Protectionism a barrier to growth, says expert
June 23, 2009
Seoul - The global economy is expected to grow more slowly even after recovering from the current crisis but efforts to remove protectionism will help foster growth, a US expert said Tuesday.
"The global outlook is for growth no faster, and (possibly) slower, than in the past very successful years," said Anne Krueger, a former vice president of the International Monetary Fund.
Krueger, a professor at Johns Hopkins University, told a conference hosted by Seoul's finance ministry and the World Bank that prospective fiscal deficits and debt may result in higher real interest rates.
She said slower global economic growth and higher rates would hamper growth in developing countries.
"But those countries that make the efforts to use their labour forces more productively may find themselves greatly advantaged as industrial countries age and capital becomes scarcer."
Krueger urged each country to exert strong political leadership to remove protectionism.
"No developing country has sustained successful long-term development strategies without opening up to the international market," she said.
"Outer-oriented development strategies will still bring benefits. Avoidance of protectionism and strengthening of the open multilateral trading system will help all."
She also stressed the importance of efficient use of labour, calling for more investment in education, health and technical training.
"With higher real interest rates and more expensive capital, efficient use of unskilled labour and measures to improve the productivity of labour will be of utmost importance." - AFP
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