The trade reduces poverty and detrimental to the environment

For the first Time since 1987, the world development report of the world Bank – the most important report of the organization on issues of world trade turning. In the centre of the report, the last week in the state Secretariat for economic Affairs (Seco) in Berne was presented, are chains the global value creation. So, the fact that individual goods, such as a Bicycle or a mobile phone facilities are the result of production, which are distributed around the globe. Value chains already account for half of the world's trade .

The Washington-based world Bank is the largest and most important Institution for the development of poor economies and emerging countries. Pinelopi Goldberg, for a year, the chief economist of the world Bank, justified the choice of the subject with its importance: "I was surprised myself, what is the importance of global value chains." As Aaditya Mattoo, Co-Director of the report, stated in Bern, promote economic growth and create more and better jobs. So you might be able to reduce the poverty.

The findings confirm chains, "the relevance of the investments of Switzerland in projects for the integration of developing countries in global value creation", held at the Seco . Its Director Marie-Gabrielle Ineichen-Fleisch said that, since many years, Switzerland has been set on the corresponding commercial projects.

Strong growth effects

According to the report, the world Bank, the "Hyper-specialization" on part of the products and processes of still greater advantages, than to Economists ascribe to the classical free trade in final products between countries. The companies of a country to strengthen their participation in global value chains to 1 percent, the average income in this country of more than 1 percent. In the case of the classical end-product trade, the increase amounts, according to the world Bank to less than half.

So, it is not surprising that exactly those regions that recorded the biggest reduction in poverty, which have focused particularly strongly on the value chains. The report refers to China, Vietnam and Bangladesh. Unlike the trade in Endgütern invest in value-added corporations chains in the world directly to the production facilities in the poorer countries. This leads to a greater transfer of technology and to a more stable development.

Until the financial crisis, then the trade war

Since the US President Donald Trump set in motion a trade war against China was already several times on its harmful consequences for the international value chains pointed out. Trumps goal is the production as completely as possible in the USA to bring back. The immediate consequence of his policy is reflected in the fact that companies worldwide put investments on ice. You want to engage only when it is clear which production sites of disadvantages be spared.

now, however, the world Bank report shows, were the global value chains already in front of Trump on the decline – specifically, since the financial crisis of 2008. The world Bank, due to a generally lower economic growth and less investment. In addition, the ability of the production to be pushed outsourcing to its limits. In the increasing protectionism of the past few years, the world Bank sees a big risk for a further reduction in the international division of labor, with negative consequences for poorer countries.

risk of rising inequality

Although it primarily emphasizes the advantages of the value-added chains, names the world Bank also have their disadvantages. For example, the inequality is threatening to grow: Because of the specialization of international production, the use of capital at the expense of the labour input increases, benefit capital owners in particular. Because of the complexity of the work increases, better benefit Qualified as low-skilled. Who loses because of a lack of qualifications, the work also has poor chances of finding a new Job.

As countermeasures, the world Bank recommends that extensive opportunities for education and training and a strong social network. As a model, the report calls the "Flexicurity"model, Denmark, to allow employers to dismiss unneeded Employees quickly. At the same time be supported but the unemployed are generous, and there are programmes for reintegration.

Harmful to the environment

disadvantages show, according to the report, but also for the environment. In the context of the value chain of Goods are transported by chains over long distances than trade in final products. The result is higher CO2 emissions. Also, the demand for packaging materials increases. The report recommends that the environmental costs to the producers need to be imposed. This would lead to an adjustment of the production and of the means of Production. In this area, additional regulations were necessary.

Finally, the world Bank calls for enhanced international cooperation. This should also relate to the topic of taxes and infrastructures included – and measures to the Opening up of the markets. A look at the current political situation in the world economy suggests that the world Bank can be found here hearing.

Created: 18.11.2019, 18:18 PM