Chapter 7: Regional Trade-FDI-Poverty Alleviation Linkages – Some Analytical and Empirical Explorations
Ram Upendra Das* 7.1 INTRODUCTION The theme of this chapter is to explore both analytically and empirically the interlinkages among trade, foreign direct investment (FDI) and poverty alleviation in a regional context. While most regional cooperation initiatives entail trade liberalization and investment cooperation agreements, they have largely been bereft of being contextualized in terms of developmental goals like poverty reduction. Various factors explain this neglect of development concerns in regional economic groupings both at the analytical and policy levels. First, most of the rather successful regional economic groupings have remained in the developed world. Second, there are only few regional integration initiatives in the developing world that have been acknowledged as relatively successful, such as the Association of Southeast Asian Nations (ASEAN), but they have not coherently incorporated developmental goals as their prime policy pursuits. Third, some of the developing country groupings that have done so have not been acknowledged as successful, such as the South Asian Association for Regional Cooperation (SAARC).1 Finally, the analytical basis of the channels through which trade can contribute to poverty reduction is not yet fully understood. For instance, the tradeemployment linkage and its impact on income generation and subsequent poverty reduction are not directly considered in the literature on regional economic cooperation. Trade-investment linkages, which are another channel through which trade and poverty could be linked, have not received adequate attention and formal treatment in the literature on the subject either. The importance of understanding issues as those highlighted above is 149 M2619...
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