Bridges Weekly Trade News Digest • Volume 13 • Number 15 • 29th April 2009
World Bank Chief Scolds G20 Leaders for Backsliding on Protectionism
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World Bank President Robert Zoellick issued a stern warning to world leaders last week, urging them to follow through on their commitments to keep their borders open to international trade.
“We need to be ever-vigilant that whether it is financing, instruments, or policy prescriptions, we deliver on our commitments and are held accountable for doing so,” Zoellick said. “As the recession deepens, leaders will be under growing pressure to protect home markets. Such retreats behind barriers will only make the economic crisis worse.”
Zoellick noted that G20 leaders meeting in London earlier this month had pledged to refrain from imposing any obstacles to international commerce flows. But in the three weeks that have passed since the 2 April summit, nine of the 20 nations in that group either have implemented or are considering putting in place new measures to restrict trade, Zoellick said.
“That’s almost half the G-20 member states,” Zoellick said.
A fact sheet released by the World Bank’s press office accused G20 members Argentina, Brazil, the European Union, India, Russia and the United States of implementing trade-restricting measures – specifically, anti-dumping duties and safeguard duties – since the 2 April summit in London.
But the World Bank noted that, over the same period, several countries had taken steps to open their borders to trade: South Korea has begun accepting imports of US beef; Japan has lifted a ban on Chilean pork and ended a punitive import duty on Korean computer chips; and India has eliminated import duties on sugar and soybean oil.
In his address to reporters, Zoellick also called attention to the potential human impacts of the downturn, noting that the Asian Crisis of the late 1990s led to an upswing in anemia among pregnant women in Thailand and a decrease in the average weight of children under the age of three in Indonesia. During such times, it is critical to ensure that adequate safety net programmes are in place, Zoellick said.
Indeed, the World Bank has stressed that the effects of the economic crisis will likely be most acute in developing countries, which will be hard hit by declines in foreign aid, income from exports, remittances sent home from citizens who have moved abroad.
In Africa, economic growth will slow to 2.9 percent this year, down from 4.9 percent in 2008, according to the World Bank. The effects of that slide will be far-reaching.
“You don’t talk about an increase in infant mortality when there is a drop in growth in Europe and the United States, but in Africa, where people are living on that margin, that fall in growth could lead to an additional 700,000 infants failing to reach their first birthday,” Shanta Devarajan, the World Bank’s chief economist for Africa told reporters last week, according to Reuters.
Additional information
The World Bank’s fact sheet on recent G20 protectionist measures is available here.
ICTSD reporting; “Africa could be worst hit by the crisis,” REUTERS, 22 April 2009.
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