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UNCTAD: Amid Healthy Signs, Large Imbalances Remain in Global Economy - Global Policy Forum UNCTAD: Amid Healthy Signs,
UN Newservice
Large Imbalances Remain in Global Economy
September 19, 2000Economic prospects for developing countries could deteriorate rapidly if the major industrial countries continue to set their policies without regard for their global repercussions, according to a new report on the global economy released today by the United Nations Conference on Trade and Development (UNCTAD).
The Trade and Development Report, 2000 -- an annual publication containing review, analyses and forecasts for the year ahead -- discusses global imbalances, the world economy's performance and prospects, and crisis and recovery in East Asia. The report draws attention to the promise of a "new economy" underpinned by new technologies, as well as to growing instability linked to market-driven globalization.
According to UNCTAD, the world economy was able to pull itself back from the brink last year largely due to unexpected events, including the continued strength of the United States economy, resulting in improved prospects for this year, with growth expected to exceed 3 per cent.
At a news conference launching the report at UN Headquarters in New York, Jan Kregel, UNCTAD High Level Expert in International Finance, said the Asian recovery had been faster than expected and the global economy had performed better than anticipated. But there were substantial factors which are grounds for extreme caution, he said, including existing macroeconomic imbalances, and dependence on the US economy.
As for Latin America, UNCTAD reports that per capita income contracted for the first time since 1990, although Mexico, with close links to the US economy, avoided this trend and many small Caribbean economies posted healthy growth. Elsewhere, weak commodity prices, excessively tight macroeconomic policies and the collapse in regional trade tipped some countries into recession.
Similarly, despite positive signs in North and East Africa, growth stagnated in much of that continent in 1999 due to weak commodity prices, conflicts and adverse weather conditions, the report says. While countries with economies in transition posted their highest growth in a decade -- 2.4 per cent -- there was wide variation within the group, the report said.
Asia was "the big success" last year, the report says, with growth exceeding 5 per cent and rates in India and China reaching around 7 per cent. The sharp recovery in East Asia included the rebound in the Republic of Korea and double-digit growth in Malaysia in the first months of 2000. But recovery remains fragile, the report says. The social burden of the crisis has been unevenly distributed and solid growth over the next decade will be needed to eliminate its impact.
GPF Note: Find the following items relating to the Trade and Development Report 2000 on the UNCTAD website:
UNCTAD Publications: The TDR - More Information about the Report;
Download an Overview of the TDR. You need Adobe Acrobat to view this document.
Download Chapters I and IV of the TDR. You need Adobe Acrobat to view this document.
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