Greater market access will be an essential instrument for improving the economic conditions of those living in poverty and I welcome the recent initiative taken by the Fund and the World Bank aimed at supporting the Doha round. At this stage, the global momentum towards trade liberalization must continue effectively, yet there is reason for concern over the way that the current international trade negotiations are proceeding. Progress has been slower than was previously hoped, especially in light of the disappointing result of the WTO meeting in Cancun. Another worrying aspect is the trend of bilateral trade agreements instead of multilateral agreements. To support low-income countries, the industrialized nations should reduce their overall levels of support for agriculture and textiles and direct the remaining subsidies away from trade-distorting price support towards income support. The advantages of trade liberalization are greater than the risks associated with it. Reforms in these areas will benefit both the industrial and the low-income countries. There might, however, be temporary or transitional difficulties as increased liberalization can entail a reallocation of labor between sectors. Governments should be ready to inform and educate their citizens and prepare safety nets to make the transformation more acceptable, both domestically and internationally. High-income countries ought to be prepared to assist developing countries in such undertakings. Low-income countries must also open up their markets in order to increase the volume of trade between each other as well as with industrialized countries. Bilateral and regional trade agreements have become increasingly common in recent years.

These concepts are not all that easy to define but roughly speaking it is a matter of new technology leading to extensive changes in the business community, as well as in society in general. The economy is launched into a process of transformation — a sort of struggle between old and new. New products are introduced as well as new forms of production. Patterns of consumption also change and so does the demand for education. Growth shifts to other parts of the country. The new demand stimulates the growth of capital markets. All these developments influence the public debate and the political system. Bit by bit, the entire economy responds to the new technology. That is what happened in many parts of the world when the steam-engine was successfully developed in the late 18th century. It also occurred after new sources of motive power led to the electric motor and the combustion engine in the late 19th century. 2  See e.g. Myhrman, J. (1994), Hur Sverige blev rikt (How Sweden became prosperous), SNS Förlag, Stockholm. 3  See Magnusson, L. (1996), Sveriges Ekonomiska Historia (Sweden’s economic history), Tiden Athena, Stockholm; Schön, L. (2000), En Modern Svensk Ekonomisk Historia (A modern Swedish economic history), SNS Förlag, Stockholm; Åkerman, G. (1932), Om konjunkturväxlingarnas nödvändighet och grundorsak (On the necessity and basic cause of economic fluctuations), Ekonomisk Tidskrift 1. For a survey of Erik Dahmén’s work and contributions to economic research, see Eklund, K. (1986), Springtime for Dahmén.