ALSO READIMF, WTO, OECD vow to defend free trade against protectionism OECD chief voices concern over protectionist moves by US China, EU keen to push message of free trade, engagement China, Norway resume free-trade talks after diplomatic freeze Pacific leaders urged to defend free trade after Trump win
The World Bank today strongly defended globalisation and free trade, saying they have had a "huge impact" on poor countries and helped reduce inequality as well as lifting millions out of poverty.
"We believe that globalisation and free trade has had just an absolutely huge impact on poor people and poor countries. I think what you see is a reduction in inequality between countries, but increases in inequality within countries, especially OECD countries," World Bank President Jim Young Kim told reporters.
"We are also very much aware of the fact that there are many who have not benefitted from globalisation, who are very angry at the fact that they have not benefitted," Kim said at the start of the annual Spring meeting of the International Monetary Fund and the World Bank.
Referring to what has happened in the world in terms of eradicating poverty, he said China has had the strongest experience as 800 million people have been lifted out of penury.
That happened when China embraced the global market, when it opened itself to competition, when it engaged more and more in trade, he asserted.
"We've been saying along with the IMF and WTO that trade has been an extremely important part of global economic growth, and it's been an extremely important part of the reduction in poverty, the tremendous reduction in poverty we have seen over the last 30 years," he said.
Kim said OECD countries were now looking very seriously at how they've done in terms of ensuring that globalisation and economic growth has been experienced by everyone.
"I think there is a lot of attention, and that's good. We continue to argue that freer trade, more openness, is actually critical for the future of the world, and there may be individual countries that choose to look inward, but just because those individual countries look inward doesn't mean everyone else is going to look inward," he said, adding that China was a good example.
"China is not going to stop trading with all of its trading partners and it's not going to stop continuing to work with Latin America. China's work in those countries has only gone up over the last few years, and I think it will go up further. So, we're trying to make the case," Kim said.
Kim acknowledged that a lot of people blame trade for the loss of jobs.
"For example, in the US, but if you ask the WTO, they will say at most, at the very most, only 20 per cent of job loss is from trade, and the vast majority is from automation. That's what we're seeing all over the world," he said.
"So, my message is you're not going to bring these old jobs back. Every country in the world has to think about how it's going to compete in the economy of the future. When we say something like two-thirds of jobs in developing countries could be lost to automation, we don't know exactly what the timing is going to be," Kim said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)