| Doha Round poses shrinking gains for poor countries, says EJAD | |
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Press release
July 14, 2006
Mr. Paul Wolfowitz (World Bank President) sent a letter to heads of the G8 states before the G8 meeting this weekend. The letter urges to conclude the Doha Round claiming that: "world's poorest people, the 1.2 billion living on less than $1 a day, are counting on your good intentions being transformed into decisive action". The civil society rejects this false claim that a complete free trade would benefit poor countries and alleviates poverty, says EJAD (Economic Justice and Development Organization, based in Islamabad). The civil society circles believe that Mr. wolfowitz is actually preparing ground for developed countries to get the global trade talks back on track and, with the same token, he is misleading leaders of developing countries that further trade liberalization in their countries would benefit them and alleviate poverty.
Mr. Tahir Hasnain, Executive Director, EJAD said that these outrageous claims were roundly refuted last year, and since wolfowitz is recycling this bad information, they need to be refuted again. The World Bank's study was roundly critiqued by leading economists last year, who pointed out that of the $54 billion (a mere 0.1 percent of world income) the World Bank estimates will supposedly be generated by the Round, only 1.9 percent will go towards the poorest countries. According to Mr. Hasnain, this would bring the world's poorest people only about $2 per person additional income per year which is hardly a significant outcome.
Even more importantly, Mr. Hasnain continued, these economic models contain significant reality errors, such as that they "assume full employment." That means that while large multinational corporations may generate new revenues that may slightly increase GDP, the decimation of large rural populations are not taken into consideration. In addition, the models do not include the additional massive costs to developing countries of agreeing to stringent corporate patent monopolies in the WTO's TRIPS agreement - the antithesis of so-called "free trade." Not to mention that they completely fail to account for the loss in government revenue from trade taxes - tariffs - that would starve governments of income essential for important health care and education budgets.
Referring to a study done by researchers at the Tufts University in USA, Mr. Hasnain said that economic projections based on World Bank modeling results can be notoriously unreliable, as they rest on an unrealistic set of assumptions (e.g., that no country loses or gains jobs, and no government loses or gains revenue). Still, the World Bank’s projections are often cited to justify the benefits for developing countries from trade liberalization. A close look at last few year’s numbers suggest that those benefits are largely gone and developing countries are anxious about their expected shrinking gains in the ongoing Doha Round.
Mr. Hasnain said that Doha is no more a "Development Round" and Mr. Wolfowitz should therefore stop kidding ourselves. He concluded that the failure of countries to come to agreement should be seen as a clarion call to stop the expansion of the unfair WTO model - and instead look to develop an alternative global economic model.
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