The monthly briefing of the World Economic Situation and Prospects report calls on governments to diversify their economies, address rising inequality, establish a new financial architecture, and strengthen institutions, in order to pursue economic growth and SDG achievement.
The yearly version of WESP covers expected trends in the global economy.
10 January 2018: A briefing from the UN Department of Economic and Social Affairs (DESA) calls for a focus on inequalities, sustainable financing, and institutions, in order to “move out of crisis mode and steer the world in a more sustainable direction.” Four steps are outlined in the monthly briefing of the World Economic Situation and Prospects (WESP), with an emphasis on economic growth and SDG achievement.
The briefing notes that following recent crises, global demand, trade and investment are increasing. Governments can take advantage of this trend through action to: diversify economies; stem the rise of inequalities; make finance sustainable; and improve institutions.
On diversifying economies, the brief notes that planning for such “distant horizons” as in the SDGs and the African Union’s 2063 Agenda requires a stable source of financing. Developing countries that depend on only a few commodities must diversify, to ensure protection from price shocks and shifts in investment cycles. Fiscal reform is a step in this direction.
The US’ 2017 tax reform will contribute to “a further rise in after-tax wage inequality.”
On rising inequalities, the brief argues that moving forward on the SDGs and economic expansion depend on raising living standards for the “most deprived” and addressing the inequality of opportunities. The authors note that the tax reform adopted in the US in 2017 is expected to contribute to “a further rise in after-tax wage inequality.”
On finance, the brief recalls that, out of the several trillion US dollars needed each year to achieve the SDGs, public funds are only expected to cover up to US$1 trillion. Therefore, it says, “the need for the private sector to chip in is obvious.” Bridging the gap will require not just “side projects” by charitable businesses but a new financial architecture, driven by government policy action, to shift from short-term, profit-oriented transactions to long-term investments in areas such as research, infrastructure, and health care.
Finally, on improving institutions, the authors report that in 2017, “capital started flowing back” to developing countries, but political instability could stop the flow again. Countries must improve their legal institutions, administrative capacities, transparency and business environment, they stress. The brief concludes that strengthening governance and ensuring political stability are essential for achieving the SDGs and economic growth.
The yearly version of the WESP report covers expected trends in the global economy, and is produced by DESA in collaboration with the UN Conference on Trade and Development (UNCTAD), the five UN regional commissions and the World Tourism Organisation (UNWTO). The 2018 edition of WESP was released in December 2017. Finding that global economic growth had increased by three percent, it suggested that policymakers take the opportunity to readjust policies towards long-term issues that have hindered progress towards the SDGs, including by removing obstacles to development and tackling climate change and inequalities. [WESP Monthly Briefing] [SDG Knowledge Hub Briefing on WESP 2018]