WASHINGTON (AP) - Rising trade tensions are threatening to block a path out of poverty for the world’s poorest countries: their ability to manufacture low-cost parts for multinational corporations.
In a report Tuesday, the World Bank warns that trade conflicts between major countries - specifically the United States and China - are disrupting supply chains and causing manufacturers to delay investment decisions to avoid getting caught in a trade-war crossfire.
For years, developing countries have managed to “export their way out of poverty” by supplying multinational companies, said World Bank economist Aaditya Mattoo, who co-directed the study. But rising protectionism “could stymie” that progress. The worst-case scenario looks ugly: Up to 30.7 million people worldwide could fall into poverty - incomes below $5.50 a day - if the trade relations continue to deteriorate.
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