TRADE AND POVERTY REDUCTION IN THE ASIA...
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TRADE AND POVERTY REDUCTION IN THE ASIA-PACIFIC REGION This book explores the complex relationship between international trade and poverty reduction through a combination of research papers and con- temporary case studies. Written mainly by developing country authors in consultation with local businesses and communities, the case studies contribute to our understanding of the ways in which low-income com- munities are dealing with trade as a practical challenge, especially in the Asia-Pacific region where approximately two thirds of the world’s poor live. While making it clear that there is no ‘one size fits all’ formula, the research and stories highlight a number of necessary preconditions – such as political commitment and cooperation at all levels – if trade is to success- fully reduce poverty. Openness to trade, serious commitment to domestic reform, trade-related capacity building, a robust and responsible private sector and access to the markets of developed countries are all identified as powerful tools for building trade-related sustainable development. andrew l. stoler is Executive Director, Institute for International Trade, University of Adelaide and former Deputy Director-General of the WTO. jim redden is Director, International Programmes for China and the Pacific and Senior Lecturer at the Institute for International Trade, Uni- versity of Adelaide. lee ann jackson is Economic Affairs Officer in the WTO Agriculture and Commodities Division. www.cambridge.org © in this web service Cambridge University Press Cambridge University Press 978-0-521-74530-7 - Trade and Poverty Reduction in the Asia-Pacific Region: Case Studies and Lessons from Low-Income Communities Frontmatter Edited by Andrew L. Stoler, Jim Redden and Lee Ann Jackson More information
Transcript of TRADE AND POVERTY REDUCTION IN THE ASIA...
TRADE AND POVERTY REDUCTION IN THE
ASIA-PACIFIC REGION
This book explores the complex relationship between international tradeand poverty reduction through a combination of research papers and con-temporary case studies. Written mainly by developing country authorsin consultation with local businesses and communities, the case studiescontribute to our understanding of the ways in which low-income com-munities are dealing with trade as a practical challenge, especially in theAsia-Pacific region where approximately two thirds of the world’s poorlive. While making it clear that there is no ‘one size fits all’ formula, theresearch and stories highlight a number of necessary preconditions – suchas political commitment and cooperation at all levels – if trade is to success-fully reduce poverty. Openness to trade, serious commitment to domesticreform, trade-related capacity building, a robust and responsible privatesector and access to the markets of developed countries are all identifiedas powerful tools for building trade-related sustainable development.
andrew l. stoler is Executive Director, Institute for International Trade,University of Adelaide and former Deputy Director-General of the WTO.
jim redden is Director, International Programmes for China and thePacific and Senior Lecturer at the Institute for International Trade, Uni-versity of Adelaide.
lee ann jackson is Economic Affairs Officer in the WTO Agricultureand Commodities Division.
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Cambridge University Press978-0-521-74530-7 - Trade and Poverty Reduction in the Asia-Pacific Region: Case Studiesand Lessons from Low-Income Communities
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TRADE AND
POVERTY REDUCTION IN THE
ASIA-PACIFIC REGION
Case studies and lessons from low-incomecommunities
Edited by
ANDREW L. STOLER, JIM REDDEN AND
LEE ANN JACKSON
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Cambridge University PressTh e Edinburgh Building, Cambridge cb2 8ru, UK
Published in the United States of America by Cambridge University Press, New York
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DisclaimerOpinions expressed in the case studies and any errors oromissions therein are the responsibility of their authorsand not of the WTO, the Australian Government, AusAID,the editors of this volume or of the institutions with whichthey are affiliated. The authors of the case studies wish todissociate the institutions with which they are associatedfrom opinions expressed in the case studies and from anyerrors or omissions therein.
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CONTENTS
List of contributors xiAcknowledgements xvList of abbreviations xvii
Introduction 1
jim redden
Overview paper: The economic effects of trade on povertyreduction: perspectives from the economic literature 21
euan macmillan
part i Transnational corporations, trade andpoverty reduction
1 Transnational corporations and the global supply chain 69
andrew l. stoler
Case studies
1.1 Cambodia’s textile and garment industry 97
peter van diermen
1.2 Australia’s WTO trade-policy changes and the future of aSamoan car-parts investor 112
margaret b. malua
1.3 The textile and clothing sector in Indonesia 131
omas bulan samosir
1.4 Transnational corporations and the footwear industry:women in Jakarta 146
beta gitaharie laksono
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viii contents
1.5 Pakistan: the arrival and departure of Nike 160
safdar sohail
1.6 Vietnam: Intel and the electronics sector 175
andrew l. stoler and phan van sam
part ii Trade in agriculture and poverty reduction
2 Agriculture and trade solutions for rural poverty 195
lee ann jackson
Case studies
2.1 Food aid: commitments and oversight 227
john finn
2.2 Indigenous Nepalese and trade liberalisation 252
purushottam ojha
2.3 Samoan agricultural policy: graduating fromleast developed country status 270
hamish smith and lee ann jackson
2.4 Bali’s ornamental fishing industry 287
lydia napitupulu
2.5 The rice sector in West Java 306
milda irhamni and chaikal nuryakin
2.6 Chinese agricultural policy: central andwestern province 325
shunli yao
part iii Trade in services and poverty reduction
3 The future of trade in services for developing countries 341
joy abrenica, christopher findlay and aik hoe lim
Case studies
3.1 Information and communications technology services inUganda 364
siddhartha prakash
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contents ix
3.2 Health services in Malaysia 385
aik hoe lim
3.3 Trade in services liberalisation in India 405
ajitava raychaudhuri and prabir de
3.4 Trade, aid and services in Tanzania 426
amanda sunassee lam
3.5 Telecommunications reform in the Pacific and the case ofVanuatu 449
chakriya bowman
part iv Migration, labour mobility and povertyreduction
4 Migration, labour mobility and poverty 465
graeme hugo
Case studies
4.1 Migrant labour and remittances in Bangladesh 513
fahmida khatun
4.2 Migrant remittances in the state of Kerala, India 540
saibal kar
4.3 Migrant workers and the role of remittancesin Indonesia 556
nur hadi wiyono and dwini handayani
4.4 Labour mobility and poverty reduction in Tonga 572
salote vaimoano taukolo, jim redden and
raelyn esau
part v Trade and poverty reduction in small andvulnerable economies
5 Trade strategies for poverty reduction in small and vulnerableeconomies 595
jim redden and ron duncan
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x contents
Case studies
5.1 Lombok pots 648
heather baigent
5.2 Plantations to professors in Grenada 665
sacha silva
5.3 Fisheries subsidies and the western and central Pacific 690
manleen dugal
5.4 Trade and youth unemployment in Timor-Leste 707
joao saldanha and jim redden
5.5 Trade reform and poverty reduction in Papua NewGuinea 731
nolpi kilwa
5.6 The future of the Fijian garment industry 748
biman chand prasad, yenteshwar ram and ariel marr
Index 768
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CONTRIBUTORS
Editors
andrew l. stoler is Executive Director, Institute for InternationalTrade, University of Adelaide and former WTO DeputyDirector-General.
jim redden is Director, International Programmes for China and thePacific and Senior Lecturer, Institute for International Trade, Universityof Adelaide.
lee ann jackson is Economic Affairs Officer, WTO Agriculture andCommodities Division.
Assistant editors
christopher findlay is Head of School, School of Economics,University of Adelaide.
graeme hugo is University Professorial Research Fellow, Professor ofGeography and Director, National Centre for the Social Applications ofGIS, University of Adelaide.
patrick low is Director, Economic Research Division, WTO.
Authors
joy abrenica is Associate Professor, School of Economics, University ofthe Philippines.
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xii list of contributors
heather baigent is an independent consultant, Auckland, NewZealand.
chakriya bowman is Trade Advisor and Acting Director, PacificGrowth Section, Australian Government aid agency, AusAID.
prabir de is a fellow, Research and Information System for DevelopingCountries (RIS), New Delhi, India.
manleen dugul is Technical Advisor (Trade Policy) and PermanentRepresentative for the Pacific Island Delegation to the WTO.
ron duncan is Professor Emeritus, Crawford School of Economics andGovernment, Australian National University.
raelyn esau is Deputy Director, Policy and Planning Division,Ministry of Education, Tonga.
christopher findlay is Head of School, School of Economics,University of Adelaide.
john finn is a counsellor, WTO Agriculture and Commodities Division.
beta gitaharie laksono is a senior researcher, Faculty of Economics,University of Indonesia.
dwini handayani is a researcher, Demographic Institute, Faculty ofEconomics, University of Indonesia.
graeme hugo is University Professorial Research Fellow, Professor ofGeography and Director, National Centre for the Social Applications ofGIS, University of Adelaide.
milda irhamni is a research fellow in the Faculty of Economics,University of Indonesia.
lee ann jackson is Economic Affairs Officer, WTO Agriculture andCommodities Division.
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list of contributors xiii
saibal kar is a fellow in Economics, Centre for Studies in SocialSciences, Calcutta, India.
fahmida khatun, phd is Additional Director, Centre for PolicyDialogue (CPD), Dhaka, Bangladesh.
nolpi kilwa is Principal Research Analyst, Policy Planning, Researchand Information Division, Department of Commerce and Industry,Papua New Guinea.
amanda sunassee lam is an IF facilitator specialist and a consultant,Ministry of Industry and Commerce, Foreign Trade Policy Department,Lao PDR.
aik hoe lim is a counsellor, Trade in Services Division of the WTOSecretariat.
euan macmillan is a consultant, WTO Economic Research Division.
margaret malua is Director, Small Business Enterprise Centre, Samoaand an Economic and Trade Consultant.
ariel marr is a postgraduate student at the University of the SouthPacific, Suva, Fiji Islands.
lydia napitupulu is a research fellow, Faculty of Economics,University of Indonesia.
chaikal nuryakin is a research fellow, Faculty of Economics,University of Indonesia.
purushottam ojha is Secretary, Ministry of Industry, Commerce andSupplies, Government of Nepal.
siddhartha prakash is Senior Manager, Government Regulation andInstitutional Development, PricewaterhouseCoopers Pvt Ltd, India.
biman chand prasad is Professor of Trade and Development and Deanof Faculty of Business and Economics, University of the South Pacific.
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xiv list of contributors
ajitava raychaudhuri is Professor and Coordinator, Centre forAdvanced Studies, Department of Economics, Jadavpur University,Kolkata, India.
jim redden is Director, International Programs for China and thePacific and Senior Lecturer, Institute for International Trade, Universityof Adelaide.
sohail safdar works with the Commerce and Trade Group, Pakistanand is former Secretary, Ministry of Women and Development.
joao saldanha is Lead Negotiator on the Millennium ChallengeAccount, Ministry of Finance, Timor-Leste.
omas bulan samosir is a senior researcher, Faculty of Economics,University of Indonesia.
sacha silva is a consultant, Caribbean Regional NegotiatingMachinery, Barbados.
hamish smith is an economic affairs officer, WTO Agriculture andCommodities Division.
andrew l. stoler is Executive Director, Institute for InternationalTrade, University of Adelaide.
salote vaimoana taukolo is Deputy Director, Tonga Trade, Ministryof Labour, Commerce and Industries, Kingdom of Tonga.
peter van diermen is Economic Adviser, Australian Government aidagency, AusAID.
phan van sam is Dean, Mekong University, Vietnam.
nur hadi wiyono is a researcher, Demographic Institute, Faculty ofEconomics, University of Indonesia.
shunli yao is Associate Professor, School of International Trade andEconomics, University of International Business and Economics, Beijing.
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ACKNOWLEDGEMENTS
We, the editors, would like to express our sincere thanks to the authorswhose research papers and case studies appear here. Their insightsmake this book a unique contribution to our understanding of thecomplex links between trade and poverty reduction strategies. We aregrateful for their willingness to go beyond the theoretical perspective.As a result of their consultations with government, the private sectorand local communities, and as a result of their own comprehensiveresearch, we find a variety of practical suggestions for readers gen-erally and for trade and development policy makers in particular toconsider.
This project would not have been possible were it not for the enthusi-astic support and funding it received from the Australian Government’sinternational development agency, AusAID, and from the WTO Secre-tariat. On the AusAID side, we are indebted to the support received fromMark McGillivray, Chakriya Bowman, Janet Donnelly, Peter Van Dier-men, Steven Kaleb, Tim Murton, Anne Rigby and Lydia Bezeruk. On theWTO Secretariat side, particular thanks are due to Patrick Low, Direc-tor of Economic Research and Statistics Division, for his warm supportthroughout the project, and for the contributions or assistance given byMarion Jensen, Hans-Peter Werner, Peter Pedersen, John Finn and AikHoe Lim.
Throughout the Asia-Pacific region, and indeed globally, a number ofexperts were particularly helpful in offering advice or in promoting theproject, including Aldo Caliari, Sophia Murphy, Hugo Cameron, RomanGrynberg, Kamal Malhotra, Liam Campling, Sara Carley, MaryannAthaide and Pierre Encontre.
At the Institute for International Trade, Graeme Hugo, ChristopherFindlay, Keith Wilson and visiting WTO Fellow Victoria Donaldsoncontributed considerable time and effort to the editing of this volume.
xv
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xvi acknowledgements
Valuable comments and support were also provided by Letizia Raschella-Sergi, Peter Gallagher, Simon Molloy, John Spoehr, Mark Collett,Jameson Henderson-Redden and Ngaire Henderson. Finally, specialthanks are due to IIT’s Office Manager, Marie Gutsche, as well as toMaria Naso and Morgan Reid, all of whom put in many hours on thisproject.
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ABBREVIATIONS
ACFTA ASEAN-China Free Trade Area
ACP Africa, Caribbean and Pacific (countries that are parties to the
Cotonou Agreement between the EU and the ACP states)
ADB Asian Development Bank
AfDB African Development Bank
AfT Aid for Trade
AFTA ASEAN Free Trade Area
AGOA Africa Growth and Opportunity Act
AIRTIA ASEAN-India Regional Trade and Investment Area
AKFTA ASEAN-Korea Free Trade Agreement
APEC Asia-Pacific Economic Cooperation
ASA Association for Social Advancement
ASCM Agreement on Subsidies and Countervailing Measures
ASEAN Association of Southeast Asian Nations
ATC Agreement on Textiles and Clothing
AusAID Australian Agency for International Development
BIMST-EC Bengal Initiative for Multi-Sectoral Technical and Economic
Cooperation
BIT bilateral investment treaty
BMET Bureau of Manpower Employment and Training
BOESL Bangladesh Overseas Employment Services Limited
BOMSA Bangladesh Women Migrants Association
BPO business process outsourcing
BRAC Bangladesh Rural Advancement Committee
CARICOM Caribbean Common Market
CCN collusion, corruption and nepotism
CEDAW Committee on the Elimination of Discrimination Against Women
CEP comprehensive economic partnership
CET common external tariffs
CGE Computational General Equilibrium
CMT cut, make and trim
CPI consumer price index
xvii
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xviii list of abbreviations
CSA corporative social responsibility
CSSD Consultative Subcommittee on Surplus Disposal
CTC/CTH Change in Tariff Classification / Change in Tariff Heading
CTEP comprehensive trade economic partnership
CV coefficient of variation
DAC Development Assistance Committee
DDA Doha Development Agenda
DFID Department for International Development
DTIS Diagnostic Trade Integration Study
DTT double taxation treaty
DWF distant water fleets
DWFN distant water fishing nation
EAC East African Community
EBA Everything But Arms
EC European Community
EEZ exclusive economic zone
EIAPA Enterprises Incentives and Export Promotion Act 1992–93
EPA economic partnership agreement
EPZ export processing zone
ERT European Round Table
EU European Union
EVI economic vulnerability index
FAC Food Aid Convention
FAO Food and Agriculture Organization
FDA foreign direct assistance
FDI foreign direct investment
FFA Forum Fisheries Agency
FGO focus group discussion
FIC Forum Island country
FLA Fair Labour Association
FSM Federated States of Micronesia
FTA free trade agreement
FY financial year
GATS General Agreement on Trade in Services
GATT General Agreement on Tariffs and Trade
GDP gross domestic product
GMAC Garment Manufacturers Association of Cambodia
GSP Generalised System of Preferences
HCR head-count ratio
HDI Human Development Index
HIPC Heavily Indebted Poor Countries Initiative
IBRD International Bank for Reconstruction and Development
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list of abbreviations xix
ICS Import Credit Scheme
ICT information and communications technology
ICTSD International Centre for Trade and Sustainable Development
IF Integrate Framework
IFC International Finance Corporation
IFPRI International Food Policy Research Institute
IGC International Grains Council
IGO inter-governmental organisations
IJEPA Indonesia-Japan Economic Partnership Agreement
ILO International Labor Organization
IMAC Independent Monitoring Association for Child Labour
IMF International Monetary Fund
INTERFAIS International Food Aid Information System
IOS International Organization for Standardization
IPEC International Program on the Elimination of Child Labour
ISIC International Standard Industrial Classification
IT information technology
ITC International Trade Centre (UNCTAD/WTO)
ITES information technology-enabled services
JITAP Joint Integrated Technical Assistance Programme
LDC Least Developed Country
LPC Lombok Pottery Centre
MAC Marine Aquarium Council
MDG Millennium Development Goal
MFA Multi-Fibre Arrangement
MFN Most Favoured Nation
MIC middle-income country
MNC Multinational corporation
MOEWOE Ministry of Expatriates’ Welfare and Overseas Employment
MOU Memorandum of Understanding
MRA mutual recognition agreement
MRP mixed recall period
MSG Melanesian Spearhead Group
MTI Ministry of Trade and Industry
NAFTA North America Free Trade Agreement
NBER National Bureau of Economic Research
NCFMEA National Committee of Foreign Medical Education (US) and
Accreditation
NGO non-governmental organisation
NISIT National Institute of Standards and Industrial Technology (PNG)
NRD New Rural Development
NSDP net state domestic product
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xx list of abbreviations
NTB non-tariff barrier
NTP National Trade Policy
NZAID New Zealand Aid
OBM original brand name manufacturing
OCHA Office for Coordination of Humanitarian Affairs
OCW overseas contract worker
ODA official development assistance
OECD Organisation for Economic Cooperation and Development
OEM original equipment manufacturing
PACER Pacific Agreement on Closer Economic Relations
PACP Pacific Africa, Caribbean and Pacific
PCI per capita income
PCISE per capita income from services export
PESA Private Enterprise Support Activities
PFI Policy Framework for Investment
PIC Pacific Island country
PICTA Pacific Island Countries Trade Agreement
PIFS Pacific Islands Forum Secretariat
PNG Papua New Guinea
PPF production possibility frontier
PPP purchasing power parity
PRIME Project for Rural Initiatives in Micro-Enterprise Development
PRSP Poverty Reduction Strategy Papers
PSD private-sector development
R&D research and development
RCDF Rural Communications Development Fund
RCDP Rural Communications Development Policy
RFMO regional fisheries management organisation
RGDP regional gross domestic product
RMMRU Refugee and Migratory Movements Research Unit
ROO rules of origin
RSE Registered Seasonal Employer
RTA regional trade agreement
SAFTA South Asian Free Trade Area
SDS Strategy for the Development of Samoa
SDT special and differential treatment
SECO State Secretariat for Economic Development
SES Statement of Economy Strategy
SIDS small island developing states
SLOM Senior Labour Officials Meeting
SME small and medium enterprise
SMME small, medium and micro enterprise
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list of abbreviations xxi
SOE state-operating enterprise
SPARTECA South Pacific Regional Trade and Economic Cooperation
Agreement
SPS sanitary and phytosanitary
SVE small and vulnerable economy
TBT technical barriers to trade
TFF Tax Free Factories
TNC Transnational Corporation
TRAOE Tariff Relief Assistance for a Development Economy
TRQ tariff rate quota
TTP textile and textile product
UCC Uganda Communications Commission
UMR Usual Marketing Requirements
UN United Nations
UNCDP United Nations Committee for Development Policy
UNCLOS United Nations Convention on the Law of the Sea
UNCST Uganda National Council for Science and Technology
UNCTAD United Nations Conference on Trade and Development
UNDP United Nations Development Programme
UNECOSOC United Nations Economic Social Council
UNEP United Nations Environment Programme
UNESCAP United Nations Economic and Social Commission for Asia and
the Pacific
UNIDO United Nations Industrial Development Organization
UPTC Uganda Post and Telecommunications Corporation
UTL Uganda Telecom Ltd
US United States of America
USAID United States Agency for International Development
USDA United States Department of Agriculture
USG St George’s University School of Medicine
USGAO United States Government Accountability Office
UNU-WIDER United Nations University – World Institute for Development
Economic Research
VAT value-added tax
WARBE Welfare Association of Returnee Bangladeshi Employees
WCPO Western and Central Pacific Ocean
WFP World Food Programme
WHO World Health Organization
WIBDECO Windward Islands Banana Development and Exporting Company
WPR worker population ratio
WTO World Trade Organization
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