Shortcomings in economic policy in rich and poor nations alike, and the resulting public discontent over the continuing fallout from the 2008 financial crisis, will be the focus of debate at the UNCTAD XIII High-level Segment of Heads of State and Government.
Leaders meeting here on 21 April will discuss the extent to which economic factors such as job shortages and income inequalities have contributed to the recent popular movements in the Arab region. They will also discuss the parallels with discontent elsewhere, such as the recent social protests in developed countries. And they will consider what can be done to refashion economic policies so that their benefits are spread more equitably.
Heads of State and Government from the Arab world, Asia, Latin America and Africa have been invited to share their views and experiences with conference delegates. The panel session will take place from 5.30 p.m. to 8 p.m. on the first day of the quadrennial UNCTAD conference. The topic is “In the wake of the global economic crisis: New opportunities for economic growth with social equity”.
There is strong evidence, UNCTAD economists contend, that the recent popular discontent in the Arab region does not only reflect grievances about governance issues. Playing an equal role are larger trends across numerous countries in which economic progress has failed to lead to broad-based rises in living standards, leaving the poor and middle-income groups with stagnant or declining wages.
In both oil-producing (surplus) and more diversified (deficit) Arab economies, growth over the last 20 years has not been inclusive. Even high rates of growth have often been accompanied by wage stagnation. While many Arab economies have experienced average annual real economic growth rates of above 5 per cent over the last 20 years, increased productivity has not been reflected in rising real wages and standards of living for the majority of the population, nor has it led to consistently expanding domestic demand. Despite wage restraint, unemployment has remained high in most Arab countries over the past decade, at more than 10 per cent even in the more diversified Arab economies.
The global downturn that began in 2008 and led to unemployment for many, and to especially high rates of joblessness among the young, has now thrown widening inequality into stark relief. UNCTAD economists highlight the urgent need for new thinking that puts greater emphasis on inclusive and sustainable growth. In its “issues note” for the event (TD/454), the UNCTAD secretariat urges reforms in order to prevent a “lost development decade”.
Since the financial crisis erupted in 2008, conventional ideas about the workings of the economy have been questioned and popular movements around the world have taken governments to task for failing to deliver on the development aspirations of their populations and for tolerating growing social and economic inequality. There have been vocal calls for a fresh economic direction to alleviate poverty, generate more and better jobs, improve social protection, ensure access to basic services and commodities at affordable prices, and establish more equitable distributions of national income.
It is an opportune moment to renew the social contract between States and citizens, and to reconsider the results of “finance-led” globalization, UNCTAD experts contend. The theme of UNCTAD XIII is “development-centred globalization”, which calls for trade, investment, technology transfer and entrepreneurship to be carefully focused and managed so that they lead to expanding employment and to improved living conditions for all. The challenge is to take advantage of the opportunities offered by political transformation, to assess the lessons of past failures, and to identify feasible alternative paths to inclusive and sustainable development.
The panel discussion, led by Heads of State, will highlight some of the key policy questions that such a reassessment poses, with a strong focus on the situation in the Arab region. The issues note stresses, however, that “the movement that began in the region should be regarded as part of a broader policy debate about the impacts of financial and trade liberalization and the missing role of the State as guarantor of social equity and development for all.”
The UNCTAD issues note poses several questions to inform the debate through an appraisal of the economic policy implications of these challenges for the region. Alongside the overriding political and human rights dimensions, what role did socio-economic governance failures play in the build-up to the Arab protests? Moreover, UNCTAD asks whether the extent and handling of economic liberalization contributed to the inability of prevailing economic policy frameworks to deliver sustained growth and development. Panellists are encouraged to look towards new approaches to development policy that allow governments to respond to rising social discontent without jeopardizing the fragile growth gains that have been achieved in recent years.
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