An Example from a Nobel Peace Prize Laureate
Bangladeshi Nobel Laureate Dr. Muhammad Yunus, who won the Nobel Peace Price for his work on poverty reduction, recently visited Washington, D.C. to make an inspiring and compelling case to the U.S. Senate about why better trade preferences for the world's Least Developed Countries (LDCs) are critical to ending poverty. His argument - greater entry into the U.S. market of poor country products has a tremendous potential to create even more jobs and earnings, especially for women.
Using Bangladesh as an example, Yunus identified two major forces that are helping the country move closer to achieving the U.N. Millennium Development Goals: the rise of the micro-credit industry driven largely by the Grameen Bank, which has helped almost 6 million women in that country, and increased garment exports to the United States and Europe, which have created millions of manufacturing jobs for low income women.
Yunus
also noted that the growth in garment trade has not only assisted the economic
transformation of Bangladesh, but it has also enhanced the social and political
rights of women in that country. Even though Bangladesh is a relatively progressive
for a majority-Muslim country, until recently village women were often assigned
stereotypical gender roles. The transition of women from these traditional
roles into role as garment factory managers and small enterprise owners has
brought on a sea change in the status and attitudes toward of women in that
country.
On the larger scheme, garment exports have been central to the development of this poor South Asian country, where 72 million people still live below the poverty line. Nevertheless, U.S. trade policy remains unfriendly towards Bangladeshi garment exports. For example, while the average tariff on apparel imports from Bangladesh is about 16.5 percent, similar items from other LDCs, such as Haiti face only 1.3 percent. Moreover, the average U.S. tariffs on all imports from OECD countries is only 0.8 percent, while the average tariff on Bangladeshi imports is 14.9 percent.
A New Role for U.S. Trade Policy
The United States has been the arbiter of peace and stability in many countries in the world, but a part of U.S. trade policy actually threatens economic stability and prosperity in many poor countries. U.S. protective trade measures, even in a liberal international economy, have stymied job growth in poor countries. For example, a country like Bangladesh, which is struggling to compete in the U.S. import market against countries, such as India and China, is hit by steep tariffs of about $496 million on just $3.3 billion in exports. On the other hand, a developed country, such as France only pays the United States $367 million for $36.8 billion worth of exports.
Furthermore, U.S. trade policy has blocked preferential access to those products that many poor countries are able to produce the best. For example, many cotton and sugar products have been excluded from AGOA. These are the two major agricultural commodities that the poorest African countries have the capacity to produce. Consequently, such a policy hinders opportunities for job growth, which, in turn, perpetuates a cycle of poverty.
Some policymakers argue
that opening up trade with the poorest countries in the world would threaten
U.S. agricultural and manufacturing jobs. These fears are exaggerated provided
that Least Developed Countries (LDCs) account for only $8.2 billion of U.S.
non-oil imports, or only 1.3 percent of all U.S. imports
U.S.
Foreign Trade Policy and Poverty Reduction: Can U.S. Trade Policy Help the
World's Poorest Women?
Shamarukh Mohiuddin
Introduction
While trade policy remains a controversial subject in the United States and in many other countries, trade has already shown an enormous potential to spur economic development and reduce poverty. Trade has also provided undisputable benefits for low income women around the world. This is especially true of trade in light manufactures and agriculture, where women dominate the workforce.
The exports of garments and clothing accessories to the international market benefit women throughout Asia and Africa by providing them with employment and income. In Phnom Pen, Cambodia, one of the poorest capitals of the world, about 270,000 workers are employed in garment factories, 90 percent of them women. Garments from Cambodia that are later sold in U.S. stores, such as Banana Republic, Gap and J.C. Penney provide support for hundreds of thousands of Cambodian women and their families. The garment industry also provides employment for tens of thousands of women in Swaziland and Lesotho as a result of the African Growth and Opportunity Act (AGOA), a U.S. trade preference program. Jewelry and trinkets, popular commodities in Target and Wal-Mart stores, employ no less than 325,000 poor women in India, in some cases saving them from human trafficking and slavery, chilling fates which sometimes befall unemployed, single women in that country and other poor countries.
Additionally, exports of agricultural products increase the opportunities for women to escape poverty. In places like Kenya and Uganda, vanilla and cut flowers exports offer tens of thousands of women a chance to earn a better living. Kenya is the largest supplier of cut flowers to Europe, which supplies employment to many Kenyan women. For example, in the Kenyan county of Naivasha, 40,000 women receive employment from the flower farms.
Development institutions and organizations, such as the United Nations and Women's Edge Coalition have acknowledged the role of trade in generating employment and income for women, which is key to tackling poverty overall.
However, despite the aforementioned figures, U.S. trade policy fails to adequately emphasize the importance of trade for the poorest members of society, many of them women. Much more work needs to be done to allow more generous market access for those manufactured and agricultural products that are central to the lives of so many women around the world.
The Story of Anwara Begum
Anwara Begum is a young woman employed as a division manager in one of the larger garment factories in Bangladesh, Dyetex Enterprise Ltd. (Bangladesh, which is an extremely poor country with a per capita income of US$480, exports a significant amount of apparel to the United States.). Five years ago, Anwara's life changed when she made the hard decision of leaving her parents and four brothers and sisters in their remote village of Munishganj to travel to Dhaka, Bangladesh's bustling capital city to take a job at a garment factory.
Prior to her work in the garment industry, Anwara's parents depended upon rice farming for a meager income for their family of seven. As the eldest member in her family, Anwara grew up having to look after her four young siblings while both her parents toiled on a small rice farm. In this specific case, the annual near-destruction of the family's rice farm from floodwaters brought by the monsoon season often made it difficult to rely on agriculture for a substantial source of income. As a result, the family could only afford two meals a day. One of these meals comprised solely of boiled rice, a hardly nutritious intake for young kids. Anwara's family was so poor that her parents eagerly anticipated the wedding of their 19-year-old daughter into a slightly wealthier family as the only escape for their children from economic destitution.
In 2002, when Anwara learned about the many job opportunities in the booming garment industry in the capital city, she realized an alternative opportunity to escape poverty. Within a few weeks of traveling to Dhaka, Anwara landed a job as a line-worker at a factory, which supplies ready-made garments to major U.S. retailers. She began to earn an income that was double what her parents earned combined from their farming activities.
Eventually, Anwara's earnings benefited her family as a whole. Within one year, she was promoted to line supervisor, a role that allowed her to send 60 percent of her annual income back to her family in Munshinganj and still afford a decent living in Dhaka. Her consistent contribution to the family income helped her two younger brothers finish secondary school and find jobs of their own. Presently Anwara works as a division manager, supervising 470 employees in Dyetex's knitting department.
Anwara's story is not
unique. In Bangladesh, the garment manufacturing industry is the largest employer
in the formal sector, and sewing machines are the source of livelihood for
almost 2 million poor women. Many of the women send money back to their villages,
thus enabling their families to enjoy a slightly better life.