But Government officials, trade and development experts express concern over shadow cast by mounting global financial crisis
Geneva, 15 October 2008 - Rapidly expanding exports have yielded benefits in reducing poverty in India, speakers said in New Delhi Tuesday as a three-day conference opened on the topic of "How are the poor affected by trade?"
They cautioned, however, that progress achieved in India and elsewhere now must be protected from the financial turbulence that is spreading through the world economy.
And they said research indicates that while the poor do benefit from trade, they are proportionately less affected than higher-income groups.
India´s Commerce Secretary, G. K. Pillai, opening the meeting, said globalization and energetic government efforts to use it to good effect have created widespread employment and have fired the ambitions of the country´s young.
Lakshmi Puri, Acting Deputy Secretary-General of UNCTAD, reported that a detailed study carried out by UNCTAD, the Indian Government, and the Department for International Development (DFID) of the United Kingdom found that rises in exports from India between 2003-04 and 2006-7 led to 26 million new jobs, to US$55 billion in income, and to greater empowerment of women. However, income generated for people in the lowest income group, while significant, was only around 1.6% of total income generated, she said.
The three-day meeting is being sponsored by the UNCTAD/DFID/India Project on Strategies and Preparedness for Trade and Globalization in India.
Kaushik Basu, C. Marks Professor of Economics at Cornell University in the United States, who delivered the keynote address, told the meeting that India´s current high growth could be sustained over the next few years because domestic savings have increased and investment rates are at an impressive 35% of national income. But he cautioned that the globalization from which India has benefited significantly since 1991 has a tendency to increase economic inequality. He recommended that national and international efforts be coordinated to ensure that the benefits from trade do, in fact, reach the poor and are spread equitably through national populations.
Both Mrs. Puri and Creon Butler, Deputy High Commissioner of the British High Commission, said it is necessary to focus on the current financial crisis and to take steps to keep it from reversing recently improved living standards in developing regions. Mr. Butler urged academicians and policy makers to analyze how the crisis and international trade are linked and what impacts this could have on efforts directed at poverty reduction. Beyond urgent stabilization measures, a fundamental "rethink" of the global financial and trade systems is required, he said. He and several others noted that sound government policies also are vital.
Summarizing UNCTAD research and the findings of the UNCTAD/DFID/India Study, UNCTAD´s Mrs. Puri said the poor in India have benefited from export growth but the gains have been unevenly distributed, with 70% of the income generated going to higher income groups. Expanding trade alone is not sufficient to ensure that poverty is significantly reduced, she said; complementary policies are necessary, including measures to improve the skills of workers. While the study brings out the uniqueness of the Indian situation, many of its findings may apply equally to other developing countries, she said.
