Increased inequality is primarily responsible for the failure to convert growth into poverty reduction. Extreme inequality is a lose-lose scenario, it is bad for poverty reduction, but it is also bad for growth because it restricts the size of markets and the potential for investment and innovation. What is needed is a redistribution of opportunity at the national and global levels to enable poor people to develop their skills, access markets, and produce their way out of poverty. This briefing note looks at five key areas where pro-poor interventions should be made to promote the kind of equitable growth which is needed if the 2015 targets are to be met. We hope that these interventions will be included among the Globalisation White Paper's policy proposals.
Rich countries continue to dump heavily subsidised agricultural exports.
This dumping distorts markets and destroys the livelihoods of poor farmers. There is a striking contrast between the WTO's benign tolerance of European and American subsidies and the approach to market reforms reflected in IMF-World Bank loan conditions. All too often liberalisation in developing countries has been poorly planned and poorly sequenced, leaving vulnerable producers locked into competition with heavily subsidised imports. In West Africa, for example, a flood of cheap flood of European tomato concentrate has undermined local tomato production and processing, while heavily subsidised EU dairy products have caused loss of income for dairy producers in Brazil and Jamaica. Current intellectual property rules are another reason why trade is not working for the poor.