Effect of trade liberalization and growth on poverty and inequity : empirical evidences and policy options

Studies assessing the link between trade liberalization, poverty and equity come up with debatable results. The effect of open markets on poverty alleviation is usually divisive between pros (Anderson, Jha, et. al., dan Bhattasali et al.) and cons (Coller and Dollar, Twyford, Medeley, and Abbotts), while effect on equity is more conclusive. These conclusions are also true for Indonesia case. Two policy insights are derived from studies review to reconcile the benefits of trade liberalization and growth with poverty alleviation and equity improvement in Asia and the Pacific. The first one relates to pro-poor trade liberalization through 1) rectifying imbalances; 2) rethinking reciprocity; 3) special and differential treatment and flexibility; and 4) trade issues of special interest to developing countries. The second is related to pro-poor domestic policies that include 1) reducing assets/land inequity, 2) promoting rural infrastructure, 3) creating conducive investment climate, 4) promoting pro-poor employment, and v) promoting agricultural research and development. (Résumé d'auteur