In particular, the advanced economies should lower the effective protection on goods of interest to sub-Saharan African countries, such as clothing, fish, processed foods, leather products, and agricultural products more generally. The IMF will continue to make this case vigorously whenever and wherever it can. Second, let me talk about the importance of effective social spending. Globalization delivers its economic benefits in part by promoting change, the rise and fall of different industries and economic activities. The process is not a painless one.
Economists talk in the abstract about labor moving from low productivity to high productivity uses.
But it is individuals and families who have to do the moving. If they feel threatened and unable to cope with the process of change, they will resist it and the economic benefits will be lost. In the past the IMF perhaps paid too little attention to this need, but I believe we have now given it the right priority in the programs we support through our Poverty Reduction and Growth Facility, in partnership with the World Bank. One result is that when poor countries need to get their budgetary house in order to ensure the sustainability of the growth on which long-term poverty reduction depends, we take very seriously indeed the need to protect productive social spending from budget cuts. In fact, among the low-income countries that have received IMF support since 1985, per capita spending on both health and education has risen by more than 4 per cent a year on average.