Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
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IV.<br />
EXPORTS AND POVERTY<br />
Can developing countries “export their way out of poverty”, can they export their way<br />
to achievement of the MDGs? How can the poor in developing countries achieve<br />
productivity and the means to compete in the world market? How can governments<br />
ensure that the benefits of exports are w idely shared and that they reduce inequalities?<br />
How can it be assured that export industries are sustainable, that adequate working<br />
conditions are maintained, that environmental impacts do not undermine the<br />
livelihoods of people in other sectors. What are the constraints faced by governments<br />
in promoting exports? What contribution can “aid for trade” programmes make to<br />
addressing “supply side” constraints which inhibit a country’s ability to export?<br />
Export Growth and the MDGs<br />
Increased exports of goods and services can provide increased incomes for poor<br />
people, government revenue, new opportunities for employment, including high paid<br />
jobs abroad, particularly for women and young jobseekers. Exports can contribute to<br />
the achievement of MDGs by lifting people out of poverty (MDG1) and empowering<br />
women (MDG3), and by contributing to the achievement of MDG8. MDG8 aims at a<br />
trading system in which developing countries can extract greater benefits from the<br />
international trading system.<br />
<strong>Trade</strong> policies should be aime d at enabling poorer people to compete in the world<br />
market and derive benefits from globalization. The simple orthodoxy would suggest<br />
that trade liberalization will allow resources to be redeployed from low productivity<br />
to high productivity export sectors. However, it ignores the basic fact that there are<br />
already high levels of unemployment in developing countries. Human resources are<br />
available for the export sector, they do not have to be “liberated” by creating<br />
unemployment in other sectors. 31 Import and e xport policy should be twin elements of<br />
an overall industrialization strategy, targeting the import of essential food, fuels, raw<br />
materials, inputs, capital equipment, machinery, spare parts and intermediate inputs<br />
goods, supporting export growth and earning the foreign exchange necessary to<br />
finance such imports. Priority should be given to the expansion of those export<br />
sectors that will provide opportunities for achieving the MDGs and other<br />
development goals.<br />
One problem is that many poorer developing countries have suffered a decline in their<br />
share in world exports, even when benefiting from tariff preferences which they now<br />
find eroding. Other countries have been able to rapidly increase exports in response to<br />
certain trade policy measures which have wor ked in their favour, but are finding<br />
themselves unable to compete when faced with a more open, competitive situation.<br />
One example is textiles and clothing, where many poorer countries have developed a<br />
successful export industry within the framework of the discriminatory structure of the<br />
Multi Fibre Agreement (MFA) and are now faced with the challenge of a more<br />
competitive environment as described in Annex A to this Section. Another example is<br />
the sugar sector where the erosion of EU preferences will cause inevitable adjustment<br />
costs to poor producers.<br />
31 See Stiglitz, Joseph and Andrew Charlton, op. cit., p. 25-26.<br />
27