, while imposing huge costs on developing countries. The WTO’s bias in favour of the self-interest of rich countries and big corporations raises fundamental questions about its legitimacy.
Reform of world trade is only one of the requirements for ending the deep social injustices that pervade globalisation. Action is also needed to extend opportunity, and reduce inequalities in health, education, and income distribution. However, world trade rules are a key part of the poverty problem. Fundamental reforms are needed to make them part of the solution.
George Bush
For Immediate Release
Office of the Press Secretary
July 20, 2001
Embargoed
Until Delivery
Until 10
06 A.M. Edt
Saturday, July 21, 2001
Radio Address of the President to the Nation
Good Morning. as You Hear This, I AM in Genoa, Italy, at An Important Meeting of the World’s Most Industrialized Nations And Russia. Our Focus This Year Is on the Poor and Struggling Nations of The World and What Prosperous Democracies Can Do to Help Them Build a Better future.
This cause is the priority of the United States’ foreign policy. We’re a wealthy nation with responsibilities to help others. It is also in our best interest to do so, because we benefit when we have strong and stable partners around the world who trade with us and help keep the peace.
Our discussions here in Europe are centered on some great goals. We want to spread the benefits of free trade as far and as wide as possible. Free trade is the only proven path out of poverty for developing nations. And when nations are shut off from the world, their people pay a steep price.
Despite trade’s proven track record for lifting the lives of the poor, some still oppose it. They seek to deny the poor and developing countries their best hope for escaping poverty. Legitimate concerns about labor standards, economic dislocation and the environment should be addressed, and will be.
But the developing countries have no need for protectionist policies that would condemn them to permanent poverty. Yet, trade alone is not enough. Wealthy nations must also work in true partnership with developing countries to help them overcome obstacles to their development, such as illiteracy, disease and unsustainable debt.
This is compassionate conservatism at an international level, and it is the responsibility that comes with freedom and prosperity. To advance literacy in the developing world, I have proposed that the United States increase funding for our international education assistance programs by nearly 20 percent. And we will lead a new effort to improve basic education and teacher training in Africa.
We’ve proposed that the World Bank and other development banks increase the share of their funding devoted to education, and to tie the support more directly to clear measurable results. And we have proposed that up to half of all the funds provided by development banks to the poorest countries be provided as grants rather than loans for education, health and human needs.
Today, many poor nations are benefitting from efforts to relieve them of the crippling burden of massive debt. But debt relief is ultimately a short-term fix. My proposal doesn’t merely drop the debt, it helps stop the debt.
A final item of business at our Genoa summit is to launch a new global fund to combat HIV/AIDS, malaria and tuberculosis. The U.S. contributes nearly $1 billion a year annually to international efforts to combat AIDS and infectious diseases, and we stand ready to contribute more to the global fund as it demonstrates its success.
This is a time of great opportunity. What some call globalization is in fact the triumph of human liberty across national borders. We have today the chance to prove that freedom can work not just in the new world or old world, but in the whole world.
Our great challenge is to include all the world’s poor in an expanding circle of development throughout all the Americas and all of Asia and all of Africa. Such a world will enjoy greater freedom and prosperity, and is far more likely to be at peace.
Thank you for listening.
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