Assistant Secretary-General for Economic Development, Department of Economic and Social Affairs

2015 High-level Segment of Economic and Social Council

Moderator remarks: 2015 High-level Policy Dialogue
“Headwinds in the global economy”

Excellencies,
Distinguished Delegates,
Distinguished Panellists,
Dear Colleagues,
Ladies and Gentlemen,

It is a pleasure for me to moderate this High-level Policy Dialogue on the headwinds in the global economy.

I wish to thank my colleagues from UNCTAD, the World Bank, WTO and IMF for joining us in this Dialogue.

I also wish to give a special warm welcome to the ILO, who will be contributing as a Lead Discussant to this Dialogue.

Your participation today demonstrates the commitment of the United Nations system to working together to meet global economic challenges.

Excellencies,

Allow me to briefly address three specific questions that will serve as guidelines for the discussion we are about to enter this morning.

The first question I would like to raise is: “What is your current assessment of the current global macroeconomic and trade situation and the outlook for the coming two years?”

The new forecasts of the UN World Economic Situation and Prospects highlight that the global economy continues to grow at only a modest pace.

Compared to the forecasts presented at the beginning of this year, there has been a mild downward revision of global growth to 2.8 per cent in 2015.

Nonetheless, a gradual improvement is expected for next year, with growth forecast at 3.1 per cent.

However, growth rates in virtually all regions of the world will remain well below pre-crisis levels. In many countries, they are also too low to make significant gains in employment creation and poverty reduction.

A key feature of the macroeconomic outlook for this year is the widening divergence in growth rates between the various developing regions.

Growth is projected to be relatively strong in many countries in East and South Asia and also in parts of Africa, particularly in East Africa and West Africa.

By contrast, the short-term prospects for the economies in transition, parts of Latin America and the Caribbean and Western Asia are rather bleak.

This divergence partly reflects a combination of global factors, such as the decline in the prices of oil and other commodities and volatile international capital flows, and country- or region-specific factors, including macroeconomic imbalances, governance issues and armed conflicts.

The subdued performance of the world economy has been accompanied by relatively weak growth in global trade. In recent years, trade has expanded at roughly the same pace as global output after growing twice as fast in the decades before the crisis.

The question is whether trade can once again become an engine of global growth or whether this shift to lower rates of expansion is more permanent.

We are also concerned about the fragmentation of the international trading system, as a result of the slow progress in the WTO multilateral trade negotiations and the proliferation of regional trade agreements (RTA). In particular, the so-called mega-regional initiatives, such as the Trans-Pacific Partnership Agreement, the Transatlantic Trade and Investment Partnership, are likely to be qualitatively different from previous RTAs in their size, depth and systemic consequences and generally developed by major players.

We need to double the efforts to conclude the Doha Development Agenda. The 10th Ministerial Meeting of the WTO to take place in Nairobi, Kenya, in December 2015, is another chance for the world to save the Doha Round.

The second question is: In light of the trends in global trade and growth, what in your view is the macroeconomic situation and outlook for the least developed countries (LDCs)?

Average growth in the LDCs is expected to slow down moderately to 4.9 per cent in 2015, before strengthening to 5.6 per cent in 2016.

While average growth in the LDCs is much lower than in the years before the global financial crisis, this masks large differences between countries.
A number of LDCs, such as Bangladesh, Ethiopia, Rwanda and Tanzania have been seeing robust growth on the back of strong domestic demand, supported by significant investment in infrastructure and agricultural development.

On the other hand, the macroeconomic situation and near-term outlook has deteriorated notably in other LDCs due to the commodity price decline, internal conflicts and natural disasters.

At the 2015 triennial review of the list of LDCs, the Committee for Development Policy established that an increasing number of countries meet the graduation criteria from the LDC category.

Smooth transitioning from the category is likely to become an increasingly important international policy issue in the coming years.

Graduation signifies progress. Yet, graduating countries still require financial support and favourable market access conditions to ensure the sustainability of their development progress.

The international community needs to be prepared to fully support these countries after their graduation, particularly in view of their acute vulnerability to climate change In this regard, priority access to concessional forms of climate finance should be decided on the basis of vulnerability and need and not on whether countries are classified as LDCs.

My third and final question is: What are the key enablers at the international level for building resilience against economic and financial shocks and ensuring economic growth and stability in support of the post-2015 development agenda?

It is imperative for the international community to ensure a smooth transition from the MDGs to the SDGs and to fully enable the success of the post-2015 development agenda.

Given the interconnectedness of our globalized economy, realization of the post-2015 development agenda will require strengthened international cooperation to build resilience against economic shocks and contagion, promote economic growth and stability, and ensure the adequacy and predictability of long-term development finance.

Stronger international policy coordination in economic areas will become ever more critical in the post-2015 context in light of the ambitious new development agenda.

Since the global financial and economic crisis in 2008, attempts at better policy coordination at the regional and global levels have produced mixed results. This suggests the need for a redoubling of efforts to create the proper enabling environment for the post-2015 development agenda.

With these opening remarks, I now wish to invite our panelists to share their insights with us.

Please check against delivery.

*****
Follow Us