Financial and economic crisis

World Economic Situation - Monthly Briefing

The world economy is mired in the most severe economic and financial crisis since the Great Depression, which threatens the ability of countries to confront issues such as poverty, hunger and disease. As the crisis deepens, the impact on developing countries is rapidly worsening, particularly in terms of rising unemployment and a widening external financing gap. A sharp decline in international trade flows, a collapse in commodity prices, a drop in international tourism, and a moderation in remittances have contributed to a significant deterioration in the current account balances of many developing countries.

 

Dialogue

DESA plays a major convening role to support intergovernmental dialogue and coordinated courses of action to address the challenge. The Department serves as the Secretariat of the United Nations Conferences on Financing for Development and many of the functional commissions of the Economic and Social Council. All of these conferences play a key role in addressing the economic and social impact of the current crisis on developing countries.

The Doha Declaration on Financing for Development, adopted by consensus by the Member States on 2 December 2008 during the four-day Follow-up International Conference, calls for a United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development. The conference will take place from 24-26 June 2009 at the United Nations Headquarters in New York.

The Commission for Social Development held experts panels on the financial crisis and its impact on development and stressed that countries must work together to ensure that the world’s most vulnerable do not bear the brunt of the turmoil.

The food crisis, climate crisis, financial crisis and a global recession are all interconnected and the Commission on Sustainable Development expressed concern on their impact on sustainable development, including trade financing for food and other essential imports as well as farmers’ access to credit.

The Commission on the Status of Women focused on the gender perspective of the financial crisis as an emerging issue where disproportionate burden on women was discussed.

The implications of statistics arising from the systemic aspects of the global financial crisis and economic downturn were the focus at the 2009 session of the Statistical Commission. Opportunities were explored how statisticians could accelerate the availability of macroeconomic estimates.

 

Research

The Department serves with its analysis, research and publications as a think tank within the United Nations in the area of economic and social affairs. Key economic policies are spelled out in the flagship publication on the World Economic Situation and Prospects. This is seen as a point of reference for discussion on economic, social and related issues, becoming the analytical basis for agreement.

DESA focuses in particular on countries with vulnerable economies, including Africa and Small Island Developing States, and conducts analytical studies on the crisis to support the intergovernmental consultations. Research also addresses women’s control over economic resources and access to financial aid.

Generating high quality estimates of economic performance have become an essential output of DESA during the crisis and resulted in a need to develop additional indicators on the performance of the economy and the financial markets.

 

Capacity development

DESA’s capacity development interventions in the context of the crisis provides supplementary macroeconomic advisory capacity (SMAC) to the Financial Crisis Working Group, as well as through direct advice to developed countries. DESA also assists countries to understand and deal with the social and sustainable development dimension of the crisis and helps countries to enhance their statistical data gathering in general, and on the financial and social aspects of the crisis in particular. DESA draws on its extensive network of partners to provide capacity development services.

The department also focuses during the current crisis on the impact of external shocks on poverty and social vulnerability and assists countries in macroeconomic policy analysis, in particular for the realization of the Millennium Development Goals (MDGs). The availability of MDG indicators and data provides instruments for monitoring these trends for timely intervention and action.

Furthermore, DESA supports the 2010 Population Census to be conducted in most countries of the world and its outcome will also provide information on migration, housing and employment, affected by the current financial and economic crisis.