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Launching development round at Doha would help poor countries: World Bank

A new World Bank report on Wednesday said the launch of 'development round' at Doha in early November would significantly help developing countries facing global downturn by improving market access for agriculture, textiles and services.

Removing barriers to trade, the topic of WTO meetings in Qatar, would boost the long-term prospects of developing countries, many of which are suffering from the fall-out of the September 11 attacks and worldwide slowdown.

India is of the view that new WTO round should not be launched until the implementation issues of the Uruguay round are resolved.

Indian efforts to prevent widening of WTO mandate have suffered a setback. The November nine to 13 meeting of trade ministers in Doha is to authorise the launch of new negotiations with an expanded agenda covering the entire range of new issues such as framing of binding global rules on foreign investment and competition.

The report entitled "Global economic prospects and the developing countries 2002: making trade work for the world's poor" paints a grim picture of the short-term outlook for poor nations because of the simultaneous downturn in the US, Europe and Japan.

Growth in developing countries is expected to fall to 2.9 per cent in 2001, nearly half the 5.5 per cent recorded in 2000.

In South Asia, with the deterioration in the external environment, GDP growth in South Asia is likely to be 4.5 per cent in 2001 and 5.3 per cent in 2002.

Briefing newspersons in New Delhi economists of the bank said multilateral co-operation outside the WTO can help build trade capacity and create sound environmental and labour standards.

The economists said high-income countries should ensure trade policies promote access and are not detrimental to poor countries.

''Trade and other policies remain the most important determinant of growth prospects'', they said.

Reshaping the world's trade system and reducing barriers to trade could accelerate medium-term growth and reduce poverty around the world, the document, the bank's yearly report on prospects for developing countries, says.

Expanding trade could well increase annual GDP growth by an additional 0.5 per cent in the long run -- and by 2015, lift 300 million people out of poverty in addition to 600 million escaping desperate poverty with normal growth.

Developing countries stand to gain an estimated $1.5 trillion of additional income in the ten years after liberalisation policies are begun; developed countries would see their incomes rise by $1.3 trillion.

''To make this happen, the developed countries have to be willing to put agriculture and textiles on the negotiating table because those are the products that the world's poor produce.

A round that brings down barriers in agriculture, advances the timetable on textiles, agrees to curtailing antidumping and at the same time it takes up the concerns of the industrialised countries has the potential for being a true development round,'' the report says.

The terrorist attacks put a huge drag on the already sputtering engines of the global economy.

''What makes this situation unusually risky is that this is the first time since 1982 that the US, Europe and Japan have all turned down at the same time'', the report says.

The outlook for 2002, though subject to unusually high risks, is that the global economy will recover: developing countries are expected to grow by 3.7 per cent if the external environment holds up from 2.9 per cent in 2001, while it is expected that the world economy will grow by 1.6 per cent.

The report shows that the impact of economic downturn on the world's six developing regions varies significantly, often mirroring export patterns.

For instance, countries in Latin America and East Asia, with large manufacturing exports, were the first to feel the impact of lower import demand in the United States and Japan.

It says that despite the tough circumstances in 2001, the long-term prospects for developing countries are promising. This is to a large extent due to improved macroeconomic management, rising savings, increased openness, and greater diversification.

Average per capita growth of 3.6 per cent is forecast for 2005-2015 for developing countries and 2.5 per cent for high-income nations.

Export markets are expected to recover robustly by 2003, but commodity prices may remain depressed for some time.

Citing the cost of subsidies to agriculture by rich nations, which amount to an estimated $1 billion a day, or more than six times all development assistance to poor nations, the report lists numerous barriers that adversely affect developing countries, including subsidies, high tariffs on selected products of developing countries and tariff codes of high income countries that discourage forward processing in developing countries.

On intellectual property, the report recommends 'rebalancing' the Uruguay round agreement on trade-related intellectual property rights.

As it stands, if developing countries were to fully implement TRIPS, they would have to pay abroad some $20 billion more in technology-related payments and foot the administration bill for local enforcement.

For these reasons, the report advocates a phased implementation of TRIPS with donor-funded technical assistance linked to level of development, and a more liberal use of compulsory licenses to stimulate competition in pricing.

UNI

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