The United Nations Office at Geneva
Multimedia Newsroom
UNCTAD Press conference 29 October 2024
/
56:54
/
MP4
/
3.3 GB
TRADE AND DEVELOPMENT REPORT 2024 – UNCTAD calls for a "rethink" of development strategies
UN Trade and Development (UNCTAD) launched today the 2024 Trade and Development Report calls for a fundamental rethink of development strategies amid a global slowdown and rising social discontent.
DESCRIPTION
STORY: UNCTAD / UN TRADE AND DEVELOPMENT REPORT
TRT: 02 :50
SOURCE: UNCTAD
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
WEBSITE: https://unctad.org/tdr2024
DATELINE: 29 OCTOBER 2024, GENEVA, SWITZERLAND
SHOTLIST
1. Wide shot, exterior, Palais de Nations
2. Med shot, press room
3. SOUNDBITE (English) Rebeca Grynspan, UN Trade and Development Secretary-General : « We are in a global economy where, although we celebrate the possibility of a soft landing, what we are saying is that we are landing on the wrong runway. We are landing in a framework of slow growth, high debt, weak investment, and the risk of fragmented trade, which is the basis for the widespread discontent we see affecting both developed and developing nations. »
4. Wide shot, speaker on screen, journalist, photographer
5. SOUNDBITE (English) Rebeca Grynspan, UN Trade and Development Secretary-General : « The report we share with you today calls for thinking about development policies with much more focus on the interlinkages between the global economy, global trade, and geopolitics. We call for reform of the international financial architecture through the revival of financial investment and trade dynamism for developing countries »
6. Wide shot, press room
7. SOUNDBITE (English) Rebeca Grynspan, UN Trade and Development Secretary-General: « Global growth is at a new low normal with developing nations facing the hardest and harshest impacts. The global economy is projected to grow at just 2.7% for 2024 and 2025. That is significantly lower from the rate that we had in the era pre-pandemic. »
8. Med shot, photographer
9. SOUNDBITE (English) Rebeca Grynspan, UN Trade and Development Secretary-General: « Debt in developing countries has surged by over 70% from 2010 to 2023.”
10. Med shot, control room
11. SOUNDBITE (English) Rebeca Grynspan, UN Trade and Development Secretary-General: « Rising debt has left many developing nations with very limited fiscal space, making structural reforms to boost productivity and resilience more difficult for their weakening their growth prospects. As we have said before, countries face impossible choices between servicing the debt and investment in development and economic transformation.”
12. Various shots, speaker, photographer, journalist
STORYLINE
UN Trade and Development (UNCTAD) today released its “Trade and Development Report 2024: Rethinking Development in the Age of Discontent”.
At a moment of low growth, high debt, weak investment and trade, and economic volatility, UNCTAD calls for a new approach to development thinking
The report highlights that despite opportunities for developing countries due to growth in South-South trade and demand created by minerals driving the green transition, developing countries face mounting challenges in navigating a sluggish global economy.
Multilateral action and revised international financial architecture are essential for addressing these challenges and supporting sustainable, inclusive growth.
UNCTAD's report underscores the emergence of a "low normal" in global economic growth, with rates projected to remain at just 2.7% for 2024 and 2025, down from an annual average of 3.0% between 2001 and 2019. This is a stark contrast to the 4.4% average growth seen in the years leading up to the global financial crisis.
For developing economies, this slowdown is more acute. While they grew at an impressive 6.6% during 2003-2013, their average growth has since fallen to just 4.1% between 2014 and 2024. Excluding China, the picture is even bleaker: growth in the Global South has averaged only 2.8% over the last decade.
At the same time, developing countries have seen their debt burdens swell by 70% between 2010 and 2023, putting many at risk of austerity measures that could undermine progress toward inclusive development.
Production date: 29 October 2024
Creator: UNCTAD
Subject topical: ECONOMICS
Corporate name: UN TRADE AND DEVELOPMENT – UNCTAD
Teleprompter
good. Good morning, everybody.
And good afternoon to those in different time zones.
And welcome to the presentation
of the UN Trade and Development,
Trade and Development Report 2024. Rethinking development
In the age of discontent
It's one of our key
flagship reports of the year
we have with us today UN Trade
and Development Secretary General Rebecca Greenspan,
who will present the report and its policy
proposals
as well with us.
Anastasia
Neova,
head of macroeconomic and development policies, who oversaw
this year's report.
She will share in depth economic analysis.
We will then take questions from the floor
and, of course, from those who are joining us online Secretary General,
the floor is yours.
Thank you. Thank you very much.
Uh, Marcelo and thank you, all of you for being here with us.
Uh, this is, uh, our annual launch of the Trade and Development Report 2024.
And, uh, let me go through the main points that the report makes first,
uh, the report clearly states, uh,
the critical point that we are in the global economy.
We are in a global economy that although
we celebrate the possibility of of a soft landing What we
say is that we are landing in the wrong runway.
We are landing
in a framework of slow growth,
high debt,
weak investment and the risk of fragmented trade
that has,
uh that is the basis for the widespread discontent
that we see
affecting develop
and developing nations.
The report we share with you today
calls for a rethinking
of the development policies
in this
much more seen much more the inter
linkages between the global economy,
global trade and geopolitics.
We call for reform of the international financial architecture,
to the revive of the financial and
investment and trade dynamism for developing countries
and
to strengthening
multilateralism.
The report out lies clearly the risks
but also does so for the opportunities
for the developing countries.
The global South, we think, has a unique chance to lead
in the energy transition in the digital economy
and in the reshaping of global trade for the future,
let me share with you four
Main fs
First,
global growth is at a new low normal.
With developing nations facing
the hardest
and harshest impacts,
the global economy is projected to grow at
just
2.7% for 2024 and 2025
That is significantly lower from the rate that we had
in the era pre pandemic
pre pandemic. We were growing at
the Glo at a global rate of 33%
and now
the new low normal is 2.7.
We have to remember
that the 3% pre pandemic growth rate
was already
much lower
than
what we were experiencing.
Pre
financial crisis
Pre financial crisis 2008 2009
we The global economy was growing at a rate of 4.4%
so we never recovered. Really. We never recovered the dynamism
in trade, in investment and in growth that we had pre 2008.
But now we are a step lower
because we were after that we were growing pre pandemic at 3% and now
at 2.7. The difference between this rate
and the rate presented by the IMF in the recent meetings,
uh, fall meetings in DC
is because
the rates that they are uh given are at PPP prices
and we
are given
the growing rates at constant prices.
So,
developing nations, how,
uh, how do developing nations do in this framework?
Well, they do badly.
They are growing
at a rate of 2.8% only 0.10 0.1%
higher
than
the global average. And as we know, developing countries require
to grow much faster than developed countries and mature economies
for developing countries.
We developing countries grew
6.6% between 2003 and 2013
and 4.1% between 2014 and 2024
and what we are expecting this year next year is only 2.8%.
So,
as we said before, developing countries are taking a big impact
after
pandemic and the cascading crisis that followed.
The second point with respect to this to to low growth
is high. Debt
debt in developing countries
has surged by over 70%
from 2010 to 2023
and a lot of this increase, 15.7% came
since the pandemic.
That is a point
that an
that has made
repeatedly
precisely
because
in the pandemic, the only way
the developing countries had to protect their population
was to get into more debt
and the high interest rates that followed because of the increases in the
main reserve currency central banks made the situation much harder for them.
Rising debt has left many developing nations with very limited fiscal space,
making structural reforms to boost productivity and resilience
more difficult,
further weakening their growth prospects.
As we have said before,
countries face impossible choices between service and the debt,
an investment in development and economic transformation.
Our second message of the report
is that trade is changing.
Trade is now growing less than global GDP that global growth
and is not anymore the engine of gold. That was before,
uh, since 2008 that this is the case and now
growth because of geopolitics and because of
rising protectionism, trade is even weaker.
Trade as a share of GDP
reached 16% in 2008 but has stagnated
since then.
Geopolitical tensions.
As I said,
protectionism on the rise and policy uncertainty are dampening dampening
hopes for a strong trade revival.
As we have said before,
trade will recover in 2024
but will continue to grow below global
GDP
and
at very low rates for the moment at around 2%.
Another structural factor in trade that the TDR emphasises
is the growing importance of services
in trade.
Services alone now make up to nearly 25% of global trade
and is projected to grow farther.
I said that global trade is growing at around 2% per year.
In services, trade services are growing at around 5% per year,
so we can expect the share of services in global trade to continue rising
third point.
Although inflation
is receding in some developed countries.
And as I said,
there is the expectation of a soft landing.
Still, prices are still very high
and inflation in some developing countries continue to be very high.
In general, prices are still high in developed and developing countries,
eroding household incomes and feeding social discontent.
That is the second part of the title of the TDR of this year.
Inflation,
driven by post pandemic supply chain disruptions and monopolistic practises,
has eroded purchasing power in the household
in both developed and developing countries.
With respect to investment,
I think that it is important
to emphasise
three aspects
that we see relevant.
First, there is the growing importance of intangible assets in
investment
brands, software data. Patented technologies
are increasingly important in global supply chains
and this intangible assets in investment have grown
three times faster than physical assets.
And we know that in this intangible assets,
developing countries are in a disadvantage.
Also, investment in critical minerals have gone up considerably
20% in 2021 30% in 2022.
But
processing
is still very concentrated.
So here there is an opportunity for developing countries.
And but this opportunity won't
be uh, uh, We won't be able to take advantage of it
if we don't go up
the value added chain and the supply chain.
Let's remember that only 22 developing countries only 22 developing countries
have investment rating,
right?
So
uh uh so you understand
that the rest of the developing countries that don't have
investment ratings
have very difficult to attract investment.
So
in the report
in the World Investment Report, you will remember
that we
stated that the investment in the main SDGS uh uh
sectors have gone down by 10%
and that investment towards the developing countries is really very low,
and the risk perception and cost of capital
in these countries continues to be very high.
So
the fourth
uh, message
that we want to send
is with respect to a characteristic of trade
that is usually not
brought to the centre of the discussion.
That is, that South South trade
is growing much faster
than global trade.
So south South Strait,
together with the energy transition and the digital economy,
are clear opportunities for developing countries
to achieve sustainable economic development.
South South trade
has more than doubled,
reaching 5.6 trillion by 2023
offering an opportunity for diversification
and
to reduce dependency on traditional partners specially
in the face of rising protectionism.
At the same time,
the energy transition and the digital
economy provide further potential for growth.
As I have said
before
now,
for these opportunities to materialise,
developing countries have to avoid the trap of commodity dependence.
We know that from before
and so if we will stay only in
the extractive industries.
Despite the fact that most of the
reserve for the critical minerals needed for digital
and and and for the digital and energy transition are in the developing countries,
if we don't take advantage of diversification, adding value added,
we will continue in the vicious cycle of commodity dependency
As you know,
a commodity dependent countries have gone up and not down
during the last three decades.
So today
we are making a call to rethink economic development.
The report analyses the global economy today and underlines
that we need a new approach to development.
The challenges are clear as I state stated before slow growth, high debt,
weak investment and trade
and economic volatility.
Yet, as our findings show, real opportunity
also exist
for developing countries specially
in the energy transition in the digital
revolution
and in south south create and new forms of regionalism.
We must support developing countries, seize the opportunity of South South trade,
the digital revolution and the energy transition
and battle the challenges of slow global growth, financial instability,
high debt and accelerated changes in global trade.
Some of the policy recommendations include
the support to fiscal reform and modern tax policies
to create space for structural changes that promote growth.
And the report calls also for curbing anti
competitive practises and the need for better regulatory
frameworks to manage inflation in key sectors.
Regional trade agreements are an opportunity.
For example,
the African Continental Free Trade Agreement is a huge opportunity for Africa
and we must support multilateral agreements in
trade which also benefit developing countries,
avoiding defragmentation
of rules and regulations that are really represented,
representing an obstacle in a barrier for trade in the developing world.
A proactive, modern, new productive policies are key for diversification,
Investment in infrastructure and skills,
co-ordination capacities and institutional arrangements are also
key in terms of the capabilities of the state
scale. Up investment in
critical minerals for new technologies for more value
added in the critical mineral sector is necessary
to diversify
into
sectors that will bring about
more technology and manufacturing
to promote sustainable development and modern tax policies,
as I said before.
But national efforts are not enough,
and that stresses the need to rethink macroeconomic
and development policy at the global level,
stressing the urgency of global governance reforms across the global debt,
financial and trade architectures
in the international financial architecture. As you know,
we have proposed the scale up of development financing,
uh, with appropriate conditions for the developing world,
long term and affordable rates,
the
debt restructuring
architecture,
uh, to be reformed. And
here,
uh, we are in sync with the pact of the future
that was agreed on
in the last,
uh, general assembly meetings
in New York.
Investment and financing,
crowding in private investment and direct resources to SDG impact areas.
The other
global issue
is taxation.
We are discussing in the framework of the UN a
convention on taxation.
And there is the reforms that the OECD is already presenting.
This constitute a key element
of opening up the fiscal space for developing countries.
So
the combination of this new
low normal global growth and high debt
stands in the way to achieve sustainable development.
Low growth
at the same time, is underpinned by low investment and trade.
We cannot be complacent.
There are important steps in the right direction.
But for the developing countries to really be
able to take advantage of the new opportunities,
the national and the international policies will have to,
uh,
feed each other
in a coherent framework for a new development era
will have to come together.
Thank you.
Thank you. Thank you very much. Secretary General, for giving this overview
before we open the floor, we give the opportunity
to our colleague Anastasia
Neova
to
provide some more analysis on the
underlying macroeconomic mechanisms
explaining what the secretary general just briefed everybody about. Thank you.
Thank you very much, Marcelo. Thank you very much. Secretary-general.
Good afternoon, colleagues.
I will go in slightly more detail into the profound
transformations that underline the current
critical moment in global integration.
That report identifies as an inflexion point in globalisation, a pivot
of global trade, Financial system, technological growth wave to a different new
phase.
We do not call it this
globalisation. We avoid
references to fracturing.
But we do acknowledge that globalisation is qualitatively new phase of evolution.
There are three major transformations that underlie the current shift.
And it's remarkable that this particular moment comes exactly
80 years after the establishment of the Bretton Woods institutions
and 60 years after the establishment of
itself.
And this gives us a moment to rethink
development strategies for the emerging new growth
wave that is driven by new technology,
green transition,
new social and corporate forms and growing role of the global South.
So the three transformations that we speak about in detail in the report
first of them concern global trade.
Global trade is increasingly influenced by the rise of the service
economy and the active industrial and trade policies of major countries.
In contrast,
the global financial architecture has remained largely
unchanged since its inception 80 years ago.
We stress that addressing this imbalance and
making global economic governance institutions more inclusive
and accountable to countries of the global south
is vital to mitigate the deepening debt crisis
and foster sustainable development.
Second, new technologies, including those linked to the green transition,
artificial intelligence, precision by bioengineering but not confined to them
are reshaping economic systems As we speak.
Some developing economies stand to benefit from the rising demand for
critical minerals and resources needed for the new technological economy,
but
others will face significant risks.
Major oil exporting countries will face financial
constraints over the next two decades,
and this underscores the urgency for the need to
economically diversify and go on with structural transformation.
Additionally, the rising service economy,
particularly finance and related sectors,
complicated the management of extractive industries.
Without effective policies.
The expansion of finance related sectors
will add to the problems of resource curs,
deepen inequalities and impede diversification.
To navigate these challenges,
economies of the Global South must implement comprehensive regulatory
and diversification policies that extend beyond traditional manufacturing,
safeguarding economic resilience and addressing inequalities in
the age of compound and overlapping crises,
demands enhanced policy, co ordination and data sharing,
especially regarding the activities of multinational enterprises.
Third and finally,
geopolitics is reshaping supply chain chains
and does inform some investment decisions.
Yet there is a deeper structural issue
that underpins many of the ongoing shifts.
That is the diminishing role of manufacturing
as an engine of development and growth.
It remains crucial for economic transformation,
but
its effectiveness as an engine for growth has been waning.
The comparative advantage of lower labour costs
has diminished in relevance to modern industries.
Demand for higher skills and capital investment
in the 2010, only 18 per cent of global trade was based on labour cost arbitrage.
Over the past two decades,
manufacturing investment has halved
whilst investment in services activities within the manufacturing sectors
surged to nearly 70 per cent just last year.
This relative decline of manufacturing
does raise concern for both advanced and developing economies.
The loss of rewarding manufacturing jobs fuels, economic insecurity
and a sense of social discontent. In
response,
many advanced economies are adopting new industrial and trade policies to address
public discontent with globalisation.
However,
we do caution that rising protectionism threatens the multilateral system,
where fair competition and market access
remain essential for sustainable development.
For many developing nations,
a retreat for manufacturing exacerbates reliance
on commodities and hinders structural change.
This is particularly evident in the global food system,
which has shifted from a labour intensive sector
to a complex financialized landscape dominated by few.
Under regulated corporations.
New technologies can further accelerate the concentration of data
in the hands of a few large seed companies.
We cite one example among many in the report and this example is Brazil.
Despite Brazil's efforts to engineer soybeans for local conditions,
the country is still exposed to the vulnerabilities
and concentration of key markets and sectors.
It only captures around 36 per cent of soil profits as
the economy relies heavily on foreign inputs for fertilisers and technology.
This underscores the need for policies to
integrate better into complex value chains along
the whole process of investment and
research and development and intangible assets.
Our analysis indicates that failure to respond to
challenges posed by new technologies and ongoing financialization
will likely result in a significant portion of the global
economy being controlled by large Corporates and private entities,
undermining
inclusivity and public interest.
There was, however, a positive development for the global south that came up in 2024
and this is the initiative to establish a United
Nations Framework Convention for International Tax Cooper operation.
It presents
a
viable opportunity to address gaps in the financial architecture globally and
capture sources of long term capital so much needed for S
and development.
Many developing economies lack resources to
combat base erosion and profit shifting,
which leads to reduced fiscal capacities and diminished policy manoeuvre
between 2015 and 2019.
Around 40 per cent of multinational profits were shifted to tax havens,
which resulted in a 10 per cent cut in global corporate tax revenues.
This regulatory arbitrage has disproportionately
affected low income countries,
exacerbating their fiscal challenges.
The aim of the UN convention is to create a
multilateral framework to tackle base erosion and profit shifting,
enhance financial governance and support
development financing aligned with the.
Unlike previous proposals,
this initiative focuses on a
comprehensive international tax framework addressing
both trade and financial dimensions of global business activities.
These are early but meaningful steps on a complex path ahead.
The success of new tax architecture hinges
on Cooper operation among developing countries,
ability to draw on technical expertise and constructive north
north south dialogue.
Overall, the global economy faces significant challenges.
But new opportunities are also emerging and are there to be captured
to fully harness these opportunities.
Innovative approaches to structural transformation,
industrial policies and financial governance are essential.
And this is,
in short, the content of our report. Thank you very much.
Thank you. Thank you very much. We open now
the floor
to questions first here in the room of the
just a reminder.
Of course, you've received all the press release in various language versions.
Also, the overview
of the Trade and Development Report and the report itself. I see one hand
over here, You know, the drill name, media outlet.
And to whom you direct your question. Thank you.
Hi, everybody.
This is ANAs Pedrero
from a
FP.
Um, I would like to to to ask you about a comment which is in the
in the summary, I think, in the report.
But at least in the in the overview of the report, which says that the global finance,
trade and debt pressures are dividing the world into the rich, the big and the rest.
What do you mean with a the rich I can understand. But what?
What do you mean with with the big? And if you could explain, uh, a bit, uh, this, um
this sentence. Thank you.
Yeah. Thank you. Thank you very much.
Yes.
Uh,
the thing here is that the big countries in the developing
world are doing better than the small and medium sized countries.
And this is because when you are bigger,
you are more resilient to the drugs that are happening.
Yes.
So,
uh,
the the, uh, phrase that, uh uh, we sometimes use,
uh,
try to differentiate
the possibilities in a world
that is getting more protectionist.
The possibilities for a big country are a
wider than for small and medium sized countries that depend much more on trade.
So a country like Costa Rica
without trade,
we,
uh we we have, uh we have a very, uh, high difficulties
to
have high growth. So
in a way,
the a more dynamic trade
will give more opportunities
for an inclusive global economy.
At the same time, trade itself has to get more inclusive
in the countries for it
to really have the spread benefits that we
will expect for the rest of the population.
But is,
uh, you know, more or less what we are saying is that,
uh, there are countries that becau, uh,
because of their size can be more resilient to the disruptions
and shocks that we that the the global economy have experienced.
Thank you. Thank you so much.
I see online
so far a
few questions
the first one
and just correct me if any info is is wrong or needs amending
Yare
from
RIA
Novosti.
Yes, Thank you,
Secretary General. Thank you, Anastasia
for this, uh, for this briefing, I have, in fact, three questions.
I don't know if you want to take them one by one
or if you want to take them all at the same time.
Let's
let's group them for efficiency's sake. Let's group them, please. Thank you.
OK,
So the first question concerns the risk of
fragmentation of the economies that you have just
described during the opening remarks and that is
in the report and the increase in prices for
a
agricultural projects and energy
Are you in this regard? Speaking about the Western sanctions against Russian
agricultural and energy projects because it was one of the main
reasons for which UN and Russia have signed a memorandum,
for example, on the Black Sea for the export of the Russian fertilisers.
It is something that is not implemented
right now after the retreat of
uh of Russia and Ukraine from this agreement.
So I wanted to know if you are speaking frequently
about that when you are speaking about that in the report
Uh,
my second question is that the report highlights
the need to strengthen South south trade.
So do you think organisations like the BRICs have a
positive role to play for developing countries in this regard?
Because we had the the brics summit, uh,
just the past week with the Secretary General there,
and they were speaking about the fact that they need to have more, uh,
exchanges between South south countries
and my last. My last question is about the financial crisis, uh, of, uh, 202,008
that you mentioned during your opening remarks and also in the report.
Um, it was a Western crisis, but because,
uh, it was in the US. Say it had an impact in the whole world.
So are you calling? And, uh, are you expecting that?
Uh, the South countries will develop their own,
um, financial systems and tools, uh, to be independent of the crisis. That can
happen in the north. Um, just to give them more independence
in the fact of economical crisis. Thank you.
I got all of it. And I will ask also Anastasia
to, uh, to comment on, especially on the prices part.
the risk of fragmentation. Uh,
we really believe that fr
Uh uh uh,
if you will have competing and fragmented,
uh, systems in trade and in finance,
it will impact negatively on the developing world.
Uh, so
this links to your last question in terms
of the South having their own financial system?
No, I believe
that we need to have complementary systems at the global level.
You know, competing and fragmented systems won't help the developing world.
It doesn't,
uh, you know, it's very good that there are more development banks.
And, for example, you mentioned the brics and the brics have
the the the new development bank That is very complementary. But to think about
competing, uh, financial systems
uh uh is not what we are,
uh, in any way supporting, because fragmentation
will bring a less efficient
and less opportunities for the developing countries
and precisely
the the risks.
But that we are seeing is that, for example, in the trade rules, we have had
an explosion of rules that are not being determined
in a multilateral framework.
So if I remember correctly from, uh the, uh the the number that was given by WTO,
uh is that we have gone from 250
trade rules to 3000.
So
the capacity of the developing world and the
small and medium sized enterprises to navigate,
such as spaghetti bowl of rules, is very limited. And it is,
uh, acting de facto as, uh, an obstacle to trade and to growth.
So,
uh,
when we we we talk about the risk of fragmentation
is because we see
a tendency specially in trade of fragmented rules and high protectionism
that works against the developing world
with respect to the show of prices.
Uh, the report and I will give the floor to Anastasia
talks more about
the financialization of of important sectors and key sector stores.
Uh, that determine a price levels in the economy and monopolistic practises.
And so I will ask, uh
uh, you you refer to that Anastasia in in your remarks, so I would ask you to,
uh, elaborate more on this,
But is the it is true that trade disruptions push prices up,
and, uh, we saw that
in the war in Ukraine, in the Black Sea,
we saw a hike in prices that we were able to bring down,
Uh, because trade resumed
in the Black Sea and trade is still happening in the Black Sea, especially for, uh,
uh, food and fertilisers.
But we are seeing now also other disruptions, for example,
in the Red Sea because of geo
geopolitical. Uh
uh, tensions.
And we see the same in the Panama Canal because of climate change disruptions.
So, for example, the disruptions in the Red Sea
are also pushing transaction cost up. And we already see
that if this, uh uh uh, situation is prolonged,
uh, we will see,
uh
uh, uh,
supply bottlenecks that will push prices up in the global economy.
And that is a risk.
And the in the maritime report, we go into more detail into this
Uh, and I, I, um,
uh suggest you to to to to look at it because we go in very,
uh uh in detail on these risks
and how high transaction cost because of disruption
in maritime trade will push,
uh,
could push prices up. But I will give you the floor in a moment. Anastasia
on more on this,
uh, with respect to,
um
uh, to to to the crisis to the 22, 2008 crisis is true. That was a Western crisis first,
but because
investment
never recovered
after 2008
and trade never recovered after 2008 because of the importance
of these countries in global trade,
the growth of the,
uh, global south also suffered.
So we never recco recovered global growth at the levels that we had pre crisis.
This is not
I don't think that resilience will come on a fragment.
Fragmented financial, uh, financial system as I I said before. Yes. Because
you know, uh,
if the fin
the financial system will fragment it, it will make it more less resilient,
not more resilient.
So
complementarity is good,
but we have put a lot of effort in the
call for the reform of the international financial architecture.
Uh, pre precisely because we think
that the multilateral development banks,
all the network of multilateral development banks,
uh, can play a very important role in increasing
investment and crowding in private investment. Uh uh
uh,
towards developing countries and because we really believe
that the capacity of the IMF to support growth
and development in the in in the developing world is important.
And that's why we have pushed for governance reforms for the debt,
uh, architecture to be a reformed. And also for the, uh
uh,
policies in terms of interest rates and surcharges and
the IMF to change we have already seen a
step forward in this direction,
uh, taken in the IMF board.
Uh uh, before
the, uh uh, the fall meeting. So we are go, we we could go in the right direction.
And I think
that we,
uh can,
uh, reform the system
to resume
dynamic,
inclusive and sustainable growth for all.
Anastasia,
please.
Thank you very much.
Thank you
for the questions for agriculture and oil.
It's interesting that you picked these two sectors because both in this report,
but in particular in our earlier work.
We focused on these two very systemically important areas of
the economy specifically for developing countries because they have suffered
from
a financial speculation and B and crucially unregulated corporate profiteering.
And we actually did a very detailed study on specifically
food traders last year.
But their dynamics of profits and behaviour is very
similar to the behaviour of oil giants that aggravated
risks and price fluctuations at the moment of crisis for the world economy.
So prices for commodities are broadly coming down, they have receded,
but they remain at 20 per cent higher than the pre pandemic levels
and they remain volatile. In fact, one projection, I believe, is from
FAO
and
this is why we're interested in long term
trends and what they mean for globalisation.
The
estimate suggests that global demand for food for agricultural commodities will
increase by between 30 to over 50 per cent by 2050
in
the era of climate crises
of various disturbances to supply chains, transportation and markets.
These are massive areas for volatility, potential speculation and profiteering,
and unfortunately,
the reform of these markets and of mechanisms
that hurt developing countries most has been very slow
So we call for a
concerted action now for a systemic reform that would include not only
and
regulations on specific speculative practises,
but actually addressing monopoly and monopoly practises
in key markets that matter for development.
May I also come back to the idea that
a
financial crisis was a Western phenomenon
and didn't affect developing countries?
Chapter four of the report actually has
a section dedicated to this particular crisis,
and it establishes that whilst initially it seems to
many observers that this is now a new age
of global South. Having decoupled from the crisis stricken North
Global South suffered massively just a few years afterwards. So, by 2013 14,
the risen economies of the global south already had been in retreat
because many of them were not able to
diversify away from the commodity wave they ridden.
They rode the commodity wave and
and high prices,
but they did not pursue enough of
structural transformation redistribution and
macroeconomic stabilisation programmes inside
Africa is in particular affected,
but it's not only it's not the only region of the world,
so we call not to make such mistakes again now that commodity
prices are on the rise that demand is projected to go up,
but financial activities and corporate practises continue
pretty much unregulated.
Thank you.
Thank you very much.
And as the Secretary General mentioned as a reminder, just last week,
today we issued the review of maritime transport.
It goes in depth into several of the points
that were mentioned here.
We have another question online
from Ravi Kant,
Washington Trade daily. Thank you.
Thank you. Uh, thank you, Secretary General, Uh,
my question is, uh, to you only, actually,
I'm following from Yuri's question about the recent
brics meeting as well as a larger question.
Uh, one of the great things or good things that seems to happen in the brics meeting is
that, uh, the kind of process they started to pay.
Uh, you know, transactions in their independent national currency, uh,
currencies to move away from the,
uh, the continued, uh uh, you know, brutal grip of dollar,
uh, dollar payments and all,
uh, perhaps, uh, this seems to be a major
departure or a break from the existing international financial payments order.
Surprisingly on
does not have something to say.
And moreover, the second question is that on
trade
reports
over the years
are essentially a hallmark
in terms of presenting the asymmetries and the biases,
as well as the spillovers that make
the life of developing country policy makers very difficult in achieving those
development
development objectives.
This year's report seems to be a rehash of,
uh, you know, the previous IMF
and the WTO and OECD reports it lacks a kind of coherent picture. On what exactly?
How do you address, for example, the asymmetries,
the biases and spillovers in the international economy?
Thank you.
Thank you, Robie. Uh
uh. Let me, uh let me say that
the proposal of the BRICs to continue
on, uh, create different
enough,
uh, in in the development of a payment system for trade between the brics countries
was just,
um
a
shared a
concept note
in the brics meeting
is not something that was published before
the intention was there,
uh, for a long time.
But this is the first time that we see a concept note
in this direction that has been agreed to continue in the making.
Uh, between the brics countries is not a reality yet,
but I think that is a serious attempt to
try to reduce the transaction cost that come from,
uh uh,
having to go through
the,
uh, intermediate banks. Uh uh,
uh, in the dollar system.
Uh, is not a new currency. What they are,
uh uh,
putting forward,
but
a way to be able to, As you said, transact between them for trade purposes,
uh, in their own currencies,
the system is not in place. And it needs still more elaboration.
In the brics meeting where I was, uh, present. As you know,
uh,
they have con,
uh, decided to continue the development
of the concept note and the idea
that for the first time was shared,
uh, in this meeting so impossible for the TDR
to, uh,
to, uh
uh,
yeah, yeah,
to have comments on it or take it into account because,
uh, is is the the the main idea,
uh, was just shared. Although
the objective has been present for a long for a long time.
And Anastasia said that in chapter three, we we talk about that.
Perfect.
Uh, the other, uh, point
is that, uh, the reason why
the developing countries are suffering more
from this low growth,
high debt,
weak investment and fragmented trade is because of the asymmetries.
So if that was not
obvious, um,
so maybe
we need to be more
didactic in the
report.
Uh, but I wish you will read it
carefully.
Uh,
because there is no reason why
the developing countries will suffer more
if it's not was because of the asymmetries of the system.
Yes.
Uh, but,
uh,
if you think that
that is not explicitly,
uh,
express,
uh,
we will look at it,
but
for me is very straightforward.
Yes.
and that's why we call on the reform of the international financial architecture.
And let me say something, Robbie here. Uh
uh, because you you know that you and I disagree on this point.
Uh, this is not the first time,
uh,
that many of the issues
that have been discussed in the fact of the future
in the framework of the UN
and many of the reforms that are also being considered today
that benefit developing countries in the international financial architecture
is because,
uh an a T has contributed to push that agenda.
And, uh, we feel very proud of our voice,
uh, in defending the developing countries
in this direction, because I we really think that the
the reform of the international financial architecture is not something new.
Uh,
and that has the,
uh, ask for it
many times before.
But we see much more movement today because we have come together
with the voice of the Secretary General of the of the
UN and with the the other organisations of the UN.
But we have made
a forceful,
case for that to happen.
Not
we are not seeing all we want to see,
but we see more movement
and more
efficacy in our voice today
than it was in the past.
So
uh but maybe, uh, Anastasia, you can comment on chapter three, please.
Thank you very much.
Yes, indeed.
We pre emptively discussed the idea of
switching away from the dollar dominated system
through trade and financial arrangements at the discussion
in Chapter three when we discuss inflexion of globalisation
and we discuss the difficulties and symmetries,
especially in current accounts and trade balances,
the developing countries face on the way from
trade system into a more complex financial arrangements
just to give you one idea.
So
if trade
is understood in the ecosystem of global economy and
by that we mean the global financial system.
Of course,
trade is serviced by various financial
and legal operations and financial services,
for example, insurance,
for example,
credit and debt mechanisms.
Those are very important for overall trade balance,
but also for financial balances and the symmetries
to take the most transparent data. And this is available from the bi
on foreign exchange transactions
and derivatives that involve non dollar currencies.
If you net out all the transactions,
the share of non dollar currencies at the moment is less than four per cent.
That underscores the challenge
of the overall economic governance reform needed to make it more
inclusive and reflective of the interests of the global South.
But also it underscores how trade, business,
investment and financial activities are interlinked, so you cannot reform one
and not reform the other.
On the question of asymmetries, Chapter one
deals with macroeconomic asymmetries and in particular, very unpleasant
fiscal arithmetic. I believe it's box number 12.
Chapter two discusses asymmetries that are carried
through into the service based economy and again hurt at the moment,
developing countries more
and Chapter three discusses technology driven asymmetries
that are going to escalate as we go into the new growth wave.
Chapter four draws lessons from what we know from before,
but also charts some new policy suggestions.
It's a long read.
Thank you.
Thank you.
Thank you. Thank you, Secretary
General. Thank you, Anastasia.
I don't see any more questions online and from the floor,
we still have a few minutes time. If not,
we thank everybody for taking part for showing interest
in our work. Thank you, Secretary General. Thank you,
Nastasia
for helping us navigate through
the complexities of current
macroeconomic challenges.
We invite everybody to read again the press release, the detailed overview and,
of course, to dive deeper.
Ther
is available. Thank you very much.