Globalisation not a panacea for reducing poverty: UN report

Globalisation is "not a panacea for poverty reduction" and trade protectionism in wealthy countries is "the biggest threat" to the people of poorer countries, according to the United Nations annual World Economic and Social Survey, released yesterday.

The report recommended "greater openness" between developing countries, with South-South trade estimated to account for about 40% of all trade in developing countries.

But it warned that "openness and liberalization are not a panacea for poverty reduction," stressing that economic policy-making has to be "tailored" to the individual circumstances of countries.

The survey stipulated a link between economic policies geared to promoting growth and a reduction in poverty, although it added that a mix of economic policies is "best in fighting poverty".

At the launch of the survey, UN Under-Secretary-General for Economic and Social Affairs José Antonio Ocampo said "first-rate economic policies" were needed if the world is to achieve the Millennium Development Goal of halving extreme poverty by 2015.

"But the current era of low economic growth and difficulties in maintaining an open trade regime poses a threat to universally agreed goals on reducing world poverty," he said.

According to the survey, land redistribution and the liberalization of agricultural markets can also reduce poverty in rural areas – home to three out of every four people defined as living in absolute poverty.

The report contrasted the experience of many East Asian countries in the late 1990s, when they recovered relatively quickly from a financial crisis, through to Latin America, where crises have become "cyclical" and governments have been unable to do much to help the poor during downturns.

(gmcg)