26 September 2016
UNCTAD Identifies Policies for Inclusive, Sustained Economic Growth
story highlights

Global economic recovery requires that leaders use bolder macroeconomic policies, stronger regulation of finance, and active industrial policies, argues the UN Conference on Trade and Development (UNCTAD) in its latest Trade and Development Report.

The 2016 report reviews trends in the global economy and highlights policies needed to foster structural transformation.

UNCTAD22 September 2016: Global economic recovery requires that leaders use bolder macroeconomic policies, stronger regulation of finance, and active industrial policies, argues the UN Conference on Trade and Development (UNCTAD) in its latest Trade and Development Report. The 2016 report reviews trends in the global economy and highlights policies needed to foster structural transformation.

According to the report, titled ‘The Trade and Development Report 2016: Structural transformation for inclusive and sustained growth,’ global economic growth remains weak, growing at a rate below 2.5%; global trade slowed down “dramatically” to around 1.5% in 2015 and 2016, compared to 7% before the crisis; and developing economies will grow on average less than 4% in 2016, with considerable variation across countries and regions – Latin America is in recession, growth in Africa and West Asia is slowing down to around 2%, while East, South-East and South Asia continues to grow at a rate close to 5%. The report notes that a major investment push for developing regions remains one of the unfulfilled promises of the more open global economy set in place in the 1980s and 1990s. After general growth accelerations at the beginning of the century, it reports, convergence is now “losing steam” with a more challenging international environment.

In order to attain sustained and inclusive growth, the publication identifies several critical issues for governments to address, including: combining production for global, regional and domestic markets; developing the production and learning linkages between the exporting sectors and the rest of the economy; and implementing strategic policies for international trade, as well as pro-growth macroeconomic policies to ensure high levels of aggregate demand and a stable and competitive exchange rate, as well as policies in support of the profits-investment nexus.

The 2016 report further recommends: providing adequate credit and liquidity to small and medium-sized enterprises (SMEs); supporting sectors that are key to diversifying and upgrading the economy; developing institutions, rules and norms that provide a stable framework for economic activity while being flexible to respond to specific situations; and changing corporate governance and recovering public investment, including through taxation rules that facilitate profit reinvestment and reduce incentives for debt financing. [Publication: The Trade and Development Report 2016: Structural Transformation for Inclusive and Sustained Growth][UNCTAD Press Release] [UNRIC Press Release]

related posts