Building more inclusive economies beyond austerity: the 2017 Trade and Development Report

15 September 2017 – 10 years after the crisis, the recovery of the global economy is still limited, according to a new report of the United Nations Conference on Trade and Development (UNCTAD).

The 2017 Trade and Development Report: Beyond Austerity – Towards a Global New Deal sets out an ambitious alternative policy route to build more inclusive and caring economies.

At the launch of the report in Brussels, Deputy Secretary-General of UNCTAD Isabelle Durant noted that the growth of the world economy, expected to reach 2.6 % this year, is picking up but not lifting off. She identified austerity measures as the main obstacle to a robust recovery. In the spirit of the opportunities offered by the Sustainable Development Goals and the Paris Climate Agreement, she emphasized the need to move away from hyper-globalization towards building inclusive economies.

Three additional themes for inclusive growth were highlighted at the launch by UNCTAD Senior Economist Alex Izurieta: robotization, gender dynamics and inequalities. On the topic of robot-based technological change, Izurieta pointed out that what is technically feasible to automate through robots is not necessarily also economically profitable. He also warned to stay away from alarmist discourses that can be used to negatively negotiate for lower wages. On gender inequality, he stated that gender-positive policies should be accompanied by real job creation in order to be successful, as well as the need to increase the share of women in ‘good jobs’ in the industrial sector. Finally, Izurieta explained that increased financial instability, culminating in a financial crisis, is related to growing inequality. These inequalities are worsened by excessive austerity measures, as well as a greater concentration in the corporate sector.

The report ends on a hopeful note: alternatives are possible. UNCTAD emphasizes that people should be put before profits, calling for a twenty-first century makeover to offer a global “new deal”.  Stronger participation of states, ending austerity, clamping down on corporate rent seeking and harnessing finance to support job creation and infrastructure investment will be key to such a makeover.