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As the
world continues to reel under the impact of the global
economic crisis, world leaders, policymakers,
industrialists, academics, economists and civil society
leaders will once again gather in Davos at the World
Economic Forum (WEF) to discuss the way forward.
The
encouraging news is that the emphasis of the WEF this year
is on rethinking business models, financial innovations and
risk management, redesigning processes, procedures and
systems, and rebuilding the trust of the people in the
decision makers and the new systems.
At a time
when most national economies and corporate houses are
struggling to overcome the effects of the financial crisis,
it is important to rethink strategies and redesign policies
and programmes to rebuild the lives of the people who were
worst affected by the financial crisis. Hit by the
spiralling food prices, the plight of some 1.4 billion
people living below the poverty line, earning two dollars
per day or less, has worsened owing to the financial
meltdown.
Estimates by researchers indicate that the financial crisis
has added 53 million people to the 2009 count of the number
of people living below 1.25 dollars per day. And based on
growth projections for 2010, this number is likely to swell
by an extra 73 million people living under 1.25 dollars a
day and 91 million more under two dollars a day.
The increase in food prices coupled with the financial
crisis has reversed the achievements of poverty alleviation
programmes in many developing countries in Africa and Asia.
While the
hike in food prices strained the budgets of developing
nations, the financial crisis has nearly crippled the
ability of many developing nations to deliver on their
development promises. As a result, the world's poor have
been affected not only by financial poverty but also as
social and resource poverty.
Development has become the biggest casualty of the economic
meltdown. It has deprived millions of people of social
resources that could have changed their lives. Communities
in Asia and Africa will now have to forgo access to social
security, health, education, markets, credits and other
facilities for a much longer period than expected.
It is time to rethink our goal, redesign our strategies and
rebuild the confidence of the poor in the institutions that
are charged with the responsibility of alleviating poverty
and implementing development programmes.
Strategies
to deal with financial poverty alone will not make a
difference. Another financial crisis and the continuing rise
in food prices will undo the gains once again. We have
experienced it time and again.
There is
an urgent need to develop and implement strategies to tackle
social poverty, which can go a long way in alleviating the
social and economic conditions of the poor, a vast majority
of whom live in rural areas. For sustainable development we
need to build infrastructure to help the poor reach the
market with their produce, provide them with education,
health and credit facilities. The poor cannot and should not
be viewed as another "emerging market" for cheaper
commodities.
Liberalised trade alone is not the solution to the problem
of rural poverty. Over the years, it has not changed the
lives of the millions of poor. In fact, their number has
swelled and will continue to increase until we reform the
trading system making it more equitable. The biggest hurdle
in improving their conditions is the lack of economic
opportunities for them.
Trade alone may not be enough to eradicate povert but it is
essential if poor people are to have any hope of a bright
future.
The farming community in the developing countries that
feeds the world deserves preferential treatment and support
from the international market. Fair trade combined with free
trade can make a huge difference in the lives of millions of
farmers and wage workers in Africa, Asia and Latin America.
Improved market opportunities for the small-scale farm
sector will help farmers contribute to their own
development, especially in reducing financial and social
poverty.
The International Assessment of Agricultural Knowledge,
Science and Technology for Development (IAASTD) recommended
in its report, "Business as Usual is Not an Option," that
alternative trading channels should be promoted, trade
barriers for products in which developing countries have a
comparative advantage should be removed, and deeper
preferential access to markets should be provided to least
developed countries (LDCs).
The IAASTD held the view that supporting the development of
certified organic agriculture and fair trade to offer
alternative trading channels to mainstream commodity markets
can help improve the social and environmental performance of
agriculture, and provide more favourable and stable returns
to farmers and agricultural workers.
Indeed, there is merit in IAASTD's recommendations, and
studies conducted by various universities have amply
demonstrated the positive impacts of fair trade on the lives
of poor farmers. Policymakers and economists should focus on
evolving a trading system based on the principles of fair
trade that shields the farmers against massive price
fluctuations and provides them with a social premium to
achieve their developmental aspirations.
The private sector has already taken a lead in supporting
fair trade. Big brands like Starbucks and Cadbury have
committed themselves to fair trade.
As the third-party certification body for fair trade
products worldwide, we at FLO-CERT have countless examples
of how farmers in Asia, Africa and Latin America have
managed to alleviate their social and economic poverty by
constructing hospitals, schools and communication facilities
for their communities from the fair trade premium they
receive through the sale of their produce.
Rural poverty can be challenged by affording fair
opportunities to the farming communities to trade freely in
the global economy dotted with tariff barriers.
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