Development, when inclusive, is the best strategy to mainstream trade: CUTS

July 25, 2008, New Delhi
“I do not see much intersection between trade policy and development policy in India.The degree of overlap between trade policy and development policy is often exaggerated” said Anwarul Hoda, Member of the Planning Commission of India and a former Deputy Director-General of the World Trade Organisation. He was speaking at a national seminar Towards a Coherent Trade and Development Strategy of India organised by CUTS International with support from UK’s Department for International Development, the Netherlands Ministry of Foreign Affairs and the Royal Norwegian Embassy in New Delhi.

More than 50 participants from different parts of the country took part in deliberations. Alok Ray, former Professor of Economics at the Indian Institute of Management, Calcutta explained the links between globalisation, growth and poverty. According to him, growth does reduce poverty, however linkages between globalisation and growth are more controversial. Domestic policies are very important for inclusive growth. There were debates on inclusive growth. The important questions are why the poor are poor? How to empower the poor to get benefits from globalisation? Much of the problems that the poor are facing is due to lack of endowment and that of connectivity.

Siddhartha Mitra, Director (Research) of CUTS International responds to some challenges posed by international trade for securing an inclusive path to development. The main question that he addressed was, how to ensure that trade leads to poverty reduction? He argued that promotion of the production of labour-intensive goods, tariff reduction on inputs into labour-intensive imports, avoidance of excessive rigidity in labour legislation and use of aid for trade to provide safety nets for the poor are some factors that are to be looked at to find an answer to this question.

Rajiv Kumar, Director of the Indian Council for Research on International Economic Relations said that we should look into a set of public policies which enhance opportunities for the poor to get more benefits from international trade. Pramod Dev, Policy Analyst of CUTS International presented a fieldwork-based research on whether the stage is set for mainstreaming international trade into the national development strategy of India. According to him globalisation and liberalisation are most noticeable in livelihoods and economic security in the agriculture sector.

Sugata Marjit, Director of the Centre for Studies in Social Sciences, Calcutta presented his work on regional trade openness index, poverty and inequality in India. It was observed that the relative income of a region is closely related to the extent of opneness and that such relationship gets stronger over time. It demonstrate that trade openness has contributed significantly to divergent income patterns across states in India. The effect of international trade on low wage workers in West Bengal was studied. More exposure to international markets has increased wage rates, there were other benefits too, the job has become more skill-intensive, employer-employee relations have improved but uncertainties are also increasing and that is related to increasing risks associated with the changing regime.
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