Since the last session of the United Nations Conference on Trade and Development four years ago, fractures and fault lines have deepened across the world economy, compromising the achievement of the Sustainable Development Goals. These fractures include widening inequalities that have fuelled popular discontent with globalization, deepening digital divides and uneven vulnerabilities to climate change. These fractures also include a growing disconnect between investment in the real economy and exuberant financial markets that have left the 2030 Agenda for Sustainable Development underfinanced yet have kept debt burdens growing and illicit financial flows rising. The multilateral system itself has shown increasing signs of fracturing, as it has come under mounting stress due to tensions over trade and technology and rising economic nationalism.
These growing fractures have been further scarred by the coronavirus disease (COVID-19) pandemic and its disproportionate impact on the most vulnerable. A worrying economic symptom of the pandemic is the striking discrepancy between the massive national policy responses observed in developed countries and the woefully inadequate international response, which has left many developing countries searching for answers and options. The time is now to redress this situation with a new international approach that sets us on a path towards more gainful globalization and a more resilient form of multilateralism that can heal these fractures.
The pandemic is accelerating a transformation in global production towards shorter, more regional and more resilient value chains. It has also shown the limits of “go it alone” nationalism. The strong national policy responses to the COVID-19 pandemic are hastening the revival of industrial policies and suggest a changing paradigm that reaffirms stronger developmental States. The international community needs to build common ground on these trends so that they feed an acceleration of the 2030 Agenda for Sustainable Development.
In my report to the fifteenth session of the United Nations Conference on Trade and Development, which will be held in Bridgetown, Barbados, in October 2021, I focus on how expanding the transformative productive capacities and capabilities of all States could form the core of a new, more resilient multilateral consensus for accelerating achievement of the Sustainable Development Goals. Building productive capacities that facilitate structural transformation, economic diversification and industrialization – or “transformative productive capacities” – is needed in all countries. They will be vital to overcoming the current, fractured global economic landscape and addressing the new challenges posed by the COVID-19 pandemic.
The fifteenth session of the Conference should be the moment for debate on how to put these transformative productive capacities at the centre of United Nations efforts for a better recovery from the pandemic, and for achieving gainful globalization and a revived multilateralism. If the outcome of the Bridgetown Conference can strengthen the focus of the entire United Nations system on the productive side of economic sustainability, then it will go a long way towards accelerating achievement of the 2030 Agenda.
Secretary-General of UNCTAD