EXPERTS EXCHANGE VIEWS ON TRADE REFORMS & POVERTY
NCAER-UNCTAD WORKSHOP ON IMPACT OF TRADE REFORMS ON THE INDIAN INFORMAL
ECONOMY AND POVERTY
Date : 08 Jan 2004
Location : New Delhi
A two-day Workshop on "Impact of Trade Reforms on the Indian Informal Economy and Poverty: Macro and Case Study Analyses" organised by the National Council for Applied Economic Research (NCAER) and the United Nations Conference on Trade & Development (UNCTAD) began here this morning with experts exchanging views on a wide range of issues relating to trade liberalisation and poverty, including assessing the poverty impact of the Doha Agenda. Shri S.N. Menon, Special Secretary, Ministry of Commerce & Industry, chaired the inaugural session, which was also addressed by Prof. Barbara Harriss-White of the Oxford University; Dr. Veena Jha, Coordinator, UNCTAD India Programme; and Mr. Tim Conway of the Overseas Development Institute (ODI). Other experts who participated in today’s session, along with senior officials of the Ministry of Commerce & Industry, included Dr. Rajesh Chadha, Dr. Abhijit Sen, Dr. Bibek Debroy, Mr. Renana Jhabvala, Dr. Navsharan Singh, Ms. Mrinalini Kaur Sapra, Dr. Jeemol Unni, Dr. Samar Varma and Dr. Anushree Sinha.
Underlining the importance of the need to understand the implications of trade liberalisation for India and its impact on various sectors, Shri Menon welcomed the initiative taken by UNCTAD and NCAER to organise the Workshop which deliberated on a draft report prepared by the UNCTAD India team on Trade Liberalisation and Poverty in India and said the deliberations would provide useful research inputs for ongoing negotiations in the Doha Round. It would help in addressing the equity aspects of growth, he said.
In her presentation, Prof. Barbara Harriss-White focussed on the predominance of the informal sector in India and pointed out that far from being temporary, the informal sector in India had persisted over time and was dynamic and of increasing rather than diminishing significance. Prof. Harriss presented the findings of two joint studies – on Garments in Tirupur and rice in Punjab and Bengal which Oxford University had carried out in collaboration with NCAER. She said evidence from field work relating to the informal economy suggested that formal and informal goods were hard to distinguish and that plurality of technologies co-exist in the informal sector, including textiles and garment. She also mentioned that the phase-out of the multi-fibre arrangement (MFA) would increase competition globally and India must maintain high quality of its garments so that the informal sector could flourish.
Dr. Veena Jha gave an overview of the theoretical linkages as well as the empirical analysis relating to trade liberalisation and poverty and its potential in relation to agriculture, non-agricultural market access and intellectual property rights. Studies indicate that traditional approaches such as global or universal free trade may not be optimum for poverty alleviation and that differential liberalisation could yield maximum poverty benefits for India. Further, many of the poverty gains from trade liberalisation would accrue only if agricultural domestic reforms were also carried out.
Mr. Conway, presenting a study by ODI for the UK Department for International Development (DFID) on "Assessing the Poverty Impact of the Doha Development Agenda", spoke of a global review linking trade policy changes to poverty and presented the results of country-case studies of Brazil and Vietnam. His conclusion was that multilateral liberalisation had complex poverty effects. There was need to distinguish between aggregate of regional and national poverty gains of multilateral liberalisation – probably on balance beneficial to the poor in large countries and not so much for the least developed countries. He also said trade policy change could not be assessed in isolation since a wide range of intermediary institutions (political, economic and social) determined how changes in border prices transmitted down to poor households and complementary policies of governments (in infrastructure and social services) were critical in minimising the losses and maximising the gains for poor from liberalisation. DFID was unusual in combining a strong focus on poverty reduction and a strong belief in the benefits of globalisation, he added.