Linkages between trade, development and poverty reduction (TDP)


‘Trade liberalisation needs enforcement’

The Himalayan Times, Kathmandu, May 26, 2006
Dr Ram Sharan Mahat, minister for finance today pointed out the fact that due to a lack of ‘effective implementation of trade liberalisation initiatives’, no substantial progress has been made in poverty reduction and trade expansion fronts.

Dr Mahat stressed that to make ‘trade liberalisation’ more fruitful, it should be accompanied with effective implementation.

He was addressing a programme on national policy dialogue on “Linkages between Trade, Poverty Reduction: Transmission Mechanism and Impact”, organised jointly by South Asia Watch on Trade, Economics and Environment (SAWTEE), Forum for Protection of Public Interest (Pro Public) and Institute for Policy Research and Development (IPRAD).

He said that if we could link up trade liberalisation initiatives with a drive for equality, it might be productive. What is worrisome is that if the liberalisation policy is not implemented seriously, it would turn out to be a curse, Dr Mahat said.

What is crucial is that we need to make our economy competitive, focusing on capacity building and removing barriers. Trade liberalisation activities should be participatory with the involvement of disadvantaged groups of people so as to benefit them from this mechanism, he added.

Matthew Kahane, resident representative of UNDP, stressed that trade liberalisation should be linked with rural sector’s development endeavors. Kahane said that unless women are empowered and get involved in mainstream development activities, poverty reduction would be difficult.

Dr Dilli Raj Khanal, UML lawmaker and former member of National Planning Commission (NPC), said that there should be a consensus on the economic agenda between the seven party alliance (SPA) and the Maoists to attain poverty reduction.

Dr Khanal also stressed that it is equally important to hold public debate on such issues at length. He stressed on the need to have a new thinking on socio-economic transformation.

Dr Posh Raj Pandey, president of SAWTEE, was of the view that proper design and sequencing of trade liberalisation and development is needed. In connection with linkages between trade and poverty reduction, global partnership is a must, he opined.

The private sector should come up with effective mechanisms and move forward to exploit the potentials of trade liberalisation in a changed context, he suggested.

To reduce poverty, improvement is needed in household investment as well as consumption, said Dr Pandey while giving his remarks.

The paper prepared by SAWTEE recommended that as there is no mention of the direct trade and poverty linkages in the poverty reduction strategy paper (PRSP) of the government, there is a gap in terms of mainstreaming trade in poverty reduction strategy.

It further states that the indirect link between trade and poverty can face a number of problems from high economic growth, as the benefits are not automatically pro-poor.

This news item can also be viewed at: