- Development & Aid
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Thursday, October 27, 2016
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- In the past two decades, it has often been claimed that trade liberalization can, on balance, be a positive force for development. During this time, the Least Development Countries (LDCs) themselves became some of the most open economies in the world, based on the share of their exports in Gross Domestic Product (GDP). But greater opening of LDCs markets has not always benefitted all people in these countries, and the impact of trade reforms has affected their populations differentially.
In general, trade liberalisation can have strong redistributive effects within the economy, potentially benefitting some industrial sectors and harming others. At a more disaggregated level, such effects can also magnify or reduce existing disparities among different groups based on gender, ethnicity, class, and geography. With regard to gender, trade policies can have strong differential impacts on men and women. The degree of difference will depend on a number of factors, including existing gender patterns within the division of labour, structural inequalities in the ownership of assets, educational level and entitlements, and the pattern of (traditional) gender roles.
When considering trade reforms, therefore, it is crucial for policy makers to anticipate how policy changes will affect the redistribution of jobs and wealth at a sectoral level, and to prevent the deepening of social polarisation and exclusion.
The United Nations Conference on Trade and Development (UNCTAD) has repeatedly stressed that a key feature of the last two decades was the disconnect between economic growth and social development. An era of globalisation that was defined by opening up to trade and capital flows has left many countries with increased income disparities, and rising social inequality and exclusion even in economies that recorded high levels of GDP growth and trade. The economic crisis of 2008/9 has shown that globalisation needs to be led by a development agenda, in which the State plays a stronger catalytic role through policy, regulation and institutions.
Macroeconomic policy, and trade policy in particular, can and should be used not only to promote trade but to achieve other social policy objectives, such as the better opportunities for women in the labour market. A globalisation process that leaves behind important segments of the population is not conducive to development or, indeed, to long-term, sustainable economic growth.
In the LDCs, trade policies that are aimed at fostering market integration should thus be cautiously designed so as to contribute to sustainable and equitable socio-economic development. In practice, this often calls for a balance to be struck between new, dynamic export sectors and traditional ones. UNCTADs own analysis of the gender dimension of trade policy, through a series of country case studies, seeks to assess who would benefit from trade liberalisation policies and whether there would be a gender bias in any gains arising from increased trade.
A recent study of Bhutan analyses this question, with a specific focus on agriculture and intellectual property.
Agriculture is the main source of employment in Bhutan accounting for more than 65 percent of the total work force and just over 72 percent of the female work force. Such a distribution is common in many LDCs where women are predominantly employed in the agricultural sector. Beyond subsistence agriculture, women in Bhutan are involved in producing some high-value agricultural commodities that have export potential. Carefully balanced and sequenced trade liberalisation could offer opportunities to women as producers and exporters, but attention should also be paid to food security concerns, as in other LDCs.
Trade in cultural industry goods and services can offer LDCs a strategy for diversifying their economic and export base while at the same time contributing to the conservation of their cultural heritage. One of the recommendations included in the case study is that, through strategic marketing of its global image, the country could gain brand identification and position its goods and services in high-value markets. Women would benefit enormously from this strategy, since they are involved in the production of handmade textiles and other handicraft manufactures as well as forest-based products, such as medicinal plants and essential oils. They are also employed in the tourism sector, and linkages could be established between agro-processing industries and tourism opportunities.
A further recommendation of the case study emphasised that Bhutan, and LDCs in general, could make better use of Intellectual Property Rights to identify and give additional commercial value to cultural products and services. For example, geographical indication (GIs) and trademarks can be used for this purpose to protect local knowledge, techniques, and resources.
Addressing the challenges and opportunities of pursuing a more equal and inclusive economy, in which women can equitably share in the benefits from trade and enjoy an equal share of income and assets generally, will require attention at a number of levels. Countries must seek ways of reorienting globalisation so that it better serves the needs of all. (END/COPYRIGHT IPS)
(*) Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD).