[World Bank] Trade liberalisation alone not enough

from Sify

New Delhi: Even as the $38 billion spent by the World Bank in financing trade programmes since 1987 helped open markets, it was not as effective as anticipated in boosting exports and growth, and alleviating poverty, according to a new report presented by the World Bank's Independent Evaluation Group (IEG), at a seminar organised by the Indian Council for Research on International Economic Relations (ICRIER).

According to the report titled `Assessing World Bank Support for Trade, 1987-2004,' the World Bank's strategies on trade were successful in helping countries to liberalise trade, but the impact on employment and poverty was less than expected. If developing countries are to reap larger gains from trade liberalisation, the reforms need to be complemented with investments and institution building and measures to mitigate adverse effects, the report said.

"The evaluation confirms that liberalising trade alone is not enough to generate growth and fight poverty," said Ajay Chhibber, Director of the IEG.

The report recommends that the World Bank pay greater attention to addressing distributional outcomes, and to cushioning shocks associated with trade policies.

The report analyses the Bank's contribution to freer trade in poor countries and makes concrete recommendations on how to boost trade opportunities to better reduce poverty in the future. Between 1987 and 2004, 8.1 per cent of the total Bank commitments ($38 billion) went to 117 countries to help them become better integrated into the global economy, the report said.

Overall, the evaluation found that the World Bank was effective in helping developing countries liberalise their trade regimes.