external influence in the making of development ... - FES Ethiopia

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5. International Trade Arrangements and Local Policy Making The key issue concerning trade is whether neo-liberal economic policies are in line or against policies that favour and meet the real and urgent needs of LDCs population. Well managed trade has the potential to lift millions of people out of poverty. As stated in Oxfam report (2004) on global trade, the problem is not that international trade is inherently opposed to the needs and interests of the poor but that the rules that govern it are rigged in favor of the rich. Current liberalizations policies, which focus on increasing exports and satisfying the needs of corporations, actually work, however, in the opposite direction, threatening those very needs. They are actually destroying livelihoods and cultures, local methods of production, and access to food, seeds, water and land. The WTO exists to promote liberalization and trade negotiators focus almost exclusively on the speed and form of this liberalization. However, the liberalization process is fundamentally flawed and works in favour of commerce but against the needs of families, communities, small businesses and the environment. The costs include devastating impacts on family farmers, peasants, fisherfolk, farm and food workers and consumers everywhere, and severe environmental degradation occurs wherever intensive farming for export is introduced. Priortising production for export over production for national and local markets leads to local food scarcity. It divorces food, farming and fisheries from their critical social, cultural and environmental contexts. It weakens, therefore, governments' abilities to develop policies focused on local needs. It enables trade interests of the largest corporations to prevail. (www.viacampesina.org, article 286). Double standard and rigged rules The US and the EU are targeting other countries' agricultural markets, using every opportunity, including through negotiations in the WTO, bilateral and regional trade agreements, to obtain lower agricultural import tariffs and more market access. This policy is designed to drive the prices of key agricultural commodities down to below the cost of production, which in turn drives peasants and family farmers off their lands. (Prices have gone down as much as 57% below the actual cost of production). This 'predatory pricing' means that farmers can no longer afford to produce food even for their own local markets. In many countries, especially in the South, peasant based production is being replaced with a combination of cheap imports from other countries and industrial, export-oriented production based on cheap labour and lax enforcement of social and environmental standards. This behavior is hypocritical, since the EU and the US are at the same time protecting their own markets, for domestic political reasons, in ways that they argue others may not(www.viacampesina.org, article 286). The biggest producers in the DCs are cushioned by increasing domestic agricultural subsidies. This perpetuates the downward spiral of commodity prices by permitting big farmers in the EU and the US to produce surpluses, which are then dumped on world markets at low prices, further devastating rural peasant and independent family-based economies, especially in the South. In the North, large parts of family farming and peasant agriculture have already disappeared as a result. So, this is not really a North- 24
South conflict, but a fundamental social conflict that needs to be addressed. It is a conflict between different models of agricultural production and rural development, a conflict that exists in both the North and the South. It is a conflict between centralized corporate-driven, export-oriented, industrial agriculture versus de-centralized , peasant, and family farm-based sustainable production primarily oriented towards domestic markets. (www.viacampesina.org, article 286). While rich countries keep their markets closed, developing countries have been pressurized by the IMF and WB to open their markets at breakneck speed, often with damaging consequences to poor communities. As a result of pressure by the WB and IMF including northern governments, the developing countries have rapidly opened up their economies than the rich countries. As a result the average level of import tariffs have been halved in SSA and South Asia, and cut by two-thirds in Latin America and East Asia. Africans in turn know they need to diversify their exports from basic crops such as coffee and cocoa into products which earn more money such as clothes, textiles and manufactured goods. But Africans could also earn more from basic crops if they were allowed to process these before they export them. For example, Ghana can export raw cocoa beans duty free to Europe, but a 25% tariff is imposed if they process that cocoa before exporting it to Europe. But the processing (canning, roasting, labeling) helps a country earn more money and develop its manufacturing base — and that allows its economy to grow. While fair trade could be Africa's ticket out of the vicious cycle of poverty, unfair trade rules like these trap Africa at the gates. These double standards have to end. It is important to have rules — but not ones only written by the rich. The World Trade Organization (WTO) is the place where these rules are written. But of the 38 African nations which are members of the WTO, 15 nations have no representative at all at the headquarters in Geneva, and 4 nations have an office of only one person. Most rich nations have dozens of staff to make their case, and more experts at home. Poorer countries often aren't able to participate fully or even analyze what the effect of proposals on their economies would be How do countries cope? Various developing countries which are quite comparable in terms of their natural resources (land, water, arable soil, minerals, climate etc.) and social structures have over the past thirty years shown strikingly differing records of economic and social progress. Similarly, countries facing some similar external factors, have faired differently in development terms, because of internal dynamism differences. This shows that historical burdens, adverse international economic conditions such as falling raw material prices or other external factors, though important, do not have a decisive impact on the achievement of a higher quality of life in the countries concerned. 25
Page 1 and 2: EXTERNAL INFLUENCE IN THE MAKING OF
Page 3 and 4: Hence, developing countries are dou
Page 5 and 6: other goals may include advancing t
Page 7 and 8: Since 1991, Ethiopia mainly followe
Page 9 and 10: WIDER (2004), total official develo
Page 11 and 12: The end of the Cold War removed the
Page 13 and 14: Aid (grant) Data on aid flows is in
Page 15 and 16: FDI flow to Ethiopia Year FDI Inflo
Page 17 and 18: 4. Ethiopia's Dependence on Aid Eth
Page 19 and 20: Source of Aid Ethiopia receives a f
Page 21 and 22: Dependence on Aid could stifle inte
Page 23: Aid conditionalities Aid is expecte
Page 27 and 28: such as the World Bank and Internat
Page 29 and 30: higher, plateau level. The large in
Page 31 and 32: Conclusion Ethiopia has been quite
Page 33: References Abebe Taddesse, (2004):

external influence in the making of development ... - FES Ethiopia

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