Globalisation 'helps cut world poverty'
http://www.smh.com.au/news/0110/16/national/national10.html
By Toni O'Loughlin
Globalisation has helped slash world poverty over the past 30 years, according to a Government report.
Poverty-stricken countries now make up only 8 per cent of the world's population, compared with 45 per cent in 1970, the report, commissioned by Treasury and the Department of Finance and Trade says.
In countries such as China, India, Pakistan, Bangladesh and Indonesia, which have embraced globalisation, incomes have grown more than twice as fast as developed nations, it says.
"During the 1990s their growth in gross domestic product per person was 5 per cent a year compared to 2 per cent for rich countries."
The ratio of average income in countries accounting for the richest 20 per cent of people to the average of the poorest 20 per cent fell from 15 to 1 in 1970 to 13 to 1 in 1997, it says.
Globalisation has meant that despite the growing world population the number of people living in poverty has fallen, it says.
The proportion of people living below the internationally accepted poverty line has fallen from about 28 per cent in the late 1980s to about 24 per cent, the report says.
But globalisation - increased economic integration through trade and investment - alone will not liberate the poor from poverty, the report says.
"Rich countries continue to impose trade barriers on exports from developing countries which cost developing countries dearly in terms of income foregone."
The World Bank estimates that protection in rich countries costs developing countries more than $A200 billion a year, twice the value of aid flows. About half of this is caused by tariffs, particularly on agriculture, textiles and clothing.
The OECD subsidises its farmers about $A2 billion a day, about the equivalent of the GDP for sub-Saharan Africa and more than six times the amount given to developing countries as aid.
Studies by the International Monetary Fund estimate that if the European Union, Japan, Canada and the United States eliminated their trade barriers on African trade, exports from Africa would be 14 per cent higher.
But developing nations are also hindering their own growth by putting up their own trade barriers, the report says.
Internal conflict, poor governance and anti-business policies have also stymied growth in these countries, it says.
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