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World Bank: Fight Poverty With Political Reform

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World Bank: Fight Poverty With Political Reform

Economy

World Bank: Fight Poverty With Political Reform

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RENEE MONTAGNE, host:

The global economic outlook is next. Rising oil prices certainly figure into that uncertain picture. Finance ministers from around the world will meet in Washington this week to determine other causes. They're gathering for the spring meetings of the world bank and the International Monetary Fund.

NPR's Tom Gjelten has more.

TOM GJELTEN: The idea of these meetings is to encourage countries to cooperate for the sake of the global economy. It's a challenge, because governments are generally inclined to protect their own national interests. The biggest tensions are between the advanced countries and those that are still developing. In recent years, thanks to global trade, developing countries have really taken off. But negotiations over new global trade rules are now stalled.

Pascal Lamy, the director of the World Trade Organization, told reporters in Geneva last week that the current trade picture reminds him of a stubborn mule.

Mr. PASCAL LAMY (Director, World Trade Organization): The difficulty with a mule is that they sometimes get stuck. They don't go backwards, but they refuse to move forward, either.

GJELTEN: Governments agree that more global trade would be good for the world economy, and that barriers to trade therefore need to come down. But they don't agree on whose barriers come down first, and these talks have gone on now for nearly 10 years.

In a recent interview with NPR, Pascal Lamy said: As the developing countries become more powerful, they are more determined to assert their own trade interests - vis-a-vis the U.S., the European Union, and other advanced countries.

Mr. LAMY: Twenty years ago, a deal was about the EU, U.S., Japan, Canada agreeing on something, and, you know, most of the rest of the membership would go along with that. We are now in a world where China, India, Brazil, South Africa, Indonesia are playing their own game. And, you know, this complexity is not just simply add and multiply.

GJELTEN: Rich countries like the United States say the developing countries, like China, need to open their economies to more international competition by reducing tariffs or import quotas, for example.

But Jagdish Bhagwati, a Columbia University professor who has advised the World Trade Organization, argues that at a certain point trade negotiators should give up trying to see who has made the most concessions and just make a deal.

Professor JAGDISH BHAGWATI (Columbia University): There are so many issues at stake: intellectual property protection, anti-dumping rules, concessions on tariffs, concessions on non-tariff barriers. To say that we are doing a certain number of things and they don't balance what you are doing, I mean, that's becoming rather stupid, in my opinion.

GJELTEN: Stalled trade talks will be in the background at this week's World Bank and IMF sessions here. Advocates of a trade deal hope the meetings might spur some progress.

Political events in the Arab world will also get attention. It's no accident that popular uprisings have come in countries whose economies are stagnating.

In a speech here last week, World Bank President Robert Zoellick argued that whether countries grow depends not just on what economic policies they adopt, but on how they treat their populations.

Mr. ROBERT ZOELLICK (President, World Bank): Our message to our clients, whatever their political system, is that you cannot have successful development without good governance and without the participation of your citizens.

GJELTEN: In Tunisia and Egypt, in Morocco and in other Arab countries, people have shown how angry they are about government corruption and blocked opportunity. Zoellick said governments everywhere need to heed developments in the Arab world. Countries stagnate when their populations are alienated. They prosper when their societies are energized.

Mr. ZOELLICK: I'm trying to say that what happens with Middle East and North Africa, this needs to be factored into where we go from here.

GJELTEN: That lesson is underscored in a World Bank development report released today. This main conclusion: political conflict in a country is a huge barrier to economic development. To attack poverty, governments need to reform politically.

But that message might be undercut at the World Bank and IMF meetings by one rather awkward fact: the chairman of the meeting's development committee happens to be the finance minister of Bahrain, a country where a popular uprising has just been forcefully repressed.

Tom Gjelten, NPR News, Washington.

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