For many years now, the Trade and Development Reports produced by UNCTAD have been providing a voice of sanity in a global discourse on the world economy that has often appeared to be dominated by denial and irrelevance. The Report has also often proved to be remarkably prescient, for example by anticipating as early as 2006 the likely collapse of financial markets that occurred in 2008, or by pointing in the past few years to the futility of excessive reliance on monetary policies alone to lift economic growth, which policy makers are only beginning to come to grips with at present.
This year’s Report provides a similarly insightful assessment of current economic trends, which captures the dilemmas facing policy makers across the world. It summarises the poor state of the global economy, with slow growth in advanced economies (expected to be less than 2 per cent this year) and developing countries (at around 4 per cent, that is 2.5 percentage points below the pre-crisis figure). Global trade has meanwhile decelerated even more, and the commodity cycle is now in its second year of sharp downturn, even as many commodity prices have been falling since 2012. Capital flows have become more volatile again and debt crises are looming in several countries.
This reflects the unbalanced and unsustainable nature of the supposed recovery from the crisis.