The United Nations Office at Geneva
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UNCTAD Press conference 29 October 2024
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56:54
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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
[Other language spoken]
Good morning, everybody, and good afternoon to those in different time zones.
And welcome to the presentation of the UN Trade and Developments 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 Nitotalova, Ungtat's 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 on 9.
Secretary General, the floor is yours.
[Other language spoken]
Thank you very much Marcelo and thank you all of you for being here with us.
This is our annual launch of the Trade and Development Report 2024 and let me go through the main points that the report makes.
First, the report clearly states 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 runaway.
We are landing in a framework of slow growth, **** debt, weak investment in the risk of fragmented trade that has 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 S 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 4 main fundings.
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 at the global rate of three, 3% 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 2000 and eight 2009 we the global economy was growing at a rate of 4.4%.
So we never recovered really we've never recovered the minimism 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, in full meetings in DC is because the rates that they are given are at PPP prices and we are given the growing rates at constant prices.
So developing nations, how?
How do developing nations do in this framework?
Well, they do badly.
They are growing at a rate of 2.8%, only 0.10 point, 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 four point 1% between 2014 and 2024.
And what we are expecting this year and 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 **** 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 Antat 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 **** 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 servicing the debt and 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 growth that was before 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 and 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, is still prices are still very **** and inflation in some developing countries continued to be very ****.
In general, prices are still **** 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 developing developing countries.
With respect to investment, I think that is important to emphasise 3 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 these intangible assets in investment have grown three times faster than physical assets.
And we know that in these intangible assets developing countries are in a disadvantage.
Also investment in critical minerals have gone up considerably, 20% in 2020, one 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 a a, 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 rates.
So, 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 is the GS 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 ****.
So the 4th 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.
[Other language spoken]
So SS trade, together with the energy transition and the digital economy, are clear opportunities for developing countries to achieve sustainable economic development.
SS trade has more than doubled, reaching 5.6 trillion by 2023, offering an opportunity for diversification and to reduce dependency on traditional partners, especially 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 individual 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 analysis the global economy today and underlines that we need a new approach to development.
The challenges are clear.
As I stated before, slow growth, **** debt, weak investment in trade and economic volatility.
Yet, as our findings show, real opportunities also exist for developing countries, especially in the energy transition, in the digital revolution, and in South S trade and new forms of regionalism.
We must support developing countries seize the opportunity of South S trade, the digital revolution, and the energy transition in battle the challenges of slow global growth, financial instability, **** debt, and accelerated changes in global trade.
Some of the policy recommendations include the support to fiscal reform and modern tax policies to createspace 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 and a barrier for trade in the developing world.
A proactive, modern new productive policies are key for diversification.
Investment in infrastructure and skills, coordination 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 app of development financing with appropriate conditions for the developing world, long term and affordable rates, the debt restructuring architecture to be reformed and here we are In Sync with the pact of the future that was agreed on in the last 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 these new low normal global growth and **** 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 feed each other in a coherent framework for a new development era.
We'll have to come together.
Thank you, thank you, Thank you very much Secretary General, for giving this this overview.
Before we open the floor, we give the opportunity to our to our colleague Anastasia Nesrat Ilova to provide some more analysis under the the underlying macroeconomic mechanisms, explaining what the Secretary General just briefed everybody about.
[Other language spoken]
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 an 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 this, the establishment of UNCTED 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 and accountable to countries of the global S is vital to mitigate the deepening debt crises and foster sustainable development.
Second, new technologies, including those links to the green transition, artificial intelligence, precision by bioengineering but not confined to them, are reshaping economic systems as we speak.
Some developing economies tend to benefit from the rising demand for critical minerals and resources needed for the new technological economy, but other 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 complicate the management of extractive industries.
Without effective policies.
The expansion of finance related sectors will add to the problems of resource curse, deepen inequalities, and impeach diversification.
To navigate these challenges, economies of the global S 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 coordination and data sharing, especially regarding the activities of multinational enterprises.
3rd 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 it's it's effectiveness as 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 20 tens, only 18% 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% 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 hinder structural change.
This is particularly evident in the global food system, which has shifted from a labour intensive sector to a complex financialised landscape dominated by few under regulated corporations.
New technologies can further accelerate the concentration of data in the hands of 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 of and concentration of key markets and sectors.
It only captures around 36% of soy 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 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 financialisation 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 S that came up in 2024 and this is the initiative to establish a United Nations Framework Convention for International Tax Corporation.
It presents a viable opportunity to address gaps in the financial architecture globally and capture sources of long term capital so much needed for SDGS 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% of multinational profits were shifted to tax havens, which resulted in a 10% 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, profit shifting, enhance financial governance and support development financing aligned with the SDGS.
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 the success of new tax architecture hinges on Co operation among developing countries, ability to draw on technical expertise and constructive NSNS 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.
[Other language spoken]
Thank you very much.
We open now the floor to questions, first here in the in the room of the Palladinacion.
Just a reminder, of course you've received all the press release in various language versions.
Also the 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.
[Other language spoken]
Hi everybody.
This is Anya Pedrero from AFP.
I would like to to to ask you about a comment which is in the in the summary, I think in the.
[Other language spoken]
In the in the overview of the report.
[Other language spoken]
That the the global.
Finance, trade and debt pressures are dividing the world.
Into the rich, the big.
And the rest.
What do you mean with the rich I can understand, but what what do you mean with with the big and if you could?
Explain a bit this this sentence.
[Other language spoken]
[Other language spoken]
Thank you very much.
[Other language spoken]
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 frogs that are happening.
[Other language spoken]
So the the phrase that they we sometimes use try to differentiate the possibilities in a world that is getting more protectionist.
The possibilities for a big country are are a wider than for small and medium sized countries that depend much more on trade.
So a country like Costa Rica without trade will we have will have a very **** difficulties to have **** 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 this, you know, more or less what we are saying is that there are countries that because of their size can be more resilient to the disruptions and shocks that we, that the global economy have experienced.
[Other language spoken]
[Other language spoken]
I see online so far a few questions, the first one and just correct me if any info is is wrong or needs amending Yuri Abrelev from Rhea Nervosi.
Yes, thank you, Secretary General.
Thank you Anastasia for this, for this briefing.
I have in fact three questions.
I don't know if you want to take them 1 by 1 or if you want to take them all at the same time.
Let's group, let's group them for efficiency sake, let's group them please.
[Other language spoken]
OK, so for the first question concerned 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 agricultural projects and energy.
Are you in this regard speaking about the Western sanctions against Russian agricultural and and energy projects, because it was one of the main reason for which UN and Russia signed the memorandum, for example, on the Black Sea for the export of the Russian fertilisers?
It is something that is not implemented what right now after the the retreat of of Russia and Ukraine from this agreement.
So I wanted to know if you are speaking quickly about that when you are speaking about that in the report.
My second question is that the report highlights the need to stress on South S 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 just the past week with the Secretary General there and they were speaking about the fact that they need to have more XNGS between South S countries.
And my last, my last question is about the financial crisis of 202,008 that you mentioned during your opening remarks and also in the report.
It was a Western crisis, but because it was in the US, say it had an impact in the whole world.
So are you calling and are you expecting that the South countries will develop their own financial systems and tools to be independent of the crisis that can happen in the North just to give them more independence in the fact of economical crisis?
[Other language spoken]
I got all of it.
And I will ask also Anastasia to to comment on especially on the prices part, the risk of fragmentation.
We really believe that if you will have competing and fragmented systems in trade and in finance, it will impact negatively on the developing world.
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, you know, it's very good that there are more development banks and for example you mentioned the bricks and the bricks have the, the, the new Development Bank that is very complementary.
But to think about competing financial systems is not what we are 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 the, the, the number that was given by WTO 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 a spaghetti bowl of rules is very limited and it is acting de facto as an obstacle to trade and to growth.
So when we we we talk about the risk of fragmentation is because we see a tendency, especially in trade or fragmented rules and **** protectionism that works against the developing world.
With respect to the issue of prices, the report and I will give the floor to Anastasia talks more about the financialization of of important sectors and key sectors that determine a price levels in the economy and monopolistic practises.
And so I will ask you, you refer to that Anastasia in in your remarks.
So I would ask you to elaborate more on this.
But it's the, it is true that trade disruptions push prices up.
And 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 because trade resumed in the Black Sea.
And trade is still happening in the Black Sea, especially for food and fertilisers.
But we are seeing now also other disruptions, for example, in the Red Sea because of geopolitical 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 situation is prolonged, we will see a 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.
And I, I suggest you to, to, to, to look at it because we go in very in detail on these risks and how **** transaction cost because of disruption in maritime trade will push a.
Could push prices up, but I will give you the floor in a moment.
Anastasia on more on this with respect to to, to, to the crisis, to the to to 2008 crisis.
It's 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 a global S also suffered.
So we never 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, financial system.
As I I said before, yes, because you know, if the 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 precisely because we think that the multilateral development banks, all the network of multilateral development banks, can play a very important role in increasing investment and crowding in private investment 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, a architecture to be a reform, and also for the policies in terms of interest rates and surcharges and the IMF to change.
We have already seen step forward in this direction taken in the IMF board before the the fall meeting.
So we are we we could go in the right direction.
And I think that we can reform the system to resume dynamic, inclusive and sustainable growth for all.
[Other language spoken]
Thank you very much as Jean.
Thank you, Yuri 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, we actually did a very detailed study on specifically food, 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% higher than the pre pandemic levels and they remain volatile.
In fact, one projection, I believe it's from FAO and This is why we're interested in long term trends and what they mean for globalisation.
The FAO estimate suggests that global demand for food for agricultural commodities will increase by between 30 to over 50% by 2050 in.
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 of mechanisms that hurt developing countries most has been very slow.
So we call for a, a concerted action now for a systemic reform that would include not only regulations on on specific speculative practises, but actually addressing monopoly and all 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 4 of the report actually has a section dedicated to this particular crisis and it establishes that whilst initially it may, it seems to many observers that this is now a new age of global S having decoupled from the crisis stricken N Global S suffered massively just a few years afterwards.
So by 20/13/14 the the reason economies of the global S 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 **** 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 and corporate practises continue pretty much unregulated.
[Other language spoken]
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.
[Other language spoken]
[Other language spoken]
Thank you, Secretary General.
My question is to you only.
Actually, I'm following from Yuri's question about the recent BRICS meeting as well as larger question.
One of the great things or good things that seems to happen in the BRICS meeting is that the kind of process they started to pay, you know, transactions in their independent national currency currencies to move away from the the continued, you know, brutal grip of dollar, dollar payments and all.
Perhaps this seems to be a a major departure or a break from the existing international financial payments order.
Surprisingly on that does not have something to say.
And moreover, the second question is the on tax trade.
PDR reports over the years are essentially a hallmark in terms of presenting the asymmetries and the biases as well as the spillovers that make life of a developing country policy makers very difficult in achieving those developmental, developmental objectives.
This year's report seems to be a rehash of, 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?
[Other language spoken]
[Other language spoken]
Let me let me say that the proposal of the BRICS to continue on a trade different in a in in the development of a payment system for trade between the BRICS countries was just a shirt.
A concept note in the BRICS meeting is not something that was published before.
The intention was there 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 between the BRICS countries is not a reality yet, but I think that it's a serious attempt to try to reduce the transaction cost that come from having to go through the intermediate banks.
And the dollar system is not a new currency what they are putting forward, but a way to be able to, as you said, transact between them for trade purposes in their own currencies.
The system is not in place and it needs still more elaboration.
In the BRICS meeting where I was present, as you know, they have decided to continue the development of the concept note and the idea that for the first time was shared in this meeting.
So impossible for the TDR to to yeah, yeah.
To have comments on it or take it into account because is the the the main idea was just shared.
Although the objective has been present for a long for a long time.
And Anastasia said that in Chapter 3, we we talk about that.
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The other point is that the reason why the developing countries are suffering more from these low growth, **** debt, weak investment in fragmented trade is because of the asymmetries.
So if that was not obvious.
So maybe we need to be more didactic in the report, but I wish you will read it carefully, 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, but if you think that that is not explicitly express, we will look at it.
But for me it's very straightforward.
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And that's why we call on the reform of the international financial architecture.
And let me say something, Robbie here, because you, you know that you and I disagree on this point.
This is not the first time 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 Ankat has contributed to push that agenda.
And we feel very proud of our voice 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 and that has asked 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, but maybe Anastasia, you can comment on Chapter 3 please?
Thank you very much SD.
Yes indeed, we pre emptively discuss the idea of switching away from the dollar dominated system through trade and financial arrangements at the discussion in chapter 3 when we discuss Inflexion of globalisation.
And we'll discuss the difficulties and asymmetries 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 but by that we mean the global financial system, of course trade is serviced by various financial and legal operations and 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 asymmetries.
If if to take the most transparent data, and this is available from the BIS 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 4%.
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 1 deals with macroeconomic asymmetries and in particular, very unpleasant fiscal arithmetic.
I believe it's box number 12.
Chapter 2 discusses asymmetries that are carried through into the service based economy and again hurt at the moment developing countries more.
And chapter 3 discusses technology driven asymmetries that are going to escalate as we go into the new growth wave.
Chapter 4 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.
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I don't see any more questions online and from the floor.
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If not, we thank everybody for taking part, for showing interest in our work.
Thank you, Secretary General.
Thank you, Anastasia 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.
The TDR is available.
Thank you very much.