trade and development report, 2013 new york 14 october 2013 [email protected] adjusting
TRANSCRIPT
TRADE AND DEVELOPMENT REPORT, 2013
http://unctad.org/en/PublicationsLibrary/tdr2013_en.pdf
New York
14 October 2013
Adjusting to thechanging dynamics of
the world economy
Key points:
The global economy is in a structural crisis: reverting to pre-crisis growth strategies is neither possible nor desirable
Export-led development strategies are no longer viable. More balanced development strategies with a greater role for domestic and regional demand needed – this requires reconsideration of income distribution
5 years after the collapse of Lehman Brothers, taming finance remains a priority: financial systems need to serve the ‘real’ economy and facilitate adaptation to new global demand patterns
The global economy remains far away from a strong, sustained and balanced growth path
World output growth, selected country groups, annual percentage change, 2007–2013
Economic slowdown also affects developing countries
Output growth, selected developing regions, annual percentage change, 2007–2013
Developing country exports and developed country imports remain far from their pre-crisis dynamisms
Volume of export and imports, selected country groups, 2004–2013 (index numbers, 2005–100)
80
100
120
140
160
180
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Volume of exports
80
100
120
140
160
180
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Volume of imports
Developed countriesEmerging market economiesEmerging market economies: trend 2004–2008
Developed countriesEmerging market economiesDeveloped countries: trend 2004–2008
Employment deficit in developed countries
Compression of labour income share led to overindebtedness and is at the root of
the crisis
Global imbalances reflect adjustment asymmetries
Current account imbalances of selected groups of countries, percent of WGP
Public and private debt in selected Euro Area countries (in % of GDP)
Short-term fiscal multipliers(Government spending on goods and services)
MONETARY BASE AND BANK CLAIMS ON THE PRIVAT SECTOR, 2001–2012
(Per cent of GDP)
Monetary policies in developed countries did not lead to more domestic credit, but contributed to international
financial instability
0
5
10
15
20
25
0
10
20
30
40
50
60
70
2001 2003 2005 2007 2009 2011
A. United States
Bank claims on private sector Monetary base (right scale)
0
10
20
30
40
50
0
20
40
60
80
100
120
140
160
2001 2003 2005 2007 2009 2011
B. Euro area
2012 2012
• Developed countries recovery is hindered by low demand and are not tackling the causes of the crisis
• No growth decoupling of developing countries and continued high vulnerability; yet, even if developed countries were to persevere with their current policy stance, developing countries could still improve their economic performance by providing coordinated economic stimuli
• The share of developing countries in global GDP has strongly increased and the economic size of the largest developing countries makes larger role of domestic demand viable
• South-South trade has strongly increased; yet, it has not become an autonomous engine of growth
Structural nature of the present crisis is reflected in changing dynamics of the world economy
At market prices At purchasing power parity
The structure of world economy is changing
Shares in global GDP, 1990-2012
The direction of global trade has shifted towards a greater importance of South-South trade
Shares in world exports, selected country groups, 1995–2012 (per cent)
Consumption of selected commodities by region, 2002 and 2012
• The rapid rise of commodity prices starting in 2002 has boosted economic growth in commodity producing countries• The expansionary phase of the commodity price supercycle may have come to an end, but a price collapse is unlikely to occur in the next few years• The main challenge for commodity producing countries remains appropriating a fair share of the resource rents and using the revenues to reduce income inequality and spur industrial production
0
100
200
300
400
500
600
2002 2004 2006 2008 2010 2012
All commoditiesAll commodities (in euros)Minerals, ores and metalsCrude petroleum
0
100
200
300
400
2002 2004 2006 2008 2010 2012
FoodTropical beveragesVegetable oilseeds and oilsAgricultural raw materials
2013 2013
Per capita income and different income classes, selected countries, 2005
2.5
3.0
3.5
4.0
4.5
5.0
5.5
1 2 3 4 5 6 7 8 9 10
Income distribution deciles within countries
India
China
Brazil
United States
Russian Federation
Nigeria
Indonesia
GDP growth in alternative policy scenarios (per cent)
Baseline: Projection of current trends without policy changes nor shocks Scenario A: All countries follow more expansionary demand-driven policiesScenario B: Developed economies maintain current policy stances and only
developing and transition economies follow more expansionary policies, although stimulus is smaller than in Scenario A
World Developed economies
-2
0
2
4
6
8
1995 2000 2005 2010 2015 2020 2025 2030-4
-2
0
2
4
6
8
1995 2000 2005 2010 2015 2020 2025 2030 1995 2000 2005 2010 2015 2020 2025 2030
Baseline Scenario A Scenario B
0
2
4
6
8
10Developing and emerging economies
Labour-income share in alternative policy scenarios (per cent)
Baseline: Projection of current trends without policy changes nor shocks Scenario A: All countries follow more expansionary demand-driven policiesScenario B: Developed economies maintain current policy stances and only
developing and transition economies follow more expansionary policies, although stimulus is smaller than in Scenario A
Baseline Scenario A Scenario B
50
55
60
1995 2000 2005 2010 2015 2020 2025 2030
World
55
60
65
1995 2000 2005 2010 2015 2020 2025 2030
Developed economies
1995 2000 2005 2010 2015 2020 2025 203040
45
50
55
60
Developing and emergingeconomies
Financing the real economy for meeting the new patterns of demand
_____________________________________________________________________________
A redesign of development strategies involves an expansion of productive capacities and their adaptation to new demand patters, all of which requires investment and its financing
Key challenges: Capital flows management: pragmatic exchange-rate management and capital-account management needed to reduce vulnerability to external financial shocks
Domestic financial systems need to channel credit towards productive investment in the real sector: central banks should pursue a credit policy, rather than just a monetary policy
MONETARY BASE AND BANK CLAIMS ON THE PRIVAT SECTOR, 2001–2012
(Per cent of GDP)
Monetary policies in developed countries did not lead to more domestic credit, but contributed to international
financial instability
0
5
10
15
20
25
0
10
20
30
40
50
60
70
2001 2003 2005 2007 2009 2011
A. United States
Bank claims on private sector Monetary base (right scale)
0
10
20
30
40
50
0
20
40
60
80
100
120
140
160
2001 2003 2005 2007 2009 2011
B. Euro area
2012 2012
International capital flows are highly volatile
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
1976 1981 1986 1991 1996 2001 2006 2011
Net capital inflows, billions of dollars
Developed economies
Transition economiesDeveloping economies
Net private inflowsNet private inflows, excl. equity outflows
0
1
2
3
4
5
6
7
8
9
1978 1984 1990 1996 2002 2008 2012
Net private capital inflows toemerging economies, per cent of GDP
Developing countries should rely mainly on domestic sources of finance, especially retained profits and bank credit
Sources of investment finance, selected country groups, 2005-2012, in % ___________________________________________________________________
• Monetary policy alone is not sufficient to stimulate investment
• Central banks should play an active role in the implementation of a growth and development strategy through a credit (and not only monetary) policy
• Reform at the national and global levels is needed not only to improve financial and economic stability but to ensure that sufficient investment finance goes into productive activities and helps developing countries address the new development challenges
Financing the real economy Policy conclusions