ALISTER BULL, Prague | Tuesday
GRUDGING debt relief and stingy overseas aid mean poor nations struggle to make themselves heard on the global stage and initiatives to ease poverty have not cut the odds stacked against their fragile economies, says South African Finance Minister Trevor Manuel.
Speaking on the eve of the IMF/World Bank’s annual meeting, Manuel said towering trade tariffs made it extremely hard for poor nations to compete in world markets.
”The wealthy are not putting enough on the table … the voice of the poor must be raised and strengthened,” Manuel said.
Manuel said current structures were aimed at stabilising developing nations, not invigorating them, and that there could be no escape from poverty without growth.
”This is not a begging bowl. This is about solid economic arguments,” he said.
Subsidies, especially agriculture, made matters much worse and Manuel said OECD estimates that the combined worth of these distortions to the level trade playing field added up to $300bn, placing the scale of the problem into stark context.
”We look at HIPC (highly indebted poor country initiatives) but we don’t take account of the total picture. This $300bn subsidy stands in the way of doubling Africa’s GDP,” he said.
South Africa, the economic engine of the world’s poorest continent, currently chairs the board of governors of the International Monetary Fund. It has carried the banner for poor nations and fair trade has been an issue close to its heart.
The country won a landmark trade deal with the European Union in 1999 after years of gruelling negotiations, but subsequent haggling has strangled it in red tape after the EU’s mighty farm lobby swung into action and the experience has coloured the country’s view on the sincerity of rich nations’ generosity.
”The only way you can deal with poverty is by rational economic stimulus, and that rational economic stimulus actually deals with taking away irrational subsidies,” Manuel said.
”It is very difficult to see how African countries will ever compete or access markets fairly,” he said.
The World Bank and IMF have made greater debt relief a central task and have sought to ease the purse strings. – Reuters