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Tuesday, August 14, 2007

The manipulation is not merely at the level of numbers, it extends into economic models

OPINION/ECONOMIC ANALYSIS Growing credibility gap It is widely accepted that agricultural subsidies in developed nations are distorting global agriculture trade. And yet, Purdue University and the World Bank are cleverly using economic models and simulated 'welfare gains' to push for market access in developing nations. Therein lies a danger, says Devinder Sharma.
Manipulating scientific, economic and environmental data to suit commercial and political interests has now turned into a major international activity. With only a thin line dividing commercial interests from political, inter-governmental studies and analysis are now being easily tailored to protect business and trade. Whether it is the United States, Europe, Japan or India, usurping economic and scientific numbers is becoming a norm rather than an exception.
The manipulation is not merely at the level of numbers, it extends into economic models. Over the years, there has been growing criticism of the veracity of economic analysis. To improve the quality of the global economy-wide analysis and using numerous economic models and innovative methodologies, the Global Trade Analysis Project (GTAP) was born in 1993. Based at the Purdue University in the United States, the GTAP (for an overview of the model, visit: gtap.agecon.purdue.edu) has now become a common 'language' for global economic research. Ironically, the IPCC report also banks heavily on the GTAP analysis for a wide array of issues ranging from domestic to international policies...
But starting with a faulty assumption would lead to a flawed assessment. It is widely accepted that agricultural subsidies in developed nations play a very important role in distorting global agriculture trade, not otherwise. It is here that the developing countries need to be cautious. Developing countries must build the capacity to scrutinise the economic data flowing from the western academic and research centres. Blindly accepting the analysis being put out by the western universities is fraught with unforeseen dangers.Devinder Sharma 23 Apr 2007
Devinder Sharma is a food and trade policy analyst. He also chairs the New Delhi-based Forum for Biotechnology & Food Security. Among his recent works include two books GATT to WTO: Seeds of Despair and In the Famine Trap.
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