Skip to main content Accessibility help
×
Hostname: page-component-848d4c4894-nmvwc Total loading time: 0 Render date: 2024-07-04T19:39:17.641Z Has data issue: false hasContentIssue false

10 - The Role of Trade in Fostering Inclusive Growth in the Asia-Pacific

from PART 1 - SPECIAL TOPICS

Published online by Cambridge University Press:  22 July 2017

Ravi Ratnayake
Affiliation:
Colombo
Get access

Summary

Rising inequalities in wealth and income, alongside other measures of exclusion, have been observed in both advanced and developing economies in recent decades. These growing disparities are often interpreted as a threat to not only social stability but also future economic prosperity. Changing the dynamics of growth to make it more “inclusive” has therefore become a priority at both the national and international levels. Inclusive growth can be broadly understood as growth that is accessed and shared equitably by all segments of society. In this context, trade and investment are recognized as being intimately linked with issues of employment, income distribution, and equality. However, the role that trade and international economic openness plays in generating inclusive growth, and the evidence from the Asia-Pacific region, is not empirically analysed. This chapter reviews the trends in growth, and inequality in the Asia-Pacific region before setting out a framework for linking changes in trade with inclusiveness. Next, the chapter presents cross-country analysis linking inclusivity across four dimensions — aggregate employment, productivity, poverty and income equality, and gender equality — to international openness through trade and investment. The results show that an expansion of trade and investment does not necessarily produce more inclusive development. Rather, a range of complementary policies need to be deployed alongside managed opening of national economies. Effective complementary policies likely to raise the inclusivity of growth include: increasing labour market flexibility; raising aggregate investment; lifting expenditures on information and communications technologies; and improving equal access to education.

INTRODUCTION

The Asia-Pacific region has achieved dynamic economic growth matched with significant reductions in absolute poverty over the last four decades. However, there has not been similar success on other aspects of inclusiveness. In particular, inequality within many countries has worsened. Moreover, marginalized and vulnerable countries did not succeed in capturing a proportionate share of the benefits created by the region's growth. Put simply, the orthodox approach which emphasized using trade and investment to increase overall growth, and considered distributional issues as secondary, has not produced fully inclusive societies. If the tradeand investment-led growth pursued to date had been more geared towards inclusiveness, the number of poor would today be even lower. In this context, the chapter reviews whether international trade and investment policies have supported inclusive growth in the Asia-Pacific region and considers how more inclusive growth can be fostered in future.

Type
Chapter
Information
Managing Globalization in the Asian Century
Essays in Honour of Prema-Chandra Athukorala
, pp. 240 - 274
Publisher: ISEAS–Yusof Ishak Institute
Print publication year: 2016

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×