Development and building trade capacity
Are the “Poor” Getting Globalised?
Globalization is under fire. Public perceptions and recent policy debates increasingly appear to indicate that trade liberalization has been accompanied by rising income inequality in developed and developing economies. The fact that trade liberalization creates both winners and losers has never been in question. While international trade enhances economic growth in the aggregate the distribution of its benefits may vary by income group location gender and the formal-informal divide.
Exporting, Importing and Wages in Africa: Evidence from Matched Employer-Employee data
The economic and social development of the African continent has been on the agenda of policy makers and the international community for decades. With over a billion inhabitants and the fastest growing population worldwide the African market presents an enormous potential. Despite remarkable economic growth rates however many countries on the continent struggle to translate this potential into significant improvements in socio-economic indicators. International trade is considered by many as one of the main contributors to reductions in poverty and the improvement of livelihoods (Dollar and Kraay 2004; Le Goff and Singh 2014). This stance has been adopted in global policy making with trade forming an integral part of the 2030 Sustainable Development Agenda of the United Nations. The Sustainable Development Goals (SDG) include the objective to double the share of least developed countries’ (LDC) exports in global exports by 2020. Thirty-four of the 48 LDCs are located on the African continent implying that this endeavor is particularly relevant for Africa.
Trade and Poverty Reduction: New Evidence of Impacts in Developing Countries: Introduction and Overview
In recent years there has been an intensification of the long-running debate on the effects of trade integration. This debate has focused largely on the impact of trade in advanced economies which has risked diverting attention away from the impact of trade on people’s lives in developing countries and especially the extreme poor. This volume brings together new research using a range of different analytical approaches that examines how the extreme poor have fared following trade liberalization in various developing countries and regions and the challenges that poor people face in benefitting from trade.
Trade Openness and Vulnerability to Poverty in Viet Nam under Doi Moi
Following the so-called “Asian option” of transition from the early 1990s Viet Nam adopted the Doi Moi (renovation) process a combination of liberalization stabilization and structural reforms. This included two main waves of trade liberalization one in the 1990s and a second in the 2000s (Coello at al. 2010). The first wave lasted from the initial opening of the country until approximately 2001 and foresaw the total abolition of trade licences and the removal of most quantitative restrictions (Thanh and Duong 2009). The second wave—still ongoing—includes the full involvement of the country in the global network of reciprocal trade agreements (both multilateral WTO accession in January 2007 and bilateral such as agreements signed with the United States in 2001 as well as FTA negotiations with the EU concluded in 2016).
Foreword
In 2015 the World Bank and the World Trade Organization published a flagship report on the role of trade in the effort to end poverty by 2030. Over the past three years the two organizations have collaborated in various ways to advance that goal from supporting implementation of the WTO Trade Facilitation Agreement; to assisting the poor including women and small-scale traders to take advantage of trade opportunities; to supporting trade reforms in the world’s poorest countries.
Glass Barriers: Constraints to Women’s Small-Scale,Cross-Border Trade in Cambodia and Lao PDR
Border checkpoints in developing countries often teem with traders transporting small quantities on foot or pushing carts alongside trucks that sport the insignia of formal companies. Those small-scale cross-border traders may eventually be superseded by larger import-export firms. But during the process of development their trade may be a valuable avenue for poverty alleviation and women’s empowerment. This chapter focuses on the latter in the context of small-scale cross-border trade in Cambodia and Lao People’s Democratic Republic (Lao PDR). It analyzes recent survey research undertaken by the World Bank and draws conclusions about the key policy implications for facilitating the poverty-reducing impact of women’s participation in small-scale cross-border trade.
Agricultural Logistics in Lagging Regions: Evidence from Uganda
Small scale farmers face many hurdles when attempting to connect to global markets. While infrastructure and trade facilitation improvements are helping to reduce overall trade costs the challenges faced by such farmers are most acute at the local level. Efforts to eradicate poverty therefore need to start with constraints at the farmgate. The problems faced are compounded by the general lack access to proper agricultural inputs technology and intermediate services.
Gender Welfare Effects of Regional Trade Integration on Households in Ghana
Over the past two to three decades a number of developing countries have pursued regional economic integration to harmonize trade policies and increase their weight in global trade. Economic integration particularly in Africa has also been seen as a way to diversify the structure of African economies boost intra-African trade and investment build supply capacity and sustainably reduce poverty (Osakwe 2015). These integration efforts have resulted in the creation of regional blocs such as the Economic Community of West African States (ECOWAS) West African Economic and Monetary Union (WAEMU) Common Market for East and Southern Africa (COMESA) Economic Community of Central African States (ECCAS) Central African Economic and Monetary Community (CEMAC) Southern African Customs Union (SACU) and Arab Maghreb Union (AMU). The trade-related objectives of these blocs include the establishment of custom unions with a common external tariff (CET) as a major trade policy instrument.
Trade and Poverty Reduction
Global trade has contributed strongly to reducing poverty but important challenges remain in making trade work for the poorest. This publication presents eight case studies to reveal how trade can help to reduce poverty in developing countries. It focuses on four constraints faced by the extremely poor – namely that they tend to live in rural areas work in the informal sector live in fragile and conflict-affected regions and face gender inequality. The case studies identify ways to overcome these constraints including through the adoption of policies that maximize the contribution of trade to poverty reduction. The studies also highlight the ongoing gaps in data and research that constrain policy-making. The publication is a follow-up to The Role of Trade in Ending Poverty co-published by the WTO and the World Bank in 2015 which examined the challenges the poor face in benefiting from trade opportunities. The country-specific approach of this new publication complements the global perspective of the previous report.
The Poverty Impact of Modernising Dar es Salaam Port
This study assesses the likely impact of the modernization of the Port of Dar es Salaam on household welfare and poverty in Tanzania and neighboring countries. Trade volumes in Tanzania increased more than 10% per year in the last decade and international trade has been one of the engines of growth in the country. However the current state of Dar es Salaam port is a severe constraint on further growth. Increasing the efficiency of the port is a key challenge; container vessels have to wait an average of more than 10 days before berthing and dwell times average another 10 days. The costs associated with the inefficiencies in the port are partially related to congestion. The situation is more critical for imports than for exports; the inefficiencies act as an implicit tax on imports and to a lesser extent as a tax on exports (Morisset 2013).
The economic dimension of trade in the SDGs
Trade can play an important role in boosting economic growth and supporting poverty reduction. The increased market access opportunities it offers can help countries create jobs improve incomes and attract investments. The SDGs put significant emphasis on the role that trade plays in promoting sustainable development and recognize the contribution that the WTO can make to the 2030 Agenda.
Mainstreaming trade to expand economic opportunities for poverty reduction
The United Nations General Assembly formally adopted the 2030 Agenda for Sustainable Development at a summit held in New York from 25 to 27 September 2015 which was attended by some 150 heads of state and government.
Executive summary
The WTO is central to achieving the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs) which set targets to be achieved by 2030 in areas such as poverty reduction health education and the environment. The SDGs put significant emphasis on the role that trade plays in promoting sustainable development and recognize the contribution that the WTO can make to the 2030 Agenda.
The environmental dimension of trade in the SDGs
Achieving better economic growth and better environmental outcomes is an indispensable condition for achieving the SDGs. If economic growth continues along its current environmentally unsustainable trajectory the world risks compromising the prospects for future growth and human well-being and even undoing much of the progress made on both fronts during the past 50 years according to an OECD study. Forests wetlands and other forms of “natural capital” which make up almost 40% of the total wealth in developing and least-developed countries are under increased pressure due to air water and soil pollution along with rising greenhouse gas emissions says a recent World Bank report.
Emerging issues requiring the attention of the international community
Over the past 20 years international trade has undergone major changes. One main factor leading to these changes has been the unprecedented pace of technological innovation which is transforming the traditional way of conducting trade. Supported by increasingly fast and efficient technology e-commerce has been growing at significant rates. While global trade growth continues to be slow e-commerce was valued at US$ 22.1 trillion in 2015 a 38% increase from 2013.
Mainstreaming Trade to Attain the Sustainable Development Goals
The WTO is central to achieving the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs) which set targets to be achieved by 2030 in areas such as poverty reduction health education and the environment. The SDGs put significant emphasis on the role that trade plays in promoting sustainable development and recognize the contribution that the WTO can make to the 2030 Agenda. By delivering and implementing trade reforms which are pro-growth and pro-development and by continuing to foster stable predictable and equitable trading relations across the world the WTO will play an important role in delivering the Sustainable Development Goals just as it did with the Millennium Development Goals before them. This report identifies steps which would help to ensure that international trade contributes to accelerating progress in achieving the SDGs
The social dimension of trade in the SDGs
Trade plays a critical role in addressing hunger food security nutrition and sustainable agriculture contributing to healthy lives and wellbeing employment and growth.
Understanding Supply Chain 4.0 and its potential impact on global value chains
The reorganization of supply chains using advanced technologies such as the Internet of Things (IoT) big data analytics and autonomous robotics is transforming the model of supply chain management from a linear one in which instructions flow from supplier to producer to distributor to consumer and back to a more integrated model in which information flows in an omnidirectional manner to the supply chain. While e-commerce is uniquely suited to many of these techniques they also hold the promise of improving efficiency in brick-and-mortar stores. These technologies are generating enormous benefits through reducing costs making production more responsive to consumer demand boosting employment (employment in supply chain sectors where such technologies are most likely to be applied has grown much more rapidly than in other supply chain sectors and in the economy as a whole) and saving consumers’ time. The impact of these technologies on the length of supply chains is uncertain: they may reduce the length of supply chains by encouraging the reshoring of manufacturing production to high-income economies thus reducing opportunities for developing countries to participate in GVCs or they may strengthen GVCs by reducing coordination and matching costs.
Trade, value chains and labor markets in advanced economies
Trade is a major source of employment. Nevertheless trade has recently been caught in the crossfire in discussions around the decline of manufacturing employment and the polarization of labor markets in advanced economies. In this chapter we examine what the academic literature has to say on the relationship between trade and labor markets with a specific focus on studies with a value chain perspective. We find that trade has only modest effects on aggregate employment and is unlikely to have been a major contributor to the decline of manufacturing. However the effects vary considerably across regions and individuals with different skill levels. This implies that policy has a central role to play in making sure that the gains from trade are shared evenly. Our findings highlight that a value chain perspective is important for assessing the impact of trade on labor markets. The emergence of value chains has strengthened linkages between sectors magnified trade’s impact on skill demand and requires novel trade statistics. Ignoring this leads to a biased view of trade and overestimates its role in the decline of manufacturing employment.