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Trade-generated wealth yet to turn
south
By Hilmi Toros
ISTANBUL
- World trade is booming. Food, goods and services move
across the globe with astonishing speed. Money is made.
Yet female entrepreneurs from Mauritania cannot
ship camel cheese to the North because of stringent
European Union health regulations. The 15 million cotton
farmers in Africa lose US$250 million a year because of
US subsidies to its own cotton growers.
Around
the world, 2.8 billion people live on $2 a day, One
billion live on just $1 a day.
How to trickle
the enormous wealth generated by world trade down to the
poor is once again under global scrutiny at the 11th
United Nations Conference on Trade and Development
(UNCTAD XI), taking place this Sunday to Friday in Sao
Paulo, Brazil's largest city.
UNCTAD secretary
general Rubens Ricupero called this gathering an
"unprecedented opportunity" to help developing nations
overcome trade imbalance and its consequences.
Trade and wealth are growing steadily, but so is
inequality. To revert this trend, the South and the
North must make changes. Developing countries need to
increase South-South trade and explore new competitive
edges.
For its part, the North must provide
improved access to markets and reduce trade barriers and
subsidies that distort trade to the detriment of poorer
nations, thus compounding poverty and gender inequality.
North-South rift
Representatives of
civil society fear the Sao Paulo gathering could again
wind up in an impasse between North and South, the North
unwilling to yield its entrenched gains from world trade
to the South.
"UNCTAD must be ready to make
far-reaching proposals and resist pressure from some
industrialized nations to limit its role," said Celine
Charveriat of Oxfam.
Iara Pietrikovsky of the
Brazilian Network of Trade added, "The International
Status Quo does not allow for international development
compatible with the global needs to grow, to generate
wealth and overcome poverty."
Statistically,
global commerce rose 4.3% last year and is projected to
shoot up 7% in 2004. This growth has benefited
developing countries as their share of world trade
climbed from 24% in 1990 to 32% in 2000.
However, more than 80% of all global exports are
produced by only 10 countries, and the lion's share of
every dollar of wealth produced in the world economy
goes to wealthy or middle-income countries. Only 3 cents
of every dollar, says the World Bank, goes to low-income
countries that are home to 40% of the world's
population.
The 50 least developed countries'
share in trade slumped from 1.7% in 1970 to 0.6% in
2002, as East Asia produces 75% of the developing
world's manufactured exports.
Moreover, the
least developed countries accounted for a mere 0.62% of
world trade last year, and their economies combined only
made up 0.58% of global gross domestic product (GDP).
In 15 Latin American and Caribbean nations, more
than 25% of the population lives in poverty, according
to the World Bank.
Who's more
liberalized?
In parleys such as the one in Sao
Paulo, the main undercurrents are globalization and
liberalization: two trump cards of the North.
Through "outsourcing" or "offshoring", expected
to increase 30-40% in the next five years, any big
company can produce almost anything in developing
countries, taking advantage of cheap labor and benefits
extended by governments anxious to attract foreign
investment.
It is possible to link poverty to
slow trade. In China's recent trade boom, the percentage
of the extremely poor has plunged from 64% to 17% since
1981.
However, Ricupero points out there are 20
million more poor people in Latin America today than in
1997despite its impressive trade performance.
The reluctant South appears more liberalized
than the industrialized nations that advocate free
trade.
"Many of them have liberalized their
trade regimes in anticipation of those gains, and the
speed of that liberalization has often outpaced that of
developed countries. After two decades of opening up,
however, the developing world is still waiting for the
results," UNCTAD says.
Alternatives
World trade analysts see
a window of opportunity for developing nations to profit
in "creative industries" such as music, movies,
broadcasting, publishing and software production. Some
East Asian economies engaged in such fields tripled
their GDP and reduced their poverty level by 40% in the
past two decades.
Potential is also seen in
"service" exports, including labor in developed markets
through the "temporary movement of natural persons."
At the other end of the scale is commodity
production, which is highly vulnerable to price
fluctuations and external shocks, according to UNCTAD.
If the cards are stacked against the South in
North-South trade, unexplored potential exists in
South-South trade, making up 10% of total world trade,
growing 11% a year and now representing over 40% of all
developing-country trade. Brazilian President Luiz
Inacio Lula da Silva has called it the "new geography of
trade and economics".
UN Food and Agriculture
Organization (FAO) director general Jacques Diouf is
urging the creation of joint ventures between
agriculture-producing countries and oil-producing
countries to bolster the development of their production
and trading capacity.
In 2001, the former
countries' petroleum imports were worth $6.3 billion,
while the latter imported agricultural products totaling
$11.6 billion. he noted.
Women
In
trade, a key factor linked to poverty is the "gender
differential." Trade creates job opportunities for women
in expanding, labor-intensive export industries such as
textiles and clothing, footwear, horticulture and data
processing, but their wages remain depressed.
Women now account for about 40% of all workers
worldwide, and their participation rate has risen
steadily. The largest increase has been seen in South
America. where women increased from 26% to 45% of the
workforce in 20 years. However, women still earn about
two-thirds of what men earn.
The manufacturing
wage gap between men and women ranges from 52% in
Botswana and 75% in Egypt to 81% in Costa Rica and 86%
in Sri Lanka. Moreover, 60% of the world's 550 million
working poor are women, says UNCTAD.
The Sao
Paulo meeting comes in the wake of a stalemate of
North-South negotiations in the World Trade Organization
(WTO). The gathering is seen as supplying an opportunity
for governments, non-governmental organizations and
businesses to analyze alternative models for trade that
promotes sustainable development and to examine the
critical role fair trade rules play in addressing
hunger, the global farm crisis of commodities, supply
management, and economic development.
(Inter
Press Service)
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