Deglobalisation Series | (de)globalisation and the fear of trade by Ana Cristina Canales Gomez

While the consequences of globalisation over health and nutrition can be contradictory, trade openness can be a relevant policy for reducing food insecurity. This relatively inexpensive action, when compared to technology or research-based programmes, can increase the availability of nutritional foods, increase higher nutritional variety in diets, and can stabilise the food supply, reducing food shortages.


“One of the biggest ideas to hit the political world in recent years is that politics is increasingly defined by the division between open and closed, rather than left and right” (The Economist, March 24, 2018)

The recent trend of pushing against globalisation is based on different sources of information that varies from science-based evidence to ideas that trade and global agreements form part of a mastermind plan of invisible benefactors of the globalisation system. This phenomenon of deglobalisation has occurred before, but a major difference can be seen between the current and previous manifestations: in the 1930s, deglobalisation was pushed by governments, while the current expression of deglobalisation is pushed by the general public through social media.

When it comes to health and nutrition, the matter of globalisation and its impacts can be somewhat contradictory, and as with most economic matters, the perception of globalisation will depend on the viewer’s position: if you are in the LDCs where malnutrition is a leading cause of mortality, hinders development and entails national losses of around 6% of GDP[1], you might see globalisation as a beacon that could signal the introduction of greater nutritional diversity to local diets. If, on the other hand, you live in countries such as Chile or Mexico where undernourishment is no longer the main issue and the country now faces a transitional economic phase wherein obesity becomes a cause of concern, the increased inflow of foods from countries such as the United States might be viewed in a more negative light—as an influx of unhealthy types of food that contribute to obesity (Giuntella 2017).

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Graph 1 Changes in trade (% of GDP) and the prevalence of stunting in children under 5 years of age, world level. Source: author’s elaboration using STATA and the WDI (Last updated January 25, 2018).

From a descriptive perspective, during the last 30 years, and particularly after the Marrakech negotiations that led to the formation of the World Trade Organization (WTO) and its agreements, there has been an increase in trade openness and a reduction in the prevalence of stunting (PAHO 2017), even though hunger is still the leading cause of death and primary contributor to disease worldwide (Pongou et al. 2006).

We can assess the impact of trade openness using the Depth of the Food Deficit (DFD), an outcome indicator that measures inadequate access to food (Reddy et al. 2016, Santeramo 2015) by determining the amount of calories needed to lift the undernourished out of this position, ceteris paribus (Reddy et al. 2016, World Bank Group. 2017, Dithmer and Abdulai 2017).

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Table 1: Effect of the import and export value indexes (2000=100) over the depth of the food Deficit (kcal per person per day), world level.

Table 1 shows the effect of Export and Import Value Indexes, included in logarithmic form, over the DFD. There is overall a strong and significant relation between both values and the indicator: an increase of one percentage point of the Import Value Indexes reduces the Depth of the Food Deficit in a range of 21 to 37 kilocalories, such change being consistent to the inclusion of all controls. Hence, a reduction of the DFD responding to an increase in both exported and imported values speaks of narrowing gaps between current nutritional status and the average dietary energy requirements of the population, and can contribute to SDG2—Zero Hunger.

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Table 2: Effect of import and export Values (2000=100) over depth of the food deficit (kcal per person per day) in Latin American countries (excluding Haiti, Cuba and the Small Caribbean States).

The same regression can be run for the Latin American countries, including a variable constructed by the author measuring the number of food security programmes per country per year. The impact of trade openness over DFD is still strong and relevant in magnitude, and there is a linear albeit insignificant relation where programmes reduce the prevalence of undernutrition. When the quadratic variable is applied it hints—the coefficients are not significant—that such an effect only goes so far, and that, after a breaking point, these programmes show detrimental results.

Considering all of the above, the evidence shows that trade openness is in fact a relevant policy when it comes to reducing food insecurity, increasing social wellbeing and leading to socioeconomic progress. Furthermore, it would seem that trade openness is a more effective tool than the implementation of specific programmes that attempt to target food insecurity that many times end up doing more harm than good. This could be explained by the fact that there is a trend towards the indiscriminate adoption of programmes, both local and foreign. Additionally, more programmes usually signal the lack of effective stakeholder coordination, the lack of continuity in governmental strategies, and the inefficient expenditure of available resources.

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Table 3: Effect of export and import Values (2000=100) over obesity prevalence for children under 5 years of age, world level.

When it comes to obesity, our research shows inconclusive results: there is a significant albeit small effect of trade openness—both export and import values—on the prevalence of obesity, but this effect fades when controls are included in the models. This can be due to the fact that obesity is a more recent phenomenon and besides integration of economies into global markets responds to many factors, such as economic growth, urbanisation trends, and the rise of the middle class (PAHO 2017).

Conclusion

While the consequences of globalisation over health and nutrition can be contradictory, it is an effective tool for the reduction of hunger, currently the leading cause of death in the world. This relatively inexpensive action, when compared to technology or research-based programmes, can increase the availability of nutritional foods, increase higher nutritional variety in diets, and can stabilise the food supply, reducing shortages in times of dearth. Overall, opening up to trade, at least from the health and nutrition perspective, seems to be a policy worth trying, but there is only so much that trade can do without a strong institutional background.

[1] Which is the case for Central America and the Dominican Republic according to the CEPAL (as cited by Jara Navarro (2008: 9)

[2] According to the WHO, stunting is defined as the impaired growth and development that children experience from poor nutrition, repeated infection, and inadequate psychosocial stimulation. Children are defined as stunted if their height-for-age ratio is more than two standard deviations below the WHO Child Growth Standards median.


References
Dithmer, J. and A. Abdulai (2017) ‘Does Trade Openness Contribute to Food Security? A Dynamic Panel Analysis’, Food Policy 69: 218-230.
Giuntella, O., M. Rieger and L. Rotunno (2017) ‘Weight Gains from Trade in Foods: Evidence from Mexico’, University of Pittsburgh, Kenneth P. Dietrich School of Arts and Sciences. Working Paper Series 17/010 Weight gains from trade in foods: Evidence from Mexico. 17/010.
Jara Navarro, M.I. (2008) ‘Hambre, Desnutrición y Anemia: Una Grave Situación De Salud Pública’, Revista Gerencia y Políticas de Salud 7(15): 7-10.
PAHO (Last updated 2017) ‘Sobrepeso Afecta a Casi La Mitad De La Población De Todos Los Países De América Latina y El Caribe Salvo Por Haití’ (a webpage of PAHO/WHO). Accessed April 12 2017 <http://www.paho.org/chi/index.php?option=com_content&view=article&id=856:sobrepeso-afecta-a-casi-la-mitad-de-la-poblacion-de-todos-los-paises-de-america-latina-y-el-caribe-salvo-por-haiti&Itemid=1005&gt;.
Pongou, R., J.A. Salomon and M. Ezzati (2006) ‘Health Impacts of Macroeconomic Crises and Policies: Determinants of Variation in Childhood Malnutrition Trends in Cameroon’, International journal of epidemiology 35(3): 648-656.
Reddy, A.A., C.R. Rani, T. Cadman, S.N. Kumar and A.N. Reddy (2016) ‘Towards Sustainable Indicators of Food and Nutritional Outcomes in India’, World Journal of Science, Technology and Sustainable Development 13(2): 128-142.
Santeramo, F.G. (2015) ‘On the Composite Indicators for Food Security: Decisions Matter!’, Food Reviews International 31(1): 63.
The Economist (2018) ‘Bagehot: Rethinking Open v Closed’, The Economist March 24th-30th 2018 9084: 33.
WHO (Last updated 2017) ‘Noncommunicable Diseases’ (a webpage of WHO Media Centre). Accessed April 12 2018 <http://www.who.int/mediacentre/factsheets/fs355/en/&gt;.
Winters, L.A. (2004) ‘Trade Liberalisation and Economic Performance: An Overview’, The Economic Journal 114(493).
World Bank (Last updated 2018) ‘World Development Indicators’ (a webpage of The World Bank). Accessed March 1 2018 <http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators#&gt;.

0894f1c-2.jpgAbout the author:

Ana Cristina Canales Gómez is a veterinarian at the Universidad de Chile who holds a Masters degree in Public Policy from the same institution and a Masters degree in Development Studies from the ISS. Currently, she works as a consultant for Food & Foodstuffs Trade and Nutrition Policies in the Food and Agriculture Organization (FAO).

 

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