Only trade-fueled growth can help lift people out of poverty, economist William Easterly argues.
“[C]urrent experience and history both speak loudly that the only real engine of growth out of poverty is private business, and there is no evidence that aid fuels such growth,” Easterly writes in an article published by the Financial Times.
Only one of the eight Millennium Development Goals recognizes the importance of private sector in promoting development. MDG 8 “faintly” acknowledges private investment through “non-discriminatory trading system,” Easterly notes.
“Yet the trade-related MDG received virtually no attention from the wider campaign, has seen no action, and even its failure has received virtually no attention in the current MDG summit hoopla,” he writes.
Apart from helping to reduce poverty, trade-fueled growth also indirectly promotes other MDGs, Easterly argues, noting that protectionism is prevalent in the U.S. and European Union.
“It is already clear that the goals will not be met by their target date of 2015. One can already predict that the ruckus accompanying this failure will be loud about aid, but mostly silent about trade. It will also be loud about the failure of state actions to promote development, but mostly silent about the lost opportunities to allow poor countries’ efficient private business people to lift themselves out of poverty,” Easterly concludes.
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