Wednesday, February 16, 2011

Remove policy induced barriers - World Bank

COMMENT - Can the World Bank point to a single success, where their neoliberal policies have developed (rather than destroyed) a single economy? Apparently, over the past 20 years we just didn't open markets up enough - that's the problem. Neoliberalism - free markets, deregulation, privatisation/briberization - has failed time and again. It is time to let go of the dogma, and return to demand side economics.

Remove policy induced barriers - World Bank
By Mutale Kapekele
Wed 16 Feb. 2011, 03:59 CAT

REMOVING tariffs between regional groups in Africa will have limited impact on trade unless policy induced barriers to trade are eliminated, says World Bank Group chief economist for Africa Shantayanan Devarajan.

Responding to a press query on the new United Kingdom Africa Free Trade Initiative, Devarajan advised countries in the region to work at removing non-tariff barriers to trade for them to enjoy benefits of free trade. The UK launched the free trade initiative at the beginning of this month in an effort to increase trade with Africa.

"As we understand it, the Africa Free Trade Initiative works to free up all trade barriers that exist across Africa. The initiative is targeted at domestic barriers to expanded trade, rather than UK tariffs on African exports because the latter is subject to the UK's membership in the EU customs union,” Devarajan stated.

“While tariffs to regional trade have largely been removed in the EAC and Southern Africa there has been much less progress in West Africa. Removing tariffs between countries and regional groups in Africa and efforts to improve infrastructure will have limited impact on trade unless a range of policy induced barriers to trade, non-tariff barriers, are removed.”

He stated that efforts to integrate markets should extend to services as well as goods since access to competitively priced services was crucial to competitiveness.

“A complement to this program of domestic reform is increased access to G20 markets as envisaged under the duty free quota free commitment at the Hong Kong summit,” stated Devarajan.

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