Make Poverty History through Trade and Investment

Make Poverty History is an idea that has been picked up by nearly every agency working in developing countries whether they are charities, NGO’s or development agencies. However the slogan has become so closely related to charity and foreign aid, that I fear the wider picture has been forgotten. Make Poverty History is even more relevant for the Growth agenda, for CBC we are trying to make poverty history though trade and investment. I am glad to support the work of the multi party parliamentary group, Trade out of Poverty, who are dedicated to this agenda and aim to help the world’s poorest countries trade their way to a better life.

It is my feeling that we too often forget that the only sustainable way to eliminate poverty is to ensure that the local government is responsible for its achievement. This does not mean that we don’t have a responsibility to eliminate poverty, quite the opposite; I feel it is all of our responsibilities to support the governments in their mission to eliminate poverty.

Growth is the only tool that can eliminate poverty, aid alone will never achieve this, and developing countries must develop their economic infrastructure, which will in turn increase their tax revenues allowing greater investment in the engines of growth. It is the responsibility those outside the country to support the government’s efforts in this regard, whether it be refocusing aid to help in the strengthening of business environment or facilitating private sector investment in big infrastructure projects.

Indian Elections

I would like to congratulate Manmohan Singh on his election as India’s Prime Minister, the workings of the world’s largest democracy are an impressive sight nearly 1 billion people have chosen their representatives.

This election marks a particular change in India’s politics; the congress party now has a working majority and can no longer be held to ransom by the smaller parties that were previously able to prevent governments from taking action. With the ruling party now longer beholden to minority interest progress can now be made on the Doha round as both the US and UK want and expect, leading to further economic reforms in the labour, legal and financial spheres.

Equally India has a major role to play in the response to the financial crisis; European and especially UK Business are looking to India as partners for ventures there and abroad with a high expectation of success. Finally with India looking to be one of the big winners in the proposed IMF reforms in terms of voting rights, India role in the global economy and the Institutions that govern it can only grow.

The G20, the IMF and the Doha Round

The G20 meeting last week is being hailed as a success and in many respects I think it was, I hope it will be a helpful step on the road to recovery. The meeting represents the start of a new global process as both the developed and emerging economies come together to form a new Global Forum.

For the developing countries, one of the best outcomes was the larger commitments made to the IMF. According to the Closing statement the Organisations resources have been trebled to $750 Billion, consequently the IMF is going to become a much more important actor on the world stage. The next thing on its agenda must be reform and reorganisation to ensure it can match its new responsibilities in restoring the flows of trade and finance to the developing world.

I was, however, disappointed by how little progress was made on international trade. The requisite statements were made regarding resisting protectionism, but a stronger commitment to the Doha round would have been encouraging in this time of decreasing global growth.

From G7 to G20 - The Financial Crisis

The G7 finance ministers meeting on the 13th passed almost un-noticed there were the requisite statements on coordinating the response to the financial crisis, resisting the pull of protectionism, and the importance of free trade, but no progress on an international trade deal, or a global response to the crisis.

The real priority is to shore up the banking system. Governments should take action together to remove toxic assets from banks’ balance sheets through insurance schemes, and reopen the flow of credit. Im surprised that Governments are mainly taking advice from bankers in this restructuring, when input should come from as wide as possible, including other sectors of the economy.

Attention is now focused on the G20 meeting in London in April, with many hoping that it will become the starting point for recovery, for a new global financial and governance structure.