Elimination of agricultural subsidies? Better regulation of capital flows? Increases in social spending? Protection of the property rights of small and medium sized enterprises in the rural areas of developing countries? Tackling of greenhouse gases?
The next thing to watch for is how the US gets WTO going or works around it for deregulation/liberalization of capital.
http://lnweb18.worldbank.org/news/pressrelease.nsf/673fa6c5a2d50a67852565e20 0692a79/096250d934f6a66185256b1900684012?OpenDocument
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Seven-Point Plan of Action
The Bank study puts forward a seven-point plan of action that aims to strengthen the benefits of globalization for poor people and to help those countries that have been left out of the benefits of globalization.
"For the two billion people in the non-integrating countries, globalization is not working as well as it should," says David Dollar, a co-author of the research report. "Some of these countries have been handicapped by weak policies, institutions, and governance, or by civil unrest and even civil war. Others have been handicapped by unfavorable geography, such as being land-locked and prone to disease. Both global and national action is needed to help those people who have been marginalized."
The seven-point plan of action calls for:
· A 'Development Round' of Trade Talks – Developing countries would gain enormously if rich nations make the WTO Doha Development Agenda a reality and agreed to bring down their trade barriers. Poor workers in developing countries today face tariffs twice as high as workers in rich countries. This must change. Rich countries must also take action to reduce dramatically their agricultural subsidies – which currently stand at $350 billion a year, roughly seven times what rich countries spend on development aid. These subsidies not only hurt poor people in developing countries, they also mean higher taxes and higher prices for people in rich countries. Developing countries would also benefit from better access to each other's markets – barriers between them are still higher than the barriers they face in rich countries.
· Improving the Investment Climate in Developing Countries – Encouraging investment and creating jobs requires good economic governance – measures to combat corruption, better-functioning bureaucracies and better regulation, contract enforcement, and protection of property rights. This is especially important for small and medium-sized firms and farms which are key to job creation and to raising living standards of the rural poor.
· Improving Delivery of Education and Health Services –The developing countries that have gained the most from integrating into the world economy have shown impressive gains in primary education and infant mortality. This suggests that many countries have made investments in education and health services that enable the poor to benefit from growth.
· Provide Social Protection to a Changing Labor Market – Tailoring social protection to the needs of a changing economy helps individual workers adjust to the challenges of a more open economy. Better social protection enables workers and entrepreneurs to take more risks and to avail themselves of new opportunities.
· Rich Nations Should Increase Foreign Aid – Evidence shows that private investors can be slow to respond when low-income countries improve their investment climate and social services. It is precisely at this stage when large-scale aid can have a great impact on growth and poverty reduction. Aid should also address the serious health and geographic problems of the most marginalized countries. Foreign aid has fallen to 0.22 percent of donor countries' GDP--its smallest proportion since it was first institutionalized with the Marshall Plan in 1947.
· Support Debt Relief for Reformers – Reducing the debt of the most marginalized countries, especially in Africa, will enable them to participate more in globalization and the benefits it can bring. Debt relief is particularly powerful for those countries that improve their investment climate and social services. Debt relief packages are now in place for 24 countries under the enhanced HIPC Initiative for which total committed assistance is estimated at more than US$36 billion. It is critical, though, that further debt relief should not come out of the shrinking pie of foreign aid, which would simply move aid resources around. Debt relief must come in addition to foreign aid.
· Tackling Greenhouse Gases – There is broad agreement among scientists that human activity is leading to potentially disastrous global warming, and that these changes in climate will be especially burdensome for poor countries and poor people. The report urges more effective international cooperation to address these problems.
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Charles Jannuzi