Liberalisation, health and the World Trade Organisation
- University of Saskatchewan and University of Regina, Canada and Saskatchewan Population Health and Evaluation Research Unit
- Dr Labonte, School of Health Sciences, Faculty of Health and Behavioural Sciences, Deakin University, 221 Burwood Highway, Burwood, Victoria 2125, Australia
The contemporary globalisation project of which Baum writes rests on the promise that economic growth benefits all.1Originally enforced through Structural Adjustment Programs' trinity of privatisation, reduced public spending and increased trade liberalisation, it is the benefits of the latter that now dominate the “globalisation is good” argument. So dominant is this claim that it deserves closer scrutiny.
Liberalisation. Growth and inequality
To the extent liberalisation promotes economic growth for poorer nations, it may help to reduce absolute poverty and so improve health. But there is surprisingly little evidence that liberalisation, in itself, promotes growth.2 Moreover, absolute poverty is not the same as relative poverty or inequality. Studies by the World Bank claim that liberalisation is “income neutral,” generating the same rate of growth for rich and poor alike.3 This as much as admits that inequalities will continue to grow, simply because the denominators of rich and poor are unequal to begin with. A recent study of 40 developing and least developed nations found that trade openness increased poverty and inequality.4 Similarly, a World Trade Organisation (WTO) report, extolling how liberalisation would lead to greater “income convergence” between trading partners, found this was so, but only in a downwards (income declining) direction.5 As income inequalities rise, so do health, education and gender inequalities, and social instability.
Part of the problem is that liberalisation is unequally practised. Wealthy nations remain protectionist in areas where it benefits their interests while demanding open markets where it harms only poorer nations. Nowhere is this more obvious than in agriculture and textiles, where many rich nations continue to increase domestic subsidies while removing import tariffs only gradually and reluctantly. Developing nations lose US $700 billion a year by this double standard, 14 times more than they receive in aid.6 Mexico, where poverty rates …
