The pressure on local producers to reduce prices, however, can have negative effects on businesses and employment, at least in the short-term. Trade liberalization also affects government revenues, but not necessarily in a negative way. When high tariffs are reduced, import volumes and therefore revenues normally increase. The removal of tariff exemptions reduces inequalities in the tax structure, because exemptions benefit the wealthier. Government can use additional resources to finance antipoverty programs, although they not do so automatically.
Greater openness increases vulnerability of economies and people.
Social safety nets are needed to prevent risks to poor people and those at risk of falling into poverty in times of crisis. Many governments of developing countries believe that public-financed social safety nets are a luxury they cannot afford. ADB's upcoming Social Protection Strategic Framework suggests ways for working with the governments of its developing member countries to respond to this challenge. Many countries in Asia serve as examples where poverty reduction and trade openness worked together. Singapore, South Korea, and Taipei,China dramatically reduced inequality and the incidence of poverty, and are well integrated into global markets.