UN calls for a global ‘New Deal’ for world economy » Manila Bulletin News

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By Agence France-Presse

The world economy, stunted by years of austerity and growing inequality, needs a global “New Deal”, inspired by policies that helped Europe rebound after World War II, the UN said Thursday.

“The world economy remains unbalanced in ways that are not only exclusionary, but also destabilizing and dangerous for the political, social and environmental health of the planet,” said the UN development agency, UNCTAD.

“Ending austerity and harnessing finance to serve society once again, rather than the other way around, are the most urgent challenges,” the UN development agency, UNCTAD said. (AFP / MANILA BULLETIN)

“What is urgently needed now is a global new deal,” the agency said in its flagship Trade and Development Report.

The original New Deal, launched in the United States in the 1930s in response to the Great Depression, was replicated at an international level with the Marshall Plan, which is widely credited with helping Western Europe make a spectacular recovery after World War II.

“Seven decades later, an equally ambitious effort is needed to tackle the inequities of hyperglobalisation in order to build inclusive and sustainable economies,” UNCTAD said.

As with the previous plans, the report argued that the world, at both national and international levels, should be focusing on job creation, the expansion of taxes to enable redistribution of wealth and regulation aimed at taming finance.

End austerity

“Ending austerity and harnessing finance to serve society once again, rather than the other way around, are the most urgent challenges,” the report said.

It pointed out that nearly a decade after the global financial crisis, “a strong recovery has remained elusive”.

UNCTAD forecasts that the global economy will grow 2.6 percent this year, only slightly higher than the 2.2 percent registered in 2016, and far below the 3.2 percent average seen in the years leading up to the financial crisis.

Growth in developed countries is expected to tick in at 1.9 percent this year, up from 1.7 percent in 2016.

The sluggish growth in richer nations, along with renewed volatility in global capital flows, has also limited growth in developing countries, the report said, forecasting growth there of 4.2 percent this year up from 3.6 percent in 2016.

And the widespread tendency to turn to austerity as a default policy had made the situation significantly worse, hampering investments and entrenching inequalities, it warned.

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