Reducing world poverty through opening up markets
Tuesday, 29 April 2008
Freeing up global trade and reducing restrictions on international labour migration are among the most cost-effective ways to help fight world poverty. This is the position University of Adelaide international trade economist Professor Kym Anderson will argue before a high-profile international forum looking for the best solutions to the world's biggest problems.
Professor Anderson and nine other authors will face a panel of leading international economists, including five Nobel Laureates, at the Copenhagen Consensus 2008 in Denmark on 25-30 May, convened in order to rank priorities for action to solve the world's top 10 challenges.
Professor Anderson's paper for the Copenhagen Consensus, with co-author Professor L. Alan Winters of the University of Sussex in the UK, analyses costs versus benefits of liberalising global trade and international migration.
"We are looking at the economic consequences of trade reforms and, in a parallel way, what would happen if we opened up markets to the movement of workers from poor to rich countries at a slightly faster rate than has happened in the past," said Professor Anderson.
"If you had $75 billion to spend solving the world's 10 biggest problems, we want to see how much bang for your buck would result from addressing them with the opportunities currently available. And we're looking at how the benefits net of costs would rank against other actions, such as eradicating malaria or boosting education."
The paper concludes that multilateral gradual reductions in subsidies and trade barriers, and in restrictions on the international movement of labour, would yield huge economic benefits at relatively little economic cost, and would contribute enormously to reducing global inequality and poverty.
"The opportunity to achieve these trade reforms is sitting there before us with the Doha multilateral trade negotiations," said Professor Anderson. The World Trade Organisation's Doha round of negotiations is aimed at liberalisation of global trade in goods and services.
At the Copenhagen Consensus, the other "biggest challenges" are: air pollution, conflicts, diseases, education, global warming, malnutrition and hunger, sanitation and water, terrorism, and women and development. Professor Anderson says that opening markets could also contribute, incidentally, to reducing several of those challenges.
Professor Anderson was Lead Economist for Trade Policy at the World Bank from May 2004, until he returned to the University of Adelaide in August 2007 as George Gollin Professor of Economics in the School of Economics.
George Gollin Professor of Economics; Executive Director, Wine Economics Research Centre
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