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24.04.2008 General News

State Support To Sectors Is A Must - UNDP

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Government intervention in the growth of an economy shouldn't be a why question, but rather how and when, even in the face of growing liberalisation, a United Nation Development Programme Senior Advisor said in Accra yesterday.

Addressing delegates attending the 12th UN Conference on Trade and Development (UNCTAD) meeting currently talking place in Accra, Mr Kamal Malhotra said an effective state was what developing economies needed to turn their economic fortunes around.

He said, 'liberalisation is an outcome and not a prerequisite for development as the developed states seem to be preaching,' and noted that gradual sequence approach was rather what appeared to be more beneficial.

UNCTAD statistics, according to Mr Malhotra showed that poverty was rather increasing in countries that have liberalised more than those with little liberalisation.  'Countries dismantle trade barriers as they get richer,' he said.

Giving the Asian example, Mr Malhotra said as export- led growth economies, they began by protecting their domestic market, attained substantial GDP growth before embarking on sequential liberalisation in the 1980s.

He said in fashioning out policies, especially on industry, developing countries must not overlook public investments in human development, research and development, technology, and infrastructure.

The strategic national trade and industrial policy, he said must ensure infant industry protection and industrial development.

Mr Malhotra, who is also the Cluster Leader of the Inclusive Globalisation of the UNDP, said there was the need to ensure effective policy-mix where macroeconomic policies and trade policy would be looked at. 'Trade is a means to an end and not an end in itself,' he said and cautioned that trade must not be made as if it embraced development when it was rather the other way round.

Speaking on the challenges in the Non-Agricultural Market Access (NAMA) under the World Trade Organisation, Mr Rob Davies, South African Deputy Minister of Trade and Industry, said tariff policy should be an instrument of industrial policy and that policy space adjustments must be consistent with developing countries respective needs.

Mr Kouglo Body Lawson of the International Trade Union Congress, Africa attributed Africa's industrial challenges to the problem of bad governance, poor business climate and lack of effective integration of the regional economies.  'At the last Doha Round negotiations, Africa could not present a united common front on the issues mainly because of weak integration of regional blocs,' he said.

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