Neither Aid nor Trade
For many Africans, the current impasse in WTO negotiations is an old, familiar story--the wealthy family that neglects its rural relatives--writ large. The poorer cousins send many letters asking for help with school fees, seeds, and fertilizer; the city folk respond that help was sent in the past but ended badly, so they now say, "Pull up your socks! Use your own savings!"
But the rural relatives have no socks to pull up or money to save. They can sell a few things, so everyone now agrees: it's trade, not aid. But prices are low, and the poor have little to sell--and are stuck in this condition until something genuinely new comes along. Science-based R&D is one of the few ways we know that can generate real innovations to raise poor peoples' productivity despite an unfavorable environment. But the "trade, not aid" approach does nothing to help deliver the benefits of science and technology to the people who need them the most--the world's poor.
In the real world of global markets, the "development round" of WTO negotiations may yet recover from its breakdown at Cancun earlier this year, and could eventually deliver the benefits promised by economic theory: a larger volume of trade, at better terms, spurring more investment and more technology transfer, in turn benefiting the poor as well as the rich.
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