Foreword by Dr. Supachai Panitchpakdi, Secretary-General of UNCTAD
Many analysts concluded that 2010 was the year of recovery, after the world economy was pulled back from the brink of a 1930s-style depression. Swift and coordinated policy actions by the Group of Twenty Finance Ministers and Central Bank Governors – the G-20 - maintained just enough aggregate demand and liquidity in the global economy to avoid a prolonged crisis.
Hence, in 2010, the global economy grew at a rapid pace of 4.8 per cent, and developing countries – especially the large emerging economies – led the field in GDP growth. Nevertheless, even the positive signs of recovery are geographically variable, and UNCTAD is still concerned by a number of issues that remain unresolved in the global economic recovery – namely, the lack of employment opportunities being generated; the increasing risk of sovereign debt crises; high and volatile commodity prices; and the persistence of negative effects resulting from exchange rate fluctuations, including volatile capital flows. Lastly, I am also struck by the tendency for policy divergence at the international level, and a cooling of enthusiasm for policy coordination, embodied by the G-20’s actions at the start of the global economic crisis.
While indicators may concern us or give us hope, it is important to take a step back and look at the causes and culture that led to the crisis, and how we can rectify that course in the future. Moreover, other threats, such as climate change and food security, pose huge challenges for the developing countries. UNCTAD has been a persistent critic of finance-led globalization, which has created immense (albeit unsustainable) wealth for some but has left behind a great number of people, including the majority of the 800 million citizens of the Least Developed Countries. It is a form of globalization that has also been indifferent to the externalities of growth, including industrial waste and pollution, energy consumption, and rising inequality; all of these factors will eventually put a brake on growth.
The UNCTAD Annual Report 2010 details some of UNCTAD’s research and technical cooperation activities that suggest that another way is possible: developmentled globalization. Already during the global economic crisis, we have seen governments acknowledge that intervention in the market may be necessary.
UNCTAD’s long-held view that a rebalancing is required at all levels – whether between debtor and creditor nations, between trade-surplus and trade-deficit economies, or between the State and the market – is starting to be recognized by a broader community. Such a rebalancing is one component that is needed to put growth in the real economy before the interests of the financial sector, and to create decent jobs on a large scale for the millions of people who were left behind in the previous era of globalization.
As we begin preparations for UNCTAD XIII, our fouryearly conference which will be held in Doha in 2012, we will continue our analysis of the above-mentioned issues and many more besides, all of which can be found in this annual report. These are some of the most important questions for development, for developing and industrialized countries alike.
UNCTAD XIII provides a timely opportunity to debate and reflect on the lessons of the crisis and to present an alternative policy agenda for a new era of globalization.