1.- INTRODUCTION


The 4th of October of 2001, the Observatory of Globalisation invited Sheila Page, senior researcher of the Overseas Development Institute of London (ODI) and president of the European Association of Development Research and Training Institutes (EADI) to introduce the Association and to give a lecture on "Trade and development: The perspective of a very poor country".

The event was held at the "Aula Magna" of the Faculty of Law, University of Barcelona.

This is the briefing of her lecture.

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The central problem in analysing the effects of trade on development is that we do not really understand what it is that promotes development.

I shall look at different analyses of the relationship between trade and development, identifying variants, which show an interesting progression: from policy-based, to market-based, to various combinations, to a renewed interest in policies, but now no longer very targeted industrial or sectoral policies, but rather the general 'governance' of a country (and potentially of the international system). But without knowing what is missing in countries which have not developed, it is difficult to know whether trade can provide 'it', whatever 'it' is, and how it should do so.

Reducing dependence on commodities has proved to be not merely the best, but the only successful strategy for countries which have developed rapidly in the last 50 years, while the still-commodity-dependent countries are among the most slow growing, and remain concentrated among the least developed. Diversification has involved a set of general economic measures including high saving and investment, public investment in infrastructure and in education, and in some cases specific trade promotion. An essential element is finding the capital to invest to establish new types of production and trade. As external assistance is unlikely to be sufficient, and is now often targeted at income and social goals, not productive capacity and sustainable development, this requires using income from existing exports, either directly (the exporters themselves diversifying into new products) or indirectly (taxation and then assistance to different entrepreneurs). Where there are extra non-economic profits, for example from quotas, such transfers to new activities are particularly appropriate. But the countries which have not done this are in many cases those where the formula is difficult to apply.


2.- Malawi's trade