Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic...
-
Upload
vincent-houston -
Category
Documents
-
view
217 -
download
3
Transcript of Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic...
![Page 1: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/1.jpg)
Conference on the impact of Trade Liberalisation and Poverty
Rebeca GrynspanDirector
UN Economic Commission for Latin America and the Caribbean (ECLAC)
Woodrow Wilson International Center for Scholars
April 15, 2005
![Page 2: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/2.jpg)
In the last 25 years…
Latin America has undergone a strong process of economic reforms
There were great expectations that trade (and the reforms) will bring high economic growth and poverty reduction. Little attention to the specific conditions of the region: middle income countries, with very high initial inequality, on a demographic transition
![Page 3: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/3.jpg)
010
20
30
40
50
60
7080
90
100
Uru
guay
Méx
ico
Bra
sil
Perú
Arg
entin
a
Ven
ezue
la
Col
ombi
a
Ecua
dor
Para
guay
Bol
ivia
Gua
tem
ala
Cos
ta R
ica
Chi
le
Nic
arag
ua
1980s 1990 2003
Average Tariff Average Tariff NMF NMF
> 100%
29%
10%
Regional Average Tariff, weighted by Preferential Agreements, decreased to 5%
Fall of Import Tariffs in Latin America Countries
![Page 4: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/4.jpg)
Fall of Import Tariffs in Central America 1995-2002
0.00
2.00
4.00
6.00
8.00
10.00
12.00
1 2 3 4 5 6 72000 20011998 19991995
1997 2002
![Page 5: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/5.jpg)
Trade Openness Coefficient
Ar
Bo
Br
Cl
Co
Cr
Ec
Sv
GtHt
Hn
Mx
Ni
Pa
Pr
Pe
Do
Uy
Ve
0
10
20
30
40
50
60
70
0 10 20 30 40 50 60 70
1980-1983
20
00
-20
03
WeightedAverage
WeightedAverage
Simple Average
Simple Average
Resulting Trade Openness
![Page 6: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/6.jpg)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Latin America (18)
Venezuela
Uruguay
Dominican Rep.
Peru
Paraguay
Panama
Nicaragua
Mexico
Honduras
Guatemala
El Salvador
Ecuador
Costa Rica
Colombia
Chile
Brazil
Bolivia
Argentina
bilateral IPTAs bilateral EPTAs plurilateral IPTAs plurilateral EPTAs without PTAs
Export Flows by Preferential Trade Agreements, 1991
![Page 7: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/7.jpg)
0% 20% 40% 60% 80% 100%
Latin America (18)
Venezuela
Uruguay
Dom. Republic
Peru
Paraguay
Panama
Nicaragua
Mexico
Honduras
Guatemala
El Salvador
Ecuador
Costa Rica
Colombia
Chile
Brazil
Bolivia
Argentina
bilateral IPTAs bilateral EPTAs plurilateral IPTAs plurilateral EPTAs without PTAs
Export Flows by Preferential Trade Agreements, 2004
![Page 8: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/8.jpg)
Results:
Unprecedented exports and FDI growth
Growth was resumed after the crisis and it was associated to export growth
From 1990 to 2004 the percentage of the population living in poverty declined
![Page 9: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/9.jpg)
Ar
Bo
Br
Cl
Co
Cr
Ec
Sv
Gt
Ht Hn
Mx
Ni
Pa
Py
Pe
Do
Uy
Ve
-2
0
2
4
6
8
10
12
14
16
18
-1 0 1 2 3 4 5 6
GDP growth, average 1990-2003
Exp
ort
gro
wth
, av
era
ge
199
0-20
03
LAC: Economic growth and exports
![Page 10: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/10.jpg)
Poverty and Extreme poverty in LAC 1990-2004
% of total population
Extreme poverty Not extreme poverty
![Page 11: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/11.jpg)
But
The rate of growth was mediocre and lower than in the past, volatility of GDP and consumption was very high at the same time that coverage of the social security systems declined
Relation between exports and growth, growth and employment and growth and poverty has weakened.
Inequality raised: wage inequality, income inequality, social inequality, rural-urban inequality, regional inequality, inequality between age groups. Inequality matters: initial inequality and its evolution
Increased structural heterogeneity of the productive structure. Low increase in value added
Unemployment raised in the south and informality raised in the north. Productivity increases very slow and not across all sectors
Poverty is still higher than in 1980 in relative terms, and raised in absolute terms from 135 millions in the 80´s to 200 millions in the 90´s to 222 millions in 2004
![Page 12: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/12.jpg)
Most countries resume growth at a slower rate than in the past
Crecimiento medio anual del PIB real
Chile
Argentina
Bolivia
Uruguay
República Dominicana
Costa Rica
México
Brasil
EcuadorVenezuela
Paraguay
ColombiaHonduras
Nicaragua
Guatemala
PanamáPerúEl Salvador
1%
2%
3%
4%
5%
6%
7%
2% 3% 4% 5% 6% 7% 8%
1945-1980
1991
-200
0
![Page 13: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/13.jpg)
… menos estables que lo esperado.
Isto Centroamericano: PIB, 1960-2001(Tasas anuales de crecimiento)
-1
0
1
2
3
4
5
6
7
1960-1970 1970-1980 1980-1985 1985-1990 1995 1996 1997 1998 1999 2000 2001 2002
Tasa
s de
pro
med
io a
nual
del
PIB
América Latina Istmo Centroamericano
Fenómeno El Niño
Huracán Mitch 98.
Terremotos en El Salvador y
sequía generalizada
![Page 14: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/14.jpg)
Fuente: de Ferranti et. al. (2000)
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998
9
8
7
6
5
4
3
2
1
0
Po
rce
nta
je
PIB
Consumo Privado
Volatilidad del crecimiento del PIB y consumo privado en
América Latina:(Ten-Year Window, mediana regional)
![Page 15: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/15.jpg)
Inequality worsenLatin America: relation betwen average income of the richest 10% and the
lower 40%
![Page 16: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/16.jpg)
LAC is the most unequal continent of the worldGini coefficients 1997-2002
América Latina
y el Caribe
Highest inequality
50% of the countries
Media
Lowest gini coefficient
![Page 17: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/17.jpg)
Extreme poverty Not extreme poverty Index of GDP P.C.
Growth is becoming increasingly less efficient to combat poverty
Poverty and Extreme poverty in LAC 1990-2004 (millions) and per capita GDP index
![Page 18: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/18.jpg)
Poverty: 1980-2004
1980 2004
Total poverty 135.9 222.0
Extreme poverty 62.4 96.0
![Page 19: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/19.jpg)
![Page 20: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/20.jpg)
![Page 21: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/21.jpg)
Share of selected regional groups and developing economies in world exports of manufactures and manufacturing value added, 1980 and 1997(Percentage share)
Share in world Share in world exports of manufactures manufacturing value added
Region/economy 1980 1997 1980 1997
Source: International Yearbook of Industrial Statistics, various issues; World Bank, World Development Indicators 2000 (table 4.3); UN/DESA, Commodity UNCTAD secretariat calculations, based on UNIDO, Handbook of Industrial Statistics (various issues); UNIDO, Trade Statistics database; and UN/DESA, Monthly Bulletin of Statistics (various issues).
Note: Calculations in current dollars. Value-added data are based on the definition of manufactures used in industrial statistics, while export data are based on the definition of manufactures used in trade statistics. However, calculating the share in world manufactured exports based on the definition of manufactures used in industrial statistics yields very similar results for countries for which comprehensive data are available.
a Excluding China.b 1984.
Developed countries 82.3 70.9 64.5 73.3
Developing countries 10.6 26.5 16.6 23.8Latin America 1.5 3.5 7.1 6.7South and East Asia 6.0a 16.9 7.3 14.0
NIEs 5.1 8.9 1.7 4.5ASEAN-4 0.6 3.6 1.2 2.6
China 1.1b 3.8 3.3 5.8India 0.4 0.6 1.1 1.1Turkey 0.1 0.5 0.4 0.5
![Page 22: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/22.jpg)
Conclusions:
Research points to positive effects of the reform but small gains (high political costs), but we have to recognize that the impact of trade liberalization on poverty is country-specific
There is disappointment with the results (also medium income groups, nor only the poor). Assumptions of the Washington consensus proofed basically wrong
Low growth and rising inequality limited the effects on poverty (despite an important increase in social expenditure) and continue to be the main challenges faced by the region. Inequality matters. Remember a lot of people moves around the poverty line, so impoverishment is also a concern.
![Page 23: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/23.jpg)
Conclusions:
Trade agreements will continue to be pushed for:Trade liberalization is not a development strategy. Since the consensus moves to a highly conditioned endorsement of free trade the discussion of the development agenda turns to be more important to combine trade, growth and poverty
The gains of future trade liberalization through bilateral agreements are limited and will not come from the static benefits of trade but from the dynamic ones: economies of scale, technological change, foreign direct investment, and productivity gains coming from better trade structure (dynamic products, more value added, etc.)
There may be excessive competition among developing countries in world markets for labour-intensive goods (fallacy composition).
![Page 24: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/24.jpg)
Conclusions:Better initial conditions of infrastructure and education determined the possibilities of benefiting from the opportunities of trade.
Public investment in infrastructure and human capital key factor to combat inequality and foster private capital formation, employment and growth Need to change the bias against public investment that is treated as expenditure together with designing the right mechanisms to benefit small public works specially in the rural areas
Openness of the capital account and remittances contributed to high volatility and a tendency to currency appreciation
Anti cyclical policiesStrong and universal social protection systems (maybe independent of type od employment?)A macroeconomic policy that will target not only price and monetary stability but growth, employment and stability in the “real” sector
![Page 25: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/25.jpg)
Conclusions:Those countries that made a smooth transition from import substitution, to export promotion to trade liberalization obtained better results even in the rural sectors.
Need for a responsible public policy to address structural heterogeneity, weak linkages, low “density” of the productive apparatus, weak innovation and technology systems, high cost and uncertainty to penetrate markets. Special attention to rural areas and agriculture.
There are loosers and winners, averages say little in LAC. Policies to offset the costs of the transition and help vulnerable groups to successfully face increased competition and develop human capital are indispensable
We are not alone:
William Cline has suggested that “the largest gains to the poor would come from differential trade liberalisation”, Domestic policies of the United States impact on the economic performance of the region.Trade policies and subsidies in the developed world International cooperation Regional integration with cohesion and structural funds to address asymmetries
![Page 26: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/26.jpg)
And last…
Institutions matter, without adequate institutions the benefits of trade will not be transfer to the poor and allow sustained growth: better governments and better markets.
Regulation, good governance, transparency and accountability, fiscal resourcesDemocracy (options to choose from). Room, for maneuverProtect Rightsw
Useful to Recall some of Adam Smith´s thoughts on the keys to development:
“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things”
![Page 27: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/27.jpg)
Indeed: the Smithian Pillars explained…
A Peaceful environment: Lowers transactions costs, improves contract-enforcement, attracts investment
Easy taxes: efficient and effective fiscal structure. Without a fiscal reform very little could be done in LAC´s development agenda
Tolerable administration of justice: sets the basis for fair-play, builds trust
![Page 28: Conference on the impact of Trade Liberalisation and Poverty Rebeca Grynspan Director UN Economic Commission for Latin America and the Caribbean (ECLAC)](https://reader035.fdocuments.in/reader035/viewer/2022062518/56649e545503460f94b4ae90/html5/thumbnails/28.jpg)
13.6 14.8 15.17.8
3.69.4
5.7 6.0
14.5 15.37.6
7.010.0
11.112.6 11.9
10.111.4
6.9
3.0
12.6
3.5 1.40.9
29.6
38.2
19.3
33.1
16.615.7
21.8
41.5
0
5
10
15
20
25
30
35
40
45
OCDE (30) UE (15) EE.UU. SudesteAsiático (6)
ALC (19) Brasil Argentina Chile
Carga tributaria directa Carga tributaria indirecta Carga Seguridad Social
Comparación Internacional de la Carga Fiscal(*), 1999-2000 (en porcentajes del PIB)Fuente: ILPES-CEPAL, Panorama de las Finanzas Públicas, 2004. (*)Las cifras de la OECD tienen cobertura de Gobierno General, al igual que Argentina, Brasil y Chile. El resto tiene cobertura de Gobierno Central