Welcome, A World Connected readers!

By Alex Singleton | 3 June 2005

Welcome to readers from A World Connected! This blog appears both on the Globalisation Institute site and now through a feed on the Institute for Humane Studies' A World Connected site. A World Connected is a really great site discussing globalization, putting a very balanced view on globalization issues. We recommend it highly.

My friend Juan Carlos Hidalgo from Guatemala has recently had an article published on the site that's well worth reading - on the subject of aid and trade:

The European Union appears to be a major donor of foreign aid to Latin America, a fact that has been offered repeatedly by the former European Commerce Commissioner, Pascal Lamy. However, as shown in dozens of studies, economic development in poor countries depends not on foreign aid, but rather development is fostered by open exchange. In this department, the European Union has failed to help Latin America.

There is a growing consensus that an increase in trade between rich and poor countries is both necessary and beneficial. Studies show that the inhabitants of countries with greater economic freedom enjoy higher standards of living. For example, the Economic Freedom of the World Report published annually by the Fraser Institute, demonstrates a correlation between open trade and GDP. The study shows that the GDP per capita in the quintile of nations with the most restricted trade was only $1,883 in 2002, compared to $23,938 enjoyed by the quintile of countries with most commercial freedom.

Sadly, protectionism closes the door to economic development for less developed countries. According to the United Nations conference on Commerce and Development, European protectionism deprives developing countries of approximately $700 billion in income from exports each year. That is almost 14 times what poor countries receive in foreign aid annually.

Read the full article here.