ISLAMABAD, July 9: Trade liberalization will continue to increase inequality and poverty in the developing countries, including Pakistan, as their total share falls in the world trade under the WTO regime.
Speakers at a round-table discussion on social dimensions of globalization said globalization was a reality, which could not be rejected and the developing countries should make preparation to face the challenges of the multilateral trading system.
The round-table was organized by Sustainable Development Policy Institute (SDPI) in collaboration with Friedrich Ebert Stiftung (FES).
Director ILO Pakistan Johannes Lokolo, PML-N leader Sartaj Aziz, Dr Abid Qayyum Suleri of SDPI and Dr Shahrukh Rafi Khan spoke at the four sessions.
The panelists for the sessions included PIDE director Dr A.R. Kemal, MNA Kunwar Khalid Yunus, head of restructuring and planning ZTBL Dr Nadeem Inayat, MNA Syed Naveed Qamar, MNA Dr Donia Aziz, director, foreign trade section, foreign office, Dr Asad Majeed; Ali Dehlvi; joint secretary, commerce ministry, Qasim Niaz; MNA Kashmala Tariq, director, Pakistan Agriculture Research Council Dr Wajid Pirzada, Sohail Malik, Dr Zafar Altaf, Karamat Ali and Shafqat Munir.
Former finance minister Sartaj Aziz, in his paper, called for a fundamental rethinking about globalization and trade liberalization. He said there was no clear-cut correlation between economic growth and trade liberalization.
“Pakistan’s own experience shows that the process of import liberalization initiated in the early 1990s was accompanied by a steady decline in the GDP growth from 6.1 per cent in the 1980s to 4.5 per cent in the 1990s,” he said.
Mr Aziz said this was mainly because the rate of industrial growth slowed down from an average of eight per cent in the 1980s to four per cent in the 1990s as lower tariffs and resultant reduced protection led to the closure of thousands of factories without a corresponding upsurge of investment in value-added export industries.
He suggested in this paper that the developing countries should present their united position on trade issues at the WTO’s Cancun ministerial to be held in September.
He said the developing countries could not liberalize their trade regime for goods and services, unless the actual and not promised market access for their export had reached the desired level.
They should not be asked to reduce their measure subsidies for agriculture unless and until the developed countries have cut their domestic support by at least half. They cannot agree to broaden the scope of WTO further unless the Doha commitment to incorporate the development dimension in all areas of the multilateral trading system has been effectively implemented.
In his presentation, the ILO director, Johanas Lokolo, said the ability to respond to the opportunities created by globalization depended on a more integral view of interdependent economic and social objectives. This calls for an integrated approach to the economic, social and political dimensions of public policy. He said under ILO’s Decent Work Agenda, the concept of working poor was an important tool in the analysis of the labour market. Poverty is associated with unemployment and Decent Work is a critical component of an integrated approach to poverty reduction and more equitable development.
Governor State Bank of Pakistan Dr Ishrat Hussein said: “We should rise above petty criticism on the international financial institutions and their conditionalities and prepare ourselves to get rid of their dominance by adopting coherent and vibrant economic policies, increasing growth and earnings.”
We need strategies to get maximum benefits from globalization and emerging opportunities under WTO regime, he added.
Mr Hussein said economic growth was the key to success of democracy, respect for human and labour rights.
Speaking at the session, Dr Shahrukh Rafi said there was a need to take into consideration whether the agreement which the government was going to sign at the international level was poverty-sensitive and did not adversely affect the poor communities in the third-world countries.
Joint secretary Qasim Niaz said the WTO was comparatively more democratic and poor-country friendly regime.
To get benefit out of it, we need to build alliances of civil society to lobby respective governments to make WTO pro poor.
Director, agriculture research centre, Dr Wajid Pirzada said globalization was a decades long process and multinational institutions were pushing it forward. It undermines the nation states, their sovereignty and integrity.