Washington (AFP)

Donald Trump's trade war is undermining the ability of emerging and developing countries to grow out of poverty, World Bank chief economist Pinelopi Koujianou Goldberg said Tuesday in an interview with AFP .

"Trade tensions have increased uncertainty, which has suddenly reduced investment," she says.

But these fragile countries, which do not have their own capital like the poor countries of Africa, fundamentally need foreign investment to develop.

The "significant" decrease in these investments is all the more problematic as they had "never really recovered after the financial crisis" in 2008, says the economist.

If this trend continues, "some countries will never get out of poverty," she says.

Worse, countries that had managed to extricate themselves from poverty, now considered middle-income economies, could go backwards, she predicts.

And without growth, people will remain stuck in poverty, condemned to survive on less than $ 5.5 a day.

Koujianou Goldberg acknowledges that many economists have underestimated the repercussions of the US-China trade war launched in March 2018.

"Many of us thought that trade tensions were a temporary phenomenon and that they would have disappeared by now," she admitted.

On the contrary, these tensions have "degenerated" over time and nobody knows how they will end, she laments.

In a report released Tuesday on global value chains, the World Bank notes that if the trade conflict worsens and further undermines confidence, "the effects on global growth and poverty could be significant."

"More than 30 million people could sink into poverty and global income could fall, up to $ 1.4 trillion," according to the institution's calculations.

- The environment in question -

In this context, Pinelopi Koujianou Goldberg recalls the importance of global value chains that have contributed in recent decades to transform the economies of the poorest countries.

These chains allow poor countries to specialize in the manufacture of a specific product (a car spare part for example) and enrich themselves without having to build entire industries starting from nothing.

According to the economist, all countries have much to gain by accelerating reforms to increase international trade.

It therefore advocates simple measures to facilitate trade by, for example, improving customs logistics to ensure that "products do not remain blocked on one side of the border" for days or even weeks.

On a positive note, it welcomes the fact that countries that have already taken steps in the value chain, such as Vietnam or Bangladesh, aspire to step up the ladder so as not to "get stuck in textile production. ".

To do this, "they must invest in human capital" because it is impossible to manufacture sophisticated products without a skilled workforce.

In addition, they must invest in research and development and in the protection of intellectual property rights.

Asked about the adverse effects of international trade on the environment, the economist acknowledges that this leads to an increase in carbon dioxide (CO2) emissions from transport and an excess of waste - particularly in the fields of electronics and plastics - from the packaging of the goods.

But "in developing countries, it is much more defensible to prioritize the eradication of extreme poverty than the cost of packaging associated with global value chains," she notes.

And to note that the trade "has also beneficial effects for the environment".

"Take the example of an electric bicycle made in Shanghai, with the contribution of 20 countries," she says. "So it's a classic product in the global value chain, and it's good for the environment."

Ms. Koujianou Goldberg finally concluded that the more advanced countries have the responsibility to take initiatives before asking the developing countries to follow suit.

© 2019 AFP