“The world economy continues to recover from the global economic crisis, but the pace remains uneven across countries,” said Rob Vos, Director of DESA’s Development Policy and Analysis Division, at a press conference to launch a mid-year update of the World Economic Situation and Prospects (WESP) 2011 today. Mr. Vos continued, “trade is recovering but at a moderate pace…commodity prices are surging, but remain highly volatile”.
WESP, a joint product of DESA, the UN Conference for Trade and Development (UNCTAD) and the five UN regional commissions, provides an overview of the world economy and key economic and development issues. In the first quarter of 2011, WESP highlighthed that East Asia’s economies continued to register robust growth and that the recovery is led by emerging economies, particularly China, India and Brazil.
For developed countries, however, it is expected to take another four or five years before employment is back at pre-crisis levels. Oil and other commodity prices have risen more than anticipated driven by the political unrest in Western Asia and North Africa.
One of the major concerns is public indebtedness in developed economies. The average public debt ratio for developed economies has already surpassed 100 per cent of GDP in 2011.
The credit-rating agency Standard and Poor’s revised its long-term outlook for the US debt from “stable” to “negative”, demonstrating that the path towards addressing large budget deficits remains unclear. Mr. Vos stressed that US recovery is “not sufficient to deal with the job crisis in the US”.
“We don’t have efficient financial regulation on the international level,” said Jomo Kwame Sundaram, Assistant-Secretary-General for Economic Development. He stressed the urgent need to find ways to arrive at credible and effective policy coordination among major economies. “We are committed to great cooperation and coordination,” said Mr. Jomo.
Developing countries are doing reasonably well compared to developed countries, however the challenge is that many cannot deal with high food and energy prices that soared in early 2011. “DESA has a broad mandate – we speak about developing countries’ concerns – but we are responsible for all member states,” concluded Mr. Jomo.