Global Policy Forum

Trade Rules a Stumbling Block


By Walter Kudzodzi

Inter Press Service
March 15, 2006

Less than a decade remains for countries to reach the ambitious targets laid out in the United Nations Millennium Development Goals (MDGs) -- agreed on by global leaders at a summit in 2000.

The eight MDGs focus on halving the number of people living in extreme hunger and poverty, achieving universal primary education, promoting gender equality and reducing child mortality, all by 2015.

They also aim to improve maternal health, combat disease, ensure environmental sustainability and develop partnerships that can tackle issues such as unfair global trade rules, and debt in developing countries.

To get a sense of what progress is being made towards achieving the MDGs, Walter Kudzodzi spoke to Tetteh Homeku, director of programmes at the Accra-based Third World Network-Africa (TWN-Africa). This non-governmental organisation is active in various social and economic issues affecting the developing world.

WK: What do you see as the main obstacles to achieving the goals?

TWN-Africa: In a certain sense, I see two types of obstacles: the first is internal while the second has to do with political will. All the MDGs are aspirations.but goal eight specifically talks about the strategy for mobilising resources for achieving the aspirational goals set up in other areas. We must address whether the governments of developed nations are prepared to make a serious commitment to address the failings of the multilateral trading system.

WK: But we must acknowledge that this process has started to some extent. The debt of certain African countries has been scrapped and we have seen increased inflows of assistance to the continent -- not so?

TWN-Africa: Yes, debt forgiveness has started. We are seeing increases in overseas development aid which we can link to last year's G8 meeting (the Group of Eight nations includes the world's leading industrial states). But we must also recognise that much more needs to be done to ensure that the international trading system is fair and takes into consideration Africa's economic capacity. The problem with today's international trading system it that it undermines the capacity of developing countries to exploit their own resources fully in order to support themselves.

WK: What role do you see for macroeconomic and trade policies in enabling us to reach the MDGs?

TWN-Africa: There is no doubt that foreign direct investment (FDI) helps to generate growth in the economies of developing countries, but generating growth in itself does not lead to economic development. To adopt the proper macroeconomic targets we have to move away from the International Monetary Fund/ World Bank/ World Trade Organisation dictates of liberalisation. We should move into a situation where we have targeted policies which support and protect our local industries. Trade policies must be operated differently from the ones we are applying now, which are geared towards attracting FDI to generate profits for foreign producers and goods at the expense of our economies.

WK: Several years since the debate on MDGs kicked off, the language is still very much within development institutions and government offices at the national level. What steps should be taken to bring grassroots communities on board in this debate?

TWN-Africa: Certainly, grassroots communities have a role to play in these debates.The challenge is for the formulators of the MDGs to connect themselves to existing campaigns and social mobilisations, and stop behaving as if they are reinventing the wheel.

WK: What role does good governance and democratic reform play in meeting the MDGs?

TWN-Africa: Good governance and democratic reform do play a role in helping us meet the MDGs, as long as these two terms are understood to mean empowering the ordinary people and citizens of a country to have access and influence over policies in their economies. But if we understand governance and democratic reform today as the "rule of law", as defined by the World Bank to mean that we should have structures or institutions which can enforce contracts and property rights of foreign corporations, then that unfortunately is part of the problem.

The other issue is corruption, and people making a great fuss about corruption as if that is the fundamental problem facing developing countries. Actually, corruption takes fewer resources away from Africa than what international trade does. Out of every dollar that comes to Africa, 50 cents is lost through unfair and unequal forms of trade. Twenty cents goes to settle debts, 20 cents goes into capital flight and only 10 cents is taken out through corruption and kickbacks.

More Information on Social and Economic Policy
More General Analysis on Poverty and Development
More Information on Poverty and Development in Africa
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More Information on the World Trade Organization


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