many ESAP countries need to intensify efforts to implement and enable quality assurance systems. With the exception of a few countries like Japan, the consumers in ESAP are largely indifferent to questions concerning the safety of biofortified and genetically engineered food (Hoban, 2004), and reveal widespread acceptance of relatively low cost pharmaceuti­cal products (drugs and vaccines) from genetically modified or cloned animals.

4.2.3.2  Implications of GDP growth for agriculture
In the past few decades, agriculture has experienced some stagnation in growth compared with historical rates. The sector has also experienced lower investment in recent years and this trend is likely to continue in future. Other issues that may affect the agriculture sector include withdrawal of subsidies, less priority for R&D and an aging labor force. The manufacturing sector, which has grown strongly in the past few decades, is by contrast receiving many incentives including tax exemptions, low import duties and priori­tized training. This trend will likely intensify, especially in the large emerging economies of ESAP. In ESAP as in much of other developing regions of the world, the impact of an increasingly globalizing and industrializing food system will be evident as diverging rural worlds and increasing concen­tration of power in the hands of a few transnational actors (Pimbertetal., 2001).
     The expected rapid growth of many of the ESAP coun­tries will have significant implications for agriculture. Struc­tural transformation of these economies is expected—while the absolute output of agricultural production from this re­gion is expected to grow over time, the relative importance of agriculture will decline as manufactures and services be­come relatively more important sources of GDP. The largest contributors to the rise in developing country service ex­ports over the past two decades have been East Asia and the Pacific and Europe and Central Asia (World Bank, 2007).
     Although the agriculture sector is expected to continue to be a major employer in the region, labor will continue to move to other sectors and increasingly so as wage dif­ferentials grow in relation to other sectors. Although there is a shift toward off-farm employment in South East Asia, agricultural output in the region has not fallen; in fact, ag­ricultural production capacities in Indonesia, Malaysia and other countries in the ESAP region have increased in the past two decades (FAO, 2006a). This is partially explained by the adoption of increased capital investments in technology to offset labor shortages (Mahmoud and Shively, 2004).
     It can be expected that trade and investment liberaliza­tion and greater globalization will enhance allocative effi­ciency and enhance specialization alongthe lines of countries' comparative advantage. Globalization, or domestic policies that lead to more efficient allocation of resources, reduces production costs and thereby leads to significant increases in output and income growth. These effects are documented in the literature on the economic effects of trade liberalization (see Schneider et al., 2000; Anderson and Martin, 2006). However, there are predictions that agriculture in particular may be negatively affected by the pressures of globalization given that 60% of the farming community is small-scale/ marginal peasantry who may suffer heavy losses during

adjustments to global changes  (Ghosh, 2005; WCSDG, 2004).

4.2.4     Sociopolitical drivers

4.2.4.1   Economic liberalization and regulation
Economic liberalization and increasing globalization have benefited those countries and populations who have capital, entrepreneurial ability, education and skills (WCSDG, 2004). The poor populations of the world, illiterate and unskilled, with limited capital assets, have lost out. Since a majority of this population is in Asia, especially South Asia, this region will face a crisis of employment and income generation, es­pecially in rural and remote areas, amidst rapidly expanding urban growth and flourishing international trade in services and manufacturing. (WCSDG, 2004). Most countries in the ESAP region will meet their MDG targets of reducing poverty by half between 1990 and 2015 (ADB, 2005). Some countries like China, Thailand and Sri Lanka have already halved or more than halved their population living in abject poverty.
     What are the chances that economic liberalization in an era of globalization will bring more effective redistribu­tion in unequal societies in ESAP countries such as India, the Philippines and Bangladesh? Overall it does appear that globalization and economic liberalization may create a new political cleavage between "cosmopolitans" who have skills and assets to adjust easily to changes in global markets (and consequently increasing political clout domestically) and "provincials" who are less mobile with lower labor market skills (Bowles and Pagano, 2006).
      Economic liberalization and new labor and knowledge market regulations may enhance private investment—but to what extent these drivers will change investment in R&D is not known. In a region where fundamental labor regula­tions that protect basic rights of workers are "conspicuous by their absence" or are never enforced (ADB, 2005), there is a significant opposition to any reform in the regulations governing input markets, trade or tariffs. This opposition is largely voiced by NGOs who state that poor farmers cannot afford to pay for or purchase seeds and other technologies (see Chapter 3).
     The impacts of globalization are likely to vary widely, from posing severe production and consumption constraints on small-scale farmers and the agricultural sector in gen­eral in areas that are not well-endowed with resources or that are without social security, to rapid growth in markets, commodity production and trade in other areas. Latecomers into processes of globalization are likely to be penalized be­cause of a lag time in bringing domestic institutional struc­tures and productive sectors into line with new norms for tariffs, markets, and standards, as well as to compete with other countries that have been pre-disposed to such norms or have fewer people affected by these new norms (Nayyar, 2006). Given the uneven impacts of globalization, it is likely that developing countries may invest less of their scarce pub­lic sector resources on relatively long term investments like AKST and may address more immediate issues like subsi­dies for small-scale farmers to access inputs or price support mechanisms. These in turn may have negative consequences for agriculture in developing and developed countries.