Friday, October 05, 2007

Unfair trade hindering growth in developing countries - SARPN

Unfair trade hindering growth in developing countries - SARPN
By Florence Bupe
Friday October 05, 2007 [04:00]

DEVELOPING countries are unable to significantly benefit from global trade due to unfavourable competition, Southern African Regional Poverty Reduction Network (SARPN) policy analyst Jack Zulu has said. Zulu said developing nations, including Zambia, were unable to benefit from booming global trade because of market policies that were not conducive for emerging markets.

"The free market ideology that encompasses the IMF (International Monetary Fund) thinking and policy analysis suits multinational corporations perfectly. Small and less developed economies, many of which are in Africa, are not able to compete effectively," Zulu said. "Therefore, imposing free market policies on economies that are not ready leads to massive problems."

Zulu was giving his views at a session to review the role of the International Monetary Fund in low-income countries.

He advised that the IMF should be consistent in its policy stipulation in order to level the market playing field for developed and developing countries.

He cited the Fund's attempt to get developing countries to scrap agricultural subsidies as one unfair policy imposition.

"Whilst a number of countries in Africa are generally advised to remove subsidies on agriculture, we don't hear the same voice by the Fund or World Bank to European countries. This to us is a contradiction, and we feel that the IMF should be consistent in some of these policies," he said.

Zulu also said there was need for low-income countries to ensure that there is policy coordination.

He said it was not enough for low-income countries to focus only on attaining macroeconomic stability, but ensure that these efforts are matched with other sets of policy imperatives such as debt sustainability and fair trade.

"For us in Africa, the issue is not just achieving macroeconomic stability, though it is very essential for growth and poverty reduction. But I think stability has to go along with other sets of policy imperatives such as debt sustainability, cautious trade liberalisation, promotion of fair trade, job creation, poverty reduction and good governance," said Zulu.

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