Trade, not aid, offers path out of poverty

Published on Monday 19 September 2005 01:38

"GIVE us justice, not generosity," said the delegate from Kenya as he began a powerful contribution to a discussion I attended in Fiji on how to assist nations suffering under the greatest poverty.

He went on to explain that what he meant was trade justice - access to world markets that were blocked through quotas, the reduction or abolition of tariffs, the removal of export subsidies and an end to surplus produce being dumped in fragile emerging economies.

Many delegates I talked to now see intergovernmental aid as a poisoned chalice. It satisfies the need of Western politicians to say they are tackling the problems of malnutrition and extreme poverty in the Third World but it can also bring with it many problems, leaving some countries in a dependency culture and with rampant corruption and fraud.

Other Africans, from Uganda and Sierra Leone, made similar points and the representative from Guyana explained how its tomato crop was rendered pointless when Italian tomatoes were dumped there.

It does seem a particularly absurd system that Europe raises taxes to support its farmers who, understandably chasing the subsidy, then produce more than we can consume. This excess is then dumped on the same countries that our taxes are being also being used to give aid to. Why not open up the markets, let suppliers compete on quality and price and reduce the taxes that are no longer required to pay for subsidies, price support and foreign aid?

I'm not against all development aid; I just believe we should put improving trade as the number one priority in our efforts to make poverty history. Development aid should be targeted at the relief of diseases and the creation of infrastructures that allow nations to trade their way to prosperity.

Britain should take the lead in trade justice, insisting that the European Union reforms itself. International trade through free markets offers the best hope for Africans and other impoverished nations as its scale is far bigger than development aid and its capacity to expand is greater.

Increasing trade with Africa by 5 per cent annually generates an additional $8 billion (4.4 billion) for their economies while increasing aid by the same percentage worldwide generates only $3bn - and trade is growing.

The Africans I talked to are increasingly frustrated at the slow progress being made in removing import duties and the example of the "bra wars" was familiar to them, with many Commonwealth countries already under quota controls.

People across the world are crying out for the chance to show they can build their own nations and lift themselves out of extreme poverty. By reducing their subsidies, removing their tariffs and opening up their markets the European Union and United States can do far more good than taxpayers transfers ever will.

• Brian Monteith is a Scottish Conservative MSP for Mid- Scotland and Fife