Trade — the missing link in fighting global poverty

Today, World Bank president Paul Wolfowitz presented an address to the National Press Club on the centrality of trade in combatting poverty, especially in Africa. A draft of the speech, which has aired on C-SPAN and C-SPAN radio, is available here.

Wolfowitz’s basic thesis is captured in this passage:

As important as aid and debt relief are, the opportunities generated by trade are far more significant. It is the missing link to jobs and opportunity. Unless the people of Africa and other poor countries have access to markets to sell their products, they will not escape poverty or give their children a better future.

Accordingly, Wolfowitz urged wealthy nations to make concessions at the upcoming Doha Round of trade talks in order to create a level playing field for poor nations. Right now, the field is anything but level. For example, under current rules, rich countries are allowed to keep barriers highest on the goods produced by poor countries. Thus, the U.S. actually extracts more in tariffs (in absolute terms) from its small volume of imports from Mongolia than from its sizeable imports from Norway. And, by virtue of its agricultural subsidies and tariffs, the U.S. denies access to its markets to poor farmers in developing countries. Unless the Doha Round produces progress on these fronts, the outlook for economic development in Africa is grim.

Wolfowitz also focused on the other great impediment to development — corruption. He pointed to World Bank research showing that countries that defend civil liberties, protect the freedom of the press, recognize women’s rights, and allow civil society to operate freely experience less corruption than countries that don’t.

“In the last forty years,” Wolfowitz noted, “we have learned a lot about what works and what doesn’t in development.” The key now is putting that knowledge to work. It’s fortunate that President Bush has selected Wolfowitz as his point man for that task.


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