The following is an article written by David Abney of
UPS
The playwright George Bernard Shaw once wrote that poverty is
"the greatest of evils and the worst of crimes." While Shaw penned
those poignant words more than a century ago, the reality is that
too many people still lead lives filled with hunger and
hardship.
Most unjust is the number of children who grow up in poverty.
According to UNICEF, more than 160 million malnourished children
under the age of five suffer from stunted growth, and 22,000
children die each day from starvation or other health issues caused
by poverty. Most die quietly, never able to fight for
themselves.
The good news is that gains have been made in reducing poverty.
Between 1990 and 2010 - a period when communism fell and markets
opened - the percentage of people living in extreme poverty in
developing economies dropped by half, to 21 percent.
Still, that still leaves more than 1 billion people surviving on
$1.25 or less a day. As Nelson Mandela once said, poverty is not an
act of nature - it's a man-made problem that can be overcome and
eradicated by the actions of us all.
The World Bank has set an ambitious goal of bringing the last
billion people out of extreme poverty by 2030, and it's an endeavor
we all should support. It truly will "take a village," because the
World Bank can't end poverty solely through its development
work.
The question then is what more can be done and, not
surprisingly, there are reasonable differences on the other tactics
we should employ. For instance, some call for forgiving the debts
of poor countries, while others advocate for micro-financing
programs that provide loans at the grass roots.
There's another solution that has gotten little attention, yet
is sitting right before us: enacting trade reforms that make it
easier for every artisan, every entrepreneur, and every peasant
farmer to sell their goods freely in other markets.
An Undeniable Impact
At UPS, we've always believed in the enabling power of trade,
and I'm heartened this sentiment is gaining currency in development
circles. For instance, the World Bank noted in a 2009 report that
"sustained long-term poverty reduction depends on stimulating
economic growth, which in turn depends on trade policy reform."
History shows that nations that open their economies to trade
become more prosperous over time. Liberalizing trade creates the
supply and demand that prompts businesses to hire more employees,
which in turn enables these workers to feed their families.
Opening economies also forces businesses to become more
competitive. The ones that rise to the challenge are often able to
then export their goods and services to other countries as
well.
But first we must enact the trade initiatives that are currently
on the table. These include the Trade in Services Agreement, the
Transatlantic Trade and Investment Partnership (TTIP), the
Trans-Pacific Partnership (TPP), and the Trade Facilitation
Agreement (TFA).
Collectively, these initiatives would further reduce tariff and
non-tariff barriers, would liberalize services and public
procurement, and promote greater co-operation among regulators. And
they would bring jobs - and hope - to regions where these are in
short supply.
The Peterson Institute for International Economics estimates
that the Trade Facilitation Agreement alone would create 21 million
new jobs, with 18 million of those coming in the developing
economies.
Too Powerful to Ignore
Of course, these initiatives have encountered their share of
political resistance. This resistance was to be expected, because
trade pacts have always inflamed passions.
Nearly 200 years ago, British historian Thomas B. Macaulay
observed that "free trade - one of the greatest blessings which
government can confer on its people - is in almost every country
unpopular."
But recent history has shown how trade can lift developing
economies and their people. We only have to contrast the China of
today - prosperous and globally engaged - with its
pre-liberalization days to see the benefits of opening markets that
were long walled off.
History has also shown the need to help economies make the
transition to an open market. For instance, while the benefits of
trade are undeniable, there's a reasonable argument for providing
assistance to displaced workers who need time to learn new
skills.
These issues aside, all of us have a moral obligation not to
waver in our support because the benefits of trade - economic and
humanitarian - are too powerful to ignore. But it will take an
ongoing commitment by nations and their people, along with the
efforts of public and private sectors, to end the injustices that
poverty bestows on the least advantaged.
David Abney is chief executive officer of
UPS.
Reprinted with permission of
Longitudes, the UPS blog devoted to the
trends shaping the global economy.
We welcome the re-use, republication, and distribution
of this commentary -as long as you credit us. If you publish,
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CONTACT: Dean Foust
UPS Executive Communications
dfoust@ups.com
404-828-7123
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