10 September 2014: Strengthened domestic and regional demand, accompanied by better income distribution, is necessary to put the world economy on a path towards sustainable growth, according to the 2014 issue of the Trade and Development Report (TDR), titled ‘Global Governance and Policy Space for Development,’ published by the UN Conference on Trade and Development (UNCTAD). The 2014 report underscores the role of proactive trade and industrial policies in the post-2015 development agenda, and highlights policies that can help achieve sustained economic growth, poverty reduction and full employment.

The world economy has not established a sustainable growth regime since the onset of the global economic and financial crisis, according to the report. It finds that policies to support recovery are inadequate and do not address the root causes of the crisis, including income inequality. The report recommends global financial architecture reform to ensure stable, long-term public and private financing for poor economies.

According to the report, the post-2015 development agenda will require flexible choice, design and implementation of policies. In this regard, it highlights: the importance of industrial policy (with examples from the US and EU); the potential of industrial policy that supports the private sector to identify and expand manufacturing sector activities to facilitate diversification; the potential for global value chains to create jobs and support industrial development while cautioning against “the risk of being trapped in a low-level niche of the value chain”; and the need for developing countries to place greater emphasis on domestic and regional demand rather than on exports to developed countries.

The report also highlights challenges faced by the international community in moving towards the post-2015 development agenda. It notes the importance of aligning goals and targets with a policy paradigm that can raise productivity and per capita incomes, generate decent jobs on a sufficient scale, deliver reliable public services that leave no one behind and establish a stable international financial system. The report also discusses the challenges of inequality, and ensuring the availability of effective policy instruments to help countries advance the post-2015 agenda and achieve goals. It also addresses: attempts to build a more inclusive, sustainable economic order; expansion of government fiscal space; tax structures; trade negotiations and multilateral agreements; and international investment frameworks. [UNCTAD Press Release] [Publication: TDR 2014: Global Governance and Policy Space for Development] [TDR 2014 Highlights]