Reforms wont help India's poor: Escap

 It says that agricultural trade liberalisation will not help India reduce poverty. In fact poverty would increase in Bangladesh, India, the Russian Federation and Sri Lanka in both the short and long run. India would suffer the most with 7.2 mn new poor due to the negative impact on the real wages, according to a study done by Escap.

 It says that the study on the impact of agricultural trade liberalisation shows poverty reductions in some countries but increases in others. The region could take 5 mn people living on less than $1 a day out of poverty through Doha agricultural trade reforms in the short run, possibly increasing to 7 million in the long run. China appears to gain the most reducing the number of poor people by 10 mn mainly in rural areas due to an increase in wages of unskilled workers.

 "Thailand and Vietnam would also reduce the incidence of poverty as would Indonesia and the Philippines. Poverty would however increase in Bangladesh, India, the Russian Federation and Sri Lanka in both the short and long run. India would suffer the most with 7.2 mn new poor due to the negative impact  on the real wages of the unskilled labourers," it says.

 It further says that if the world went beyond Doha reforms and undertakes comprehensive agricultural liberalisation, eliminating all tariffs, export subsidies and domestic support for agricultural and food products, the Asia Pacific region would take 48 mn people out of poverty in the short run increasing to 51 mn in the long run. All countries except Sri Lanka would see a reduction. Rural China would see nearly 25 mn people come out of poverty and India 12 mn.

 Escap estimates of the aggregate welfare effects under Doha show modest annual gains of $4.6 bn globally in the short run increasing to $5.2 bn in the long run. Two-thirds of the gain would accrue to Asia with Japan gaining the most, it says.

 The developing countries in Asia would gain a modest $365 mn (8% of the total) in the short run and $640 mn (12%) in the long run. Republic of Korea, Thailand and India appear to gain the most from agricultural trade liberalisation under Doha mainly due to gains in the terms of trade, it says.
Citing another study Escap says that in India the welfare of the poorest households would fall while the richest could gain.