[India] shows trade not aid way to fight poverty: Bush

from Hindustan Times

US President George Bush has cited the examples of India and South Korea to illustrate that more trade rather than aid was the best way out of poverty for the developing world.

"Prosperity as a result of trade is more likely -- ten times more likely to have a positive effect on somebody living in a poor society than just investment and grants," he said in a special address to the Initiative for Global Development's 2006 National Summit on Thursday.

Co-chaired by former secretaries of state, Colin Powell and Madeleine Albright, the summit brings together about 150-200 of America's foremost business leaders to set an action agenda for the private sector on what it can do to eradicate extreme global poverty.

"History has shown what I'm talking about," Bush said recalling the India success story. "India, for a long period of time, had restricted its markets. India opened its markets to global trade 15 years ago. It has doubled the size of its economy since then and created a middle class which is larger than the entire population of the United States".

Similarly, South Korea once one of the poorest nations in Asia, has thanks to export growth today become the 10th largest economy in the world after it reformed its economy and opened its markets to the world.

These are not isolated examples, said Bush, noting that a World Bank study had found that developing nations that lowered their trade barriers in the 1990s grew three times faster than those that did not.

"Economic growth is one important way to reduce poverty. It's the most effective way to reduce poverty. The best way to help millions mired in poverty is to expand the benefits of global trade," said the president, setting it out as his administration's new policy outlook.

Outlining the US position on the upcoming Doha Round of WTO negotiations, Bush said Washington was ready to eliminate all tariffs and subsidies and other barriers to free flow of goods and services, and it expected other nations to do the same.

"We're ready to make the move -- on agriculture and services and manufacturing, but we expect other nations to do the same thing. We expect other nations to give us market access," he said.

Similarly, European countries needed to make a tough decision on farming, while the G20 countries needed to do so on manufacturing, Bush said, declaring the United States is prepared to make a tough decision along with them.

Since 2002, the US had more than doubled assistance around the world from 10 billion dollars to 27.5 billion dollars -- the largest increase of foreign aid since the Marshall Plan - to fight poverty, Bush said.

At the same time US foreign policy now recognises true compassion being measured by real improvements, not just by the amount of money spent. "And real improvement is the goal of our assistance," he said.

But it did not stop US from moving when disaster strikes, said Bush noting, "We moved hard for the tsunamis, with a military presence that helped organize relief. When the earthquake came in Pakistan, we didn't hesitate, we moved."