101584

The Developing World Need the opportunity to Trade out of Poverty


by
James D. Wolfensohn
President
The World Bank Group
November 4, 2002


Your Excellency Deputy Prime Minister Jeon, distinguished delegates and
friends,

I am very happy indeed to participate in this fourth meeting of the Asian
Development Forum, and particularly to know that it is happening in
Seoul. My only regret is that I cannot be there with you to visit again
with my many friends that I know are in the audience. Nonetheless, I do
have the opportunity, by means of this message, to convey to you the very
strong feelings of our institution in support of the subject (of the
Forum) which is Trade and Poverty Reduction. This is a subject which is
very dear to the heart of this institution and which clearly is well
understood in your region.

I think you all know that in recent years we at the World Bank have been
drawing attention to the fact that for poverty alleviation to take place,
for jobs to be created, and for there to be economic development in
countries that need such development, an important, if not essential,
element is openness of markets for trade. I have many times pointed out
that it makes no sense to assist countries to develop their productive
capacity if you deny them access to markets. It makes no sense to spend
$350 billion a year on agricultural subsidies when one is hoping to
strengthen exports of agriculture from developing countries. These are
points that I have made and that my colleague Horst Kohler of the
International Monetary Fund has made, as have our colleagues from the
ADB, who I am very happy to welcome here today and thank them for being a
cosponsor of this meeting along with our Korean hosts to whom I express
great gratitude.

In coming to these meetings as I am now, I'd like to say to you that we
recognize fully that opening markets for trade is not something that is
done simply through debate or via verbal coercion from me or anybody
else. Opening markets for trade needs to be something that emerges from a
recognition by our leaders in the developed and developing world that
global security, global economics, and global peace depend on a more
equitable development of our planet. And tied in to that (notion of)
equitable development is clearly the issue of trade. I need hardly say
that in East Asia an understanding of the role of trade, development, and
economics is something of an "Asian consensus," much like the "Washington
Consensus" was alleged to be a consensus some years before. But your
consensus, unlike the Washington consensus, is seen to be an outstanding
success!
What we are trying to do in these meetings is to join with you to try to
see how we can benefit from the knowledge and experience of those
countries that have used trade, have used openness of markets, have used
an environment in which direct investment can flourish, to deal with the
question of job creation and with it the question of alleviation of
poverty. I have seen the agenda for these meetings which is indeed very
full and which gives you the opportunity to discuss many subjects, many
aspects of the issues relating to trade and poverty reduction, and I
dearly wish that I could be with you to share your thoughts.

Included in the discussion is the subject of China, a country that has
demonstrated with its own growth and with its own poverty alleviation
aspects, the importance of trade and the importance of education and
training, and preparation before trade. The numbers indeed are
enormously significant. China has become the 7th largest exporter and
the 8th largest importer in the world. But what is important is that
China has also become the fastest growing market for developing countries
in East Asia with imports from these developing countries up 35 percent
in the year 2000, 18 percent in 2001 and 20 percent for first half of
2002.

This leads me to conclude that development and openness of markets for
trade is not just a one-way benefit. It leads to an establishment of a
two-way street, and this two-way street is something that can be tried
and helped within Asia itself. I'm particularly concerned that we should
also have in these discussions today discussions beyond the simple
question of tariffs and the simple question of protectionism. Trade is
dependent on much more than that, it is dependent on a comprehensive
approach to development. Addressing the possibilities of increasing
trade gets back to education; it gets back to health, it gets back to
transportation, it gets back to regulation, it gets back to creating an
environment in which foreign direct investment can flourish, and it gets
back to the issue of cleaning up legal systems and attacking the question
of corruption.

All of us today understand that you cannot take the question of trade out
and simply think of it as a result of WTO negotiations. WTO negotiations
are extraordinarily important, in fact pivotal, but beyond that there is
a tremendous challenge which we need to deal with in countries in
development to ensure that poverty can be addressed in its manifest
aspects by addressing the questions of equitable development inside a
country. And that requires a comprehensive approach to development that
has been so effectively used in many of the countries in your region.

I cannot help comment on Korea itself and my discussions with Deputy
Prime Minister Jeon, who will be speaking to you later this morning. At
our meetings in Washington, I was enormously impressed by the way in
which Korea has responded to the challenges, not just of trade, but to
the challenges it faced in the financial crisis in Asia. And now as
Korea has emerged from this crisis, it is already looking to its
responsibilities internationally, in terms of giving the benefit of
experience and its financial and technical support to others who are
looking for a better life. I think it is therefore particularly
important that this meeting should be held in Seoul, and I want to pay
tribute to the Deputy Prime Minister and to his colleagues for taking
such an open view to a universal sense of responsibility at this time.

I think these meetings we are going to have will be particularly
important. I only wish that I could be there with you today. I wish you
very useful and fruitful discussions, supported fully by my institution.