Asia Pacific Human Development Report 2006: trade on human terms; transforming trade for human development in Asia and the Pacific (overview)

This report is the result of a consultation among policymakers, academics, civil society groups, the private sector and other stakeholders and looks at recent developments on trade and economic growth in Asia in order to assess the impact on human development and poverty.

It raises the following questions. Against a background of rapid economic growth in South and East Asia:

• who will produce what, where and how?
• what impact will this have on people’s lives – on their incomes, their health, their levels of education and their future prospects, on who they are and what they can become?
• what will all this mean for human development?
• what contribution can higher standards of human development make to expanding trade and economic growth?

The following are the main policy recommendations:

• invest for competitiveness: to provide a successful basis for trading, countries need to invest in infrastructure, human capital, and research and development that raises productivity and specifically addresses the needs of poor people
• adopt strategic trade policies: states have to identify a few sectors and industries that have both short- and long-term potential in international markets and guide enterprises towards them. The essential requirement for engagement in international trade, however, is that the process should be strategically planned and carefully sequenced
• restore a focus on agriculture: a trade strategy based on human development has to have agriculture at its core. This is not because agriculture offers export opportunities, but because in many countries farming is still the primary source of income for the poor; so no trade strategy that undermines rural livelihoods can claim to be promoting human development
• combat jobless growth: enterprises should be allowed to choose the lowest cost option for production, but this choice should not be biased away from labour
• prepare a new tax regime: governments need to have an alternative tax regime in place before embarking on liberalisation, because an important source of revenue will be lost from tariffs, with the uptake of liberalisation
• maintain stable and realistic exchange rates: if rates are too high, this will jeopardise employment prospects for the poor by penalising exporters as well as farmers and other local producers who will face increased competition from imports; if they are too low, this will raise the domestic price level and affect the cost of living of the poor
• persist with multilateralism: bilateral agreements typically involve much deeper tariff concessions from the developing countries and make demands on issues like intellectual property rights that go far beyond what WTO members require of each other
• co-operate with neighbours